The consolidated interim financial statements, in the opinion of management, include all adjustments necessary for a fair presentation in accordance with International Financial Reporting Standards (IFRS).
These financial results in accordance with IAS 34 “Interim Financial Reporting” are unaudited and should be read in connection with the Company's annual consolidated financial statements according to IFRS for the year ended December 31, 2006. The consolidated results for the interim periods are not necessarily indicative of results for the full year.
No major related party transactions, commitments, contingencies and guarantees occurred since December 31, 2006.
The preparation of the interim financial statements in conformity with IFRS requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
The Company has applied the same accounting policies and methods of computation in the interim financial statements as in the annual financial statements as of and for the year ended December 31, 2006 except for the following:
During 2006, IFRIC 7 “Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflation Economies”, IFRIC 8 “Scope of IFRS 2”, IFRIC 9 “Reassessment of Embedded Derivatives”and IFRIC 10 “Interim Financial Reporting and Impairment”, were issued and became effective for annual periods beginning on or after various dates in 2006. The Company has adopted these standards as of January 1, 2007. The effects, if any, on its consolidated financial statements were insignificant.
Compared to other economic sectors the telecommunications industry is in general little cyclical. Within the telecommunication sector the seasonality of the Company’s Fixed Net and Mobile Communications segment shows the same pattern as other European incumbents, having lower margins in the year-end quarter due to Christmas promotions, equipment provided to customers and increases in sales commissions. However, in the Mobile Communications segment customer and visitor roaming revenues are above average in the third quarter due to the summer vacation season. In Austria visitor roaming is also above average in the first quarter due to winter sports tourism.