Exclusions

Analysis of the impact of the respective lines of business interest groups in their conclusion that the business units of fixed and mobile telephony that have a material impact on its stakeholders

There are some telephone operators whose information is not included in the report, because the percentage of shareholding does not exceed 50%:

• Living: a mobile telephone company in Brazil, managed as a joint venture with Portugal Telecom to 50%. This company publishes its own report in 2004 Corporate Social Responsibility.
• Meditel: joint venture with Portugal Telecom, in which Telefónica holds a 32.18%.
• China Netcom: Telefónica company which holds a 5.38% strategic.
• Portugal Telecom, with which Telefónica holds a stable 9.86% of the capital.
• Telecom Italia: Telefónica company which holds a 10.36% strategic.

According to the criterion of relative impact, the units of Telefónica de Contenidos (Endemol, Telefe, and Telefónica Servicios de Música Telefonica Audiovisual Services), Atento, Telefónica I + D or T-handles are not included in the report except to mention or explicit reference to the group. Other companies for which reports are not Sogecable Telefónica (16.76% participation), Lycos Europe (32.1%) or Amper (6.10%).

However, it has been analyzed for each interest group if there are units within the Telefónica Group that may have a significant impact, concluding as follows:

• Telefónica I + D in innovation.
• Aware of employees in the chapter.
• Fundación Telefónica and ATAM in the chapter on society.
• Telefonica SA as a corporate center in the chapters of shareholders and the media.