Obligation Turk Telekom AS 4.875% ( XS1028951264 ) en USD

Société émettrice Turk Telekom AS
Prix sur le marché 100 %  ▲ 
Pays  Turquie
Code ISIN  XS1028951264 ( en USD )
Coupon 4.875% par an ( paiement semestriel )
Echéance 18/06/2024 - Obligation échue



Prospectus brochure de l'obligation Turk Telekomunikasyon AS XS1028951264 en USD 4.875%, échue


Montant Minimal 200 000 USD
Montant de l'émission 500 000 000 USD
Cusip M9T40NAA5
Notation Standard & Poor's ( S&P ) BB- ( Spéculatif )
Notation Moody's N/A
Description détaillée Türk Telekomünikasyon A.?. est une société de télécommunications intégrée turque fournissant des services de téléphonie fixe, mobile, internet haut débit et de télévision par câble.

Un examen approfondi de l'obligation émise par Turk Telekomunikasyon AS révèle des caractéristiques clés de cet instrument financier désormais arrivé à terme : identifiée par le code ISIN XS1028951264 et le code CUSIP M9T40NAA5, cette émission a été réalisée par Turk Telekomunikasyon AS, l'opérateur historique et principal fournisseur de services de télécommunications fixes et mobiles en Turquie, basé dans son pays d'émission, la Turquie. Libellée en dollars américains (USD), l'obligation portait un taux d'intérêt annuel de 4,875%, avec une fréquence de paiement bimensuelle des intérêts, et représentait une taille totale d'émission de 500 000 000 USD, accessible avec une taille minimale à l'achat de 200 000 USD. Sa date de maturité était fixée au 18 juin 2024, date à laquelle elle a été intégralement remboursée à 100% de son prix nominal, confirmant ainsi son statut d'instrument arrivé à échéance et clôturé. Parallèlement à ces données, l'obligation bénéficiait d'une notation "BB-" de l'agence Standard & Poor's (S&P), reflétant l'évaluation de la qualité de crédit de l'émetteur.







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Türk Telekomünikasyon A..
(incorporated as a joint stock company (anonim irket) with limited liability in the Republic of Turkey)
U.S.$500,000,000 3.750 per cent. Notes due 2019
U.S.$500,000,000 4.875 per cent. Notes due 2024
Türk Telekomünikasyon A.., a public joint stock company (the "Issuer" and, together with its consolidated subsidiaries, "Türk Telekom" or the
"Group"), is issuing U.S.$500,000,000 3.750 per cent. Notes due 2019 (the "2019 Notes") and U.S.$500,000,000 4.875 per cent. Notes due 2024
(the "2024 Notes" and, together with the 2019 Notes, the "Notes" and each a "Series").
Interest on the 2019 Notes will be paid in arrear on the nineteenth day of each June and December, provided that if any such date is not a Business
Day (as defined below), then such payment will be made on the next Business Day. Principal of the 2019 Notes is scheduled to be paid on 19 June
2019, but may be paid earlier under certain circumstances as further described herein. The 2019 Notes initially will be sold to investors at a price
equal to 99.612 per cent. of the principal amount thereof. For a more detailed description of the 2019 Notes, see "Terms and Conditions of the 2019
Notes".
Interest on the 2024 Notes will be paid in arrear on the nineteenth day of each June and December, provided that if any such date is not a Business
Day (as defined below), then such payment will be made on the next Business Day. Principal of the 2024 Notes is scheduled to be paid on 19 June
2024, but may be paid earlier under certain circumstances as further described herein. The 2024 Notes initially will be sold to investors at a price
equal to 99.165 per cent. of the principal amount thereof. For a more detailed description of the 2024 Notes, see "Terms and Conditions of the
2024 Notes".
INVESTING IN THE NOTES INVOLVES RISKS. PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH
UNDER "RISK FACTORS" BEGINNING ON PAGE 24 OF THIS OFFERING CIRCULAR.
This Offering Circular (the "Offering Circular") has been approved by the Central Bank of Ireland, as competent authority under Directive
2003/71/EC (the "Prospectus Directive") as amended (which includes the amendments made by Directive 2010/73/EU to the extent that such
amendments have been implemented in a relevant Member State of the European Economic Area). The Central Bank of Ireland only approves this
Offering Circular as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Application has been made
to the Irish Stock Exchange for the Notes to be admitted to the official list of the Irish Stock Exchange (the "Official List") and to trading on its
regulated market (the "Main Securities Market"). Such approval only relates to Notes which are to be admitted to trading on a regulated market
for the purposes of Directive 2004/39/EC and/or which are to be offered to the public in any Member State of the European Economic Area.
References in this Offering Circular to the Notes being "listed" (and all related references) will mean that the Notes have been admitted to the
Official List and have been admitted to trading on the Main Securities Market. The Main Securities Market is a regulated market for the purposes
of Directive 2004/39/EC.
Application has been made to the Capital Markets Board of Turkey (the "CMB") in its capacity as competent authority under the Capital Markets
Law of the Republic of Turkey, Law No. 6362 dated 6 December 2012 (the "Capital Markets Law") for the issuance and sale of the Notes by the
Issuer outside Turkey. The Notes may not be sold outside Turkey before they are approved by the CMB. The issuance of the Notes was authorised
by the CMB on 14 March 2014 through the approval of the issuance certificate (ihraç belgesi) relating to the Notes.
The withholding tax rate on interest payments in respect of Turkish bonds issued outside of Turkey varies depending on the original maturity of
such bonds as specified under the Council of Ministers' Decree dated 20 December 2010 and numbered 2010/1182 regarding Article 94 and the
Decree No. 2011/1854 dated 26 April 2011 (together, the "Decrees"). Pursuant to the Decrees, with respect to bonds with a maturity of 5 years
and more, the withholding tax rate on interest is 0 per cent. Accordingly, under current Turkish tax law, withholding tax at the rate of 0 per cent.
applies to interest on the Notes. See "Taxation -- Certain Turkish Tax Considerations".
The Notes are expected to be rated at issuance BB+ by Standard & Poor's Credit Market Services Europe Limited ("S&P") and BBB- by Fitch
Ratings Limited ("Fitch") (together, the "Rating Agencies"). The Rating Agencies have also issued ratings in respect of the Turkish government,
as set out on page 82 of this Offering Circular. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision,
suspension or withdrawal at any time by the assigning rating organisation. As of the date of this Offering Circular, each of the Rating Agencies is
established in the European Union and is registered under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation").
The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the
securities laws of any state of the United States, and are being offered: (a) for sale in the United States to qualified institutional buyers only (each
a "QIB") as defined in, and in reliance upon, Rule 144A under the Securities Act ("Rule 144A") and (b) for sale to non-U.S. persons (as defined
in Regulation S under the Securities Act ("Regulation S")) outside the United States in reliance upon Regulation S (together, the "Offering").
Prospective purchasers that are QIBs are hereby notified that the seller of the Notes may be relying on the exemption from the provisions of Section
5 of the Securities Act pursuant to Rule 144A. Investors in the Notes will be deemed to have made or be required to make certain representations
and warranties in connection with purchasing the Notes. For a description of certain restrictions on sale and transfer of investments in the Notes,
see "Subscription and Sale", "Selling Restrictions" and "Transfer Restrictions" herein.
The Notes are being offered under Rule 144A and Regulation S by each of Barclays Bank PLC, BNP Paribas, Deutsche Bank AG, London Branch,
Emirates NBD Capital Limited and J.P. Morgan Securities plc (each, a "Joint Lead Manager" and, collectively, the "Joint Lead Managers"),
subject to their acceptance of, and right to reject, orders in whole or in part.
The Notes will be issued in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. The Notes in respect of each
Series will initially be represented by two global certificates in registered form (the "Global Certificates"), one of which will be issued in respect
of the Notes of such Series (the "Rule 144A Notes") offered and sold in reliance on Rule 144A (the "Restricted Global Certificate") and will be
registered in the name of Cede & Co., as nominee for the Depository Trust Company ("DTC"), and the other of which will be issued in respect of
the Notes of such Series (the "Regulation S Notes") offered and sold in reliance on Regulation S (the "Unrestricted Global Certificate") and
will be registered in the name of a nominee of a common depositary for Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société
anonyme ("Clearstream, Luxembourg"). It is expected that delivery of the Global Certificates will be made in immediately available funds on
19 June 2014 (i.e., the fifth Business Day following the date of pricing of the Notes (such date being referred to herein as the "Issue Date" and
such settlement cycle being herein referred to as T+5)).
Joint Lead Managers and Bookrunners
BARCLAYS
BNP PARIBAS
DEUTSCHE BANK
EMIRATES NBD CAPITAL LIMITED
J.P. MORGAN
The date of this Offering Circular is 18 June 2014.


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This Offering Circular constitutes a prospectus for the purpose of Article 5 of the Prospectus Directive. This
Offering Circular is to be read in conjunction with the Financial Statements (as defined in "Presentation of
Financial and Other Information -- Financial Information"), which form part of this Offering Circular and
are included herein.
The Issuer accepts responsibility for the information contained in this Offering Circular. To the best of the
knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case), the
information contained in this Offering Circular is in accordance with the facts and there are no other facts
the omission of which would be likely to affect the import of such information.
This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer or the
Joint Lead Managers to subscribe for or purchase, any Notes (or beneficial interests therein). This Offering
Circular is intended only to provide information to assist potential investors in deciding whether or not to
subscribe for or purchase Notes (or beneficial interests therein) in accordance with the terms and conditions
specified by the Joint Lead Managers. The Notes (and beneficial interests therein) may not be offered or sold,
directly or indirectly, and this Offering Circular may not be circulated, in any jurisdiction except in
accordance with legal requirements applicable to such jurisdiction.
The distribution or delivery of this Offering Circular and the offer or sale of the Notes (or beneficial interests
therein) in certain jurisdictions may be restricted by law. Persons into whose possession this Offering
Circular may come are required by the Issuer and the Joint Lead Managers to inform themselves about and
to observe any such restrictions. For a description of certain restrictions on offers, sales and deliveries of the
Notes (or beneficial interests therein) and on the distribution or delivery of this Offering Circular and other
offering material relating to the Notes, see "Selling Restrictions" and "Transfer Restrictions".
No person has been authorised in connection with the offering of the Notes (or beneficial interests therein)
to give any information or make any representation regarding Türk Telekom, the Joint Lead Managers or the
Notes other than as contained in this Offering Circular. Any such representation or information must not be
relied upon as having been authorised by the Issuer or the Joint Lead Managers. The delivery of this Offering
Circular at any time does not imply that there has been no change in Türk Telekom's affairs or that the
information contained in it is correct as of any time subsequent to its date or that any other information
supplied in connection with the Offering is correct as of any time subsequent to the date indicated in the
document containing the same. This Offering Circular may only be used for the purpose for which it has been
published. The Joint Lead Managers expressly do not undertake to review the financial condition or affairs
of the Issuer during the life of the Notes or to advise any investor in the Notes of any information coming to
their attention. None of the Joint Lead Managers have independently verified the information contained
herein. Accordingly, no representation or warranty, express or implied, is made by the Joint Lead Managers
as to the accuracy or completeness of the information set forth in this Offering Circular, and nothing
contained in this Offering Circular is, or should be relied upon as, a promise or representation, whether as to
the past or the future. None of the Joint Lead Managers assumes any responsibility or liability for the
accuracy or completeness of the information set forth in this Offering Circular. No Joint Lead Manager
accepts any liability in relation to the information contained in this Offering Circular or any other
information provided by the Issuer in connection with the offer or sale of the Notes or their distribution.
Neither this Offering Circular nor any other information supplied in connection with the offering of the Notes
(a) is intended to provide the basis of any credit or other evaluation or (b) should be considered as a
recommendation by the Issuer or any of the Joint Lead Managers that any recipient of this Offering Circular
or any other information supplied in connection with the offer or sale of the Notes should purchase the Notes.
Each person contemplating making an investment in the Notes must make its own investigation and analysis
of the creditworthiness of the Issuer and its own determination of the suitability of any such investment, with
particular reference to its own investment objectives and experience, and any other factors that may be
relevant to it in connection with such investment. In particular, each potential investor should:
·
have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits
and risks of investing in the Notes and the information contained in this Offering Circular or any
applicable supplement;
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·
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Notes and the impact such investment will have on
its overall investment portfolio;
·
have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes,
including where the currency for principal and profit payments is different from the potential
investor's currency;
·
understand thoroughly the terms of the Notes and be familiar with the behaviour of financial markets
in which they participate; and
·
be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear the
applicable risks.
None of the Issuer, the Joint Lead Managers or any of their respective representatives is making any
representation to any offeree or purchaser of the Notes (or beneficial interests therein) regarding the legality
of any investment by such offeree or purchaser under applicable legal investment or similar laws. Each
investor should consult with its own advisers as to the legal, tax, business, financial and related aspects
of an investment in the Notes.
GENERAL INFORMATION
The Notes have not been and will not be registered under the Securities Act or under the securities laws of
any state of the United States or any other U.S. jurisdiction. Each investor, by purchasing a Note (or a
beneficial interest therein), agrees that the Notes (or beneficial interests therein) may only be reoffered,
resold, pledged or otherwise transferred only upon registration under the Securities Act or pursuant to the
exemptions therefrom described under "Transfer Restrictions". Each investor also will be deemed to have
made certain representations and agreements as described therein. Any resale or other transfer, or attempted
resale or other attempted transfer, that is not made in accordance with the transfer restrictions may subject
the transferor and transferee to certain liabilities under applicable securities laws.
The offering of the Notes has been authorised by the CMB through the approval of the issuance certificate
(ihraç belgesi) only for the purpose of the sale of the Notes outside of Turkey in accordance with Article 11
of the Capital Markets Law, Article 15(b) of Decree 32 on the Protection of the Value of the Turkish Currency
dated 7 August 1989 (as amended from time to time, "Decree 32") and Article 6 of the Communiqué No. II-
31.1 on Debt Instruments dated 7 June 2013 (the "Communiqué"). The Notes (or beneficial interests
therein) must be offered or sold outside of Turkey and the CMB has authorised the offering of the Notes,
provided that, following the primary sale of the Notes, no transaction that may be deemed as a sale of the
Notes (or beneficial interests therein) in Turkey by way of private placement or public offering may be
engaged in. Pursuant to Article 15(d)(ii) of Decree 32, there is no restriction on the purchase or sale of the
Notes (or beneficial interests therein) by residents of Turkey, provided that they purchase or sell such Notes
(or beneficial interests) in the financial markets outside of Turkey through banks and/or licensed brokerage
institutions authorised pursuant to CMB regulations and the purchase price of the Notes is transferred abroad
through banks. This Offering Circular is being provided on a confidential basis in the United States to a
limited number of QIBs for informational use solely in connection with the consideration of the purchase of
the Notes. It may not be copied or reproduced in whole or in part nor may it be distributed or any of its
contents disclosed to anyone other than the prospective investors to whom it is originally submitted.
According to the Communiqué, the Notes are required under Turkish law to be issued in an electronically
registered form in the Central Registry Agency (Merkezi Kayit Kuruluu) (the "CRA") and the interests
therein recorded in the CRA. However, upon the Issuer's request, the CMB may resolve to exempt the Notes
from this requirement if the Notes are to be issued outside Turkey. The Issuer submitted an exemption request
through its letter to the CMB and obtained an exemption from this registration requirement from the CMB
in a letter dated 18 March 2014 numbered 29833736-105.03.01-571.
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Notes offered and sold to QIBs in reliance upon Rule 144A will be represented by beneficial interests in one
or more permanent global certificates in fully registered form without interest coupons. Notes offered and
sold outside the United States to non-U.S. persons pursuant to Regulation S will be represented by beneficial
interests in one or more permanent global certificates in fully registered form without interest coupons.
Except as described in this Offering Circular, beneficial interests in the Global Certificates will be
represented through accounts of financial institutions acting on behalf of beneficial owners as direct and
indirect participants in DTC, Euroclear and Clearstream, Luxembourg. Except as described in this Offering
Circular, owners of beneficial interests in the Global Certificates will not be entitled to have the Notes
registered in their names, will not receive or be entitled to receive physical delivery of the Notes in definitive
form and will not be considered holders of the Notes under the Notes and the Agency Agreement in respect
of each Series.
An application has been made to admit the Notes to listing on the Official List and to have the Notes admitted
to trading on the Main Securities Market; however, no assurance can be given that such application will be
accepted.
Other than authorisation by the CMB, the Notes have not been approved or disapproved by the U.S.
Securities and Exchange Commission (the "SEC"), any state securities commission or any other U.S.,
Turkish, Irish, United Kingdom or other regulatory authority, nor have any of the foregoing authorities
passed upon or endorsed the merits of this Offering or the accuracy or adequacy of this Offering Circular.
Any representation to the contrary may be a criminal offence.
The distribution of this Offering Circular and the offering of the Notes (and beneficial interests therein) in
certain jurisdictions may be restricted by law. Persons that come into possession of this Offering Circular are
required by the Issuer and the Joint Lead Managers to inform themselves about and to observe any such
restrictions.
This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy the Notes (or
any beneficial interest therein) in any jurisdiction to the extent that such offer or solicitation is unlawful. In
particular, there are restrictions on the distribution of this Offering Circular and the offer and sale of the
Notes (and beneficial interests therein) in the United States, Turkey, the United Kingdom, the United Arab
Emirates (excluding the Dubai International Financial Centre), the Dubai International Financial Centre, the
State of Qatar, the Republic of Italy, Switzerland and numerous other jurisdictions.
TURKISH TAX CONSIDERATIONS
The withholding tax rates on interest payments of bonds issued by Turkish legal entities outside of Turkey
vary depending upon the original maturity of such bonds as specified under the Decrees. According to the
Decrees, the local withholding tax rate on interest payments is 0 per cent. for notes with an initial maturity
of five years and more. See "Taxation -- Certain Turkish Tax Considerations".
STABILISATION
In connection with the issue of each Series, J.P. Morgan Securities plc (the "Stabilising Manager") (or
persons acting on behalf of the Stabilising Manager) may over-allot Notes of a Series or effect transactions
with a view to supporting the market price of the Notes of a Series at a level higher than that which might
otherwise prevail; however, there is no assurance that the Stabilising Manager (or persons acting on behalf
of the Stabilising Manager) will undertake any stabilisation action. Any stabilisation action may begin on or
after the date on which adequate public disclosure of the terms of the offer of the Notes of the relevant Series
is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the
Issue Date and 60 days after the date of the allotment of the Notes of a Series. Any stabilisation action or
over-allotment must be conducted by the Stabilising Manager (or persons acting on behalf of the Stabilising
Manager) in accordance with all applicable laws and rules. Notwithstanding anything herein to the contrary,
the Issuer may not (whether through over-allotment or otherwise) issue more Notes of a Series than have
been approved by the CMB.
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AVAILABLE INFORMATION
The Issuer has agreed that, for so long as any Notes are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, it will, during any period in which it is neither subject to and in
compliance with Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended (the
"Exchange Act"), nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, furnish upon request
to any holder or beneficial owner of Notes, or any prospective purchaser designated by any such holder or
beneficial owner, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the
Securities Act.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE
HAS BEEN FILED UNDER CHAPTER 421B OF THE NEW HAMPSHIRE REVISED STATUTES
ANNOTATED (THE RSA) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW
HAMPSHIRE CONSTITUTES A FINDING BY THE NEW HAMPSHIRE SECRETARY OF STATE
THAT ANY DOCUMENT FILED UNDER RSA 421 B IS TRUE, COMPLETE AND NOT MISLEADING.
NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS
AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE NEW HAMPSHIRE
SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF,
OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION.
IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER,
CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF
THIS PARAGRAPH.
FORWARD-LOOKING STATEMENTS
This Offering Circular contains statements that may be considered to be "forward looking statements" as that
term is defined in the U.S. Private Securities Litigation Act of 1995. Forward looking statements appear in a
number of places throughout this Offering Circular, including, without limitation, under "Risk Factors",
"Management's Discussion and Analysis of Financial Condition and Results of Operations", "Business", and
include, but are not limited to, statements regarding Türk Telekom's objectives, goals, strategies, future
events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to
acquisitions, competitive strengths and weaknesses, business strategy and the trends management anticipates
in the telecommunications industry and the political and legal environment in which Türk Telekom operates
and other information that is not historical information.
In some cases, forward looking statements may be identified by words such as "believes", "expects",
"anticipates", "projects", "intends", "plans", "should", "could", "would", "may", "will", "seeks",
"estimates", "probability", "risk", "target", "goal", "objective", "future" or similar expressions or variations
on such expressions.
Forward looking statements involve risks, uncertainties and assumptions. Actual results may differ materially
from those expressed in these forward looking statements.
The Issuer has identified some of the risks inherent in forward looking statements under "Risk Factors" in
this Offering Circular. Other important factors that could cause Türk Telekom's actual results, performance,
achievements or financial condition to differ materially from those in forward looking statements include,
among others:
·
changes in government policies or political, social, legal, regulatory or economic conditions in Turkey
or other jurisdictions where any such changes could affect Türk Telekom's financial condition or
prospects;
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·
Türk Telekom's ability to fund future operations and capital needs through borrowing or otherwise;
·
Türk Telekom's ability to implement successfully any business strategies;
·
Türk Telekom's ability to integrate businesses, including recently acquired businesses, and to realise
operational benefits from such integration;
·
Türk Telekom's ability to increase market share and retain customers;
·
Türk Telekom's ability to attract and retain qualified personnel;
·
the results of Türk Telekom's investments and capital expenditures;
·
the loss of suppliers or disruption of supply chains;
·
a decrease in demand for Türk Telekom's products and services;
·
Türk Telekom's ability to obtain and retain the licences necessary for doing business;
·
the effects of increased competition in the Turkish telecommunications market;
·
the effects of inflation, interest rate and exchange rate fluctuations; and
·
Türk Telekom's success in identifying other risks to businesses and managing the risks of the
aforementioned factors.
This list of important factors is not exhaustive. There may be other risks, including risks of which the Issuer
is unaware, that could adversely affect Türk Telekom's results or the accuracy of forward looking statements
in this Offering Circular. When relying on forward looking statements, investors should carefully consider
the foregoing factors and other uncertainties and events, especially in light of the political, economic, social
and legal environment in which Türk Telekom operates. Such forward looking statements speak only as at
the date on which they are made. Accordingly, the Issuer does not undertake any obligation to update or
revise any of them, whether as a result of new information, future events or otherwise. The Issuer makes no
representation, warranty or prediction that the results anticipated by such forward looking statements will be
achieved. Such forward looking statements represent, in each case, only one of many possible scenarios and
should not be viewed as the most likely or standard scenario.
The forward looking statements contained in this Offering Circular are based on the beliefs of the Issuer's
management, as well as the assumptions made by and information currently available to the Issuer's
management. Although the Issuer's management believes that the expectations reflected in such forward
looking statements are reasonable, no assurances can be given that such expectations will prove to be correct.
Given these uncertainties, investors are cautioned not to place undue reliance on such forward looking
statements. Important factors that could cause actual results to differ materially from the Issuer's
management's expectations are contained in cautionary statements in this Offering Circular, including,
without limitation, in conjunction with the forward looking statements included in this Offering Circular and
specifically under "Risk Factors" and above. In addition, under no circumstances should the inclusion of
such forward looking statements in this Offering Circular be regarded as a representation or warranty by the
Issuer, the Joint Lead Managers or any other person with respect to the achievement of the results set out in
such statements or that the underlying assumptions used will in fact be the case. If any of these risks and
uncertainties materialise, or if any of these underlying assumptions prove to be incorrect, Türk Telekom's
actual results of operations or financial condition could differ materially from that described herein as
anticipated, believed, estimated or expected.
All subsequent written and oral forward looking statements attributable to the Issuer are expressly qualified
in their entirety by reference to these cautionary statements.
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INDUSTRY AND MARKET DATA
This Offering Circular contains historical and forward-looking market and industry data which have been
obtained from industry publications, market research and other publicly available information. In particular,
market data, statistics and information relating to the demographics and economy in Turkey and the Turkish
telecommunications market have been derived from data published by the Turkish Statistics Institute
("Türkstat"), the Economist Intelligence Unit (the "EIU"), Analysys Mason Limited ("Analysys"), and
Wireless Intelligence, a service run by GSM Media LLC ("Wireless Intelligence"). Figures in this Offering
Circular relating to Türk Telekom's share of the fixed-line and broadband markets, TTNET's share of the
broadband market and Avea's share of the mobile communications market in Turkey are management
estimates based on internal data and data published by other telecommunications operators and the ICTA.
The information provided from the sources referred to above has been accurately reproduced and, as far as
the Issuer is aware and has been able to ascertain from information published by such sources, no facts have
been omitted which would render the reproduced information inaccurate or misleading. Where third-party
information has been used in this Offering Circular, the source of such information has been identified.
The Issuer has not independently verified the information in industry publications or market research,
although management believes the information contained therein to be reliable. None of the Issuer or any of
the Joint Lead Managers represents that this information is accurate.
The methodology for calculating performance measures such as customer numbers, average revenue per user
("ARPU"), access lines and churn rates varies substantially among operators and is not standardised across
the telecommunications industry, and reported performance measures thus vary from those that would
probably result from the use of a single methodology. In addition, customer numbers in the mobile
communications sector may be difficult to calculate as a result of individuals having more than one SIM card
or SIM cards being removed due to periods of inactivity. The differing methodologies for calculating these
performance indicators make it difficult to draw comparisons between these figures for, and determining the
relative market share of, different mobile operators.
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Financial Information
As the Issuer is listed on the Istanbul Bourse (the "Borsa Istanbul"), its consolidated financial statements
are required to be prepared in conformity with the financial reporting standards accepted by the CMB
("CMB Financial Reporting Standards"). The consolidated financial statements have not been prepared in
accordance with the international accounting standards adopted pursuant to the procedure of Article 3 of
Regulation (EC) No. 1606/2002. There may be material differences in the financial information had
Regulation (EC) No. 1606/2002 been applied to the historical financial information of the Issuer.
The Issuer's consolidated financial statements include:
·
the unaudited interim condensed consolidated financial statements as at and for the three months
ended 31 March 2014, which include comparative financial information for the period ended 31
March 2013 (the "Interim Financial Statements");
·
the audited consolidated financial statements as at and for the year ended 31 December 2013, which
include comparative financial information as at and for the year ended 31 December 2012 (the "2013
Financial Statements"); and
·
the audited consolidated financial statements as at and for the year ended 31 December 2012, which
include comparative financial information as at and for the year ended 31 December 2011 (the "2012
Financial Statements" and, together with the Interim Financial Statements and the 2013 Financial
Statements, the "Financial Statements").
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The Financial Statements have been prepared and presented in accordance with CMB Financial Reporting
Standards. Unless otherwise indicated, the financial information presented in this Offering Circular is
extracted or derived from the Financial Statements, which appear beginning on page F-1 of this Offering
Circular. CMB Financial Reporting Standards differ from International Financial Reporting Standards
("IFRS") as promulgated by the International Accounting Standards Board ("IASB"). See ``Management's
Discussion and Analysis of Financial Condition and Results of Operations -- Summary of Differences
between IFRS and CMB Accounting Principles'' for a discussion of the significant differences between IFRS
as promulgated by the IASB and CMB Financial Reporting Standards. For future periods, the Issuer intends
to continue to use CMB Financial Reporting Standards as its sole basis for reporting and not to publish or
otherwise report financial statements in accordance with IFRS.
The Financial Statements as at and for the years ended 31 December 2013, 2012 and 2011 have been audited
by Güney Baimsiz Denetim ve Serbest Muhasebeci Mali Müavirlik Anonim irketi, a member firm of
E & Y Global Limited. Effective 27 May 2014, being the date of the Issuer's last General Meeting, Akis
Baimsiz Denetim ve Serbest Mali Müavirlik A.. (KPMG Turkey) was appointed as auditor to the Issuer.
Reclassifications
Based on the decision taken on 7 June 2013 by the CMB at its meeting numbered 20/670, new illustrative
financial statements and guidance have been issued, which are effective for interim periods ending after 31
March 2013 and apply to companies that are subject to the Communique on the Principles of Financial
Reporting in Capital Markets. Based on these new illustrative financial statements, a number of changes have
been made to Türk Telekom's consolidated balance sheet and consolidated income statement. The
reclassifications that have been made on Türk Telekom's consolidated balance sheet as at 31 December 2012
are as follows:
·
pre-paid expenses amounting to TL 218 million and advances given for fixed assets and inventories
amounting to TL 23 million previously presented in other current assets have been reclassified to pre-
paid expenses;
·
amounts of TL 74 million and TL 3 million which were previously presented under other trade
payables to third parties have been reclassified to employee benefit obligations and provision for
short-term employee benefits accounts, respectively;
·
income accruals in the amount of TL 503 million have been reclassified from other current assets to
trade receivables from third parties;
·
prepaid taxes amounting to TL 5 million have been reclassified from other current assets to current
tax related assets;
·
expense accruals amounting to TL 387 million and TL 88 million have been reclassified from other
current liabilities to other trade payables to third parties and provision for short-term employee
benefits accounts, respectively;
·
pre-paid expenses amounting to TL 24 million have been reclassified from other non-current assets to
prepaid expenses;
·
deferred revenues amounting to TL 80 million and TL 40 million that were previously presented as
other current liabilities have been reclassified to current deferred revenue, while other current
liabilities of TL 46 million have been reclassified to other short-term provisions;
·
customer returns liability amounting to TL 5 million that was previously presented as other payables
to third parties have been reclassified to other short-term provisions;
·
ICTA share accruals, treasury share accruals and universal services fund accruals amounting to TL
205 million that were previously presented as other current liabilities have been reclassified to other
payables to third parties; and
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·
deferred revenues amounting to TL 159 million and advances amounting to TL 78 million that were
previously presented as other non-current liabilities have been reclassified to the non-current deferred
revenue account.
The reclassifications that have been made to Türk Telekom's consolidated income statement for the year
ended 31 December 2012 are as follows:
·
foreign exchange gains, interest income and discount income on current accounts amounting to TL
338 million have been reclassified from financial income to other operating income;
·
foreign exchange losses, interest expense and discount expense on current accounts amounting to TL
227 million have been reclassified from financial expense to other operating expenses;
·
profit on sale of fixed assets amounting to TL 184 million presented in other operating income has
been reclassified to income from investing activities;
·
loss on sale of fixed assets amounting to TL 12 million presented in other operating expenses has been
reclassified to expense from investing activities; and
·
income from reversal of doubtful receivable amounting to TL 5 million that was previously presented
in other operating income has been reclassified to the general administrative expenses account.
Additionally, the below reclassifications were made on Türk Telekom's consolidated balance sheet as at 31
December 2012:
·
payables to Saudi Telecom Company amounting to TL 0.2 million that were previously presented as
trade payables to third parties have been reclassified in the account for amounts due to related parties;
and
·
receivables from Saudi Telecom Company amounting to TL 7.6 million that were previously
presented as trade receivable from third parties have been reclassified in the account for amounts due
from related parties.
As a result of the amendments to Türk Telekom's cost accounts, amounts of negative TL 159 million, TL 202
million and negative TL 42 million for the year ended 31 December 2012 have been reclassified to cost of
sales, marketing, sales and distribution expenses and general administrative expenses, respectively.
Interest income from deposits amounting to TL 44 million, which was previously presented as interest
received from investing activities in the cash flow statement for the year ended 31 December 2012, has been
reclassified to net cash used in financing activities, while interest received from customers amounting TL 160
million, which was previously presented as interest received from investing activities, has been reclassified
to net cash from operating activities.
As at 31 December 2012, vacation pay liability amounting to TL 91 million presented in short-term
provisions has been reclassified to long-term provisions for employee benefits due to amendments to TMS
19 "Employee Benefits", which came into effect on 1 January 2013. According to revised TMS 19, short-
term benefits provided to employees comprise benefits which are expected to be settled in full within twelve
months from the end of the reporting period. Management's expectation is that the entirety of vacation pay
liabilities will not be settled within twelve months after the end of the reporting period. Accordingly, the
relevant vacation pay liabilities have been reclassified to other long-term employee benefits and the
necessary reclassifications for the comparative period have been made by the Issuer.
The reclassifications that have been made to Türk Telekom's consolidated income statement as at 31 March
2013 are as follows:
·
foreign exchange gains, interest income and discount income on current accounts amounting to TL 48
million has been reclassified from financial income to other operating income;
·
foreign exchange losses, interest expense and discount expense on current accounts amounting to TL
26 million has been reclassified from financial expense to other operating expenses;
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·
gain on sale of fixed assets amounting to TL 21 million previously recognised as other operating
income has been reclassified to income from investing activities; and
·
income from reversal of doubtful receivable amounting to TL 0.4 million previously recognised as
other operating income has reclassified to general administrative expenses account.
Interest income from deposits amounting to TL 7 million of total interest income amounting to TL 43
million, which was previously presented as interests received from investing activities in the cash flow
statement for the period ended 31 March 2013, has been reclassified to net cash used in financing activities;
interest received from customers amounting to TL 36 million, however, has been reclassified to net cash from
operating activities.
In this Offering Circular, the reclassified consolidated income statement data for the three months ended 31
March 2013 and for the year ended 31 December 2012 and the reclassified consolidated balance sheet data
as at 31 December 2012 are presented.
EBITDA and Related Measures
This Offering Circular includes certain measures that are not measures of performance under CMB
accounting standards or IFRS. These include EBITDA and other related measures, as described in "Selected
Consolidated Historical Financial and Operating Data". Although EBITDA is not a measure of operating
income, operating performance or liquidity under CMB accounting standards or IFRS, the Issuer has
presented EBITDA because it understands that EBITDA and EBITDA-based indicators are used by some
investors to determine a company's ability to service indebtedness and fund ongoing capital expenditures.
EBITDA should not, however, be considered in isolation or as a substitute for operating income as
determined by CMB accounting standards or IFRS, or as an indicator of operating performance, or of cash
flows from operating activities as determined in accordance with CMB accounting standards or IFRS. In
addition, EBITDA as reported by the Issuer may not be comparable to similarly titled amounts reported by
other companies.
Rounding
Certain amounts which appear in this Offering Circular have been subject to rounding adjustments;
accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
which precede them.
Currency Presentation
References in this document to "U.S. dollars", "dollars", "U.S.$" and "$" refer to United States dollars;
references to "Lira" or "TL" are to the Turkish lira, the lawful currency of Turkey; and references to "euro"
and "" refer to the currency introduced at the start of the third stage of European economic and monetary
union pursuant to the Treaty establishing the European Community, as amended.
Other Information
In this Offering Circular, unless otherwise indicated, the "Issuer" refers to Türk Telekomünikasyon A.., and
"Türk Telekom" refers to the Issuer together with its consolidated subsidiaries.
Unless otherwise indicated, "Avea" refers to Avea letiim Hizmetleri A.., the Issuer's Turkish mobile
operator subsidiary, "TTNET" refers to TTNET A.., the Issuer's retail broadband Internet service provider
subsidiary, "Aycell" refers to Aycell Haberleme ve Pazarlama Hizmetleri A.., "Innova" refers to Innova
Biliim Çözümleri A.., "Argela" refers to Argela Yazilim ve Biliim Teknolojileri Sanayi ve Ticaret A..,
"IES" refers to IES Eitim ve Bilgi Teknolojileri A.., "Sebit" refers to Sebit Eitim ve Bilgi Teknolojileri
A.., "Albtelecom" refers to Albtelecom Sh.A., the incumbent fixed-line and mobile operator in Albania,
"AssisTT" refers to AssisTT Rehberlik ve Müteri Hizmetleri A.. , and "Türk Telekom International" refers
to Türk Telekom International Holding B.V. and its subsidiaries.
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Document Outline