DEBT DETAIL AND EVOLUTION

LEVERAGE RATIO

 

January-December 2017 Net Financial Debt Evolution

See this information in accesible format

 

 

Net financial debt and commitments

Unaudited figures (Euros in millions)

  December 2017

Notes:

(1) Net financial debt includes a positive value of the derivatives portfolio for a net amount of €505m, €3,152m included as financial liabilities and €3,657m included as financial assets.

Non-current financial liabilities 46,332
Current financial liabilities 9,414
Gross Financial Debt 55,746
Cash and cash equivalents (5,192)
Current financial assets (2,154)
Positive mark-to-market value of long-term derivative instruments (2,812)
Other non-current liabilities included in "Trade and other payables" 708
Other current liabilities included in "Trade and other payables" 111
Other assets included in "Non-current financial assets" (1,516)
Other assets included in "Current trade and other payables" (661)
Net Financial Debt (1) 44,230
Gross commitments related to employee benefits 6,578
Value of associated Long-term assets (749)
Tax benefits (1,533)
Net commitments related to employee benefits 4,295
Net financial debt plus commitments 48,526
Net Financial Debt / OIBDA 2.66x

 

FINANCING ACTIVITY

 

During 2017, Telefónica´s financing activity amounted to approximately €10,501m equivalent (without considering the refinancing of commercial paper and short-term bank loans) and focused on maintaining a solid liquidity position and refinancing and extending debt maturities (in an environment of very low interest rates). Therefore, as of the end of December, the Group has covered debt maturities for the next two years. The average debt life stood at 8.08 years (vs. 6.35 years in December 2016).

Among the main financial operations in the quarter, stood out in December the issuance of undated deeply subordinated securities guaranteed on a subordinated basis by Telefónica, S.A. for a nominal amount of €1,000m, callable after five and a half years from the issuance date. It should be noted that the strong demand from institutional investors enabled the annual coupon to be set at 2.625%, the lowest set by Telefónica for a hybrid issuance in euros in history. Also, loan transactions for an aggregated amount of €655m were closed at very attractive rates, maturing up to 12 years.

After the closing of the year, a senior debt issuance of €1,000m was closed in January, maturing in January 2027 with an annual coupon of 1.447%. On the other hand, Telefónica Deutschland Holding issued debt instruments in the local market ("Schuldscheindarlehen" and "Namensschuldverschreibung") maturing up to 15 years and a target volume of €250m, including a tranche via Blockchain technology amounting to €75m with a maturity slightly longer than one year.

In 2017, the Telefónica Group obtained funding by means of extending payment terms with suppliers or the factoring company where those had been discounted, for a total of €691m equivalent (€82m equivalent in the fourth quarter). In January-December 2016, this financing amounted to €982m equivalent (€115m in October-December).

Moreover, Telefónica, S.A. and its holding companies continued the issuance activity under the Promissory notes and Commercial Paper Programmes (Domestic and European), maintaining an outstanding balance of approximately €2,054m at the end of December.

At year end, Telefónica maintained undrawn, committed credit lines with different credit institutions for an approximate amount of €13,531m (€12,541m maturing in more than twelve months) which, combined with the cash equivalents position and current financial assets excluding Venezuela placed liquidity at €20,852m.

 

 

FINANCIAL DEBT

 

Total financial liabilities breakdown

Unaudited figures (Euros in millions)

  December 2017
  Bonds and commercial paper Debt with financial institutions Other financial debt (including governments) and net derivatives
Total financial liabilities (1) 83% 15% 2%
(1) Includes positive value of derivatives and other financial debt.
 

Net financial debt structure by currency

Unaudited figures (Euros in millions)

  December 2017
  EUR LATAM GBP USD
Net financial debt structure by currency 82% 10% 7% 1%

 

FINANCIAL EXPENSES

 

Net financial expenses in the quarter totalled €470m, 27.6% higher than the previous year due to the greater impact of inflation in Venezuela in 2016, despite the ongoing reduction of the cost of debt in European and Latin American currencies. In January-December (€2,199m) net financial expenses decreased 0.9% y-o-y, mainly due to the reduction in the cost of debt.

NOTE: For further information, please access the January – December 2017 Results Report

View Quarterly Report PDF document [1.6 MB]