30 Table of Contents A. History and Development of the Company Overview Telefónica, S.A. is a corporation duly organized and existing under the laws of the Kingdom of Spain, incorporated on April 19, 1924. We: •are a diversified telecommunications group which provides a comprehensive range of services through one of the world’s largest and most modern telecommunications networks; •are focused on providing telecommunications services; and •operate principally in Europe and Latin America. The following significant events occurred in 2024: •On January 3, 2024, certain subsidiaries of Telefónica Spain endorsed the agreement reached on December 28, 2023 with the most representative trade unions to (i) sign the III Collective Bargaining Agreement, which runs until December 31, 2026 and can be extended for a further year; and (ii) execute a collective redundancies plan affecting up to a total of 3,420 employees (the "Collective Redundancies Plan"). Employees who turned 56 years or older in 2024 and with a seniority of more than 15 years could adhere to the Collective Redundancies Plan. However, targets were established that resulted in limits on adherence in critical areas or additional redundancies based on business reasons. The present value of the estimated payment flows resulting from the Collective Redundancies Plan was estimated in a provision of 1,320 million euros (before taxes), recorded as of December 31, 2023 under "Personnel expenses" (see Note 24.a to the Consolidated Financial Statements), with no cash impact as of such date. •On January 13, 2024, the second annual extension of the sustainability-linked syndicated credit facility for up to 5,500 million euros of Telefónica, S.A. was exercised, extending the maturity date to January 13, 2029. •On January 17, 2024, Telefónica, S.A., through its wholly-owned subsidiary Telefónica Emisiones, S.A.U. launched under its European medium-term notes program (the "EMTN Programme") a new issuance of notes guaranteed by Telefónica, S.A. in an aggregate principal amount of 1,750 million euros. This issue was split into two tranches. The first tranche, with an aggregate principal amount of 1,000 million euros, due on January 24, 2032, pays an annual coupon of 3.698% and was issued at par. The second tranche, with an aggregate principal amount of 750 million euros, due on January 24, 2036, pays an annual coupon of 4.055% and was also issued at par. The settlement of the transaction took place on January 24, 2024. An amount equivalent to the net proceeds was intended to be allocated towards eligible investments in accordance with the Sustainable Financing Framework, including the transformation and modernization of telecommunications networks based on high-speed fixed and mobile networks, including supporting infrastructure and software to improve the energy efficiency of the networks, as well as the implementation of Telefónica's Renewable Energy Plan, and development and implementation of digital products and services with a focus on saving energy and/or natural resources. •On January 19, 2024, Telefónica Audiovisual Digital, S.L.U. was awarded exclusive broadcasting rights for five matches per matchday of the Spanish First Division Football League National Championship for pay television in the residential market in Spain. Telefónica Audiovisual had first pick on 18 matchdays and second pick on 17 matchdays (or the applicable portion for the 2024/2025 season), including the second match of the season between Real Madrid and Barcelona. In addition, it was awarded exclusive broadcasting rights of one matchday for the 2024/2025 season and three matchdays in the remaining seasons. The award covers the 2024/2025 season, beginning January 20, 2025, as well as the 2025/2026 and 2026/2027 seasons. The price has been set at 250 million euros for the 2024/2025 season and 520 million euros for each of the 2025/2026 and 2026/2027 seasons (see Note 29.c "Other Information–Commitments" to the Consolidated Financial Statements). •On January 22, 2024, regarding the voluntary public acquisition offer in the form of a partial offer (the "Offer") launched by Telefónica — through Telefónica Local Services GmbH— for shares of Telefónica Deutschland Holding AG ("Telefónica Deutschland") announced in November 2023, the Company reported that, following the expiry of the acceptance period, the Offer had been accepted by shareholders holding 233,732,773 Telefónica Deutschland shares, representing approximately 7.86% of its share capital and voting rights, for an approximate amount of 549 million euros. In addition, Telefónica had made direct market purchases, from January 1, 2024 to January 26, 2024, for a total of 113,999,566 shares of the aforementioned subsidiary, for an approximate amount of 31 Table of Contents 268 million euros. Thus, as of January 26, 2024 Telefónica owned, directly and indirectly, 2,799,576,769 shares which represented 94.12% of the share capital and voting rights of Telefónica Deutschland. •On February 5, 2024, Telefónica Emisiones S.A.U. redeemed 1,000 million euros of its notes issued on February 5, 2019. These notes were guaranteed by Telefónica, S.A. •On February 22, 2024, the Audit and Control Committee and the Nominating, Compensation and Corporate Governance Committee of Telefónica adopted the following resolutions relating to their composition: (i) to appoint Mr. José Javier Echenique Landiribar as Chairman of the Audit and Control Committee; and (ii) to appoint Mr. Peter Löscher as Chairman of the Nominating, Compensation and Corporate Governance Committee. •On February 23, 2024, Telefónica filed with the United States Securities and Exchange Commission its annual report on Form 20-F for the year ended December 31, 2023. •On March 6, 2024, Telefónica Europe B.V. carried out the following transactions related to its capital structure: ◦a new securities issue amounting to 1,100 million euros, guaranteed by Telefónica, S.A. An amount equal to the net proceeds of the issue of the securities was subject to specific eligibility criteria to be applied to finance new or refinance existing projects, as detailed in Telefónica's Sustainable Financing Framework. The settlement took place on March 15, 2024; and ◦a tender offer for any outstanding 1,300 million euros Undated 6 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities. Telefónica Europe B.V. accepted the purchase in cash of the tendered securities for an aggregate principal amount of 1,097 million euros. The tender offer settled on March 18, 2024. •On March 7, 2024, Telefónica announced a decision to make, through Telefónica Local Services GmbH, a public delisting acquisition offer with the aim of acquiring the shares in Telefónica Deutschland not yet directly or indirectly held by Telefónica. On March 20, 2024, the relevant offer document was published following its review and approval by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht), and the acceptance period for the delisting offer commenced. The offer could be accepted in respect of up to 156,565,942 Telefónica Deutschland shares, corresponding to approximately 5.26% of the share capital and voting rights in Telefónica Deutschland, at an offer price of 2.35 euros per share. On March 26, 2024, Telefónica Deutschland's management and supervisory boards issued the joint reasoned statement with respect to the delisting offer, recommending that its shareholders accept the delisting offer. The acceptance period expired on April 18, 2024. On April 23, 2024, Telefónica had reached approximately 96.85% of the share capital and voting rights of Telefónica Deutschland after giving effect to the acquisition at settlement of the number of shares for which the delisting offer had been accepted and considering the number of Telefónica Deutschland shares held directly or indirectly by Telefónica at the close of the last trading day of the acceptance period, which corresponded to 2,880,817,453 shares of Telefónica Deutschland. The total number of shares for which the delisting offer was accepted, together with the number of Telefónica Deutschland shares acquired from the announcement of the delisting offer until the close of the last trading day of the acceptance period, was 74,338,954 shares, representing approximately 2.50% of Telefónica Deutschland's share capital and voting rights, acquired for a total consideration of approximately 175 million euros, funded entirely with cash. Lastly, the management board of the Frankfurt Stock Exchange approved the delisting of the shares of Telefónica Deutschland which became effective as of April 18, 2024. •On April 12, 2024, the Annual General Shareholders' Meeting of Telefónica held at second call approved all the resolutions submitted by the Board of Directors for deliberation and vote by the General Shareholders' Meeting. Likewise, it was informed that a proposal made during the meeting by a shareholder was rejected by a majority of more than 99%. In addition, the Annual General Shareholders' Meeting approved the distribution of a dividend in cash charged to unrestricted reserves, by means of a payment of a fixed gross amount of 0.30 euros during 2024 payable in two tranches, for each existing Telefónica share and carrying entitlement to this distribution on the following dates: (i) the first payment in cash of a gross amount of 0.15 euros per share was made on June 20, 2024, and (ii) the second payment in cash of a gross amount of 0.15 euros per share was made on December 19, 2024. On the same date, the Board of Directors of Telefónica, following a favorable report from the Nominating, Compensation and Corporate Governance Committee, unanimously adopted the following resolutions regarding the reelection, and the ratification and appointment of Directors approved in the abovementioned meeting: i) to re-elect Mr. Isidro Fainé Casas as Vice-Chairman of the Board of Directors; ii) to re-elect Mr. José Javier Echenique 32 Table of Contents Landiríbar as Vice-Chairman of the Board of Directors and Lead Independent Director; iii) to re-elect Mr. Isidro Fainé Casas, Mr. José Javier Echenique Landiríbar, Mr. Peter Löscher and Ms. Claudia Sender Ramírez as members of the Executive Commission of the Board of Directors; and iv) that the Directors re-elected, and ratified and appointed by the Annual General Shareholders' Meeting who were members of any of the remaining Committees of the Board of Directors (i.e. Mr. José Javier Echenique Landiríbar, Mr. Peter Löscher, Ms. Verónica Pascual Boé and Ms. Solange Sobral Targa) continue as members of the same. In this regard, Mr. Echenique Landiríbar would continue as a member of the Audit and Control Committee, and of the Nominating, Compensation and Corporate Governance Committee; Mr. Löscher of the Nominating, Compensation and Corporate Governance Committee and of the Audit and Control Committee; Ms. Pascual Boé of the Nominating, Compensation and Corporate Governance Committee; and Ms. Sobral Targa of the Sustainability and Regulation Committee. In addition, the Audit and Control Committee agreed to re-elect Mr. José Javier Echenique Landiríbar as Chairman, and the Nominating, Compensation and Corporate Governance Committee agreed to re-elect Mr. Peter Löscher as Chairman. In addition, the Board of Directors of Telefónica at its meeting held on such date, resolved to carry out the implementation of the share capital reduction through the cancellation of treasury shares approved by the Annual General Shareholders' Meeting held on the same date under item IV of its Agenda. The share capital of Telefónica was reduced in the amount of 80,296,591 euros, through the cancellation of 80,296,591 shares of Telefónica then held as treasury stock, with a nominal value of one euro each. The share capital of Telefónica resulting from the reduction was set at 5,670,161,554 euros corresponding to 5,670,161,554 shares with a nominal value of one euro each. On May 13, 2024, the public deed relating to the share capital reduction was registered in the Commercial Registry of Madrid. •On May 8, 2024, the Board of Directors of Telefónica unanimously resolved to accept the voluntary resignation presented by Ms. Carmen García de Andrés from her position as Director of Telefónica, for personal reasons and in order to contribute to the process of orderly renewal of the Board of Directors of Telefónica. The Board of Directors expressed its gratitude for the services rendered to Telefónica during her tenure. Consequently, Ms. Carmen García de Andrés was no longer a member of the Board of Directors Committees of which she was a member (i.e. the Audit and Control Committee and the Sustainability and Regulation Committee). To fill the abovementioned vacancy, and following a favorable report from the Nominating, Compensation and Corporate Governance Committee, the Board of Directors resolved to appoint, by co-optation, Mr. Carlos Ocaña Orbis as Proprietary Director to the Board of Directors of Telefónica, nominated by the shareholder Sociedad Estatal de Participaciones Industriales. Likewise, the Board of Directors resolved, following a favorable report from the Nominating, Compensation and Corporate Governance Committee, to appoint Mr. Carlos Ocaña Orbis as a member of the Executive Commission and the Audit and Control Committee. •On July 31, 2024, in relation to the subsidiary Colombia Telecomunicaciones S.A. ESP BIC ("Colombia Telecomunicaciones"), Telefónica informed that the Telefónica Group entered into a non-binding agreement with the Millicom Group to explore a possible corporate transaction, with respect to the assets that both Groups have in Colombia. This potential transaction is subject to the signing of the definitive agreements between the companies involved and the obtaining of the corresponding regulatory approvals, and may involve the sale of the Telefónica Group's shares in Colombia Telecomunicaciones. •On July 31, 2024, Telefónica, S.A. drew down 150 million euros of its bilateral loan signed on March 27, 2024 and maturing in 2034. •On October 31, 2024, Telefónica, S.A. drew down 140 million euros of its bilateral loan signed on October 9, 2024, and maturing on October 31, 2031. •On November 7, 2024, Telefónica España Filiales, S.A.U. ("Telefónica España Filiales") reached an agreement with Vodafone ONO, S.A.U. ("Vodafone España") to incorporate a joint company, whose main activity is the commercialization of a fiber to the home (FTTH) network for its shareholders, Telefónica España Filiales and Vodafone España, so that they can in turn provide retail and wholesale broadband access services. The joint company is expected to cover approximately 3.6 million premises, with assets that are currently part of Telefónica de España’s FTTH network and that represent approximately 12% of its national network. It is estimated that the joint company will initially have around 1.4 million clients, which implies a penetration level of approximately 40%. As part of the transaction, the required agreements for the provision of services by Telefónica Group to the joint company must be signed. After the closing of the transaction, Telefónica España Filiales will hold a 63% in the joint company and Vodafone España the remaining 37%. 33 Table of Contents •On November 12, 2024, Telefónica obtained a favorable award regarding the investment dispute with the Republic of Colombia (Case ICSID No. ARB/18/3) submitted to the International Center for Settlement of Investment Disputes (“ICSID”), pursuant to the Agreement between the Republic of Colombia and the Kingdom of Spain for the Promotion and Reciprocal Protection of Investments (APRI). The tribunal determined that Colombia failed to comply with its obligation to grant fair and equitable treatment to Telefónica's investments under Article 2(3) of the APRI, and it ordered Colombia to pay the amount of 380 million U.S. dollars (approximately 358 million euros at the exchange rate of November 12, 2024) plus compound interest at a rate of 5% per year as compensation for the damages caused (i.e., the entire principal amount and interest claimed by Telefónica). In addition, the tribunal ordered Colombia to pay Telefónica’s attorneys’ fees with respect to the arbitration proceedings, together with the corresponding interest. On November 27, 2024, the Republic of Colombia filed a request with the ICSID to annul and suspend the award. •On December 4, 2024, the first one-year extension option of the 145 million euros syndicated credit facility of Telxius Telecom, S.A. was executed. The facility has two annual extension options at the request of Telxius Telecom, S.A., which would allow the facility's maturity to be extended up to 2030. •On December 16, 2024, Telefónica, S.A. drew down 100 million euros of its bilateral loan signed on November 21, 2024, and maturing on December 16, 2031. •The second one-year extension option of the 360 million euros syndicated facility of Bluevía Fibra S.L.U., was executed on December 20, 2024, extending the maturity date to December 20, 2029. For information on certain significant events that have occurred to date in 2025, see “—Recent Developments”. 34 Table of Contents Business areas In 2024 the Telefónica Group is reporting financial information, both internally and externally, according to the following segments: Telefónica Spain, VMO2, Telefónica Germany, Telefónica Brazil and Telefónica Hispam (formed by the Group's operators in Colombia, Mexico, Venezuela, Ecuador, Argentina (sold in February 2025), Chile, Peru and Uruguay). The segments referred to above include the information related to the fixed, wireless, cable, data, Internet and television businesses and other digital services provided in each related region. Inter-segment transactions are carried out on an arm's-length basis. In 2024, impairments losses on goodwill of Peru and Chile cash-generating units have been included in the Telefónica Hispam segment, and impairments losses on goodwill of Telefónica Tech UK & Ireland and BE-terna Group have been included in "Other companies" , which is described below (see Note 7 to the Consolidated Financial Statements). Likewise, impairment losses on intangible assets and property, plant and equipment in Argentina and on intangible assets and held for sale assets in Peru, as well as the reversal of deferred tax assets for loss carryforwards, have been included in the Telefónica Hispam segment (see Note 6, 8 and 30 to the Consolidated Financial Statements). In 2023, impairment losses on goodwill of the Ecuador cash-generating unit were included in the Telefónica Hispam segment (see Note 7 to the Consolidated Financial Statements). The VMO2 segment information included in this Annual Report is presented under management criteria, and shows 100% of VMO2’s results. In addition, information included in this Annual Report on the accesses of the Group and the VMO2 segment includes 100% of the accesses of VMO2. Telefónica’s actual percentage ownership of VMO2 is 50% and its results are accounted for under the equity method. Information relating to other Group companies not specifically included in the segments referred to above is reported under "Other companies" (see Appendix I to the Consolidated Financial Statements), which includes Telefónica, S.A. and other holding companies, as well as companies whose main purpose is to provide cross-sectional services to Group companies, and other operations not included in the segments. The Incremental Group and BE-terna Group, acquired in March and June 2022 (see Note 5 to the Consolidated Financial Statements), respectively, are reported within "Other companies". "Other companies" also includes the share of results of investments accounted for by the equity method corresponding to the fiber optic companies in which Telefónica Infra, S.L. ("T. Infra") has ownership interests (see Note 10 to the Consolidated Financial Statements). The Group centrally manages borrowing activities, mainly through Telefónica, S.A. and other companies included in “Other companies” (see Note 19, Appendix III and Appendix V to the Consolidated Financial Statements), so most of the Group's financial assets and liabilities are reported under “Other companies”. In addition, Telefónica, S.A. is the head of the Telefónica tax group in Spain (see Note 25 to the Consolidated Financial Statements). Therefore, a significant part of the deferred tax assets and liabilities is included under “Other companies”. For these reasons, the results of the segments are disclosed up through operating income. Revenues and expenses arising from intra-group invoicing for the use of the trademark and management services were eliminated from the operating results of each Group segment. The results of the holding companies also exclude dividends from Group companies and impairments of investments in Group companies. These adjustments have no impact on the Group’s consolidated results. In addition, segment reporting considers the impact of the purchase price allocation to the assets acquired and the liabilities assumed by the companies included in each segment. The assets and liabilities presented in each segment are those managed by the heads of each segment, regardless of their legal structure. 35 Table of Contents The following chart shows the organizational structure of the principal subsidiaries of the Telefónica Group at December 31, 2024, including their jurisdictions of incorporation and our ownership interest. For further detail, see Exhibit 8.1 to this Annual Report. (1) Investment accounted for under equity method. 36 Table of Contents Telefónica, S.A., the parent company of the Telefónica Group, operates as a holding company with the following objectives: •coordinate the Group’s activities; •allocate resources efficiently among the Group; •provide managerial guidelines for the Group; •manage the Group’s portfolio of businesses; •foster cohesion within the Group; and •foster synergies among the Group’s subsidiaries. Our principal executive offices are located at Distrito Telefónica, Ronda de la Comunicación, s/n, 28050 Madrid, Spain, and our registered offices are located at Gran Vía, 28, 28013 Madrid, Spain. Our telephone number is +34 900 111 004. Capital Expenditures Our principal capital expenditures for the years ended December 31, 2024, 2023 and 2022, consisted of additions to property, plant and equipment and additions to intangible assets, including spectrum. In 2024, 2023 and 2022, we had capital expenditures of 5,475 million euros, 5,579 million euros and 5,819 million euros, respectively, in line with Telefónica’s objective to reduce CapEx. Our objective is to reduce CapEx while improving its allocation to maximize revenues, aiming for a CapEx-to-revenue ratio below 12% by year-end 2026. In recent years, most of our CapEx has been allocated to expanding both our mobile and fixed footprint across all markets, transitioning our IT systems to future-oriented architectures and enhancing the capacity of our core networks. These initiatives collectively accounted for more than two-thirds of the Company’s total CapEx in 2024. Year ended December 31, 2024 Capital expenditures in 2024 decreased by 1.9% compared to 2023. Capital expenditures in 2024 included the cost of spectrum mainly in Colombia, amounting to 157 million euros. Investment by Telefónica Spain amounted to 1,571 million euros and was primarily focused on continuing the deployment of the fiber optic network. The number of homes passed in Spain reached 30.8 million by year-end 2024. In Spain, more than 90% of the retail copper network has been switched off. Due to regulatory requirements, the remaining portion of the network is expected to be switched off by May 2025. In terms of mobile deployment, the development of the 5G network remains a priority, with a focus on expanding coverage in rural areas. By the end of 2024, 5G coverage reached 91% of the population. Investment by Telefónica Germany in 2024 amounted to 1,141 million euros and was primarily focused on expanding the footprint and capacity of the 5G network, which has reached a 99% coverage footprint across the country, as well as strengthening the capacity of the 4G network to ensure an optimal customer experience. Investment by Telefónica Brazil in 2024 amounted to 1,583 million euros and was primarily directed toward the expansion of the 5G mobile network, to cover 504 municipalities, ensuring the quality of the 4G mobile network, and expanding the fixed fiber business, including both the customer base and the network, which totaled 29.1 million homes passed with FTTH by year-end 2024. Investment by Telefónica Hispam in 2024 amounted to 1,001 million euros and was mainly focused on improving mobile networks through coverage expansions, capacity enhancements, and 5G deployment in Argentina, Colombia, Uruguay, and Chile. Additionally, there was a strong emphasis on the deployment of proprietary fixed networks in the region, supported by the fiber optic companies currently operating in Chile, Colombia and Peru. Efficient management of available resources and the pursuit of synergies remained key for the region, driven by regional initiatives that enable synergy in negotiations and the identification of best practices to be replicated across other operators, as well as the process of phasing out legacy systems. Year ended December 31, 2023 Capital expenditures in 2023 decreased by 4.1% compared to 2022. Capital expenditures in 2023 included the cost of spectrum mainly in Argentina and Spain, amounting to 183 million euros. Investment by Telefónica Spain amounted to 1,607 million euros and was primarily focused on continuing the deployment of the fiber optic network to achieve the goal of decommissioning the legacy copper network. Telefónica Spain’s fiber optic network reached more than 29 million premises passed by year-end 2023. Likewise, investment 37 Table of Contents in 4G network capacity continued, as well as in the deployment of the 5G network, where population coverage had reached 87% by the end of the year. Investment by Telefónica Germany in 2023 amounted to 1,133 million euros and was primarily focused on continuing the strong progress in network modernization, especially with respect to 5G, where 94% population coverage had been reached by the end of 2023. Telefónica Germany also made investments in expanding 4G capacity, to absorb traffic growth and reduce congestion nodes. The transformation of the transport network in Germany continued in 2023 as well as the transformation of the business support systems (BSS) in IT. Investment by Telefónica Brazil in 2023 amounted to 1,671 million euros and was mainly dedicated to extending the capacity of 4G mobile networks, improving quality, absorbing traffic growth and preparing the network for 5G deployment, as well as a massive rollout of 5G in the 3,500MHz band. Telefónica Brazil continued the expansion of its FTTH network, reaching more than 26 million premises passed by year-end 2023. Investment by Telefónica Hispam in 2023 amounted to 938 million euros and was mainly focused on the improvement of mobile networks (with coverage expansions and capacity reinforcement) as well as on the deployment of our own fixed network through the fiber optic companies incorporated since 2021 (in which we generally retain a non-controlling stake) that operate in Chile, Colombia and Peru and through certain strategic alliances in Argentina. The efficient administration of available resources and the optimization of CapEx were the main management levers in the region, focusing on the simplification and digitization of processes and the promotion of regional initiatives to accomplish synergies during the negotiation of projects and to identify the best practices in the region that can be replicated in other operating businesses. Further, focus was placed on the legacy shutdown process, such as achieving the mainframe technology shutdown with the complete migration of clients to the full stack system. Year ended December 31, 2022 Capital expenditures in 2022 decreased by 19.9% compared to 2021. Capital expenditures in 2022 included the cost of spectrum mainly in Colombia, Brazil, Argentina and Uruguay, amounting to 173 million euros. Investment by Telefónica Spain amounted to 1,550 million euros and was primarily focused on continuing the deployment of the fiber optic network, exceeding 28 million premises passed by year-end 2022, as well the development of the 5G network, reaching 85% population coverage at the end of the year. Investment by Telefónica Germany in 2022 amounted to 1,209 million euros and was primarily focused on continuing the progress in 5G roll-out and network modernization. 5G population coverage stood at approximately 80% at year-end, significantly over-achieving the initial target and aiming for nationwide 5G coverage by no later than 2025. Investment by Telefónica Brazil in 2022 amounted to 1,795 million euros and was mainly dedicated to extending the coverage and capacity of 4G mobile networks, with a population coverage of 96%, and the improvement of network quality and deployment of the FTTH network in the fixed business, exceeding 23.3 million premises passed. Investment by Telefónica Hispam in 2022 amounted to 1,058 million euros and was mainly focused on the improvement of mobile networks (with coverage expansions and capacity reinforcement) as well as on the deployment of our own fixed network. The efficient administration of available resources and the optimization of CapEx were the main management levers in the region, focusing on the simplification, digitization of processes and the search for synergies through the promotion of regional initiatives. Financial Investments and Divestitures Our principal financial investments in 2024 were: (i) a voluntary public acquisition offer for shares of Telefónica Deutschland. The offer was announced by Telefónica on November 7, 2023, and the acceptance period for the offer commenced on December 5, 2023 and expired on January 17, 2024 without extension. Upon the conclusion of the acceptance period, the offer had been accepted by shareholders holding 233,732,773 Telefónica Deutschland shares, representing approximately 7.86% of Telefónica Deutschland’s share capital and voting rights, for an approximate amount of 549 million euros. The offer was settled on January 26, 2024. In addition, from January 1, 2024 to January 26, 2024, Telefónica made direct market purchases, outside of the offer, acquiring a total of 113,999,566 shares of the aforementioned subsidiary, for an approximate amount of 268 million euros. Thus, as of January 26, 2024, Telefónica owned, directly and indirectly, 2,799,576,769 shares representing 94.12% of the share capital and voting rights of Telefónica Deutschland; and (ii) a subsequent public delisting acquisition offer for the shares of Telefónica Deutschland not yet directly or indirectly owned by Telefónica. The offer was announced by Telefónica on March 7, 2024, and the acceptance period for the offer commenced on March 20, 2024 and expired on April 18, 2024. Upon conclusion of the acceptance period, the delisting offer had been accepted by shareholders holding 74,338,954 shares, representing approximately 2.50% of Telefónica Deutschland’s share capital and voting rights, for an approximate amount of 175 million euros. The delisting offer settled on April 29, 2024. As a result of the delisting offer and direct market purchases made by Telefónica, Telefónica reached approximately 96.85% of the share capital and voting rights of Telefónica Deutschland as of April 23, 2024. See “—Public Takeover Offers” for additional information. 38 Table of Contents In addition, on November 7, 2024, Telefónica España Filiales, S.A.U. (Telefónica España Filiales) reached an agreement with Vodafone ONO, S.A.U. (Vodafone España) to incorporate a joint company, whose main activity is the commercialization of a fiber to the home (FTTH) network for its shareholders, Telefónica España Filiales and Vodafone España, so that they can in turn provide retail and wholesale broadband access services. The joint company is expected to cover approximately 3.6 million premises, with assets that are currently part of Telefónica de España’s FTTH network and that represent approximately 12% of its national network. It is estimated that the joint company will initially have around 1.4 million clients, which implies a penetration level of approximately 40%. As part of the transaction, the required agreements for the provision of services by Telefónica Group to the joint company must be signed. After the closing of the transaction, Telefónica España Filiales will hold a 63% in the joint company and Vodafone España the remaining 37%. Our principal financial divestiture in 2024 was the sale of our stake in China Unicom for an aggregate amount of 147 million euros. Our principal financial investment in 2023 was the acquisition by Pontel Participaciones, S.L. (Telefónica's subsidiary then held 83.35% by Telefónica and 16.65% by Pontegadea Inversiones, S.L.) of 40% of the share capital of Telxius Telecom, S.A. from Taurus Bidco S.à r.l. (a company managed by KKR) on January 18, 2023 as a result of which acquisition Pontel Participaciones, S.L., became the sole shareholder of Telxius Telecom, S.A. (which later absorbed Pontel Participaciones, S.L.). Within the framework of this transaction, Pontel Participaciones, S.L. carried out a capital increase fully subscribed and paid up by its shareholders in proportions agreed between them, in such a way that both Telefónica and Pontegadea Inversiones, S.L. paid out 111 million euros. The impact of this transaction on the consolidated statement of changes in equity was a reduction in equity attributable to the parent company for an amount of 46 million euros and a reduction in equity attributable to minority interests for an amount of 585 million euros (see Note 17 to the Consolidated Financial Statements). Telefónica did not complete any significant financial divestitures in 2023. On July 6, 2023 Telefónica Hispanoamérica, S.A. ("Telefónica Hispanoamérica") entered into agreements to sell 54% and 10% stakes in Pangea, the wholesale FTTH company in Peru, to KKR and Entel Perú, respectively. Upon settlement of the transactions, which are currently pending the final agreement between the parties, Telefónica Hispanoamérica will retain a 36% stake in Pangea (see Note 30 to the Consolidated Financial Statements). Our principal financial investments in 2022 were: (i) the acquisition of the mobile assets of the Oi Group on April 20, 2022 for consideration of 1,093 million euros; (ii) the acquisition of Incremental Group on March 21, 2022 for consideration of 104 million euros (including potential contingent payments linked to its future performance); (iii) the acquisition of BE-terna Group on June 9, 2022 for consideration of 191 million euros (including potential contingent payments linked to its future performance); and (iv) the closing on December 20, 2022 of the agreement between Telefónica de España, S.A.U. and T. Infra with a consortium formed by Vauban Infrastructure Partners and Crédit Agricole Assurances to incorporate a company, Bluevia Fibra, S.L., for the deployment and commercialization of an FTTH network mainly in rural areas in Spain, after obtaining the corresponding regulatory authorizations and the fulfillment of certain other agreed conditions. The consortium acquired 45% of the company for the amount of 1,021 million euros. Our principal financial divestiture in 2022 was the sale on January 13, 2022 of Telefónica Móviles El Salvador to General International Telecom El Salvador, S.A. de C.V. for 139 million U.S. dollars (approximately 121 million euros at the exchange rate at such date), after the satisfaction of the relevant closing conditions and once the relevant regulatory approvals were obtained. Active portfolio management is part of Telefónica’s strategy and therefore it may undertake transactions involving its or its subsidiaries' shares, including transactions similar to those undertaken in the 2022-2024 period or otherwise, at any time. Public Takeover Offers On November 7, 2023, Telefónica, through its subsidiary Telefónica Local Services GmbH, launched a partial voluntary public tender offer for shares representing up to approximately 28.19% of the share capital and voting rights of Telefónica Deutschland. The consideration offered to Telefónica Deutschland shareholders amounted to 2.35 euros in cash for each share, representing a premium of approximately (i) 37.6% over Telefónica Deutschland's previous day closing price and (ii) 36.3% over Telefónica Deutschland's volume-weighted average price during the three months prior to the announcement. The offer acceptance period began on December 5, 2023 and ended on January 17, 2024 (both inclusive). 39 Table of Contents At the date of the offer announcement, Telefónica was the owner, directly or indirectly, of 71.81% of the share capital and voting rights of Telefónica Deutschland, and, consequently, the offer was announced for shares representing approximately the 28.19% of share capital and voting rights remaining. Upon the conclusion of the acceptance period, the offer had been accepted by shareholders holding 233,732,773 Telefónica Deutschland shares, representing approximately 7.86% of Telefónica Deutschland’s share capital and voting rights, for an approximate amount of 549 million euros. The offer settled on January 26, 2024. In addition, Telefónica made direct market purchases, outside the offer, from January 1, 2024 to January 26, 2024, acquiring a total of 113,999,566 shares of the aforementioned subsidiary, for an approximate amount of 268 million euros. Thus, as of January 26, 2024 Telefónica owned, directly and indirectly, 2,799,576,769 shares representing 94.12% of the share capital and voting rights of Telefónica Deutschland. On March 20, 2024, Telefónica, through its subsidiary Telefónica Local Services GmbH, launched a public delisting acquisition offer with the aim of acquiring the shares of Telefónica Deutschland not yet directly or indirectly held by Telefónica. The cash consideration offered to Telefónica Deutschland shareholders was 2.35 euros per share. Upon conclusion of the acceptance period on April 18, 2024, the delisting offer had been accepted by shareholders holding 74,338,954 shares, representing approximately 2.50% of Telefónica Deutschland’s share capital and voting rights, for an approximate amount of 175 million euros. The delisting offer settled on April 29, 2024. As a result of the delisting offer and direct market purchases made by Telefónica, Telefónica reached 96.85% of the share capital and voting rights of Telefónica Deutschland as of April 23, 2024. The management board of the Frankfurt Stock Exchange approved the delisting of the shares of Telefónica Deutschland, effective as of April 18, 2024. Together, these purchases made in 2024 produced an increase of 28 million euros in the equity attributed to the parent company and a decrease of 1,057 million euros in the equity attributed to minority interests. Recent Developments The principal events that have occurred since December 31, 2024 are set forth below: •On January 10, 2025, Telefónica Germany GmbH & Co. OHG completed the early termination of its 750 million euros sustainability-linked syndicated credit facility signed on December 17, 2019 and originally scheduled to mature in 2026. •On January 13, 2025, Telefónica, S.A. signed an extension with respect to its sustainability-linked syndicated credit facility for up to 5,500 million euros for an additional year (extending the maturity date to January 13, 2030). Additionally, Telefónica signed 2 extension options for 1 additional year each, permitting Telefónica, S.A.,to extend the maturity date of the credit facility to January 13, 2032. •On January 15, 2025, Telefónica, S.A. signed a bilateral loan in the amount of 125 million euros maturing on January 15, 2035. As of the date, there was no outstanding amount under this bilateral loan. •On January 16, 2025, Telefónica, S.A. through its wholly-owned subsidiary Telefónica Emisiones, S.A.U., launched in the Euro market under its EMTN Programme an issuance of Notes guaranteed by Telefónica, S.A. in a principal amount of 1,000 million euros. This issue, due on January 23, 2034, pays an annual coupon of 3.724% and was issued at par. The settlement of the issuance took place on January 23, 2025. •On January 17, 2025, Telefónica Emisiones, S.A.U. redeemed 1,250 million euros of its notes issued on January 17, 2017. These notes were guaranteed by Telefónica, S.A. •On January 18, 2025, Telefónica, S.A. in view of its new shareholding structure and that some of its relevant shareholders expressed the convenience of embarking on a new stage in the executive chairmanship, Telefónica’s Board of Directors, which met on the aforementioned date to assess the situation, under the chairmanship of Mr. José María Álvarez-Pallete, adopted, following a favorable report from the Nominating, Compensation and Corporate Governance Committee, the following resolutions: ◦ To agree on the orderly renewal of the Company's chairmanship, in order to adapt it to its new shareholding structure. 40 Table of Contents ◦To approve the termination of the contract signed with Mr. José María Álvarez-Pallete as Executive Chairman of Telefónica’s Board of Directors, and to request from him, in accordance with the provisions of Article 12.2.a) of the Regulations of the Board of Directors, his resignation from his position as Director. Mr. Álvarez-Pallete, in response to said request, tendered his resignation as a Director, which was accepted by the Board of Directors. ◦In order to guarantee an adequate replacement in the executive chairmanship of the Company, to approve the appointment by co-optation of Mr. Marc Thomas Murtra Millar, as Executive Director of the Company, also appointing him as Executive Chairman of the Board of Directors and delegating to him all the powers that may be delegated by the Board of Directors, to be exercised jointly and severally. Mr. Murtra accepted his appointment as Executive Chairman of Telefónica, on this same date. •On January 29, 2025, the Board of Directors of Telefónica, S.A., resolved with the abstention of the Executive Directors and upon proposal of the Nominating, Compensation and Corporate Governance Committee, to appoint Mr. Peter Löscher as Lead Independent Director. On the same date, the Audit and Control Committee resolved to appoint the Independent Director Ms. María Luisa García Blanco as Chairwoman of that Committee. •On February 14, 2025 the Board of Directors of Telefónica del Perú, S.A.A. (“Telefónica del Perú”), with the aim of achieving an orderly restructuring of the liabilities of said company, resolved to invoke the Ordinary Insolvency Procedure, established under the Peruvian law (Ley General del Sistema Concursal) with respect to Telefónica del Perú. The invocation of said insolvency procedure is focused on the financial and operational restructuring within the framework of the applicable insolvency law. Thus, the protection of the insolvency framework, established by the Ley General del Sistema Concursal, will allow Telefónica del Perú for an orderly restructuring of liabilities with the arrangement of its creditors. In order to facilitate the invocation of the Ordinary Insolvency Procedure, Telefónica Hispanoamérica has granted a credit facility of up to 1,549 million Peruvian soles (approximately 394 million euros at an estimated average rate of 3.93 Peruvian soles per euro), subject to strict conditionality and with a maturity of 18 months, to meet exclusively operational cash requirements of Telefónica del Perú. The financial situation of Telefónica del Perú has been very negatively affected by tax contingencies that are more than 20 years old (see "Item 8. Financial Information—Consolidated Financial Statements—Tax Proceedings—Tax litigation in Telefónica del Perú), as well as by administrative decisions that have placed the company in a competitive disadvantage within a particularly challenging market environment. In relation to the abovementioned tax contingencies, Telefónica is currently in arbitration before the International Centre for Settlement of Investment Disputes (ICSID). See "Item 8. Financial Information—Consolidated Financial Statements—Legal Proceedings—ICSID Arbitration Telefónica, S.A. vs. Republic of Perú. As previously informed to the market, Telefónica reiterated that Telefónica del Perú’s liabilities are not guaranteed by any other company of the Telefónica Group. Telefónica will continue to explore strategic alternatives with regard to its investment in Telefónica del Perú. •On February 24, 2025, Telefónica's subsidiary TLH Holdco, S.L.U., a company 100% owned by Telefónica, sold all the shares that it held in Telefónica Móviles Argentina, S.A. representing 99.999625% of its share capital and of the entire share capital of its operations in Argentina to Telecom Argentina S.A. The total price for 100% of the shares transferred amounts to 1,245 million U.S. dollars (approximately 1,189 million euros at the date of the transaction). The signing and closing of the transaction took place simultaneously. •On February 26, 2025, the Board of Directors of Telefónica unanimously resolved, following a favorable report from the Nominating, Compensation and Corporate Governance Committee, the following resolutions: related to the Board of Directors: i) to appoint, by co-optation, Mr. Olayan Alwetaid as Proprietary Director to the Board of Directors of Telefónica, nominated by the shareholder Green Bridge Investment Company SCS / Stc Group, filing the existing vacancy on the Board of Directors after the passing of the Vice Chairman, Mr. José Javier Echenique Landiríbar; ii) to accept the voluntary resignation presented by Mr. Francisco José Riberas Meras from his position as Director of Telefónica, in order to allow the Company to continue with the orderly renewal process of its Board of Directors, taking into account that his current mandate as Director of the company would have expired on April 23, 2025. The Board of Directors has expressed its gratitude for the services rendered to Telefónica during his tenure; iii) in order to fill the abovementioned vacancy, and at the proposal of the Nominating, Compensation and Corporate Governance Committee, to appoint, by co-optation, Ms. Ana María Sala Andrés as Independent Director to the Board of Directors of Telefónica; iv) to appoint the Director, Mr. Carlos Ocaña Orbis, as Vice Chairman of Telefónica’s Board of Directors; related to the Committees: i) to appoint Ms. María Luisa García Blanco as Member of the Executive Commission; ii) to appoint 41 Table of Contents Mr. Carlos Ocaña Orbis as Member of the Nominating, Compensation and Corporate Governance Committee; iii) to appoint Ms. Ana María Sala Andrés as Member of the Sustainability and Regulation Committee, in replacement of Ms. María Luisa García Blanco. Public Information The SEC maintains an Internet site (www.sec.gov) that contains reports and other information regarding issuers that file electronically with the SEC, including Telefónica. See "Item 10. Additional Information—Documents on Display". Additional information on the Group is also available on our website at www.telefonica.com. The information contained on such websites does not form part of this Annual Report on Form 20-F. 42 Table of Contents B. Business Overview Telefónica is a telecommunications service provider with its footprint in some markets in Europe and Latin America. Telefónica offers its customers a wide range of products and services, based on the latest technologies available in each area. Within its core telecommunications business, Telefónica deploys next-generation networks (based on fiber and 5G) to connect the societies in which it operates. Our objective is to create, protect and promote fixed and mobile connections and digital services for our customers helping them to take control over their digital lifestyle. Therefore, we primarily offer our customers the connectivity they need to interact and live in the markets where we operate through simple products and services while protecting their data and managing it in a responsible way. We rely on modern technology to create a better and more inclusive society. We aim at offering our customers the possibility to reach the digital world regardless of their location, economic status, level of digital knowledge and capacities. The Telefónica Group’s strategy aims to: Enhance value through: •Making our world more human, by connecting lives in a sustainable way as we continue to leverage opportunities in our markets and deliver towards our strategy focused on value creation. •Offering good connectivity, for which our infrastructure management and our continuous investment in network and platforms are key. •Good connectivity is the enabler for all digital services. Telefónica provides a wide range of services over connectivity through a fixed and mobile bundled offer which includes video and digital services. We offer our customers additional data in order to amplify services through unique, simple and clear offers. Telefónica includes services beyond core connectivity services in its portfolio, such as Internet of Things (IoT), cybersecurity, Big Data, Artificial Intelligence and Cloud services among others. •Focusing on customers’ needs, making their life and digital experience easier through customized offers, With the following enablers: •End-to-end digitalization: seeking the reduction of our legacy investments to increase virtualization, the reduction of physical servers, data centers and applications, the digitalization of IT systems and processes and the digitalization of front and back office. Digitalization efforts undertaken in the past have allowed Telefónica to provide a rapid response to companies as they adapted to and sought to enhance their competitiveness in the new landscape. •Continued focus on the simplification of processes and cost efficiencies right sizing the Company and realization of synergies in the United Kingdom, Brazil and Germany. In 2024, Telefónica continued the digitalization and automation of sales channels and customer care, process improvements and modernization and rationalization of the network. The Company is driving efficiencies to reduce operating expenses through switching from copper to fiber broadband networks and legacy technology switch-off. Telefónica leads copper switch-off in Europe, and in Spain more than 90% of the retail copper network has been switched off. Due to regulatory requirements, the remaining portion of the network is expected to be switched off by May 2025. •Digital trust: as we manage ever more personal information about our customers, their trust in us is key. Telefónica seeks a relationship of trust with its customers, and therefore we invest in network security. Telefónica is developing tools to protect information stored on user devices and transmitted across our fixed and mobile communications networks, as well as to protect customers' digital identity. •Fiber, 4G and 5G deployment enables Telefónica to maintain and grow its customer base in terms of accesses, and decrease churn, by offering customers a better experience. These networks help Telefónica 43 Table of Contents to contribute to make technology more accessible and sustainable, to continue to maintain high quality services for home offices and a higher consumption of entertainment services. •In recent years, Telefónica has diversified its revenue mix with adjacent businesses. Although these services still have a substantially lower weight in Telefónica's total revenues, these revenues represent more than 40% of the Company’s B2B revenues and grew at double digits as of December 31, 2024. These efforts include: ◦Telefónica Empresas in Spain continues to advance in its proposals for the business segment. Positive developments on this front include the collaboration agreement with Microsoft to facilitate the adoption of Copilot+ PCs, Windows devices with integrated AI. This collaboration will allow Spanish companies to upgrade their workstations and improve their productivity through advance digital solutions. ◦Energy: GUD Energía, is a joint venture created in 2024 to capture the opportunities generated by the opening of the free market with a focus on the sale of personalized renewable energy solutions throughout Brazil, helping consumers to cut their energy bills. 44 Table of Contents Results Highlights In 2024, Telefónica delivered a good operational performance. Telefónica maintained a strong market position, growing in high-value accesses such as fiber and mobile contract. The company has grown in reported revenues y-o-y, but impairment losses on assets have had an adverse effect on profit. Investments in next generation networks, like Fiber and 5G, have allowed Telefónica to maintain and grow its customer base in terms of accesses, by offering customers a better experience. In addition, Telefónica has driven efficiencies to reduce certain operating expenses by switching from copper to fiber broadband networks and switching off certain legacy technologies, network sharing, reducing energy costs through hedging agreements and right-sizing the organization. The table below shows the evolution of accesses over the past three years as of December 31 of such years: ACCESSES (1) Thousands of accesses 2022 2023 2024 % YoY 23/22 % YoY 24/23 Fixed telephony accesses (2) 27,941.9 26,261.2 24,386.6 (6.0 %) (7.1 %) Broadband 26,303.9 26,787.8 27,402.5 1.8 % 2.3 % UBB 23,757.7 25,048.7 26,249.0 5.4 % 4.8 % FTTH 14,273.0 16,121.4 17,933.4 13.0 % 11.2 % Mobile accesses 292,168.1 298,569.5 300,271.4 2.2 % 0.6 % Prepay 129,685.7 127,766.9 122,298.0 (1.5 %) (4.3 %) Contract 126,242.3 130,134.1 132,704.7 3.1 % 2.0 % IoT 36,240.1 40,668.5 45,268.8 12.2 % 11.3 % Pay TV 10,586.5 10,258.5 10,110.8 (3.1 %) (1.4 %) Retail Accesses 357,213.3 362,073.4 362,289.8 1.4 % 0.1 % Wholesale Accesses 25,932.9 25,724.2 27,660.0 (0.8 %) 7.5 % Fixed wholesale accesses 3,665.7 3,579.9 3,422.2 (2.3 %) (4.4 %) FTTH wholesale accesses 3,211.7 3,295.3 3,352.7 2.6 % 1.7 % Mobile wholesale accesses 22,267.2 22,144.3 24,237.7 (0.6 %) 9.5 % Total Accesses 383,146.2 387,797.6 389,949.7 1.2 % 0.6 % Notes: (1) The access information provided as of December 31, 2024, 2023 and 2022 includes 100% of the accesses of VMO2. Telefónica’s actual percentage ownership of VMO2 is 50%. (2) Includes fixed wireless and VoIP accesses. 45 Table of Contents The table below shows the evolution of accesses by segment: 23/22 YoY variation 24/23 YoY variation % Over Total Accesses Accesses 2022 2023 2024 Telefónica Spain 1.2% 1.9% 10.6% 10.6% 10.7% VMO2 (0.2%) 0.6% 15.1% 14.9% 14.9% Telefónica Germany 1.9% (0.4%) 12.8% 12.9% 12.7% Telefónica Brazil 0.6% 2.7% 29.3% 29.2% 29.8% Telefónica Hispam 1.4% (3.3%) 29.0% 29.0% 27.9% Other companies 8.4% 13.1% 3.3% 3.5% 4.0% Accesses 2024 vs 2023 Telefónica’s total accesses were 389.9 million as of December 31, 2024, increasing by 0.6% year-on-year, mainly due to increases in mobile contract accesses in Telefónica Brazil and IoT accesses in VMO2 and Telefónica Brazil, offset in part by the decrease in prepaid accesses, mainly in Chile and Mexico, due to the high competitiveness in the prepaid market and the decrease in fixed telephony accesses across the Group. Mobile accesses totaled 300.3 million as of December 31, 2024, up 0.6% compared to December 31, 2023, mainly as a result of the good performance in mobile contract accesses in Telefónica Brazil and IoT access growth in VMO2 and Telefónica Brazil, offset in part by the decrease in prepaid accesses mainly in Chile and Mexico, due to the high competitiveness in the prepaid market. Postpaid accesses represented 52.0% of the Group's total mobile accesses excluding IoT (+1.6 p.p. year-on-year). Fixed broadband accesses stood at 27.4 million at December 31, 2024, up 2.3% year-on-year. Retail fiber (FTTH) accesses stood at 17.9 million at December 31, 2024, growing by 11.2% compared to December 31, 2023. Pay TV accesses totaled 10.1 million as of December 31, 2024, down 1.4% year-on-year. Accesses 2023 vs 2022 Telefónica’s total accesses were 387.8 million as of December 31, 2023, increasing 1.2% year-on-year. This increase was mainly attributable to mobile accesses in particular in Telefónica Hispam, Telefónica Brazil and Telefónica Germany as well as growth in VMO2's IoT accesses. Mobile accesses totaled 298.6 million as of December 31, 2023, up 2.2% compared to December 31, 2022, an increase mainly attributable to the growth in mobile accesses in Telefónica Hispam and postpaid accesses in Telefónica Brazil. Postpaid accesses represented 50.5% of the Group's total mobile accesses in 2023, excluding IoT accesses (+1.1 p.p.). Fixed broadband accesses stood at 26.8 million at December 31, 2023, up 1.8% year-on-year. Retail fiber (FTTH) accesses stood at 16.1 million at December 31, 2023, growing by 13.0% compared to December 31, 2022. Pay TV accesses totaled 10.3 million as of December 31, 2023, down 3.1% year-on-year, mainly due to the strategic decision to discontinue the DTH service in Telefónica Brazil and in Telefónica Spain due to higher penetration of customers in service bundles that do not include TV. The tables below show the evolution of Telefónica's estimated access market share for mobile and fixed broadband for the past three years. 46 Table of Contents Competitive Position Evolution Mobile Market Share (1) Telefónica 2022 2023 2024 Spain 27.5% 27.3% 27.5% United Kingdom (2) 29.6% 28.9% 23.9% Germany 34.2% 32.9% 31.4% Brazil 38.9% 38.7% 38.8% Argentina 28.5% 28.2% 27.6% Chile 25.5% 27.0% 20.5% Peru 29.0% 27.1% 26.2% Colombia 25.6% 24.8% 22.6% Venezuela 53.3% 53.9% 54.3% Mexico 18.3% 18.2% 18.9% Ecuador 31.4% 30.1% 28.8% Uruguay 27.8% 24.6% 21.5% (1) Internal estimates in each year. (2) The percentage refers to VMO2's market share as of September of each year. FBB Market Share (1) Telefónica 2022 2023 2024 Spain 34.0% 32.8% 32.1% Brazil 14.6% 14.2% 14.4% Argentina 11.3% 11.5% 12.0% Chile 31.5% 31.5% 29.2% Peru 55.1% 43.8% 33.9% Colombia 15.1% 16.2% 16.5% (1) Internal estimates in each year. 47 Table of Contents Consolidated results In this section, we discuss changes in the Group’s consolidated income statements for the years ended December 31, 2024, 2023 and 2022. Year ended December 31, Variation Variation Consolidated Results 2022 2023 2024 2023 vs 2022 2024 vs 2023 Millions of euros Total Total Total Total % Total % Revenues 39,993 40,652 41,315 659 1.6% 663 1.6% Other income 2,065 1,541 1,692 (524) (25.4%) 151 9.8% Supplies (12,941) (13,298) (13,377) (357) 2.8% (79) 0.6% Personnel expenses (5,524) (7,207) (5,882) (1,683) 30.5% 1,325 (18.4%) Other expenses (10,741) (10,298) (12,554) 443 (4.1%) (2,256) 21.9% Operating results before depreciation and amortization 12,852 11,390 11,194 (1,462) (11.4 %) (196) (1.7 %) Depreciation and amortization (8,796) (8,797) (8,799) (1) 0.0% (2) 0.0% Amortization of rights of use (leases amortization) (2,065) (2,159) (2,235) (94) 4.6% (76) 3.5% Amortization of intangible assets, depreciation of property, plant and equipment (6,731) (6,638) (6,564) 93 (1.4%) 74 (1.1%) OPERATING INCOME 4,056 2,593 2,395 (1,463) (36.1 %) (198) (7.6 %) Share of (loss) income of investments accounted for by the equity method 217 (2,162) (49) (2,379) c.s. 2,113 (97.7%) Net financial expense (1,313) (1,904) (1,789) (591) 45.0% 115 (6.0%) PROFIT (LOSS) BEFORE TAX 2,960 (1,473) 557 (4,433) c.s. 2,030 c.s. Corporate income tax (641) 899 (348) 1,540 c.s. (1,247) c.s. PROFIT (LOSS) FOR THE YEAR 2,319 (574) 209 (2,893) c.s. 783 c.s. Attributable to equity holders of the parent 2,011 (892) (49) (2,903) c.s. 843 (94.5%) Attributable to non-controlling interests 308 318 258 10 3.1% (60) (19.0%) c.s.: change of sign Analysis of Results 2024 vs 2023 The Group's operating results in 2024, compared to 2023, have been impacted mainly by: –Impairments of goodwill, assets held for sale and other assets: In 2024 Telefónica recorded impairment losses on intangible assets and property, plant and equipment in Argentina in an aggregate amount of 1,274 million euros and impairment losses on goodwill in an aggregate amount of 866 million euros with respect to the cash-generating units in Chile (397 million euros), Perú (226 million euros), Telefónica Tech UK & Ireland (192 million euros) and BE-terna Group (51 million euros). Additional impairment losses were recorded in Perú, including impairment losses on intangible assets (54 million euros) and impairment losses on held for sale assets corresponding to fiber optics business in Peru , which include property, plant and equipment (108 million euros) and goodwill (34 million euros) (see Notes 2, 6, 7, 8 and 30 to the Consolidated Financial Statements). In 2023 there was an impairment of goodwill amounting to 58 million euros in Ecuador. –Restructuring costs: The impact of restructuring costs was much lower in 2024 (104 million euros) than in 2023 (1,538 million euros). Restructuring costs in 2023 related mainly to the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023. –Impairment of goodwill in investments accounted for by the equity method: In 2023, VMO2 recorded an impairment of goodwill amounting to 3,572 million euros, with an impact of 1,786 million euros on the share of (loss) income of investments accounted for by the equity method in the consolidated income statement of the Telefónica Group. No impairment of goodwill in investments accounted for by the equity method was recorded in 2024. 48 Table of Contents –Foreign exchange effects and hyperinflationary adjustments: In 2024, foreign exchange effects (without considering the impact of hyperinflationary countries) had a negative impact on the year-on-year growth of the Group's consolidated revenues and operating results before depreciation and amortization, subtracting 2.2 percentage points and 2.9 percentage points, respectively, due mainly to the significant depreciation of the Brazilian real against the euro (in 2023, foreign exchange effects had a positive impact of 0.2 percentage points on year-on-year revenue growth and no impact at the operating results before depreciation and amortization level). In relation to hyperinflationary countries, the exchange rate used to translate inflation-adjusted items denominated in Argentine pesos in the consolidated financial statements as of and for the year ended December 31, 2024 was the closing exchange rate as of December 31, 2024 which was 1,073.18 Argentine pesos per euro (893.45 Argentine pesos per euro as of December 31, 2023). The annual inflation rate in Argentina for 2024 was 117.8%. As a result of these changes in the exchange and inflation rates, in 2024 Telefónica Argentina contributed 2,226 million euros to the consolidated revenues of the Telefónica Group and a loss of 84 million euros to operating income (1,237 million euros and a loss of 199 million euros, respectively, in 2023) before the 1,274 million euros impairment losses described above. –ICSID arbitration award: On November 12, 2024 Telefónica obtained a favorable award in an investment dispute submitted to the International Centre for Settlement of Investment Disputes (“ICSID”) against the Republic of Colombia (see Note 29.a to the Consolidated Financial Statements) for an amount of 380 million U.S. dollars (approximately 358 million euros based on the exchange rate at such date). The principal amount component of the award was recorded under "Other income", whereas the corresponding interest component was recorded under "Finance income". On November 27, 2024, the Republic of Colombia filed a request with the ICSID to annul and suspend the award. See “Item 8. Financial Information—Consolidated Financial Statements—Legal Proceedings—ICSID Arbitration Telefónica, S.A. vs. Republic of Colombia”. Revenues in 2024 totaled 41,315 million euros, up 1.6% year-on-year compared to 2023, due mainly to the positive growth in service revenues (+2.5%) driven by higher B2B revenues (+4.8%), offset in part by the depreciation of various Latin American currencies (in particular the Brazilian real) against the euro. Other income mainly includes work on fixed assets and gains on disposal of assets. In 2024, other income amounted to 1,692 million, up 9.8% year-on-year compared to 2023. The year-on-year increase was driven mainly by the award received by Telefónica in ICSID arbitration proceedings against the Republic of Colombia, with an impact of 380 million U.S. dollars (approximately 358 million euros). The evolution of expenses is explained below: •Supplies amounted to 13,377 million euros in 2024, up 0.6% year-on-year, mainly as a result of higher costs in Telefónica Spain and Telefónica Brazil driven, by costs associated with IT-related activity (including digitalization projects by B2B customers) in Telefónica Spain and higher equipment purchases and handset costs in Telefónica Brazil as further explained under “Segment results”. •Personnel expenses amounted to 5,882 million euros in 2024, down by 18.4% year-on-year. Personnel expenses were higher in 2023 mainly as a result of the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023 (resulting in a provision of 1,320 million euros before taxes). The average headcount was 101,384 employees in 2024, down 2.6% compared to 2023. •Other expenses amounted to 12,554 million euros in 2024 up 21.9% year-on-year, mainly as a result of impairments of goodwill and other assets. In 2024, Telefónica recorded impairment losses on intangible assets and property, plant and equipment in Argentina in an aggregate amount of 1,274 million euros and impairment losses on goodwill in an aggregate amount of 866 million euros with respect to the cash-generating units in Chile (397 million euros), Peru (226 million euros), Telefónica Tech UK & Ireland (192 million euros) and BE-terna Group (51 million euros). Additionally, Telefónica recorded in Perú impairment losses on intangible assets (54 million euros), impairment losses on held-for-sale assets corresponding to the property, plant and equipment of the fiber optics business of Pangea (108 million euros) and goodwill (34 million euros). In 2023, there was an impairment of goodwill amounting to 58 million euros in Ecuador. 49 Table of Contents As a result of the foregoing, operating results before depreciation and amortization totaled 11,194 million euros in 2024 down 1.7% year-on-year. Operating results before depreciation and amortization is a non-GAAP financial measure. For a reconciliation of operating results before depreciation and amortization to operating income, see “Item 5. Operating and Financial Review and Prospects—Non-GAAP Financial Information”. Operating results before depreciation and amortization after leases in 2024 totaled 8,448 million euros, down 4.0% year-on-year, due to the lower operating results before depreciation and amortization mentioned above, and higher costs associated with operating leases in 2024. Operating results before depreciation and amortization after leases is a non-GAAP financial measure. For a reconciliation of operating results before depreciation and amortization after leases to operating income, see “Item 5. Operating and Financial Review and Prospects—Non-GAAP Financial Information”. Depreciation and amortization amounted to 8,799 million euros in 2024, remaining stable compared to 2023 (8,797 million euros). Operating income totaled 2,395 million euros in 2024 compared to 2,593 million euros in 2023. The year-on-year decrease was due mainly to the higher other expenses (as a result of impairments), partially offset by the lower restructuring expenses incurred in 2024, as well as the higher service revenues (+2.5%). The share of (loss) income of investments accounted for by the equity method in 2024 was a loss of 49 million euros, compared to a loss of 2,162 million euros in 2023. The higher loss in 2023 was mainly due to the results of VMO2, which were adversely affected by a goodwill impairment amounting to 3,572 million euros (1,786 million euros of which was reflected in the consolidated income statement of the Telefónica Group in 2023). Net financial expense amounted to 1,789 million euros in 2024, decreasing 115 million euros compared to 2023. The lower amount in 2024 is mainly due to the positive impact of 154 million euros in interest associated with the favorable award relating to the ICSID arbitration procedure initiated by Telefónica, S.A. in 2018 against the Republic of Colombia. Corporate income tax represented an expense of 348 million euros in 2024 compared to an income of 899 million euros in 2023. The income in 2023 was mainly due to the tax effect of the provision associated with the Collective Redundancies Plan and the recognition of deferred tax assets for the future use of tax credits, both in Spain. As a result, loss for the year attributable to equity holders of the parent in 2024 was 49 million euros, mainly due to the impairments recorded, compared to a loss of 892 million euros in 2023. Profit attributable to non-controlling interests was 258 million euros in 2024 (compared to 318 million euros in 2023). The variation is mainly due to decreases in the results attributable to minority interests in Germany, following the public takeover bid, and in the results attributable to minority interests in Brazil. CapEx totaled 5,475 million euros in 2024, down 1.9% year-on-year, in line with Telefónica's objective of reducing CapEx. Analysis of Results 2023 vs 2022 The Group's operating results in 2023, compared to 2022, have been impacted mainly by: –Restructuring costs: The impact of restructuring costs was much higher in 2023 (1,538 million euros) than in 2022 (179 million euros). Restructuring costs in 2023 related mainly to the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023. –Capital gains/losses on sale of business: In 2022 Telefónica booked gains from the sale of fiber optic assets in Colombia (162 million euros) and in the United Kingdom (20 million euros) (see Notes 10 and 26 to the Consolidated Financial Statements). Telefónica did not book gains from similar sales in 2023. 50 Table of Contents –Foreign exchange effects and hyperinflationary adjustments: Foreign exchange effects (without considering the impact of hyperinflationary countries) had a small positive impact on our 2023 results compared with 2022, when there was significant appreciation of the Brazilian real against the euro that positively impacted our 2022 results. In relation to hyperinflationary countries, the exchange rate used to translate inflation-adjusted items denominated in Argentine pesos in the consolidated financial statements as of and for the year ended December 31, 2023 was the closing exchange rate as of December 31, 2023 which was 893.45 Argentine pesos per euro (189.08 Argentine pesos per euro as of December 31, 2022). The annual inflation rate in Argentina for 2023 was 211%. As a result of these changes in the exchange and inflation rates, in 2023 Telefónica Argentina contributed 1,237 million euros to the consolidated revenues of the Telefónica Group and a loss of 199 million euros to the consolidated operating income of the Telefónica Group (2,066 million euros and a loss of 270 million euros, respectively, in 2022). –Impairment of goodwill and other assets: In 2023 the impairment of goodwill amounted to 58 million euros in Telefónica Ecuador. In 2022 the impairment of assets amounted to 77 million euros, in Telefónica Argentina. –Impairment of goodwill in investments accounted for by the equity method: In 2023, VMO2 recorded an impairment of goodwill amounting to 3,572 million euros, with an impact of 1,786 million euros on the share of (loss) income of investments accounted for by the equity method in the consolidated income statement of the Telefónica Group. Further, the Group's operating results in 2023 and 2022 were impacted by the acquisition of the mobile assets of the Oi Group on April 20, 2022 for consideration of 1,093 million euros, which was entirely paid in 2022. See "Item 5. Operating and Financial Review and Prospects―Operating Results―Significant Factors Affecting the Comparability of Our Results of Operations in the Periods under Review” and Note 2 to the Consolidated Financial Statements. Revenues in 2023 totaled 40,652 million euros, increasing 1.6% year-on-year due mainly to the growth in service revenues (+1.5%) and handset sales (+3.0%). Other income mainly includes capitalized costs on fixed assets, gains on disposals and other operating income. In 2023, other income totaled 1,541 million euros compared to 2,065 million euros recorded in 2022, a decrease of 25.4%. The higher amount in 2022 was impacted by the capital gains resulting from the sale of fiber optic assets in Colombia (162 million euros) (see Notes 10 and 26 to the Consolidated Financial Statements). The evolution of expenses is explained below: •Supplies amounted to 13,298 million euros in 2023, up 2.8% year-on-year, mainly as a result of higher handset costs in all segments due to higher commercial activity with a higher number of gross adds and continued inflation. •Personnel expenses amounted to 7,207 million euros in 2023, up by 30.5% year-on-year compared to 2022, mainly as a result of higher restructuring costs (+24.6 p.p.) which relate mainly to the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023, resulting in a provision of 1,320 million euros, before taxes, and higher expenses in all segments. The average headcount was 104,124 employees in 2023, up 1.5% compared to 2022 •Other expenses amounted to 10,298 million euros in 2023, down 4.1% year-on-year. This decrease was mainly attributable to lower expenses in Telefónica Spain, as a result of lower energy costs as well as savings associated with higher efficiencies, mainly related to network and system costs, and Telefónica Brazil, due to the acquisition price adjustment recorded in connection with Oi’s assets and cost efficiencies due to digitalization. As a result of the foregoing, operating results before depreciation and amortization totaled 11,390 million euros in 2023, compared to 12,852 million euros in 2022, a year-on-year decrease of 11.4%. The period-on-period evolution was strongly impacted by total restructuring expenses in 2023 of 1,538 million euros (-10.6 p.p.), which relate mainly to the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023 (resulting in a provision of 1,320 million euros before taxes) and the decrease in capital gains recorded in “Other income” from the sale of businesses compared to 2022. Operating results before depreciation and amortization is a non-GAAP 51 Table of Contents financial measure. For a reconciliation of operating results before depreciation and amortization to operating income, see “Item 5. Operating and Financial Review and Prospects Non-GAAP Financial Information”. Depreciation and amortization amounted to 8,797 million euros in 2023. It remained stable compared to 2022 (8,796 million euros). Operating income totaled 2,593 million euros in 2023 compared to 4,056 million euros recorded in 2022. The period-on-period evolution was strongly impacted by the total restructuring expenses in 2023 (-33.5 p.p.), which relate mainly to the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023 (1,320 million euros before taxes) and the capital gains on the sale of businesses in 2022 (-4.3 p.p.). The share of (loss) income of investments accounted for by the equity method in 2023 was a loss of 2,162 million euros, compared to an income of 217 million euros in 2022, mainly due to the results of VMO2, which were adversely affected by a goodwill impairment amounting to 3,572 million euros (1,786 million euros of which was reflected in the consolidated income statement of the Telefónica Group), mainly due to the decrease in projected cash flows of VMO2 as a consequence of the effects of the macroeconomic conditions and competitive environment in the United Kingdom and the increase in the discount rate (WACC). Net financial expense amounted to 1,904 million euros in 2023, increasing 591 million euros compared to 2022. The lower amount in 2022 was mainly due to extraordinary income of 526 million euros related to payments by the Spanish administration to the Group of delayed interest in connection with tax litigation in Spain. Corporate income tax represents an income of 899 million euros in 2023 compared to an expense of 641 million euros in 2022, mainly due to the tax effect of the provision associated with the Collective Redundancies Plan and the recognition of deferred tax assets for the future use of tax credits, both in Spain. As a result, losses for the year attributable to equity holders of the parent in 2023 was 892 million euros, compared to a profit of 2,011 million euros in 2022. Profit attributable to non-controlling interests was 318 million euros in 2023 (compared to 308 million euros in 2022). The variation is mainly due to an increase in profit attributable to non-controlling interests in Brazil, partially offset by a decrease in profit attributable to non-controlling interests in Colombia. CapEx totaled 5,579 million euros in 2023, down 4.1% year-on-year, impacted by lower spectrum purchases in 2023 (-1.6 p.p.). 52 Table of Contents Segment results For information on how segment information is presented in this Report, see “―History and Development of the Company―Business areas”. TELEFÓNICA SPAIN The table below shows the evolution of accesses in Telefónica Spain over the past three years as of December 31 of such years: ACCESSES Thousands of accesses 2022 2023 2024 % YoY 23/22 % YoY 24/23 Fixed telephony accesses (1) 8,102.3 7,948.4 7,774.9 (1.9 %) (2.2 %) Broadband 5,854.5 5,934.7 6,020.5 1.4 % 1.4 % FTTH 5,042.2 5,345.4 5,615.4 6.0 % 5.1 % Mobile accesses 19,347.3 20,115.0 21,054.0 4.0 % 4.7 % Prepay 796.0 705.4 492.6 (11.4 %) (30.2 %) Contract 15,099.5 15,296.8 15,543.0 1.3 % 1.6 % IoT (2) 3,451.8 4,112.8 5,018.4 19.1 % 22.0 % Pay TV 3,526.3 3,426.4 3,520.5 (2.8 %) 2.7 % Retail Accesses 36,838.9 37,424.5 38,369.9 1.6 % 2.5 % Wholesale Accesses 3,653.6 3,567.8 3,410.1 (2.3 %) (4.4 %) FTTH Wholesale Accesses 3,206.1 3,289.7 3,347.1 2.6 % 1.7 % Total Accesses 40,492.6 40,992.3 41,780.0 1.2 % 1.9 % (1) Includes "fixed wireless" and Voice over IP accesses. (2) Accesses in 2022 include an upward revision of approximately 500 thousand IoT accesses recorded in March 2022. Telefonica Spain maintained a positive evolution in 2024, with year-on-year growth in accesses and the main financial indicators. As the main commercial novelty in the residential segment, it is worth highlighting the reinforcement of the TV entertainment offer with the integration of Apple TV+, through the signing of a strategic agreement that brings the complete Apple TV+ service to miMovistarFicción subscribers, as part of the navigation on the TV platform and also on demand. Additionally, Telefónica Empresas, servicing Telefónica Spain's business customers, continues to advance in its proposals for the business segment. Positive developments on this front include the collaboration agreement with Microsoft to facilitate the adoption of Copilot+ PCs, Windows devices with integrated AI. This collaboration will allow Spanish companies to upgrade their workstations and improve productivity through advanced digital solutions. Telefónica Empresas has also incorporated Network Slicing capability into the Movistar Intranet service, becoming the first operator in Spain to offer quality of service in private mobile connectivity end-to-end for secure access to corporate networks in mobility. This advancement allows for the establishment of secure virtual private networks (VPNs) on mobile devices that are able to communicate with each other even in high-traffic scenarios, optimizing communications with new technologies that require greater mobility or lower latency. Finally, Movistar Prosegur Alarmas, the joint venture of Prosegur and Telefónica Spain, reached 550 thousand customers as of December 31, 2024, up by 12.8% y-o-y. Accesses 2024 vs 2023 Telefónica Spain had 41.8 million accesses as of December 31, 2024, an increase of 1.9% compared to December 31, 2023, driven by the positive evolution of mobile IoT, mobile contract and FTTH accesses, both those included in the convergent offer, as well as standalone mobile contract and FTTH accesses not included in the offer. These 53 Table of Contents growth drivers were offset in part by decreases in mobile prepay and retail fixed accesses, as well as decreases in legacy wholesale accesses, despite year-on-year growth in FTTH wholesale accesses. The convergent offer (residential and SMEs) had a customer base of 4.6 million customers as of December 31, 2024, an increase of 0.5% y-o-y. Retail fixed accesses totaled 7.8 million and decreased 2.2% as compared to December 31, 2023, with a net loss of 174 thousand accesses in 2024. Retail broadband accesses totaled 6.0 million (+1.4% y-o-y), with net adds of 85.8 thousand accesses as of December 31, 2024. Retail fiber (FTTH) accesses reached 5.6 million in December 2024 (an increase of 5.1% as compared to December 31, 2023), representing 93.3% of total retail broadband customers (an increase of 3.2 p.p. y-o-y) with net adds of 270 thousand accesses as of December 31, 2024. At December 31, 2024, fiber deployment reached 30.8 million premises, 1.6 million more than at December 31, 2023. Total retail mobile accesses stood at 21.1 million as of December 31, 2024, an increase of 4.7% as compared to December 31, 2023 mainly as a result of an increase in the IoT accesses base (up 22.0% y-o-y), together with increases in mobile contract accesses (up 1.6% y-o-y). Pay TV accesses reached 3.5 million at December 31, 2024, increasing 2.7% year-on-year, mainly driven by the positive evolution of Movistar Plus+, an OTT product. Wholesale accesses stood at 3.4 million at December 31, 2024, down 4.4% year-on-year. Wholesale fiber (FTTH) accesses were up 1.7% year-on-year and corresponded to 98.2% of total wholesale accesses at December 31, 2024 compared with 92.2% at December, 31, 2023. Accesses 2023 vs 2022 Telefónica Spain had 41.0 million accesses as of December 31, 2023, an increase of 1.2% as compared to December 31, 2022, due mainly to an increase in the IoT accesses base. The convergent offer (residential and SMEs) had a customer base of 4.5 million customers as of December 31, 2023, a decrease of 0.1% y-o-y. Retail fixed accesses totaled 7.9 million and decreased 1.9% as compared to December 31, 2022, with a net loss of 154 thousand accesses as of December 31, 2023. Retail broadband accesses totaled 5.9 million (+1.4% y-o-y), with a net gain of 80 thousand accesses as of December 31, 2023. Retail fiber (FTTH) accesses reached 5.3 million (+6.0% as compared to December 31, 2023), representing 90.1% of total retail broadband customers (+3.9 p.p. y-o-y) with net adds of 303 thousand accesses as of December 31, 2023. At December 31, 2023, fiber deployment reached 29.3 million premises, 1.2 million more than at December 31, 2022. Total retail mobile accesses stood at 20.1 million as of December 31, 2023, an increase of 4.0% as compared to December 31, 2022 as a result of an increase in the IoT accesses base (+19.1% y-o-y) and contract accesses (+1.3% y-o-y), with a decrease in mobile prepay accesses (-11.4% y-o-y). Pay TV accesses reached 3.4 million at December 31, 2023, decreasing 2.8% year-on-year due to a higher penetration of customers in service bundles that do not include TV. Wholesale accesses stood at 3.6 million at December 31, 2023, down 2.3% year-on-year, and wholesale fiber (FTTH) accesses were up 2.6% year-on-year (92.2% of total wholesale accesses at December 31, 2023 compared with 87.8% at December 31, 2022). 54 Table of Contents The table below shows Telefónica Spain’s results over the past three years: Millions of euros TELEFÓNICA SPAIN 2022 2023 2024 % YoY 23/22 % YoY 24/23 Revenues 12,497 12,654 12,791 1.3 % 1.1 % Mobile handset revenues 548 518 532 (5.4 %) 2.6 % Revenues ex-mobile handset sales 11,948 12,136 12,259 1.6 % 1.0 % Retail 9,662 9,872 10,092 2.2 % 2.2 % Wholesale and Other 2,286 2,264 2,167 (1.0 %) (4.3 %) Other income 803 526 477 (34.5 %) (9.3 %) Supplies (5,008) (5,027) (5,313) 0.4 % 5.7 % Personnel expenses (1,765) (3,194) (1,717) 81.0 % (46.2 %) Other expenses (1,939) (1,730) (1,624) (10.8 %) (6.1 %) Operating results before depreciation and amortization 4,588 3,229 4,614 (29.6 %) 42.9 % Depreciation and amortization (2,157) (2,200) (2,202) 2.1 % 0.1 % OPERATING INCOME 2,431 1,029 2,412 (57.7 %) 134.5 % Amortization of rights of use (leases amortization) (410) (510) (577) 24.5 % 13.2 % Financial expenses on lease liabilities (15) (36) (51) 147.2 % 42.0 % Operating results before depreciation and amortization after leases 4,163 2,683 3,986 (35.5 %) 48.5 % Analysis of results 2024 vs 2023 Revenues in 2024 amounted to 12,791 million euros, growing 1.1% y-o-y mainly as a result of increased IT revenues due to the higher demand for digitalization projects by B2B customers, partially offset by the decrease in wholesale and other revenues. The evolution of revenues excluding mobile handset sales is described below: •Retail revenues totaled 10,092 million euros in 2024, an increase of 2.2% year-on-year, driven by greater B2B sales volume and IT revenue growth and increases in tariffs charged to customers and, to a lesser extent, by growth in B2C customers. •Wholesale and other revenues totaled 2,167 million euros in 2024, decreasing by 4.3% year-on-year, mainly due to the impact of cuts to the mobile termination rate (MTR) (which decreased by 50% during 2024) and the discontinuation of “Fórmula 1” (racing cars) TV content in 2024, partially offset by the positive evolution of MVNO revenues. The evolution of expenses is explained below: •Supplies amounted to 5,313 million euros in 2024, up 5.7% year-on-year compared to 2023, mainly attributable to the increase in costs to support the increased IT-related activity (due to the higher demand for digitalization projects by B2B customers). •Personnel expenses amounted to 1,717 million euros in 2024, down 46.2% year-on-year compared to 2023. The year-on-year evolution was mainly attributable to the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023 (which resulted in a provision of 1,320 million euros before taxes in 2023). •Other expenses amounted to 1,624 million euros in 2024, down 6.1% year-on-year compared to 2023.The higher expenses in 2023 were due mainly to provisions recorded in Telefónica Spain to optimize the distribution network. 55 Table of Contents Operating results before depreciation and amortization reached 4,614 million euros in 2024, a year-on-year increase of 42.9%. Depreciation and amortization amounted to 2,202 million euros in 2024, remaining stable compared to 2023. Operating income amounted to 2,412 million euros in 2024, a year-on-year increase of 134.5%. The lower operating income in 2023 was mainly attributable to the impact of the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023 (resulting in a provision of 1,320 million euros, before taxes), as well as the higher provisions recorded in Telefónica Spain to optimize the distribution network in 2023 (60 million euros). Analysis of results 2023 vs 2022 Revenues in 2023 amounted to 12,654 million euros, growing 1.3% y-o-y. This trend was supported by the evolution of revenues excluding mobile handset sales, which grew 1.6% year-on-year and is described below. This growth was partially offset by the 5.4% y-o-y decline in mobile handset revenues driven by higher volumes achieved during 2022 as a result of including the possibility to add devices in the convergent portfolio (beginning in February 2022 for the total convergent customer base) that boosted these revenues at the beginning of the initiative. •Retail revenues totaled 9,872 million euros in 2023, increasing by 2.2% year-on-year, due in part to the recovery of the retail commercial activity and higher IT revenues as a result of higher demand for digitalization projects in the B2B segment. •Wholesale and other revenues totaled 2,264 million euros in 2023, decreasing by 1.0% year-on-year, due mainly to the decrease in fixed traffic revenues, mobile interconnection revenues due to lower mobile termination rates, and the impact of less "LaLiga" (Spanish football league) content available in the wholesale offer after mid-August 2022 (after a competitor obtained a portion of the broadcasting rights for the 2022/2023 season), partially offset by the growth of roaming-in revenues and the growth of revenues from MVNOs. The evolution of expenses is explained below: •Supplies amounted to 5,027 million euros in 2023, up 0.4% year-on-year compared to 2022, mainly attributable to the increase in costs related to IT revenue growth. •Personnel expenses amounted to 3,194 million euros in 2023, up 81.0% year-on-year compared to 2022. The year-on-year evolution was mainly attributable to the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023 (resulting in a provision of 1,320 million euros before taxes) and wage increases driven by inflation. •Other expenses amounted to 1,730 million euros in 2023, down 10.8% year-on-year compared to 2022, as a result of lower energy costs as well as savings associated with higher efficiencies, mainly related to network and system costs. Operating results before depreciation and amortization reached 3,229 million euros in 2023, a year-on-year decrease of 29.6%. Depreciation and amortization amounted to 2,200 million euros in 2023, increasing by 2.1% year-on-year, mainly explained by growth of the amortizable base of rights of use. Operating income amounted to 1,029 million euros in 2023, a year-on-year decrease of 57.7%. Operating income was adversely affected in 2023 mainly by the Collective Redundancies Plan adopted by certain companies in Telefónica Spain in 2023 (resulting in a provision of 1,320 million euros before taxes). The higher personnel costs, IT costs related to IT revenue growth and cost increases due to inflation were partially offset by the higher service revenues. 56 Table of Contents VMO2 In accordance with applicable accounting standards, Telefónica's share in the results of VMO2, our 50:50 joint venture with Liberty Global Plc in the United Kingdom, is presented in a single line of the income statement, “Share of (loss) income of investments accounted for by the equity method”. However, the VMO2 segment information included in this section is presented using management criteria and shows 100% of VMO2's results; Telefónica’s actual percentage ownership of VMO2 is 50%. More than three years after the formation of VMO2, the company continues to integrate and innovate while investing heavily to expand and upgrade its fiber and 5G networks to provide the highest quality connectivity to more regions of the country. VMO2’s gigabit fixed network footprint reached 18.3 million premises at the end of 2024, delivering 1.3 million homes serviceable in the year underpinned by the expansion of the FTTH network of nexfibre, the FTTH joint venture formed by Telefónica Infra, Liberty Global and InfraVia (see "Item 10. Additional Information—Material Contracts— Agreement reached by T. Infra, Liberty Global and InfraVia for the establishment of a fiber-to-the-home (FTTH) joint venture in the United Kingdom" for additional information). The expansion of the nexfibre footprint helped to deliver 20,000 new accesses in 2024. The upgrade of VMO2’s fixed network to fiber continued at pace across the year, with a total fiber footprint of 6.4 million premises by year end when including the nexfibre footprint. In its mobile business, significant progress was also made in the evolution of the company’s mobile network to 5G, with UK outdoor population coverage standing at 75% at the end of 2024, an increase of 24 percentage points in the year. In December 2024, the UK’s Competition and Markets Authority approved the merger between Vodafone UK and Three UK in the United Kingdom (‘MergeCo’). Subject to the final completion of the merger and relevant approvals, VMO2 expects to acquire spectrum from MergeCo and MergeCo’s enlarged network would participate in network sharing with VMO2. The table below shows the evolution of accesses of VMO2 over the past three years as of December 31 of such years: ACCESSES (1) Thousands of accesses 2022 2023 2024 % YoY 23/22 % YoY 24/23 Fixed telephony accesses 4,239.7 3,876.5 3,504.6 (8.6 %) (9.6 %) Broadband 5,661.6 5,724.7 5,744.5 1.1 % 0.3 % UBB 5,653.8 5,717.6 5,738.9 1.1 % 0.4 % Mobile accesses 33,831.3 35,216.3 35,652.5 4.1 % 1.2 % Prepay 7,968.3 7,617.9 7,369.8 (4.4 %) (3.3 %) Contract 16,087.6 16,122.3 15,836.0 0.2 % (1.8 %) IoT 9,775.5 11,476.1 12,446.7 17.4 % 8.5 % Pay TV 3,194.1 3,146.9 3,016.3 (1.5 %) (4.1 %) Retail Accesses 46,926.8 47,964.4 47,918.0 2.2 % (0.1 %) Wholesale Accesses 10,818.6 9,644.9 10,048.2 (10.8 %) 4.2 % Total Accesses 57,745.4 57,609.3 57,966.2 (0.2 %) 0.6 % (1) The access information provided as of December 31, 2024, 2023 and 2022 includes 100% of the accesses of VMO2. Telefónica’s actual percentage ownership of VMO2 is 50%. Accesses 2024 vs 2023 The total accesses base grew 0.6% year-on-year and stood at 58.0 million as of December 31, 2024, mainly driven by the increase in wholesale accesses and the 8.5% year-on-year growth in IoT accesses, offset in part by decreases in fixed telephony accesses, mobile prepay and contract accesses and Pay TV accesses. 57 Table of Contents The contract mobile customer base decreased 1.8% year-on-year to 15.8 million accesses, with a net loss of 286 thousand accesses in 2024 due to the poorer performance in the consumer segment as a result of more aggressive competition, especially from MVNOs, reflecting broader market trends. The prepay mobile customer base decreased 3.3% year-on-year to 7.4 million accesses, with a net loss of 248 thousand accesses in 2024. IoT mobile customer base grew 8.5% year-on-year and reached 12.4 million accesses underpinned by the continued roll-out of the United Kingdom’s Smart Metering Implementation Programme. The Smart Metering Implementation Programme (SMIP) is an energy-industry led program which aims to roll-out approximately 53 million smart electricity and gas meters to domestic properties and non-domestic sites in the United Kingdom. The fixed broadband base grew 0.3% year-on-year and reached 5.7 million accesses adding 20 thousand new accesses in 2024 supported by the expansion of the nexfibre footprint. Accesses 2023 vs 2022 The total accesses base decreased 0.2% year-on-year and stood at 57.6 million as of December 31, 2023, mainly driven by the decrease in wholesale caused by the migration of customers from one of the business’s smaller MVNO partners to BT (completed in the second half of 2023), partially offset by the increase in the mobile accesses base, which grew 4.1% year-on-year and reached 35.2 million accesses supported by growth in contract and IoT accesses. The contract mobile customer base grew 0.2% year-on-year and reached 16.1 million accesses adding 35 thousand new accesses to the base in 2023. The prepay mobile customer base decreased 4.4% year-on-year and totaled 7.6 million accesses, a decline of 350 thousand accesses in 2023. IoT mobile customer base grew 17.4% year-on-year and reached 11.5 million accesses underpinned by the Smart Metering Implementation Programme roll out. The Smart Metering Implementation Programme (SMIP) is an energy-industry led program which aims to roll-out approximately 53 million smart electricity and gas meters to domestic properties and non-domestic sites in the United Kingdom. The fixed broadband base grew 1.1% year-on-year and reached 5.7 million accesses, adding 63 thousand new accesses in 2023 supported by the increase in customer demand for higher speeds. UBB accesses grew 1.1% year-over-year with a net gain of 64 thousand new accesses in 2023. The company’s average broadband speed is 358 Mbps and increased 18.9% year-on-year, reaching speeds five times higher than the national speed average, according to Ofcom. 58 Table of Contents The table below shows the evolution of the VMO2 segment's results over the past three years: Millions of euros VMO2 2022 2023 2024 % YoY 23/22 % YoY 24/23 Revenues 12,155 12,547 12,616 3.2 % 0.6 % Mobile Business 6,938 6,840 6,718 (1.4 %) (1.8 %) Handset revenues 1,894 1,749 1,521 (7.7 %) (13.0 %) Fixed Business 4,639 4,453 4,550 (4.0 %) 2.2 % Other 578 1,254 1,348 117.0 % 7.5 % Other income 551 516 516 (6.3 %) 0.1 % Supplies (4,019) (4,294) (4,354) 6.8 % 1.4 % Personnel expenses (1,348) (1,303) (1,295) (3.3 %) (0.6 %) Other expenses (2,938) (3,035) (3,016) 3.3 % (0.6 %) Impairment losses in goodwill — (3,572) — n.m. n.m. Operating results before depreciation and amortization 4,401 859 4,467 (80.5 %) n.m. Depreciation and amortization (4,170) (3,685) (3,371) (11.6 %) (8.5 %) Operating income (loss) 231 (2,826) 1,096 c.s. c.s. Share of income of investments accounted for by the equity method 1 2 4 n.m. 105.8 % Financial income 24 55 51 126.3 % (8.3 %) Financial expenses (1,020) (1,436) (1,578) 40.7 % 9.9 % Realized and unrealized gains on derivate instruments, net (1) 2,567 (924) 463 c.s. c.s. Foreign currency transaction losses, net (1,296) 677 (34) c.s. c.s. Net financial result 275 (1,628) (1,098) c.s. (32.6 %) Result before taxation 507 (4,452) 2 c.s. c.s. Taxes (37) 265 (22) c.s. c.s. Result for the period 492 (4,187) (20) c.s. (99.5 %) Attributable to non-controlling interests — — (19) n.m. n.m. Result for the period attributable to equity holders of the parent (100% VMO2) 492 (4,187) (39) c.s. n.m. Operating results before depreciation and amortization 4,401 859 4,467 (80.5 %) n.m. Amortization of rights of use (leases amortization) (235) (208) (220) (11.5 %) 5.6 % Financial expenses on lease liabilities (44) (51) (53) 18.0 % 2.6 % Operating results before depreciation and amortization after leases 4,122 600 4,194 (85.4 %) n.m. c.s.: change of sign; n.m.: not meaningful Notes: (1) VMO2 entered into various derivative instruments to manage interest rate exposure and foreign currency exposure. Generally, VMO2 does not apply hedge accounting to its derivative instruments. Accordingly, changes in the fair values of most of its derivatives are recorded in the finance results of its consolidated income statement. Analysis of results 2024 vs 2023 In 2024, revenues amounted to 12,616 million euros, growing 0.6%, mainly due to price increases implemented by VMO2 and the appreciation of the pound sterling offset in large part by the decline in handset sales and B2B revenues. 59 Table of Contents •Mobile business revenues amounted to 6,718 million euros in 2024, declining by 1.8% year-on-year, mainly as a result of the decrease in handset revenues as customers held onto their devices for a longer period, partially offset by the appreciation of the pound sterling. •Fixed business revenues amounted to 4,550 million euros in 2024, increasing by 2.2% year-on-year, mainly driven by growth in revenues per customer household due to price increases, coupled with the appreciation of the pound sterling, partially offset by the decline in B2B fixed revenues. •Other revenues amounted to 1,348 million euros in 2024, growing 7.5% year-on-year, mainly driven by increased revenues related to the expansion of the nexfibre network and the appreciation of the pound sterling. The evolution of expenses is explained below: •Supplies amounted to 4,354 million euros in 2024, up 1.4% year-on-year, mainly due to costs of expanding the nexfibre network and the appreciation of the pound sterling, offset in part by a decline in handset costs. •Personnel expenses amounted to 1,295 million euros in 2024, down 0.6% year-on-year. The decrease was due in part to the realization of synergies through the execution of restructuring plans aiming to deliver a single operating model (through the convergence of several functions across sales, marketing, product and call center teams) and a leaner company, offset in part by the appreciation of the pound sterling. •Other expenses amounted to 3,016 million euros in 2024, down 0.6% year-on-year mainly due to lower commercial costs related to lower handsets sales (translating to decreases in associated bad debt, costs of sale of receivables and commissions to handset suppliers), partially offset by the appreciation of the pound sterling. Operating results before depreciation and amortization reached 4,467 million euros in 2024 compared to 859 million euros in 2023. The lower operating results before depreciation and amortization in 2023 was mainly due to the impairment of goodwill in 2023 amounting to 3,572 million euros. Depreciation and amortization amounted to 3,371 million euros in 2024, decreasing by 8.5% due to a lower depreciable base after certain assets fully depreciated in 2023. Operating income amounted to 1,096 million euros in 2024, compared to an operating loss of 2,826 million euros in 2023. The lower operating income in 2023 was mainly due to the impairment of goodwill in 2023 amounting to 3,572 million euros. Analysis of results 2023 vs 2022 In 2023, revenues amounted to 12,547 million euros, growing 3.2% year-on-year, mainly due to the nexfibre revenues contribution (where VMO2 is the anchor wholesale tenant) and the price increases implemented by VMO2, partially offset by the depreciation of the pound sterling and the decline in the access base. •Mobile business revenues amounted to 6,840 million euros in the year 2023, declining by 1.4% as a result mainly of the decrease in handset revenues (where there were deteriorating margins) and the depreciation of the pound sterling, partially offset by the price increases implemented by VMO2. •Fixed business revenues amounted to 4,453 million euros in the year 2023, decreasing by 4.0%, mainly due to reduced customer spend (driven by the increased cost-of-living) and the depreciation of the pound sterling, partially offset by the price increases implemented by VMO2. Moreover, B2B fixed revenue decreased due to lower prices offered upon customer contract renewals and customer shifts to lower-cost products and services. •Other revenues amounted to 1,254 million euros in the year 2023, a 117.0% increase driven by revenues from construction, network and other services provided to nexfibre. The evolution of expenses is explained below: •Supplies amounted to 4,294 million euros in 2023, up 6.8% year-on-year compared to 2022 driven by nexfibre growth offset in part by synergies realization, cost efficiencies, lower hardware sales and the depreciation of the pound sterling. 60 Table of Contents •Personnel expenses amounted to 1,303 million euros in 2023, down 3.3% year-on-year compared to 2022 positively impacted by the realization of synergies through the execution of restructuring plans aiming to deliver a single operating model and a leaner company and the depreciation of the pound sterling, partially offset by higher restructuring costs. •Other expenses amounted to 3,035 million euros in 2023, up 3.3% year-on-year compared to 2022, attributable to inflationary tensions, including higher energy costs, and integration costs, partially offset by the depreciation of the pound sterling. •In addition, in 2023, VMO2 recorded an impairment of goodwill amounting to 3,572 million euros,related to an increase in VMO2’s weighted average cost of capital and the impacts of the macroeconomic conditions and competitive environment in the United Kingdom on estimated future cash flows of VMO2. Operating results before depreciation and amortization in 2023 reached 859 million euros, decreasing 80.5% year-on-year in reported terms. Depreciation and amortization amounted to 3,686 million euros in 2023, decreasing by 11.6% year-on-year, impacted by a lower depreciable base and the depreciation of the pound sterling (-1.8 p.p.). Operating loss amounted to 2,826 million euros in the year 2023, compared to 231 million euros in 2022, mainly due to the impairment of goodwill amounting to 3,572 million euros. 61 Table of Contents TELEFÓNICA GERMANY The table below shows the evolution of accesses in Telefónica Germany over the past three years as of December 31 of such years: ACCESSES Thousands of accesses 2022 2023 2024 % YoY 23/22 % YoY 24/23 Fixed telephony accesses (1) 2,211.6 2,299.9 2,292.3 4.0 % (0.3 %) Broadband 2,294.2 2,384.3 2,375.3 3.9 % (0.4 %) UBB 1,939.1 2,064.6 2,091.9 6.5 % 1.3 % FTTH 13.9 28.3 50.6 103.4 % 78.8 % Mobile accesses 44,306.6 45,072.4 44,989.5 1.7 % (0.2 %) Prepay 16,274.8 15,526.6 14,873.7 (4.6 %) (4.2 %) Contract 26,336.2 27,686.4 27,888.8 5.1 % 0.7 % IoT 1,695.7 1,859.3 2,227.0 9.7 % 19.8 % Retail Accesses 48,891.6 49,832.2 49,657.1 1.9 % (0.4 %) Total Accesses 48,891.6 49,832.2 49,657.1 1.9 % (0.4 %) (1) Includes "fixed wireless" and Voice over IP accesses. In 2024,Telefónica Germany continued with commercial traction and low churn in a competitive market. Telefónica Germany’s key milestones in 2024 were as follows: •Good financial execution, with operating results before depreciation and amortization accelerating y-o-y in the last three months of 2024. •Ongoing commercial activity reflecting sustained O2 brand appeal and enhanced partner brands momentum. •Telefónica Germany made good progress with the densification and further roll-out of its green 5G network resulting in coverage 97% as of December 31, 2024, leaving Telefónica Germany well on track to achieve nationwide 5G coverage by the end of 2025. •Telefónica Germany maintained mobile trading momentum in a competitive environment, leveraging continued enhancement of network and service quality. •On January 26, 2024, Telefónica completed a voluntary public acquisition offer for shares of Telefónica Deutschland, followed by a public delisting acquisition offer completed on April 29, 2024. As a result of these transactions and direct market purchases by Telefónica outside the offers, Telefónica reached approximately 96.85% of the share capital and voting rights of Telefónica Deutschland. See “Item 4. Information on the Company—History and Development of the Company—Public Takeover Offers”. In August 2023, the 1&1 Group disclosed that it would switch its host network operator in Germany from Telefónica Germany to Vodafone in the second half of 2024, under a long-term, exclusive national roaming partnership with Vodafone Group. This exclusivity arrangement includes the non-discriminatory provision of national roaming services in areas not yet covered by the new 1&1 mobile network and in particular includes access to the 5G network of Vodafone Group, including mobile communication standards 2G and 4G and future mobile communication standards and technologies. The agreement between the 1&1 Group and Vodafone has limited Telefónica's network sharing opportunities with 1&1. Migration of customers to 1&1’s own network and Vodafone’s network (for roaming) began in the first quarter of 2024 and is expected to be completed in the second half of 2025. It is expected that the completion of this migration will have a significant impact on Telefónica Germany’s accesses and revenues.The ongoing migration of 1&1 customers from Telefónica’s network to 1&1’s own network and Vodafone’s network (for roaming) is referred to below as the “change to the 1&1 business model". 62 Table of Contents Accesses 2024 vs 2023 The total access base decreased 0.4% year-on-year and stood at 49.7 million on December 31, 2024, mainly driven by a 4.2% decrease in the prepay mobile accesses base, which reached 14.9 million. The contract mobile customer base reached 27.9 million accesses in 2024, growing 0.7% year-on-year due to O2 good performance driven by brand appeal, continued network enhancement and service quality, partially offset by the lower customer base in partner brands as a result of the change to the 1&1 business model. Migration of customers to 1&1’s own network and Vodafone’s network (for roaming) began in the first quarter of 2024 and is expected to be completed in the second half of 2025. Excluding 1&1 customers accessing Telefónica Germany’s network, the contract mobile customer base was 17.3 million accesses as of December 31, 2024, growing 5.0% year-on-year mainly due to the O2 brand customer growth. The prepay mobile customer base decreased 4.2% year-on-year to 14.9 million accesses reflecting a net loss of 652.9 thousand accesses in 2024 due to the German market trend of prepaid-to-postpaid migration. Broadband accesses reached 2.4 million accesses (down 0.4% y-o-y), with a net loss 9.0 thousand accesses in 2024, mainly driven by legacy DSL churn, offset in part by continued customer for high-speed cable and fiber accesses. Accesses 2023 vs 2022 The total access base increased 1.9% year-on-year and stood at 49.8 million on December 31, 2023, mainly driven by a 1.7% increase in the mobile accesses base, which reached 45.1 million. The contract mobile customer base grew 5.1% year-on-year and reached 27.7 million accesses, increasing the share over the total mobile accesses base to 61.4%. Net adds reached 1.4 million accesses driven by own brand gross adds momentum in combination with low churn levels. Churn rates remained at low levels based on the high network and service quality combination. The prepay mobile customer base decreased 4.6% year-on-year to 15.5 million accesses, reflecting the German market trend of prepaid to postpaid migration. There was a net loss of 0.7 million prepay customers in 2023. Broadband accesses reached 2.4 million accesses (up 3.9% y-o-y) with a net add of 90 thousand accesses in 2023, mainly driven by the good performance of “O2 myHome” tariff, continued VDSL demand and a low level of churn. Fiber and cable technologies are gaining more and more traction with high-value customers in these technologies. 63 Table of Contents The table below shows the evolution of Telefónica Germany’s results over the past three years: Millions of euros TELEFÓNICA GERMANY 2022 2023 2024 % YoY 23/22 % YoY 24/23 Revenues 8,224 8,614 8,492 4.7 % (1.4 %) Mobile Business 7,394 7,767 7,596 5.0 % (2.2 %) Handset revenues 1,652 1,872 1,785 13.3 % (4.7 %) Fixed Business 806 827 857 2.7 % 3.6 % Other income 153 160 192 4.7 % 20.2 % Supplies (2,524) (2,677) (2,588) 6.1 % (3.3 %) Personnel expenses (622) (669) (700) 7.6 % 4.7 % Other expenses (2,673) (2,788) (2,631) 4.3 % (5.7 %) Operating results before depreciation and amortization 2,558 2,640 2,765 3.2 % 4.7 % Depreciation and amortization (2,295) (2,323) (2,226) 1.2 % (4.1 %) OPERATING INCOME 263 317 539 20.8 % 69.7 % Amortization of rights of use (leases amortization) (636) (673) (688) 5.7 % 2.2 % Financial expenses on lease liabilities (16) (36) (66) 134.1 % 86.4 % Operating results before depreciation and amortization after leases 1,906 1,931 2,011 1.3 % 4.1 % Analysis of results 2024 vs 2023 Total revenues were 8,492 million euros in 2024, a year-on-year decrease of 1.4% driven by the decrease in the mobile business. –Mobile business revenues totaled 7,596 million euros decreasing 2.2% y-o-y as a result of 50% cuts in the mobile termination rate (MTR) from 0.40 euros to 0.20 euros per minute effective from January 1, 2024, as well as the change to the 1&1 business model, partially offset by the good performance of O2 own brand revenues. Excluding the impact of the cuts to the mobile termination rate, mobile business revenues were down 1.1% year-on-year in 2024. –Handset revenues (which are included in mobile business revenues) amounted to 1,785 million euros, decreasing 4.7% y-o-y due to lower commercial activity of the “O2 myHandy” monthly installment handset financing model, which faced tough competition after the record volume sold in the previous year. –Fixed business revenues were 857 million euros, increasing 3.6% y-o-y due to the increasing demand of fiber and cable technologies combined with price increases. Mobile ARPU reached 10.4 euros (-3.4% y-o-y), due to the decline in contract and prepay ARPU of 7.8% and 1.9% respectively, impacted by the 50% cut to the mobile termination rate (MTR), as well as the higher share of second and third SIM cards tied to family contracts, which usually have lower ARPUs. Data ARPU reached 7.0 euros (-5.5% y-o-y), also as a result of higher shares of second and third SIM cards tied to family contracts which usually have lower ARPUs. TELEFÓNICA GERMANY 2022 2023 2024 % YoY 23/22 % YoY 24/23 ARPU (EUR) 10.1 10.8 10.4 6.5 % (3.4 %) Prepay 6.7 7.8 7.6 15.3 % (1.9 %) Contract (1) 13.3 13.2 12.2 (0.1 %) (7.8 %) Data ARPU (EUR) 6.7 7.4 7.0 9.2 % (5.5 %) (1) Excludes IoT. 64 Table of Contents The evolution of expenses is explained below: •Supplies amounted to 2,588 million euros in 2024, decreasing 3.3% year-on-year mainly as a result of the lower handset cost of sales and the positive effects from cuts in mobile termination rate (MTR) fees paid to other operators. •Personnel expenses amounted to 700 million euros in 2024, increasing 4.7% year-on-year, reflecting further staff and wage increases in 2024, which were intended to support Telefónica Germany's transformation and growth plans. •Other expenses amounted to 2,631 million euros in 2024, decreasing 5.7% year-on-year compared to 2023 from savings in commercial costs (due to the optimization and digitalization of customer service, lower marketing costs and efficiencies in commercial channels), savings from the digital transformation of system and network operations and energy cost optimization. Operating results before depreciation and amortization totaled 2,765 million euros in 2024, growing by 4.7% year-on-year. Depreciation and amortization amounted to 2,226 million euros in 2024, decreasing by 4.1% year-on-year, mainly due to a lower amortizable base of intangible assets as a result of fully amortized assets in the year. Operating income totaled 539 million euros in 2024, growing 69.7% year-on-year as a result of the good performance of the own brand and focused strategy execution driving mainly from successful commercial cost management and savings from digital transformation and energy cost optimization and lower depreciation and amortization. Analysis of results 2023 vs 2022 Total revenues were 8,614 million euros in 2023, a year-on-year increase of 4.7%, driven by the increase in the mobile business. –Mobile business revenues totaled 7,767 million euros, increasing 5.0% year-on-year. This reflects the sustained mobile service revenue momentum on the back of the ongoing strong commercial traction of the O2 brand and a solid contribution from partner brands selling O2 services. –Handset revenues (which are included in mobile business revenues) amounted to 1,872 million euros, increasing 13.3% year-on-year due to high demand for accessories and high value devices supported by the “O2 myHandy” monthly-installment financing model. –Fixed business revenues were 827 million euros, increasing 2.7% year-on-year, due to the good performance of “O2 myHome” tariff and the increasing demand of fiber and cable technologies. Mobile ARPU was 10.8 euros (+6.5% y-o-y) due to the 15.3% year-on-year increase in prepay ARPU, offset in part by the 0.1% year-on-year decrease in contract ARPU. Data ARPU was 7.4 euros (+9.2% y-o-y), supported by the successful “O2 Mobile” portfolio. The evolution of expenses is explained below: •Supplies amounted to 2,677 million euros in 2023, increasing 6.1% year-on-year compared to 2022. This increase was mainly attributable to higher handset cost of sales partially offset by positive effects from cuts in the MTR (Mobile Termination Rate) fees paid to other operators. •Personnel expenses amounted to 669 million euros in 2023, increasing 7.6% year-on-year compared to 2022, reflecting staff and wage increases, which were intended to support Telefónica Germany's transformation and growth plans. •Other expenses amounted to 2,788 million euros in 2023, increasing 4.3% year-on-year compared to 2022 reflecting higher commercial costs, energy costs and higher technology costs required for the digital transformation of the company. Operating results before depreciation and amortization totaled 2,640 million euros in 2023, increasing by 3.2% y-o-y. 65 Table of Contents Depreciation and amortization amounted to 2,323 million euros in 2023, increasing by 1.2% year-on-year mainly due to higher amortization of rights-of-use assets. Operating income totaled 317 million euros in 2023 increasing 20.8% year-on-year due mainly to good performance in both fixed and mobile business revenues, own brand momentum and further efficiency gains. 66 Table of Contents TELEFÓNICA BRAZIL The table below shows the evolution of accesses of Telefónica Brazil over the past three years as of December 31 of such years: ACCESSES Thousands of accesses 2022 2023 2024 % YoY 23/22 % YoY 24/23 Fixed telephony accesses (1) 7,012.7 6,457.7 5,746.4 (7.9 %) (11.0 %) Broadband 6,419.6 6,677.9 7,273.7 4.0 % 8.9 % UBB 5,967.7 6,386.5 7,049.1 7.0 % 10.4 % FTTH 5,482.4 6,174.7 6,958.4 12.6 % 12.7 % Mobile accesses 97,973.0 99,070.2 102,310.3 1.1 % 3.3 % Prepay 39,305.9 37,267.3 35,816.3 (5.2 %) (3.9 %) Contract 43,947.2 45,902.7 49,076.8 4.4 % 6.9 % IoT 14,719.9 15,900.2 17,417.2 8.0 % 9.5 % Pay TV 966.3 844.9 785.2 (12.6 %) (7.1 %) IPTV 898.3 844.9 785.2 (5.9 %) (7.1 %) Retail Accesses 112,423.7 113,101.8 116,163.6 0.6 % 2.7 % Total Accesses 112,424.0 113,102.1 116,164.0 0.6 % 2.7 % (1) Includes "fixed wireless" and Voice over IP accesses. In 2024, Telefónica Brazil maintained its leadership in the mobile segment and, in a more consolidated market environment, a market share of 38.8%, 5.7 p.p. ahead of its closest competitor (data from the last official publication of ANATEL, December 31, 2024). Telefónica Brazil's strategy remains focused on strengthening its high-value customer base. Telefónica Brazil reached a contract market share (excluding IoT accesses) of 43.1% as of December 31, 2024 (ANATEL). In the fixed business, Telefónica Brazil continued with the implementation of strategic technologies, focusing on the deployment of fiber, centering its commercial offer around Vivo Total, and maintaining low churn rates. In addition, Telefónica Brazil continued to advance in the development of an ecosystem with relevant partners to promote its consolidation as a digital services hub. To this end, it offers a broad portfolio of services, highlighting those described below: –Health & Wellness: Vale Saúde is a monthly subscription service that provides discounts for online or in-person medical care, exams and medications, through more than 3 thousand pharmacies and 3 thousand clinics and laboratories in 2024. –Education: Viva E is an employment platform that combines online courses and job offers. The joint venture created by Telefónica Brazil and Ânima Educação offers more than 400 hours of content. –Vivo Ventures: Telefónica Brazil’s corporate venture capital fund for strategic investments, invested 5 million euros in CRMBonus, a platform specialized in the use of artificial intelligence to build customer loyalty, in June 2024, in addition to 1.4 million euros in Agrolend, an agricultural credit fintech company targeting small and medium-sized rural producers, in October 2024. –Fintech: Vivo Pay is Telefónica Brazil's 100% digital platform that consolidates Vivo's financial solutions, including personal loans, insurance, unemployment benefit advances and instant payment solutions, among others. Telefónica Brazil operated Vivo Pay with BTG Bank until September 2024, when the Central Bank of Brazil approved the request for authorization to operate Vivo Pay Sociedade de Crédito S.A. as a direct credit company. Vivo Pay is expected to enhance Vivo's financial services. –Energy: GUD Energía is a joint venture created in 2024 to capture the opportunities generated by the opening of the free market with a focus on the sale of personalized renewable energy solutions throughout Brazil, helping consumers to cut their energy bills. 67 Table of Contents Accesses 2024 vs 2023 Total accesses stood at 116.2 million as of December 31, 2024, increasing 2.7% year-on-year mainly due to the growth in contract mobile accesses thanks to Telefónica Brazil's totalization strategy (expanding the services we offer to provide customers with a complete experience) and the growth in FTTH, which offset the decrease in prepaid mobile accesses as customers migrate to hybrid postpaid (accesses with usage limits, requiring customers to purchase “top-ups” if they exceed these limits), the decline in the fixed voice business due to the continuous migration from fixed to mobile, the contraction of the lower-value fixed broadband customer base, and the loss of DTH customers as a result of the company’s strategic decision to discontinue legacy technologies. Contract mobile accesses grew by 6.9% year-on-year and reached 49.1 million with net adds of 3.2 million new accesses in 2024, with churn at very low levels (1.0%), driven by the totalization strategy and by the launch of new attractive bundles (packaged offers with more than one service) in hybrid postpaid. Prepaid mobile accesses decreased by 3.9% year-on-year and reached 35.8 million accesses with a net loss of 1.5 million accesses during 2024. The lower customer base has been mainly a consequence of the strategy of migrating prepaid customers to hybrid postpaid and focusing more on encouraging the consumption of top-ups. Broadband accesses grew by 8.9% year-on-year and reached 7.3 million accesses with net adds of 596 thousand new accesses in 2024. Telefónica Brazil maintained its strategic focus on the deployment of fiber, reaching 7.0 million homes connected with FTTH as of December 2024, growing 12.7% year-on-year. Telefónica Brazil reached 31.5 million real estate units passed with FTTx access, and 7.0 million connected homes, which grew by 10.4% year-on-year, which managed to offset the decrease in other accesses of legacy broadband services (xDSL). Traditional voice accesses decreased by 11.0% year-on-year due to fixed-mobile substitution, reaching 5.7 million accesses. Pay TV accesses reached 785 thousand as of December 31, 2024, decreasing by 7.1% year-on-year, mainly as a result of the strategic decision to discontinue the DTH service. Accesses 2023 vs 2022 Total accesses stood at 113.1 million as of December 31, 2023, increasing by 0.6% year-on-year mainly due to the growth in contract thanks to Telefónica Brazil's totalization strategy (expanding the services we offer to provide customers with a complete experience) and the growth in FTTH, which offset the decrease in prepaid mobile accesses, the decline in the fixed voice business due to the continuous migration from fixed to mobile, the contraction of the lower-value fixed broadband customer base, and the loss of DTH customers as a result of the company’s strategic decision to discontinue legacy technologies. Contract mobile accesses grew by 4.4% year-on-year and reached 45.9 million with net adds of 2.0 million new accesses in 2023, with a churn at historical low levels (1.0%), driven by the totalization strategy and by the launch of new attractive bundles (packaged offers with more than one service) in hybrid postpaid (postpaid accesses with usage limits, requiring customers to purchase “top-ups” if they exceed these limits). Prepaid mobile accesses decreased by 5.2% year-on-year, reaching 37.3 million accesses with a net loss of 2.0 million accesses in 2023. The lower customer base has been mainly a consequence of the disconnection of inactive customers, mostly from Oi's customer base incorporated in 2022, as well as the strategy of migrating prepaid customers to hybrid postpaid (postpaid accesses with usage limits, requiring customers to purchase “top-ups” if they exceed these limits). Broadband accesses grew by 4.0% year-on-year and reached 6.7 million accesses with net adds of 258 thousand new accesses in 2023. Telefónica Brazil maintained its strategic focus on the deployment of fiber, reaching 6.2 million homes connected with FTTH as of December 2023, growing 12.6% year-on-year. Telefónica Brazil reached 26.2 million real estate units, which managed to offset the decrease in other accesses of legacy broadband services (xDSL). Traditional voice accesses decreased by 7.9% year-on-year due to fixed-mobile substitution, reaching 6.5 million accesses. Pay TV accesses reached 0.8 million as of December 31, 2023, decreasing by 12.6% year-on-year, mainly as a result of the strategic decision to discontinue the DTH service. 68 Table of Contents The table below shows the evolution of Telefónica Brazil’s results over the past three years: Millions of euros TELEFÓNICA BRAZIL 2022 2023 2024 % YoY 23/22 % YoY 24/23 Revenues 8,870 9,650 9,618 8.8 % (0.3 %) Mobile Business 6,106 6,792 6,846 11.2 % 0.8 % Handset revenues 573 640 642 11.6 % 0.5 % Fixed Business 2,764 2,858 2,772 3.4 % (3.0 %) Other income 416 427 317 2.8 % (25.9 %) Supplies (1,783) (2,170) (2,234) 21.7 % 3.0 % Personnel expenses (1,097) (1,220) (1,218) 11.2 % (0.2 %) Other expenses (2,674) (2,559) (2,367) (4.3 %) (7.5 %) Operating results before depreciation and amortization 3,732 4,128 4,116 10.6 % (0.3 %) Depreciation and amortization (2,369) (2,511) (2,474) 6.0 % (1.4 %) OPERATING INCOME 1,363 1,617 1,642 18.6 % 1.5 % Amortization of rights of use (leases amortization) (563) (621) (594) 10.3 % (4.2 %) Financial expenses on lease liabilities (238) (258) (281) 8.1 % 8.9 % Operating results before depreciation and amortization after leases 2,931 3,249 3,241 10.8 % (0.3 %) Analysis of results 2024 vs 2023 In 2024, revenues amounted to 9,618 million euros, decreasing by 0.3% year-on-year, mainly due to the depreciation of the Brazilian real, despite the growth in service revenues, driven by the price increases in the mobile business and by businesses associated with new technologies (FTTH and digital services). –Mobile business revenues totaled 6,846 million euros in 2024, increasing 0.8% year-on-year, mainly as a result of the positive evolution of contract accesses due to the larger customer base, price increases and the positive evolution of digital services, partially offset by the depreciation of the Brazilian real. –Fixed business revenues amounted to 2,772 million euros in 2024, decreasing 3.0% year-on-year, mainly as a result of the depreciation of the Brazilian real, partially offset by higher FTTH revenues, in line with the strategic focus on such services, and higher IT service revenues. Mobile ARPU decreased 4.0% year-on-year, mainly due to the depreciation of the Brazilian real, despite the price increases carried out and the good evolution of the postpaid business, which was helped by the totalization strategy. TELEFÓNICA BRAZIL 2022 2023 2024 % YoY 23/22 % YoY 24/23 ARPU (EUR) 4.7 5.0 4.8 7.2 % (4.0 %) Prepay 2.3 2.4 2.2 4.0 % (7.8 %) Contract (1) 8.3 8.8 8.3 6.3 % (5.3 %) Data ARPU (EUR) 3.7 4.1 4.0 8.6 % (2.0 %) (1) Excludes IoT. The evolution of expenses is explained below: • Supplies amounted to 2,234 million euros in 2024, increasing 3.0% year-on-year mainly due to higher equipment purchases and handset costs associated with increased commercial activity, offset in part by the depreciation of the Brazilian real. 69 Table of Contents • Personnel expenses amounted to 1,218 million euros in 2024, decreasing 0.2% year-on-year compared to 2023, mainly as a result of the depreciation of the Brazilian real, which offset salary increases implemented during the year. • Other expenses amounted to 2,367 million euros in 2024, decreasing 7.5% year-on-year compared to 2023, impacted by the reversal of contingencies related to the migration from the existing concession regime to the new authorization model for the provision of fixed telephony services, the depreciation of the Brazilian real, tax recoveries and lower copper prices. Operating results before depreciation and amortization stood at 4,116 million euros in 2024, decreasing by 0.3% year-on-year mainly due to the depreciation of the Brazilian real. Depreciation and amortization amounted to 2,474 million euros in 2024, decreasing 1.4% year-on-year, mainly due to the depreciation of the Brazilian real, which more than offset the higher amortizable base of property, plant and equipment assets associated with new investments. Operating income stood at 1,642 million euros in 2024, increasing by 1.5%, mainly due to lower depreciation and amortization and positive performance in service revenues, as a result of increased commercial activity, and the impact of the reversal of contingencies related to the migration from the existing concession regime to the new authorization model for the provision of fixed telephony services, offset in part by the depreciation of the Brazilian real. Analysis of results 2023 vs 2022 In 2023, revenues amounted to 9,650 million euros, growing by 8.8% year-on-year, mainly due to the growth in service revenues (mainly coming from the mobile business), businesses associated with new technologies like FTTH, IPTV and Digital Services and higher handset sales. To a lesser extent, revenues grew due to the price increases implemented by Telefónica Brazil and the appreciation of the Brazilian real. These impacts offset the revenue erosion associated with traditional telephony accesses and to a lesser extent due to lower Pay TV revenues. –Mobile business revenues totaled 6,792 million euros in 2023, increasing by 11.2%, mainly due to the larger contract customer base, the price increases implemented by Telefónica Brazil and, to a lesser extent, the appreciation of the Brazilian real. –Fixed business revenues amounted to 2,858 million euros in 2023, growing 3.4% mainly due to higher FTTH revenues in line with the strategic focus on such services as well as higher IT service revenues and, to a lesser extent, the appreciation of the Brazilian real. Mobile ARPU grew by 7.2% year-on-year mainly due to the price increases implemented by Telefónica Brazil together with the good evolution of the contract business, helped by the totalization strategy (expanding the services we offer to provide customers with a complete experience), mobile shelf plans with new hybrid bundles (packaged offers including, e.g., health insurance and entertainment services as Vale Saúde and VIVOplay) and, to a lesser extent, the appreciation of the Brazilian real. The evolution of expenses is explained below: • Supplies amounted to 2,170 million euros in 2023, increasing 21.7% year-on-year, due to higher equipment purchases and handset costs associated with increased commercial activity and to the appreciation of the Brazilian real. • Personnel expenses amounted to 1,220 million euros in 2023, increasing 11.2% year-on-year, as a result mainly of the salary increases due to inflation and to a lesser extent, the appreciation of the Brazilian real. • Other expenses amounted to 2,559 million euros in 2023, decreasing 4.3% year-on-year compared to 2022, due mainly to the acquisition price adjustment recorded in connection with Oi's assets, and cost efficiencies due to digitalization, offset in part by the appreciation of the Brazilian real. Operating results before depreciation and amortization stood at 4,128 million euros in 2023, growing by 10.6% year-on-year. Depreciation and amortization amounted to 2,511 million euros in 2023 , increasing 6.0% year-on-year due to higher amortization of intangible assets. 70 Table of Contents Operating income stood at 1,617 million euros in 2023, increasing by 18.6% year-on-year due to the good performance of service revenues as a result of higher commercial activity and the price increases implemented by Telefónica Brazil, that together with good cost management, more than offset the growth in expenses and depreciation and amortization. This variation was also impacted positively by the appreciation of the Brazilian real. 71 Table of Contents TELEFÓNICA HISPAM The table below shows the evolution of accesses of Telefónica Hispam over the past three years as of December 31 of such years: ACCESSES Thousands of accesses 2022 2023 2024 % YoY 23/22 % YoY 24/23 Fixed telephony accesses (1) 6,375.7 5,678.7 5,068.4 (10.9 %) (10.7 %) Broadband 6,030.6 6,029.2 5,957.0 — % (1.2 %) UBB 5,155.0 5,534.6 5,753.7 7.4 % 4.0 % FTTH 5,053.9 5,466.7 5,712.8 8.2 % 4.5 % Mobile accesses 95,579.7 97,945.7 95,001.4 2.5 % (3.0 %) Prepay 65,340.7 66,649.7 63,745.6 2.0 % (4.4 %) Contract 24,771.9 25,125.8 24,360.0 1.4 % (3.0 %) IoT 5,467.2 6,170.1 6,895.8 12.9 % 11.8 % Pay TV 2,899.8 2,840.3 2,788.8 (2.1 %) (1.8 %) IPTV 1,384.7 1,682.7 1,838.5 21.5 % 9.3 % Retail Accesses 110,958.9 112,563.5 108,886.1 1.4 % (3.3 %) Total Accesses 110,970.7 112,575.3 108,897.9 1.4 % (3.3 %) (1) Includes "fixed wireless" and Voice over IP accesses. Accesses 2024 vs 2023 Telefónica Hispam's total accesses reached 108.9 million as of December 31, 2024 (-3.3% year-on-year), mainly as a result of the decrease in mobile accesses. We sold all of our shares in Telefónica Móviles Argentina, S.A. in February 2025, see “—Recent Developments”. Mobile accesses closed at 95.0 million, decreasing by 3.0% year-on-year, mainly due to decreases in prepaid customers and, to a lesser extent, a decrease in contract customers. •Contract accesses decreased by 3.0% year-on-year due to the lower accesses recorded in Colombia (-7.7%), Ecuador (-7.0%), Chile (-3.8%) and Argentina (-2.3%), partially offset by the increase in Mexico (+5.2%). This evolution was driven by aggressive competition in the postpaid markets in Colombia, Ecuador, Chile and Argentina and a strong increase in customer churn. •Prepay accesses decreased by 4.4% year-on-year, resulting in a net loss of 2.9 million accesses as of December 31, 2024, due to a revenue-neutral technical customer base adjustment in Chile (-1.9 million accesses) and Mexico (-1.1 million accesses), which entailed excluding inactive accesses that did not generate revenue over a given period of time. The prepay customer base was also negatively impacted by the aggressive competition in the prepaid markets in Chile, Mexico, Colombia and Argentina. Fixed accesses stood at 5.1 million as of December 31, 2024 (-10.7% year-on-year), with a net loss of 610 thousand accesses, due to the ongoing erosion of this business in all countries in the region. Fixed broadband accesses amounted to 6.0 million as of December 31, 2024 (-1.2% year-on-year). The penetration of fixed broadband accesses over traditional business accesses stood at 117.5% (+11.4 p.p. year-on-year), as a result of the focus on ultra broadband (UBB) deployment in the region, reaching 5.7 million connected accesses (+4.0% y-o-y) and 25.0 million premises passed. The penetration of UBB accesses over fixed broadband accesses stood at 96.6% (+4.8 p.p. y-o-y). Pay TV accesses stood at 2.8 million as of December 31, 2024, a decrease of 1.8% y-o-y. This evolution is explained by the decline in cable accesses (-181.5 thousand accesses) and direct-to-home accesses (-109.7 thousand accesses), in line with the change in the commercial strategy in the region, partially offset by the increase in IPTV accesses (+155.7 thousand accesses), the company's main strategic focus. 72 Table of Contents Accesses 2023 vs 2022 Telefónica Hispam's total accesses amounted to 112.6 million as of December 31, 2023 (+1.4% year-on-year), as a result of the increase in mobile and FTTH accesses. Mobile accesses amounted to 97.9 million, increasing by 2.5% y-o-y mainly due to the higher prepay customer base. •Contract accesses increased by 1.4% year-on-year due to the increase in accesses in Mexico (+22%), Venezuela (+4.1%) and Peru (+2.4%), partially offset by the decrease in Chile (-2.2%) and Colombia (-1.3%). This evolution is mainly thanks to attractive commercial offers which result in a higher number of gross adds. •Prepay accesses increased by 2.0% year-on-year, with a net gain of 1.3 million accesses as of December 31, 2023. The year-on-year accesses evolution was greatly impacted by the gain of accesses in Colombia (+912 thousand accesses), Chile (+900 thousand accesses) and Venezuela (+673 thousand accesses) due to lower churn. The year-on-year increase was partially offset by an access decrease in Peru (-998 thousand accesses), and to a lesser extent Mexico (-151 thousand accesses) and Uruguay (-38 thousand accesses). Fixed accesses stood at 5.7 million as of December 31, 2023 (-10.9% year-on-year) with a net loss of 0.7 million accesses due to the continued erosion of the traditional fixed business. Fixed broadband accesses amounted to 6.0 million as of December 31, 2023 (stable year-on-year). The penetration of FBB accesses over fixed accesses stood at 106.2% (+11.6 p.p. y-o-y), as a result of the focus on Ultra Broadband (UBB) deployment in the region reaching 5.5 million connected accesses (+8.2% y-o-y) and 20.3 million premises. The penetration of UBB accesses over fixed broadband accesses stood at 91.7% (+6.2 p.p. y-o-y). Pay TV accesses stood at 2.8 million as of December 31, 2023, a decrease of 2.1% y-o-y or a net loss of 60 thousand accesses, a consequence of the decrease in Direct-to-Home (DTH) technology accesses (-146.2 thousand accesses) due to the change in commercial strategy, as well as the decreasing cable access base (-211.2 thousand accesses). This evolution was partially offset by the increase in IPTV accesses (+298 thousand accesses), on which the Company is placing strategic focus. The table below shows the evolution of Telefónica Hispam's results over the past three years: Millions of euros TELEFÓNICA HISPAM 2022 2023 2024 % YoY 23/22 % YoY 24/23 Revenues 9,141 8,381 9,032 (8.3 %) 7.8 % Mobile Business 6,003 5,493 6,056 (8.5 %) 10.3 % Handset revenues 1,541 1,416 1,228 (8.1 %) (13.3 %) Fixed Business 3,138 2,888 2,976 (8.0 %) 3.0 % Other income 448 263 203 (41.3 %) (22.7 %) Supplies (3,384) (3,211) (3,042) (5.1 %) (5.3 %) Personnel expenses (1,201) (1,126) (1,293) (6.3 %) 14.8 % Other expenses (3,046) (2,797) (5,300) (8.1 %) 89.5 % Operating results before depreciation and amortization 1,958 1,510 (400) (22.9 %) c.s. Depreciation and amortization (1,799) (1,557) (1,651) (13.5 %) 6.1 % OPERATING (LOSS) INCOME 159 (47) (2,051) c.s. n.m. Amortization of rights of use (leases amortization) (454) (350) (370) (23.0 %) 5.9 % Financial expenses on lease liabilities (123) (104) (112) (15.1 %) 7.3 % Operating results before depreciation and amortization after leases 1,381 1,056 (882) (23.5 %) c.s. c.s.: change of sign. 73 Table of Contents n.m.: not meaningful. Analysis of results 2024 vs 2023 Venezuela and Argentina are considered countries with hyperinflationary economies in 2024 and 2023, and the Argentine peso's exchange rate had a significant impact on the segment’s results in both 2024 and 2023. The exchange rate used to translate inflation-adjusted items denominated in Argentine pesos in the consolidated financial statements as of and for the year ended December 31, 2024 was the closing exchange rate as of December 31, 2024 which was 1,073.18 Argentine pesos per euro (893.45 Argentine pesos per euro as of December 31, 2023). The annual inflation rate in Argentina for 2024 was 117.8% (211.4% for 2023). As a result of these changes in the exchange and inflation rates, in 2024 Telefónica Argentina contributed 2,226 million euros (1,237 million euros in 2023) to the consolidated revenues of the Telefónica Group and a loss of 84 million euros to operating income (199 million euros loss in 2023) before the 1,274 million euros impairment losses of intangible assets and property, plant and equipment described below. Revenues amounted to 9,032 million euros in 2024, growing by 7.8% year-on-year. This growth was caused by higher B2C postpaid and prepaid revenues, higher revenues from B2B customers, higher revenues from fixed broadband and digital services and higher Pay TV revenues, which were partially offset by lower revenues from handset sales and lower fixed voice revenues. Mobile business revenues amounted to 6,056 million euros in 2024, growing by 10.3% year-on-year. This growth was mainly due to improved B2C postpaid and prepaid revenues, together with the growth of revenues from B2B customers, partially offset by the decrease in handset sale revenues. The performance by country was as follows: •In Argentina, mobile business revenues amounted to 1,473 million euros in 2024, growing by 70.9% year-on-year, impacted by the higher postpaid and prepaid mobile revenues in 2024, partially offset by the lower handset sales in 2024, a consequence of the devaluation mentioned above. •In Chile, mobile business revenues were 812 million euros in 2024, decreasing by 17.8% year-on-year, explained by lower handset sale revenues and lower B2C and B2B revenues, derived from the decrease in the customer base. •In Peru, mobile business revenues were 811 million euros in 2024, decreasing by 3.4% year-on-year due to lower handset sale revenues and lower prepaid revenues, as a result of the lower level of top-ups. •In Colombia, mobile business revenues were 736 million euros in 2024, decreasing by 4.9% year-on-year mainly due to the decrease in the customer base and lower postpaid revenues, due to aggressive competition in the market and a related increase in customer churn. This decrease was partially offset by the exchange rate effect and higher revenues in prepaid B2C. •In Mexico, mobile business revenues were 1,286 million euros in 2024, decreasing by 2.5% year-on-year, negatively impacted by lower handset sale revenues, lower B2C prepaid revenues and exchange rate effects, partially compensated by higher postpaid revenues and B2B revenues. Fixed business revenues amounted to 2,976 million euros in 2024, growing by 3.0% year-on-year, mostly due to higher broadband revenues and digital services offered in Argentina, as well as higher Pay TV revenues in Argentina and Colombia, partially offset by the decrease in fixed business revenues in Peru and Chile. The evolution of expenses is explained below: •Supplies amounted to 3,042 million euros in 2024, decreasing by 5.3% year-on-year in 2024, mainly due to lower handset costs in the region as a result of decreased commercial activity. •Personnel expenses stood at 1,293 million euros in 2024, up by 14.8% year-on-year, due to wage increases in Argentina, Colombia, Peru and Uruguay, and higher restructuring costs in all countries in the region. •Other expenses reached 5,300 million euros in 2024, up 89.5% year-on-year compared to 2023. This increase was mainly due to the recording of impairment losses on intangible assets and property, plant and equipment in Argentina in an aggregate amount of 1,274 million euros and impairment losses on goodwill 74 Table of Contents with respect to cash-generating units in Chile (397 million euros) and Peru (226 million euros). Additionally, Telefónica recorded in Perú impairment losses of intangible assets (54 million euros), impairment losses on held-for-sale assets corresponding to property, plant and equipment of the fiber optics business of Pangea (108 million euros) and goodwill (34 million euros). See Notes 2, 6, 7, 8, 26 and 30 to the Consolidated Financial Statements. In addition, there were higher other expenses, although to a lesser extent, due to an increase in network, IT and client management costs. Operating results before depreciation and amortization stood at -400 million euros in 2024, compared to 1,510 million euros in 2023. Depreciation and amortization amounted to 1,651 million euros in 2024, increasing 6.1% year-on-year, mainly impacted by new right of use agreements, higher depreciation associated with Capex in Argentina and higher depreciation of property, plant and equipment assets in Telefónica del Perú, partially offset by lower amortization in Telefónica Colombia, following the agreement with Colombia Móvil S.A. ESP for the implementation of a single mobile access network through an independent company (see Note 5 to the Consolidated Financial Statements), as well as intangible assets fully amortized in 2024, and in Telefónica Chile due to a lower depreciable base of property, plant and equipment assets. Operating loss stood at 2,051 million euros in 2024, compared to the operating loss of 47 million euros in 2023. This increase in operating loss was mainly due to the impairment losses of assets described above (see Notes 2, 6, 7, 8, 26 and 30 to the Consolidated Financial Statements). Below is additional information by country: •In Argentina, operating loss was 1,359 million euros in 2024 compared to an operating loss of 199 million euros in 2023, due to the impairment of intangible assets and property, plant and equipment mentioned above. •In Chile, operating loss was 410 million euros in 2024, compared to an operating income of 35 million euros in 2023, negatively impacted by the impairment of goodwill amounting 397 million euros and, to a lesser extent, the lower revenues mentioned above. •In Peru, operating loss was 592 million euros in 2024 compared to an operating loss of 33 million euros in 2023. This result was negatively impacted mainly by the recording of impairment losses on goodwill (226 million euros), impairment losses on intangible assets (54 million euros) and goodwill (34 million euros). To a lesser extent, operating loss was impacted by the lower fixed and mobile revenues mentioned above and the higher depreciation and amortization in 2024. •In Colombia, operating income was 155 million euros in 2024, compared to 64 million euros in 2023, due to lower operating expenses and lower depreciation and amortization in the period. •In Mexico, operating income reached 10 million euros in 2024, compared to operating income of 3 million euros in 2023, due to lower operating expenses and lower depreciation and amortization in the period, offset in part by lower revenues. Analysis of results 2023 vs 2022 Venezuela and Argentina are considered countries with hyperinflationary economies in 2023 and 2022, and hyperinflation in Argentina had a significant impact on the segment’s results in 2023. The exchange rate used to translate inflation-adjusted items denominated in Argentine pesos in the consolidated financial statements as of and for the year ended December 31, 2023 was the closing exchange rate as of December 31, 2023 which was 893.45 Argentine pesos per euro (189.08 Argentine pesos per euro as of December 31, 2022). The annual inflation rate for 2023 was 211%. As a result, in 2023 Telefónica Argentina contributed 1,237 million euros to the consolidated revenues of the Telefónica Group and an operating loss of 199 million euros to the consolidated operating income of the Telefónica Group (2,066 million euros and a loss of 270 million euros, respectively, in 2022). Revenues amounted to 8,381 million euros in 2023, decreasing 8.3% year-on-year. This decrease was caused by the devaluation of the Argentine peso and to a lesser extent, by lower handset sales and lower prepaid B2C (Business to Customer) and TV revenues, partially offset by higher broadband and new services revenues. 75 Table of Contents Mobile business revenues amounted to 5,493 million euros in 2023, decreasing 8.5% year-on-year. This decrease was caused by the devaluation of the Argentine peso, the decrease in handset sales, as a result of the slowdown in commercial activity with a lower number of gross adds and lower prepaid B2C (Business to Customer) revenues. The performance by country was as follows: •In Argentina, mobile revenues amounted to 862 million euros in 2023, decreasing 37.5% year-on-year. This decrease was negatively impacted by exchange rate effects, given the devaluation of the Argentine peso but partially offset by the higher postpaid and prepaid B2C (Business to Customer) revenues (due to the increase in accesses) and higher handset sales. •In Chile, mobile revenues amounted to 988 million euros in 2023, increasing 2.0% year-on-year, explained by higher handset sales and mobile postpaid revenues. •In Peru, mobile revenues amounted to 840 million euros in 2023, decreasing 9.1% year-on-year, mainly due to an aggressive competitive environment in postpaid which has led to a lower ARPU, lower prepaid commercial activity with lower number of gross adds, and lower handset sales. •In Colombia, mobile revenues amounted to 774 million in 2023, decreasing 13.1% year-on-year due to lower prepaid and handset sales revenues, as a result of the slowdown in commercial activity, with a lower number of gross adds, partially offset by higher postpaid revenues. •In Mexico, mobile revenues amounted to 1,318 million euros in 2023, increasing 12.5% year-on-year due to the exchange rate effects (+10.5 p.p.), higher B2C (Business to Customer) postpaid revenues with a good level of commercial activity resulting in a higher number of gross adds, and higher handset sales revenues. Fixed business revenues amounted to 2,888 million euros in 2023, decreasing 8.0% year-on-year. This decrease was mainly attributable to the devaluation of the Argentine peso and the decrease in fixed business revenues in Peru due to an aggressive competitive environment, partially offset by higher broadband and new services revenues and the increase in voice accesses in Chile and Colombia. The evolution of expenses is explained below: •Supplies amounted to 3,211 million euros in 2023, decreasing 5.1% year-on-year compared to 2022. This decrease was mainly attributable to the devaluation of the Argentine peso and lower direct costs, partially offset by higher commercial costs. •Personnel expenses amounted to 1,126 million euros in 2023, decreasing 6.3% year-on-year compared to 2022. This decrease was mainly attributable to the devaluation of the Argentine peso, partially offset by the year-on-year increase in restructuring costs in several operating businesses in the region (+2.6 p.p.) and higher wages. •Other expenses amounted to 2,797 million euros in 2023, down 8.1% year-on-year compared to 2022. This decrease was mainly attributable to the devaluation of the Argentine peso and cost efficiencies. Operating results before depreciation and amortization reached 1,510 million euros in 2023, decreasing 22.9% year-on-year. Depreciation and amortization amounted to 1,557 million euros in 2023, decreasing 13.5% year-over-year, mainly due to the effect of the devaluation of the Argentine peso and to the lower amortization base in Telefónica México. Operating loss was 47 million euros in 2023, compared to operating income of 159 million euros in 2022. This year-on-year variation was mainly affected by the recording of capital gains in 2022 from the sale of fiber assets in Colombia and, in 2023, the higher restructuring expenses carried out in several operating businesses in the segment, the devaluation of the Argentine peso and, more generally, lower revenues. The year-on-year variation was partially offset by the difference in the impairment recorded in 2023 in Ecuador (amounting to 58 million euros) and the other assets impairment recorded in 2022 relating to Telefónica Argentina (amounting to 77 million euros). Moreover, the year-on-year variation was affected by the lower depreciation and amortization base in 2023 compared to 2022 in Telefónica Mexico related to the transformation of the operating model of Telefónica México (as a result of the 2019 wholesale access services agreement with AT&T). 76 Table of Contents Below is additional information by country: •In Argentina, operating loss was 199 million euros in 2023 compared to operating loss of 270 million euros in 2022, a 26.5% year-on-year decrease mainly due to the devaluation of the Argentine peso and depreciation and amortizations expense in 2023. •In Chile operating income was 35 million euros in 2023 compared to operating income of 179 million euros in 2022. The 80.6% year-on-year decrease is explained mainly by the capital gain recorded in 2022 on the sale of a data center in such year. •In Peru the operating loss was 33 million euros in 2023 compared to operating income of 60 million euros in 2022, mainly due to lower revenues. •In Colombia, operating income was 64 million euros in 2023 compared to operating income of 261 million euros in 2022, a 75.6% year-on-year decrease mainly due to the capital gains recorded in 2022 in connection with in fiber asset sales in such year. •In Mexico operating income was 3 million euros in 2023 compared to operating loss of 176 million euros in 2022. The better performance was due in part to the lower amortization base related to the transformation of the operating model of Telefónica México (as a result of the 2019 wholesale access services agreement with AT&T). Our services and products New digital technologies are the main driving force of social and economic transformation today. This premise is the basis upon which we build our vision: we want to provide access to digital life, using the best technology and without leaving anyone behind. Connectivity is our ally in reducing the digital divide and, due to our fixed and mobile network infrastructure and the services we develop around it, we can aid progress in the communities in which we operate. To move towards this vision, at Telefónica we work on three basic fronts: 1) Providing access to technology through digital inclusion, in other words, by means of network roll-out and an accessible and affordable offer for all sectors of the population. 2) Developing innovative services that add value to our connectivity and which we develop through innovation: Big Data, the Internet of Things (IoT), eHealth, digital education and eFinances. 3) Incorporating sustainability principles across all of our product development processes. Mobile business Telefónica offers a wide variety of mobile and related services and products to personal and business customers. Although they vary from country to country, Telefónica’s principal services and products are as follows: •Mobile voice services: One of Telefónica's main services in all of its markets is mobile voice telephony. •Value added services: Customers in most of the markets have access to a range of enhanced mobile calling features, including voice mail, call on hold, call waiting, call forwarding and three-way calling. •Mobile data and Internet services: Current data services offered include Short Messaging Services, or SMS, and Multimedia Messaging Services, or MMS, which allow customers to send messages with images, photographs, sound recordings and video recordings. Customers may also receive selected information, such as news, sports scores and stock quotes. Telefónica also provides mobile broadband connectivity and Internet access. Through mobile Internet access, customers are able to send and receive e-mail, browse the Internet and access real-time available entertainment services (such as video and audio streaming), download games, purchase goods and services in m-commerce transactions and use Telefónica’s other data and software services. •Wholesale services: Telefónica has signed network usage agreements with several MVNOs in different countries. 77 Table of Contents •Corporate services: Telefónica provides business solutions, including mobile infrastructure in offices, private networking and portals for corporate customers that provide flexible online billing. •Roaming: Roaming agreements allow Telefónica customers to use their mobile handsets when they are outside their service territories, including on an international basis. •Fixed wireless: Telefónica provides fixed voice telephony services through mobile networks in Brazil, Venezuela, Argentina (sold in February 2025), Peru, Mexico and Ecuador. Until January 13, 2022, Telefónica also provided these services in El Salvador. •Trunking and paging: Telefónica provides digital mobile services for closed user groups of clients and paging services in Spain and most of the regions in which it operates in Latin America. Fixed-line telephony business The principal services Telefónica offers in its fixed businesses in Europe and Latin America are: •Traditional fixed telecommunication services: Telefónica’s traditional fixed telecommunication services include PSTN lines; ISDN accesses; public telephone services; local, domestic and international long-distance and fixed-to-mobile communications services; corporate communications services; supplementary value added services (including call waiting, call forwarding, voice and text messaging, advanced voicemail services and conference-call facilities); video telephony; business oriented value-added services; intelligent network services; leasing and sale of handset equipment; and telephony information services. •Internet and broadband multimedia services: the principal Internet and broadband multimedia services include Internet provider service; portal and network services; retail and wholesale broadband access through ADSL, narrowband switched access and other technologies. Telefónica also offers high-speed Internet services through fiber to the home (FTTH) in certain markets (primarily Spain, Brazil, Chile and, through VMO2, the United Kingdom) and VDSL-based services (primarily Spain and Germany). Telefónica also offers VoIP services in some markets. •Data and business-solutions services: the data and business-solutions services principally include leased lines; virtual private network, or VPN, services; fiber optics services; the provision of hosting and application, including web hosting, managed hosting, content delivery and application, and security services; outsourcing and consultancy services, including network management, or CGP; and desktop services and system integration and professional services. •Wholesale services for telecommunication operators: the wholesale services for telecommunication operators principally include domestic interconnection services; international wholesale services; leased lines for other operators; and local loop leasing under the unbundled local loop regulation framework. It also includes bit stream services, wholesale line rental accesses and leased ducts for other operators' fiber deployment and other agreements to provide wholesale access to our fixed infrastructure. Digital services The main digital services offered by Telefónica are: •Video/TV services: Interactive TV services in High Definition (HD) or Ultra High Definition (UHD), using several technologies (IPTV, DTH, CATV and OTT) on various types of networks (Fiber, Satellite, Cable or Mobile Networks). These services can be provided through a variety of devices (TV with STBs, smart TVs, PCs, smartphones, tablets, and streamers, etc.), allowing also the Multiroom function (customers can watch different TV channels in different rooms or on different devices simultaneously). The service allows the access to lineal TV content with advanced functions such as "Restart TV" (which allows a viewer to watch any content from the beginning), "Last 7 days" (recordings of content for the last seven days), "cPvR" (recordings using cloud computing) and "Download to Play" (downloading the content on the device). Customers also have access to the content on demand catalogue (Video on Demand or VoD), in "Subscription Video on Demand" (SVoD), "Transactional Video on Demand" (TVoD) or "Pay per View" options, as well as access to content of third parties, such as Netflix, Amazon, Disney+, YouTube and Max, among others. In addition, Telefónica offers accessible content in several different languages (original or 78 Table of Contents translated to Spanish) with subtitles or not, audio description and sign language functionalities through the Movistar+ 5s service, which aims to contribute toward the inclusion of disabled people across the country. •IoT (Internet of Things): Telefónica’s Global IoT portfolio includes: ◦Smart Connectivity: connectivity services for machines, mainly handled through the Kite platform. ◦Smart Services: end-to-end solutions that include "device + connectivity + application". These business to business solutions are mainly aimed at (i) the mobility management of vehicles, assets and/or people, (ii) the support of the retail and industrial sectors and (iii) the efficient management of energy and water consumption. •Financial services and other payment services: These services provide customers with access to consumer credit and payment facilities in the check out process. •Cloud services: Telefónica offers a wide range of Cloud services. The value proposition includes: (i) IaaS services: Virtual Data Center, which facilitates the migration of existing applications to the cloud and hyperscalers (such as AWS, Microsoft Azure and Google Cloud Platform) to develop new applications in the public cloud; (ii) unified communications and contact center applications in the Cloud; (iii) Cloud networking; (iv) SaaS applications, productivity (Microsoft Office 365), domains, web presence and online marketing; and (v) Platforms as a service (SAP, Oracle). •Security services: Telefónica provides comprehensive cybersecurity solutions, including security system integration (deployment of security hardware/software), threat and risk management, network and cloud security, managed and mobile protection, identity and access control, professional services, and antivirus solutions for B2B and B2C. •Advertising: A portfolio of marketing channels that third-party brands can use to acquire and engage with customers. Traditional channels such as SMS/MMS messaging may be used alongside with new channels like programmatic display and sponsored connectivity. All of which leverage on the Group's customer data in order to send messages to the correct target as well as to generate post-campaign brand analysis. •Big Data: Includes products and services designed to enable companies and governments to make AI-powered data-driven decisions. The Group's Big Data offer comprises of three main categories: (i) "business insights", which provides information for decision-making based on analysis from advanced analytical products developed on top of data generated in the Group's network and systems; (ii) "consulting and analytics", which includes specialist professional services focused on data strategy, data science, data architecture and data engineering; and (iii) "tools and infrastructure", which provides advanced technology for data management, storage and exploitation. •Customer Digital Products: defines and develops the omnichannel digital experience, guiding the Telefónica customer through his life cycle, adapting the digital experience to every moment's necessity, with three main pillars: ◦ Digitalize Telefonica customers turning our digital channels into the main point of relationship for the clients with Telefonica in all the main markets. ◦ Maximize customer engagement in the digital channel by providing an outstanding customer experience in order to increase Customer Life Time Value. ◦ Provide tools so that Telefónica’s operating subsidiaries can create autonomously personalized digital experiences in a fast (time-to-market), reliable and scalable way. •Aura is an artificial-intelligence ("AI") ecosystem designed to improve communication between the Telefónica Group and its customers through cognitive channels. Its aim is to address customer needs and provide them with relevant information related to the company, potentially in any area where Telefónica offers services such as answering questions about telecommunications services, offering financial service 79 Table of Contents proposals, or making recommendations about television or connection offerings. To foster a relationship with customers, Aura offers the creation of conversational bots and other interfaces that use natural language capabilities, using its own infrastructure, with a private and transparent data approach by design. Additionally, to generate useful information, Aura provides its own AI model execution platform with the goal of enhancing the information provided to customers. Moreover, Aura has the capability to create copilot apps for internal use, leveraging the kernel platform (data and APIS) for operations, marketing, and other functions. This aims to ensure that data privacy is maintained by design, providing a secure and efficient way to manage internal processes while enhancing customer interactions. •Movistar Home: Telefónica launched Movistar Home in Spain on October 18, 2018, a new device designed around the functionality of Aura and targeted at the Group's Movistar and Pay TV customers. Movistar Home is designed to strengthen Telefónica's position by enabling highly-converged services and experiences that differentiate the Group from its competitors. Movistar Home aims to provide the Group's customers with an enhanced TV experience on IPTV, increased landline functionality (which enables videoconferences), the Group's smart home package and games in addition to third-party services. •Open Gateway: GSMA-led initiative in the telco sector that aims to transform communications networks into programmable digital platforms by providing the same APIs for all operators. APIs are deployed under the framework of the CAMARA standard (for service delivery) and TM Forum (for operation, administration and management). APIs can be commercialized through channel partners that bring access to developers, including hyperscalers, aggregators and integrators. •Living Apps: A platform that allows Telefónica and its partners to create relevant home experiences on Telefónica TV. The vision is going beyond the consumption of TV content, bringing Telefónica services to the main screen of the home, turning the TV watching habit into an interactive experience and opening the home ecosystem to selected partners . The main objectives are generating revenue to Telefónica, adding value to customers and exploring new business models with partners. •Smart Wi-Fi: An advanced home connectivity platform and key lever in the premium connectivity strategy, that enables key capabilities like intelligent Wi-Fi connectivity management or web browsing protection (Protección Digital). •NT: A micro-rewards program in Spain to reward customers with Tokens for their digital behavior. Tokens are awarded when customers make use of our digital channels, products and services and can be exchanged for a given catalog of company products. •Solar 360: In March 2022 Repsol and Telefónica Spain created a joint venture to develop the solar self-consumption business. The company started to operate in June 2022 launching Solar 360, offering a comprehensive self-consumption solution to private customers, communities of neighbors and companies, SMEs, and large companies, through solar panel installation. The offer is customized for each type of customer according to their level and habits of consumption, seeking to maximize savings on their current electricity bill. It includes a mobile application for the control of the installation and the continuous optimization of energy expenditure, personalized financing for each type of consumer and other value-added services linked to the solar panel installation. •Phoenix: A digital sales platform that allows customers to receive personalized offers to renew their devices and process purchases in a simple and fully digital checkout. When customers are eligible to renew their devices or expand their devices ecosystem with Telefónica, a customized offer is sent to them via the usual communication channels (SMS, RCS, emailing, self-care app..). Once the customer chooses among the selected proposed portfolio a number of payment and logistics options can be chosen to complete a convenient “few-clicks” device renewal. Sales and Marketing Our sales and marketing strategy is aimed toward reinforcing our market position, generating brand awareness, promoting customer growth and achieving customer satisfaction. We use a variety of marketing initiatives and programs, including those that focus on customer value, with in-depth market segmentation; programs to promote customer loyalty; pricing initiatives aimed toward stimulating usage, including segmented packages and innovative 80 Table of Contents tariff options; and initiatives that are responsive to the latest market trends, including those aimed toward boosting demand for our fixed and mobile Internet and mobile broadband offerings. In connection with these and our other sales and marketing initiatives, we market our products through a broad range of channels, including television, radio, billboards, telemarketing, direct mail and Internet advertising. We also sponsor a variety of local cultural and sporting events in order to enhance our brand recognition. Competition The telecommunications industry is competitive, and consumers generally have a choice of mobile and fixed line operators from which to select services. We are a global telecommunications services provider and face significant competition in most of the markets in which we operate. In Europe, our largest competitors include Vodafone, Orange, Deutsche Telekom and BT Group, among others. In Latin America, our main regional competitor is América Móvil, along with other smaller multi-country players (such as Entel, Milicom and WOM) and purely local players. Newer competitors, including handset manufacturers, MVNOs, Internet companies and software providers, are also entering the market and offering integrated communications services. We compete in our markets on the basis of price; the quality and range of features of our services; the added value we offer with our service; additional services associated with those main services; the reliability of our network infrastructure and its technological attributes; and the desirability of our offerings, including bundled offerings of one type of service with another and, in the case of the mobile industry, in some markets offers that include subsidized handsets and handsets sold on installment plans. To compete effectively with our competitors, we need to successfully market our products and services and to anticipate and respond to various competitive factors affecting the relevant markets, such as asymmetries in regulation (including regulation of access to the network infrastructures of telecoms network providers), the introduction of new products and services, different pricing strategies and changes in consumer preferences. Regulation Please see Appendix VI to our Consolidated Financial Statements. Licenses and Concessions Please see Appendix VI to our Consolidated Financial Statements. Seasonality Our business is not significantly affected by seasonal trends. Patents Our business is not materially dependent upon the ownership of patents, commercial or financial contracts or new manufacturing processes. Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act. Section 13(r) requires an issuer to disclose in its annual or quarterly reports filed with the SEC whether the issuer or any of its affiliates has knowingly engaged in certain activities, transactions or dealings with the Government of Iran, relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction during the period covered by the annual or quarterly report. Disclosure is required even when the activities were conducted outside the United States by non-U.S. entities and even when such activities were conducted in compliance with applicable law. The following information is disclosed pursuant to Section 13(r). None of these activities involved U.S. affiliates of Telefónica. Some of our subsidiaries have entered into roaming agreements with Iranian telecommunication companies. Pursuant to such roaming agreements our subsidiaries’ customers are able to roam in the particular Iranian network (outbound roaming) and customers of such Iranian operators are able to roam in our relevant subsidiary’s network (inbound roaming). For outbound roaming, our subsidiaries pay the relevant Iranian operator roaming fees for use of 81 Table of Contents its network by our customers, and for inbound roaming the Iranian operator pays the relevant subsidiary roaming fees for use of the respective network by its customers. Our subsidiaries and our former subsidiary Telefónica UK Ltd. were party to the following roaming agreements with Iranian telecommunication companies in 2024: 1.Telefónica Móviles España S.A. (“TME”), our Spanish directly wholly-owned subsidiary, has respective roaming agreements with (i) Mobile Telecommunication Company of Iran (“MCI”), (ii) Taliya (“Taliya”) and (iii) Telecommunication Kish Co (“TKC”). During 2024 TME recorded the following revenues related to these roaming agreements: (i) 474,806 euros from MCI, (ii) no revenues from Taliya and (iii) no revenues from TKC. 2.Telefónica Germany GmbH & Co. OHG (“TG”), our German 96.85% indirectly-owned subsidiary (as of December 31, 2024), has respective roaming agreements with (i) MCI and (ii) Irancell. During 2024 TG recorded the following revenues related to these roaming agreements: (i) no revenues from MCI and (ii) 7,467 euros from Irancell. 3.Telefónica UK Ltd (“TUK”), our former English directly wholly-owned subsidiary, has a roaming agreement with Taliya. TUK ceased to be our subsidiary upon the establishment of VMO2 on June 1, 2021, following which establishment TUK has been owned by VMO2. During 2024 TUK recorded no revenues from Taliya. 4.Telefônica Brasil S.A. (“Telefónica Brasil”), our Brazilian 76.49% indirectly-owned subsidiary, has a roaming agreement with Irancell. During 2024, Telefónica Brasil recorded 3 U.S. dollars in roaming revenues from Irancell under this agreement. 5.Pegaso PCS S.A. de C.V. (“PCS”), our Mexican directly wholly-owned subsidiary, has a roaming agreement with Irancell. During 2024 PCS recorded 146 U.S. dollars in roaming revenues under this agreement. The net profit recorded by our subsidiaries and TUK pursuant to these agreements and arrangements did not exceed the related revenues recorded thereunder. The purpose of all of these agreements is to provide our customers with coverage in areas where we do not own networks. For this purpose, we intend to continue maintaining those agreements which are still outstanding. The Group does not currently have any plans to enter into new roaming arrangements with Iranian telecommunication companies. However, the Group may consider entering into such arrangements in the future. During 2024, Telefónica Hispam ("TH") had one retail mobile phone contract with one customer identified in the list administered by OFAC as sanctioned pursuant to Executive Order 13382. During 2024, TH recorded revenues totaling 67.28 U.S. dollars related to this customer. The termination of such contract is being considered. The provision of the relevant services by TH was in compliance with applicable laws. During 2024, TG had retail mobile phone contracts with two customers in Germany identified in the lists administered by OFAC as sanctioned pursuant to Executive Order 13224 and Executive Order 13382. During 2024, TG recorded revenues totaling 1,833.87 euros related to these customers. The termination of such contracts is being considered. The provision of the relevant services by TG was in compliance with applicable laws. In 2023, TG had retail mobile phone and internet contracts with four additional customers in Germany identified in the lists administered by OFAC as sanctioned pursuant to Executive Order 13224 and Executive Order 13382. Certain of these contracts have been terminated. TG did not record any revenue in 2024 related to these customers. The provision of the relevant services by TG was in compliance with applicable laws. 82 Table of Contents C. Organizational Structure See “—History and Development of the Company” and “—Business Overview”. D. Property, Plant and Equipment Our central headquarters for the Telefónica Group are located in “Distrito Telefónica,” in Madrid, Spain. Telefónica’s operations and assets (including its towers and submarine cables) are located in many areas that are subject to natural disasters and severe weather, and which may be adversely affected in the future by climate change. See Note 8 to the Consolidated Financial Statements for information on the year-on-year decrease in “Property, plant and equipment” from 22,944 million euros as of December 31, 2023 to 21,439 million euros as of December 31, 2024. Fixed Networks We own fixed networks in Spain, Latin America and Europe, having an incumbent role in Spain, Brazil (São Paulo), Chile, Peru and Colombia. Following market trends, competitive environments, evolution of technologies and new multimedia and broadband services demanded by our customers, we have upgraded our networks in recent years through the following: •deprioritization of broadband technologies over copper wires (ADSL, ADSL2+, VDSL2, etc.), effected through decommissioning of legacy copper networks (especially in Spain), in order to focus efforts on the deployment of fiber networks; •deployment of fiber access technologies (xPON) focused on fiber to the home (FTTH) deployment, currently delivering customer access speeds of up to 1 Gbps with Gigabit Passive Optical Network (GPON), and laying the groundwork for our plans for XGS-PON (an updated standard for Passive Optical Networks (PON) that can support higher speed 10 Gbps symmetrical data transfer) upgrades to deliver speeds above 1 Gbps to our customers; •service support based on powerful Internet Protocol/ Multiprotocol Label Switching (IP/MPLS) backbones, providing full connectivity to the rest of the network layers, such as access and control, to support services for business and customer market segments (fixed and mobile); •simpler Internet Protocol ("IP") architectures (IP-FUSION), reducing layers and eliminating ports and links, leading to better efficiency and network performance; •introduction of segment routing protocols for better traffic engineering and latency control; •new network solutions using Open Networking and convergence between IP and optical networks; •network automation through Software Defined Networking (SDN); •replacement of legacy transport technologies and reduction of dependencies on PSTN and ISDN (Time Division Multiplexing (TDM) based) by moving to all-IP communications; •empowerment of the intelligence of the network to better manage its use, to avoid saturations and frauds and to identify new business opportunities; •convergence of fixed and mobile networks, services and support systems from both technological and operational points of view; and •deployment of services such as Pay TV, to customers connected through broadband accesses in Spain, Chile, Argentina (sold in February 2025), Brazil, Peru and Colombia. 83 Table of Contents Mobile Networks We operate mobile networks in Spain, the United Kingdom (through VMO2), Germany, Brazil, Argentina (sold in February 2025), Venezuela, Chile, Peru, Colombia, Mexico, Ecuador and Uruguay. Telefónica also provided these services in El Salvador until January 13, 2022. For additional information, see "—History and Development of the Company—Overview”. In addition, Telefónica entered in 2019 into an agreement with AT&T to access AT&T’s last mile wireless capacity in Mexico. Through this agreement, Telefónica gains access to capacity on AT&T’s 3G and 4G access network and any future access network technologies nationwide, while maintaining its transport network and all of its platforms in such country. The migration of the traffic to the AT&T access network was completed during 2022. For additional information on the Wholesale Agreement and its subsequent renewal, see “Item 10. Additional Information—Material Contracts—Wholesale Access Services Agreement with AT&T Mexico”. We use a number of mobile technologies in the countries in which we operate, namely: GSM, UMTS, LTE and 5G. 5G is being used in Spain, the United Kingdom, Germany, Brazil, Argentina (sold in February 2025), Chile, Colombia, Mexico and Uruguay, although it does not yet cover the entire population in these countries. We continue the work of upgrading our mobile networks in line with market trends, the demand of new services from customers and the evolution of technologies. The main steps we are currently taking include: •evolution of broadband in mobile access using the latest LTE standards (LTE-A, MIMO and carrier aggregation) to improve network capacity and user experience; •deployment of 5G networks following different approaches in order to give our customers the best experience for this new access technology. Together with the main vendors and sharing experience with other operators, we are exploring the opportunities that the new 5G standards can offer by providing higher capacity at a lower relative cost by user/traffic unit; •deployment of new services such as mobile television (OTT) and distribution services for next generation music, video and games; and •convergence of fixed and mobile networks, services and support systems from both technological and operational points of view. Satellite communications Multiple services are provided using both Telefónica's own satellite platforms and ground assets and third-party (GEO/LEO satellite service operators) managed services complementing Telefónica's terrestrial footprint. These include television contribution signal to feed cable and IPTV head ends, DTH television and VSAT mainly for mobile telephony, IoT, Internet access and mobile backhaul in rural environments or remote areas, emergency and disaster recovery solutions, corporate communications and international communications. Submarine cables We are one of the world’s largest submarine cable infrastructure companies, through our subsidiary, Telxius Telecom, S.A. ("Telxius"). Telxius is a leading global connectivity provider that combines submarine and terrestrial networks with data centers worldwide. Its extensive ecosystem includes nine next-generation fiber optic submarine cables and terrestrial backhauls together spanning more than 100,000 kilometers, 100 points of presence (PoPs) and 20 data centers. As of the date of this Annual Report, Telefónica holds a 70% beneficial interest in Telxius following the completion of the transaction with Taurus Bidco S.à r.l. in 2023. See "—Financial Investments and Divestitures". In addition, Telefónica owns around 20 submarine domestic cables in Spain. There are submarine cable connections linking Europe, the Americas and Africa which are jointly owned by us and other telecom operators. The SAm-1 cable, fully owned by Telxius, has a length of approximately 25,000 kilometers and links different countries such as the United States, Puerto Rico, Ecuador, Guatemala, Peru, Chile, Brazil, Argentina and Colombia. Next-generation submarine cable systems are already in service to help meet the capacity demand in the future. The Brusa cable links Brazil and the United States, while the Marea and Dunant cables links the United States and Europe. Additionally, the 7,300 km Mistral cable serves the entire Pacific coast of South America with the highest levels of service, reliability and security. The 2,000 km next generation Tannat system (Santos – Las Toninas) adds to the Brusa (Virginia Beach – Rio de Janeiro) and Junior (Rio de Janeiro – Santos) cables on the Atlantic coast of Latin America to deliver modern and diverse end-to-end connectivity between the United States, Brazil and Argentina. Firmina is a next-generation submarine cable set to connect the East Coast of the United 84 Table of Contents States to Las Toninas, Argentina. The Tikal submarine cable is intended to connect Boca Ratón, Florida, United States, with Puerto Barrios, Guatemala, with a landing point in Cancún, Mexico, and the recently announced CELIA cable seeks to link Boca Ratón, Florida, United States with San Juan, Puerto Rico. 85 Table of Contents