FINANCIAL POSITION OF THE GROUP T 020 G 21. Condensed consolidated statement of financial position millions of

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1 88 FINANCIAL POSITION OF THE GROUP T 020 Condensed consolidated statement of financial position Dec. 31, 2014 Change Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2011 Dec. 31, 2010 ASSETS CURRENT ASSETS 29,798 7,835 21,963 15,019 15,865 15,243 Cash and cash equivalents 7,523 (447) 7,970 4,026 3,749 2,808 Trade and other receivables 10,454 2,742 7,712 6,417 6,557 6,889 Non-current assets and disposal groups held for sale 5,878 4,845 1, Other current assets 5, ,248 4,486 5,123 5,495 NON-CURRENT ASSETS 99,562 3,377 96,185 92, , ,569 Intangible assets 51,565 5,598 45,967 41,847 50,227 53,807 Property, plant and equipment 39,616 2,189 37,427 37,407 41,797 44,298 Investments accounted for using the equity method 617 (5,550) 6,167 6,726 6,873 7,242 Other non-current assets 7,764 1,140 6,624 6,943 7,734 7,222 TOTAL ASSETS 129,360 11, , , , ,812 LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES 28,198 5,702 22,496 22,995 24,215 26,452 Financial liabilities 10,558 2,667 7,891 9,260 10,219 11,689 Trade and other payables 9,681 2,422 7,259 6,445 6,436 6,750 Current provisions 3, ,120 2,885 3,095 3,193 Liabilities directly associated with non-current assets and disposal groups held for sale 6 (107) Other current liabilities 4, ,113 4,396 4,465 4,820 NON-CURRENT LIABILITIES 67,096 3,507 63,589 54,416 58,249 58,332 Financial liabilities 44, ,708 35,354 38,099 38,857 Non-current provisions 10,838 1,761 9,077 9,169 7,771 8,001 Other non-current liabilities 11, ,804 9,893 12,379 11,474 SHAREHOLDERS EQUITY 34,066 2,003 32,063 30,531 40,032 43,028 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 129,360 11, , , , ,812 G 21 Structure of the consolidated statement of financial position ASSETS LIABILITIES AND SHAREHOLDERSʼ EQUITY Intangible assets 129, , , , % 40 % 22 % 19% Current liabilities Property, plant and equipment 32 % 31 % 52 % 54 % Non-current liabilities Trade receivables Other assets 7 % 22 % 8 % 21 % 26 % 27 % Shareholdersʼ equity

2 COMBINED MANAGEMENT REPORT 58 Overview of the 2014 financial year 67 Group organization 69 Group strategy 72 Management of the Group 76 The economic environment 82 Development of business in the Group 96 Development of business in the operating segments 113 Development of business at Deutsche Telekom AG 116 Corporate responsibility 123 Innovation and product development 128 Employees 134 Significant events after the reporting period 134 Forecast 146 Risk and opportunity management 164 Accounting-related internal control system 165 Other disclosures 89 Total assets increased by EUR 11.2 billion compared with December 31, 2013, largely due to higher intangible assets and property, plant and equipment. EUR 4.0 billion of this figure alone was attributable to exchange rate effects, mainly from the translation from U.S. dollars into euros. The level of trade and other receivables was also up significantly against the previous year. Total liabilities and shareholders equity increased in particular on account of higher current liabilities. G 23 Intangible assets and property, plant and equipment 100,000 80,000 98,105 92,024 79,254 83,394 91,181 Cash and cash equivalents decreased by EUR 0.4 billion year-on-year. G 22 Trade and other receivables 12,000 10,000 8,000 6,000 4,000 2, ,889 6,557 6,417 7,712 10, Trade and other receivables increased by EUR 2.7 billion to EUR 10.5 billion, due in particular to customer growth and an increased percentage of terminal equipment sold under installment plans in our United States operating segment. This results from the strategy pursued by T-Mobile US to introduce new rate plans under which terminal equipment is no longer sold at a subsidized price, but on the basis of an installment plan, for example. The net carrying amounts of the non-current assets and disposal groups held for sale increased by EUR 4.8 billion, primarily due to the reclassification of our EE joint venture in connection with the sales negotiations with BT. The following effects, which had an impact in the previous year, were no longer included: In the United States operating segment, the exchange of mobile licenses with Verizon Communications for EUR 0.6 billion was completed. In the Group Headquarters & Group Services segment, the sale of the shares in the Scout24 group totaling EUR 0.3 billion was consummated. Intangible assets increased by EUR 5.6 billion, mainly as a result of capital expenditure in the amount of EUR 7.2 billion. This figure includes EUR 3.6 billion for the acquisition of mobile licenses by T-Mobile US, in particular in connection with the two transactions consummated in April 2014 for the acquisition and the exchange of mobile licenses 60,000 40,000 20,000 0 Intangible assets Property, plant and equipment with Verizon Communications. Effects of changes in the composition of the Group totaling EUR 0.2 billion resulting from the inclusion of the GTS Central Europe group and goodwill of EUR 0.1 billion recognized in this connection likewise contributed to this increase. Exchange rate effects of EUR 2.8 billion, primarily from the translation from U.S. dollars into euros, also increased the carrying amount of intangible assets. The recognition of amortization of EUR 3.8 billion and disposals of EUR 0.8 billion mainly in connection with the exchange of mobile spectrum with Verizon Communications had an offsetting effect on the carrying amount of intangible assets. Property, plant and equipment increased by EUR 2.2 billion compared to December 31, 2013 to EUR 39.6 billion. In particular capital expenditure of EUR 7.9 billion in the Germany and United States operating segments increased the carrying amount. Of the additions, 70 percent related to investments intended to increase operating capacities. Apart from investments in new products and technologies, these were primarily measures to increase capacities and improve quality in existing products and technologies. Exchange rate effects, predominantly from the translation from U.S. dollars into euros, raised the carrying amount by EUR 1.0 billion. The increase was also attributable to effects of changes in the composition of the Group of EUR 0.4 billion, mainly from the inclusion of the GTS Central Europe group (EUR 0.2 billion) and the first-time consolidation of four structured leasing SPEs for the operation of data centers in Germany (EUR 0.2 billion). Depreciation of EUR 6.6 billion and disposals of EUR 0.3 billion reduced property, plant and equipment. The carrying amount of investments accounted for using the equity method decreased by EUR 5.6 billion in the reporting year. This decrease was mainly due to the reclassification of our stake in the EE joint venture as non-current assets and disposal groups held for sale. For detailed information on this change, please refer to the consolidated statement of cash flows, PAGES 180 and 181, and Note 31 Notes to the consolidated statement of cash flows in the notes to the consolidated financial statements, PAGES 238 and 239.

3 90 G 24 Financial liabilities 60,000 40,000 20,000 0 Our current and non-current financial liabilities increased by EUR 3.6 billion compared with the prior year to EUR 55.2 billion in total. Significant effects on financial liabilities are set out in the following tables and the accompanying explanations. T 021 Non-current 50,546 Financial liabilities 48, Current 44,614 51,599 55,227 Trade and other payables increased by EUR 2.4 billion compared with the previous year, due in part to the stockpiling of terminal equipment (in particular smartphones) and the network build-out in the United States operating segment. Exchange rate effects from the translation from U.S. dollars into euros accounted for EUR 1.4 billion of the increase. Provisions (current and non-current) increased by EUR 2.2 billion overall, of which EUR 1.5 billion related to provisions for pensions and other employee benefits. This was mainly attributable to the recognition of actuarial losses of EUR 1.6 billion (before taxes) directly in equity as a consequence of continued drop in interest rates. Current service cost increased provisions for pensions by EUR 0.2 billion. The increase in plan assets of EUR 0.3 billion (allocation under contractual trust agreement) had an offsetting effect. Shareholders equity increased by EUR 2.0 billion compared with December 31, 2013 to EUR 34.1 billion, due to profit of EUR 3.2 billion and currency translation effects recognized directly in equity of EUR 1.8 billion. In addition, in connection with the option granted to our shareholders to have their dividend entitlements converted into shares, a capital increase of EUR 1.0 billion was carried out involving the contribution of the dividend entitlements. Dividend payments for the 2013 fi nancial year to Deutsche Telekom AG shareholders of EUR 2.2 billion and to non-controlling interests of EUR 0.1 billion had an offsetting effect. Furthermore, shareholders equity was also reduced by the acquisition of the remaining shares in T-Mobile Czech Republic of EUR 0.8 billion and the recognition of actuarial losses (after taxes) of EUR 1.1 billion. Dec. 31, 2014 Due within 1 year Due >1 year 5 years Due > 5 years Total Bonds and other securitized liabilities Bonds 32,751 3,250 9,333 20,168 Commercial paper, medium-term notes, and similar liabilities 11,468 2,175 4,557 4,736 Liabilities to banks 3,676 1,369 1, ,895 6,794 15,824 25,277 Finance lease liabilities 1, Liabilities to non-banks from promissory notes Other interest-bearing liabilities 1,775 1, Other non-interest-bearing liabilities 2,055 1, Derivative financial liabilities 1, ,332 3,764 2,161 1,407 FINANCIAL LIABILITIES 55,227 10,558 17,985 26,684

4 COMBINED MANAGEMENT REPORT 58 Overview of the 2014 financial year 67 Group organization 69 Group strategy 72 Management of the Group 76 The economic environment 82 Development of business in the Group 96 Development of business in the operating segments 113 Development of business at Deutsche Telekom AG 116 Corporate responsibility 123 Innovation and product development 128 Employees 134 Significant events after the reporting period 134 Forecast 146 Risk and opportunity management 164 Accounting-related internal control system 165 Other disclosures 91 Cost of debt. At the end of the financial year, the average interest rate for financial liabilities was 5.8 percent (2013: 5.6 percent). The average interest rate was higher than in the previous year, mainly due to the significant increase in T-Mobile US self-financing in T 022 Net debt Dec. 31, 2014 Change Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2011 Dec. 31, 2010 Financial liabilities (current) 10,558 2,667 7,891 9,260 10,219 11,689 Financial liabilities (non-current) 44, ,708 35,354 38,099 38,857 FINANCIAL LIABILITIES 55,227 3,628 51,599 44,614 48,318 50,546 Accrued interest (1,097) (6) (1,091) (903) (966) (1,195) Liabilities from corporate transactions (1,566) Other (1,038) (157) (881) (754) (615) (467) GROSS DEBT 53,092 3,465 49,627 42,957 46,737 47,318 Cash and cash equivalents 7,523 (447) 7,970 4,026 3,749 2,808 Available-for-sale financial assets/ Financial assets held for trading 289 (21) Derivative financial assets 1, ,287 1, Other financial assets 1,437 (46) 1, ,331 NET DEBT 42,500 3,407 39,093 36,860 40,121 42,269 G 25 Changes in net debt 39,093 (4,140) 1, ,289 (1,576) 2,310 1,914 42,500 Net debt at Jan. 1, 2014 Free cash flow (before dividend payments, spectrum investment) Sale of Scout24 group Spectrum acquisition Dividend payments (including non-controlling interests) Acquisition of shares in T-Mobile Czech Republic Acquisition of the GTS Central Europe group First-time consolidation of structured leasing SPEs Allocation under contractual trust agreement on pension commitments Exchange rate effects Other effects Net debt at Dec. 31, 2014 Our net debt increased by EUR 3.4 billion year-on-year to EUR 42.5 billion. The factors responsible for this are shown in GRAPHIC 25. Other effects of EUR 1.9 billion include financing options under which the payments for trade payables from investing and operating activities become due at a later point in time by involving banks in the process. Other effects also include a payment as part of a wholesale transaction.

5 92 For more information, please refer to the explanations in Note 34 Leases, PAGE 245 ET SEQ., and Note 35 Other financial obligations, PAGE 247, in the notes to the consolidated financial statements. Off-balance sheet assets and financial instruments. In addition to the assets recognized in the statement of fi nancial position, we use off-balance-sheet assets. This primarily relates to leased property. Off-balance-sheet fi nancial instruments mainly relate to the sale of receivables by means of factoring. Total receivables sold as of December 31, 2014 amounted to EUR 1.4 billion (December 31, 2013: EUR 1.5 billion). Furthermore, in the 2014 fi nancial year, we chose fi nancing options totaling EUR 0.6 billion (2013: EUR 0.4 billion) which extended the period of payment for trade payables from operating and investing activities by involving banks in the process. These payables are now shown under financial liabilities in the statement of financial position. Finance management. Deutsche Telekom s fi nance management ensures the Group s ongoing solvency and hence its financial equilibrium. The fundamentals of Deutsche Telekom s finance policy are established each year by the Board of Management and overseen by the Supervisory Board. Group Treasury is responsible for implementing the finance policy and for ongoing risk management. T 023 The rating of Deutsche Telekom AG Standard & Poor s Moody s Fitch LONG-TERM RATING Dec. 31, 2010 BBB+ Baa1 BBB+ Dec. 31, 2011 BBB+ Baa1 BBB+ Dec. 31, 2012 BBB+ Baa1 BBB+ Dec. 31, 2013 BBB+ Baa1 BBB+ Dec. 31, 2014 BBB+ Baa1 BBB+ SHORT-TERM RATING A-2 P-2 F2 OUTLOOK Stable Stable Stable T 024 Financial flexibility RELATIVE DEBT Net debt EBITDA (adjusted for special factors) x 2.2 x 2.1 x 2.1 x 2.2 x EQUITY RATIO % Glossary, PAGE 277 ET SEQ. T 025 Condensed consolidated statement of cash flows To ensure financial flexibility, we essentially used the key performance indicator relative debt in One component of this KPI is net debt, which the Group uses as an important indicator for investors, analysts, and rating agencies NET CASH FROM OPERATING ACTIVITIES 13,393 13,017 13,577 Effects from the AT&T transaction Compensation payments for MetroPCS employees 60 NET CASH FROM OPERATING ACTIVITIES a 13,393 13,214 14,047 Cash outflow for investments in intangible assets (excluding goodwill and before spectrum investment) and property, plant and equipment (CASH CAPEX) (9,534) (8,861) (8,021) Proceeds from disposal of intangible assets (excluding goodwill) and property, plant and equipment FREE CASH FLOW (BEFORE DIVIDEND PAYMENTS AND SPECTRUM INVESTMENT) a 4,140 4,606 6,239 NET CASH USED IN INVESTING ACTIVITIES (10,761) (9,896) (6,671) NET CASH (USED IN) FROM FINANCING ACTIVITIES (3,434) 1,022 (6,601) Effect of exchange rate changes on cash and cash equivalents 323 (167) (28) Changes in cash and cash equivalents associated with non-current assets and disposal groups held for sale 32 (32) Net increase (decrease) in cash and cash equivalents (447) 3, CASH AND CASH EQUIVALENTS 7,523 7,970 4,026 a Before effects in connection with the AT&T transactions and compensation payments for MetroPCS employees.

6 COMBINED MANAGEMENT REPORT 58 Overview of the 2014 financial year 67 Group organization 69 Group strategy 72 Management of the Group 76 The economic environment 82 Development of business in the Group 96 Development of business in the operating segments 113 Development of business at Deutsche Telekom AG 116 Corporate responsibility 123 Innovation and product development 128 Employees 134 Significant events after the reporting period 134 Forecast 146 Risk and opportunity management 164 Accounting-related internal control system 165 Other disclosures 93 G 26 Changes in cash and cash equivalents 13,393 (10,761) (3,434) 7, ,523 Cash and cash equivalents at Jan. 1, 2014 Net cash from operating activities Net cash used in investing activities Net cash used in financing activities Other changes Cash and cash equivalents at Dec. 31, 2014 Free cash flow. Free cash flow of the Group before dividend payments and spectrum investment decreased by EUR 0.5 billion year-on-year. This was due to the year-on-year increase of EUR 0.7 billion in cash outflows for investments in intangible assets (excluding goodwill and before spectrum investment) and property, plant and equipment, which mainly related to further rolling out broadband and expanding capacities in existing networks. In mobile communications, we invested in LTE, increased network coverage, and upgraded capacity to meet increasing demand for data volumes. In the fi xed-network area, priority was given to expanding the fiber-optic infrastructure, to IPTV, and to the continued migration of the existing telephone network to an IP-based network. Net cash from operating activities increased by EUR 0.4 billion yearon-year to EUR 13.4 billion. Dividend payments received from the EE joint venture, which were EUR 0.1 billion higher than in the prior year, had a positive effect on net cash from operating activities. In the reporting period, financing options were chosen which extended the period of payment for trade payables by involving banks in the process and, when payment is made, are shown in net cash used in/from fi nancing activities. This resulted in a positive total effect on net cash from operating activities of EUR 0.4 billion. Net cash from operating activities in the previous year had included total cash outflows of EUR 0.2 billion in connection with the AT&T and MetroPCS transactions, and EUR 0.3 billion higher cash outfl ows for severance and early retirement payments. By contrast, net cash from operating activities was reduced by a EUR 0.4 billion increase in net interest payments. In the previous year, this item had included EUR 0.2 billion higher cash inflows from entering into, canceling or changing the terms and conditions of interest rate derivatives. For information on net cash used in investing activities and net cash from/used in financing activities, please refer to Note 31 Notes to the consolidated statement of cash flows in the notes to the consolidated financial statements, PAGES 238 and 239.

7 94 T 026 Reconciliation for the change in disclosure of key figures in 2014 Profit (loss) from Total revenue operations (EBIT) PRESENTATION AS REPORTED (BEFORE ADJUSTMENTS) Germany 22,435 22,736 4,435 4,213 United States 18,556 15,371 1,404 (7,547) Europe 13,659 14, ,437 Systems Solutions 9,491 10,016 (279) (307) Group Headquarters & Group Services 2,879 2,835 (1,582) (1,750) TOTAL 67,020 65,364 4,936 (3,954) Reconciliation (6,888) (7,195) (6) (8) GROUP 60,132 58,169 4,930 (3,962) +/ CHANGE IN DISCLOSURE OF LOCAL BUSINESS UNITS AS OF JANUARY 1, 2014 Germany United States Europe Systems Solutions (453) (465) (15) (16) Group Headquarters & Group Services TOTAL (408) (430) (1) Reconciliation GROUP +/ CHANGE IN DISCLOSURE OF THE EE JOINT VENTURE AS OF JANUARY 1, 2014 Germany United States Europe Systems Solutions Group Headquarters & Group Services TOTAL Reconciliation GROUP = PRESENTATION AS OF DECEMBER 31, 2014 Germany 22,435 22,736 4,435 4,213 United States 18,556 15,371 1,404 (7,547) Europe 13,704 14, ,453 Systems Solutions 9,038 9,551 (294) (323) Group Headquarters & Group Services 2,879 2,835 (1,582) (1,750) TOTAL 66,612 64,934 4,935 (3,954) Reconciliation (6,480) (6,765) (5) (8) GROUP 60,132 58,169 4,930 (3,962)

8 COMBINED MANAGEMENT REPORT 58 Overview of the 2014 financial year 67 Group organization 69 Group strategy 72 Management of the Group 76 The economic environment 82 Development of business in the Group 96 Development of business in the operating segments 113 Development of business at Deutsche Telekom AG 116 Corporate responsibility 123 Innovation and product development 128 Employees 134 Significant events after the reporting period 134 Forecast 146 Risk and opportunity management 164 Accounting-related internal control system 165 Other disclosures 95 Depreciation and EBITDA Adjusted EBITDA amortization Impairment losses Segment assets ,401 8,606 8,936 9,166 (3,959) (4,389) (7) (4) 30,738 31,224 3,642 5,319 3,874 3,840 (2,133) (2,265) (105) (10,601) 38,830 27,436 4,340 4,728 4,518 4,936 (2,738) (2,903) (644) (388) 35,552 36, (656) (632) (13) (17) 8,705 9,045 (883) (997) (655) (715) (627) (654) (72) (99) 91,594 95,182 15,890 17,998 17,479 17,974 (10,113) (10,843) (841) (11,109) 205, ,466 (56) (3) (55) (1) 47 (5) 3 (87,271) (91,524) 15,834 17,995 17,424 17,973 (10,066) (10,848) (838) (11,109) 118, , (17) (18) (32) (34) (32) (36) (277) (279) (1) (9) (49) (5,844) (6,352) (7,998) (7,492) (13,842) (13,844) 13,842 13,844 8,401 8,606 8,936 9,166 (3,959) (4,389) (7) (4) 30,738 31,224 3,642 5,319 3,874 3,840 (2,133) (2,265) (105) (10,601) 38,830 27,436 4,371 4,762 4,550 4,972 (2,755) (2,921) (644) (388) 29,976 30, (639) (614) (13) (17) 8,428 8,766 (883) (997) (655) (715) (627) (654) (72) (99) 83,596 87,690 15,889 17,998 17,479 17,974 (10,113) (10,843) (841) (11,109) 191, ,573 (55) (3) (55) (1) 47 (5) 3 (73,420) (77,631) 15,834 17,995 17,424 17,973 (10,066) (10,848) (838) (11,109) 118, ,942

Harvest time for Deutsche Telekom on both sides of the Atlantic

MEDIA INFORMATION Bonn, August 7, 2014 Harvest time for Deutsche Telekom on both sides of the Atlantic T-Mobile US exceeds the 50-million customer mark and raises guidance on customer figures for the full