Q4/Year-end Report 2013

Q4/Year-End Report 2013

COMMENTS BY THE PRESIDENT AND CEO OF TERACOM GROUP

Competition in the Swedish and Danish Pay TV market remains stiff. Fundamental changes to media

consumption habits and growing demand for additional options are challenging the entire industry. Total hours of TV viewing are increasing and online streaming is expected to grow considerably. These trends present us with tremendous opportunities.

The Teracom Group adopted both strategic and tactical measures in 2013 to take advantage of the changes that the media market is already undergoing. The group identified strategic focus areas and refined its business strategy.

The ongoing effort to develop an online TV solution for smartphones and tablets will result in a step-by-step launch throughout 2014. The appealing content that we have negotiated is decisive to attracting and retaining customers. The focus of the Group in 2013 was to surpass customer expectations by being more oriented towards their needs and preferences.

Boxer holds a strong position in the Danish Pay TV market. With a 14% share, the company has firmly established its brand there. We added Denmark's most attractive channels to our program offering during the year, and Boxer Denmark operated in the black for the first time since starting in 2008. The broad customer base and popular brand represent solid potential for growth. The decline in Boxer Sweden customers slowed down during the second half of the year. The systematic effort to improve customer satisfaction and offer additional options bore fruit. One result was a second place ranking on the Swedish Quality Index (SKI) customer satisfaction survey among digital TV operators.

The Group's radio business remained relatively stable. Swedish Pay TV providers have adopted a wait-and-see attitude to digitalization. The Government submitted a bill in mid-June 2013, but a final decision is unlikely before fall 2014. The basic scenario is that FM broadcasts will end in 2022. Digital radio is already up and running in Denmark. Demand for Network Services at Teracom Sweden was strong in 2013. A great deal of effort was devoted to the tender process for the Swedish National Communications System for Emergency Services (Rakel) – an announcement is expected in spring 2014. Preparations for transitioning to state-of-the-art technology in parts of Swedish transmitting networks will begin in 2014. One benefit will be more space for additional channels and HDTV channels in the terrestrial network. Now that Teracom Denmark has completed expansion of transmitting network 6, Boxer Denmark's program offering includes additional HDVT channels.

For the purpose of strengthening our sustainability effort, we established clear, quantifiable targets for diversity, supplier selection and the environment, our three most important areas. That way we are better equipped to advance our market position, not to mention the pride and commitment of our employees. Last but not least, I would like to take this opportunity to express my gratitude to everyone who works at the Group for their invaluable contributions in 2013.

Åsa Sundberg

OCTOBER - DECEMBER 2013 IN SUMMARY JANUARY - DECEMBER 2013 IN SUMMARY • Income SEK 968 million (993) • Income SEK 3,875 million (3,900) • EBITDA SEK 228 million (238) • EBITDA SEK 1,051 million (897) • EBITDA margin 24% (24%) • EBITDA margin 27% (23%)

• Operating profit SEK 124 million (127) • Operating profit SEK 638 million (501) • Operating margin 13% (13%) • Operating margin 16% (13%) • Net income SEK 92 million (71) • Net income SEK 586 million (233)

SIGNIFICANT EVENTS, JANUARY – DECEMBER 2013

 The Teracom Group annual general meeting on April 26 elected Kia Orback Pettersson as the new chairman of the board. Fredrik Rystedt and Jeanette Almberg were also elected to the board. Lars Grönberg and Kristina Axberg Boman resigned from the board.

 Teracom Group AB sold PlusTV, its wholly owned Finnish Pay TV provider, to DNA Ltd, a

telecommunications company, following approval by the Finnish Competition and Consumer Authority.

 Teracom Sweden signed an agreement with Huawei, an international telecommunications company, for preventive maintenance, troubleshooting and facility management of a nationwide mobile network in Sweden.

 Sveriges Radio renewed its agreement with Teracom Sweden for FM and peripheral services through December 2015.

 A bill submitted by the Swedish Government in mid-June included a proposal for digitalization of radio. The proposal specified terms and guidelines for public service companies during the 2014-2019 licensing period. Full transition to digital radio is targeted for 2022.

 Teracom Sweden submitted a tender for operation, maintenance and customer support of Rakel.

 Teracom Denmark signed an agreement with the Danish Broadcasting Corporation/DIGI TV for operation and maintenance of their digital TV terrestrial network.

 Expansion of Danish transmitting network 6 was completed according to plan. One benefit is space for additional HD channels in Boxer Denmark's offering.

 Boxer Denmark began distributing Viasat's channels in its terrestrial network. TV3 was available as of January 1 and TV3 Plus as of July 1. The Boxer offering now includes all major Danish channels.

 Boxer Denmark launched an on-demand box of 3,500 titles in May. Boxer Sweden followed suit at the end of the year.

 Boxer Sweden was ranked second and improved the most of all digital TV operators on the Swedish Quality Index annual customer satisfaction survey. Boxer Sweden signed agreements to sell its base of approximately 9,500 ADSL and VoIP customers to Alltele. The customers migrated to the Alltele network on December 16.

 Åsa Ragnar took over as Head of Human Resources and Communications and Roland Svensson became the new Head of Product Development.

SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

 Andrea Gisle Joosen has resigned as President of Boxer Sweden. Gunilla Berg, CFO and Executive Vice President of the Group, will serve as Acting President during the hiring process.

FINACIAL OVERVIEW FOR THE REMAINING OPERATIONS

Q4 Q4 Total Jan-Dec Jan-Dec Total

SEK million 2013 2012 change % 2013 2012 change %

Income 968 993 -2,5 3 875 3 900 -0,6

Operating profit 124 127 -2,4 638 501 27,3

Operating margin 13% 13% 16% 13%

Profit after financial items 116 127 607 459

Equity ratio 45% 33% 45% 33%

Cash flow for the period 75 -25 346 -210

FINANCIAL OVERVIEW

Income

and profits

Fourth quarter 2013

Due primarily to Boxer Sweden's smaller customer base, Group income declined slightly from the fourth quarter of 2012 to SEK 968 million (993).

Operating profit was down by SEK 3 million to SEK 124 million (127). The decline, which was due to Boxer Sweden's smaller customer base and fewer Danish Broadcasting Corporation projects for Teracom Denmark, was offset by higher earnings at Boxer Denmark.

Net financial expense amounted to SEK -8 million (0). The poorer outcome stemmed from the inclusion in 2013 of major unrealized exchange gains. Profit after financial items was SEK 116 million (127). Owing to the sale of PlusTV Finland, the capital gain and associated profits were reported under "net profit for the period from discontinued operations," which totaled SEK 1 million (-89) for the fourth quarter.

Net profit for the period was SEK 92 million (71).

Full year 2013

Group income for the full year amounted to SEK 3,875 million (3,900). The decline, which was due to the same trends at Boxer Sweden and Teracom Denmark as in the fourth quarter, was offset by higher average income per customer for Boxer Denmark and somewhat better sales for Teracom Sweden.

Operating profit rose by SEK 137 million to SEK 638 million (501). Boxer Denmark was chiefly responsible for the improvement. The figure included costs affecting comparability totaling SEK 13 million (35). Net financial expense for the year was SEK -31 million (-42). Lower net debt was the reason for the improvement.

Profit after financial items was SEK 607 million (459). Net profit from discontinued operations was SEK 100 million (-142).

Net profit for the period was SEK 586 million (233).

0% 5% 10% 15% 20% 25% 0 50 100 150 200 250 Q1 2010 Q3 Q1 2011 Q3 Q1 2012 Q3 Q1 2013 Q3 SEK Mill. Earnings trend - Teracom Group

MARKET OVERVIEW

Sweden

Due to the arrival of new providers with online distribution platforms, the Swedish Pay TV market has become more competitive in recent years. The older providers, including Boxer, tried to parry by developing new online and other services.

The radio market is relatively stable. Digitalization of radio is around the corner in accordance with a bill that the Government submitted in June 2013. As passed by the Riksdag in November, the bill specifies terms and guidelines for public service companies during the 2014-2019 licensing period. The Government will review digitalization issues again in 2014 based on the scenario that FM broadcasts will end in 2022.

Denmark

The conversion of TV2, the most popular Danish TV channel, to Pay TV in 2012 substantially expanded the market and increased competition. The arrival of new providers also made the market more competitive.

Digital radio has been up and running for several years. A decision has been made to revise the broadcasting standard for digital radio in preparation for shutting down the FM network.

PERFORMANCE BY SEGMENT

The Teracom Group monitors operations in four segments. Two segments run network operations in the areas of terrestrial TV, radio and transmission. Two segments run Pay TV operations based on terrestrial TV. The geographic market ranges across Sweden and Denmark. 27% (26%) 51% (52%) 4% (5%) 18% (17%)

External Income by Segment - Q1-Q4 2013

Teracom Sweden Boxer Sweden Teracom Denmark Boxer Denmark 31% (31%) 69% (69%)

External Income by Activity - Q1-Q4 2013

Network Pay-tv

Teracom Sweden

Orders received remained brisk in the fourth quarter. The company signed a field service agreement with Huawei. Agreements for co-location of 4G equipment, satellite services and broadcasting of regional direct TV were also signed during the year.

Both income and operating profit for the fourth quarter were essentially on a par with the year before.

Owing primarily to the filling of vacancies and higher consulting expenses for several projects, net profit for the year was lower than 2012. Depreciation was higher in the wake of expansion of the TV network in 2012.

Cumulative income was higher than the previous year. The increase was mostly attributable to broadcasting of Digital TV, Service and the Media Transport product.

Network quality was very good during the year.

Boxer Sweden

Boxer carried out a number of activities and projects during the year to improve customer satisfaction and strengthen its market position. A major repackaging effort increased the content offering, while the launch of Flex-16 in the fall provided even more options.

The decline in the number of Boxer Sweden customers slowed down in the fourth quarter. The pace decreased substantially in the second half of the year.

Income and profit for the fourth quarter were lower than 2012. A smaller customer base and price competition in the Swedish market were responsible. The same income and profit trends could be seen for full-year 2013.

Number of TV households broken down by main type of reception. DTT FTA: households with only free TV via the terrestrial network. Many TV households also have DTT FTA as a supplemental type of reception.

SEK million Q4 2013 Q4 2012 Q1-4 2013 Q1-4 2012 Income incl. internal sales 378 383 1 517 1 484 Operating profit/loss 102 102 461 470 Operating margin 27% 27% 30% 32% SEK million Q4 2013 Q4 2012 Q1-4 2013 Q1-4 2012 Income incl. internal sales 493 513 1 978 2 024 Operating profit/loss 56 75 253 289 Operating margin 11% 15% 13% 14% Number of subscr. (thous.) 578 594 578 594

0% 10% 20% 30% 40% 50% 0 20 40 60 80 100 120 140 160 Q1 2010 Q3 Q1 2011 Q3 Q1 2012 Q3 Q1 2013 Q3 %

SEK Mill. Earnings trend - Teracom Sweden

Operating Profit/Loss Operating Margin

0% 5% 10% 15% 20% 0 20 40 60 80 100 120 Q1 2010 Q3 Q1 2011 Q3 Q1 2012 Q3 Q1 2013 Q3 % SEK Mill. Earnings trend - Boxer Sweden

Operating Profit/Loss Operating Margin

0 1 000 2 000 3 000 4 000 5 000 6 000

Thous. Distribution TV reception, share of households

Sweden 2005-2012 IPTV Satellite Cable/SMATV Analogue FTA DTT FTA DTT Pay TV

Teracom Denmark

Expansion of transmitter network 6 for TV was completed according to plan during the fall. The infrastructure is now in place for the inclusion of HDTV channels in Boxer Denmark's offering. The step-by-step regional rollout of new channels in October went well.

In the wake of fewer maintenance projects, particularly from the Danish Broadcasting Corporation, income was lower for both the fourth quarter and the full year.

Due primarily to the same developments, operating profit was also poorer for the two periods. Given the above trends and the loss of much of the relationship with TV2, a restructuring effort was undertaken later in the year for the purpose of adjusting costs.

Network quality was very good during the year.

Boxer Denmark

After several years of construction, the business entered a more stable phase based on its large customer base and established brand.

New agreements with TV3, TV3 Plus and a number of other popular channels expanded the program offering. Boxer Denmark's offering now includes the country's most attractive channels. Video on demand was also added to the company's services.

An increase in average income per customer led to an improvement for both the fourth quarter and the full year.

Chiefly as a result of the fact that income was higher and selling expenses associated with rapid growth in 2012 had been fully charged to earnings, the company operated in the black for the first time in 2013.

Number of TV households broken down by main type of reception. DTT FTA: households with only free TV via the terrestrial network. Many TV households also have DTT FTA as a supplemental type of reception.

SEK million Q4 2013 Q4 2012 Q1-4 2013 Q1-4 2012 Income incl. internal sales 85 102 309 352 Operating profit/loss 20 33 70 78 Operating margin 23% 32% 23% 22% SEK million Q4 2013 Q4 2012 Q1-4 2013 Q1-4 2012 Income incl. internal sales 180 155 712 655 Operating profit/loss 7 -45 3 -218 Operating margin 4% -29% 0% -33% Number of subscr. (thous) 335 365 335 365

0% 5% 10% 15% 20% 25% 30% 35% 0 5 10 15 20 25 30 35 Kv4 2010 Q2 Kv4 2011 Q2 Kv4 2012 Q2 Kv4 2013 % SEK Mill. Earnings trend - Teracom Denmark

Operating Profit/Loss Operating Margin

-350% -300% -250% -200% -150% -100% -50% 0% 50% 100% 150% -100 -80 -60 -40 -20 0 20 40 Q1 2010 Q3 Q1 2011 Q3 Q1 2012 Q3 Q1 2013 Q3 % SEK Mill. Earnings trend - Boxer Denmark

Operating Profit/Loss Operating Margin

0 500 1 000 1 500 2 000 2 500 3 000

Thous. Distribution TV reception, share of households

Denmark 2005-2012 IPTV Satellite Cable/SMATV Analogue FTA DTT FTA DTT Pay TV

CASH FLOW

Cash flow includes discontinued operations for the comparative year.

Cash flow from operating activities for the full year was SEK 854 million (510). The improvement was due to an increase in operating profit to SEK 638 million (352) and a reduction in working capital tied up to SEK -48 million (-133). Cash flow tied up in 2012 stemmed primarily from accounts receivable at year-end due to holidays, as well as higher inventory tied up.

Group investments in property, plant and equipment and intangible assets totaled SEK 348 million (317) for the year. The increase was due primarily to expansion of Danish transmission network 6. Subsidiaries sold refer to the divestment of PlusTV, which increased cash flow by SEK 392 million (-).

Cash flow for the year from financing activities was SEK 552 million (403). In addition to the dividend of SEK 125 million (110) in the second quarter, the figure consisted of net repayment of debt.

FINANCIAL POSITION

The Group's interest-bearing liabilities were SEK 1,286 million (1,711). Cash and cash equivalents, current investments and available bank credit amounted to SEK 541 million (874). The net equity ratio was 0.42 (0.96).

Total assets decreased by SEK 207 million to SEK 5,060 million (5,267). The equity/assets ratio was 45 percent (33).

RISKS AND UNCERTAINTIES

Please see Teracom's Annual Report 2012 for a description of risks and risk management practices. No additional risks or uncertainties were identified during the period.

Net debt/equity ratio

SEK million Dec 31, 2013 Dec 31, 2012

Interest-bearing liabilities 1 286 1 711 Less: Cash and cash equivalents -341 -10 Other interest-bearing assets - -45

Net liability 945 1 656

Equity 2 259 1 728

CONSOLIDATED INCOME STATEMENT

SEK million Note Oct-Dec 2013 Oct-Dec 2012 Jan-Dec 2013 Jan-Dec 2012

Continuing operations Operating income

Net sales 959 981 3 837 3 869

Other income 9 12 38 31

2 968 993 3 875 3 900

Work performed by the company for its own

use and capitalized 26 8 84 37

Operating expenses

Material costs -42 -57 -179 -234

Employee benefit costs -184 -165 -633 -602

Depreciation/amortization and impairment 5 -104 -111 -413 -396

Other expenses -540 -541 -2 096 -2 204

Operating profit 2 124 127 638 501

Net financial income/expense 3 -8 0 -31 -42

Profit after financial items 116 127 607 459

Tax on net profit for the period -25 33 -121 -84

Net profit for the period from continuing

operations 91 160 486 375

Net loss for the period from discontinued

operations 4 1 -89 100 -142

Net profit for the period 92 71 586 233

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEK million Note Oct-Dec 2013 Oct-Dec 2012 Jan-Dec 2013 Jan-Dec 2012

Net profit/loss for the period 92 71 586 233

Other comprehensive income:

Items that will not be reclassified to profit or loss

Remeasurement of net pension obligation -6 12 52 -6

Tax related to the net pension obligation 2 -6 -13 -1

-4 6 39 -7

Items that may be reclassified to profit or loss

Cash flow hedges -6 1 7 -7

Hedging of net investment -37 -18 -50 62

Translation differences from continuing

operations 41 39 50 -47

Translation differences from discontinued

operations - 2 4 -5

Income tax related to Other comprehensive income 10 6 20 -14

8 30 31 -11

Other comprehensive income, net after tax 4 36 70 -18

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS Fixed assets

Property, plant and equipment 2 804 2 840

Intangible assets 1 053 1 351

Other long-term receivables 3 107 207

Total fixed assets 3 964 4 398

Current assets

Inventories 73 92

Current receivables 3 682 767

Cash and cash equivalents 341 10

Total current assets 1 096 869

TOTAL ASSETS 5 060 5 267

EQUITY AND LIABILITIES

Equity 2 259 1 728

Liabilities to credit institutions 3 1 286 1 711 Long-term liabilities and provisions 480 547 Current liabilities and provisions 3 1 035 1 281

TOTAL EQUITY AND LIABILITIES 5 060 5 267

Memorandum items

Pledged assets 0 0

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to the Parent Company's shareholders

SEK million Share capital

Other contributed

capital Reserves Earned profits Total equity

Opening balance January 1, 2013 0 1 633 -88 183 1 728

Comprehensive income for the period - - 31 625 656

Dividend pertaining to 2012 - - - -125 -125

Closing balance December 31, 2013 0 1 633 -57 683 2 259

Attributable to the Parent Company's shareholders

SEK million Share capital

Other contributed

capital Reserves Earned profits Total equity

Opening balance January 1, 2012 0 1 633 -77 217 1 773

Effects of a change in the accounting principle for

reporting defined-benefit pension plans - - - -99 -99

Adjusted opening balance January 1, 2012 0 1 633 -77 118 1 674

Comprehensive income for the period - - -11 226 215

Harmonization of accounting principles in the

Group - - - -51 -51

Dividend pertaining to 2011 - - - -110 -110

CONSOLIDATED STATEMENT OF CASH FLOWS

SEK million Note Oct-Dec 2013 Oct-Dec 2012 Jan-Dec 2013 Jan-Dec 2012

Operating profit 124 36 638 352

Adjustments for non-cash items 109 138 420 470

Paid financial income and expenses -4 -4 -18 -35

Income tax paid -26 -14 -138 -144

Cash flow before changes in working capital 203 156 902 643

Change in working capital -17 177 -48 -133

Cash flow from operating activities1) 186 333 854 510

Investment in tangible and intangible assets -138 -90 -348 -317

Subsidiaries sold 1 - 392

-Cash flow from other investing activities - -1 -

-Cash flow from investing activities2) -137 -91 44 -317

Cash flow before financing activities 49 242 898 193

Dividends - - -125 -110

Amortization/New loans 26 -267 -427 -293

Cash flow from financing activities3) 26 -267 -552 -403

Cash flow for the period 75 -25 346 -210

287 0 10 220

Exchange rate differences on cash equivalents -21 1 -6 0

Less opening balance in subsidiaries sold - - -9

-Cash and cash equivalents, closing

balance4) 341 -24 341 10

For 2012 discontinued operations are included

Whereof discontinued operations

1) Cash flow from operating activities - -21 - -45

2) Cash flow from investing activities - -2 - -4

3) Cash flow from financing activities - -4 - 49

- -23 - 9

Cash and cash equivalents, opening balance

NOTES

Note 1 Accounting principles

The Group reports in accordance with the Government Ownership Policy and the guidelines for external reporting that apply to government-owned companies. This year-end report was prepared pursuant to IAS 34, Interim Financial Reporting, as well as the Swedish Annual Accounts Act for the Group. The Group applied the same accounting principles as described in the annual report for 2012, with the exception of the additions and revisions presented below.

IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, has been applied for PlusTV, a discontinued operation in 2013. Thus, income and expenses for PlusTV have been excluded from all items in the income statement for the current period, as well as prior periods in 2012. They have been reported separately in the income statement as net profit/loss for the period from discontinued operations. Capital gains from divestment have been reported in the income statement on the "Profit/loss from discontinued operations" line, as well as on a separate line in Note 4. Assets and liabilities held for sale have been valued at the lower of carrying amount and fair value after deducting estimated selling expenses.

Revised accounting principles

IAS 1, Presentation of Financial Statements, has been revised with respect to other comprehensive income. The most important revision is the requirement that items reported in other comprehensive income be broken down into two categories. The breakdown is based on whether or not the items may potentially be reclassified to the income statement. The revision does not address the issue of which items are to be included in other comprehensive income.

IFRS 13, Fair Value Measurement, took effect on January 1, 2013. The standard provides guidance in measuring fair value, whereas the question of when fair value is to, or may be, reported is still stipulated by individual IAS and IFRS standards. IFRS 13 also contains requirements for disclosing fair value, which are applicable to interim reports as well when it comes to financial instruments.

IAS 19, Employee Benefits Revised, affected financial reporting in 2013. The revisions are attributable to reporting of defined benefit pension plans. The revision to IAS 19 eliminates the option of using the corridor method, i.e., reporting only part of actuarial gains and losses as income or expense. Revaluation is to be reported on a current basis in other comprehensive income instead. In accordance with the previously amended standard, return on plan assets is not to be reported with expected return, but interest income is to be reported in the income statement on the basis of the particular discount rate at the beginning of the year.

Thus, the accounting principles for defined benefit pension plans have been revised from the group's accounting principles in the annual report for 2012, as well as previously released interim reports for 2012. Because the new principles affect accounting retroactively, the opening balance as of January 1, 2012 has been recalculated. The comparative figures for 2012 have also been recalculated.

As a result of the new accounting principles, net provision for pension, including the special employer's contribution, has increased by SEK 135 million as of January 1, 2012. Because the deficit associated with the transition has been reported against profit brought forward, i.e., equity, group equity has been reduced by SEK 99 million with consideration paid to deferred tax.

In the comparative figures as of December 31, 2012, net provision for pension has been recalculated from a receivable of SEK 73 million to a liability of SEK 67 million, while deferred tax has been revised from a liability of SEK 16 million to a receivable of SEK 15 million. The recalculation has reduced net profit for the group in 2012 by SEK 3 million, as well as other comprehensive income from SEK -11 million to SEK -18 million.

Note 2 Segment information

The segments are reported in accordance with the same accounting principles that are applied by the Group. Sales between segments occur at prices that are fair estimates of current market prices. Operating profit is used to assess the performance of each segment. Financial expenses, financial income and income tax are addressed at the Group level.

Operating income per segment and quarter

SEK million Q4 2013 Q4 2012 Full year 2013 Full year 2012

Teracom Sweden 378 383 1 517 1 484 Boxer Sweden 493 513 1 978 2 024 Teracom Denmark 85 102 309 352 Boxer Denmark 180 155 712 655 Other 23 28 113 117 Oneoff effects 0 0 0 0

Adjustments made upon consolidation -191 -188 -754 -732

Total 968 993 3 875 3 900

Operating profit/loss per segment and quarter

SEK million Q4 2013 Q4 2012 Full year 2013 Full year 2012

Teracom Sweden 102 102 461 470 Boxer Sweden 56 75 253 289 Teracom Denmark 20 33 70 78 Boxer Denmark 7 -45 3 -218 Other -46 -28 -139 -73 Oneoff effects -13 -6 -13 -35

Adjustments made upon consolidation -2 -4 3 -10

Note 3. Financial instruments

The table below shows financial instruments measured at fair value, based on how classification in the fair value hierarchy has been performed. The various levels have been defined as follows:

- Level 1 – quoted prices (unadjusted) on active markets for identical assets or liabilities

- Level 2 – Observable market inputs for assets or liabilities other than Level 1 inputs – such data may be observable either directly (i.e., as quotations) or indirectly (i.e., derived from quotations)

- Level 3 – inputs for assets or liabilities that are not based on observable market data (i.e., non-observable data)

Fair value hierarchy

SEK million Level 1 Level 2 Level 3 Total

Derivative instruments where hedge accounting is applied - - -

-Financial assets valued at fair value via the income statement - - -

-Financial assets, total - - -

-Derivative instruments where hedge accounting is applied 21 - - 21

Financial liabilities, total 21 - - 21

Fair value hierarchy

SEK million Level 1 Level 2 Level 3 Total

Derivative instruments where hedge accounting is applied 60 - - 60

Financial assets valued at fair value via the income statement 4 - - 4

Financial assets, total 64 - - 64

Derivative instruments where hedge accounting is applied 28 - - 28

Financial liabilities, total 28 - - 28

Dec 31, 2013

Note 4 Discontinued operations

PlusTV in Finland was sold to DNA Ltd in the third quarter following approval by the Finnish Competition and Consumer Authority.

Note 5 Impairment losses

Impairment losses for the year on property, plant and equipment in the amount of SEK 1 million were attributable to the Teracom Sweden segment. Of the SEK 75 million in impairment losses for the same period last year, SEK 4 million was for property, plant and equipment in the Teracom Sweden segment and SEK 71 million was Group surplus values.

Net loss for the period from discontinued operations

SEK million Okt-Dec 2013 Okt-Dec 2012 Jan-Dec 2013 Jan-Dec 2012

Net sales - 132 358 578

Operating profit - -91 -7 -149

Net financial income/expense - 2 0 7

Profit after financial items - -89 -7 -142

Tax on net profit for the period - 0 8 0

Net loss for the period from discontinued

operations - -89 1 -142

Capital gain on disposal 1 - 99

-Net loss for the period from discontinued operations including capital gain

1 -89 100 -142

Assets Jan-Dec 2013 Jan-Dec 2012

Impairment losses -1 -75

Total -1 -75

ANNUAL GENERAL MEETING

The Annual General Meeting will be held in Stockholm at 2 p.m. on Wednesday, April 23.

Where: Teracom Group AB, Lindhagensgatan 122, Stockholm, Sweden

The annual report will be available at the Teracom website (www.teracomgroup.se) on March 26.

UPCOMING FINANCIAL REPORTS

Interim Report for January 1 – March 31, 2014 Interim Report for January 1 – June 30, 2014

March 26, 2014 April 23, 2014 August 15, 2014

On behalf of the Board of Directors, Stockholm, February 14, 2014

……… Åsa Sundberg

President and CEO

FOR MORE INFORMATION, FEEL FREE TO CALL:

Gunilla Berg, Executive Vice President and CFO, Teracom Group, +46 (0)8 555 421 37

Teracom Group AB Phone: +46 (0)8 555 420 00

Box 30150 Fax: +46 (0)8 555 420 01

SE-104 25 Stockholm www.teracomgroup.se