Ote Ads Regulatory News (OTES)

27 Feb 2006 12:01

Hellenic Telecomms Organization S A27 February 2006 OTE GROUP REPORTS 2005 FOURTH QUARTER AND FULL YEAR RESULTS UNDER US G.A.A.P.(UNAUDITED) • Q4 operating revenues up 9% o resilient Greek and Romanian Fixed-Line operations o strong growth in Mobile, particularly international • Operating expenses stabilizing in quarter • Voluntary Retirement Plan on track • Highlights of three-year Business Plan presented today ATHENS, Greece - February 27, 2006 - Hellenic Telecommunications Organization SA(ASE: HTO, NYSE: OTE), the Greek full-service telecommunications provider, todayannounced consolidated unaudited results (prepared under US GAAP) for thequarter and full year ended December 31, 2005. CONSOLIDATED FINANCIAL HIGHLIGHTS FOR THE THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2005 AND 2004 IN ACCORDANCE WITH U.S. GAAP • million except per Q4 05 Q4 04 % 12M 05 12M 04 %share data Change ChangeOperating Revenues 1,398.6 1,286.7 8.7% 5,471.0 5,184.0 5.5%Operating Income 173.6 84.7 105.0% 2.6 637.9 -99.6%Pre-tax Income 149.0 81.1 83.7% (20.4) 525.8 N/ANet Income 37.1 58.9 -37.0% (294.1) 171.3 N/AOperating IncomebeforeDepreciation & 449.9 340.0 32.3% 1,056.0 1,661.0 -36.4%Amortization*Pro Forma Operatingincomebefore depreciation 451.5 340.0 32.8% 1,995.6 1,689.9 18.1%andamortization **Operating IncomebeforeDepreciation & 32.2% 26.4% 5.8 pp 19.3% 32.0% -12.7 ppAmortizationas % of OperatingRevenues*Pro Forma Operatingincomebefore depreciationand 32.3% 26.4% 5.9 pp 36.5% 32.6% 3.9 ppamortization as % ofOperating revenues **Basic EPS (•) 0.0757 0.1202 -37.0% (0.6000) 0.3495 N/ACashflowfrom Operations 481.2 320.3 50.2% 1,534.6 1,380.9 11.1%CAPEX as % of 19.7% 15.4% 4.3 pp 12.4% 16.3% -3.9 ppRevenues* See notes on p. 13 ** excluding impact of OTE SA Voluntary Retirement Plans in2004 and 2005 Commenting on the quarter, Mr. Panagis Vourloumis, Chairman and CEO, noted:"As we present our business plan for the coming three years, I am pleased toreport that the initiatives we have taken in 2005 - which also underpin ourplans for the future - are beginning to bear fruit. In Greek fixed-line, effortsaimed at preserving revenues together with a major push on ADSL are bolsteringour top line, while our cost base is beginning to show the impact of headcountreductions, which will really start kicking in towards the end of this year.In mobile, the new sources of growth we have transferred to Cosmote aredelivering the expected results. In Romania, management's disciplined approachenables RomTelecom to continue to post higher margins despite greater pressureon revenues." Mr. Vourloumis added, "We are ready for another year of hard workin 2006, but we are confident that we are progressing along the right path." Financial Highlights Operating revenues OTE Group Operating Revenues increased by 8.7% in the three months endedDecember 31, 2005. All major segments contributed to the increase, with aparticularly strong performance from international telephony. • million Q4 05 Q4 04 % 12M 05 12M 04 % Change ChangeDomestic Telephony 589.5 559.4 5.4% 2,308.1 2,262.9 2.0%International 94.0 77.9 20.7% 391.0 376.6 3.8%TelephonyMobile Telephonyservices 449.7 392.2 14.7% 1,756.7 1,555.4 12.9%Other 265.4 257.2 3.2% 1,015.2 989.1 2.6% Total 1,398.6 1,286.7 8.7% 5,471.0 5,184.0 5.5% Operating expenses Voluntary Retirement Plan OTE is currently implementing an ambitious reorganization of its core fixed-lineactivities in Greece, which like all other incumbents, need to adapt to a newcompetitive and technological environment. As part of this process, OTE isattempting to dramatically reduce its cost base, notably by bringing itsheadcount to levels that are better aligned to its current and expected revenuestreams. In the fourth quarter of 2005, OTE took an additional charge of • 1.6 millionfor Voluntary Retirement costs, bringing the total for full year 2005 to • 939.6million. Payroll and Employee Benefits Payroll and Employee Benefits increased by 9.2% to • 335.4 million in the fourthquarter of 2005, compared to the fourth quarter of 2004. In the quarter, payrolland employee benefits include a • 23.6 million charge for voluntary retirementat RomTelecom. Payments to International and Domestic Operators Payments to International Operators decreased by 41.9% to • 34.4 million.Payments to domestic telephony operators (Mobile and Fixed-line Operators)increased by 19% to • 178.8 million. Other Operating Expenses Other Operating Expenses decreased by 7.3% to • 398.5 million. The decrease islargely attributable to the Greek Fixed Line. An analysis of Group Other Operating expenses follows: • million Q4 05 Q4 04 % 12M 05 12M 04 % Change ChangeCommission to dealers 47.9 36.9 29.8% 166.9 137.2 21.6%Cost of equipment 49.9 60.7 -17.8% 149.6 143.4 4.3%Repairs, maintenance, costof telecom materials 58.9 49.3 19.5% 203.6 254.8 -20.1%Provision for doubtfulaccounts 29.7 53.5 -44.5% 110.4 137.6 -19.8%Advertising 47.9 45.2 6.0% 133.3 142.0 -6.1%Taxes other than incometaxes 4.4 16.4 -73.2% 30.1 41.5 -27.5%Other 159.7 168.0 -4.9% 541.8 577.2 -6.1%-Third party fees 47.5 42.2 12.6% 155.9 155.1 0.5%-Travel costs 7.0 4.6 52.2% 17.0 15.4 10.4%-Audiotex 4.4 11.7 -62.4% 21.7 60.5 -64.1%-Telecards 6.4 15.2 -57.9% 31.1 37.8 -17.7%-Misc. 94.5 94.3 0.1% 316.1 308.4 2.5%TOTAL 398.5 430.0 -7.3% 1,335.7 1,433.7 -6.8% Operating income before depreciation and amortizationIn the fourth quarter of 2005, OTE reported consolidated Operating Income beforedepreciation and amortization of • 449.9 million, an increase of 32.3% from theprior year's quarter. The underlying increase in margin stands at 5.8 pp. Other income / (expense)In the quarter, OTE recorded Net Other Expense of • 24.6 million, as compared toNet Other Expense of • 3.6 million in the comparable period of 2004. Thedifference primarily reflects lower foreign exchange gains. Net income /(Loss)In the quarter OTE posted Net Income of • 37.1 million, a decrease of 37.0%compared to the fourth quarter of 2004. The decrease is chiefly due to a taxcredit posted in the prior year's quarter. Cash flowCash provided by operating activities amounted to • 481.2 million for the threemonths ended December 31, 2005. CONDENSED CASH FLOW• million Q1 05 Q2 05 H105 Q3 05 9M05 Q405 12M05Cash and Cashequivalents 870.3 959.5 870.3 985.8 870.3 1,267.2 870.3atbeginning ofperiodNet Cashprovided by 318.0 373.3 691.3 362.1 1,053.4 481.2 1,534.6OperatingActivitiesNet Cash usedin InvestingActivities (139.3) (327.7) (467.0) (151.9) (618.9) (260.4) (879.3)Net Cashprovided by(used in) (89.5) (19.3) (108.8) 71.2 (37.6) 24.2 (13.4)FinancingActivitiesNetIncrease/(Decr 89.2 26.3 115.5 281.4 396.9 245.0 641.9ease) in Cashand CashEquivalentsCash and CashEquivalents 959.5 985.8 985.8 1,267.2 1,267.2 1,512.2 1,512.2at end ofperiod Capital Expenditure Capital expenditure in the fourth quarter of 2005 totaled • 275.1 million. Debt On December 31, 2005, OTE Group gross debt amounted to • 3,447.7 million, up8.4% compared to December 31, 2004. The total amount of OTE debt outstandingbreaks down as follows: • million Dec 31 2005 Dec 31 2004 % ChangeShort-Term:-Bank loans 14.3 37.3 -61.7%Medium & Long-term:-Bonds 2,604.6 2,591.3 0.5%-Bank loans 795.3 517.8 53.6%-Other loans 33.5 34.2 -2.0%Total Indebtedness 3,447.7 3,180.6 8.4% Business Overview OTE's segment reporting is based on its legal structure. A reconciliation ofintersegment revenues to total revenues is provided below: SEGMENT FINANCIALS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2005• million OTE* COSMOTE RomTelecom All Other Total Adjustments & Eliminations ConsolidatedRevenuesfromexternal 2,502.0 1,618.7 917.1 433.2 5,471.0 - 5,471.0customersIntersegmentrevenues 211.7 178.9 8.6 66.6 465.8 (465.8)Total 2,713.7 1,797.6 925.7 499.8 5,936.8 (465.8) 5,471.0revenues* OTE comprises the OTE parent company and OTE Estate. 1. OTE Fixed-Line TRAFFIC STATISTICS FOR THE FOURTH QUARTER OF 2005Call Service Category Calls, millions Average Call Duration (minutes) Minutes, millions Split of minutesLocal 1,140.2 2.7 3,079.3 44.9%National Long- Distance 152.0 3.1 469.2 6.8%InternationalLong -Distance 22.0 3.7 80.4 1.2%Internet 329.0 1.3 2,745.6 6.4%Fixed-to-Mobile 116.8 23.5 437.6 40.0%Special Calls 82.5 0.6 53.1 0.8%Total 1,842.4 3.7 6,865.2 100.0% OTE estimates that its share of the Greek fixed-line market, as measured inoutgoing voice call minutes (excluding internet), was approximately 73% inDecember 2005, a drop of roughly two percentage points compared to a yearearlier. • million Q4 05 Q4 04 % 12M 05 12M 04 % Change ChangeOperating Revenues 688.0 675.2 1.9% 2,713.7 2,753.3 -1.4%- Basic Monthly Rentals 166.6 159.4 4.5% 669.8 631.6 6.0%- Fixed to fixed calls 128.5 134.9 -4.7% 511.0 554.9 -7.9%- Fixed to mobile calls 98.3 85.1 15.5% 367.4 383.9 -4.3%- International 49.4 41.6 18.8% 216.0 217.2 -0.6%- Other 245.2 254.2 -3.5% 949.5 965.7 -1.7%Operating Profit / (Loss) 21.7 (24.3) N/A (776.2) 31.5 N/AOperating income / (Loss)before depreciation andamortization 164.4 90.7 81.3% (217.3) 601.8 N/APro Forma Operatingincomebefore depreciation and 166.0 90.7 83.0% 722.3 630.7 14.5%amortization *Operating income beforedepreciation andamortization 23.9% 13.4% 10.5 pp -8.0% 21.9% N/Aas % of OperatingRevenuesPro Forma Operatingincomebefore depreciation andamortization as % of 24.1% 13.4% 10.7% 26.6% 22.9% 3.7 ppOperatingRevenues *Depreciation & 142.7 115.0 24.1% 558.9 570.3 -2.0%Amortization* excluding impact of OTE SA Voluntary Retirement Plans in 2004 and 2005 In the fourth quarter of 2005, fixed-line revenues totaled • 688.0 million,increasing by 1.9% compared to last year's fourth quarter, reflecting increasesin international telephony, monthly rental and fixed to mobile calls. Revenuesfrom basic monthly rentals rose 4.5% in the quarter, reflecting the tariffincreases implemented in January and August of this year. OTE continued the promotion of its sales and marketing programs in the quarter,resulting in higher penetration and usage of its pricing packages, andcontributing to the relative stability in its market share. OTE also continuedto implement the restructuring and renovation of its retail shop network, andopened new third-party distribution channels, notably for its ADSL products andservices. As of the end of December 2005, OTE had over 154,000 ADSL customers, as comparedto approximately 44,000 at the beginning of the year, while the total marketamounted to approximately 161,000 customers. Total Operating Expenses, excluding depreciation, amounted to • 523.6 million inthe fourth quarter of 2005, as compared to • 584.5 million in the comparable2004 period. The 10.4% drop reflects reductions in payments to internationaloperators, reductions in provisions compared to 2004 fourth quarter which hadbeen impacted by provisions related to alternative carriers receivables, as wellas reduced cost of equipment, advertising and Audiotex. Payroll and employeebenefits were virtually unchanged from the same quarter in 2004. Other Operating Expenses were adversely affected by a • 27.8 million provisioncharged to "Other/other" expenses, related to stamp taxes and penalties from thetax authorities, for the period 1982 to 1992. The tax authorities had lodged anappeal with the Administrative court of Appeal and won the litigation inDecember 2005. Excluding this charge, "Other/other" expenses would have beendown by over 40%. An analysis of the OTE segment Other Operating Expenses follows: • million Q4 05 Q4 04 % 12M 05 12M 04 % Change ChangeCost of equipment 28.4 42.1 -32.5% 99.4 109.1 -8.9%Repairs, maintenance, Costof telecom materials 32.5 23.6 37.7% 107.4 126.2 -14.9%Provision for doubtfulaccounts 27.0 50.0 -46.0% 91.0 120.0 -24.2%Advertising 9.9 15.5 -36.1% 38.4 38.3 0.3%Taxes other than incometaxes 3.9 10.2 -61.8% 17.0 24.3 -30.0%Other 103.2 111.7 -7.6% 311.2 359.9 -13.5%-Third party fees 30.0 30.4 -1.3% 113.0 120.1 -5.9%-Travel costs 2.0 2.4 -16.7% 7.2 9.6 -25.0%-Audiotex 2.3 8.3 -72.3% 14.6 51.4 -71.6%-Telecards 0.9 0.9 0.0% 8.0 8.4 -4.8%-Other 68.0 69.7 -2.4% 168.4 170.4 -1.2% TOTAL 204.9 253.1 -19.0% 664.4 777.8 -14.6% In the twelve months ended December 31, 2005, Net Working Capital for theDomestic Fixed-line business (including bad debt, excluding intra-grouptransactions and cash) continued to decline as a percentage of revenue comparedto the same period of 2004, standing at 15% versus 18% last year (under IFRS).These historically low Net Working Capital levels confirm the sustainableimprovements that the Domestic Fixed-line business has achieved on most leversaffecting Net Working Capital, including receivables and payables management,inventory utilization and billing efficiency. Days Sales Outstanding (includingVAT) have stabilized below 100 days, standing currently at 84 days (decliningboth on a year-on-year as well as on a quarter-on-quarter basis), Days PayablesOutstanding have increased by twelve days since last year to 132. With thecontinuing institutionalization of the credit and collections framework in OTE,the positive trends in terms of Net Working Capital are expected to continue. • Million 12M 05 12M 04Net Accounts Receivable 691 803Net Working Capital 376 462NWC/Sales (%) 15% 18%DSO (incl. VAT) 84 97DPO (incl. VAT) 132 120 2. Cosmote SUMMARY CONSOLIDATED RESULTS FOR THE PERIOD 1.1.2005 - 31.12.2005 IN ACCORDANCE WITH IFRS (UNAUDITED) COSMOTE Greece AMC GLOBUL COSMOFON COSMOTE Romania COSMOTE GROUP • million 12 months 12 months since 8/1 since 8/12 since 7/7 12M 2005 12M 2004 % ChangeRevenues 1,517.5 137.6 130.0 17.7 5.1 1,797.6 1,587.8 13.20%OperatingIncomebeforeDepreciation 639.3 82.6 45.5 1.2 (13.8) 754.5 675.1 11.80%&amortizationOperatingIncomebeforeDepreciation&Amortizationas % of 42.1% 60.0% 35.0% 6.6% N/A 42.0% 42.5% -0.5ppOperatingRevenuesNet Income 315.6 41.5 14.9 (3.6) (21.0) 339.9 309.1 10.00%Net Incomemargin 20.8% 30.1% 11.4% N/A N/A 18.9% 19.5% -0.6pp SUMMARY CONSOLIDATED RESULTS FOR THE PERIOD 1.10.2005 - 31.12.2005 IN ACCORDANCE WITH IFRS (AUDITED) • million COSMOTE Greece AMC GLOBUL COSMOFON COSMOTE Romania COSMOTE GROUP Q4 2005 Q4 2004 % ChangeRevenues 378.9 35.4 76.3 11.6 3.5 505.3 385.5 31.1%OperatingIncomebeforeDepreciation 148.7 20.9 22.9 (0.2) (12.3) 184.8 160 15.5%&amortizationOperatingIncomebeforeDepreciation&Amortizationas % of 39.2% 59.0% 30.1% N/A N/A 36.6% 41.5% -4.9 ppOperatingRevenuesNet Income 77.8 9.2 4.5 (2.6) (9.8) 84.7 74.9 13.10%Net Incomemargin 20.5% 26.1% 6.0% N/A N/A 16.8% 19.4% -2.6 pp Cosmote operates in five countries of Southeastern Europe: Greece (Cosmote),Albania (AMC), Bulgaria (GloBul), FYROM (CosmoFon) and Romania (CosmoteRomania-formerly Cosmorom). GloBul and CosmoFon have been transferred from OTEto Cosmote during August 2005. Additionally, on July 7, 2005, through a €120million capital contribution, Cosmote aquired a 70% equity stake in Cosmorom,the mobile telephony subsidiary of RomTelecom. Cosmote started consolidating theoperations of GloBul in Bulgaria (starting August 1, 2005), CosmoFon in FYROM(starting August 12, 2005) and Cosmote Romania (starting July 7, 2005), inaddition to those in Albania and Greece. Cosmote consolidated operating revenues for the fourth quarter of 2005 increasedby 31.1% to €505.3 million from • 385.5 million in last year's fourth quarter.Turnover growth was driven by the consolidation of GloBul and CosmoFon and a 10%turnover growth in Greece, resulting from higher voice usage and stability inSMS revenue. AMC generated strong growth with high profitability margins, as lowpenetration levels lead to increasing subscriber growth. GLOBUL, still in anexpansion phase, generated quarterly growth of 44.6%. The entry of a thirdoperator in the market has introduced new dynamics, leading to fasterpenetration growth in recent months. CosmoFon in FYROM, at an early developmentphase, returned positive Operating Income before Depreciation and Amortizationafter just over two and a half years of operation and is set for furtherimprovements. Finally, COSMOTE Romania launched its operations in December asplanned, and initial data support management optimism about the prospects inthis market. Cosmote consolidated Operating Income before Depreciation and Amortizationincreased by 15.5% million to • 184.8 million in the fourth quarter of 2005,compared to the fourth quarter of 2004, with Operating Income beforeDepreciation and Amortization margin reaching 36.6%. As a result of the growthof international assets, Operating Income before Depreciation and Amortizationof these operations accounts for approximately 17.4% of the Cosmote consolidatedtotal on a quarterly basis, despite Cosmote Romania's negative contribution. Net Cosmote consolidated income for the three months ended December 31, 2005reached • 84.7 million, up 13.1% from net income of • 74.9 million in lastyear's fourth quarter. Cosmote in Greece maintained its market leading position while at the same timemanaging a considerable increase in traffic volume both on an annual and on aquarterly basis. Revenues in Greece during the fourth quarter reached • 378.9 million, posting ayear-on-year increase of 6.9%. The growth in Greek core service revenues(monthly fees, airtime, SMS & data, roaming revenue) continues, up by 4% in thetwelve months and 10% in the fourth quarter, demonstrating the significantimpact of higher traffic. As in previous quarters, bundled packages continue tobe the most attractive market proposition, reflected in the 30% increase inmonthly fees during 2005. The October 2004 interconnection rate cut has led to areduction of F2M interconnection revenues (-14% year-on-year), which now accountfor less than 10% of Greek revenues. Mobile-to-mobile usage however hasdemonstrated positive elasticity as M2M interconnection revenues grew by 3.6%y-o-y, enabling Cosmote to more than recover the impact of lower rates. For thequarter, Operating Income before Depreciation and Amortization margin of Cosmotein Greece reached 42.1%. Traffic volumes in Greece during the twelve months ended December 31, 2005increased by 15% year on year as a result of higher usage, new subscribers andthe sustained positive momentum in the take up of bundled packages. Cosmote iscontinuously introducing commercial offerings, aiming at leading usage to higherlevels mostly by enhancing its own customer-generated traffic, e.g. by promotinghigher bundles to customers and on-net traffic, e.g. by offering attractivefamily packages. Data revenues (which include SMS, MMS, i-mode(R) and other "soft data" revenuesfrom Value Added Services) represent 11% of total domestic telecommunicationrevenues. During 2005 Cosmote introduced i-mode over 3G, supported by its 3Gnetwork, the widest in Greece. Cosmote is scheduling new data offeringsgradually, in response to market and subscriber demand, as new services andhandsets become available. At the end of 2005 Cosmote had signed 391 roaming agreements in 182 countries.In addition, the Company has signed 85 GPRS roaming agreements in 45 countries. During the fourth quarter of 2005 Cosmote added 14,323 net new contractcustomers and 132,647 net new prepaid customers in Greece bringing the totalnumber of customers at the end of 2005 to 4.6 million, 11.8% higher than a yearago, while it held an estimated market share of approximately 37.3% reaffirmingits leading position in the Greek mobile market. The total contract customers atthe end of September 2005 reached 1,721,590, while prepaid customers during thesame period amounted to 2,919,850. Blended AMOU during the twelve month period up to December 2005 increased by 5%year on year, to 138 min. This is driven by the continuous growth in contractAMOU that at the end of the nine months was 22 minutes higher, an 8.2% increasecompared to a year ago. Additionally, pre-paid AMOU increased by 11% annuallydriven by positive price elasticity. Voice usage still represents the key growthdriver in the Greek mobile market, as AMOU continues to converge with theEuropean average. Cosmote blended ARPU for the year was • 29.7, or 5.1% lower compared to a yearago, reflecting the interconnection rates cuts and lower SMS revenues. In Albania, 2005 has been one more impressive year for AMC, which continued toimprove its performance at all levels. AMC maintained its market leadingposition, and continued to drive usage and subscriber numbers to higher levels.Operating Income before Depreciation and Amortization margin increased during2005 to over 60%. During the twelve months ended in December, AMC contributedapproximately 8% to consolidated revenues and 11% to Cosmote consolidatedOperating Income before Depreciation and Amortization. During the fourth quarter of 2005 AMC added 19,401 net new customers, bringingthe total number of customers at the end of 2005 to 781,496 (mostly prepaid),22.4% higher than a year ago, while it held an estimated market share ofapproximately 51%. AMC's blended AMOU during the twelve months to December 2005 was 67 minuteswhile blended ARPU for the same period stood at • 17. Cosmote started consolidating the operations of GloBul in Bulgaria (startingAugust 1, 2005), CosmoFon in FYROM (starting August 12, 2005) and CosmoteRomania - former Cosmorom (starting July 7, 2005), in addition to those inAlbania and Greece. Key financial figures of the fourth quarter and twelve months 2005 results ofGloBul and CosmoFon are presented in Exhibit VI. 3. RomTelecom OTE, through its wholly owned subsidiary OTE International Investments Ltd,holds a 54.01% interest in RomTelecom S.A., the incumbent telecommunicationsoperator in Romania. RomTelecom's key financial figures are stated below: ROMTELECOM CONSOLIDATED STATEMENTS OF OPERATIONS FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2005 AND 2004 IN ACCORDANCE WITH U.S. GAAP (UNAUDITED) • Millions Q4 05 Q4 04 % Change 12M 05 12M 04 % ChangeOperating Revenues 235.0 220.7 6.5% 925.7 839.0 10.3%Operating IncomebeforeDepreciation & 71.4 72.9 -2.1% 340.7 283.4 20.2%amortizationOperating IncomebeforeDepreciation &Amortization as % 30.4% 33.0% -2.6 pp 36.8% 33.8% 3.0 ppofOperating RevenuesOperating Income 0.1 1.8 -94.4% 132.4 98.7 34.1%Net Income/(Loss) 25.0 156.6 -84.0% 237.9 212.6 11.9%Net Income/(Loss)Margin 10.6% 71.0% -60.4 pp 25.7% 25.3% 0.4 ppIncrease/(Decrease) in 25.3 68.9 -63.3% 92.0 139.4 -34.0%Gross PP&EFixed Telephony, 3,957,870 4,337,823 -8.8%Lines 31.12.05 31.12.04Cash and cashequivalents 157.5 99.2 58.8%Short-term 0.0 29.3 N/AborrowingsLong-term debt 148.4 175.6 -15.5%Net Financial Debt (9.1) 105.7 N/A In the fourth quarter of 2005, RomTelecom posted revenues of €235.0 million, up6.5% from revenues of €220.7 million in the same period last year. The increaseis primarily due to positive evolution of rental, interconnection and dataservices revenues. Revenues from monthly rental fees increased by 20.6% as a result of the tariffrebalancing that took place in February 2005. Wholesale revenues rose by 5.6% inthe fourth quarter of 2005 due to a 38% increase in wholesale traffic, a naturalconsequence of the upward trend characterizing the Romanian telecommunicationsmarket. Retail traffic decreased during the quarter, in comparison to the fourth quarterof 2004, due to mobile substitution and higher competition from fixed-linealternative carriers. Conversely, tariff rebalancing resulted in a 9% increasein international traffic and a 3% increase in fix-to-mobile traffic for PSTNresidential customers. Operating income before depreciation and amortization as a percentage ofrevenues for Q4 2005 was down slightly compared to the same period 2004. The2005 fourth quarter total operating expenses before amortization anddepreciation increased (8%) as compared to the corresponding figures in 2004.Personnel expenses increased by 41%, with a 6% increase in wages and salarieswhile redundancy payments were €23.6 million, as compared to a €4.0 millionprovision reversal. Interconnection expenses rose by 15% as a result of increased traffic. Thecompany's efforts to improve its image and promote the recently launchedproducts led to a 58% increase in advertising spent in Q4 2005 compared to theprevious year. RomTelecom's management is continuing the implementation of its TransformationPlan:Efficiency improved from 240 Lines per Employee at the end of 2004 to 303 Linesper Employee at the end of 2005, an increase of 26%. Headcount continued todecrease, reaching 13,050 by the end of December 2005 from 18,083 at December31, 2004. Implementation of several projects is proceeding according to plan: deploymentof the new central Billing System was completed in July 2005; a new financiale-business system was introduced at Corporate Center and in one regionalorganization in November 2005; manual switches replacement is completed andprovision of modern, broadband services continues (new ADSL packages areprovided for business and residential customers, Next Generation Network programwas initiated). 4. OTEnet OTENET CONSOLIDATED STATEMENTS OF OPERATIONS FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2005 AND 2004 IN ACCORDANCE WITH U.S. GAAP (UNAUDITED) • Millions Q4 05 Q4 04 % Change 12M 05 12M 04 % ChangeOperating Revenues 28.3 18.8 50.5% 96.6 87.0 11.0%Operating Profit 3.0 -0.2 N/A 8.1 5.8 39.7%Operating Incomebefore Depreciation &amortization 4.7 1.9 147.4% 14.8 13.6 8.8%Operating Incomebefore Depreciation &Amortization as % ofOperating Revenues 16.6% 10.1% 6.5 pp 15.3% 15.6% -0.3 ppDepreciation &Amortization 1.7 2.1 -20.5% 6.7 7.8 -14.5% OTEnet is the Internet and IP services subsidiary of OTE. It offers Internetaccess, IP telecom solutions, IT application development and hosting servicesusing Internet technologies. Revenues in the fourth quarter of 2005 were • 28.3 million, increasing by 50.4%compared to the fourth quarter of 2004. Operating income before depreciation andamortization was • 4.6 million, increasing by 147.4% compared to the fourthquarter of 2004 due to the rapid growth of ADSL. As of December 31, 2005, OTEnet had over 413,200 active residential customersusing retail product and services and over 13,900 business customers,representing significant increases compared to the same period last year. 5. Other International Investments Armentel ArmenTel's Operating Revenues for the fourth quarter of 2005 amounted to • 37.4million compared to • 23.5 million in the fourth quarter of 2004. This 59.1%increase is mainly attributed to the 64.7% increase in the number of mobilesubscribers, which reached 320,757 at the end of the quarter. Operating incomebefore depreciation and amortization reached • 22.2 million, or 59.4 % ofoperating revenues. Net income reached • 20.1 million. 6. Events of the quarter OTE INCREASED ITS PARTICIPATION IN OTENET'S SHARE CAPITALIn the quarter, OTE increased its participation in OTEnet's share capital. OTE'sparticipation in OTEnet now stands at 94.6%. OTE ANNOUNCED STRONG VOLUNTARY RETIREMENT SCHEME TAKE UPIn October 20, 2005, OTE announced that out of a final pool of 6,000 eligibleOTE fixed-line employees, more than 5,500 have elected to apply for earlyretirement. An additional 250 employees will leave during the year due to normalretirement. OTE OFFERS TO EXCHANGE BOND ISSUE DUE IN 2007 On October 25, 2005 OTE announced that its 100% subsidiary OTE PLC was offeringto exchange any or all of its Euro 1.1 billion 6.125 per cent Guaranteed Notesdue 2007, for new 5 to 6 year Euro denominated Fixed Rate Guaranteed Notes. TheNew Notes would be issued by OTE PLC and would be fully and unconditionallyguaranteed by OTE under its Global MTN Program. The purpose of the ExchangeOffer was to give OTE greater financing flexibility by extending its debtmaturity profile. By November 4, 2005, the final date of the offer, a total ofEuro 608,366,000 in principal amount of Existing Notes was submitted bybondholders and given the Exchange Ratio of 1.0455, Euro 636,056,000 inprincipal amount of New Notes were issued via the Exchange Offer. The New Noteswere priced to yield 3.829% and will pay an annual coupon of 3.750%. OTE issueda further Euro 13,944,000 of Additional Notes to create a total new issue sizeof Euro 650,000,000. REPEATED ADJOURNED EXTRAORDINARY GENERAL ASSEMBLY On November 4, 2005, OTE held its Repeated Adjourned Extraordinary GeneralAssembly of Shareholders, during which the company's shareholders approved thetermination of stock option plans, that had been available to all OTE directorsand personnel and also approved the remuneration payable to the Chairman andmembers of the Audit and Compensation and Human Resources Committees. 7. Subsequent Events VOLUNTARY RETIREMENT PLAN The European Commission (EC) is currently reviewing the Greek State's proposedcontribution to the OTE pension fund (TAP-OTE) to assess its conformity withEuropean competition rules. On February 8, 2006, OTE restated its intention toproceed with the full implementation of its plan regardless of the final outcomeof the EC review, and noted that the full cost of the VRS has already beencharged in its 2005 accounts. As part of its Greek Fixed-Line Business Plan presented today, OTE indicatedthat all 5,500 employees who have accepted to take early retirement as part ofthe 2005 Voluntary Retirement Plans will have left the Company by mid-October2006 at the latest. 8. OutlookAs part of its three-year Business Plan outlined today, OTE indicated that Groupconsolidated revenues were expected to grow by 13%, or by a compound annualgrowth rate of 4.2%, during the 2006-2008 period. Operating Income beforeDepreciation and Amortization margin should gradually increase from 36.5% in2005 (excluding Voluntary Retirement Plan) to 40.5% in 2008. For 2006, OTE expects a slight decline in operating revenues in its Greekfixed-line activities, while operating profitability should improve quarterafter quarter mainly due to the progressive implementation of its earlyretirement program. At Cosmote, revenues should increase significantly,reflecting the growth of international operations, while Operating Income beforeDepreciation and Amortization margin will be held back by high development costsin fast-growing activities and the cost of relaunching Cosmote Romania. Finally,assuming no adverse regulatory decisions, RomTelecom should post a furtherimprovement in Operating Income before Depreciation and Amortization margin onroughly stable revenues, reflecting competition in the Romanian market andcontinuing control over the company's cost base. About OTE OTE Group is Greece's leading telecommunications organization and one of thepre-eminent players in Southeastern Europe, providing top-quality products andservices to its customers. Apart from serving as a full service telecommunications group in the Greektelecoms market, OTE Group has also expanded during the last decade itsgeographical footprint throughout South East Europe, acquiring stakes in theincumbent telecommunications companies of Romania, Serbia and Armenia, andestablishing mobile operations in Albania, Bulgaria and the Former YugoslavRepublic of Macedonia. At present, companies in which OTE Group has an equityinterest, employ over 44,000 people in seven countries, and our portfolio ofsolutions ranges from fixed and mobile telephony to Internet applications,satellite, maritime communications and consultancy services. Listed on the Athens Stock Exchange, the company trades under the ticker HTO aswell as on the New York Stock Exchange under the ticker OTE. In the U.S., OTE'sAmerican Depository Receipts (ADR's) represents 1/2 ordinary share. Additional Information is also available on http://www.ote.gr. Contacts:OTE: Dimitris Tzelepis - Head of Investor Relations, OTE Group Tel: +30 210 611 1574 E-mail: dtzelepis@ote.gr Nikos Kallianis, Senior Financial Analyst, Tel: +30 210 611 8167 E-mail: nkallianis@ote.gr Daria Kozanoglou - IR Communications Officer, Tel: +30 210 611 1121 E-mail: nkozanoglou@ote.gr Christina Hadjigeorgiou-Financial Analyst, Tel: +30 210 611 1428 E-mail: cchatzigeo@ote.gr Marilee Diamanti-Investor Relations Coordinator, Tel: +30 210 611 5070 E-mail: mdiamant@ote.gr Forward-looking statement Any statements contained in this document that are not historical facts areforward-looking statements as defined in the U.S. Private Securities LitigationReform Act of 1995. All forward-looking statements are subject to various risksand uncertainties that could cause actual results to differ materially fromexpectations. The factors that could affect the Company's future financialresults are discussed more fully in the Company's filings with the U.S.Securities and Exchange Commission (the "SEC"), including the Company's AnnualReport on Form 20-F for 2004 filed with the SEC on June 30, 2005. OTE assumes noobligation to update information in this release. NOTES • In line with SEC recommendations on the use of non-GAAP financial measures, OTE has decided to replace the caption "EBITDA" used in prior filings by "Operating income before depreciation and amortization". This item is the sum of "Operating income" and "Depreciation and amortization". Similarly, the previously used "EBITDA margin" caption is henceforth replaced by "Operating income before depreciation and amortization as a percentage (%) of Operating Revenues". • For comparison, certain inter-company revenues and equal expenses, for the third quarter of 2004, have been transferred from "OTE" segment to "All other" segment. Exhibits to follow: I. Condensed Consolidated Balance Sheets as of December 31, 2005 and December 31, 2004 (Under US GAAP)II. Condensed Consolidated Statements of Operations for the twelve months and three months ended December 31, 2005 and 2004 (Under US GAAP)III. Condensed Consolidated Statement of Cash Flows for the twelve months ended December 31, 2005 (Under US GAAP)IV. Operating Revenues for the twelve months and three months ended December 31, 2005 and 2004 (Under US GAAP)V. Segment Reporting based on the Company's legal structureVI. RomTelecom, ArmenTel, Globul, CosmoFonVII. Operational Highlights EXHIBIT I - BALANCE SHEETS HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES Condensed Consolidated Balance Sheets Prepared under U.S. GAAP as of December 31, 2005 and December 31, 2004 (• million) Dec 2005 Dec 2004 Dec 2005 Dec 2004 --------- -------- --------- -------- Assets (Unaudited) Liabilities and Shareholders' Equity (Unaudited) -------- ----------------------------- Current Assets Current LiabilitiesCash and cashequivalents 1,512.2 870.3 Short - term borrowings 14.3 37.3Accountsreceivable 1,050.7 1,079.7 Current maturities of long-term debt 321.5 320.6Materials andsupplies 128.4 132.0 Accounts payable 708.4 846.5 Reserve for voluntary retirement 434.9 0.0 program Accrued and other liabilities 654.9 681.8Other currentassets 404.3 251.6 Income taxes payable 81.9 101.9 Deferred income taxes 12.5 --------- -------- Dividends payable 5.2 7.2 --------- -------- 3,095.6 2,333.6 2,221.1 2,007.8 --------- -------- --------- --------Other assetsInvestments 159.3 221.3 Long-Term LiabilitiesAdvances topension funds 180.6 215.8 Long-term debt, net of current 3,111.9 2,822.7 maturitiesDeferredIncome taxes 51.6 Reserve for staff retirement 206.4 377.3 indemnitiesOtherlong-termassets 409.0 250.7 Reserve for voluntary retirement 603.8 --------- -------- program 800.5 687.8 Reserve for Youth Account 328.0 330.0 --------- -------- Deferred income taxes 96.4 --------- -------- Other long-term liabilities 132.1 140.6 --------- -------- 4,382.2 3,767.0Telecommunicationproperty, --------- --------Plant andequipmentNet ofAccumulateddepreciation 6,484.7 6,736.4 Minority interests 965.8 1,020.2 --------- -------- --------- -------- Shareholders' Equity Share capital 1,172.5 1,174.1Telecommunication licenses,net ofamortization 376.3 380.0 Paid-in surplus 486.6 487.5 --------- -------- Treasury stock (5.9) (15.1) Legal reserve 256.7 256.7Goodwillresulting 79.8 79.8 Retained earnings 1,452.8 1,744.2fromconsolidatedsubsidiaries --------- -------- Accumulated other comprehensive (94.9) (224.8) income 3,267.8 3,422.6 --------- -------- 10,836.9 10,217.6 ========= ======== 10,836.9 10,217.6 ========= ======== Movement in Shareholders' equity -------------------------------- ---------- --- 2005 ---------- Unaudited Shareholders' equity, January 1 3,422.6 ----------Net Income for the period (294.1)Accumulated other comprehensive income 139.3 ----------Unaccrued compensation (154.8) ---------- ==========Shareholders' equity, December 31 3,267.8 ========== EXHIBIT II - STATEMENTS OF OPERATIONS HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES Condensed Consolidated Statements of Operations Prepared under U.S. GAAP for the twelve months and three months ended December 31, 2005 and 2004 (• million) Q4 05 Q4 04 % 12M 05 12M 04 % Change Unaudited Unaudited Change Unaudited UnauditedOperatingRevenues:DomesticTelephony 589.5 559.4 5.4% 2,308.1 2,262.9 2.0%InternationalTelephony 94.0 77.9 20.7% 391.0 376.6 3.8%Mobiletelephonyservices 449.7 392.2 14.7% 1,756.7 1,555.4 12.9%Other 265.4 257.2 3.2% 1,015.2 989.1 2.6%TotalOperating 1,398.6 1,286.7 8.7% 5,471.0 5,184.0 5.5%Revenues ======== ======== ======== ======== OperatingExpenses:Payroll andemployeebenefits (335.4) (307.2) 9.2% (1,322.9) (1,226.9) 7.8%Voluntaryretirementcosts (1.6) 0.0 N/A (939.6) (28.9) N/APayments tointernationaloperators (34.4) (59.2) -41.9% (175.1) (188.9) -7.3%Payments todomestictelephonyoperators (178.8) (150.3) 19.0% (665.5) (644.6) 3.2%Depreciationandamortization (276.3) (255.3) 8.2% (1,053.4) (1,023.1) 3.0%Extinguishmentof liabilities 0.0 0.0 23.8 0.0Otheroperating (398.5) (430.0) -7.3% (1,335.7) (1,433.7) -6.8%expensesTotalOperating (1,225.0) (1,202.0) 1.9% (5,468.4) (4,546.1) 20.3%Expenses ======== ======== ======== ======== OperatingIncome/(Loss) 173.6 84.7 105.0% 2.6 637.9 -99.6%Other income /(expense),net:Interest 15.3 12.9 18.6% 53.9 47.6 13.2%incomeInterestexpense (46.9) (47.1) -0.4% (165.6) (163.3) 1.4%FX gain/(loss), 7.8 20.9 -62.7% 37.5 13.3 182.0%netFinancial (23.8) (13.3) 78.9% (74.2) (102.4) -27.5%netInvestmentincome/(loss)/Gain on sale of 0.8 11.4 -93.0% 54.1 13.1 313.0%investmentOther, net (1.6) (1.7) -5.9% (2.9) (22.8) -87.3% --------- --------- --------- ---------Total Otherincome /(expense), net (24.6) (3.6) 583.3% (23.0) (112.1) -79.5% ========= ========= ========= ========= Income/(Loss)beforeprovision forincome taxesand minorityinterests 149.0 81.1 83.7% (20.4) 525.8 N/A ========== ========== ========== ========== Provision forincome taxes (63.0) 82.8 N/A (37.9) (120.8) -68.6% ---------- ---------- ---------- ---------- Income/(Loss)beforeminority 86.0 163.9 -47.5% (58.3) 405.0 N/AinterestsMinorityInterests (48.9) (105.0) -53.4% (235.8) (233.7) 0.9% ---------- ---------- ---------- ---------- NetIncome/(Loss) 37.1 58.9 -37.0% (294.1) 171.3 -271.7% ========== ========== ========== ========== EXHIBIT III - STATEMENT OF CASH FLOWS HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES Condensed Consolidated Statement of Cash Flows Prepared under U.S. GAAP for the three months and twelve months ended December 31, 2005 (• million) Q1 05 Q2 05 H105 Q3 05 9M05 Q405 12M05Cash Flows fromOperatingActivities: Net income 90.7 119.1 209.8 (541.0) (331.2) 37.1 (294.1)Adjustments toreconcile to netcashprovided byoperatingactivities: Depreciation 262.7 251.7 514.4 262.7 777.1 276.0 1,053.1 and amortization Provision for 0.0 0.0 0.0 912.9 912.9 1.6 914.5 voluntary retirement costs Provision for 25.9 25.8 51.7 29.0 80.7 29.7 110.4 doubtful accounts Provision for 23.1 23.3 46.4 23.2 69.6 23.2 92.8 staff retirement indemnities and youth account Extinguishment 0.0 0.0 0.0 (23.8) (23.8) 0.0 (23.8) of liabilities Gain on sale (13.8) (3.3) (17.1) (8.6) (25.7) 0.0 (25.7) of investment Minority 52.3 55.3 107.6 79.3 186.9 48.9 235.8 interests Working (122.9) (98.6) (221.5) (371.6) (593.1) 64.7 (528.4) capital movement and other related movements ======= ====== ====== ====== ====== ====== ======Net Cashprovided byOperatingActivities 318.0 373.3 691.3 362.1 1,053.4 481.2 1,534.6 ------- ------ ------ ------ ------ ------ ------ Cash Flows fromInvestingActivities: Capital (124.0) (113.8) (237.8) (167.3) (405.1) (275.1) (680.2) expenditures Acquisition of (56.3) (229.4) (285.7) (1.8) (287.5) (8.5) (296.0) additional share in consolidated subsidiary Proceeds from 26.7 3.3 30.0 4.8 34.8 0.0 34.8 sale of investments Interest and 14.3 12.2 26.5 12.4 38.9 23.2 62.1 dividends received ======= ====== ====== ====== ====== ====== ======Net Cash usedin InvestingActivities (139.3) (327.7) (467.0) (151.9) (618.9) (260.4) (879.3) ------- ------ ------ ------ ------ ------ ------ Cash Flows fromFinancingActivities: Net change in 21.6 (17.6) 4.0 137.4 141.4 24.5 165.9 short-term and long-term debt Dividends (0.3) (1.4) (1.7) 0.0 (1.7) (0.3) (2.0) paid Dividends paid (123.6) (0.3) (123.9) (66.2) (190.1) 0.0 (190.1) to minority shareholders Proceeds from 12.8 - 12.8 0.0 12.8 0.0 12.8 issuance from minority shareholders ======= ====== ====== ====== ====== ====== ======Net Cashprovided byFinancingActivities (89.5) (19.3) (108.8) 71.2 (37.6) 24.2 (13.4) ------- ------ ------ ------ ------ ------ ------ NetIncrease/(Decrease) in Cash 89.2 26.3 115.5 281.4 396.9 245.0 641.9and CashEquivalentsCash and Cashequivalents 870.3 959.5 870.3 985.8 870.3 1,267.2 870.3at beginning ofperiod ======= ====== ====== ====== ====== ====== ======Cash and CashEquivalents 959.5 985.8 985.8 1,267.2 1,267.2 1,512.2 1,512.2at end ofperiod ======= ====== ====== ====== ====== ====== ====== EXHIBIT IV - OPERATING REVENUES HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES Consolidated Operating Revenues prepared under U.S. GAAP for the three months and twelve months ended December 31, 2005 and 2004 (• million) Q4 05 Q4 04 12M 05 12M 04 Unaudited Change Unaudited Change ------- -------DomesticTelephony:Basic monthlyrentals 236.2 214.4 10.2% 950.1 849.2 11.9%Local and long - -distance calls-Fixed to fixed 191.2 203.3 -6.0% 759.1 785.7 -3.4%-Fixed to mobile 138.8 112.3 23.6% 515.7 533.3 -3.3% ------- ------- ------- ------- 330.0 315.6 4.6% 1,274.8 1,319.0 -3.4% ======= ======= ======= =======Other 23.3 29.4 -20.7% 83.2 94.7 -12.1% ------- ------- ------- -------Total DomesticTelephony 589.5 559.4 5.4% 2,308.1 2,262.9 2.0% ======= ======= ======= ======= InternationalTelephony:Internationaltraffic 37.0 36.3 1.9% 150.5 169.0 -10.9%Payments frommobile operators 8.3 9.8 -15.3% 38.1 37.7 1.1% ------- ------- ------- ------- 45.3 46.1 -1.7% 188.6 206.7 -8.8%Payments fromInternational 48.7 31.8 53.1% 202.4 169.9 19.1%operatorsTotalInternationalTelephony 94.0 77.9 20.7% 391.0 376.6 3.8% ======= ======= ======= ======= Mobile TelephonyServices: 449.7 392.2 14.7% 1,756.7 1,555.4 12.7% ======= ======= ======= ======= Other OperatingRevenues:TraditionalServices:Prepaid cards 29.5 31.0 -4.8% 126.6 147.2 -14.0%Directories 14.3 13.0 10.0% 56.1 54.1 3.7%Radiocommunications 9.9 4.6 115.2% 24.1 18.9 27.5%Audiotex 6.4 7.2 -11.1% 25.9 72.2 -64.0%Telex andtelegraphy 0.9 0.7 28.6% 3.6 6.5 -44.6% ------- ------- ------- ------- 61.0 56.5 8.0% 236.3 298.9 -20.9% ======= ======= ======= =======New Business:Leased lines anddatacommunications 44.4 45.4 -2.2% 211.4 147.1 43.7%ISDN, connection& 37.8 37.3 1.3% 141.4 121.2 16.7%monthly chargesSales oftelecommunication 36.7 32.0 14.7% 107.7 117.3 -8.2%equipmentInternet services/ ADSL 19.3 16.1 19.9% 81.0 61.1 32.6%ATM 5.9 7.9 -25.3% 23.1 26.0 -11.2% ------- ------- ------- ------- 144.1 138.7 3.9% 564.6 472.7 19.4% ======= ======= ======= =======Other:Services rendered 22.6 19.0 18.9% 72.3 85.0 -14.9%Interconnectioncharges 27.9 27.3 2.2% 101.7 84.3 20.6%Miscellaneous 9.7 15.7 -38.2% 40.2 48.2 -16.6% ------- ------- ------- ------- 60.2 62.0 -2.9% 214.2 217.5 -1.5% ======= ======= ======= =======Total OtherOperating 265.3 257.2 3.1% 1,015.2 989.1 2.6%Revenues ======= ======= ======= =======Total OperatingRevenues 1,398.5 1,286.7 8.7% 5,471.0 5,184.0 5.5% ======= ======= ======= ======= EXHIBIT V - SEGMENT REPORTING HELLENIC TELECOMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES Segment Reporting Prepared under U.S. GAAP for the twelve months ended December 31, 2005 (In millions of Euro) OTE Cosmote Romtelecom All Other Total Adjustments & Eliminations ConsolidatedOperatingRevenues:DomesticTelephony 1,617.3 636.5 56.3 2,310.1InternationalTelephony 216.0 144.2 38.3 398.5Mobiletelephonyservices 1,736.1 0.2 206.9 1,943.2Other 880.4 61.5 144.8 198.3 1,285.0TotalOperatingRevenues 2,713.7 1,797.6 925.7 499.8 5,936.8 (465.8) 5,471.0 ------- ------- -------- ------ ------- --------- -------- IntersegmentRevenues (211.7) (178.9) (8.6) (66.6) (465.8) Revenue fromExternalCustomers 2,502.0 1,618.7 917.1 433.2 5,471.0 5,471.0 ------- ------- -------- ------ ------- --------- -------- OperatingExpenses:Payroll andemployeebenefits (851.2) (98.5) (285.7) (88.7) (1,324.1) 1.2 (1,322.9)Voluntaryretirementcosts (939.6) (939.6) (939.6) Total (1,790.8) (98.5) (285.7) (88.7) (2,263.7) 1.2 (2,262.5)Payments tointernationaloperators (103.1) (29.7) (32.3) (15.2) (180.3) 5.2 (175.1)Payments todomestictelephonyoperators (372.7) (327.3) (98.0) (36.3) (834.3) 168.8 (665.5)Depreciationandamortization (558.9) (223.3) (189.2) (85.2) (1,056.6) 3.2 (1,053.4)Extinguishmentof liabilities 23.8 23.8 23.8Otheroperatingexpenses (664.4) (586.3) (169.8) (202.2) (1,622.7) 287.0 (1,335.7) ------- ------- -------- ------ ------- --------- --------TotalOperatingExpenses (3,489.9) (1,265.1) (751.2) (427.6) (5,933.8) 465.4 (5,468.4) ------- ------- -------- ------ ------- --------- -------- ------- ------- -------- ------ ------- --------- --------OperatingIncome (776.2) 532.5 174.5 72.2 3.0 (0.4) 2.6 ------- ------- -------- ------ ------- --------- -------- Operatingincome beforedepreciationandamortization (217.3) 755.8 363.7 157.4 1,059.6 (3.6) 1,056.0--------------- ------- ------- -------- ------ ------- --------- --------Operatingincome beforedepreciationandamortizationas % ofOperatingrevenues -8.0% 42.0% 39.3% 31.5% 17.8% 0.8% 19.3% EXHIBIT VI - INTERNATIONAL ASSETS RomTelecom OTE has a 54.01% stake in RomTelecom, which is fully consolidated. ROMTELECOM CONDENSED BALANCE SHEETS As of December 31, 2005, in accordance with US GAAP (• thousand) (Unaudited)Property, plant and equipment 1,650,429Intangible assets 39,189Investments and other long-term assets 82,998Fixed assets investments 33,762Long-term assets 1,806,378 Inventories 58,110Trade and other receivables 116,665Cash and cash equivalents 157,486Current assets 332,261 Total assets 2,138,639 Shareholders' Equity 1,522,252 Borrowings 104,319Other long-term liabilities 321,295Long-term liabilities 425,614 Trade payables and other current liabilities 146,731Borrowings 44,042Current liabilities 190,773 Total liabilities 616,387 Total liabilities and shareholders' equity 2,138,639 ROMTELECOM CONSOLIDATED and STAND ALONE INCOME STATEMENT For the twelve months ended Decemberr 31 2005, in accordance with US GAAP (• thousand) Stand-Alone (Unaudited)Basic monthly rentals 269,652Domestic Telephony calls 366,750 ---------------Domestic Telephony 636,402International Telephony 144,245Mobile Telephony 213Other Revenues 144,805 ---------------Total Operating Revenues 925,665 Personnel (inc Voluntary Redundancy) (285,659)Other operating expenses (299,337)Depreciation and Amortization (208,254)Total Operating expenses (793,250) Operating income 132,415 Financial, net 118,279 Income before provision for income taxes 250,694 Provision for Income taxes (12,837) Net income 237,857 Armentel OTE has a 90% stake in ArmenTel, which is fully consolidated. ArmenTel's keyfinancial figures are stated below: ARMENTEL Statement of Operations, prepared under U.S. GAAP for the three months and twelve months ended December 31, 2005 and 2004 (Unaudited) • Millions Q4 05 Q4 04 % Change 12M 05 12M 04 % ChangeOperating Revenues 37.4 23.5 59.1% 119.1 85.7 39.0%Operating Incomebefore Depreciation &amortization 22.2 14.1 57.4% 70.8 49.9 41.9%Operating Incomebefore Depreciation &Amortization as % ofOperating Revenues 59.4% 60.0% -0.6 pp 59.4% 58.2% 1.2 ppOperating Income 15.5 7.5 106.7% 45.3 25.6 77.0%Net Income/(Loss) 20.1 7.0 187.1% 45.8 20.9 119.1%Net Income/(Loss)Margin 53.7% 29.8% 24 pp 38.5% 24.4% 14.1 ppFixed Telephony, Lines 594,404 578,973 2.7%Mobile Telephony,Total customers 320,757 194,713 64.7% Cosmobulgaria (GloBul) The ownership of GloBul was transferred from OTE to Cosmote during the thirdquarter of 2005 and Cosmote started consolidating the operations of Globul toits accounts since August 1, 2005. Globul's key financial figures are statedbelow: COSMOBULGARIA Statement of Operations Prepared under US GAAP for the three months and twelve months ended December 31, 2005 and 2004 (Unaudited) • Millions Q4 05 Q4 04 % Change 12M 05 12M 04 % ChangeOperating Revenues 76.3 52.8 44.5% 274.1 177.5 54.4%Operating Incomebefore Depreciation& amortization 22.9 16.3 40.5% 93.7 45.4 106.4%Operating Incomebefore Depreciation& Amortization as % 30.0% 30.9% -0.9 pp 34.2% 25.6% 8.6 ppofOperating RevenuesNet Income/(Loss) 4.5 1.9 136.8% 26.3 (8.4) N/ANet Income/(Loss)Margin 5.9% 3.6% 2.4 pp 9.6% -4.7% N/AMobile Telephony,Total customers 2,393,717 1,624,569 47.3% CosmoFon Mobile Telecommunications AD Skopje (MTS) The ownership of CosmoFon was transferred from OTE to Cosmote during the thirdquarter of 2005 and Cosmote started consolidating the operations of CosmoFon toits accounts since August 12, 2005. CosmoFon key financial figures are statedbelow: COSMOFON Statement of Operations Prepared under US GAAP for the three months and twelve months ended December 31, 2005 and 2004 (Unaudited) • Millions Q4 05 Q4 04 % Change 12M 05 12M 04 % ChangeOperating Revenues 11.6 6.7 73.1% 40.4 23.5 71.9%Operating income(loss) beforedepreciation andamortization (0.2) (3.5) -94.3% 2.0 (8.6) -123.3%Operating income(loss) beforedepreciation andamortization as %of -1.7% -52.2% N/A 5.0% -36.6% N/AOperating revenuesNet Income/(Loss) (2.6) (7.0) N/A (12.8) (22.1) N/ANet Income/(Loss)Margin -22.4% -104.5% N/A -31.7% -94.0% N/AMobile Telephony,Total customers 384,186 245,294 56.6% EXHIBIT VII -OPERATIONAL HIGHLIGHTS ------------------------------ Operational Highlights for the quarters ended December 31, 2005 and 2004 ------------------------------OTE Q4 05 Q4 04 % Change(Greek wireline)PSTN lines 4,927,622 5,078,709 -3.0%ISDN, 64kb equiv. lines 1,369,830 1,264,992 8.3%Total lines 6,297,452 6,343,701 -0.7% ADSL sub. 154,530 43,758 253.1% COSMOTE (Greece)Pre-paid sub. 2,919,850 2,515,117 16.1%Contract sub. 1,721,590 1,636,230 5.2%Total subscribers 4,641,440 4,151,347 11.8% AMCTotal subscribers 781,496 638,728 22.4% GLOBULTotal subscribers 2,393,717 1,624,569 47.3% COSMOFONTotal subscribers 384,186 245,294 56.6% OTE netDial up clients 413,200 316,600 30.5%Business customers 13,900 9,955 39.6% Group Employees:-OTE 14,741 16,302 -9.6%-of which: at other subsidiaries 350 415 -15.7%-Subsidiaries (Greece) 1,537 1,294 18.8%-COSMOTE 2,125 2,040 4.2%-RomTelecom 13,078 18,083 -27.7%------------ -------- -------- -------- This information is provided by RNS The company news service from the London Stock Exchange