registration document France Telecom 2009 - Orange.com

financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
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CONSOLIDATED STATEMENTS
Orange Austria subgroup (ex-One)
In October 2007, One, which has since been renamed Orange
Austria subgroup, underwent a Leveraged Buy Out (LBO).
France Telecom’s share of the total cash consideration received
was 154 million euros on the transaction date.
At the same time, France Telecom and the Mid Europa Partners
(MEP) investment fund entered into an investment agreement
through which France Telecom invested 108 million euros in
Orange Austria subgroup, giving it an interest of 35% in Orange
Austria subgroup, compared with its 17.45% stake in One
before the LBO.
Other than the shares pledged as collateral, France Telecom
provided no guarantee for any liability, nor entered into any
agreement that would require it to provide fi nancial support to
Orange Austria subgroup in any manner whatsoever.
France Telecom’s ownership interest in Orange Austria subgroup
was 35% at December 31, 2009, 2008 and 2007.
The main fi nancial aggregates for Orange Austria subgroup are as follows:
(in millions of euros) 2009 2008 2007 (1)
Revenues 595 615 164
Net income (32) (82) (73)
Total assets 759 878 895
Non-current fi nancial liabilities 1,250 1,264 1,235
Equity (657) (626) (544)
France Telecom share in equity (230) (219) (190)
(1) 3 months to December 31, 2007.
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Based on the terms of this transaction, France Telecom
deemed that its stake in Orange Austria subgroup is identical
to the stake it previously held in One, plus a cash distribution,
as Orange Austria subgroup is the same company as One, only
more leveraged. Equity recognized on the LBO transaction date
amounted to (471) million euros for 100%, representing One’s
pre-LBO equity less 774 million euros of distributions paid to
One’s historical shareholders (net of the amount reinvested
by France Telecom) plus the 200 million euro investment of
the new shareholder, MEP. Given negative equity and the
absence of commitment, the contribution to the consolidated
fi nancial statements is nil. The distribution, net of France
Telecom’s reinvestment, was fi rst recorded as a reduction of
the carrying amount (10 million euros before the transaction),
and the amount of 36 million euros in excess of this value was
recognized as a gain.
France Telecom will subsequently start to recognize a share
of income in Orange Austria subgroup only when France
Telecom’s share of Orange Austria subgroup’s cumulative
net income equals the gain recognized in the transaction, in
accordance with IAS 28. The share of total net income for the
Orange Austria subgroup that is not included in the consolidated
fi nancial statements of the France Telecom Group amounted
to (66) million euros, including (11) million euros for 2009, (29)
million euros for 2008 and (26) million euros for 2007.
Compagnie Européenne de Téléphonie (CET)
France Telecom Group owns 48.5% of CET alongside
Compagnie du Téléphone (CDT). In September 2009, the
Group acquired 24.99% of CDT, thereby increasing its fi nancial
interest in CET to 61.37%.
This ownership structure and an analysis of the respective rights
of the shareholders indicate that the Group has only signifi cant
infl uence over CET.
The main fi nancial aggregates for CET are as follows:
(in millions of euros) 2009 (1) 2008
Revenues 160 183
Net income (37) (45)
Total assets NC 198
Equity (100) (63)
France Telecom share in equity (62) (31)
(1) The share of CET’s earnings recognized in the consolidated fi nancial statements for the year ended December 31, 2009 was determined based on an estimate of the net income
of CET, whose closing date occurs after France Telecom Group reports its fi nancial results.
2009 REGISTRATION DOCUMENT / FRANCE TELECOM
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