Notes to the consolidated financial statements - Swisscom

In February 2000, Unisource sold its 100% interest in D-Plus Telecommunications GmbH to
MobilCom, a public company in Germany, for CHF 41 million in cash and 3 million shares
of MobilCom which were subsequently sold. The total gain that Swisscom recognized on
these transactions was CHF 197 million. In addition, Unisource sold its investment in Arcor
in 2000 and Swisscom recorded a gain of CHF 31 million.
Year ended December 31, 2001
Additions
In 2001, total additions to investments in affiliated companies of CHF 124 million comprises
primarily a capital increase and the conversion of a loan into equity at AUCS.
Equity in net result of operations
Equity in net result of operations in 2001 comprises primarily the gain on AUCS (see below)
and Swisscom’s share of net income from Cesky Telekom offset by Swisscom’s share
of losses incurred by UTA. See Note 13.
In 1999 Unisource and its shareholders’ entered into an agreement in which they effectively
sold much of the operations of the AUCS business to Infonet, who are managing the
AUCS business for a three-year period ending October 2002. Under the terms of various
agreements, Unisource is required to provide certain services to Infonet during this threeyear
period. Unisource and its shareholders’ entered into an agreement with Infonet,
whereby they will settle any losses incurred by AUCS during that three-year period, and
will pay a bonus to Infonet, if the AUCS losses remain under an agreed limit. Swisscom’s
share of the minimum loss is CHF 157 million. Swisscom’s share of the consideration for
this transaction was the purchase from Infonet of 15.9 million of its Class B shares shortly
before its initial public offering at a price below fair value. Based on the offering price,
these shares of Infonet were worth CHF 530 million and Swisscom paid CHF 21 million.
Swisscom’s share of the potential gain on this transaction of CHF 352 million, representing
the gain on the shares purchased of CHF 509 million less the minimum future losses of
AUCS of CHF 157 million that have been guaranteed, is being amortized into income over
the three-year period. Swisscom’s investment in Infonet is included within other financial
assets. See Note 26.
Swisscom is jointly and severally liable with its other partners, Telia and Royal KPN, for all
remaining costs in winding down the AUCS business. These costs will consist primarily of
severance payments, lease terminations and settling tax liabilities, and are not expected
to exceed the accrual that has been recorded.
Impairment
In 2000, Swisscom acquired shares in three subsidiaries of tamedia AG. These three companies
provide platforms for auctioning and classified personal ads. In connection with
this transaction, Swisscom recognized goodwill of CHF 79 million. At the end of March
2001, two of the internet platforms ceased operations. As a result Swisscom recognized
an impairment to the goodwill relating to these two companies of CHF 30 million.
Selected aggregated key data
The following schedule provides selected aggregated key data of Swisscom’s proportionate
interest in joint ventures including AUCS, TelSource, Swisscom Directories (for the nine
months to September 30, 2000), PubliDirect and UTA. Other equity investments are insignificant.
41 Swisscom Consolidated financial statements