OTE Group Reports Group Second Quarter 2004 Results Under US G.A.A.P. - Unaudited, Part 1 of 2.ATHENS Athens, city, Greece Athens (ăth`ĭnz), Gr. Athínai, city (1991 pop. 2,907,179; 1991 urban agglomeration pop. 3,072,922), capital of Greece, E central Greece, on the plain of Attica, between the Kifisós and , Greece Greece, Gr. Hellas or Ellas, republic (2005 est. pop. 10,668,000), 50,944 sq mi (131,945 sq km), SE Europe. It occupies the southernmost part of the Balkan Peninsula and borders on the Ionian Sea in the west, on the Mediterranean Sea in the south, on -- Hellenic Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Organization SA (ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. : HTO HTO Tritiated Water HTO High Tibial Osteotomy HTO High Temperature Oxidation HTO Hostile Take Over HTO Happy to Oblige HTO Horizontal Take-Off HTO Hydrogen Tritium Oxygen HTO Hospital Transfer Order )(NYSE NYSE See: New York Stock Exchange :OTE OTE Chiefly Brit (esp. in job adverts) on target earnings: the minimum amount of money a salesman is expected to make OTE abbr (Comm) (= on-target earnings) → Einkommensziel nt ): --Operating revenues up 6% on strong mobile sales (Cosmote, Globul GLOBUL (network code 284-05) is the second-largest Bulgarian GSM/UMTS operator. The company was founded in 2001 and is 100% owned by Greek telecommunications corporation Cosmote, which is active in five Balkan countries: Greece, Bulgaria, Romania, Macedonia and Albania. ), sound Romtelecom Romtelecom is the largest telecommunications company in Romania; the majority of shares are held by the Greek telecommunications company OTE (54.01% of shares). The Romanian state also has a minority stake of 45.99% in the company. performance --Continuing difficulties in Greek In desktop publishing, to display text in a representative form in which the actual letters are not discernible, because the screen resolution isn't high enough to display them properly. The software lets you set which font sizes should be greeked. fixed-line Refers to wired devices. For example, a fixed-line phone is a standard phone with the handset wired to the base unit in contrast to a portable phone or cellphone. : slower revenue erosion but market share loss and further increase in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. --Severe action plan required to reverse slide, control costs and restore leadership - management program to be unveiled in fourth quarter Hellenic Telecommunications Organization SA (ASE: HTO)(NYSE:OTE), the Greek full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. telecommunications provider, today announced consolidated unaudited results (prepared under US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) for the quarter ended June June: see month. 30, 2004. CONSOLIDATED FINANCIAL HIGHLIGHTS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 IN ACCORDANCE Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. WITH U.S. GAAP
EUR million except % %
per share data Q2 04 Q2 03 Change H1 04 H1 03 Change
----------------------------------------------------------------------
Operating Revenues 1,304.6 1,234.0 5.7% 2,527.9 2,327.9 8.6%
----------------------------------------------------------------------
Operating Income 193.5 246.4 -21.5% 358.7 483.6 -25.8%
----------------------------------------------------------------------
Pre-tax Income 161.5 240.7 -32.9% 308.2 441.7 -30.2%
----------------------------------------------------------------------
Net Income 45.0 117.7 -61.8% 93.1 210.3 -55.7%
----------------------------------------------------------------------
Operating Income
before Depreciation &
Amortization 451.1 485.9 -7.2% 865.1 923.9 -6.4%
----------------------------------------------------------------------
Operating Income
before Depreciation &
Amortization as % of
Operating Revenues 34.6% 39.4%-4.8 pp 34.2% 39.7% -5.5 pp
----------------------------------------------------------------------
Basic EPS (EUR ) 0.0918 0.2400 -61.8% 0.1899 0.4289 -55.7%
----------------------------------------------------------------------
Cashflow
from
Operations 445.3 357.7 24.5% 736.9 544.0 35.5%
----------------------------------------------------------------------
CAPEX as % of Revenues 22.6% 22.8%-0.2 pp 18.7% 19.3% -0.6 pp
----------------------------------------------------------------------
See notes on p. 13 Commenting on the quarter, Mr. Panagis Vourloumis, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , noted: "OTE's results in the second quarter highlight the contrast between the poor performance of our Greek fixed-line activities and our successes in mobile, at Cosmote and Globul in particular, and in Romania Romania (rōmān`ēə, –yə) or Rumania (r  –), republic (v), 91,699 sq mi (237,500 sq km), SE Europe. . The deterioration de·te·ri·o·ra·tionn. The process or condition of becoming worse. of OTE's domestic competitive position in fixed-line and the continuing rise in operating expenses in the face of a shrinking revenue base reinforce the need for drastic actions aimed at bolstering revenues and cutting costs. On the revenue side, we are accelerating the introduction of broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). , a transforming technology in which we are late. And we are going to implement long overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. changes throughout the organization, above and beyond the required headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. reductions. To succeed, our plans will require radical shifts in the way the Greek authorities and the unions deal with OTE. But I am confident that they will see, that OTE urgently needs these changes - and hope to be able to present our plans in the fourth quarter of this year." FINANCIAL HIGHLIGHTS Operating Revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. OTE's Operating Revenues increased by 5.7% in the three months ended June 30, 2004. This is largely due to the continued strong performance in mobile telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. , both in Greece and abroad. Higher revenues from Cosmote and, to a lesser extent, Globul offset the decline in revenues from Greek fixed-line operations. The continuing decline in Greek fixed-line telephony revenues is due to the combined effect of reduced traffic and prices as well as the decision by the telecommunications regulator regulator, n the mechanical part of a gas delivery system that controls gas pressure that allows a manageable flow of drug vapor to escape. regulator see reducing valve. (NTPC NTPC National Thermal Power Corporation (India) NTPC Northwest Territories Power Corporation NTPC Northwest Territories Power Corporation (Canada) NTPC Navy Training Plan Conference ), to impose reductions on leased lines A private communications channel leased from a common carrier. Most digital lines require four wires (two pairs) for full-duplex transmission. (communications, networking) leased line and interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. tariffs This is a list of tariffs and trade legislation:
% % EUR million Q2 04 Q2 03 Change H1 04 H1 03 Change ---------------------------------------------------------------------- Domestic Telephony 562.8 609.3 -7.6% 1,135.2 1,147.8 -1.1% ---------------------------------------------------------------------- International Telephony 100.3 91.4 9.7% 193.1 175.4 10.1% ---------------------------------------------------------------------- Mobile Telephony services 385.1 292.7 31.6% 727.6 551.5 31.9% ---------------------------------------------------------------------- Other 256.4 240.6 6.6% 472.0 453.2 4.1% ---------------------------------------------------------------------- Total 1,304.6 1,234.0 5.7% 2,527.9 2,327.9 8.6% ---------------------------------------------------------------------- Operating Expenses Payroll and Employee Benefits increased by 2.9% to EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 309.6 million in the second quarter of 2004. In Greek fixed-line operations, payroll and employee benefits decreased slightly to reach EUR 203.0 million. There were no Voluntary Retirement Costs for the second quarter of 2004, as the charges taken in the first quarter cover most of the estimated Voluntary Retirement Plan cost for 2004. Payments to International Operators increased by 7.6% to EUR 47.9 million. Payments to domestic telephony operators (Mobile and Fixed-line Operators) increased by 5.6% to EUR 164.8 million. These payments do not include payments to Cosmote, but include payments from Cosmote to other mobile operators. Depreciation and Amortization increased by 7.6%, to EUR 257.6 million in the second quarter of 2004. This increase reflects significant infrastructure investments completed in 2003 at Globul, Cosmofon Founded in 2003, Cosmofon was the second GSM mobile phone operator in Macedonia. The first call through the network of Cosmofon took place on May 16, 2003, and now it's network codes are 075 and 076. Cosmofon commenced its commercial operation on June 12, 2003. and HellasSat, as well as projects related to the 2004 Athens Olympic Games Olympic games, premier athletic meeting of ancient Greece, and, in modern times, series of international sports contests. The Olympics of Ancient Greece Although records cannot verify games earlier than 776 B.C. . Other Operating Expenses increased by 16.3% to EUR 331.2 million, reflecting significant increases in repairs & maintenance, provisions for doubtful accounts and third party fees. An analysis of Group Other Operating expenses follows: % % EUR million Q2 04 Q2 03 Change H1 04 H1 03 Change --------------------------------------------------- ------------------ Commission to dealers 37.2 44.3 -16.0% 62.5 74.0 -15.5% --------------------------------------------------- ------------------ Cost of equipment 25.0 29.3 -14.7% 51.3 60.2 -14.8% --------------------------------------------------- ------------------ Repairs, maintenance, Cost of telecom materials 56.6 43.4 30.4% 110.3 76.3 44.6% --------------------------------------------------- ------------------ Provision for doubtful accounts 28.1 19.7 42.6% 54.1 43.0 25.8% --------------------------------------------------- ------------------ Advertising 29.9 24.1 24.1% 48.5 35.1 38.2% --------------------------------------------------- ------------------ Taxes other than income taxes 10.4 9.7 7.2% 17.2 15.9 8.2% --------------------------------------------------- ------------------ Other 144.0 114.4 25.9% 260.7 202.9 28.5% --------------------------------------------------- ------------------ -Third party fees 40.1 31.1 28.9% 68.6 57.4 19.5% --------------------------------------------------- ------------------ -Travel costs 3.3 3.6 -8.3% 5.4 6.0 -10.0% --------------------------------------------------- ------------------ -Audiotex 17.8 12.1 47.1% 39.2 25.2 55.6% --------------------------------------------------- ------------------ -Telecards 7.2 7.2 0.0% 13.6 13.3 2.3% --------------------------------------------------- ------------------ -Misc. 75.6 60.4 25.2% 133.9 101.0 32.6% --------------------------------------------------- ------------------ TOTAL 331.2 284.9 16.3% 604.6 507.4 19.2% --------------------------------------------------- ------------------ Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before depreciation and amortization For the second quarter of 2004, OTE Group Operating income before depreciation and amortization, including RomTelecom, amounted to EUR 451.1 million, or 34.6% of operating revenues. The drop in margin, from 39.4% in the comparable quarter last year, primary reflects the deterioration of operating performance in Greek fixed-line operations. Net Income Net Income for the three months ended June 30, 2004 reached EUR 45.0 million, down 61.8% from net income of EUR 117.7 million in last year's second quarter. This fall is mainly attributed to the continuing drop in fixed-line revenues in Greece and the slow progress in the area of operating cost reduction. Cash Flow Cash provided by operating activities amounted to EUR 445.3 million for the three months ended June 30, 2004. CONDENSED con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. CASHFLOW IN ACCORDANCE WITH U.S. GAAP EUR million Q1 04 Q2 04 H1 04 H1 03 ----------------------------------------------------------------- Cash and Cash equivalents at beginning of period 601.3 680.3 601.3 447.5 ----------------------------------------------------------------- Net Cash provided by Operating Activities 291.6 445.3 736.9 544.0 ----------------------------------------------------------------- Net Cash used in Investing Activities (177.9) (295.2) (473.1) (440.5) ----------------------------------------------------------------- Net Cash provided by (used in) Financing Activities (34.7) (75.7) (110.4) (96.6) ----------------------------------------------------------------- Net Increase/(Decrease) in Cash and Cash Equivalents 79.0 74.4 153.4 6.9 ----------------------------------------------------------------- Cash and Cash Equivalents at end of period 680.3 754.7 754.7 454.4 ----------------------------------------------------------------- Capital Expenditure Capital expenditure in the second quarter of 2004 totaled EUR 295.2 million, and EUR 473.1 million for the first half of 2004. Debt At June 30, 2004, OTE Group gross debt amounted to EUR 3,241.4 million, down 1.2% compared to December December: see month. 31, 2003. The total amount of OTE debt outstanding breaks down as follows:
EUR million Jun 30 Dec 31
2004 2003 % Change
----------------------------------------------------------------------
Short-Term:
----------------------------------------------------------------------
-Bank loans 28.5 51.6 -44.8%
----------------------------------------------------------------------
Medium & Long-term:
----------------------------------------------------------------------
-Bonds 2,591.4 2,590.9 0.0%
----------------------------------------------------------------------
-Bank loans 586.8 598.2 -1.9%
----------------------------------------------------------------------
-Other loans 34.7 40.3 -13.9%
----------------------------------------------------------------------
Total Indebtedness 3,241.4 3,281.0 -1.2%
----------------------------------------------------------------------
EVENTS OF THE QUARTER AGM AGM annual general meeting AGM n abbr (= annual general meeting) → AG f AGM n abbr (= annual general meeting) → JHV f On June 17, 2004, OTE held its 52nd Annual General Meeting. During the AGM, amendments to the Company's Articles of Association were approved, the most important of which were the following: --The number of Board members was reduced from 15 to 11 (or 9) --Directorship terms were shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. from 5 to 3 years --One-third of Directors became subject to annual re-election re-election n → reelección f re-election n → réélection f re-election n → Wiederwahl f 4. BUSINESS OVERVIEW OTE's segment reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four is based on its legal structure. A reconciliation of intersegment revenues to total revenues is provided, as below: SEGMENT FINANCIALS FOR THE SIX MONTHS ENDED JUNE 30, 2004 All Adjustments & OTE(a) COSMOTE RomTelecom Other Total EliminationsConsolidated ---------------------------------------------------------------------- 1,309.3 651.2 398.6 168.8 2,527.9 - 2,527.9 ---------------------------------------------------------------------- 112.5 102.0 2.2 86.1 302.8 (302.8) ---------------------------------------------------------------------- 1,421.8 753.2 400.8 254.9 2,830.7 (302.8) 2,527.9 ---------------------------------------------------------------------- (a) For comparison purposes, OTE comprises the OTE parent company and OTE Estate. 4.1. OTE FIXED-LINE TRAFFIC STATISTICS FOR THE SECOND QUARTER OF 2004
Average
Call Service Category Calls, Call Minutes, Split of
millions Duration millions minutes
(minutes)
----------------------------------------------------------------------
Local 1,280.6 2.5 3,242.4 41.7%
----------------------------------------------------------------------
National Long - Distance 159.8 3.0 480.6 6.2%
----------------------------------------------------------------------
International Long - Distance 26.5 3.6 96.1 1.2%
----------------------------------------------------------------------
Internet 154.6 22.3 3,451.1 44.5%
----------------------------------------------------------------------
Fixed-to-Mobile 340.2 1.3 440.0 5.7%
----------------------------------------------------------------------
Special Calls 87.5 0.6 52.4 0.7%
----------------------------------------------------------------------
Total 2,049.2 3.8 7,762.6 100.0%
----------------------------------------------------------------------
OTE estimates that its share of the Greek fixed-line market, as measured in call minutes, stood at approximately 85% in June 2004. % % EUR million Q2 04 Q2 03 Change H1 04 H1 03 Change ---------------------------------------------------------------------- Operating Revenues 729.3 766.9 -4.9%1,421.8 1,554.3 -8.5% ---------------------------------------------------------------------- Adjusted Operating Revenues(a) 729.3 766.9 -4.9%1,421.8 1,544.6 -8.0% ---------------------------------------------------------------------- - Basic Monthly Rentals157.4 152.8 3.0% 315.9 309.8 2.0% ---------------------------------------------------------------------- - Fixed to fixed calls 142.7 167.8 -15.0% 293.0 351.5 -16.6% ---------------------------------------------------------------------- - Fixed to mobile calls 99.9 126.6 -21.1% 195.1 255.6 -23.7% ---------------------------------------------------------------------- - International 58.3 63.7 -8.5% 113.2 130.7 -13.4% ---------------------------------------------------------------------- - Other 271.0 256.0 5.9% 504.6 506.7 -0.4% ---------------------------------------------------------------------- Operating Profit 50.6 141.9 -64.3% 79.6 280.6 -71.6% ---------------------------------------------------------------------- Operating income before depreciation and amortization 197.3 294.2 -32.9% 379.6 570.2 -33.4% ---------------------------------------------------------------------- Operating income before depreciation and amortization as % of Operating revenues 27.1% 38.4%-11.3 pp 26.7% 36.7%-10.0 pp ---------------------------------------------------------------------- Depreciation & Amortization 146.7 152.3 -3.7% 300.0 289.6 3.6% ---------------------------------------------------------------------- (a) Up to January January: see month. 31, 2003, OTE was billed by the mobile operators for substantially all its revenue from calls placed from its network to customers of the mobile operators. These charges were included in "Payments to mobile telephony operators" in Operating Expenses. Simultaneously, OTE charged the mobile operators an interconnection fee relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc such calls, which was included in "Interconnection charges" in Other Operating Revenues. Effective February February: see month. 1, 2003, OTE, based on new arrangements made with the mobile operators, no longer charges an interconnection fee for such calls but pays a charge per minute at rates determined in the new agreements. Adjusted Operating Revenues eliminate the effect of that change. Fixed-line operating revenues dropped by 4.9% in the second quarter of 2004 to EUR 729.3 million. This decline is due to lower traffic volume and the new tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic structure introduced to meet heightened competition, partly offset by an increase in revenues from monthly rentals and special projects. Despite fixed-to-mobile substitution Substitution Arsinoë put her own son in place of Orestes; her son was killed and Orestes was saved. [Gk. Myth.: Zimmerman, 32] Barabbas robber freed in Christ’s stead. [N.T.: Matthew 27:15–18; Swed. Lit. , the total number of installed lines remained roughly unchanged in the second quarter of the year, as a 3% drop in PSTN (Public Switched Telephone Network) The worldwide voice telephone network. Once only an analog system, the heart of most telephone networks today is all digital. In the U.S. lines was more than offset by an increase of nearly 19% in ISDN ISDN in full Integrated Services Digital Network Digital telecommunications network that operates over standard copper telephone wires or other media. lines. In late June, OTE introduced a package targeting owners of vacation homes Vacation Home A home separate from an individual's primary residence that is used for recreational purposes and may also be rented out at unused times. Notes: For tax purposes, those who rent their vacation homes may result in a lower amount of allowable expense , aimed at reducing the switch to mobile phone use among seasonal residential users. OTE is addressing the delays that have affected the deployment of its ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line offering and taking steps to accelerate installation time and boost demand. The company expects to meet its 50,000 ADSL customer target by the end of 2004, and will make a significant push to raise broadband usage closer to levels recorded in other European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. countries. The decline in total traffic, as measured in call minutes, slowed down during the period as compared to the first quarter of the year. However, aggressive competitive actions, made possible in part by regulatory decisions, continue to depress de·press v. 1. To lower in spirits; deject. 2. To cause to drop or sink; lower. 3. To press down. 4. To lessen the activity or force of something. traffic, market share and revenues. As announced last quarter, OTE is vigorously contesting leased line and interconnection tariffs imposed by the regulator, and expects a resolution of this dispute until the end of the year. Total operating expenses increased by 7.3% compared to the second quarter of 2003 reaching EUR 675.2 million, mainly influenced by the growth of Other Operating Expenses. An analysis of the OTE segment Other Operating Expenses follows: % % EUR million Q2 04 Q2 03 ChangeH1 04 H1 03 Change ---------------------------------------------------------------------- Cost of equipment 22.7 25.5 -11.0% 41.7 49.5 -15.8% ---------------------------------------------------------------------- Repairs, maintenance, Cost of telecom materials 24.5 21.9 11.9% 45.8 39.6 15.7% ---------------------------------------------------------------------- Provision for doubtful accounts 24.6 16.7 47.3% 45.1 33.5 34.6% ---------------------------------------------------------------------- Advertising 8.4 4.1 104.9% 11.3 5.5 105.5% ---------------------------------------------------------------------- Taxes other than income taxes 7.2 6.4 12.5% 10.8 10.0 8.0% ---------------------------------------------------------------------- Other 106.7 76.8 38.9%189.1 152.4 24.1% ---------------------------------------------------------------------- -Third party fees 31.1 22.2 40.1% 43.7 38.0 15.0% ---------------------------------------------------------------------- -Travel costs 1.8 2.7 -33.3% 2.7 4.2 -35.7% ---------------------------------------------------------------------- -Audiotex 16.3 11.1 46.8% 35.5 23.9 48.5% ---------------------------------------------------------------------- -Telecards 2.8 3.0 -6.7% 4.4 6.2 -29.0% ---------------------------------------------------------------------- -Other 54.7 37.8 44.7%102.8 80.1 28.3% ---------------------------------------------------------------------- TOTAL 194.1 151.4 28.2%343.8 290.5 18.3% ---------------------------------------------------------------------- In the second quarter of 2004, Other Operating Expenses showed an increase of 28.2% in comparison to the corresponding quarter of 2003. This was mainly due to additional advertising costs supporting a number of new products and services as well as the Olympic Games sponsorship, increased provision for doubtful accounts, higher commissions to Audiotex providers, and increased third party fees. In the six months ending June 30, 2004, Net Working Capital for the Domestic Fixed-line business (including bad debt, excluding intra-group transactions and cash) declined substantially as a percentage of revenue compared to the same period of 2003, at 23.7% versus 25.3% last year (Greek GAAP). These are the lowest Net Working Capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. of the Domestic Fixed-line business for over three years, and are the result of a concerted 12-month effort of improving billing efficiency, collections effectiveness, payables Payables Related: Accounts payable management and inventory control. In particular, Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (including VAT VAT See: Value-added tax VAT See value-added tax (VAT). ) have decreased significantly since the seasonally high Q1 and reached last year's levels at 106, Days Payables Outstanding increased substantially from 108 last year to 132 and inventories, though still higher than June 2003, have reduced by 8% since end- end- pref. Variant of endo-. 2003, following the continued roll-out of the Olympic Projects. Further reduction of Net Working Capital is expected through 2004, especially through lower DSO See CSO. , as improved credit control and collections management begin to influence OTE's receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . EUR million Q2 04 Q2 03 ------------------------------------------------------------ Net Accounts Receivable 941.0 1,044.0 ------------------------------------------------------------ Net Working Capital 653.0 780.0 ------------------------------------------------------------ NWC/Sales (%) 23.7 25.3 ------------------------------------------------------------ DSO (incl. VAT) 106 105 ------------------------------------------------------------ DPO (incl. VAT) 132 108 ------------------------------------------------------------ 4.2. COSMOTE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 IN ACCORDANCE WITH U.S. GAAP (UNAUDITED)
EUR millions Q2 04 Q2 03 % Change
---------------------------------------------------------------
Operating Revenues 394.8 327.2 20.7%
---------------------------------------------------------------
Monthly service fees 59.7 43.6 36.9%
---------------------------------------------------------------
Airtime revenues 159.1 135.7 17.2%
---------------------------------------------------------------
Interconnection Revenues 116.2 94.6 22.8%
---------------------------------------------------------------
Roaming revenues 10.0 9.0 11.1%
---------------------------------------------------------------
SMS revenues 35.9 35.5 1.1%
---------------------------------------------------------------
Sales of handsets/accessories 11.0 6.7 64.2%
---------------------------------------------------------------
Other operating revenues 3.0 2.2 36.4%
---------------------------------------------------------------
Operating Income before Depreciation
& Amortization 167.8 136.6 22.8%
---------------------------------------------------------------
Operating Income before Depreciation
& Amortization as % of Operating
Revenues 42.5% 41.7% +0.8 pp
---------------------------------------------------------------
Operating Profit (EBIT) 121.0 96.7 25.1%
---------------------------------------------------------------
Net Income 76.7 61.0 25.7%
---------------------------------------------------------------
Net Income Margin 19.4% 18.6% +0.8 pp
---------------------------------------------------------------
Depreciation & Amortization 46.8 39.9 17.3%
---------------------------------------------------------------
---------------------------------------------------------------
Customers (Greece) n/a n/a
---------------------------------------------------------------
Contract n/a n/a
---------------------------------------------------------------
Pre-Paid n/a n/a
---------------------------------------------------------------
Customers (Albania) n/a n/a
---------------------------------------------------------------
Contract n/a n/a
---------------------------------------------------------------
Pre-Paid n/a n/a
---------------------------------------------------------------
Employees (consolidated) n/a n/a
---------------------------------------------------------------
ARPU blended (Greece, Euro) n/a n/a
---------------------------------------------------------------
AMOU blended (Greece, minutes) n/a n/a
---------------------------------------------------------------
EUR millions H1 04 H1 03 % Change
---------------------------------------------------------------------
Operating Revenues 753.2 624.3 20.6%
---------------------------------------------------------------------
Monthly service fees 115.2 83.2 38.5%
---------------------------------------------------------------------
Airtime revenues 310.2 260.7 19.0%
---------------------------------------------------------------------
Interconnection Revenues 218.9 182.2 20.1%
---------------------------------------------------------------------
Roaming revenues 13.9 11.6 19.8%
---------------------------------------------------------------------
SMS revenues 70.6 71.2 -0.8%
---------------------------------------------------------------------
Sales of handsets/accessories 17.4 13.2 31.8%
---------------------------------------------------------------------
Other operating revenues 7.0 2.2 218.2%
---------------------------------------------------------------------
Operating Income before Depreciation
& Amortization 320.7 263.7 21.6%
---------------------------------------------------------------------
Operating Income before Depreciation
& Amortization as % of Operating
Revenues 42.6% 42.2% +0.4 pp
---------------------------------------------------------------------
Operating Profit (EBIT) 230.8 185.4 24.5%
---------------------------------------------------------------------
Net Income 145.0 114.7 26.4%
---------------------------------------------------------------------
Net Income Margin 19.3% 18.4% +0.9 pp
---------------------------------------------------------------------
Depreciation & Amortization 89.9 78.3 14.8%
---------------------------------------------------------------------
---------------------------------------------------------------------
Customers (Greece) 4,075,539 3,856,565 5.7%
---------------------------------------------------------------------
Contract 1,602,188 1,579,358 1.4%
---------------------------------------------------------------------
Pre-Paid 2,473,351 2,277,207 8.6%
---------------------------------------------------------------------
Customers (Albania) 641,058 560,728 14.3%
---------------------------------------------------------------------
Contract 15,025 13,180 14.0%
---------------------------------------------------------------------
Pre-Paid 626,033 547,548 14.3%
---------------------------------------------------------------------
Employees (consolidated) 2,390 2,131 12.2%
---------------------------------------------------------------------
ARPU blended (Greece, Euro) 30.4 28.0 8.6%
---------------------------------------------------------------------
AMOU blended (Greece, minutes) 126.0 101.0 24.8%
---------------------------------------------------------------------
Cosmote operates in four countries of Southeastern Europe: through direct ownership in Greece (Cosmote) and Albania (AMC (Advanced Mezzanine Card) See AdvancedTCA. ) and since January 2003, through management of companies owned by OTE in Bulgaria (GLOBUL) and F.Y.R. of Macedonia (CosmoFon). Cosmote group consolidated results incorporate the Greek and Albanian companies This is an initial and incomplete list of Albanian companies. This list is presently a business sector list. Banking Central Bank
Commercial Banks
Cosmote group operating revenues for the second quarter of 2004 increased by 20.7% to reach EUR 394.8 million. The overall revenue increase reflects a 17.2% increase in airtime air·time n. 1. The time during which a radio or television station is broadcasting. Also called airspace. 2. The time at which a radio or television program is broadcast. revenues, a 36.9% increase in revenues from monthly service fees chiefly and a 22.8% increase in interconnection revenues. Revenues from sales of handsets & accessories, following the launch of i-mode service in early June and the introduction of new handsets, increased by 64.2%. In total, revenues from telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. increased by 19.6%, representing approximately 96% of total revenues. The key driver behind the healthy revenue growth is the considerable increase in Cosmote's domestic operations traffic volumes, more than offsetting the impact from earlier tariff cuts and the introduction of bundled packages. Data revenues (which include SMS (1) (Storage Management System) Software used to routinely back up and archive files. See HSM. (2) (Systems Management Server) Systems management software from Microsoft that runs on Windows NT Server. , MMS (Multimedia Messaging Service) An enhanced transmission service that enables graphics, video clips and sound files to be transmitted via cellphones. Developed as part of the 3GPP project, MMS phones are generally backward compatible with SMS and EMS. , and other "soft data" revenues from Value Added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. Services) represent approximately 12.1% of total telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. revenues and 12.4% of domestic operations for the first half of 2004. In June 2004, Cosmote launched i-mode, the world's most popular mobile Internet Refers to gaining access to the Internet using a lightweight, handheld device. See Mobile IP, PDA, smartphone and mobile TV. service, in the Greek market. This exclusive launch, carried out in record time, is aimed at enhancing Cosmote's innovative data offering portfolio and further boosting service revenues. Since launch, customer response to the service provides highly encouraging indications about the positive-take up of i-mode in Greece. Roaming The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. revenues in the second quarter grew by approximately 11.1%, accounting for 2.5% of total consolidated revenues. During the second quarter of the year, Cosmote signed 21 additional roaming agreements. These, at the end of the second quarter amounted to 342 in 160 countries (five more countries compared to the end of the first quarter). In addition, since the launch of i-mode (in June 2004) Cosmote has signed 25 GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. roaming agreements in 19 countries. Group Operating Income before depreciation and amortization for the quarter increased by 22.8%, reaching EUR 167.8 million, representing a margin of 42.5%. Second quarter 2004 Cosmote Group Earnings amounted to EUR 76.7 million, up 25.7% compared to the second quarter of 2003. Consolidated Net Income margin reached 19.4%, the highest ever recorded to date. During the second quarter of 2004 Cosmote (Greece) recorded 52,064 net new additions (50,011 new prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. customers and 2,053 new contract
customers). Contract customers at the end of the quarter reached
1,602,188 or 39.3% of total while prepaid customers reached 2,473,351 or
60.7% of total. During the same period, AMC (Albania) added 25,124 net
new customers, reaching a total of 641,058 customers.4.3. ROMTELECOM OTE, through its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. OTE International Investments Ltd, holds a 54.01% interest in RomTelecom S.A., the incumbent telecommunications operator in Romania. RomTelecom's key financial figures are stated below: ROMTELECOM CONSOLIDATED STATEMENTS OF OPERATIONS SECOND QUARTER ENDED JUNE 3O, 2004 AND 2003 IN ACCORDANCE WITH U.S. GAAP (UNAUDITED)
EUR Millions Q2 04 Q2 03 % Change
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Operating Revenues 199.6 191.3 4.3%
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Operating Income before
Depreciation & amortization 63.2 54 17.0%
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Operating Income before
Depreciation & Amortization
as % of Operating Revenues 31.7% 28.2% 3.4 pp
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Operating Income 23.1 15.1 53.0%
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Net Income/(Loss) 9.3 23.6 -60.6%
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Net Income/(Loss) Margin 4.7% 12.3% -7.6 pp
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Increase/(Decrease) in Gross
PP&E 14.9 20.0 -25.5%
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Fixed Telephony, Lines
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Mobile Telephony, Contract
customers
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Mobile Telephony, Prepaid
customers
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Mobile Telephony, Total
customers
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Cash and cash equivalents
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Short-term borrowings
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Long-term dedt
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Net Financial Debt
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EUR Millions H1 04 H1 03 % Change
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Operating Revenues 400.8 389.7 2.8%
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Operating Income before
Depreciation & amortization 121.5 50.5 140.6%
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Operating Income before
Depreciation & Amortization
as % of Operating Revenues 30.3% 13.0% 17.3 pp
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Operating Income 44.8 (29.5) 251.9%
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Net Income/(Loss) 19.4 (26.6) 172.9%
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Net Income/(Loss) Margin 4.8% -6.8% 11.6 pp
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Increase/(Decrease) in Gross
PP&E 24.1 37.5 -35.7%
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Fixed Telephony, Lines 4,334,626 4,272,144 1.5%
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Mobile Telephony, Contract
customers 37,252 -100.0%
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Mobile Telephony, Prepaid
customers 46,472 -100.0%
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Mobile Telephony, Total
customers 54,401 83,724 -35.0%
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30.06.04 31.12.03
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Cash and cash equivalents 85.8 90.6 -5.3%
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Short-term borrowings 30.3 40.7 -25.6%
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Long-term dedt 201.4 223.7 -10.0%
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Net Financial Debt 145.9 173.8 -16.1%
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Comparative figures have been adjusted to reflect the EUR 60 million impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge taken by Romtelecom in 2003 results, relating to the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of Cosmorom's fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → In the second quarter of 2004, RomTelecom posted revenues of EUR 199.6 million, up 4.3% from revenues of EUR 191.3 million in the same period last year. This positive result was achieved in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite a EUR 8.6 million negative currency impact attributed to denomination Denomination The stated value found on financial instruments. Notes: This term applies to most financial instruments with monetary values. The denomination for bonds and securities would be face value or par value. of tariffs in local currency rather than Euro (until October 2003). The revenue increase is due to higher tariffs and a 98% raise in interconnection traffic. Interconnection revenues increased significantly compared to the same period in 2003 (+65%). In 2004, RomTelecom regained a significant share of the inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound and outbound out·bound adj. Outward bound; headed away: outbound trains. Adj. 1. outbound - that is going out or leaving; "the departing train"; "an outward journey"; "outward-bound ships" international traffic of Mobile Operators, previously lost as a result of the 2003 market liberalization lib·er·al·ize v. lib·er·al·ized, lib·er·al·iz·ing, lib·er·al·iz·es v.tr. To make liberal or more liberal: "Our standards of private conduct have been greatly liberalized . . . . Also, in the same period, RomTelecom's inbound traffic Traffic originating in an area outside the continental United States destined for or moving in the general direction of the continental United States. to its own network increased significantly as a result of a sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz a·ble·ness n. drop of the termination of VOIP (Voice Over IP) A digital telephone service that uses the public Internet as well as private backbones instead of the traditional telephone network. Many companies, including Vonage, 8x8 and AT&T (CallVantage), typically offer calling within the country for a international traffic.--Although the issue of tariff denomination was solved effective October 2, 2003, when the Romanian Regulator approved the conversion of RomTelecom's tariffs into Euros, revenues were still affected by the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Romanian Lei (EUR 8.6 million of revenues lost in Q2 2004). --Higher usage and rental revenues also offset the decrease due to currency devaluation Currency devaluation A deliberate downward adjustment in the official exchange rates established, or pegged, by a government against a specified standard, such as another currency or gold. . --Internet, Fixed to Mobile, Long Distance and Local traffic decreased in comparison to the second quarter of 2003 due to substitution and competition to alternative carriers. Operating income before depreciation and amortization rose to 31.7% of Operating Revenues in Q2 2004, as compared to 28.2% in 2003, mainly due to higher revenues. Operating expenses decreased slightly, despite significant personnel redundancy costs, as virtually all other expense categories were cut during the period. The drop in Interconnection costs reflects tariff reductions, despite a 5% increase in outgoing traffic. Net income amounted to EUR 9.3 million in the second quarter of 2004. RomTelecom's tariff rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting received Regulatory approval effective June 2004. ANRC ANRC Autoritatea Nationala de Reglementare in Comunicatii (Romania) ANRC American National Red Cross ANRC Alaska Native Regional Corporation ANRC Arkansas Natural Resources Commission (Little Rock, AR) approved an average increase in monthly rental of 8% for residential users and 22% for business users, as well as local and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the call tariff increases (+9%). International and Long Distance Calls charges were reduced by 10% to 21% and Fixed to Mobile call charges by -3%. Another step towards international standards was achieved with implementation of per minute based billing, in place since June 1, 2004. RomTelecom's management is moving ahead with continued implementation of its"Transformation Plan": --Efficiency improved from 181 Lines per Employee at the end of fourth quarter of 2003, to 235 Lines per Employee at the end of the second quarter of 2004, an increase of 29.8%. --Headcount was reduced to 18,453 by the end of June 2004 from 23,869 at December 31, 2003. --Implementation of several projects continues successfully, notably the development of a new central Billing System replacing 20 existing systems, deployment of the Oracle Financial e-Business System, and opening of a Directory Assistance Call Center decreasing the cost per call by 25%. COSMOROM CosmoRom's operating revenues for the three months ended June 30, 2004 amounted to EUR 2.0 million, while net loss amounted to EUR 3.5 million. As previously disclosed, CosmoRom is experiencing financial difficulties and has overdue payments to its principal equipment supplier. The investment bank, appointed by Romtelecom, has concluded the report on the strategic options regarding Cosmorom. The report was made available to Romtelecom's shareholders, OTE and the Romanian Government. The two parties are in close consultations in order to reach a final decision. 4.4. OTENET OTEnet is an 80.2%-owned OTE subsidiary offering Internet access See how to access the Internet. , IP telecom solutions and IT application development and hosting services using Internet technologies. OTEnet's operating revenues for the three months ended June 30, 2004, increased by 41.5% to EUR 23.2 million while quarterly Operating income before depreciation and amortization reached EUR 3.4 million for a margin of 14.7%. OTEnet S.A, boosted its customer base significantly. On June 30, 2004, OTEnet had 256,394 active residential customers (including all dial up, OnDSL HOME and prepaid card customers). In addition, on June 30, 2004, OTEnet had over 8,330 active business customers (including all Leased Line, OnDSL OFFICE, VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. and Data Center customers). OTEnet continues to introduce and actively promote a series of new products and value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. , while implementing efficient cost and investment control. The company's goals for 2004 are to promote the expansion of Internet penetration in Greece and to evolve into a multilevel mul·ti·lev·el adj. Having several levels: a multilevel parking garage. Adj. 1. multilevel - of a building having more than one level IP Telecom Solutions and Internet Service Applications Provider. In addition, OTEnet's strategy is to expand its offering to cover the full Internet value chain and to strengthen its brand name focusing on the two main market segments (corporate-consumer). OTENET CONSOLIDATED STATEMENTS OF OPERATIONS SECOND QUARTER AND SIX MONTHS ENDED JUNE 3O, 2004 AND 2003 IN ACCORDANCE WITH U.S. GAAP (UNAUDITED) EUR Millions Q2 04Q2 03% Change H1 04H1 03% Change ---------------------------------------------------------------------- Operating Revenues 23.2 16.4 41.5%46.0 30.6 50.3% ---------------------------------------------------------------------- Operating Profit 0.3 1.4 -78.6% 1.7 2.8 -39.3% ---------------------------------------------------------------------- Operating Income before Depreciation & amortization 3.4 2.9 17.2% 6.1 5.5 10.9% ---------------------------------------------------------------------- Operating Income before Depreciation & Amortization as % of Operating Revenues 14.7% 17.7% -3.0pp 13.3% 18.0% -4.7 pp ---------------------------------------------------------------------- Depreciation & Amortization 3.1 1.5 106.7% 4.4 2.7 63.0% ---------------------------------------------------------------------- 4.5. OTHER INTERNATIONAL INVESTMENTS TELECOM SERBIA For the second quarter of 2004, total operating revenues of Telecom Serbia amounted to EUR 140.1 million, up 11.3% from the second quarter of 2003. Net income amounted to EUR 22.6 million, 2.2% lower than in the second quarter of 2003. At June 30, 2004, Telecom Serbia had approximately 2.45 million fixed-line customers, up 2.7% from the second quarter of 2003, and nearly 2.0 million mobile customers, up 27.9% from last year's quarter. The number of pre-paid customers increased by 25.5% and accounted for over 96% of the total, while the number of contract customers increased by 162.1%. During 2003 Telecom Italia Telecom Italia is formerly a partially state-owned Italian telco. It was once known as SIP, and it has the largest user base in Italy. Telecom Italia also owns shares in Telecom Argentina and Telecom Personal, fixed and cellular networks in Argentina. International sold its 29% interest in Telecom Serbia back to the Serbian Government. As a result OTE lost its significant influence in Telecom Serbia, and therefore this investment is accounted for at cost. ARMENTEL ArmenTel's operating revenues for the second quarter of 2004 amounted to EUR 21.1 million. Operating income before depreciation and amortization reached EUR 12.7 million, or 60.2%, of Operating revenues while net income reached EUR 6.3 million. On June 28, OTE and the Government of the Republic of Armenia jointly announced the commencement of negotiations with a view to settling all outstanding issues between the two parties, including a dispute related to the granting of a second mobile telephony license in Armenia. GLOBUL Cosmo Bulgaria Mobile EAD EAD Ensino A Distancia (Brazil) EAD Encoded Archival Description (DTD for SGML) EAD Employment Authorization Document (US INS) EAD Exposure At Default is a 100%-owned OTE subsidiary, managed by Cosmote, operating a GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. 900 / 1800 mobile telephony license in Bulgaria. Operating Revenues of Cosmo Bulgaria Mobile EAD, which operates under the Globul brand, amounted to EUR 40.8 million for the second quarter of 2004, compared to EUR 22.9 million for the comparable quarter of 2003, an increase of 78%, while operating income before depreciation and amortization reached EUR 6.6 million in the second quarter of 2004, compared to a negative EUR 0.4 million for the respective quarter of 2003. The overall revenue increase reflects a 90% increase in monthly service revenues (including airtime revenue incorporated in the bundle packages), a 104% increase in airtime revenue, a 53% increase in SMS revenues and a 486% increase in roaming revenues. The key drivers behind the healthy revenue growth were: --A customer base which grew by 90% y-o-y, reaching a total of 1,287,000 customers. Pre-paid customers reached 829,000, while contract customers reached 458,000, providing a pre-paid/contract mix of 64%/36%. This increase was driven both by improved market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" and market share gains. --Stable pre-paid usage. --Further increases in contract usage, driven by an increase in corporate customers and enhanced coverage. --Territorial coverage increased to 82% vs. 57% at the end of Q2 2003. --Population coverage increased to 97% vs. 86% at the end of Q2 2003. Roaming revenues posted an impressive growth as the company activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. more roaming agreements. The number of active roaming agreements at June 30, 2004 reached 231 operators in 112 countries. COSMOFON MOBILE TELECOMMUNICATIONS AD SKOPJE (MTS (1) See Microsoft Transaction Server. (2) (Modular TV System) The stereo channel added to the NTSC standard, which includes the SAP audio channel for special use. 1. MTS - Message Transport System. 2. ) Cosmofon AD, the new corporate name of MTS, is a wholly owned subsidiary of OTE managed by Cosmote, operating the second mobile telephony license in the Former Yugoslav Republic of Macedonia (FYROM FYROM Former Yugoslavian Republic Of Macedonia ). The company launched commercially under the brand name Cosmofon in June 2003. Since then, the company has acquired more than 150,000 customers, while Operating revenues for the second quarter of 2004 reached EUR 5.3 million. 5. OUTLOOK OTE expects the trends of the first six months of the year to continue in the second half, with strong top-line performance in mobile and, to a lesser extent, at Romtelecom not sufficient to offset weakness in Greek fixed-line operations. The Company will pursue its efforts to obtain reversal of regulatory decisions concerning wholesale tariffs. For the short and medium term profits are expected to remain low. The longer-term outlook will depend on the ability of the management to carry out the reforms it is planning. If so, by mid 2005 the positive results will be visible at the bottom line. Unlike profits, cash flow will remain healthy because of very high depreciation charges. There is no plan to materially increase debt. About OTE OTE is a provider of public, fixed switch domestic and international telephony services in Greece. With local, long distance and international communications services in addition to mobile telephony, internet services, and high-speed data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. , OTE provides consumers and businesses the ability to communicate globally through its extensive network infrastructure. In addition, OTE has a number of International investments in the South East European region and addresses a potential customer base of 60 million people. Listed on the Athens Stock Exchange Athens Stock Exchange Greece's only major securities market. Greek language only. Athens Stock Exchange (ASE) Greece's principal stock exchange. , the company trades under the ticker ticker An automated quotation system on which security transactions are reported after they occur on an exchange floor. Even though the newer systems are electronic and no longer actually tick, the name of the old mechanical device has stuck. HTO as well as on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the ticker OTE. In the U.S., OTE's American Depository Receipts American Depository Receipt n. called in the banking trade an ADR, it is a receipt issued by American banks to Americans as a substitute for actual ownership of shares of foreign stocks. (ADR's) represents 1/2 ordinary share. Additional Information is also available on http://www.ote.gr. Forward-looking statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the Company's future financial results are discussed more fully in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"), including the Company's Annual Report on Form 20-F for 2002 filed with the SEC on June 30, 2003. OTE assumes no obligation to update information in this release. NOTES --In line with SEC recommendations on the use of non-GAAP financial measures, OTE has decided to replace the caption "EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become " used in prior filings by "Operating income before depreciation and amortization". This item is the sum of "Operating income" and "Depreciation and amortization". Similarly, the previously used "EBITDA margin" caption is henceforth From this time forward. The term henceforth, when used in a legal document, statute, or other legal instrument, indicates that something will commence from the present time to the future, to the exclusion of the past. replaced by "Operating income before depreciation and amortization as a percentage (%) of Operating Revenues". --Following SEC recommendations regarding the application of EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation 01-9 "Accounting for Consideration Given by a Vendor to a Customer", OTE reflects certain commissions relating to pre-paid cards as a reduction of the respective revenues rather than as operating expenses. All comparative quarterly data for 2003 and the first quarter of 2004 were restated accordingly. --Finally, 2003 comparative data and first quarter 2004 numbers have been restated to reflect the impairment of Cosmorom assets. While this impairment is effective February 2003, its detailed modalities Modalities The factors and circumstances that cause a patient's symptoms to improve or worsen, including weather, time of day, effects of food, and similar factors. were not completed until the filing of OTE's 2003 Form 20-F on July 15, 2004. All 2003 comparative data provided in this release is consistent with the 2003 Form 20-F. More to follow. |
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