registration document France Telecom 2009 - Orange.com

analysis of the financial position and earnings
9
ANALYSIS OF THE GROUP’S FINANCIAL POSITION AND EARNINGS
it so that it could examine the planned merger. The European
Commission was expected to reach a decision, both on the
request and on the approval of the agreement, on March 1, 2010
(see Notes 3 and 11 to the consolidated fi nancial statements).
■ In November 2009, France Telecom and TDC agreed to
start exclusive negotiations on the merger of their Swiss
subsidiaries, Orange and Sunrise. France Telecom is to
control 75% of the combined business, with the remaining
25% to be held by TDC. Should a deal be fi nalized, France
Telecom would make a net payment of 1.5 billion euros to
TDC in 2010.
The combined entity would become Switzerland’s secondranking
national telecommunications operator. With roughly
3.4 million mobile customers as of June 30, 2009 and
1.1 million broadband customers as of December 31, 2008, the
combined entity would hold about 38% of the mobile market as
of June 30, 2009 and 13% of the fi xed broadband market as
of December 31, 2008. As an integrated national operator for
fi xed and mobile services, the combined entity would expand
the product portfolio offered via its network of more than 100
stores, combining the best offers from both companies for the
benefi t of a larger number of customers.
Should a deal be fi nalized, France Telecom would consolidate
the combined entity using the full consolidation method. The
draft operations merger agreement has already been submitted
to the Swiss competition authorities for approval (see Notes 3
and 31 to the consolidated fi nancial statements).
Treasury share buybacks
■ In March 2009, France Telecom purchased 1.2 million treasury
shares within the framework of its 2008 share buyback
program, subsequently delivering 10.3 million shares to
employees as part of its free share award plan in France (see
Notes 21 and 27 to the consolidated fi nancial statements).
■ In December 2009, France Telecom purchased 1 million
treasury shares within the framework of its 2009 share
buyback program. This purchase was carried out as part of
the free share award plan outside France. The shares were
delivered to employees at the start of 2010 (see Notes 21 and
27 to the consolidated fi nancial statements).
Dividends
■ At the May 26, 2009 Annual Shareholders’ Meeting,
France Telecom decided on the payment of a dividend of
1.40 euros per share in respect of 2008. After taking into
account the interim dividend of 0.60 euros per share paid on
September 11, 2008, for a total of 1,563 million euros, the
payment made on June 30, 2009 worked out at 0.80 euro
per share, representing a total of 2,091 million euros. The
payment gave rise to a cash out of 1,553 million euros
and payment in shares for a total of 538 million euros, as
shareholders were able to opt to receive 50% of the balance
of the dividend, or 0.40 euro per share, in shares (see Note
21 to the consolidated fi nancial statements).
■ On July 29, 2009, France Telecom’s Board of Directors
decided to pay an interim dividend of 0.60 euros per share in
respect of 2009. Payment was made on September 2, 2009,
and represented a total of 1,588 million euros (see Note 21 to
the consolidated fi nancial statements).
Human resources
■ In November 2009, France Telecom signed an agreement
concerning the employment of older personnel in France. The
agreement, signed for a three-year period from 2010 to 2012,
will apply to all personnel, regardless of their status, in all the
French subsidiaries of which France Telecom S.A. holds at
least 50% of share capital, directly or indirectly. It provides
for specifi c activities to promote continued employment and
access to employment for older personnel, to make use of
their experience and transfer knowledge, and to provide preretirement
support and arrangements. Management and
the Group’s social partners have chosen to focus on the six
areas for action outlined in French law, for which quantifi ed
objectives have been set for the main measures: i) anticipation
of change in professional careers, ii) development of skills
and qualifi cations and access to training, iii) pre-retirement
arrangements and transition from work to retirement, iv)
implementation of a “Part-Time Seniors” plan for employees
close to retirement age (PTS, see Notes 5, 24 and 31 to the
consolidated fi nancial statements), v) transfer of knowledge
and skills and development of mentoring, and vi) other
specifi c measures in favor of older personnel. The agreement
came into force on January 1, 2010.
■ In 2009, the France Telecom Group experienced a major
social crisis in France.The Group’s Management launched a
program to build a new social contract along three lines :
■ negotiations with social partners on six main themes:
i) prospects, employment and skills, professional
development, training and mobility, ii) balance between work
and private life, iii) more effective staff representative bodies
(IRPs), iv) work organization, v) working conditions, and
vi) application of the national inter-professional agreement
on stress;
■ an assessment of working conditions via a survey conducted
by audit fi rm Technologia, to which 80,000 employees
responded; and
■ the process for rebuilding, which led to meetings in which
the teams could debate issues as a group.
These provisions were supplemented by dialogue and
counseling measures: creation of a 24/7 talk line and
strengthening of talk centers aimed at helping people who
are experiencing problems.
The purpose of the new social contract is to focus the
organization on people. It marks a step forward for employees,
will enable the Group to serve its customers better, and will
be benefi cial to all France Telecom’s stakeholders.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM
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