registration document France Telecom 2009 - Orange.com

financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
20
CONSOLIDATED STATEMENTS
At December 31, 2007
France (fixed-line
and mobile)
United Kingdom
(mobile)
Poland (fixed-line
and mobile) Spain (mobile) Enterprise
Basis of recoverable amount Fair value Fair value Value in use Value in use Value in use
Source used Five-year plan Plans Five-year plans Five -year plans Five -year plans
Discounted
cash fl ow
EBITDA
multiples
Discounted
cash fl ow
Discounted
cash fl ow
Discounted
cash fl ow
Growth rate to perpetuity 0.0% (f) 1.0% (m) n/a 0.0% (f) 3.0% (m) 2.0% 0.0%
Post-tax discount rate 7.7% n/a 11.0% 8.25% 8.5%
Pre-tax discount rate n/a n/a 13.1% to 13.5% 10.7% 14.0%
In accordance with IAS 36, the basis used for impairment testing
(fair value or value in use) may vary from one period to another;
the recoverable amount is the higher of estimated value in use
and fair value.
8.4 Sensitivity of recoverable
amounts
At the end of 2009, the analysis of recoverable amounts for
the main entities led to appreciate their sensitivity to the main
assumptions:
■ in France, Romania and Enterprise, the Group considered
it improbable that there would be a change in valuation
parameters that would bring the recoverable amount into line
with their book value;
■ in Poland, for which an impairment was booked in 2009, any
decline in estimated value in use would be liable to result in
an additional impairment for the France Telecom’s share in
TP. A change of plus or minus 0.50% in the post-tax discount
rate would increase or decrease the recoverable amount by
200 to 250 million euros for the France Telecom’s share in TP.
Likewise, a change of plus or minus 0.50% in the perpetual
growth rate would increase or decrease the recoverable
amount by 100 to 200 million euros for the France Telecom’s
share in TP. Lastly, a 10% increase or decrease in cash fl ows
after the fi fth year would increase or decrease the recoverable
amount by 200 to 300 million euros for the France Telecom’s
share in TP;
■ in Spain, value in use is close to the book value and any future
performance that would fall slightly short of that used to
determine value in use, for example due to a persistently poor
outlook for the economic environment in Spain, would be liable
to result in an impairment. A change of plus or minus 0.50%
in the post-tax discount rate would increase or decrease the
recoverable amount by 500 to 700 million euros. Likewise, a
change of plus or minus 0.50% in the perpetual growth rate
would increase or decrease the recoverable amount by 400
to 600 million euros. Lastly, a 10% increase or decrease in
cash fl ows after the fi fth year would increase or decrease the
recoverable amount by approximately 600 million euros.
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8.5 Impairment, net of reversals
December 31, 2009 December 31, 2008 December 31, 2007
(in millions
of euros)
Goodwill
Assets
with a
finite
useful life
Assets
with an
indefinite
useful life
Goodwill
Assets
with a
finite
useful life
Assets
with an
indefinite
useful life
Goodwill
Assets
with a
finite
useful life
Assets
with an
indefinite
useful life
Poland (400) (8) - - 31 - - 1 -
Spain (2) - (140) (2) - - (1) -
Ivory Coast - (42) - - - - -
Other (49) (59) - (88) (38) - (26) (77) (30)
TOTAL (449) (69) - (270) (9) - (26) (77) (30)
At December 31, 2009,
In Poland, the 400 million euros charge for France Telecom’s
share in TP refl ects the effects of regulatory pressure and
increasing competition on projected cash fl ows.
At December 31, 2008,
In Spain, the 140 million euro impairment charge of the fi xedline
market refl ects a material decline in the market valuation
of revenues per broadband subscriber based on comparable
transactions.
2009 REGISTRATION DOCUMENT / FRANCE TELECOM
395