Definitions

Acquisitions and other investments
Investments in goodwill and fair-value adjustments, shares, and participations, and asset retirement obligations.

Adjustment items
Adjustment items comprise capital gains and losses, impairment losses, restructuring programs (costs for phasing out operations and personnel redundancy costs) or other costs with the character of not being part of normal daily operations.

ARPU
Average monthly revenue per user.

Broadband revenues
External net sales related to fixed broadband services.

Business solutions
External net sales related to fixed business networking and communication solutions.

CAPEX
An abbreviation of "Capital Expenditure". Investments in intangible and tangible non-current assets but excluding goodwill, fair-value adjustments and asset retirement obligations.

Capital employed
Total assets less non-interest-bearing liabilities and non-interest-bearing provisions, and the (proposed) dividend.

Change local organic (%)
The change in Net sales/External service revenues/Adjusted EBITDA, excluding effects from changes in currency rates compared to the group’s reporting currency (SEK) and acquisitions/disposals, compared to the same period previous year.

Churn
The number of lost subscriptions (postpaid and prepaid) expressed as a percentage of the average number of subscriptions (postpaid and prepaid).

Earnings and equity per share
Earnings per share are based on the weighted average number of shares before and after dilution with potential ordinary shares, while equity per share is based on the number of shares at the end of the period. Earnings equal net income attributable to owners of the parent and equity is equity attributable to owners of the parent.

EBITDA
An abbreviation of "Earnings Before Interest, Tax, Depreciation and Amortization." Equals operating income before amortization, depreciation and impairment losses, and before income from associated companies and joint ventures.

EBITDA margin
EBITDA excluding adjustment items expressed as a percentage of net sales.

Equity/assets ratio
Adjusted equity and equity attributable to non-controlling interests expressed as a percentage of total assets.

Free cash flow
Cash flow from operating activities less cash CAPEX.

Interconnect revenues
External net sales related to mobile termination.

Interest coverage ratio
Operating income plus financial revenues divided by financial expenses.

Internal net sales
Group internal net sales

Mobile subscription revenues
Voice, messaging, data, content and machine-to-machine.

Net debt
Interest-bearing liabilities less derivatives recognized as financial assets (and hedging long-term and short-term borrowings) and related credit support annex (CSA), less 50 percent of hybrid capital (which, consistent with market practice for the type of instrument, is treated as equity), less short-term investments, long-term bonds at fair value through OCI and cash/cash equivalents.

Net debt/adjusted EBITDA ratio (multiple)
Net debt divided by adjusted EBITDA rolling 12 months and excluding disposed operations.

Net debt/equity ratio
Net debt expressed as a percentage of adjusted equity and equity attributable to non-controlling interests.

Net interest-bearing liability
Interest-bearing liabilities and provisions less interest-bearing assets but including investments in associated companies and joint ventures.

Operating capital
Non-interest-bearing assets less non-interest-bearing liabilities, including the (proposed) dividend, and non-interest-bearing provisions.

Operating margin (EBIT margin)
Operating income expressed as a percentage of net sales.

Operational free cash flow: Free cash flow from continuing operations excluding cash CAPEX for licenses and dividends from associated companies net of taxes.

Other fixed service revenues
External net sales of fixed services including fiber installation, wholesale and other infrastructure services

Other mobile service revenues
External net sales related to visitors' roaming, wholesale and other

Pay-out ratio
From 2016 dividend divided by free cash flow excluding licenses.

Return on assets
Operating income plus financial revenues expressed as a percentage of the average total assets.

Return on capital employed
Operating income plus financial revenues expressed as a percentage of average capital employed.

Return on equity
Net income attributable to owners of the parent expressed as a percentage of average adjusted equity.

Return on sales
Net income expressed as a percentage of net sales.

Self-financing rate
Cash flow from operating activities divided by gross investments.

Service revenues (external)
External net sales excluding equipment sales.

Telephony revenues: External net sales related to fixed telephony services.

Total equipment revenues
External equipment net sales.

Total service revenues
External net sales excluding equipment sales.

Turnover of capital employed
Net sales divided by the average capital employed.

TV revenues: External net sales related to TV servicesTotal asset turnover
Net sales divided by the average total assets.

Notation conventions
In conformance with international standards, this report applies the following currency notations:

• SEK Swedish krona
• DKK Danish krone
• EUR European euro
• NOK Norwegian krone