Consolidated Financial Statements 2019 Telekom Austria Aktiengesellschaft 1 TELEKOM AUSTRIA AG – Consolidated Statement of Comprehensive Income 3 TELEKOM AUSTRIA AG – Consolidated Statement of Financial Position 4 TELEKOM AUSTRIA AG – Consolidated Statement of Cash Flows 5 TELEKOM AUSTRIA AG – Consolidated Statement of Changes in Stockholders’ Equity 6 TELEKOM AUSTRIA AG – Notes to the Consolidated Financial Statements 8 (1) Segment Reporting 8 (2) The Company 13 (3) Basis of Presentation 13 (4) Use of Estimates and Judgements 17 (5) Revenues 18 (6) Cost and Expenses 21 (7) Financial Result 22 (8) Earnings per Share 23 (9) Cash and Cash Equivalents 23 (10) Accounts Receivable: Subscribers, Distributors and Other, Net 23 (11) Related Party Transactions 23 (12) Inventories 25 (13) Other Current Assets 25 (14) Contract Assets 27 (15) Property, Plant and Equipment 27 (16) Intangibles 29 (17) Goodwill 32 (18) Investments in Associates/Assets held for sale 35 (19) Investments 36 (20) Other Non-current Assets 36 (21) Short-term Debt and Current Portion of Long-term Debt 37 (22) Accounts Payable 37 (23) Accrued Liabilities and Current Provisions, Asset Retirement Obligation and Restructuring 38 (24) Contract Liabilities 41 (25) Long-term Debt 41 (26) Other Non-current Liabilities 42 (27) Employee Benefits 42 (28) Stockholders’ Equity 46 (29) Income Taxes 48 (30) Leases 51 (31) Share-based Compensation 54 (32) Cash Flow Statement 55 (33) Financial Instruments 56 (34) Companies and Business Combinations 62 (35) Commitments and Contingent Assets and Liabilities 64 (36) Remuneration Paid to the Management Board and Supervisory Board 65 (37) Employees 65 (38) Release for Publication 65 The Consolidated Financial Statements are a translation from the original German version, which is the decisive versions in all cases. The Consolidated Financial Statements 2019 are audited but not yet approved by the Supervisory Board. Consolidated Financial Statements 2019 TELEKOM AUSTRIA AG – Consolidated Statement of Comprehensive Income in TEUR Notes 2019 2018 Service revenues (incl. other operating income) 3,901,311 3,772,765 Equipment revenues 663,855 662,635 Total revenues (incl. other operating income) (5) 4,565,166 4,435,401 Cost of service – 1,302,516 – 1,395,625 Cost of equipment – 653,812 – 627,941 Selling, general & administrative expenses – 1,029,679 – 1,007,027 Other expenses – 18,535 – 13,930 Total cost and expenses (6) – 3,004,542 – 3,044,524 Earnings before interest, tax, depreciation and amortization - EBITDA 1,560,624 1,390,877 Depreciation and amortization (15) (16) – 785,427 – 956,518 Depreciation of right-of-use assets (30) – 160,379 0 Operating income – EBIT 614,818 434,360 Interest income 5,350 5,382 Interest expense – 102,935 – 86,866 Interest on employee benefits and restructuring and other financial items, net – 35,847 – 14,754 Foreign currency exchange differences, net 535 5,145 Equity interest in net income of associated companies – 316 – 768 Financial result (7) – 133,213 – 91,861 Earnings before income tax - EBT 481,605 342,499 Income tax (29) – 154,164 – 98,793 Net result 327,442 243,706 Attributable to: Equity holders of the parent 326,963 241,079 Non-controlling interests (34) 479 408 Hybrid capital owners (28) 0 2,219 Basic and diluted earnings per share attributable to equity holders of the parent in euro (8) 0.49 0.36 Other comprehensive income items: Items that may be reclassified to profit or loss: Effect of translation of foreign entities (3) (28) 17,173 – 10,340 Realized result on hedging activities, net of tax (33) 4,380 4,380 Unrealized result on debt instruments at fair value, net of tax (19) 13 – 7 Realized result on debt instruments at fair value, net of tax (7) 13 30 Items that will not be reclassified to profit or loss: Remeasurement of defined benefit obligations, net of tax (27) – 12,549 – 2,180 Total other comprehensive income (loss) 9,030 – 8,119 Total comprehensive income (loss) 336,472 235,587 Attributable to: Equity holders of the parent 335,995 232,960 Non-controlling interests (34) 477 408 Hybrid capital owners (28) 0 2,219 See accompanying Notes to the Consolidated Financial Statements. For impairment losses of accounts receivable: subscribers, distributors and other, see Note (6). The use of automated calculation systems may give rise to rounding differences. As a result of the application of the modified retrospective method for IFRS 16, the comparative figures for 2018 have not been restated. 3 Consolidated Financial Statements 2019 TELEKOM AUSTRIA AG – Consolidated Statement of Financial Position December 31, January 1, December 31, in TEUR Notes 2019 2019 2018 Current assets Cash and cash equivalents (9) 140,293 63,631 63,631 Accounts receivable: Subscribers, distributors and other, net (10) 873,048 830,375 830,375 Receivables due from related parties (11) 920 1,382 1,382 Inventories, net (12) 109,318 131,171 131,171 Income tax receivable (29) 485 2,609 2,609 Other current assets, net (13) 148,549 145,749 153,140 Contract assets (14) 124,205 141,114 141,114 1,396,819 1,316,032 1,323,422 Assets held for sale (18) 33,476 0 0 Total current assets 1,430,295 1,316,032 1,323,422 Non-current assets Property, plant and equipment, net (15) 2,840,257 2,716,084 2,716,084 Right-of-use assets, net (30) 941,957 1,010,719 0 Intangibles, net (16) 1,784,224 1,782,681 1,782,681 Goodwill (17) 1,278,845 1,277,910 1,277,910 Investments in associated companies (18) 0 33,188 33,188 Long-term investments (19) 14,317 11,475 11,475 Deferred income tax assets (29) 168,940 245,513 245,513 Other non-current assets, net (20) 27,181 16,887 17,809 Total non-current assets 7,055,722 7,094,457 6,084,660 TOTAL ASSETS 8,486,017 8,410,489 7,408,082 Current liabilities Short-term debt (21) – 123,000 – 245,000 – 245,257 Lease liability short-term (30) – 152,621 – 143,635 0 Accounts payable (22) – 909,461 – 937,898 – 937,898 Accrued liabilities and current provisions (23) – 239,406 – 233,523 – 233,738 Income tax payable (29) – 38,751 – 27,078 – 27,078 Payables due to related parties (11) – 608 – 528 – 528 Contract liabilities (24) – 173,954 – 160,160 – 160,160 Total current liabilities – 1,637,802 – 1,747,822 – 1,604,659 Non-current liabilities Long-term debt (25) – 2,539,575 – 2,536,417 – 2,536,792 Lease liability long-term (30) – 788,222 – 859,391 0 Deferred income tax liabilities (29) – 6,653 – 15,050 – 14,992 Other non-current liabilities (26) – 65,730 – 22,580 – 22,580 Asset retirement obligation and restructuring (23) – 581,987 – 575,956 – 575,956 Employee benefits (27) – 220,130 – 203,654 – 203,654 Total non-current liabilities – 4,202,297 – 4,213,047 – 3,353,974 Stockholders’ equity Capital stock – 1,449,275 – 1,449,275 – 1,449,275 Treasury shares 7,803 7,803 7,803 Additional paid-in capital – 1,100,148 – 1,100,148 – 1,100,148 Retained earnings – 791,187 – 603,632 – 603,461 Other comprehensive income (loss) items 689,254 698,286 698,286 Equity attributable to equity holders of the parent (28) – 2,643,552 – 2,446,965 – 2,446,794 Non-controlling interests – 2,367 – 2,655 – 2,655 Total stockholders’ equity – 2,645,919 – 2,449,620 – 2,449,449 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY – 8,486,017 – 8,410,489 – 7,408,082 See accompanying Notes to the Consolidated Financial Statements. The use of automated calculation systems may give rise to rounding differences. As a result of the application of the modified retrospective method for IFRS 16, the comparative figures for 2018 have not been restated. 4 Consolidated Financial Statements 2019 TELEKOM AUSTRIA AG – Consolidated Statement of Cash Flows in TEUR Notes 2019 2018 Earnings before income tax - EBT 481,605 342,499 Non-cash and other reconciliation items: Depreciation (15) 511,606 500,146 Amortization of intangible assets (16) 273,821 456,371 Depreciation of right-of-use assets (30) 160,379 0 Equity interest in net income of associated companies (18) 316 768 Result on sale/measurement of investments (7) – 2,035 147 Result on sale of property, plant and equipment (5) (6) – 1,579 4,871 Net period cost of labor obligations and restructuring (7) (23) (27) 93,601 39,350 Foreign currency exchange differences, net (7) – 535 – 5,145 Interest income (7) – 5,350 – 5,382 Interest expense (7) 129,667 94,635 Other adjustments (32) – 7,481 – 4,860 Changes in financial positions: Accounts receivable: Subscribers, distributors and other, net (10) – 38,761 – 121,615 Prepaid expenses (13) 4,500 6,352 Due from related parties (11) 462 – 438 Inventories (12) 22,569 – 29,096 Other assets (13) (20) – 14,067 – 3,869 Contract assets (14) 17,050 4,836 Employee benefits and restructuring (23) (27) – 102,531 – 101,288 Accounts payable and accrued liabilities (22) (23) – 14,339 113,841 Due to related parties (11) 80 – 26 Contract liabilities (24) 13,798 – 1,484 Interest received and income taxes paid: Interest received (7) 5,391 5,423 Income taxes paid (29) – 70,142 – 63,699 Net cash flow from operating activities 1,458,026 1,232,337 Capital expenditures paid (32) – 873,872 – 771,459 Dividends received from associates (18) 0 771 Proceeds from sale of plant, property and equipment (15) 14,271 7,520 Purchase of investments (19) – 1,791 – 231 Proceeds from sale of investments (19) 977 1,921 Acquisition of businesses, net of cash acquired (34) – 1,018 – 3,727 Sale of shares of associated companies (18) (34) 127 127 Net cash flow from investing activities – 861,306 – 765,078 Interest paid (7) – 108,303 – 84,243 Change in short-term debt (21) (32) 121,158 7,877 Repayments of short-term debt (21) (32) – 240,000 0 Dividends paid (28) – 140,063 – 167,341 Issuance of short-term debt 0 240,000 Redemption of hybrid bond (28) 0 – 600,000 Acquisition of non-controlling interest (34) – 110 – 105 Deferred consideration paid for business combinations (34) – 3,503 – 1,200 Lease principal paid (30) – 149,482 0 Net cash flow from financing activities – 520,304 – 605,012 Adjustment to cash flows due to exchange rate fluctuations, net (3) 246 – 1,006 Net change in cash and cash equivalents 76,662 – 138,759 Cash and cash equivalents beginning of period (9) 63,631 202,390 Cash and cash equivalents end of period (9) 140,293 63,631 See accompanying Notes to the Consolidated Financial Statements.