Catálogo de Símbolos del Mapa Geomorfológico

sented a DKK 147m decrease compared with 2013, primarily driven by:

Interest payments related to refunded income taxes of DKK 64m following a tax case regarding definition of infrastructure assets positively

Currency translation adjustments

2014 was negatively impacted by DKK 133m due to exchange-rate losses related to an intra- group loan to Get denominated in NOK. This was partly offset by a declining EUR/DKK ex- change rate resulting in an exchange-rate gain relating to loans denominated in EUR or hedged from GBP to EUR.

Fair value adjustments

Pre-hedges related to refinancing in 2015 resulted in an expense of DKK 172m due to declining market interest rates.

impacted 2014. 2013 was negatively impacted by interest payments of DKK 56m related to income tax payables. In Q4 2014, TDC also received a positive inflow from derivatives relating to the hedge of the acquisition of Get. This was partly offset by fees paid in relation to financing of Get in Q4 2014.

Note 4.4 Financial income and expenses

Financial income and expenses DKKm

2014 2013

Interest income 115 45

Interest expenses (1,033) (1,066)

Net interest (918) (1,021)

Currency translation adjustments (108) 7

Fair value adjustments (212) 63

Interest, currency translation adjustments and fair value adjustments (1,238) (951)

Profit from joint ventures and associates (10) 2

Interest on pension assets 233 266

Total (1,015) (683)

Interest, currency translation adjustments and fair value adjustments DKKm

2014 Net interest Currency translation adjustments Fair value adjustments Total

Euro Medium Term Notes (EMTNs) and European Investment Bank loan (EIB)

(incl. hedges treated as hedge accounting) (883) 32 (25) (876)

Other hedges (not treated as hedge accounting) 0 4 (187) (183)

Other (35) (144) 0 (179) Total (918) (108) (212) (1,238) 2013 Net interest Currency translation adjustments Fair value adjustments Total

Euro Medium Term Notes (EMTNs)

(incl. hedges treated as hedge accounting) (891) (1) (49) (941)

Other hedges (not treated as hedge accounting) 0 0 112 112

Other (130) 8 0 (122)

Total (1,021) 7 63 (951)

Cash flow from net interest DKKm

2014 2013

Interest received 690 569

Interest paid (1,576) (1,602)

Net interest paid (886) (1,033)

Specified as follows:

Euro Medium Term Notes (EMTNs) (incl. hedges treated as hedge

accounting) (862) (886)

Other hedges (not treated as hedge accounting) (15) (72)

Other (9) (75)

Interest-rate risks

TDC is exposed to interest-rate risks in the euro area, as 100% of the nominal gross debt is denominated in or swapped to EUR.

The interest-rate risk emerges from fluctuations in market interest rates, which affect the market value of financial instruments and financial income and expenses.

Throughout 2014, TDC monitored and man- aged its interest-rate risks using several varia- bles in accordance with TDC’s financial strategy to protect primarily TDC’s financial policy tar- gets. The following variables are monitored: • Floating interest-rate debt shall not exceed

60% of the total gross debt (including related derivatives)

• The maximum share of TDC’s fixed-rate debt (including related derivatives) to be reset within one year shall not exceed 25% in year two and 30% in year three, respectively. The Chief Financial Officer can approve breaches of the limit for up to three months during which Group Treasury must take action or have plans approved by the Chief Financial Officer to reduce the interest resetting risk to below the limit

• The BPV (basis point value - modified dura- tion measured in DKK) shall not exceed the BPV of the bond portfolio

The duration of TDC’s financial assets (bank accounts, marketable securities and deposits) shall not exceed 0.25 years

Note 4.5 Financial risks

Worth noting

TDC is exposed to financial market and credit risks when buying and selling goods and services denominated in foreign cur- rencies as well as due to its investing and financing activities. As a consequence of TDC’s capital structure and financing, TDC faces interest and exchange-rate risks. TDC’s Group Treasury identifies monitors and manages these risks through policies and procedures that are revised on an an- nual basis, if necessary, and approved by the Board of Directors.

TDC’s latest financial strategy (with certain subsequent amendments) was approved in December 2012 and defines maxi- ma/minima for interest-rate, exchange-rate and counterparty risks as well as maxi- ma/minima for a range of other variables. Together with market values of financial assets and liabilities, these exposures are calculated and monitored weekly. All risk measures are reported to the Group Chief Financial Officer on a weekly basis.

Monitored interest-rate risk variables (end-of-period)

Maxima/

minima Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Interval 2014 Average 2014 Average 2013

Share of floating interest-rate debt Max. 60% 33% 35% 36% 37% 53% 35%-60% 40% 30%

Actual financial portfolio BPV (DKKm) 9.3 9.5 9.8 9.4 9.5 9.0-11.2 9.6 9.8

Max. BPV of the financial portfolio (DKKm) 11.61 _{11.1 10.8 10.4 10.0 9.9-11.2 10.6 12.6}

Duration of financial assets (years) Max. 0.25 0.00 0.00 0.00 0.00 0.00 0.00-0.00 0.00 0.00

The maximum share of fixed interest-rate gross debt to

be reset within one year in year two2 _{Max. 25% 11% 8% 6% 6% 5% 0%-10% 6% 9%}

The maximum share of fixed interest-rate gross debt to

be reset within one year in year three2 _{Max. 30% 0% 0% 0% 0% 0% 0%-0% 0% 7%}

1 _{At 31 December 2014, a +/- 1 percentage point parallel shift in the interest-rate curve would impact profit for the year by approx. DKK +/- 33m due to changes in fair value adjustments and paid interest (2013: approx. DKK +/- 45m). The impact on Equity is estimated to be immaterial}

in both years.

Exchange-rate risks

TDC is exposed primarily to exchange-rate risks from NOK, USD, SEK and EUR. The exchange- rate exposure from TDC’s business activities relates principally to profits and cash flow for the year generated in foreign subsidiaries, as income and expenses generated in these entities are denominated in primarily local currencies.

For Danish companies, the net exchange-rate exposure relates to payables and receivables mainly from roaming and interconnection agreements with foreign operators as well as equipment and handset suppliers.

Due to TDC’s capital structure, the exposure from financial activities in EUR is significant, as 100% of the nominal gross debt (including derivatives) is denominated in EUR. However, due to the fixed EUR/DKK exchange-rate policy of Danmarks Nationalbank (the Danish central bank), TDC does not consider its positions in EUR to constitute a significant risk. TDC has a EUR exposure of DKK 36.5bn in 2014 (DKK 24.6bn in 2013).

Throughout 2014, TDC monitored and man- aged its exchange-rate risks using several variables in accordance with TDC’s financial strategy to protect primarily TDC’s financial policy targets. The following variables are monitored:

• Total open gross position, including payables and receivables, cash accounts, financing (in- cluding derivatives) and marketable securi- ties in other currencies than DKK and EUR must not exceed DKK 400m

• Budgeted EFCF in other currencies than EUR and DKK in the coming year must be hedged if foreign currencies constitute a risk to EFCF of more than 0.65% of total EFCF (is meas- ured and tested on an annual basis) In addition to the above variables, the financial strategy includes a range of exchange-rate hedging policies that e.g. stipulate the guiding rule that, EUR positions of TDC companies with local currencies in DKK or EUR are not to be hedged. Further, foreign subsidiaries with other reporting currencies than DKK or EUR are, as a guiding rule, to hedge payables/receivables in other currencies than DKK and EUR to local currency. Finally, to the largest extent possible, foreign subsidiaries should pay out net cash holdings as dividend to TDC A/S subject to maintaining an appropriate capitalisation and liquidity position for the subsidiary.

Further, as a guiding rule, TDC does not hedge exchange-rate exposure arising from foreign investments in the Nordic countries as these are regarded as long-term investments.This also applies to intra-group loans.

Note 4.5 Financial risks (continued)

Net investments in foreign subsidiaries, joint ventures and associates DKKm

2014 2013