In accordance with Article 47 of Royal Decree 1362/2007 of October 19, and Article 82 of the Spanish Stock Market Act, (Ley del Mercado de Valores), TELEFÓNICA, S.A. hereby discloses the following

SIGNIFICANT EVENT

In connection with the Second  phase (2012-2015) of the long-term incentive plan consisting in the granting of shares of TELEFÓNICA, S.A., - called Performance & Investment Plan ("PIP")- aimed at Telefonica Group Executives (including Executive Directors of Telefónica, S.A.), it is noted in the attached detail, as Schedule I, the number of shares to be delivered in this Second phase, to each of the beneficiaries of the Plan in their positions as Executive Directors or Executives of the Company, and which amounts to 77% of the shares they were assigned originally.

Madrid, August 4, 2015.