Telecom Italia Rsp

Quarterly Report • Mar 23, 2017

4Q16/FY16 Financial and operating data

Index

Disclaimer Key Financial Data by BU FY Key Financial Data by BU Quarter P&L Group FY Net Debt & Cash Flow Balance Sheet Domestic Business Results Domestic Wireline Results TIM Brasil Results Website link: TI Group Reported & Organic Data Telecom Italia Group Domestic Reported & Organic Data Telecom Italia Investor Relations

TELECOM ITALIA INVESTOR RELATIONS

Domestic Mobile Results investor\_relations@telecomitalia.it

Disclaimer

The financial and operating data have been extracted or derived, with the exception of some data, from the TIM 2016 and 2015 Annual Reports; the latter report was examined and approved by the TIM Board of Directors on 23 March 2017; the data of the 2016 FY were prepared (including those of the prior year/periods under comparison) in accordance with the International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the European Union (designated as "IFRS").

In particular, the accounting policies and consolidation principles adopted in the preparation of the Financial Statements at 31 December 2016 have been applied on a basis consistent with those adopted in the Annual Financial Statements at 31 December 2015, to which reference should be made, except for the use of the new standards and interpretations adopted by the TIM Group starting from 1 January 2016 which had no effects on the 2016 Financial Statements.

As of today, the audit work by our independent auditors on the TIM Consolidated and Separate Financial Statements for the year ended 31 December 2016 have not yet been completed.

Within the Brazil Business Unit, TIM Brasil's Management during 2016 identified that incorrect accounting entries were made in prior years in connection with the recognition of service revenue from the sale of prepaid traffic. Such incorrect accounting entries, resulted in the early recognition of revenues and consequently the underestimation of deferred revenue liabilities for prepaid traffic not yet consumed. The incorrect accounting entries did not have any impact either in terms of net financial position nor on cash and cash equivalents. In light of the above, the comparative financial information has been revised, segment information included.

Starting from 1 January 2016, as a result of the change in the operational mission of Persidera, the Media Business Unit was included in the Domestic Business Unit, while for prior periods under comparison it was reclassified under Other activities and Eliminations.

Furthermore, the Sofora - Telecom Argentina group, which was disposed of on 8 March 2016, is classified as Discontinued operations.

Key financial data by Business Unit

REVENUES 1Q15 1H15 9M15 FY15 1Q16 1H16 9M16 Domestic 3.631 7.375 11.127 15.001 3.548 7.247 11.036 o/w Wireline Domestic 2.657 5.345 7.990 10.654 2.553 5.131 7.774 o/w Mobile Domestic 1.151 2.387 3.690 5.068 1.186 2.447 3.747 Brasile 1.412 2.691 3.699 4.637 897 1.858 2.922 Other activities & Elim. 11 35 52 81 (5) (9) (19)	FY16 15.006 10.495 5.179 4.047 (28) 19.025
TI Group 5.054 10.101 14.878 19.719 4.440 9.096 13.939
EBITDA Reported
Domestic 1.610 2.846 4.525 5.567 1.461 3.184 4.995	6.698
Brasile 416 790 1.108 1.451 258 556 900	1.325
Other activities & Elim. 7 3 (11) (12) (7) (14) (17)	(21)
TI Group 2.033 3.639 5.622 7.006 1.712 3.726 5.878	8.002
EBITDA Margin Reported
Domestic 44,3% 38,6% 40,7% 37,1% 41,2% 43,9% 45,3%	44,6%
Brasile 29,5% 29,4% 30,0% 31,3% 28,8% 29,9% 30,8%	32,7%
TI Group 40,2% 36,0% 37,8% 35,5% 38,6% 41,0% 42,2%	42,1%
EBIT Reported
Domestic 814 1.222 2.090 2.359 662 1.581 2.575	3.376
Brazil 165 574 742 638 49 121 210	368
Other activities & Elim. 2 (8) (26) (34) (7) (15) (17)	(22)
TI Group 981 1.788 2.806 2.963 704 1.687 2.768	3.722
EBIT Margin Reported
Domestic 22,4% 16,6% 18,8% 15,7% 18,7% 21,8% 23,3%	22,5%
Brasile 11,7% 21,3% 20,1% 13,8% 5,5% 6,5% 7,2%	9,1%
TI Group 19,4% 17,7% 18,9% 15,0% 15,9% 18,5% 19,9%	19,6%
CAPEX
Domestic 676 1.506 2.297 3.900 778 1.575 2.398	3.709
Brasile 287 637 930 1.289 166 408 709	1.167
Elim & Adj 1 3 6 8 0 0 0	0
TI Group 964 2.146 3.233 5.197 944 1.983 3.107	4.876
CAPEX ON SALES (%)
Domestic 18,6% 20,4% 20,6% 26,0% 21,9% 21,7% 21,7%	24,7%
Brasile 20,3% 23,7% 25,1% 27,8% 18,5% 22,0% 24,3%	28,8%
TI Group 19,1% 21,2% 21,7% 26,4% 21,3% 21,8% 22,3%	25,6%

Key financial data by Business Unit

	Revised					UNAUDITED FIGURES
REVENUES	1Q15	2Q15	3Q15	4Q15	1Q16	2Q16	3Q16	4Q16
Domestic	3.631	3.744	3.752	3.874	3.548	3.699	3.789	3.970
o/w Wireline Domestic	2.657	2.688	2.645	2.664	2.553	2.578	2.643	2.721
o/w Mobile Domestic	1.151	1.236	1.303	1.378	1.186	1.261	1.300	1.432
Brasile	1.412	1.279	1.008	938	897	961	1.064	1.125
Other activities & Elim.	11	24	17	29	(5)	(4)	(10)	(9)
TI Group	5.054	5.047	4.777	4.841	4.440	4.656	4.843	5.086
EBITDA Reported
Domestic	1.610	1.236	1.679	1.042	1.461	1.723	1.811	1.703
Brasile	416	374	318	343	258	298	344	425
Other activities & Elim.	7	(4)	(14)	(1)	(7)	(7)	(3)	(4)
TI Group	2.033	1.606	1.983	1.384	1.712	2.014	2.152	2.124
EBITDA Margin Reported
Domestic	44,3%	33,0%	44,7%	26,9%	41,2%	46,6%	47,8%	42,9%
Brasile	29,5%	29,2%	31,5%	36,6%	28,8%	31,0%	32,3%	37,8%
TI Group	40,2%	31,8%	41,5%	28,6%	38,6%	43,3%	44,4%	41,8%
EBIT Reported
Domestic	814	408	868	269	662	919	994	801
Brasile	165	409	168	-104	49	72	89	158
Other activities & Elim.	2	(10)	(18)	(8)	(7)	(8)	(2)	(5)
TI Group	981	807	1.018	157	704	983	1.081	954
EBIT Margin Reported
Domestic	22,4%	10,9%	23,1%	6,9%	18,7%	24,8%	26,2%	20,2%
Brasile	11,7%	32,0%	16,7%	-11,1%	5,5%	7,5%	8,4%	14,0%
TI Group	19,4%	16,0%	21,3%	3,2%	15,9%	21,1%	22,3%	18,8%
CAPEX
Domestic	676	830	791	1.603	778	797	823	1.311
Brasile	287	350	293	359	166	242	301	458
Elim & Adj	1	2	3	2	0	0	0	0
TI Group	964	1.182	1.087	1.964	944	1.039	1.124	1.769
CAPEX ON SALES (%)
Domestic	18,6%	22,2%	21,1%	41,4%	21,9%	21,5%	21,7%	33,0%
Brasile	20,3%	27,4%	29,1%	38,3%	18,5%	25,2%	28,3%	40,7%
TI Group	19,1%	23,4%	22,8%	40,6%	21,3%	22,3%	23,2%	34,8%

P&L Group
		Revised					UNAUDITED FIGURES
€ mln	1Q15	1H15	9M15	FY15	1Q16	1H16	9M16	FY16
REVENUES	5.054	10.101	14.878	19.719	4.440	9.096	13.939	19.025
Other Income	53	131	206	287	47	107	165	311
TOTAL OPERATING REVENUES AND OTHER INCOME	5.107	10.232	15.084	20.006	4.487	9.203	14.104	19.336
Acquisition of goods and services	(2.171)	(4.372)	(6.340)	(8.532)	(1.923)	(3.783)	(5.710)	(7.793)
Employee benefits expenses	(833)	(1.705)	(2.433)	(3.589)	(848)	(1.551)	(2.303)	(3.106)
Other operating expenses	(265)	(888)	(1.160)	(1.491)	(247)	(501)	(757)	(1.083)
Internally generated assests and Others	195	372	471	612	243	358	544	648
EBITDA	2.033	3.639	5.622	7.006	1.712	3.726	5.878	8.002
EBITDA Margin	40,2%	36,0%	37,8%	35,5%	38,6%	41,0%	42,2%	42,1%
Depreciation and amortization	(1.052)	(2.130)	(3.164)	(4.135)	(1.009)	(2.047)	(3.116)	(4.291)
Gains (losses) on disposals of non-current assets		279	348	336	3	13	14	14
Impairment reversals (losses) on non-current assets				(244)	(2)	(5)	(8)	(3)
EBIT	981	1.788	2.806	2.963	704	1.687	2.768	3.722
EBIT Margin	19,4%	17,7%	18,9%	15,0%	15,9%	18,5%	19,9%	19,6%
Income (loss) equity invest. valued equity method	2	4	15	11		5	4	(16)
Net Financial Income / (Expenses)	(817)	(1.482)	(1.970)	(2.521)	(26)	(145)	(510)	(907)
Profit (loss) before tax from continuing operations	166	310	851	453	678	1.547	2.262	2.799
Income tax expense	(74)	(195)	(391)	(403)	(221)	(489)	(699)	(880)
Profit (loss) from continuing operations	92	115	460	50	457	1.058	1.563	1.919
Profit (loss) from Discontinued operations/Non-current assets held for sale169		330	480	611	47	47	47	47
Profit (loss) for the year	261	445	940	661	504	1.105	1.610	1.966
Attributable to:
Owners of the Parent	82	33	367	(70)	433	1.018	1.495	1.808
Non-controlling interests	179	412	573	731	71	87	115	158

Consolidated Balance Sheet				UNAUDITED FIGURES
€ mln	Revised FY15	1Q16	1H16	9M16	FY16
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill	29.383	29.436	29.566	29.548	29.612
Intangible assets with a finite useful life	6.480	6.516	6.777	6.733	6.951
	35.863	35.952	36.343	36.281	36.563
Tangible assets
Property, plant and equipment owned	12.659	12.816	13.211	13.233	13.947
Assets held under finance leases	2.208	2.210	2.298	2.358	2.413
	14.867	15.026	15.509	15.591	16.360
Other non-current assets
Investments in associates and joint ventures accounted for using the equity method	41	41	39	39	18
Other investments	45	41	38	42	46
Non-current financial assets	2.989	2.766	3.129	2.960	2.698
Miscellaneous receivables and other non-current assets	1.804	1.899	2.048	2.096	2.222
Deferred tax assets	853	894	735	579	877
	5.732	5.641	5.989	5.716	5.861
TOTAL NON-CURRENT ASSETS (A)	56.462	56.619	57.841	57.588	58.784
CURRENT ASSETS
Inventories	254	341	294	325	270
Trade and miscellaneous receivables and other current assets	5.086	5.534
			5.683	5.440	5.426
Current income tax receivables	163	26	69	81	94
Other investments
Securities other than investments, financial receivables and other current financial assets	1.840	1.130	1.330	1.983	1.908
Cash and cash equivalents	3.559	2.665	2.707	4.275	3.964
Current assets sub-total	10.902	9.696	10.083	12.104	11.662
Discontinued operations/assets held for sale
of a financial nature	227	-	-	-	-
of a non-financial nature	3.677	-	-	-	-
	3.904	-	-	-	-
TOTAL CURRENT ASSETS (B)	14.806	9.696	10.083	12.104	11.662

Consolidated Balance Sheet				UNAUDITED FIGURES
€ mln	Revised FY15	1Q16	1H16	9M16	FY16
EQUITY AND LIABILITIES
EQUITY
Equity attributable to equity holders of the Parent	17.554	18.181	19.106	19.414	21.207
Equity attributable to Minority Interests TOTAL EQUITY (C)	3.695 21.249	2.035 20.216	2.221 21.327	2.223 21.637	2.346 23.553
NON-CURRENT LIABILITIES
Non-current financial liabilities	30.518	30.354	31.027	31.363	30.469
Employee benefits	1.420	1.459	1.580	1.537	1.355
Deferred tax liabilities	323	367	434	436	293
Provisions	551	551	569	643	830
Miscellaneous payables and other non-current liabilities	1.429	1.140	1.207	1.497	1.607
TOTAL NON-CURRENT LIABILITIES (D)	34.241	33.871	34.817	35.476	34.554
CURRENT LIABILITIES
Current financial liabilities	6.224	4.440	4.209	5.266	4.056
Trade and miscellaneous payables and other current liabilities	7.563	7.701	7.445	7.183	7.646
Current income tax payables	110	87	126	130	637
Current liabilities sub-total (E)	13.897	12.228	11.780	12.579	12.339
Liabilities directly associated with Discontinued operations/Non-current assets held for sale
of a financial nature	348	-	-	-	-
of a non-financial nature	1.533	-	-	-	-
	1.881	-	-	-	-
TOTAL CURRENT LIABILITIES (E)	15.778	12.228	11.780	12.579	12.339
TOTAL LIABILITIES (F=D+E)	50.019	46.099	46.597	48.055	46.893
TOTAL EQUITY AND LIABILITIES (C+F)	71.268	66.315	67.924	69.692	70.446

Net Cash Flow & Net Debt Dynamics		Revised					UNAUDITED FIGURES
	1Q15	1H15	9M15	FY15	1Q16	1H16	9M16	FY16
(€ mln)
EBITDA	2.033	3.639	5.622	7.006	1.712	3.726	5.878	8.002
CAPEX	(964)	(2.146)	(3.233)	(5.197)	(944)	(1.983)	(3.107)	(4.876)
Change in net operating working capital:	(1.502)	(1.124)	(1.149)	(337)	(750)	(1.078)	(830)	(98)
Change in inventories	(40)	(54)	19	56	(87)	(40)	(71)	(10)
Change in trade receivables and net amounts due from customers on construction contracts	(345)	(128)	315	410	30	(130)	(31)	(310)
Change in trade payables (*)	(979)	(912)	(1.433)	(621)	(566)	(635)	(425)	445
Other changes in operating receivables/payables	(138)	(30)	(50)	(182)	(127)	(273)	(303)	(223)
Change in provisions for employee benefits	(6)	19	32	389	59	40	12	(131)
Change in operating provisions and Other changes	(16)	313	279	113	(52)	(34)	(45)	(41)
Net operating Free Cash Flow	(455)	701	1.551	1.974	25	671	1.908	2.856
Sale of investments and other disposals flow	3	1.379	1.554	1.571	707	732	737	745
Share capital increases/reimbursements, including incidental costs	186	186	186	186				1.304
Financial investments flow		(24)	(35)	(51)	(9)	(9)	(11)	(15)
Dividends payment	(3)	(204)	(204)	(204)		(227)	(227)	(227)
Change in finance lease contracts		(984)	(1.367)	(1.523)	(46)	(123)	(178)	(232)
Finance expenses, income taxes and other net non-operating requirements flow	(486)	(1.217)	(1.616)	(2.337)	(500)	(1.242)	(1.648)	(2.234)
Reduction/(Increase) in adjusted net financial debt from continuing operations	(755)	(163)	69	(384)	177	(198)	581	2.197
Reduction/(Increase) in net financial debt from Discontinued operations/Non-current assets held for sale	(24)	(178)	(222)	(243)	(38)	(38)	(38)	(38)
Reduction/(Increase) in adjusted net financial debt	(779)	(341)	(153)	(627)	139	(236)	543	2.159
OPENING NET FINANCIAL DEBT (Adjusted)	26.651	26.651	26.651	26.651	27.278	27.278	27.278	27.278
Net cash flow	(779)	(341)	(153)	(627)	139	(236)	543	2.159
ENDING NET FINANCIAL DEBT (Adjusted)	27.430	26.992	26.804	27.278	27.139	27.514	26.735	25.119
Adj for fair value valuation of derivatives and related underlyings	1.573	1.366	1.163	1.197	1.094	556	676	836
ENDING NET FINANCIAL DEBT (Reported)	29.003	28.358	27.967	28.475	28.233	28.070	27.411	25.955

(*) Includes the change in trade payables for amounts due to fixed asset suppliers

	Domestic Business Results - Reported Figures
																			UNAUDITED FIGURES
	1Q15	D% yoy	2Q15	D% yoy	3Q15	D% yoy	4Q15	D% yoy	FY15	D% yoy	1Q16	D% yoy	2Q16	D% yoy	3Q16	D% yoy	4Q16	D% yoy	FY16	D% yoy
KPI's ('000)
Wireline
Physical accesses	12.283	-5,7%	12.080	-5,8%	11.907	-5,9%	11.742	-5,9%	11.742	-5,9%	11.602	-5,5%	11.468	-5,1%	11.368	-4,5%	11.285	-3,9%	11.285	-3,9%
Broadband (retail+wholesale)	8.784	0,3%	8.821	0,7%	8.839	1,1%	8.890	1,6%	8.890	1,6%	8.955	1,9%	8.992	1,9%	9.042	2,3%	9.206	3,6%	9.206	3,6%
Mobile
Total lines (1)	30.140	-2,8%	30.075	-1,9%	30.023	-1,2%	30.007	-1,1%	30.007	-1,1%	29.846	-1,0%	29.742	-1,1%	29.549	-1,6%	29.617	-1,3%	29.617	-1,3%
€ mln	1Q15	D% yoy	2Q15	D% yoy	3Q15	D% yoy	4Q15	D% yoy	FY15	D% yoy	1Q16	D% yoy	2Q16	D% yoy	3Q16	D% yoy	4Q16	D% yoy	FY16	D% yoy
REVENUES	3.631	-2,6%	3.744	-1,6%	3.752	-1,4%	3.874	-2,3%	15.001	-2,0%	3.548	-2,3%	3.699	-1,2%	3.789	1,0%	3.970	2,5%	15.006	0,0%
o/w Services	3.435	-3,3%	3.505	-1,7%	3.539	-1,5%	3.578	-1,1%	14.058	-1,9%	3.352	-2,4%	3.468	-1,1%	3.526	-0,4%	3.532	-1,3%	13.878	-1,3%
o/w Equipments	196	12,3%	239	1,3%	213	0,7%	296	-15,0%	943	-2,7%	196	0,1%	231	-3,4%	263	23,9%	438	48,1%	1.128	19,6%
o/w Domestic Mobile Services	1.053	-4,2%	1.109	-2,5%	1.170	-1,5%	1.184	0,1%	4.517	-2,0%	1.059	0,6%	1.117	0,7%	1.183	1,1%	1.220	3,0%	4.579	1,4%
o/w Traditional	621	-12,9%	622	-14,3%	639	-12,1%	621	-10,6%	2.503	-12,5%	573	-7,7%	580	-6,9%	561	-12,2%	537	-13,5%	2.250	-10,1%
o/w Innovative	375	14,4%	416	21,8%	453	16,0%	484	19,9%	1.728	18,1%	438	16,8%	466	12,0%	527	16,4%	577	19,2%	2.008	16,2%
o/w Wholesale	57	-1,6%	71	2,1%	79	10,0%	78	-6,2%	286	0,9%	48	-15,8%	72	1,1%	96	20,7%	105	34,9%	321	12,4%
o/w Domestic Wireline Services	2.595	-4,4%	2.614	-1,9%	2.592	-1,8%	2.572	-3,1%	10.372	-2,8%	2.483	-4,3%	2.488	-4,8%	2.499	-3,6%	2.494	-3,0%	9.965	-3,9%
o/w Traditional Services	1.193	-8,4%	1.185	-6,2%	1.151	-6,3%	1.109	-9,6%	4.638	-7,6%	1.064	-10,8%	1.053	-11,1%	1.032	-10,3%	1.069	-3,6%	4.219	-9,0%
o/w Innovative Services	558	4,6%	583	7,8%	577	4,9%	596	3,8%	2.314	5,2%	590	5,8%	610	4,6%	624	8,1%	648	8,7%	2.472	6,8%
o/w Domestic Wholesale	560	-7,7%	549	-6,4%	550	-5,6%	546	1,2%	2.205	-4,8%	537	-4,1%	506	-7,8%	503	-8,6%	488	-10,7%	2.034	-7,8%
o/wTIS Group	310	3,0%	325	8,3%	336	10,5%	343	1,2%	1.314	5,6%	311	0,3%	338	4,0%	354	5,4%	348	1,5%	1.351	2,8%
o/w Subs. Adj. and Other	-26	12,2%	-28	-3,3%	-23	15,8%	-23	7,6%	-99	8,2%	-19	24,7%	-19	32,4%	-13	41,4%	-59	-155,0%	-110	-11,3%
Elimination & Other	-213	18,0%	-218	6,8%	-223	4,8%	-177	18,9%	-831	12,2%	-190	10,9%	-137	37,1%	-157	29,5%	-182	-2,9%	-667	19,8%
EBITDA	1.610	-10,2%	1.236	-27,7%	1.679	-6,5%	1.042	-38,8%	5.567	-20,4%	1.461	-9,3%	1.723	39,4%	1.811	7,9%	1.703	63,4%	6.698	20,3%
EBITDA Margin	44,3%		33,0%		44,7%		26,9%		37,1%		41,2%		46,6%		47,8%		42,9%		44,6%
Capex	676	37,1%	830	21,3%	791	28,6%	1.603	61,8%	3.900	40,1%	778	15,1%	797	-4,0%	823	4,0%	1.311	-18,2%	3.709	-4,9%
% on revenues	18,6%		22,2%		21,1%		41,4%		26,0%		21,9%		21,5%		21,7%		33,0%		24,7%
Headcount at period-end ('000)	52.965	-0,6%	52.825	-0,7%	52.726	-1,0%	52.644	-0,8%	52.644	-0,8%	52.713	-0,5%	52.622	-0,4%	52.140	-1,1%	51.280	-2,6%	51.280	-2,6%

(1) M2M included

Domestic Wireline Results - Reported Figures
																			UNAUDITED FIGURES
		1Q15 D% yoy		2Q15 D% yoy		3Q15 D% yoy		4Q15 D% yoy		FY15 D% yoy		1Q16 D% yoy		2Q16 D% yoy		3Q16 D% yoy		4Q16 D% yoy		FY16 D% yoy
KPI's
Physical accesses ('000)	12.283	-5,7%	12.080	-5,8%	11.907	-5,9%	11.742	-5,9%	11.742	-5,9%	11.602	-5,5%	11.468	-5,1%	11.368	-4,5%	11.285	-3,9%	11.285	-3,9%
OLO Access (on TI infrastructure)	7.297	1,2%	7.375	1,6%	7.392	3,1%	7.467	3,4%	7.467	3,4%	7.543	3,4%	7.606	3,1%	7.600	2,8%	7.677	2,8%	7.677	2,8%
o/w ULL	5.460	1,2%	5.511	0,9%	5.517	2,9%	5.573	3,1%	5.573	3,1%	5.632	3,2%	5.680	3,1%	5.658	2,5%	5.641	1,2%	5.641	1,2%
o/w Virtual ULL o/w Wholesale Line Rental	26 565	-6,5% -14,4%	27 547	1,4% -13,7%	29 523	16,7% -14,1%	28 497	17,4% -15,4%	28 497	17,4% -15,4%	29 470	12,2% -16,9%	28 443	2,7% -19,1%	23 416	-19,4% -20,6%	21 388	-25,8% -21,9%	21 388	-25,8% -21,9%
o/w Naked	1.207	7,3%	1.213	7,5%	1.218	5,4%	1.230	3,8%	1.230	3,8%	1.241	2,9%	1.256	3,5%	1.256	3,1%	1.274	3,6%	1.274	3,6%
o/w NGN	39	-	76	-	105	-	139	-	139	-	170	-	199	-	247	-	353	-	353	-
TI Retail Broadband Accesses ('000)	6.945	0,2%	6.971	0,5%	6.984	0,7%	7.023	1,5%	7.023	1,5%	7.067	1,8%	7.088	1,7%	7.123	2,0%	7.191	2,4%	7.191	2,4%
o/w Business	1.544	0,0%	1.522	-1,5%	1.505	-3,1%	1.488	-4,1%	1.488	-4,1%	1.480	-4,2%	1.472	-3,3%	1.470	-2,3%	1.464	-1,6%	1.464	-1,6%
o/w Consumer	5.401	0,2%	5.450	1,0%	5.479	1,8%	5.535	3,1%	5.535	3,1%	5.588	3,5%	5.616	3,1%	5.653	3,2%	5.727	3,5%	5.727	3,5%
o/w NGN	290	-	374	-	435	-	538	-	538	-	672	-	790	-	872	-	997	85,2%	997	85,2%
% flat offers on TI total portfolio (Consumer+Business)	92%	1,8pp	93%	1,9pp	93%	1,9pp	94%	1,9pp	94%	1,9pp	94%	1,8pp	94%	1,5pp	95%	1,4pp	95%	1,2pp	95%	1,2pp
BroadBand Accesses Wholesale ('000)	1.839	0,6%	1.850	1,7%	1.855	2,4%	1.867	2,1%	1.867	2,1%	1.888	2,6%	1.903	2,9%	1.918	3,4%	2.016	8,0%	2.016	8,0%
BB Arpu (euro/mese)	20,4	6,0%	20,9	6,7%	20,7	3,7%	21,2	4,9%	20,8	5,3%	21,5	5,2%	21,9	4,4%	22,4	8,1%	22,3	5,5%	22,0	5,8%
REVENUES(€ mln)		1Q15 D% yoy		2Q15 D% yoy		3Q15 D% yoy		4Q15 D% yoy		FY15 D% yoy		1Q16 D% yoy		2Q16 D% yoy		3Q16 D% yoy		4Q16 D% yoy		FY16 D% yoy
TOTAL	2.657	-4,1%	2.688	-1,8%	2.645	-2,7%	2.664	-3,9%	10.654	-3,1%	2.553	-3,9%	2.578	-4,1%	2.643	-0,1%	2.721	2,1%	10.495	-1,5%
o/w Services	2.595	-4,4%	2.614	-1,9%	2.592	-1,8%	2.572	-3,1%	10.372	-2,8%	2.483	-4,3%	2.488	-4,8%	2.499	-3,6%	2.494	-3,0%	9.965	-3,9%
o/w Equipments	62	9,1%	74	1,4%	53	-32,5%	92	-21,7%	282	-13,8%	70	13,8%	90	20,7%	144	169,0%	227	145,2%	530	88,2%
TRADITIONAL SERVICES	1.193	-8,4%	1.185	-6,2%	1.151	-6,3%	1.109	-9,6%	4.638	-7,6%	1.064	-10,8%	1.053	-11,1%	1.032	-10,3%	1.069	-3,6%	4.219	-9,0%
o/w Voice	1.038	-7,6%	1.015	-7,1%	978	-7,3%	944	-11,9%	3.975	-8,5%	901	-13,2%	874	-13,9%	836	-14,4%	830	-12,0%	3.441	-13,4%
o/w Traffic	353	-6,3%	359	-1,9%	348	1,6%	339	-9,5%	1.399	-4,1%	324	-8,4%	323	-10,1%	306	-11,9%	306	-9,9%	1.259	-10,1%
o/w Access	612	-8,0%	586	-9,3%	562	-10,9%	539	-13,0%	2.299	-10,3%	515	-15,9%	489	-16,6%	470	-16,3%	463	-14,1%	1.937	-15,8%
o/w Voice VAS	30	-6,7%	29	-12,9%	28	-18,0%	27	-17,1%	115	-13,7%	26	-15,4%	27	-5,9%	27	-4,8%	27	-2,4%	106	-7,3%
o/w Rental & other	43	-12,1%	41	-14,3%	40	-16,0%	38	-13,2%	161	-13,9%	37	-13,7%	35	-14,0%	33	-16,4%	35	-8,5%	140	-13,2%
o/w Business Data & Others trad	155	-13,9%	170	-0,5%	173	-0,3%	165	6,9%	663	-2,3%	163	5,3%	179	5,7%	195	12,9%	239	44,6%	777	17,2%
o/w Data Services	118	-6,8%	120	-4,3%	110	-9,8%	117	-4,9%	465	-6,4%	112	-4,8%	113	-5,8%	112	2,0%	115	-1,8%	453	-2,7%
o/w Rental & other	37	-30,4%	50	10,0%	63	22,3%	48	53,1%	198	9,0%	51	37,3%	67	33,4%	83	32,1%	124	157,4%	325	63,9%
INNOVATIVE SERVICES	558	4,6%	583	7,8%	577	4,9%	596	3,8%	2.314	5,2%	590	5,8%	610	4,6%	624	8,1%	648	8,7%	2.472	6,8%
o/w Broadband	418	5,7%	430	6,8%	427	3,9%	437	5,8%	1.712	5,5%	447	6,9%	457	6,2%	471	10,2%	473	8,2%	1.847	7,9%
o/w Access & Bundles Services	399	6,0%	412	7,4%	409	4,6%	419	6,4%	1.639	6,1%	429	7,6%	440	6,8%	454	10,9%	457	8,9%	1.780	8,6%
o/w Others	19	-0,8%	18	-5,0%	18	-8,8%	18	-6,6%	72	-5,4%	17	-6,4%	17	-7,6%	17	-6,4%	16	-10,0%	67	-7,6%
o/w Content	5	12,7%	5	4,8%	6	28,2%	4	-13,1%	20	7,5%	4	-17,6%	4	-21,3%	4	-23,1%	4	-10,3%	17	-18,5%
o/w ICT Service	135	1,1%	148	10,7%	145	7,1%	155	-0,9%	582	4,3%	139	3,2%	149	0,6%	149	3,0%	172	10,9%	609	4,5%
Domestic Wholesale	560	-7,7%	549	-6,4%	550	-5,6%	546	1,2%	2.205	-4,8%	537	-4,1%	506	-7,8%	503	-8,6%	488	-10,7%	2.034	-7,8%
TIS Group	310	3,0%	325	8,3%	336	10,5%	343	1,2%	1.314	5,6%	311	0,3%	338	4,0%	354	5,4%	348	1,5%	1.351	2,8%
Subs. Adj. and Other	-26	12,2%	-28	-3,3%	-23	15,8%	-23	7,6%	-99	8,2%	-19	24,7%	-19	32,4%	-13	41,4%	-59	-155%	-110	-11,3%

		Domestic Mobile Results - Reported Figures
																			UNAUDITED FIGURES
		1Q15 D% yoy		2Q15 D% yoy		3Q15 D% yoy		4Q15 D% yoy		FY15 D% yoy		1Q16 D% yoy		2Q16 D% yoy		3Q16 D% yoy		4Q16 D% yoy		FY16 D% yoy
KPI's
Total number of lines ('000) (1)	30.140	-2,8%	30.075	-1,9%	30.023	-1,2%	30.007	-1,1%	30.007	-1,1%	29.846	-1,0%	29.742	-1,1%	29.549	-1,6%	29.617	-1,3%	29.617	-1,3%
Churn Rate %	6,4%	0,3pp	5,5%	-0,4pp	5,8%	-0,5pp	5,7%	-0,1pp	23,4%	-0,7pp	5,6%	-0,8pp	5,3%	-0,2pp	5,9%	0,1pp	6,0%	0,2pp	22,8%	-0,7pp
Total User Broadband (mln of users)	10,5	20,8%	10,8	17,5%	11,2	16,9%	11,5	14,3%	11,5	14,3%	11,6	11,1%	11,8	9,5%	12,1	7,7%	12,2	6,0%	12,2	6,0%
Total User LTE (mln of users)	1,8	-	2,7	-	3,4	-	4,4	-	4,4	-	5,0	-	5,7	-	6,2	-	7,6	-	7,6	-
Volumes of traffic (mln of minutes) (2)	16.155	8,0%	16.630	6,6%	16.339	5,1%	16.998	2,7%	66.122	5,5%	16.943	4,9%	17.381	4,5%	17.213	5,3%	18.042	6,1%	69.578	5,2%
o/w Outgoing traffic volumes (mln of minutes)	10.821	4,5%	10.983	3,3%	10.711	1,9%	11.096	-0,8%	43.611	2,2%	10.999	1,6%	11.164	1,6%	11.143	4,0%	11.633	4,8%	44.939	3,0%
o/w Incoming traffic volumes (mln of minutes)	5.335	15,7%	5.647	13,9%	5.627	11,8%	5.902	9,8%	22.512	12,7%	5.945	11,4%	6.217	10,1%	6.069	7,9%	6.408	8,6%	24.640	9,5%
Usage Voice (min/line/month)(3)	214	13,0%	223	11,5%	220	8,9%	232	6,2%	222	9,8%	233	8,8%	241	8,2%	241	9,5%	256	10,2%	243	9,2%
Usage Data (GB/users/month)	1,3	14,3%	1,4	15,1%	1,6	18,3%	1,6	15,9%	1,5	15,9%	1,7	28,6%	1,9	36,0%	2,0	24,7%	2,1	30,8%	1,9	29,7%
ARPU(3) €	11,3	-1,3%	11,9	0,2%	12,5	-0,2%	12,8	0,8%	12,1	-0,1%	11,6	2,5%	12,1	1,5%	12,8	2,4%	13,3	4,1%	12,4	2,6%
REVENUES (€ mln), Reported figures		1Q15 D% yoy		2Q15 D% yoy		3Q15 D% yoy		4Q15 D% yoy		FY15 D% yoy		1Q16 D% yoy		2Q16 D% yoy		3Q16 D% yoy		4Q16 D% yoy		FY16 D% yoy
TOTAL	1.151	-2,0%	1.236	-2,2%	1.303	1,5%	1.378	0,7%	5.068	-0,5%	1.186	3,0%	1.261	2,0%	1.300	-0,2%	1.432	3,9%	5.179	2,2%
SERVICES	1.053	-4,2%	1.109	-2,5%	1.170	-1,5%	1.184	0,1%	4.517	-2,0%	1.059	0,6%	1.117	0,7%	1.183	1,1%	1.220	3,0%	4.579	1,4%
Traditional Services	621	-12,9%	622	-14,3%	639	-12,1%	621	-10,6%	2.503	-12,5%	573	-7,7%	580	-6,9%	561	-12,2%	537	-13,5%	2.250	-10,1%
o/w Outgoing voice (4)	463	-12,6%	455	-14,3%	461	-14,0%	432	-13,8%	1.810	-13,7%	404	-12,8%	403	-11,4%	395	-14,3%	379	-12,3%	1.581	-12,7%
o/w Incoming voice	58	12,3%	62	9,9%	65	14,4%	69	16,2%	254	13,3%	67	15,7%	70	13,4%	68	4,4%	71	3,2%	276	8,9%
o/w Messaging	100	-24,2%	106	-24,0%	113	-15,6%	120	-10,6%	439	-18,6%	102	2,0%	107	0,7%	98	-13,3%	87	-27,7%	394	-10,4%
Innovative Services	375	14,4%	416	21,8%	453	16,0%	484	19,9%	1.728	18,1%	438	16,8%	466	12,0%	527	16,4%	577	19,2%	2.008	16,2%
o/w Browsing	306	16,0%	339	20,7%	372	23,8%	392	20,5%	1.409	20,3%	356	16,3%	377	11,4%	392	5,4%	451	15,0%	1.576	11,9%
o/w Internet Content	69	8,1%	77	27,3%	80	-10,2%	92	17,4%	319	9,0%	83	19,4%	88	14,3%	135	67,6%	126	37,1%	432	35,4%
Wholesale Services	57	-1,6%	71	2,1%	79	10,0%	78	-6,2%	286	0,9%	48	-15,8%	72	1,1%	96	20,7%	105	34,9%	321	12,4%
Handsets	98	29,0%	127	0,1%	133	39,3%	194	4,8%	551	14,1%	127	29,5%	144	13,7%	117	-12,0%	212	9,2%	600	8,8%

(1) M2M included

(2) Incoming + Outgoing volumes (Visitors and Roamers volumes not included)

(3) Net of visitors

(4) Outgoing voice revenues include roaming revenues

TIM Brasil Results -		Reported Figures
			Revised											UNAUDITED FIGURES
	1Q15	2Q15	3Q15	4Q15	FY15	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy	4Q16	Δ% yoy	FY16	Δ% yoy
KPI's - Mobile only
Estimated Total Penetration (%)	139,0%	138,2%	134,8%	125,7%	125,7%	125,4%		123,0%		121,6%		118,0%
Market Share on total lines(%)	26,7%	26,4%	26,3%	25,7%	25,7%	26,1%	-0,6pp	25,3%	-1,2pp	25,2%	-1,1pp	26,0%	+0,3pp	26,0%	+0,3pp
Total Lines ('000) (1)	75.749	74.600	72.573	66.234	66.234	67.269	-11,2%	63.988	-14,2%	63.247	-12,9%	63.418	-4,3%	63.418	-4,3%
TOTAL ARPU (2)	16,7	16,1	16,4	17,6	16,7	17,2	3%	17,2	7%	18,4	12%	19,2	9%	18,0	8%
TOTAL MOU net of visitors	120	119	119	120	119	119	-1,4%	118	-0,4%	116	-2,1%	113	-5,8%	117	-2,4%
MAIN RESULTS (IAS/IFRS, R\$ mln)	1Q15	2Q15	3Q15	4Q15	FY15	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy	4Q16	Δ% yoy	FY16	Δ% yoy
REVENUES Reported	4.551	4.361	4.115	4.115	17.142	3.854	-15,3%	3.820	-12,4%	3.900	-5,2%	4.043	-1,7%	15.617	-8,9%
of which services	3.944	3.792	3.782	3.869	15.387	3.618	-8,3%	3.570	-5,9%	3.690	-2,4%	3.842	-0,7%	14.720	-4,3%
of which handsets	607	569	333	246	1.755	236	-61,1%	250	-56,1%	210	-36,9%	201	-18,3%	897	-48,9%
EBITDA Reported	1.341	1.276	1.285	1.463	5.365	1.107	-17,4%	1.189	-6,8%	1.270	-1,2%	1.548	5,8%	5.114	-4,7%
EBITDA margin	29,5%	29,3%	31,2%	35,6%	31,3%	28,7%	-0,8pp	31,1%	1,8pp	32,6%	1,4pp	38,3%	2,7pp	32,7%	1,4pp
EBITDA Organic (net non recurring)	1.341	1.276	1.285	1.516	5.418	1.140	-15,0%	1.190	-6,7%	1.292	0,5%	1.548	2,1%	5.170	-4,6%
EBITDA margin	29,5%	29,3%	31,2%	36,8%	31,6%	29,6%	0,1 pp	31,2%	1,9 pp	33,1%	1,9 pp	38,3%	1,5 pp	33,1%	1,5 pp
Capex Reported	924	1.184	1.168	1.488	4.764	710	-23,2%	975	-17,7%	1.122	-3,9%	1.695	+13,9%	4.502	-5,5%
% on revenues	20,3%	27,1%	28,4%	36,2%	27,8%	18,4%	-1,9pp	25,5%	-1,6pp	28,8%	0,4pp	41,9%	5,7pp	28,8%	1,0pp
	1Q15	1H15	9M15	4Q15	FY15	1Q16	Δ% yoy	1H16	Δ% yoy	9M16	Δ% yoy	FY16	Δ% yoy	FY16
Exchange rate AVG YTD (R\$ vs. euro)	3,22251	3,31144	3,52233	3,69727	3,69727	4,29753		4,13001		3,96106		3,85935		3,85935

(1) Includes company lines

(2) Gross of visitors

4Q'16 Reported & Organic Figures (*): YoY trends

Revised UNAUDITED FIGURES

		4Q'15					4Q'16			Δ% yoy reported	Δ% yoy organic *
Reported Figures (a)			Non Organic elements (b)	Non recurring items (c)	Organic figures * (d=a+b+c)	Reported figures (e)		Non recurring items (f)	Organic figures * (g=e+f)	(h=e/a-1)	(i=g/d-1)
€ mln		Change in consolid.	Exchange rate impact
REVENUES		area				REVENUES
Domestic	3.874		1		3.875	Domestic	3.970		3.970	2,5	2,5
o/w Wireline Domestic	2.664		1		2.665	o/w Wireline Domestic	2.721		2.721	2,1	2,1
o/w Mobile Domestic	1.378				1.378	o/w Mobile Domestic	1.432		1.432	3,9	3,9
Brasile	938		216		1.154	Brasile	1.125		1.125	19,9	(1,7)
Other Activities & Eliminations	29				29	Other Activities & Eliminations	(9)		(9,0)	-	-
TI Group	4.841		217		5.058	TI Group	5.086		5.086	5,1	0,6
EBITDA						EBITDA
	1.042			582	1.624		1.703	43	1.746
Domestic	343		62	14	419	Domestic	425	1	426	63,4	7,5
Brasile	(1)			20	19	Brasile	(4)		(4)	23,9	2,1
Other Activities & Eliminations TI Group	1.384		62	616	2.062	Other Activities & Eliminations TI Group	2.124	44	2.168	53,5	5,1
EBITDA Margin						EBITDA Margin
	26,9%				41,9%		42,9%		44,0%	16 pp	2,1 pp
Domestic	36,6%				36,8%	Domestic	37,8%		38,3%	1,2 pp	1,5 pp
Brasile TI Group	28,6%				40,8%	Brasile TI Group	41,8%		42,6%	13,2 pp	1,8 pp
EBIT						EBIT
Domestic	269			582	851	Domestic	801	43	844	197,8	(0,8)
Brasile	(104)		55	229	180	Brasile	158	(2)	156	-	(12,0)
Other Activities & Eliminations	(8)			21	13	Other Activities & Eliminations	(5)		(5)		-
TI Group	157		55	832	1.044	TI Group	954	41	995	507,6	(4,7)
EBIT Margin						EBIT Margin
Domestic	6,9%				22,0%	Domestic	20,2%		21,3%	13,3 pp	-0,7 pp
Brasile	-11,1%				16,0%	Brasile	14,0%		14,3%	25,1 pp	-1,7 pp
TI Group	3,2%				20,6%	TI Group	18,8%		19,6%	15,6 pp	-1 pp
Non recurring items on EBITDA				4Q15	4Q16	Non recurring items on EBIT			4Q15	4Q16
Labour cost				397	31	Labour Costs			397	31
Other Costs & Charges				219	13	Other Costs & Charges			221	13
						Impairment loss Brazil / Gain on Brazilian Tower 214
Total				616	44	Total			832	(3) 41

(*) Organic: excluding exchange rate fluctuations & non-recurring items

					Domestic Reported and Organic Ebitda
€ mln										UNAUDITED FIGURES
	1Q'15	2Q'15	3Q'15	4Q'15	FY'15	1Q'16	2Q'16	3Q'16	4Q'16	FY'16	1Q %YoY	2Q %YoY	3Q %YoY	4Q %YoY	FY %YoY
EBITDA Organic	1.612	1.627	1.732	1.624	6.595	1.528	1.739	1.867	1.746	6.880	-5,2%	+6,9%	+7,8%	+7,5%	+4,3%
Exchange Rate Impact	1	(1)	0	0	0	0	0	0	0	0
Labour Costs	0	24	19	386	429	65	2	47	30	144
Other Operational Costs	1	368	28	115	512	2	14	9	11	36
Other Charges			6	81	87			0	2	2
Non recurring Items	2	391	53	582	1.028	67	16	56	43	182
EBITDA Reported	1.610	1.236	1.679	1.042	5.567	1.461	1.723	1.811	1.703	6.698	-9,3%	+39,4%	+7,9%	+63,4%	+20,3%