Consolidated financial statements Year ended December 31, 2019 This document is a free translation into English of the yearly financial report prepared in French and is provided solely for the convenience of English speaking readers. Significant events 2019 Changes in IFRS consolidation BT shares scope Application of Acquisition of Sale of BT Group IFRS 16 "Leases" SecureData and Plc shares SecureLink IFRS 16 has been applied since In January 2019, Orange took control In June 2019, the Group sold its January 1, 2019. Information on the of SecureData. remaining 2.49% equity interest in first-time adoption of IFRS 16 BT Group Plc for a net amount of "Leases" on January 1, 2019, is In July 2019, Orange took control of 486 million pounds sterling presented in Note 2.3 "New SecureLink. (543 million euros). standards and interpretations applied from January 1, 2019". Note 2.3.1 Note 3.2 Note 12.7 Consolidated financial statements 2019 2 Table of contents Financial statements 7.4 Sensitivity of recoverable amounts 61 Note 8 Fixed assets 64 Consolidated income statement 4 8.1 Gains (losses) on disposal of fixed assets 64 Consolidated statement of comprehensive income 5 8.2 Depreciation and amortization 64 Consolidated statement of financial position 6 8.3 Impairment of fixed assets 65 Consolidated statements of changes in shareholders' equity 8 8.4 Other intangible assets 66 8.5 Property, plant and equipment 68 Analysis of changes in shareholders' equity related to 8.6 Fixed assets payables 69 components of the other comprehensive income 9 8.7 Dismantling provision 70 Consolidated statement of cash flows 10 Note 9 Lease agreements 70 9.1 Lease liabilities 71 Notes to the consolidated financial statements 9.2 Right-of-use assets 72 Note 1 Segment information 12 Note 10 Taxes 73 1.1 Segment revenue 12 10.1 Operating taxes and levies 73 1.2 Segment revenue to consolidated net income in 2019 14 10.2 Income tax 74 1.3 Segment revenue to segment operating income in 2018 Note 11 Interests in associates and joint ventures 80 and 2017 16 Note 12 Financial assets, liabilities and financial results 1.4 Segment investments 18 (excluding Orange Bank) 81 1.5 Segment assets 20 1.6 Segment equity and liabilities 22 12.1 Financial assets and liabilities of telecom activities 81 1.7 Simplified statement of cash flows on telecommunication 12.2 Profits and losses related to financial assets and liabilities 81 and Orange Bank activities 24 12.3 Net financial debt 82 1.8 Definition of operating segments and performance 12.4 TDIRA 85 indicators 27 12.5 Bonds 86 12.6 Loans from development organizations and multilateral Note 2 Description of business and basis of preparation of lending institutions 87 the consolidated financial statements 30 12.7 Financial assets 88 2.1 Description of business 30 12.8 Derivatives instruments 90 2.2 Basis of preparation of the financial statements 30 Note 13 Information on market risk and fair value of financial 2.3 New standards and interpretations applied from January 1, assets and liabilities (excluding Orange Bank) 93 2019 31 2.4 Main standards and interpretations compulsory after 13.1 Interest rate risk management 93 December 31, 2019 with no early application elected by 13.2 Foreign exchange risk management 94 the Group 33 13.3 Liquidity risk management 95 2.5 Accounting policies, use of judgment and estimates 34 13.4 Financial ratios 97 13.5 Credit risk and counterparty risk management 97 Note 3 Gains and losses on disposal and main changes in 13.6 Equity market risk 98 scope of consolidation 36 13.7 Capital management 98 3.1 Gains (losses) on disposal of fixed assets, investments 13.8 Fair value of financial assets and liabilities 99 and activities 36 Note 14 Shareholders' equity 101 3.2 Main changes in the scope of consolidation 36 14.1 Changes in share capital 102 Note 4 Sales 39 14.2 Treasury shares 102 4.1 Revenue 39 14.3 Dividends 102 4.2 Other operating income 41 14.4 Subordinated notes 102 4.3 Trade receivables 41 14.5 Translation adjustment 104 4.4 Customer contract net assets and liabilities 43 14.6 Non-controlling interests 106 4.5 Deferred income 45 14.7 Earnings per share 107 4.6 Other assets 45 Note 15 Unrecognized contractual commitments (excluding 4.7 Related party transactions 46 Orange Bank) 108 Note 5 Purchases and other expenses 47 15.1 Operating activities commitments 108 5.1 External purchases 47 15.2 Consolidation scope commitments 111 5.2 Other operating expenses 47 15.3 Financing commitments 111 5.3 Restructuring and integration costs 48 Note 16 Activities of Orange Bank 112 5.4 Broadcasting rights and equipment inventories 49 5.5 Prepaid expenses 49 16.1 Financial assets and liabilities of Orange Bank 112 5.6 Trade payables 50 16.2 Information on market risk management with respect to 5.7 Other liabilities 50 Orange Bank activities 117 5.8 Related party transactions 51 16.3 Orange Bank’s unrecognized contractual commitments 119 Note 6 Employee benefits 51 Note 17 Litigation 120 6.1 Labor expenses 51 Note 18 Subsequent events 122 6.2 Employee benefits 51 Note 19 Main consolidated entities 122 6.3 Share-based payment 55 6.4 Executive compensation 58 Note 20 Auditors’ fees 124 Note 7 Impairment losses and goodwill 59 Statutory auditors’ report on the consolidated financial statements 125 7.1 Impairment losses 59 7.2 Goodwill 60 7.3 Key assumptions used to determine recoverable amounts 60 The accompanying notes form an integral part of the consolidated financial statements. The accounting principles are split within each note in gray areas. Consolidated financial statements 2019 3 Consolidated income statement (1) (in millions of euros, except for per share data) Note 2019 2018 2017 Revenue 4.1 42,238 41,381 40,859 External purchases 5.1 (17,897) (18,563) (18,381) Other operating income 4.2 720 580 613 Other operating expenses 5.2 (599) (505) (724) Labor expenses 6.1 (8,494) (9,074) (8,574) Operating taxes and levies 10.1.1 (1,827) (1,840) (1,846) Gains (losses) on disposal of fixed assets, investments and activities 3.1 277 197 83 Restructuring costs 5.3 (132) (199) (167) Depreciation and amortization of fixed assets 8.2 (7,110) (7,047) (6,846) Depreciation and amortization of financed assets 8.5 (14) - - Depreciation and amortization of right-of-use assets 9.2 (1,239) - - Effects resulting from business combinations - - (27) Reclassification of translation adjustment from liquidated entities 12 1 (8) Impairment of goodwill 7.1 (54) (56) (20) Impairment of fixed assets 8.3 73 (49) (190) Impairment of right-of-use assets 9.2 (33) - - Share of profits (losses) of associates and joint ventures 11 8 3 6 Operating income 5,927 4,829 4,778 Cost of gross financial debt excluding financed assets (1,108) (1,341) (1,274) Interests on debts related to financed assets (1) - - Gains (losses) on assets contributing to net financial debt 5 9 11 Foreign exchange gain (loss) 76 (4) (63) Interests on lease liabilities (122) - - Other net financial expenses 15 25 (17) Effects resulting from BT stake 12.7 (119) (51) (372) Finance costs, net 12.2 (1,254) (1,362) (1,715) Income tax 10.2.1 (1,447) (1,309) (1,052) Consolidated net income of continuing operations 3,226 2,158 2,011 Consolidated net income of discontinued operations (EE) - 0 29 Consolidated net income 3,226 2,158 2,040 Net income attributable to owners of the parent company 3,006 1,954 1,843 Non-controlling interests 14.6 220 204 197 Earnings per share (in euros) attributable to parent company 14.7 Net income of continuing operations - basic 1.03 0.63 0.58 - diluted 1.02 0.62 0.58 Net income of discontinued operations - basic - 0.00 0.01 - diluted - 0.00 0.01 Net income - basic 1.03 0.63 0.59 - diluted 1.02 0.62 0.59 (1) The effects of IFRS 16 application are described in Note 2.3.1. Consolidated financial statements 2019 4 Consolidated statement of comprehensive income (in millions of euros) Note 2019 2018 2017 Consolidated net income 3,226 2,158 2,040 Remeasurements of the net defined benefit liability 6.2 (109) 45 16 Assets at fair value 12.7-16.1 (25) (22) - Income tax relating to items that will not be reclassified 10.2.2 30 (6) (23) Share of other comprehensive income in associates and joint ventures that will not be reclassified 11 - - (9) Items that will not be reclassified to profit or loss (a) (104) 17 (16) Assets at fair value 12.7-16.1 9 (8) - Assets available for sale 12.7-16.1 - - 23 Cash flow hedges 12.8.2 144 (67) 49 Translation adjustment gains and losses 14.5 78 (7) (176) Income tax relating to items that are or may be reclassified 10.2.2 (47) 18 6 Share of other comprehensive income in associates and joint ventures that are or may be reclassified - - - Items that are or may be reclassified subsequently to profit or loss (b) 184 (64) (98) Other comprehensive income from continuing operations (a) + (b) 80 (47) (114) Items that will not be reclassified to profit or loss (c) - - - Items that are or may be reclassified to profit or loss (d) - - - Other comprehensive income of discontinued operations (c) + (d) - - - Other consolidated comprehensive income (a) + (b) + (c) + (d) 80 (47) (114) Consolidated comprehensive income 3,307 2,111 1,926 Comprehensive income attributable to the owners of the parent company 3,075 1,898 1,770 Comprehensive income attributable to non-controlling interests 232 213 156 Consolidated financial statements 2019 5 Consolidated statement of financial position (in millions of euros) Note December 31, December 31, December 31, 2019 (1) 2018 2017 Assets Goodwill 7.2 27,644 27,174 26,911 Other intangible assets