FINANCIAL STATEMENTS - KPN

Fair value hedges
As of December 31, 2012, KPN carried out a sensitivity analysis with regard to interest rate risk on the fair value hedges. KPN applies fair value
hedge accounting on Euro-denominated bonds that are swapped from fixed rate to a floating rate. With all other variables held constant,
KPN calculated the hypothetical impact of changes in interest rates based on various scenarios. The expected impact on the cash flow statement
and the income statement is immaterial, since the hedges are expected to be highly effective. This results in minimal hedge ineffectiveness
and P&L volatility.
Derivatives held at fair value
As of December 31, 2012, KPN carried out a sensitivity analysis with regard to the interest rate swaps for which no hedge accounting is applied.
All changes in interest rates and resulting sensitivities have only profit & loss impact and no cash flow impact.
Impact Profit & loss amounts in millions of EUR Change 2012 2011
Interest rate swaps (2-year floating-fixed)
Changes in EUR interest rates +2%-point 81 71
+1%-point 41 36
-1%-point -35 -34
For a sensitivity analysis on interest rate risk with regard to pensions, reference is made to Note 22.
[30] Business combinations and other changes in consolidation
Significant changes in consolidation 2012
In April 2012, KPN acquired 100% of the shares of Lijbrandt Telecom Holding B.V., Glashart Media B.V., ISP Fabriek and Reggefiber Wholesale
from Reggefiber for EUR 123 million. The acquisitions strengthen KPN’s commitment to a national roll-out of a fibre to the home (“FttH”)
network and allow Reggefiber to focus solely on the roll-out of FttH and to operate an open access passive FttH network.
The following table summarizes the consideration paid for aforementioned entities, the fair value of assets acquired and liabilities assumed
at acquisition date.
Recognised amounts of identifiable assets acquired and liabilities assumed
Tangible fixed assets [11] 73
Customer relationships (included in intangibles) [10] 18
Trade name (included in intangibles) [10] 3
Net tangible non-operating assets 4
Net working capital 2
Deferred tax liabilities [7] -4
Total identifiable net assets 96
Goodwill 23
Consideration paid 119
Net cash and cash equivalents acquired 4
Net cash outflow 123
Reggefiber is a passive operator that implements a national roll-out of a fiber to the home (“FttH”) network. In the past it also started active
operations, in the areas that could not yet be serviced by KPN’s ISPs. Management of KPN indicated that the main reasons for acquiring the
Reggefiber Wholesale were to increase its homes activated base and to expand its service area.
Other changes in consolidation 2012
In September 2012 KPN entered into a strategic partnership with GroupIT B.V. (RoutIT) and acquired a stake of 12.5% with a right to the
remaining stake. The acquisition did not have a significant impact on the financial position, income and cash flows of KPN.
In October 2012, KPN acquired 100% of the shares of FttH service providers Edutel, XMS, KickXL and Concepts ICT from Reggeborgh.
The acquisition did not have a significant impact on the financial position, income and cash flows of KPN.
The purchase price and the allocated fair values of all acquisitions in 2012 have been determined on a provisional basis.
If the acquisitions had occurred on January 1, 2012, KPN’s estimated consolidated revenues would have been approximately EUR 45 million higher.
Profit for the year would have been approximately EUR 5 million lower.
Changes in consolidation 2011
On March 1, 2011 KPN acquired 100% of the Content Network B.V. The acquisition did not have a significant impact on the financial position,
income and cash flows of KPN. No other business combinations occurred in 2011.
KPN | Annual Report 2012 141