1. Eiríkur S. Jóhannsson, CEO Viðar Þorkelsson, Deputy CEO Financial Statements 2004

2. Agenda Financial overview Principal tasks in 2004 Financial Statements 2004 Analysis of operating revenue Analysis of operating expenses EBITDA-development and performance 365 Media Operating objectives for 2005

3. Financial Overview - Operating Year 2004 Pre-tax profit ISK 509 million. Profit after taxes ISK 416 million. Performance in accordance with expectations. Total revenue ISK 7,028 million. Sales revenue increased by 12% from 2003. EBITDA on regular operations ISK 1,930 million or 27.9%. Working capital provided by operations ISK 1,676 millon. Investment in fixed assets ISK 654 million. Fixed assets sold ISK 672 milion.

4. Principal Tasks in 2004 Strengthening of the transfer capacity and the expanding of the mobile network Participation in Farice Merging of three invoicing systems General increase in the security of systems Number Portability Purchase of Margmiðlun Sale of the fiber optic cable network and cooperation of Reykjavik Energy on the buildup of data services for companies and fiber to the homes. Purchase of Lina.net’s data transfer services Purchase of 365 Media and 365 Print Media Reorganization of Og Vodafone in light of more diversifed and expanding operations

5. Financial Statements 2004

6. Income Statement In ISK thousands20042003Breyting Sales6,926,7896,204,881721,908 Cost of services provided-3,917,069-3.671,271-245,798 CONTRIBUTION MARGIN3,009,7202,533,610476,110 Other operating revenue100,73213,35687,376 Operating expenese-2,225,429-2,693,049467,620 OPERATING PROFIT885,023-146,0831,031,106 Financial Income/expenses-375,929-423,77147,842 PRE-TAX PROFIT509,094-569,8541,078,948 Income tax-93,183124,800-217,983 PROFIT415,911-445,054860,965 Revenue increase Revenue increase by 12%. Cost of services sold Increases by 7%. Operating expenses Decrease of operating expenses can be explained by the fact that goodwill is no longer decpreciated and less merger cost is incurred in 2004.

7. Income Statement In iSK ThousandsDecember 31, 2004Decenber 31, 2003 Change Assets Fixed asets17,601,12110,889,9326,711,189 Current assets3,434,2581,434,3771,999,881 Accounts receivable1,478,728802,377676,351 Non-entered services349,390348,2381,152 Total Assets21,035,38012,324,3098,711,071 Fixed Assets Increase by ISK 6,8 billion mainly through the purchase of365 Media and 635 Media Print Accounts receivable Increase is explained by the accounts receivable of the subsidiaries 365 Media and 365 Media Printa. Accounts receivable of the Parent Company Og Vodafone remain the same from the previous year and amount to approximately ISK 1,160 million. Broadcasting material: Broadcasting material in the amount of ISK 486 million is included among current assets. The general rule regarding this item is that broadcasting material is capitalized at its cost price and subsequenty expensed in full upon broadcasdting or proportinally based on reruns,

8. Balance Sheet ISK thousandsDecember 31, 2004 December 31, 2003 Change Liabilities and Stockholders’ Equity Stockholders’ equity7,736,.4165,392,6102,343,806 Liabilities Long term liabilities7,964,1395,453,2842,510,855 Current liabilities5,138,7141,478,4153,660,299 Total liabilities13,298,9646,931,6996,367,265 Liablities and Stockholders’ Equity total 21.035.38012,324,3098,711,071 Stockholders’ Equity Stockholders’ Equity increases due to profit and capital stock increase in relation to the purchase of subsidiaries. Current liabilities The financing of the purchase of 365 was recently concluded and current liabilities have thus decreased. Current ratio The current ratio is 0.67 but has already increased after the bond offering and is now around 1

9. In ISK thousands20042003 Operating profit/loss according to the Income Statement 885,023-146,083 Difference between net earnings and cash from operations Depreciation983,6411,369,952 Gains on the sale of fixed assets-72,6190 Changes in operating assets and liabilities219,577-459,067 Working capital provided by operating activities less interest2,015,622764,802 Interest income received93,515103,696 Interest expenses paid-432,687-606,796 Net cash provided by operating activities1,676,450261,702 Cash flows from investing activities-2,822,709-592,776 Cash flows from financing activities1,610,223350,883 Cash and cash equivalents at year-end587,112123,148 Statement Of Cash Flows Net cash provided by operating activities Net cash provided by operating activities has more than sixtupled. Investment As announced investment exceeds expectations but this is offset by the sale of fixed assets..

10. Analysis Of Operating Revenue

11. Service Income Specified According To Types of services - Year 2004 Mobile services Fixed line services Data transfer Other Punktur 1 Og textinn um hann kemur svo hérna. Punktur 2 Og textinn um hann kemur svo hérna. Punktur 3 Og textinn um hann kemur svo hérna.

12. Operating Revenue Specified According to Services Mobile Income from mobile services increased by ISK 48 million or 5% from Q4 2003. Fixed line Income from fixed line services increased by ISK 43 million or 12% from Q4 2003. Data transfer Income from data transfer increased by ISK 117 million or 67% from Q4 2003

13. Operating Revenue Specified According To Services Moblie 7% increase. Fixed line 11% increase. Data transfer 36% increase.

14. Analysis of Operating Expenses

15. Contribution Margin - as percentage of sales Punktur 1 Og textinn um hann kemur svo hérna. Punktur 2 Og textinn um hann kemur svo hérna. Punktur 3 Og textinn um hann kemur svo hérna.

16. Development of Cost of Services Sold - as percentage of sales Punktur 1 Og textinn um hann kemur svo hérna. Punktur 2 Og textinn um hann kemur svo hérna. Punktur 3

17. Development Of Other Operating Expenses - as percentage of sales

18. Analysis Of Operating Expenses According To The Previous Presentation Method

19. Development of Cost of Services Sold* - as percentage of total operating revenue * Less depreciation and payroll expenses relating to production

20. Development of Payroll Expenses* - as percentage of total operating revenue Development of payroll expenses Increase in Q4 2004 can i.a. be explained by termination payments. * Irregular expenses excluded in Q3 2004

21. Development Of Other Operating Expenses - as percentage of total operating revenue

22. EBITDA Development and Performance

23. Development of EBITDA - as percentage of total operating revenue Development of EBITDA Irregular expenses and income are excluded in the presentation. Development of EBITDA EBITDA on regular operations is increasing from 27% for Q4 2003 to 28.8% for Q4 of 2004. 26,9%

24. Performance

25. 365 Media Operational merger as of January 1, 2005 Balance Sheet effects as of December 31, 2004 Media income from advertising and subscriptions amounted to ISK 5,400 million Media’s EBITDA amounted to ISK 485 million in 2004

26. Operating Goals for 2005

27. Operating goals for 2005 Turnover for 2005 is estimated beween ISK 13,800 – 14,200 million Telecommunications 7,600 – 7,800 million Media 6,200 – 6,400 millon Planned EBITDA is ISK 2,800 to 3,000 milion Telecommunications ISK 2,100 – 2,300 million Media 700 – 900 million Investment in fixed assets for regular operations is expected to be as follows: Telecommunications 9-10% of turnover Media 3-3.5% of turnover