Additional Information & Selected Notes
Selected Explanatory Notes to the Consolidated Interim Financial Statements (unaudited)
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 Telekom Austria Group's annual consolidated financial statements according to IFRS for the year ended December 31, 2008. The consolidated results for the interim periods are not necessarily indicative of results for the full year.
No major related party transactions, commitments and guarantees occurred since December 31, 2008.
The preparation of the interim financial statements in conformity with IFRS requires the Telekom Austria Group 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 Telekom Austria Group 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, 2008 except for IFRIC 12- Service Concession Arrangements, IFRIC 13 - Customer Loyalty Programmes, IFRIC 15 - Agreements for the Construction of Real Estate, IFRIC 16 - Hedges of a Net Investment in a Foreign Operation and IAS 32 and IAS 1 - Puttable Financial instruments and Obligations arising on Liquidation, which became effective during 2008 and as of January 1, 2009.
The Telekom Austria Group has adopted these Standards/Interpretations as of January 1, 2009. IFRIC 13 addresses the accounting of customer loyalty programs that are operated either by the manufacturer or service provider or by a third party. The award credit granted is accounted for as a separate component of the sales transaction and recognized as deferred revenue until it is either redeemed by the customer or forfeited. The adoption of IFRIC 13 led to a reclassification of approximately EUR 20.9 million from provisions and accrued liabilities to deferred income. Comparative figures were adjusted accordingly. The effect on net income was immaterial. The effects of the other new Standards/Interpretations, if any, on the consolidated financial statements were insignificant.
Compared to other economic sectors the telecommunications industry is in general less cyclical. Within the telecommunication sector the seasonality of the Telekom Austria Group’s Fixed Net and Mobile Communication 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 Communication 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.