Telia AR

LEADING
THE WAY
IN A DIGITAL
WORLD
ANNUAL + SUSTAINABILITY
REPORT 2016
OUR COMPANY
CONTENTS Annual and Sustainability Report 2016
The audited annual The corporate gov- The sustain-
CONTENTS and consolidated

accounts comprise
pages 2250,
ernance statement
examined by the
auditors comprises
ability information
reviewed by the
auditors comprises
100205 and 214. pages 5170. pages 421, 7199
and 206213.
OUR COMPANY FINANCIAL STATEMENTS

Telia Company and 2016 in brief............................................. 4 Consolidated statements of comprehensive income ......... 100
Where we operate................................................................... 8 Consolidated statements of financial positions ................. 101
How we create value ............................................................ 10 Consolidated statements of cash flows ............................. 102
Comments by the Chair........................................................ 12 Consolidated statements of changes in equity .................. 103
Comments by the CEO ........................................................ 13 Notes to consolidated financial statements ....................... 104
Trends and strategy............................................................... 15 Parent company income statements ................................. 179
Parent company statements of comprehensive income .... 180
DIRECTORS REPORT Parent company balance sheets ........................................ 181
Board of Directors' Report ................................................... 22 Parent company cash flow statements .............................. 182
Risks and uncertainties ........................................................ 41 Parent company statements of changes in
shareholders' equity ........................................................... 183
Notes to parent company financial statements ................. 184
CORPORATE GOVERNANCE
Corporate Governance Statement ....................................... 51
Board of Directors ................................................................ 67
GRI INDEX
GRI index ............................................................................ 206
Group Executive Management ............................................. 69
SUSTAINABILITY WORK OTHER INFORMATION

Board of Directors and Presidents certification................. 214
Sustainability in Telia Company ............................................ 71
Auditors Report ................................................................. 215
Sustainability focus area summary ...................................... 74
Auditors Limited Assurance Report on the
New Code of responsible business conduct........................ 76
Sustainability Report........................................................... 220
Human rights impact assessments....................................... 77
United Nations Global Compact principles......................... 221
All In Shared value creation................................................ 79
UK Modern Slavery Act Statement.....................................222
Anti-bribery and corruption .................................................. 83
Five-year summary ............................................................. 223
Freedom of expression.......................................................... 86
Alternative performance measurements ............................ 225
Customer privacy.................................................................. 89
Definitions ........................................................................... 227
Occupational health and safety............................................. 91
Annual General Meeting 2017 ............................................ 229
Responsible procurement..................................................... 93
Contact Telia Company ...................................................... 230
Environmental responsibility ................................................. 96
Children online....................................................................... 98
Telia Company AB (publ)SE-169 94 SolnaSweden
Corporate Reg. No. 556103-4249Registered office: Stockholm
Telephone: +46 (0)8 504 550 00www.teliacompany.com
2
OUR COMPANY
Annual and Sustainability Report 2016 HIGHLIGHTS
4 10
TV AND
MEDIA
FIXED
VOICE AND FINANCING
DATA
SECURITY
INTERNET DEVICE
OF THINGS SALES
E-HEALTH
THIS IS US! CURIOUS ON HOW WE

CREATE VALUE?
13 8
COMMENTS BY THE CEO: THIS IS OUR
ON THE EVE OF THE GIGABIT FOOTPRINT
SOCIETY
20 71
THIS IS HOW WE
FULFILL OUR STRATEGY OUR APPROACH TO
SUSTAINABILITY
3
OUR COMPANY
TELIA COMPANY AND 2016 IN BRIEF Annual and Sustainability Report 2016
TELIA
COMPANY
AND 2016
IN BRIEF
Telia Company provides communication services helping millions of people to be

connected and communicate, do business and be entertained. By doing that we
fulfill our purpose to bring the world closer on the customers terms.
OUR BUSINESS PURPOSE

Telia Companys operations stretch around the globe.
We connect businesses, individuals, families and BRINGING THE WORLD
communities via fixed and mobile communication
solutions. Our services have a positive effect on CLOSER - ON THE
social-, economic- and environmental development
and pave the way for an inclusive society. CUSTOMERS TERMS
People can stay in touch even when the geographi-
cal distance is far. We work with an ecosystem of
new start-ups and major service providers. Together VALUES
we provide the infrastructure for creativity, growth
and change. DARE, CARE, SIMPLIFY
4
OUR COMPANY
Annual and Sustainability Report 2016 TELIA COMPANY AND 2016 IN BRIEF
AT YEAR-END
21,030 Employees
16.7 Million mobile

subscriptions
2.6 Million fixed voice

subscriptions
2.6 Million fixed broadband

subscription
1.7 Million TV
subscriptions
512,841 Shareholders
159 SEK billion

market cap
Year-end figures for number of employees and subscriptions refer to continuing operations,
i.e. the group excluding the former segment region Eurasia.
5
OUR COMPANY
2016 IN BRIEF Annual and Sustainability Report 2016
2016 IN BRIEF
FINANCIAL TARGETS AND OUTCOME 2016
EBITDA CAPEX DIVIDEND

Outlook: In line or slightly above the level Outlook: SEK 14-15 billion Outlook: Minimum 80% of free cash
in 2015 Outcome: SEK 15 billion flow, at least SEK 2 per share
Outcome: +2.6% Outcome: SEK 2 per share
From continuing operations excluding non- From continuing operations, excluding From continuing operations
recurring items, in local currencies, exclud- license and spectrum fees, in reported Proposed
ing acquisitions and disposals currency
CONTINUING OPERATIONS
84,178 25,836 30.7

(86,498) (25,281) (29.2)
EBITDA margin (%)
EBITDA excluding non- excluding non-
Net sales (SEK million) recurring items (SEK million) recurring items
CONTINUING AND DISCONTINUED OPERATIONS
0.86 2.00 7.7 1.69

(1.97) (3.00) (8.9) (1.53)
Net debt/EBITDA
Proposed dividend Return on capital employed excluding non-recurring items
Earnings per share (SEK) per share (SEK) (percent, rolling 12 months) (multiple, rolling 12 months)
NET SALES SPLIT
per region per service per segment
n Region Sweden, 44% n Mobile, 46% n B2B, 31%

n Region Europe, 49% n Fixed telephony, 6% n B2C, 53%
n Telia Carrier, 6% n Fixed broadband, 8% n Wholesale and Other, 16%
n Other, 1% n TV, 3%
n Business solutions, 6%
n Other, 9%
n Carrier, 7%
n Equipment, 15%
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OUR COMPANY
Annual and Sustainability Report 2016 2016 IN BRIEF
SIGNIFICANT EVENTS
TeliaSonera AB changed name to Telia Company AB
Telia Company divested its holdings in Ncell in Nepal to Axiata,
one of Asia's largest telecom groups and its holding in Spanish 85%
(70)
Yoigo to Masmovil, a Spanish telecom operator
The group released a new Code of Responsible In total we purchased 782
GWh renewable electricity
Business Conduct during the year, 85% of total
electricity consumption in
regions Sweden and Europe
Human rights impact assessments were conducted in regions
Eurasia and Sweden and in Lithuania
Telia Company signed agreements to divest its holding
in the operator Tcell in Tajikistan and its Nordic and Baltic
credit management services and debt purchase business
Sergel to Marginalen 169
An agreement was signed to acquire Phonero in Norway (140)
On-site supplier audits

Telia Company received a settlement proposal of USD 1.45 conducted
billion by the US and Dutch authorities related to the entry into

Uzbekistan in 2007
POTENTIAL OF INCREASED
DIGITALIZATION
100 BILLION 24,000 DEATHS
can be added to the Nordic and Baltic can be avoided annually through
economies in 2021 due to increased e-healthcare and connected smart
digitalization in society transportation on the roads
470,000 JOBS 20%

can be created in the Nordics and reduction of greenhouse gas emissions
Baltics due to enhanced use of digital if we can take 9 million cars off the roads
solutions among governments, busi- for a year
nesses and consumers
Source: "Accelerating Sustainable Growth" report, Deloitte and Telia Company, September 2016
http://www.teliacompany.com/en/about-the-company/publications/accelerating-sustainable-growth
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OUR COMPANY
WHERE WE OPERATE Annual and Sustainability Report 2016
WHERE WE OPERATE
Denmark Norway Sweden Finland

#3 22% #1 36% #2 32%
#3 8% #1 56% #2 24%
#5 5% #1 38% #2 30%
#4 1% #2 36% #3 17% #3 22%
Lithuania Latvia Estonia Moldova

#2 30% #1 44% #2 29%
#1 89% #1 83%
#1 47% #1 57%
#1 32% #1 43% #2 35%
Telia Company has its roots in Sweden and Finland. Nowadays we Telia Companys market
share estimate is based
stand firmly in all the Nordic and Baltic countries. During 2015, the on the number of
Board of Directors announced the decision to reduce our presence subscriptions.
in region Eurasia step by step, enabling us to fully focus on our core
markets. Our backbone fiber runs around the world and is the second Mobile
largest in the world and Cygate is a leading provider of integrated Fixed voice
Broadband
solutions to business customers in the Nordics.
TV
# Market position
% Market share
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OUR COMPANY
Annual and Sustainability Report 2016 WHERE WE OPERATE
Ownership Subsidiaries
Ownership1 Consolidated share 2
Country Trademark % %
Sweden Telia, Halebop 100 100
Finland Sonera, TeleFinland 100 100
Norway Telia, Chess, MyCall, OneCall 100 100
Denmark Telia, Call me, DLG Tele 100 100
Lithuania Telia, Ezys 88.2 88.2
1) Ownership is defined Latvia Telia, Lmt Okarte, Amigo 60.33 60.33
as direct and indirect
Estonia Telia, Diil 100 100
ownership, i.e. effective
ownership. Kazakhstan Kcell, Activ 61.9 61.9
2) Consolidated share Azerbaijan Azercell 38.1 69.5
includes commitments
to acquire shares from Uzbekistan Ucell 94.0 94.0
holders of non-controlling Tajikistan Tcell 60.0 60.0
interests.
Georgia Geocell 74.3 74.3
3) Telia Company directly
owns 49 percent of LMT Moldova Moldcell 74.3 74.3
and controls the com-
pany through shareholder
agreements. In addition, Ownership Associated companies
Telia Company indirectly
holds an 11.3 percent Ownership1 Consolidated share 2
share of the company. Country Trademark % %
Latvia Lattelecom 49.0 49.0
Russia MegaFon 25.2 26.2
Turkey Turkcell 38.0 38.2
Tajikistan Uzbekistan

#2 37% #2 42%
Georgia Azerbaijan Kazakhstan

#2 34% #1 47% #1 38%
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OUR COMPANY
HOW WE CREATE VALUE Annual and Sustainability Report 2016
HOW WE CREATE VALUE

Continuing operations
RESOURCES AND ASSETS WHAT WE PROVIDE
RESOURCES
SERVICES AND SUPPORT

People
Energy
Suppliers TELIA
COMPANY
Offices and stores
MOBILE
VOICE AND CLOUD
FINANCIAL ASSETS DATA
TV AND
Debt MEDIA
Equity
FIXED
VOICE AND FINANCING
DATA
SECURITY
INTANGIBLE ASSETS
INTERNET DEVICE
Telecom licenses OF THINGS SALES
and spectrum + =
Patents
E-HEALTH
Strategic partnerships
Brand trust
INFRASTRUCTURE ASSETS CONNECTIVITY
Fiber
MACHINE
Copper MOBILE TO
MACHINE
Mobile networks
Data centers
Global IP carrier
network IP
FIXED
CAPACITY
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OUR COMPANY
Annual and Sustainability Report 2016 HOW WE CREATE VALUE
WHAT WE CREATE CREATED STAKEHOLDER VALUE
CONSUMERS
84,178
Most satisfied Operator of the year
consumers in in Sweden2
Finland1
Net sales SEK million
#1 #1
3.76
Earnings per share, SEK
BUSINESS CUSTOMERS
16.7
Most satisfied Best network perfor-
business customers mance & customer
in Sweden3 service of global IP
Mobile subscriptions, million carriers4
#1
2.6
Fixed voice subscriptions,
EMPLOYEES
million
SEK billion salaries Purple Voice score (74)
2.6
Broadband subscriptions,
12.1 77%
million

1.7
INVESTORS
Total shareholder SEK billion dividend

TV subscriptions, million return paid
CO2 287,000 -6% 13.0

tons CO2e emissions
SUPPLIERS AND PARTNERS
>96%
4G population coverage
SEK billion CAPEX
excluding licenses
Supplier capacity
building through
15.0
in the Nordics training
1.5
million households in Sweden SOCIETY
reached with fiber
Enabling sustainable SEK billion tax paid
110
economic growth
countries in which Telia Carrier

connects their customers
Contributing to the
UN Sustainable
Development Goals 3.4
1) According to EPSI survey
2) Awarded at the Swedish Telecom Gala
3) According to Svenskt kvalitetsindex survey
4) According to Atlantic-ACM
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OUR COMPANY
CHAIR COMMENTS Annual and Sustainability Report 2016
COMMENTS BY THE CHAIR
EVERYONE TO BE INCLUDED IN
THE DIGITAL SOCIETY
For advanced connectivity, telecom companies with a long-term outlook are needed;
we build the infrastructure that our customers will use for a very long time. We are
ready to build the networks that allow the Nordic and Baltic regions to be frontrunners
in the next phase of digitalization.
Our network is our backbone and we want our customers

to be confident that they will always get the best connec-
tion from Telia Company.
In order to offer a competitive customer offering and pos-
itive long-term returns for shareholders, we have continued
the important and challenging change agenda during the
year. IT systems continue to become more efficient, the
product portfolio is simpler and the old copper technology
is being replaced with modern communication solutions.
Our continued path to modernization allows us to keep the
customer in focus, and allows tomorrow's products and
services to be at our customers fingertips sooner.
Connectivity and technology have a significant impact on
society and Telia Company has an important role to play. We
want to have an active role in society that marries together
good business and sustainable development and ensures
that everyone is included in the new digital world. The All-In
strategy is our way of making that a reality. Together with
the rest of our sustainability work, which is aligned with
the UN Sustainable Development Goals, Global Compact
principles and our compliance framework, we show our
ambition to be a successful and responsible company.
In our region digitalization is at the very forefront of eco-
nomic growth, societal development and long-term sustain-
ability. With our new focus on the Nordics and Baltics we
are at the right place to maintain our world leading position a lot about ourselves and about each other. We leave
in digital development. businesses with good potential to contribute to positive
After several years of hard work, we are beginning to development in their respective countries, both in terms of
reach a point where we can sum up the consequences of technical expertise and customer offerings, and that can
the wrongful conduct in Eurasia. The investigation conduct- also contribute to spreading ethical values and sustainable
ed by authorities in the Netherlands and the United States, practices.
this year resulted in a settlement proposal, which is now 2016 has been a busy year and on behalf of the Board I
being discussed between the parties. wish to extend a warm thanks to all our employees for their
In accordance with our strategy, we have now sold our outstanding efforts during the year. I also want to thank the
operations in Nepal and Spain and an agreement is signed shareholders for the trust to lead Telia Company.
to divest Tcell i Tajikistan. The remaining operations in
region Eurasia will be divested as soon as we can reach Stockholm, March 8, 2017
an agreement that meets our requirements. We are now
separated from businesses and employees that will always Marie Ehrling
be part of the company's history. Together we learned Chair of the Board
12
OUR COMPANY
Annual and Sustainability Report 2016 CEO COMMENTS
COMMENTS BY THE CEO
ON THE EVE OF
THE GIGABIT SOCIETY
Telia Company is a company with strong values and we want digitalization and our services
to be used to help overcome the challenges of our time. I am more convinced than ever that
a commitment to digitalization is the way to effectively underpin our customers changing
reality, our societies increasing awareness and to create value for our shareholders.
Our customers will be the pioneer users of the new

generation mobile technology, 5G; Stockholm, Tallinn and
Helsinki will be first out and we thus enable our home
markets to be the worlds testing ground for connected
cars, medical care and other services that we today can
barely imagine. Our ambition is that the Nordic and Baltic
countries will take the first steps into the Gigabit society
and that Telia Company leads the way.
TO BE SOMETHING MORE
Digitalization is not an event but a series of components
that together create a pattern. Our customers are the
drivers of ingenuity and change and in the same way, Telia
Company is changing. There are days when I think that the
pace of change is too slow, and then it is good to stop and
look back. In this perspective, it becomes clear that we
really have changed since we embarked on the path that is
gradually bringing us closer to being the New Generation
Telco. This does not mean that we want to be anything dif-
ferent but that we want to be something more.
We have now reached the stage in our development
where we have been able to manifest the change with a
new name and updated visual style. In more and more
countries Telia signs are put up with the aim of creating a
cohesive and strong brand in all our core markets. Norway to choose our connections. We adapt continuously to our
was the success case earlier in 2016 as they rebranded customers changing habits in order to meet their present
to Telia from Netcom. Our mobile and fixed operations in and future needs. In line with this ambition we offer free
Lithuania which have merged, now also meet the custom- roaming in the Nordic and Baltic countries as part of our
ers as Telia. core mobile bundles, and in some countries, we are offer-
ing the ability for our customers to use their favorite social
media services without worry and without limits. Across
LEADING ON THE CUSTOMERS the group, we now extend our hands to small and large
companies for more and deeper cooperation. This is
TERMS driven from our new Division X, where we are taking
We are broadening our offerings step by step and invite advantage of the entrepreneurial spirit and passion for
consumers, as well as small and large companies to discovery in the company, and where we aim to find new
cooperate with us. Our TV service is growing steadily and solutions and business opportunities at the edge of the
is now one of the most attractive reasons for customers core business.
13
OUR COMPANY
CEO COMMENTS Annual and Sustainability Report 2016
DEVELOPMENT STEMS the credit management services and debt purchase bus-
ness Sergel. We see it highly probable that the remaining
FROM COOPERATION assets in Eurasia will be disposed during 2017. As for
The power of Nordic-Baltic digitalization is huge. It is done acquisitions, we signed an agreement to buy Phonero in
in collaboration between the public and private sectors Norway. Closing of the transaction has unfortunately been
with the goal that development should benefit everyone. disrupted as Norwegian competition authorities recently
We will continue to do our job and enable this kind of de- announced that they at this stage would not approve the
velopment and hope we can continue to make a positive transaction. Next step is to present additional arguments
contribution to our customers and society. for approving the transaction to them which they will reply
to and base their final decision on no later than April 10.
In December 2016, we announced a new organizational
SUSTAINABLE BUSINESS structure with more country exposure to enhance our
business and enable us to ramp up execution across our
AND COMMITMENTS markets even further.
In order to be a responsible company we work hard on I am very pleased that we were able to fulfill our financial
sustainability, which is aligned with the UN SDGs, Global targets to uphold or improve our EBTIDA versus 2015 and
Compact principles and our compliance framework. One that the board proposes an ordinary dividend of SEK 2 per
initiative during the year was that we decided to be com- share to be distributed to our shareholders.
mitted to Childrens rights. We recognize our obligation
to empower and protect children according to childrens
rights, as they are set forth in the UN Global Compact CAPTURE OPPORTUNITIES
Childrens Rights and Business Principles, by advanc-
ing our processes and educating our employees to be TO CREATE VALUE
able to respect and support childrens rights in our daily Change is hard and takes time. We are on a historic
operations. change mission in times of massive transformation around
us. We are not happy with a slightly negative total share-
holder return for our over 500,000 shareholders in 2016.
2016 A CHALLENGING But to stop changing is not an option. It gives us even
more energy and determination to speed up execution on
AND INTERESTING YEAR our great journey. Persistency is a virtue and I strongly be-
When I look back on 2016 it was a challenging and inter- lieve in our simple formula that engaged employees create
esting year. We continued to work in our strategic direc- loyal and happy customers that will enable growth and will
tion by investing in infrastructure to secure future demand also make our stakeholders, notably shareholders, happy.
and to deliver a superior customer experience. We are That is why we are here our purpose is clear bringing
also executing on our reshaping of the company from 17 the world closer on the customers terms.
countries to focus on the Nordic and Baltic countries. We
have divested Ncell in Nepal and Yoigo in Spain, signed an More humble than ever more determined than ever
agreement to divest Tcell in Tajikistan as well as divesting thank you for your support.
Stockholm, March 8, 2017
Johan Dennelind
President and CEO
14
OUR COMPANY
Annual and Sustainability Report 2016 TRENDS AND STRATEGY
TRENDS AND STRATEGY

Three major inputs are the cornerstones for how we develop
and formulate the strategy, namely megatrends, stakeholders
opinions and our capabilities and resources.
Exploding number of
connected devices
Our society is changing

more rapidly through
digitalization. Three
megatrends are driving
the telecom business.
MEGATRENDS
Our society is changing more rapidly through digitalization.
This might be a shift as big as the industrial revolution. The
shift is enabled by the radically reduced cost for storage
and computing, exponentially increasing number of con-
nected devices combined with advanced analytics and
artificial intelligence. This is what we believe will lead to the
tipping point. As other technologies are becoming gener-
ally available the digitalization will take further steps. The
sweet spot will be the intersection of these trends.
At the same time, we have a number of trends that
are the legacy of how we implemented industrialization.
Climate change, increased inequality and rapid urbaniza-
tion. This requires societal attention and drives the need
for a sustainable approach to all that we do. As we also
live longer than ever, medical advances give cure, and
relief from more and more deceases we will have a
pressure on our social security systems but also a risk
of a health inequality that might further challenge our
social structure.
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OUR COMPANY
TRENDS AND STRATEGY Annual and Sustainability Report 2016
KEY TRENDS AFFECTING TELIA COMPANY
1
Exponential technology
2Digitalization
3
Urbanization
4
Aging population
development everywhere
An exponential techno- Digitalization that will As more and more people The aging population will
logical development that affect every company, move to fewer cities, the drive increased health-
will be the facilitator for individual and soci- pressure on infrastruc- care need but also create
new advances and create ety and drive changes ture and sustainability a target market with
new ways for sharing in most, if not all, areas. will be enormous. The active and affluent elderly
and learning from new This starts from always concentration of people who will look for an abil-
advances and thereby being connected through will also make food, water ity for self-actualization
utilizing and also com- ubiquitous connectivity, and energy supply even and quality of life. Here
mercializing innovation personalized entertain- more sensitive. Managing the digitalization of the
advances even faster. ment, companies logistics, utilization and healthcare will be the key
changing from physical to distribution will require enabler for a sustainable
digital to everything being a level of resilience and healthcare system driving
connected. continuity that only can predictive healthcare and
be done through insight, home care.
prediction and active
response.
not. This requires services and service providers to adapt

IMPACT OF THE TRENDS to the preferences of each individual.
On society For the business customers the need for a digitalization
Our societies in the Nordic and Baltic regions will change partner is the key driving force. Many if not all companies,
more rapidly than other regions due to strong infrastruc- are facing the challenge to adapt their business to the
ture, tech savvy population and a leading digitalized posi- demands of the digitalized world. Every product or service
tion. As many jobs will disappear and be replaced by new, must gather information to further refine and develop
the need for re-training and innovation will be required the product. This will drive companies to connect their
over the coming years. To deal with the root cause of the products to the internet. The pay-per-use model is likely to
environmental change the use of renewable energy and grow as more and more products are turned into ser-
energy efficiency will be at the top of the agenda. The vices. In this world of rapidly evolving technologies, most
digital divide must be closed to secure that the digitaliza- companies want to buy services to enable digitalization.
tion gives opportunities for many people to be active in the The areas of value creation will stay in the company but
change and create new companies, services, experiences the enablers and supporting services are more likely to be
and possibilities. bought from someone else as a service.
On our customers On Telia Company

For the consumer customers there will be a need for Firstly, the need of connectivity will continue to grow ex-
affordable connectivity, services that make everyday life ponentially. The data growth will require both build-out of
easier and entertainment services that offer adaptation to new technologies and continuously expansion of capacity.
every customers preferences. The need for services that Customers are being more and more technology agnostic,
create new possibilities for personal development and take and take connectivity for granted. This will require that any
away time waste will grow rapidly over the coming years. operator remains relevant to the customers and provides
At the same time, the need for security and privacy will in- a competitive advantage versus competitors. It will also
crease. Some customers care about privacy and some do require a clear choice of competitive position.
16
OUR COMPANY
STAKEHOLDER ENGAGEMENT
Engaging with key stakeholders that directly or indirectly impact or are impacted by
our business is imperative for insight in how to best navigate our business long-term.
CONSUMERS BUSINESS CUSTOMERS EMPLOYEES
How we engage How we engage How we engage

Stores and other sales channels (O) Stores and other sales channels (O) Purple Voice employee survey (A)
Customer service (O) Account manager dialogue (M) You First employee/manager approach (O)
Social media (O) Seminars and events (M) Local and corporate intranets (O)
Local websites and newsletter (O) Net Promoter Score (NPS) surveys (O) Employer/worker cooperation (O)
Net Promoter Score (NPS) surveys (O) Local websites (O)
Social media (O) Key topics
Key topics Using You First to build a feedback culture
Network quality and coverage Key topics Equal focus on how and what in how
Value for money pricing and data Network quality and coverage we work
Reachability and easy to deal with End-to-end solutions and support that meet Strengthening customer focus and cross-
Keeping our promise and support on our customers ICT needs a one-stop shop functional collaboration
service and delivery Single point of contact experience Connecting personal goals with the big
Privacy and security of personal data Improving efficiency, productivity and qual- picture
Ensuring high speed access in rural areas ity of life using digital tools Create engagement around the Code of
Acting socially responsible Telia Company as an ethical business Responsible Business Conduct
partner Managing psycho-social well-being
Our response Privacy and data security
Continued high speed access roll-out Our response
Ensuring a responsible technology transi- Our response Action plans for cross-functional collaboration
tion in rural areas through mobile access Continued high speed access roll-out Activities to increase customer insight
and fiber Transformation programs to secure single for non-customer facing teams, and to
Simplifying offerings and revising price plans point of contact experience in endto-end strengthen customer focus in customer
Value added services and bundling such as TV solutions and deliveries facing teams
and media, family plans and roam like home Launched personal advisor and personal Local roll-out of and engagement around
Increased focus on customer experience technician concept in Sweden the new Code
and centricity White papers and seminars in the area of Continued roll-out of You First
Follow-up to identify and correct where we digitalization towards enterprise customers
fail the customer promise Work towards becoming as a service
Evaluating how customers can get bet- provider
ter understanding and control over their Developing our offerings around data
personal data security
INVESTORS SUPPLIERS SOCIETY
How we engage How we engage How we engage

Annual General Meeting (A) Contract engagements (O) ICT sector organizations (O)
Quarterly report press and analyst Strategic vendor meetings (O) Seminars and conferences (O)
conferences (M) Supplier due diligence and audits (O) Public presentations and town hall meet-
Investor meetings (M) ings (O)
Key topics Bilateral meetings with policy makers (O)
Key topics Supplier code of conduct understanding
Financial performance, cash flow genera- and adherence Key topics
tion and leverage Supplier base reduction to reduce cost and Digitalizations impacts on societal develop-
CAPEX levels going forward administration ment
New revenue streams and growth possibili- Developing strategic partnerships with Building future networks and gigabit socie-
ties in core markets fewer suppliers ties
Market consolidation Improve common ways of working in Human rights and business ethics
Region Eurasia divestment timeline procurement throughout the group Contributing to the UN Sustainable
Settlement proposal from US and Dutch Development Goals
authorities Our response Contributing to a safe, friendly online
Further development and implementa- environment
Our response tion of common procurement process and Regulatory changes and spectrum allocation
Divested Ncell in Nepal and Yoigo in Spain documents
Signed agreements to divest Tcell in New due diligence platform for sustainabil- Our response
Tajikistan and Sergel in Sweden ity requirements Accelerating sustainable growth report
Strengthen offering and market position in 169 on-site supplier sustainability audits and Telia Talks on the impacts of digitalization
Norway by signing an agreement to acquire New structure and roles in procurement, Reporting on government requests, local
Phonero including supplier relationship managers legislation and law enforcement statistics
Capital markets day focusing on region Public engagement on business ethics
Sweden and our contribution to the UN Sustainable
Development Goals
Campaigns such as #hatahat in Sweden
Frequency and Tal ordentligt in Denmark for a friendlier
(A) = Annual online experience
(M) = Multiple Blocking and collaboration around fighting
child sexual abuse material online
(O) = Ongoing
Engagement on national and EU level
regarding legislative predictability
17
OUR COMPANY
STRATEGY
CAPABILITIES Our strategy is in the third year of execution. It is based on
continuous development of our core business combined
AND RESOURCES
with focused bets in areas that are strengthening the core
but also build new businesses in growing areas.
The key assets that Telia Company has is the Enhance the core
customer base, trust from customers and an The foundation is superior network connectivity. This means
excellent network infrastructure. We are good at that we secure a network that can transport massive data
delivering volume-based services efficiently and volumes with high quality and our investments are steered
creating B2B solutions including management. towards modern technologies such as fiber and 4G. We are
We have operations in low-cost countries and also developing 5G together with our industry partners and
leading competence in networks and operations. have started to virtualize our network and drive the software
defined networks. As voice is declining we monetize data to
compensate for that.
However, a quality network must be combined with an
excellent customer experience and customer loyalty. This
means that we need to offer customers a seamless experi-
ence independent of which networks they are moving be-
tween. As the mobile and the fixed networks are converg-
ing, we can optimize the transportation of data to secure
both the experience and the production of data. However,
to further build the experience we must deliver solutions
and functionality in order to sell things as a service. This
means that we are focusing on the IT and telecom conver-
ENHANCE THE CORE

STRATEGY STRATEGIC PRIORITIES
Value through superior Customer loyalty Competitive operations

network connectivity through convergence
Develop the core

business in the #1
Nordics and Baltics
Secure the transition from Create a seamless experience Simplify operations and
voice to data through future across technologies, services transform legacy to create
proof network access to and channels agility and cost efficiency
end customers
EXPLORE OPPORTUNITIES CLOSE TO THE CORE

STRATEGY STRATEGIC PRIORITIES
IoT eHealth Security Media

Investments in areas
that complement and/
or strengthen the core
business
18
OUR COMPANY
gence for the B2B customers. As IT moves to cloud and In the networks area we optimize build-out through
several customers are using the same production environ- analytics and by closing down legacy networks.
ment, the IT business is moving towards the telco logic
and thereby gives us an opportunity to capture a larger Explore opportunities close to the core
part of the customers' telco and IT spend. In order to further grow our business and create customer
In the B2C market we are focusing on delivering a con- relevance we have chosen four focus areas in adjacencies:
verged customer experience. This means that we secure
that the customer can interact with us and our services IoT Internet of things. Which is connected devices
seamless between channels, devices, networks and ser- combined with analytics and rule engines. This is offered
vices with a unified and constant experience. By giving the as connectivity, enabling platforms, vertical solutions
customer the best experience, we also build loyalty and of eco-system services. IoT is another example of the
preference towards our services. convergence between IT and telecom.
In order to secure competitive operations we are re- eHealth In this area we are offering connected medi-
building our factory. This is what we call transformed op- cal devices, home care solutions and special services
erations. We start by simplifying our product portfolio and targeting the treatment of specific diseases. We are also
secure attractive business rules. After that, we build new working with hospitals and clinics on digitalized journals
IT systems that are agile and flexible to secure a competi- and decision support systems.
tive cost level. By using a modern operational transforma- Security In this area we secure customers networks
tion architecture with application program interfaces we from intrusion and cyber-attacks. We also offer solutions
can secure adaptability also for future needs. Driving this to secure identity and the integrity of customer solutions.
through an online first mentality, we can also simplify and Media We are today a leading TV provider in the
make our distribution more customer-friendly. Nordics and Baltics. We are now moving our services
We are also managing things cross border to secure to on-demand and OTT to secure a leading position in
that we take out scale synergies in the areas where we media services targeting the new consumption behavior.
can. One of the key areas is sourcing where we reduce We seek the richest content offering and best user expe-
cost through scale sourcing and demand driven from rience combining multiple content sources.
group-level.
19
OUR COMPANY
DELIVERING ON STRATEGY -
SOME EXAMPLES
In Denmark we launched two new value adding

In Lithuania Telia was the first operator to services Flipp which provides access to a large
launch the voice transmission technology number of digital magazines and Zetland which is
VoLTE (Voice over LTE) in its 4G net- a digital newspaper.
work. This ensures a high data transfer
rate even when simultaneously making
or receiving a call. It also improves call
quality and speeds up the call connection
process.
FLIPP
In Sweden we carried out a 5G field test dur-
ing the year an outdoor test on the first 5G
trial system in Europe over a live network and
included tests on speed and latency.
During the year we were awarded the best

networks in Sweden, Finland, Norway,
Lithuania and Estonia. 5G
20
OUR COMPANY
TELIA APP MARKET

A host for enterprise cloud
services is available in Sweden,
Finland, Lithuania and since
October 2016, also in Norway.
At Telia App Market we have gathered all the best In Sweden Telia was the first operator in the world to
business applications to provide any organization introduce a cloud based solution for the connected car -
with Software-as-a-Service (SaaS) through cloud Telia Sense. By using an app together with a piece of car
computing to make it more efficient. App market hardware, owners of somewhat older cars get access to
hosts a range of services for enterprise custom- smart services and features that up until now were only
ers, including Microsoft Onedrive & Office 365, accessible in high-end cars. Telia Sense comes with car
F-secure and Spotify Business. The demand for control features, 4G wifi connectivity and partner services
cloud services and popular business applications such as car inspection and maintenance, road assistance
is growing. and insurance.
OSLO In Norway we launched Smart Farming - a ground

breaking service based on Narrow Band-IoT which
provides farmers with a smart system for monitoring
irrigation systems. The Smart Farming service is the
We launched an IoT sustainability partnership with first service based on the new technology narrow-
Urban Infrastructure Partner in Norway where we band IoT, that enables excellent coverage indoors,
will measure air pollution in Oslo with sensors and outdoors and in the ground. It is ideal for things that
provide information for the inhabitants. run on battery or only send data irregularly.
21
DIRECTORS REPORT
BOARD OF DIRECTORS REPORT Annual and Sustainability Report 2016
BOARD OF DIRECTORS REPORT
Telia Company reports its financial results by the two In this Report, prior period has been restated to
operating segments region Sweden and region Europe. reflect certain classification errors between net sales
The regions are country-based organizations, and for and cost of sales referring to insurance sales in region
which certain financial information is reported. Collec- Europe. For additional information on restatements,
tively reported as Other operations are the international see Note C1.
carrier operations, customer financing and dunning Former segment region Eurasia is classified as held
operations, Telia Company Holding, Telia Companys for sale and discontinued operations since December
shareholdings in Russian MegaFon (25 percent) and 31, 2015. The Sergel companies (Sergel) are included in
Turkish Turkcell (38 percent) as well as Group functions. continuing operations but classified as assets held for
Group functions include Communications, Corporate sale since June 30, 2016. For information on assets held
Development (including M&A), Finance (including Pro- for sale and discontinued operations, see Note C34.
curement and Real Estate), Human Resources, Legal In this Report, comparative figures are provided in
Affairs, Global Services and Operations, CEO Office, parentheses following the operational and financial re-
Ethics and Compliance Office and Internal Audit. sults and refer to the same item in the full year of 2015,
The organizational structure changed on unless otherwise stated.
January1, 2017. For more information, see
www.teliacompany.com.
GROUP DEVELOPMENT IN 2016

Financial highlights EBITDA, excluding non-recurring items, increased 2.6
Net sales in local currencies, excluding acquisitions and percent in local currencies, excluding acquisitions and
disposals, declined 0.8 percent. In reported currency, net disposals. In reported currency, EBITDA, excluding non-
sales declined 2.7 percent to SEK 84,178 million (86,498). recurring items, increased 2.2 percent to SEK 25,836 mil-
Service revenues in local currencies, excluding acquisi- lion (25,281). The EBITDA margin, excluding non-recurring
tions and disposals, declined 0.4 percent. items, increased to 30.7 percent (29.2).
Financial highlights
SEK in millions, except key ratios, per share data and changes 2016 2015 Change (%)
Net sales 84,178 86,498 -2.7
Change (%) local organic -0.8
of which service revenues (external) 1 71,516 72,907 -1.9
change (%) local organic -0.4
EBITDA1 excluding non-recurring items 2 25,836 25,281 2.2
Change (%) local organic 2.6
Margin (%) 30.7 29.2
Operating income excluding non-recurring items 2 17,123 17,814 -3.9
Operating income 21,090 14,606 44.4
Income after financial items 19,249 11,689 64.7
Net income, continuing operations 16,433 9,532 72.4
Net income, discontinued operations -9,937 673
Total net income 6,496 10,205 -36.3
of which attributable to owners of the parent company 3,732 8,551 -56.4
Earnings per share, total (SEK) 0.86 1.97 -56.4
Earnings per share, continuing operations (SEK) 3.76 2.16 74.1
Total free cash flow 7,267 16,550 -56.1
of which from continuing operations 7,152 12,520 -42.9
CAPEX excluding license and spectrum fees 15,016 14,289 5.1
1) See Definitions
2) See section Non-recurring items for details
22
DIRECTORS REPORT
Annual and Sustainability Report 2016 BOARD OF DIRECTORS REPORT
Operating income, excluding non-recurring items, de- On April 12, 2016, Telia Company announced that the
creased 3.9 percent to SEK 17,123 million (17,814). ordinary members of the Board Marie Ehrling, Olli-Pekka
Total net income attributable to owners of the parent Kallasvuo, Mikko Kosonen, Nina Linander and Martin Lor-
company dropped to SEK 3,732 million (8,551) and earn- entzon were re-elected. Susanna Campbell, Anna Settman
ings per share to SEK 0.86 (1.97), mainly due to provision and Olaf Swantee were elected new members to the
for settlement amount proposed by the US and Dutch Board. Marie Ehrling was elected Chair of the Board and
authorities. Olli-Pekka Kallasvuo was elected Vice-Chair of the Board.
The Annual General Meeting also decided upon a
Significant events in 2016 dividend to shareholders of SEK 3.00 per share and that
Operations the payment should be distributed in two equal tranch-
For further information on acquired and disposed subsidies of SEK 1.50 each to be paid in April and October,
aries, see section Acquisitions and Disposals. respectively.
On March 18, 2016, Telia Company announced and On December 14, 2016, Telia Company announced
confirmed that it was in exclusive discussions with Zegona organizational changes in Group Executive Manage-
Communications regarding a potential divestment of Yoigo ment as of January 1, 2017. For more information, see
in Spain. www.teliacompany.com.
On April 11, 2016, Telia Company announced that it
had initiated a strategic review of its Nordic and Baltic Funding
credit management services and debt purchase business, On October 3, 2016, Telia Company announced that it had
Sergel. signed a new dual tranche EUR 1,500 million Revolving
On April 13, 2016, the Swedish Companies Registration Credit Facility with a group of thirteen relationship banks.
Office approved the name change of the company from
TeliaSonera AB to Telia Company AB. Treasury shares
On June 21, 2016, Sonera, Telia Companys Finnish op- As of December 31, 2015, 4,588 Telia Company shares
eration, announced its interest in acquiring Anvia Telecom, were held by the company itself and the total numbers
a Finnish wireline operator. On June 29, 2016, Anvia Group of issued and outstanding shares were 4,330,084,781
announced that it intended to sell its telecoms business to and 4,330,080,193, respectively. On April 29, 2016, Telia
Finnish Elisa. Company AB acquired additional 118,398 own shares at
On June 21, 2016, Telia Company hosted its 2016 Capi- an average price of SEK 38.6519 to cover commitments
tal Market Day. Presentations included updates on group under the Long term Incentive Program 2013/2016. Dur-
strategy and the financials together with a special section ing the second quarter of 2016, Telia Company distributed
on the Swedish operations. The full year 2016 outlook was 122,986 shares to the incentive program participants. As
reiterated. of December 31, 2016, no Telia Company shares were
On September 15, 2016, Telia Company announced that held by the company itself or by its subsidiaries. The
it had received a settlement proposal of USD 1.45 billion total numbers of issued and outstanding shares were
from the US and Dutch authorities. 4,330,084,781.
On October 21, 2016, Telia Company announced that
it will explore together with Turkcell a joint divestment of Net sales
Fintur Holdings. This will most likely happen in 2017. In continuing operations, net sales decreased 2.7 per-
cent to SEK 84,178 million (86,498). Net sales in local
Associated companies currencies and excluding acquisitions and disposals,
On March 29, 2016, Telia Company announced that no decreased 0.8 percent. The positive effect from exchange
decision was made on dividend at Turkcells Ordinary rate fluctuations was 0.1 percent and the negative effect
General Assembly. No material changes took place in the of acquisitions and disposals was 2.0 percent. Service
corporate governance of Turkcell during the year, regard- revenues in local currencies, excluding acquisitions and
ing the continued deadlock between the shareholders disposals, decreased 0.4 percent as growth in mobile ser-
ukurova, LetterOne and Telia Company. Telia Company is vice revenues in most of our markets and fiber installation
actively trying to contribute to the resolution of the dead- revenues in Sweden was not enough to mitigate pressure
lock through continued contacts with both ukurova and on traditional fixed telephony revenues and the decline of
LetterOne. The Turkcell Board of Directors consisted of low margin voice revenues in Telia Carrier. Also contribut-
seven independent members, all appointed by the Turkish ing to the decline in service revenues was lower intercon-
Capital Markets Board (CMB). For information regarding nect revenues in Finland and Norway, driven by changes
certain disputes related to shares in Turkcell Holding, see in termination rates. Excluding decline in Telia Carrier and
Note C29 to the consolidated financial statements. lower revenues from interconnect, service revenues in
local currencies and excluding acquisitions and disposals,
Board of Directors and Group Executive Management would have increased by 0.3 percent.
On January 12, 2016, Telia Company announced that it
had appointed Anders Olsson Chief Operating Officer and
Head of Global Services & Operations and member of the
Group Executive Management team.
23
DIRECTORS REPORT
Change (%), of which

Change
Net sales (SEK Change Local M&A FX
SEK in millions 2016 2015 million) (%), total organic effects effects
Region Sweden 37,251 37,336 -85 -0.2 -0.3 0.1 0.0
Region Europe 41,746 43,658 -1,913 -4.4 -0.4 -4.2 0.3
Other operations 7,468 7,753 -285 -3.7 -3.0 0.0 -0.7
Elimination of internal sales -2,287 -2,249 -38 1.7 n/a n/a n/a
Total, continuing operations 84,178 86,498 -2,320 -2.7 -0.8 -2.0 0.1
1) In local currencies and excluding acquisitions and disposals (M&A effects)
2) Effects of exchange rate fluctuations
Operating expenses Change

SEK in millions 2016 2015 (SEK million) Change (%)
COGS -33,578 -35,931 2,353 -6.5
of which goods and sub-contracting services purchased -17,441 -18,176 735 -4.0
of which interconnect and roaming expenses -7,971 -9,042 1,071 -11.8
of which other network expenses -4,695 -4,949 254 -5.1
of which change in inventories -3,470 -3,763 293 -7.8
Personnel expenses -12,105 -12,171 66 -0.5
Marketing expenses -4,319 -4,847 528 -10.9
Other expenses -8,456 -9,124 668 -7.3
Subtotal -58,458 -62,073 3,615 -5.8
Amortization, depreciation and impairment losses, total -11,534 -12,780 1,246 -9.7
Other operating income and expenses, net 4,093 -433 4,526
Total, continuing operations -65,899 -75,286 9,388 -12.5
1) Excluding amortization, depreciation and impairment losses
Subscription growth Cost of goods and services sold (COGS) was SEK
The total number of subscriptions in continuing operations 33,578 million (35,931) or equal to a 6.5 percent decrease
declined by 3.6 million to 23.5 million, of which mobile compared to 2015. Around half of the decrease is due to
subscriptions declined by 3.3 million to 16.7 million. The the divestment of Yoigo in Spain and half of the decrease
decrease refers mainly to the disposal of Yoigo in Spain is mainly due to lower handset sales in Finland, as well as
(3.253 million). Fixed telephony subscriptions decreased lower interconnect costs in Finland and Norway.
by 0.3 million, while TV increased by 0.1 million and the Personnel expenses, in local currencies and excluding
number of broadband subscriptions was flat. acquisitions and disposals, decreased 0.9 percent com-
pared to 2015, driven by region Sweden, partly offset by
SUBSCRIPTIONS (MILLIONS) AND CHANGE YEAR-ON-YEAR (%), an increase in region Europe. In region Sweden, the lower
personnel expenses were primarily due to lower pension
Millions costs. In region Europe, Finland was the main driver of
30 increased personnel expenses due to salary inflation and
25
higher costs for variable pay.
Marketing expenses, in local currencies and excluding
20 3.0% -13.2% acquisitions and disposals, decreased 4.9 percent, mainly
15 due to lower marketing spend in Norway. As for the other
cost items, figures in reported SEK are impacted by the
10 divestment of Yoigo in Spain.
5 Amortization, depreciation and impairment losses de-
creased 9.7 percent to SEK 11,534 million (12,780), mainly
0 2015 2016
explained by impairment losses related to Denmark in
2015, and the divestment of Yoigo in Spain from the fourth
Operating expenses quarter of 2016. Amortization and depreciation excluding
Expense items affecting operating income in continuing non-recurring items increased 6.0 percent to SEK 11,534
operations were as follows. million (10,880). In local currencies and excluding acquisi-
tions and disposals, the increase was 6.5 percent.
24
DIRECTORS REPORT
Non-recurring items
SEK in millions 2016 2015
Within EBITDA 3,977 -1,289
Restructuring charges, synergy implementation costs, etc.:
Region Sweden -362 -495
Region Europe -189 -615
Other operations -134 -194
Capital gains/losses 4,662 14
Within Amortization, depreciation and impairment losses -1,900
Impairment losses, accelerated depreciation:
Region Sweden
Region Europe -1,900
Other operations
Within Income from associated companies and joint ventures -10 -19
Capital gains/losses -10 -19
Total, continuing operations 3,967 -3,208
EBITDA excluding non-recurring items Change

Region Sweden 14,455 14,267 189 1.3
Region Europe 11,036 10,584 452 4.3
Other operations 345 430 -85 -19.8
Eliminations 0 0 0
Total, continuing operations 25,836 25,281 555 2.2
Operating income excluding non-recurring items Change

Region Sweden 9,569 9,797 -228 -2.3
Region Europe 5,219 4,875 344 7.0
Other operations 2,335 3,141 -806 -25.7
Eliminations 0 0 0
Total, continuing operations 17,123 17,814 -691 -3.9
Other operating income and expenses, net excluding due to growth in fixed broadband, tv and fiber installation
amortization, depreciation and impairment losses, was revenues and lower costs which compensated for lower
SEK 4,093 million (-433) impacted by a capital gain from traditional fixed revenues. The increase in EBITDA exclud-
the divestment of Yoigo in Spain. ing non-recurring items, in region Europe was mainly
attributable to Finland and Norway, driven by growth in
Non-recurring items mobile service revenues. Other operations contributed
Non-recurring items affecting operating income in continu- negatively, primarily due to higher pension and variable
ing operations totaled SEK 3,967 million (-3,208) and were pay expenses as well as costs related to Division X. The
mainly related to a capital gain from the divestment of EBTIDA margin, excluding non-recurring items, increased
Yoigo in Spain and restructuring charges in connection to to 30.7 percent (29.2).
cost reduction initiatives. In continuing operations, operating income, excluding
non-recurring items, decreased 3.9 percent to SEK 17,123
Earnings million (17,814), mainly due to lower income from associ-
In continuing operations, EBITDA, excluding non-recur- ated companies and higher depreciation and amortization
ring items, increased 2.2 percent to SEK 25,836 million which more than offset the EBITDA increase. The lower
(25,281). In local currencies and excluding acquisitions income from associated companies was mainly explained
and disposals, EBITDA, excluding non-recurring items, in- by negative foreign exchange rate effects. The operating
creased 2.6 percent with positive development in both re- margin, excluding income from associated companies and
gion Sweden and Europe, respectively. EBITDA excluding non-recurring items affecting operating income, was 17.0
non-recurring items, in region Sweden increased primarily percent (16.7).
25
DIRECTORS REPORT
Financial net, taxes and net income

Discontinued operations
Financial net improved to SEK -1,841 million (-2,917),
SEK in millions, except Change
primarily impacted by foreign exchange rate effects, lower
margins and changes 2016 2015 (%)
interest costs and changes in the interest component of
the defined benefit pension plan. Net sales (external) 13,653 20,742 -34.2
Income taxes increased to SEK -2,816 million (-2,157). EBITDA excluding
The effective tax rate was 14.6 percent (18.5), mainly non-recurring items 5,880 11,035 -46.7
related to non-taxable capital gain on the sale of Yoigo in Margin (%) 43.1 53.2
Spain. CAPEX 5,813 4,195 38.6
Net income from continuing operations increased to SEK CAPEX excluding license
16,433 million (9,532) and net income from discontinued and spectrum fees 2,432 3,784 -35.7
operations decreased to SEK -9,937 million (673). Total net
income decreased to SEK 6,496 million (10,205) of which
SEK 3,732 million is attributable to the owners of the par- Net sales decreased 34.2 percent in reported currency to
ent company. Earnings per share attributable to owners SEK 13,653 million (20,742), mainly due to the divestment
of the parent company increased to SEK 3.76 (2.16) for of Ncell in Nepal and foreign exchange rate fluctuations in
continuing operations. most markets.
EBITDA, excluding non-recurring items, decreased
CAPEX to SEK 5,880 million (11,035), and the EBITDA margin,
In continuing operations, capital expenditures (CAPEX) excluding non-recurring items, declined to 43.1 percent
increased to SEK 15,625 million (14,595) and the CAPEX- (53.2).
to-service revenues ratio to 21.8 percent (20.0). Main Non-recurring items within EBITDA was SEK -11,952 mil-
CAPEX components were fiber investments in Sweden lion (-474) impacted by a provision for settlement amount
(SEK 3.2 billion), continued roll-out of 4G in region Europe proposed by the US and Dutch authorities (see Note C34
as well as IT investments focusing on improved business for further information).
support. Further, telecom licenses and spectrum permits Net income was SEK -9,937 million (673), impacted by a
were acquired in Finland, Norway, Denmark and Lithuania. provision for settlement amount proposed by the US and
CAPEX, excluding license and spectrum fees, amounted Dutch authorities. See Note C34 for further information.
to SEK 15,016 million (14,289) and the CAPEX-to-service CAPEX increased to SEK 5,813 million (4,195) and
revenues ratio was 21.0 percent (19.6). CAPEX, excluding license and spectrum fees, decreased
to SEK 2,432 million (3,784).
CAPEX AND CAPEX-TO-SERVICE REVENUES,
Human resources
CAPEX CAPEX-to-service During 2016, the number of employees in continuing
(SEK billion) revenues (%)
operations decreased by 312 to 21,030 at year-end, from
20 25
21,342 at year-end 2015. The number of employees in
16 20 discontinued operations decreased by 566 to 4,987 from
5,553 at year-end 2015.
12 15
EMPLOYEES, TOTAL (THOUSANDS)
8 10
Headcount at year-end FTEs (average)
4 5
35
0 2015 2016 0 30
25
Discontinued operations 20
Former segment region Eurasia, is classified as discontin- 15
ued operations since December 31, 2015. Consequently, 10
information on region Eurasia is presented on an aggre-
5
gated level. For additional information on discontinued
operations, see Note C34 to the consolidated financial 2012 2013 2014 2015 2016
statements.
26
DIRECTORS REPORT
The total average number of full-time employees in 2016 FINANCIAL POSITION, CAPITAL
was 24,898 (25,450), of which in continuing operations
19,822 (20,036). In total, operations were conducted in 28
RESOURCES AND LIQUIDITY
countries (29), of which continuing operations in 21 coun- Financial position
tries (21). See also Note C31 to the consolidated financial The financial position remained stable year-on-year.
statements. Goodwill increased to SEK 57.9 billion mainly explained
by positive exchange rate differences, no impairment
EMPLOYEES, TOTAL (FTES, %) charges were recorded for continuing operations. Other
BY GENDER intangible assets totaled SEK 13.0 billion, positively
impacted through CAPEX (investments) of SEK 2.8 billion
and exchange rate differences but negatively impacted by
n Men, 58.8% amortization of SEK 2.6 billion.
n Women, 41.2% Property, plant and equipment, totaling SEK 58.1 billion,
increased through CAPEX (investments) totaling SEK 12.8
billion and decreased due to depreciations amounting to
SEK 8.9 billion. The divestment and deconsolidation of
Yoigo in Spain in the fourth quarter of 2016 affected prop-
BY COUNTRY
erty, plant and equipment by SEK 2.2 billion. The effects
n Sweden, 32.6% n Finland, 13.2% from exchange rate differences were positive.
n Norway, 4.4% n Denmark, 4.7% Financial and other non-current assets comprise in-
n Lithuania, 11.6% n Latvia, 3.9% vestments in associated companies and joint ventures,
n Estonia, 7.6% n Other, 7.5% deferred tax assets, pension obligation assets and other
n Kazakhstan, 7.5% n Azerbaijan, 2.9%
assets, mainly long-term interest-bearing receivables.
n Uzbekistan, 4.1%
The carrying value of associated companies and joint
ventures was SEK 22.7 billion, of which the carrying values
of Russian MegaFon and Turkish Turkcell were SEK 4.7 bil-
For additional information on employees and labor prac- lion and SEK 17.1 billion, respectively. Share of net income
tices, see Occupational health and safety and GRI Index, in the associates and joint ventures amounting to SEK 2.8
section Labor practices and decent work. billion added value, offset by dividends received from the
companies, in total SEK 2.1 billion. Currency effects were
Financial position Change

Goodwill and other intangible assets 70,947 67,933 3,014 4.4
Property, plant and equipment 58,107 55,093 3,014 5.5
Financial and other non-current assets 50,420 50,823 -402 -0.8
Total non-current assets 179,475 173,850 5,625 3.2
Other current assets 30,402 29,708 694 2.3
Cash and cash equivalents 14,510 14,647 -137 -0.9
Assets classified as held for sale 29,042 35,812 -6,770 -18.9
Total current assets 73,955 80,167 -6,212 -7.7
Total assets 253,430 254,017 -587 -0.2
Total equity 94,869 102,202 -7,334 -7.2
Borrowings 94,468 100,983 -6,515 -6.5
Provisions and other liabilities 50,466 39,234 11,232 28.6
Liabilities directly associated with assets held for sale 13,627 11,598 2,029 17.5
Total equity and liabilities 253,430 254,017 -587 -0.2
27
DIRECTORS REPORT
negative at SEK 1.4 billion, due to negative development derecognition of a put option. See Note C34 for further
of the Turkish lira, partly offset by positive development of information.
the Russian rubel, both versus the Swedish krona. See Consolidated statements of financial position,
Deferred tax assets decreased mainly due to the divest- Consolidated statements of changes in equity and related
ment of Yoigo in Spain and deconsolidation of tax loss Notes to the consolidated financial statements for further
carry-forwards related to the Spanish operation, whilst details.
deferred tax liabilities (included in Provisions and other
liabilities) were stable. All in all, the net deferred tax liability Credit facilities
was SEK 6.2 billion at year-end 2016. Telia Company believes its available bank credit facilities
Total long-term interest-bearing receivables increased to and updated open-market financing programs are suf-
SEK 18.1 billion (16.4), mainly as a result of using surplus ficient for the present known liquidity requirements. In the
cash to invest in bonds. continuing operations, Telia Companys surplus liquidity
Cash and cash equivalents in total were stable versus (short-term investments, cash and bank, and certain se-
2015. Cash flow from operations and the divestments curities with maturities exceeding 12 months but convert-
of Ncell in Nepal and Yoigo in Spain had positive impact ible to cash within 2 days) was in total SEK 29.8 billion at
offset by pay-out of ordinary dividend and changes in the year-end. In addition, the total available unutilized amount
debt portfolio described further below. under committed bank credit facilities as well as overdraft
Assets classified as held for sale, totaling SEK 29.0 bil- and short-term credit facilities at year-end were SEK 16.0
lion, decreased mainly as a result of the divestment and billion.
deconsolidation of Ncell in Nepal and impairment charges, Telia Company AB shall target a solid investment grade
see Note C34 for further information. These effects were long-term credit rating, defined as A- to BBB+. In May
partially offset by a prolonged license in Uzbekistan. 2016 Moodys decided to downgrade Telia Companys
Total equity decreased 7.2 percent to SEK 94.9 billion long- term rating to Baa1 with stable outlook after an ex-
(102.2) negatively impacted by dividends of SEK 13.0 tensive period with negative outlook. The short term rating
billion to the owners of the parent company and SEK 2.4 was reconfirmed as P-2.
billion to non-controlling interests whilst net income of SEK After the announcement of the proposed settlement from
6.5 billion affected equity positively. Other comprehen- the US and Dutch authorities in September 2016, Stand-
sive income had a positive impact of SEK 1.5 billion with ard & Poors Ratings Services decided to put its long term
positive currency effects of total SEK 2.2 billion offset by credit rating of Telia Company of A- on CreditWatch nega-
negative remeasurement effects on pension obligations net tive but confirmed A-2 for short-term borrowings.
amounting to SEK 1.3 billion. Telia Company normally arrange its financing through
Total gross borrowings decreased to SEK 94.5 billion the parent company Telia Company AB. Most issuance are
(100.9) mainly explained by the divestment and decon- done under the companys existing EMTN (Euro Medium
solidation of Yoigo in Spain and repayments of the debt Term Note) program of EUR 12 billion. The primary means
portfolio partly related to a credit facility related to the of external borrowing are described in Notes C20 and
acquisition of Tele2 in Norway in 2015. C26 to the consolidated financial statements. In 2016,
Provisions and other liabilities increased mainly due Telia Company AB issued no new debt in the debt capital
to the provision for the settlement amount proposed by markets but announced in May 2016 a tender offer in
the US and Dutch authorities, see Note C34 for further GBP under which an amount of GBP 153.9 million of the
information. outstanding bond with maturity 2042 was bought back. At
Liabilities directly associated with assets held for sale, year-end, the average time to maturity of Telia Company
totaling SEK 13.6 billion, increased mainly due to the ABs overall debt portfolio was approximately 7.8 years.
above described license in Uzbekistan, partly offset by a At the end of 2016, no Commercial Papers were
outstanding.
TOTAL NET DEBT AND TOTAL NET DEBT/ TOTAL EBITDA1, 2 LIQUIDITY AND TIME TO MATURITY1
Total net debt Total net debt/ Liquidity Time to
(SEK billion) total EBITDA* (multiple) (SEK billion) maturity (years)
75 2.5 60 10
60 2.0 48 8
45 1.5 36 6
30 1.0 24 4
15 0.5 12 2
0 2012 2013 2014 2015 2016 0 0 2012 2013 2014 2015 2016 0
Total net debt Net debt/EBITDA Liquidity Time to maturity
1) Excluding non-recurring items

2) Total Telia Company group including both continuing and 1) Liquidity includes cash balances, deposits, investment bonds and
discontiued operations unutilized credit facilities
28
DIRECTORS REPORT
DEBT PORTFOLIO MATURITY SCHEDULE 2017 AND ONWARDS
SEK
billion
10
2066
2060
2063
2064
2065
2062
2030
2033
2034
2036
2038
2039
2035
2043
2044
2053
2054
2055
2045
2056
2058
2032
2040
2046
2048
2050
2022
2049
2059
2029
2020
2023
2042
2052
2026
2061
2025
2028
2057
2037
2021
2027
2031
2024
2047
2051
2041
2019
2018
2017
Cash flow, continuing and discontinued operations in 2015. New for 2016 is repurchase agreements which net
Cash flow from operating activities decreased to SEK 26.0 were SEK 0.6 billion (0) and net of other derivatives was
billion (35.2), mainly due to Ncell in Nepal not being con- SEK 1.1 billion (0.5).
solidated the full year, weakened operational performance See Consolidated statements of cash flows and related
in Eurasia and dividend received from Turkcell of SEK 4.7 Notes to the consolidated financial statements for further
billion net of taxes in 2015. details.
Cash flow from investing activities, totaling SEK -7.4
billion (-29.0) consists of investments in intangible assets, Outlook for 2017
property plant and equipment, acquisitions and divest- Free cash flow from continuing operations, excluding
ments, changes in loans receivable and in short term licenses and dividends from associated companies, is
investments, and repayments from or additional contribu- expected to be above SEK 7 billion. This operational free
tions to pension funds. Cash CAPEX remained flat com- cash flow together with dividends from associates, should
pared to 2015. Cash received from divestments was SEK cover a dividend around the 2016 level.
12.1 billion (4.7), which mainly refers to Ncell in Nepal and EBITDA from continuing operations, excluding non-
Yoigo in Spain. Cash paid for business combinations and recurring items, in local currencies, excluding acquisitions
other equity instruments was SEK 0.1 billion (6.2). Contribu- and disposals, is expected to be around the 2016 level.
tion from the Swedish pension fund was SEK 0.5 billion (0).
Net cash used for granting loans was SEK -2.9 billion (-10.5) Dividend policy
mainly net from investment bonds. Cash inflow from net Telia Company intends to distribute a minimum of 80 per-
changes in short-term investments was SEK 1.5 billion (1.6). cent of free cash flow from continuing operations, exclud-
Cash outflow from financing activities in 2016, totaling ing licenses. The dividend should be split and distributed
SEK 22.5 billion (9.6), included dividends paid to share- in two equal tranches.
holders of the parent company of SEK 13.0 billion (13.0) The company targets a leverage corresponding to Net
and to non-controlling interests of SEK 2.4 billion (0.8). debt/EBITDA of 2x plus/minus 0.5x.
Net outflow from new and repaid borrowings amounted The company shall continue to target a solid investment
to SEK 8.9 billion (inflow 4.1) mainly from repayment of a grade long-term credit rating (A- to BBB+).
credit facility related to the acquisition of Tele2 in Norway
Cash flow Change (SEK

SEK in millions 2016 2015 million) Change (%)
Cash flow from operating activities 25,970 35,249 -9,279 -26.3
Cash CAPEX -18,703 -18,699 -4 0
Free cash flow 7,267 16,550 -9,283 -56.1
Cash flow from other investing activities 11,275 -10,285 21,560
Cash flow from investing activities -7,428 -28,985 21,557 -74.4
Cash flow from financing activities -22,491 -9,628 -12,863 133.6
Cash and cash equivalents, opening balance 25,334 28,735 -3,401 -11.8
Cash flow for the period -3,949 -3,363 -586 17.4
of which continuing operations -3,925 -7,082 3,157 -44.6
Exchange rate differences 1,523 -38 1,561
Cash and cash equivalents, closing balance 22,907 25,334 -2,427 -9.6
of which continuing operations 14,605 14,647 -42 -0.3
29
DIRECTORS REPORT
TELIA COMPANY SHARE

The Telia Company share is listed on Nasdaq Stockholm SHAREHOLDINGS BY COUNTRY, DECEMBER 31, 2016
and Helsinki. In 2016, the share price in Stockholm de- (% OF TOTAL NUMBER OF SHARES)
clined 13 percent, to SEK 36.71. During the same period,
n Sweden, 57.8% n Germany, 0.7%
the OMX Stockholm 30 Index increased 4.9 percent
n USA, 13.8% n France, 0.6%
and the STOXX 600 Telecommunications Index fell 15.9
n Finland, 10.2% n Ireland, 0.5%
percent. n Great Britain, 9.4% n Other countries,
At year-end 2016, Telia Companys market capitaliza- n Luxemburg, 3.2% 2.6%
tion was SEK 159 billion. Besides Nasdaq Stockholm and n Switzerland, 1.2%
Helsinki, the share was traded at other platforms with the
major trading volumes on Chi-X and BATS.
Holdings outside Sweden and Finland decreased from
35.1 percent to 32.0 percent. Telia Company had 512,841 Quarterly updated shareholder information is available at:
shareholders at year-end, of which one shareholder held www.teliacompany.com/Shareholdings
more than 10 percent of the shares and votes: the Swedish (Information on the Telia Company website does not form part of this
Report)
State with 37.3 percent. No other shareholder held more
than 5 percent of the shares and votes.
SHAREHOLDER STRUCTURE, DECEMBER 31, 2016
Number Percent Share data 2016 2015

Number of of share- Number of of issued
Paid at year-end (SEK) 36.71 42.19
shares holders issued shares shares/votes
Highest paid during the year (SEK) 43.24 55.65
1 500 405,685 72,630,800 1.7
Lowest paid during the year (SEK) 34.20 40.05
501 1,000 39,091 31,047,509 0.7
Number of shares at year-end (millions) 4,330.1 4,330.1
1,001 5,000 51,772 119,807,687 2.8
Number of shareholders at year-end 512,841 515,437
5,001 10,000 8,410 62,451,839 1.4
Earnings per share, total (SEK) 0.86 1.97
10,001 15,000 2,535 31,793,429 0.7
Earnings per share,
15,001 20,000 1,395 25,421,407 0.6 continuing operations (SEK) 3.76 2.16
20,001 3,953 3,986,932,110 92.1 Dividend per share (SEK)1 2.00 3.00
Total, issued shares 512,841 4,330,084,781 100.0 Pay-out ratio (%) 2 121 151.9
Equity per share (SEK) 20.75 22.60
MAJOR SHAREHOLDERS, DECEMBER 31, 2016
1) For 2016 as proposed by the Board of Directors
2) For 2015 based on EPS and for 2016 based on free cash flow
Percent Sources: Euroclear Sweden and Modular Finance
Number of of issued
Shareholder issued shares shares/votes
Swedish State 1,614,513,748 37.3
Capital Group Funds 162,536,783 3.8
Solidium Oy 137,123,642 3.2
Blackrock 69,067,163 1.6
Swedbank Robur Funds 66,877,430 1.5
Vanguard 59,015,939 1.4
AMF Insurance and Funds 44,964,265 1.0
XACT Funds 43,173,239 1.0
Nordea Funds 39,353,815 0.9
Nordea Funds (Luxemburg) 28,516,526 0.7
Total other shareholders 2,064,942,231 47.6
Total, issued shares 4,330,084,781 100.0
30
DIRECTORS REPORT
As of December 31, 2016, Telia Companys issued share In case of a change of control in Telia Company AB, the
capital totaled SEK 13,856,271,299.20 distributed among company might have to repay certain loans at short notice,
4,330,084,781 shares with a quotient value of SEK 3.20 since some of Telia Companys financing agreements
per share. For further information, see sections Share contain customary change-of-control clauses. These
capital and Treasury shares in Note C19 to the consoli- clauses generally also contain other conditions including,
dated financial statements. All issued shares have been for example, that the change of control has to cause a
paid in full and apart from treasury shares carry equal negative change in Telia Companys credit rating in order
rights to vote and participate in the assets of the company. to be effective.
At the general meeting of shareholders, each shareholder For 2016, the Board of Directors proposes to the Annual
is entitled to vote for the total number of shares she or he General Meeting (AGM) an ordinary dividend of SEK 2.00
owns or represents. Each share is entitled to one vote. As (3.00), totaling SEK 8,660 million (12,990), or 121 percent
of December 31, 2016, Telia Companys Finnish pension of free cash flow attributable to continuing operations. The
fund held 366,802 shares and its Finnish personnel fund dividend should be split and distributed into two equal
673,749 shares in the company, respectively, in total repre- tranches of SEK 1.00 each, one in April 2017 and one in
senting 0.03 percent of the outstanding shares. October 2017. See also section Proposed appropriation
There are no provisions in either the Swedish legislation of earnings.
or in Telia Company ABs Articles of Association that would
limit the possibility to transfer Telia Company shares. Telia ORDINARY DIVIDEND PER SHARE AND CHANGE
YEAR-ON-YEAR (%)
Company is not aware of any agreements between major
shareholders of the company regarding the Telia Company Dividend per share (SEK)
shares. 3.75
The Board of Directors does not currently have any 3.00 3.00 3.00
2.85
authorization by the general meeting of shareholders to 3.00
issue new shares but has the authorization to repurchase 2.00
a maximum of 10 percent of the companys total number 2.25
0.0% 5.3% 0.0% 0.0% -33.3%
of outstanding shares before the Annual General Meeting
1.50
2017. In order to continue to provide the Board of Direc-
tors with an instrument to adapt and improve Telia Com- 0.75
panys capital structure, the Board of Directors proposes
that the Annual General Meeting on April 5, 2017, resolves 0 2012 2013 2014 2015 20161
to authorize the Board of Directors to acquire the com-
1) For 2016 as proposed by the Board of Directors
panys own shares. The authorization may be exercised on
one or more occasions before the Annual General Meeting
2017. The maximum number of treasury shares held by the
company may not exceed 10 percent of all shares in the
company.
31
DIRECTORS REPORT
REGION AND COUNTRY ment, mobile billed revenues continued to grow and as the
first operator in the world, Telia Sweden offered customers
DEVELOPMENT IN 2016 free mobile surf on the most popular social media sites
Improved profitability in region Sweden and apps, including Facebook, Instagram and Twitter. Cus-
tomers continued to demand fiber and a record of 186,000
new households were reached and SDU villa campaigns
SHARE OF GROUP TOTAL, CONTINUING OPERATIONS (%) grew 44 percent. The enterprise segment remained chal-
lenging with high price pressure within the large enterprise
NET SALES OPERATING INCOME
segment. The offerings to SME and SoHo (Small office/
Home office) customers were further strengthened with
the launch of personal technicians in addition to personal
advisors in order to assist and take care of the customers
IT and technology. The year ended with Division X launch-
ing Telia Sense in the connected car space and Telia Zone
which is a connected home play.
Net sales excluding acquisitions and disposals de-
CAPEX NO. OF EMPLOYEES creased 0.3 percent. Net sales in reported currency includ-
ing acquisitions and disposals decreased 0.2 percent to
SEK 37,251 million (37,336). The positive effect of acquisi-
tions and disposals was 0.1 percent. Service revenues,
excluding acquisitions and disposals, decreased 0.6 per-
cent. Mobile service revenues increased 0.4 percent, sup-
ported by strong consumer and wholesale revenues that
more than compensated for the decline in the enterprise
segment. Mobile ARPU rose and the increase in postpaid
subscriptions more than compensated for the decline in
SEK in millions, except
margins, operational data Change
prepaid subscriptions. Fixed service revenues declined
and changes 2016 2015 (%) 0.6 percent due to the drop in revenues from traditional
fixed telephony and various business solutions. However,
Net sales 37,251 37,336 -0.2
fiber installation revenues continued to partly mitigate that
Change (%) local organic -0.3 drop. In addition, Swedish quality index (SKI) reported that
of which service revenues Telia continues to have the most satisfied TV customers in
(external) 32,128 32,268 -0.4 Sweden which is shown in a continued strong intake. Fur-
change (%) local organic -0.6 thermore, the TV ARPU displayed a double-digit growth.
EBITDA Broadband revenues grew boosted by growth in recurring
excl. non-recurring items 14,455 14,267 1.3 fiber revenues and higher ARPU.
Margin (%) 38.8 38.2 EBITDA, excluding non-recurring items, increased 1.3
Income from associated percent to SEK 14,455 million (14,267) while EBITDA
companies and joint ventures 1 -20 excluding non-recurring items, acquisitions and disposals
Operating income increased 1.2 percent. The growth in mobile, broadband,
excl. non-recurring items 9,569 9,797 -2.3 TV, fiber and wholesale revenues, cost savings from trans-
Operating income 9,360 9,284 0.8 formation, procurement and general efficiencies were the
main drivers behind the EBITDA growth despite the drop in
CAPEX excl.
revenues from traditional fixed telephony. In addition, new
license and spectrum fees 7,119 6,179 15.2
revenue streams such as value added and adjacent ser-
% of service revenues 22.2 19.1
vices also contributed to the EBITDA growth. The EBITDA
EBITDA excl. non-recurring margin increased to 38.8 percent (38.2).
items less CAPEX 7,337 8,088 -9.3
Operating income, excluding non-recurring items,
Subscriptions, decreased 2.3 percent to SEK 9,569 million (9,797). Non-
period-end (thousands)
recurring items impacted operating income were SEK
Mobile 6,207 6,119 1.4 209 million (514) and were mainly related to restructuring
Fixed telephony 1,675 1,896 -11.7 charges and an old court case partly offset by a divest-
Broadband 1,299 1,306 -0.5 ment of real estate.
TV 765 730 4.8 CAPEX increased to SEK 7,119 million (6,179). No
Employees, period-end 6,720 6,718 0.0 licenses and spectrum were acquired during the year,
since the anticipated 700 MHz auction was postponed.
Additional (unaudited) segment information available at www.teliacom
pany.com; see also the preamble to this Report for information on restated
The investments were primarily in fiber, 4G and business
financial information. transformation. Telia was awarded best mobile network
which shows that superior network connectivity is created
In region Sweden, the journey towards more connectivity and that the customer journey from voice to data contin-
and converged offerings continued. In the consumer seg- ued to be supported.
32
DIRECTORS REPORT
Solid development in region Europe divestment of Yoigo in Spain but also due to decline of
customers demand for multiple subscriptions. The share
of post-paid subscriptions increased from 82 percent to 88
SHARE OF GROUP TOTAL, CONTINUING OPERATIONS (%) percent of the total. Among the fixed services, traditional
fixed telephony continued to decline and the move from
copper- to fiber-based services continued. In the consum-
er segment, ARPU improved in most markets while price
pressure continued within the enterprise segment, most
apparent in Norway and Denmark.
Net sales in local currencies, and excluding acquisi-
tions and disposals decreased 0.4 percent, mainly due
to decreased equipment sales while service revenues
increased. Net sales in reported currency decreased 4.4
CAPEX NO. OF EMPLOYEES percent to SEK 41,746 million (43,658). The effect from
exchange rate fluctuations was positive by 0.2 percent and
the negative effect of acquisitions and disposals was 4.2
percent. Service revenues, in local currency and excluding
acquisitions and disposals, increased 0.7 percent, as mo-
bile service revenue growth compensated for the decline in
fixed service revenues.
EBITDA, excluding non-recurring items, increased to
SEK 11,036 million (10,584) in reported currency, and the
margin increased to 26.4 percent (24.2), mainly due to
SEK in millions,
except margins, operational Change
network efficiencies and lower marketing costs in Norway
data and changes 2016 2015 (%) combined with cost control in most countries. In local cur-
rencies and excluding acquisitions and disposals, EBITDA,
Net sales 41,746 43,658 -4.4
excluding non-recurring items increased 5.5 percent.
Change (%) local organic -0.4 Operating income, excluding non-recurring items,
of which service revenues increased 7.0 percent in reported currency. Non-recurring
(external) 33,497 34,429 -2.7 items in 2016 were mainly related to a capital gain from
change (%) local organic 0.7 the divestment of Yoigo in Spain and personnel restructur-
EBITDA ing across the markets. Operating income increased to
excl. non-recurring items 11,036 10,584 4.3 SEK 9,529 million (2,375) in reported currency, primarily as
Margin (%) 26.4 24.2 2016 was positively impacted by the capital gain from the
Income from associated divestment of Yoigo in Spain and 2015 being negatively
companies and joint ventures 115 119 -3.5 impacted by goodwill impairment charges related to the
Operating income operation in Denmark.
excl. non-recurring items 5,219 4,875 7.0 CAPEX excluding license and spectrum fees decreased
Operating income 9,529 2,375 9.5 percent mainly driven by lower mobile network invest-
ments in Norway and Finland.
CAPEX excl. license and
spectrum fees 4,993 5,517 -9.5
Finland Growth in mobile billed revenues
% of service revenues 14.9 16.0
EBITDA excl. non-recurring SEK in millions,
items less CAPEX 5,434 4,761 14.1 except margins, operational Change
data and changes 2016 2015 (%)
Subscriptions,
period-end (thousands) Net sales 13,042 13,279 -1.8
Mobile 10,488 13,914 -24.6 Change (%) local organic -3.0
Fixed telephony 890 942 -5.5 of which service revenues
Broadband 1,260 1,283 -1.8 (external) 11,197 11,065 1.2
TV 923 900 2.6 change (%) local organic -0.1
Employees, period-end 11,093 11,323 -2.0 EBITDA
excl. non-recurring items 4,059 3,945 2.9
Additional (unaudited) segment information available at www.teliacom
pany.com; see also the preamble to this Report for information on restated Margin (%) 31.1 29.7
financial information. Subscriptions,
period-end (thousands)
The focus on monetization on the growing data traffic Mobile 3,253 3,306 -1.6
continued in our markets during 2016 and Roam like
Fixed telephony 65 80 -18.8
home offerings were successfully launched in all markets
Broadband 497 527 -5.7
within region Europe. The number of mobile subscrip-
tions declined during the year mainly impacted by the TV 489 486 0.6
33
DIRECTORS REPORT
Net sales in reported currency decreased 1.8 percent to Denmark Still fierce competition
SEK 13,042 million (13,279). In local currency excluding
SEK in millions,
acquisitions and disposals the decrease was 3.0 percent, except margins, operational Change
mainly due to decline in equipment sales. Service revenues data and changes 2016 2015 (%)
declined 0.1 percent in local currency, excluding acquisi-
Net sales 5,880 5,890 -0.2
tions and disposals, as growth in mobile billed revenues
was offset by decline in interconnect revenues and fixed Change (%) local organic -1.6
service revenues. Growth in mobile billed revenues stems of which service revenues
primarily from higher ARPU in the consumer segment (external) 4,270 4,247 0.5
which more than offset the interconnect revenue decline. change (%) local organic -0.9
TV revenues grew as a result of higher ARPU while fixed EBITDA
broadband revenues declined as competition from mobile excl. non-recurring items 692 743 -6.8
services impacted both broadband ARPU and the number Margin (%) 11.8 12.6
of broadband subscriptions. Subscriptions,
The EBITDA margin, excluding non-recurring items, period-end (thousands)
increased to 31.1 percent (29.7), positively impacted by Mobile 1,606 1,644 -2.3
lower share of equipment sales. In local currency, exclud-
ing acquisitions and disposals, EBITDA excluding non-
Broadband 128 135 -5.2
recurring items increased 1.7 percent.
During the year, the number of TV subscriptions grew TV 28 28 0.0
by 3,000. Mobile, fixed telephony and broadband sub-
scriptions decreased by 53,000, 15,000 and 30,000, Net sales in reported currency decreased 0.2 percent to
respectively, the latter due to customers abandoning fixed SEK 5,880 million (5,890). Service revenues decreased
broadband in favour of mobile services. 0.9 percent in local currency, excluding acquisitions and
disposals. Mobile service revenues increased 2.5 percent
Norway Improved profitability despite a decline in the subscription base, due to growth
in wholesale and interconnect revenues. Fixed broadband
SEK in millions,
and TV revenues showed growth but fixed service rev-
data and changes 2016 2015 (%) enues as a whole decreased driven by decline in traditional
fixed telephony and business solutions.
Net sales 9,057 9,094 -0.4
The EBITDA margin, excluding non-recurring items,
Change (%) local organic -0.5 declined to 11.8 percent (12.6), negatively impacted by
of which service revenues continued price pressure in the enterprise segment.
(external) 7,516 7,485 0.4 The number of mobile subscriptions decreased by
change (%) local organic -0.2 38,000 during the year. Fixed telephony subscriptions de-
EBITDA creased by 13,000 and broadband subscriptions by 7,000,
excl. non-recurring items 3,125 2,761 13.2 while TV subscriptions remained flat.
Margin (%) 34.5 30.4
Subscriptions, Lithuania Revenue and earnings growth
period-end (thousands) SEK in millions,
Mobile 2,211 2,311 -4.3 except margins, operational Change
Net sales 3,268 3,146 3.9
Net sales in reported currency decreased 0.4 percent to
SEK 9,057 million (9,094). Service revenues decreased Change (%) local organic 2.6
0.2 percent in local currency, excluding acquisitions and of which service revenues
disposals, mainly due to decline in interconnect and fixed (external) 2,662 2,536 5.0
service revenues. The latter due to the divestment of the change (%) local organic 3.7
fixed telephony subscription base in the fourth quarter of EBITDA
2015. Mobile service revenue increased slightly as whole- excl. non-recurring items 1,139 1,051 8.4
sale revenues compensated for the interconnect decline. Margin (%) 34.9 33.4
Mobile ARPU declined, driven by the lower interconnect Subscriptions,
rate, despite improved consumer ARPU. period-end (thousands)
The EBITDA margin, excluding non-recurring items, Mobile 1,318 1,327 -0.7
increased to 34.5 percent (30.4), explained by network
efficiencies and lower cost for customer acquisitions and
Broadband 402 390 3.1
marketing spend.
The number of mobile subscriptions decreased by TV 229 212 8.0
100,000 during the year.
34
DIRECTORS REPORT
Net sales in reported currency increased 3.9 percent to Estonia Growing subscription base
SEK 3,268 million (3,146). Service revenues increased
SEK in millions,
3.7 percent in local currency, excluding acquisitions and except margins, operational Change
disposals driven by both mobile and fixed service rev- data and changes 2016 2015 (%)
enues as the decline in fixed telephony was more than
Net sales 2,733 2,692 1.5
compensated for by growth in other fixed services. Mobile
ARPU increased 8.1 percent mainly due to a higher share Change (%) local organic -1.3
of post-paid subscriptions. of which service revenues
The EBITDA margin, excluding non-recurring items, (external) 2,080 2,062 0.8
increased to 34.9 percent (33.4), driven by the increase in change (%) local organic -2.1
service revenues coupled with cost control and integration EBITDA
synergies. excl. non-recurring items 811 817 -0.8
The number of mobile subscriptions decreased by 9,000 Margin (%) 29.7 30.3
during the year, pre-paid subscriptions declined while Subscriptions,
post-paid increased in line with the overall trend in the period-end (thousands)
market. Fixed telephony subscriptions declined by 30,000, Mobile 901 863 4.4
while broadband subscriptions grew by 12,000 and TV
Fixed telephony 307 301 2.0
subscriptions by 17,000.
Broadband 233 231 0.9
Latvia Good net sales growth TV 177 174 1.7
SEK in millions,
Net sales in reported currency increased 1.5 percent to
data and changes 2016 2015 (%) SEK 2,733 million (2,692). Service revenues declined
2.1 percent in local currency, excluding acquisitions and
Net sales 1,788 1,660 7.8
disposals, as growth in mobile service revenues was offset
Change (%) local organic 6.4 by lower sales of travel products and as quarter four last
of which service revenues year included high revenues from the Estonian subsidiary
(external) 1,202 1,188 1.1 Green IT.
change (%) local organic -0.1 The EBITDA margin, excluding non-recurring items, de-
EBITDA creased to 29.7 percent (30.3) percent, mainly due to lower
excl. non-recurring items 580 548 5.8 wholesale revenues.
Margin (%) 32.4 33.0 The number of mobile subscriptions increased net by
Subscriptions, 38,000, with 53,000 increase of post-paid subscriptions of
period-end (thousands) which 50,000 related to subscriptions used for machine-
Mobile 1,200 1,119 7.3 to-machine services. The number of TV subscriptions
increased by 3,000 during the year.
Net sales in reported currency increased 7.8 percent to Spain Divested as of quarter four 2016
SEK 1,788 million (1,660), driven by growth in equipment
SEK in millions,
sales. Service revenues declined by 0.1 percent in local except margins, operational Change
currency, excluding acquisitions and disposals. Mobile data and changes 2016 2015 (%)
billed revenues increased and almost compensated
Net sales 6,073 7,992 -24.0
for lower other mobile service revenues. Mobile ARPU
increased 4.0 percent due to a shift from pre-paid to post- Change (%) local organic 3.6
paid subscriptions with higher ARPU. of which service revenues
The EBITDA margin, excluding non-recurring items, (external) 4,572 5,847 -21.8
decreased to 32.4 percent (33.0), due to a higher share of change (%) local organic 5.3
equipment sales. EBITDA
The number of mobile subscriptions increased by excl. non-recurring items 630 720 -12.5
81,000, as a decline of 23,000 in pre-paid was more than Margin (%) 10.4 9.0
offset by an increase of 105,000 post-paid subscriptions Subscriptions,
driven by subscriptions used for machine-to-machine period-end (thousands)
services. Mobile 3,344
35
DIRECTORS REPORT
Net sales in reported currency decreased 24.0 percent Net sales in local currencies and excluding acquisitions
to SEK 6,073 million (7,992), as the Spanish operation and disposals decreased 3.0 percent. In reported currency,
was divested and hence deconsolidated from quarter net sales decreased 3.7 percent to SEK 7,468 million
four 2016. During the period January to September 2016, (7,753). The decrease was mainly explained by lower ser-
service revenues increased 5.3 percent in local currency, vice revenues related to voice traffic in Telia Carrier.
excluding acquisitions and disposals. EBITDA, excluding non-recurring items, decreased to
The EBITDA margin, excluding non-recurring items, in- SEK 345 million (430) due to higher pension and vari-
creased to 10.4 percent (9.0). During the period January to able pay expenses as well as costs related to Division X.
September 2016, EBITDA in local currency, and excluding For Telia Carrier, EBITDA increased by 24.3 percent due
acquisitions and disposals increased by 28.3 percent. to a more favourable product mix and lower operating
expenses.
Income from associated companies decreased to SEK
Other operations 2,695 million (3,295) due to lower contribution from Mega-
Other operations include the international carrier opera- Fon and Turkcell.
tions, customer financing and dunning operations, Telia Operating income declined to SEK 2,201 million (2,948),
Company Holding, Telia Companys shareholding in the mainly due to lower income from associated companies.
associates Russian MegaFon and Turkish Turkcell as CAPEX of SEK 2,905 million (2,593) were mainly related
well as Group functions. to building and enhancing technology assets, such as IT
systems, core network and product platforms managed on
SHARE OF GROUP TOTAL, CONTINUING OPERATIONS (%) group level to benefit several countries.
CAPEX NO OF EMPLOYEES
SEK in millions,
Net sales 7,468 7,753 -3.7
Change (%) local organic -3.0
of which Telia Carrier 6,227 6,631 -6.1
EBITDA
excl. non-recurring items 345 430 -19.8
of which Telia Carrier 498 401 24.3
Margin (%) 4.6 5.5
Income from associated
companies and joint ventures 2,695 3,295 -18.2
of which Russia 899 1,413 -36.4
of which Turkey 1,805 1,894 -4.7
Operating income
excl. non-recurring items 2,335 3,141 -25.7
Operating income 2,201 2,948 -25.3
CAPEX 2,905 2,593 12.0
Employees, period-end 3,217 3,301 -2.5
Additional (unaudited) segment information available at www.teliacompany.
com.
36
DIRECTORS REPORT
ACQUISITIONS AND DISPOSALS

In 2016, agreements involving subsidiaries were made as see Note C33 and discontinued operations and assets
follows. For further information on business combinations, classified as held for sale, see Note C34 to the consoli-
dated financial statements.
Signing/Closing date Country Comments
March 1, 2016 Sweden Telia Company acquired all shares in the Swedish company Telecom3 Fibernt i
Sverige AB.
April 11, 2016 Nepal Telia Company completed the divestment of its holdings in Ncell in Nepal to Axiata,
one of Asias largest telecommunication groups. The transaction has been approved
by all relevant authorities.
June 21, 2016 Denmark, Telia Company signed an agreement to divest its 100 percent holding in Sergel
Finland, (credit management services and debt purchase business) to Marginalen at an en-
Latvia, terprise value of SEK 2.1 billion. The transaction is conditional on relevant regulatory
Lithuania, approvals including the Swedish Financial Supervisory Authority as well as Competi-
Norway, tion Authorities.
Sweden
July 1, 2016 Sweden Telia Company acquired a business consisting of fiber networks from Comne Work
AB.
September 7, 2016 Tajikistan Telia Company signed an agreement to sell its 60 percent holding in Central Asian
Telecommunications Development B.V., which controls CJSC Indigo Tajikistan
(Tcell), to the Aga Khan Fund for Economic Development (AKFED). AKFED is cur-
rently the minority owner in Central Asian Telecommunications Development B.V.
with a 40 percent holding. The transaction price for Tcell is based on an enterprise
value of USD 66 million, of which Telia Companys 60 percent share corresponds to
USD 39 million. The transaction is subject to regulatory approvals in Tajikistan and is
not yet closed.
October 5, 2016 Spain Telia Company completed the divestment of its holding in Yoigo in Spain to Mas-
movil, a Spanish telecommunications operator. The transaction has been approved
by all relevant authorities.
November 7, 2016 Norway Telia Company signed an agreement to acquire Norwegian Phonero at an enterprise
value of NOK 2,300 million on a cash and debt free basis. The acquisition is subject
to approval from the Norwegian competition authorities.
December 30, 2016 Estonia Telia Company acquired a minor business from the Estonian company AK Ss-
teemid O, consisting of IT Hosting and Workplace management solutions.
37
DIRECTORS REPORT
LEGAL AND ADMINISTRATIVE ENVIRONMENT

PROCEEDINGS Telia Company is committed to environmental responsibil-
In its normal course of business, Telia Company is involved ity in its own operations and throughout the value chain.
in a number of legal proceedings. These proceedings pri- The work is guided by the group environmental policy,
marily involve claims arising out of commercial law issues which also covers majority-owned subsidiaries, and the
and matters relating to telecommunications regulations supplier code of conduct which clarifies environmental
and competition law. For further information regarding the requirements on suppliers. As a minimum, Telia Company
provision for the settlement amount proposed by the US companies shall comply with local legal requirements
and Dutch authorities, see Notes C22, C29 and C34 and wherever they operate. All major subsidiaries in regions
Risks and uncertainties, particularly section Review of Sweden and Europe are required to work towards ISO
Eurasian transactions. 14001 environmental management system certification,
and to set local targets that contribute to the group envi-
INNOVATION, RESEARCH AND ronmental targets to reduce greenhouse gas emissions,
increase energy efficiency and improve waste manage-
DEVELOPMENT ment. Telia Company in Sweden does not conduct any op-
Innovation, research and development (R&D) activities are erations subject to environmental permits from authorities
performed to ensure Telia Companys leading position in according to the Swedish Environmental Code, Chapter 9.
the telecom industry as well as to support competitive For additional information, see Environmental
operations in the short and long term. During 2016, Telia responsibility.
Company further strengthened its focus on boosting inno-
vation by the establishment of Division X, which is tasked REMUNERATION TO EXECUTIVE
with spearheading and accelerating Telia Companys ac-
tivities in emerging business areas such as Cloud, Internet MANAGEMENT
of Things and eHealth. Also the existing Purple+ innovation Proposed remuneration principles for Group
unit has joined Division X to fast track and quickly ramp up Executive Management 2017
new growth initiatives. The Board of Directors proposes that the Annual General
Telia Company and Spotify continued their innovation Meeting on April 5, 2017, resolves on the following prin-
co-operation, which resulted in the joint launch of the ciples for remuneration to Group Executive Management.
software developer API Premium Zone in June 2016, Group Executive Management is defined as the President
enabling exciting new services such as CoPlay, which and the other members of the Management Team.
is a dynamic playlist generated through social integration
between Spotify users. At the same time the new digital Objective of the principles
ecosystem Telia Zone including start-up partners such as The objective of the principles is to ensure that the
Glue, Manetos, Jaramba, Bright, etc. was announced and company can attract and retain the best people in order
the roll-out to our customers started in November 2016. to support the purpose and strategy of the company.
Telia Company has also launched a partnership with as Remuneration to Group Executive Management should be
well as invested into eBuilder, the innovative provider of built on a total reward approach and be market relevant,
the orchestrated customer care, which will reduce support but not leading. The remuneration principles should enable
waiting time across all channels for our customers. The international hiring and should support diversity within
service is operational in Sweden and will be rolled-out in Group Executive Management. The market comparison
the Nordics and Baltics during 2017. should be made against a set of peer group companies
Telia Sense, the cloud-based solution enabling high- with comparable sizes, industries and complexity. The total
end car features for the cars of today and tomorrow, had reward approach should consist of fixed salary, pension
its Swedish commercial launch in November 2016, with benefits, conditions for notice and severance pay and
leading ecosystems partners like Bilia, Bilprovningen and other benefits.
Folksam. During 2017, more partners will be signing up
and the service to be rolled out across the Nordics and Fixed salary
Baltics, and also likely to be launched by other operators, The fixed salary of a Group Executive Management mem-
which are piloting Telia Sense. ber should be based on competence, responsibility and
As of December 31, 2016, Telia Company had 326 pat- performance. The company uses an international evalua-
ent families and 1,646 patents and patent applications. tion system in order to evaluate the scope and responsibil-
In 2016, Telia Company has completed the streamlining ity of the position. Market benchmark is conducted on a
of Patent portfolio in which 25 patent families were regular basis. The individual performance is monitored and
abandoned or expired, which cover outdated solutions or used as a basis for annual reviews of fixed salaries.
otherwise the value of the patent family is reduced.
In the continuing operations, Telia Company in 2016 Pension
incurred R&D expenses of SEK 173 million (147). Pension and retirement benefits should be based on a de-
fined contribution model, which means that a premium is
paid amounting to a certain percentage of the individuals
annual salary. When deciding the size of the premium, the
38
DIRECTORS REPORT
level of total remuneration should be considered. The level ticipants annual salary. Accumulated EBITDA represents
of contribution should be benchmarked and may vary due 50 percent of the Performance Shares (or 15 percent of the
to the composition of fixed salary and pension. The retire- participants annual salary):
ment age is normally 65 years of age. If 100 percent (or above) of the EBITDA target is met, 100
percent of Performance Shares under the EBITDA part
Other benefits will vest.
The company provides other benefits in accordance with If 97.5 percent (or less) of the target is met, 0 percent of
market practice. A Group Executive Management member Performance Shares under the EBITDA part will vest.
may be entitled to a company car, health and care provi- If between 97.5 and 100 percent of the target is met, a
sions, etc. Internationally hired Group Executive Man- proportionate amount of Performance Shares under the
agement members and those who are asked to move to EBITDA part will vest.
another country can be offered mobility related benefits for No Performance Shares will vest under the EBITDA part
a limited period of time. if the Companys accumulated EBITDA is below the mini-
mum level (97.5 percent) and no additional Performance
Notice of termination and severance pay Shares will vest if the Companys accumulated EBITDA is
The termination period for a Group Executive Management above the maximum level (100 percent).
member may be up to six (6) months (twelve (12) months
for the President) when given by the employee and up to TSR part represents 50 percent of the Performance Shares
twelve (12) months when given by the company. In case (or 15 percent of the participants annual salary):
the termination is given by the company the individual If the Companys TSR is ranked first or second compared
may be entitled to a severance payment up to twelve (12) to the defined peer group of companies, 100 percent of
months. Severance pay shall not constitute a basis for the Performance Shares under the TSR part will vest.
calculation of vacation pay or pension benefits. Termina- If the Companys TSR is ranked third of fourth, 75 percent
tion and severance pay will also be reduced if the indi- of the Performance Shares under the TSR part will vest.
vidual will be entitled to pay from a new employment or if If the Companys TSR is ranked fifth or sixth, 50 percent
the individual will be conducting own business during the of the Performance Shares under the TSR part will vest.
termination period or the severance period. If the Companys TSR is ranked seventh or lower, no Per-
The Board of Directors may make minor deviations on formance Shares under the TSR part will vest.
an individual basis from the principles stated above. The
2016 remuneration policy is reproduced in Note C31 to the The program may be repeated annually. Similar programs
consolidated financial statements. were launched in 2010-2015. The prevalence of an LTI
program is subject to the approval of the Annual General
Long-term incentive program 2016/2019 Meeting. For more information on Telia Companys LTI
The Annual General Meeting held on April 12, 2016, re- programs, see Note C31 to the consolidated financial
solved to launch a long-term incentive program (LTI) com- statements.
prising of approximately 200 key employees. This program
is not available for the members of Group Executive Man-
agement. The LTI program should strengthen Telia Com- PARENT COMPANY
panys ability to recruit and retain talented key employees, The parent company Telia Company AB (Corporate Reg.
create a long-term confidence in and commitment to the No. 556103-4249), which is domiciled in Stockholm,
groups long-term development, align key employees comprises group executive management functions includ-
interests with those of the shareholders, increase the part ing the groups internal banking operations. The parent
of the remuneration that is linked to the companys per- company has no foreign branches.
formance and encourage shareholding of key employees. Net sales were unchanged at SEK 4 million (4), of which
The LTI program rewards performance measured over a SEK 3 million (3) was billed to subsidiaries. Income before
minimum of a three-year period (performance period), is taxes decreased to SEK 11,479 million (12,879) mainly
capped to a maximum value of 60 percent of the annual driven by a provision made for a settlement amount
base salary and is equity based (delivered in Telia Com- proposed by the US and Dutch authorities partly offset
pany shares with the ambition that the employees should by increased dividends received and reversal of untaxed
remain shareholders also after vesting). A prerequisite for reserves. Net income was SEK 10,367 million (11,685).
pay-out from the LTI program is the continuous employ- Financial investments were SEK 1,498 million (8,013).
ment during the length of the program (vesting period). The investments in 2015 were mainly related to the acqui-
The LTI program measures performance over a 3-year sition of Tele2s Norwegian mobile operations and shares
period. Financial targets are earnings before interest, tax, in Spotify Technology S.A.
depreciation and amortisation (EBITDA) and total share- Cash and cash equivalents totaled SEK 12,232 million
holder return (TSR). The final allotment of Telia Company (13,558) at year-end. The balance sheet total was stable at
shares will be based 50 percent on accumulated EBITDA SEK 215,184 million (223,213), Shareholders equity was
and 50 percent on TSR compared to a corresponding TSR SEK 80,286 million (82,901), of which non-restricted equity
development of a pre-defined peer group of companies. SEK 64,573 million (67,189). The equity/assets ratio was
The maximum number of Performance Shares a partici- 36.5 percent (35.7). As of December 31, 2016, the number
pant can receive is the equivalent of 30 percent of the par- of employees was 273 (298).
39
DIRECTORS REPORT
SIGNIFICANT EVENTS AFTER PROPOSED APPROPRIATION OF

YEAR-END 2016 EARNINGS
No significant events have occurred after the end of the At the disposal of the Annual General Meeting:
reporting period.
SEK
Retained earnings 54,206,643,071
Net income 10,366,679,823
Total 64,573,322,894
The Board proposes that this sum be appropriated as

follows:
SEK
SEK 2.00 per share ordinary dividend
to the shareholders 8,660,169,562
To be carried forward 55,913,153,332
Total 64,573,322,894
The dividend should be split and distributed into two equal

tranches of SEK 1.00 each, one in April 2017 and one in
October 2017.
The Board of Directors has, according to Chapter 18
Section 4 of the Swedish Companies Act, assessed
whether the proposed dividend is justified. The Board of
Directors assesses that:
The parent companys restricted equity and the groups
total equity attributable to the shareholders of the parent
company, after the distribution of profits in accordance
with the proposal, will be sufficient in relation to the scope
of the parent companys and the groups business.
The proposed dividend does not jeopardize the parent
companys or the groups ability to make the investments
that are considered necessary. The proposal is consistent
with the established cash flow forecast under which the
parent company and the group are expected to manage
unexpected events and temporary variations in cash flows
to a reasonable extent.
The full statement by the Board of Directors on the same
will be included in the AGM documents.
AGM related documents are available at:

www.teliacompany.com/AGM
(Information on the Telia Company website does not form part of this
Report)
40
DIRECTORS REPORT
Annual and Sustainability Report 2016 RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES

Telia Company operates in a broad range of geographical Telia Company has an established risk management
product and service markets in the highly competitive and framework in place to regularly identify, analyze, as-
regulated telecommunications industry. As a result, Telia sess and report business, financial as well as ethics and
Company is subject to a variety of risks and uncertainties. sustainability risks and uncertainties, and to mitigate such
Telia Company has defined risk as anything that could risks when appropriate. Risk management is an integrated
have a material adverse effect on the achievement of Telia part of Telia Companys business planning process and
Companys goals. Risks can be threats, uncertainties or monitoring of business performance.
lost opportunities relating to Telia Companys current or Risks and uncertainties that could specifically impact
future operations or activities. the quarterly results of operations during 2017 include, but
may not be limited to:
Risk Description Mitigating activities
Customer privacy Vast amounts of data are generated in and through Telia Implementation of the EU General
Companys services and networks. New ways of connecting Data Protection Regulation
and data-driven business models increase the complexity of Mitigation activities based on road-
understanding and retaining control over how data is collected maps driven by countries and group
and used. It is challenging to establish and maintain unas- Privacy officers appointed throughout
sailable privacy protection in increasingly sophisticated data the organisation
environments and in ever-changing legal, technical and threat Efforts ongoing to strengthen informa-
landscapes. tion asset and vendor management
Potential impact
Actual or perceived issues related to data network integrity,
data security and customer privacy may lead to an unfavour-
able perception of how Telia Company handles these matters,
which in turn may adversely impact business. Not meeting
national and EU legislation may cause significant financial
penalties.
Freedom of The telecommunications industry faces high risks related to Building leverage to influence national
expression and the freedom of expression and privacy of users. Risks relate laws and regulations with peer com-
privacy to how national laws and regulations on surveillance of companies (Telecommunications Industry
munications or shutdown of networks can be overly broad in Dialogue) and joining efforts with multi
ways that violate human rights, and complicity by ICT compa- stakeholder Global Network Initiative
nies in violations linked to major and problematic government (GNI)
requests. Telia Company may be legally required to comply Transparent reporting on statistics
and, like other operators, only have limited possibility to of day-to-day conventional authority
investigate, challenge or reject such (often strictly confidential) requests (Law Enforcement Disclo-
requests. sure Reports) and of unconventional
requests (major events)
Potential impact Human Rights Impact Assessments
Actual failure in respecting freedom of expression and privacy carried out supported by external
may first and foremost damage rights holders by limiting their expertise, building knowledge and
freedom of expression and privacy. Actual or perceived failure defining actions for improvement and
may also damage the perception of Telia Company, leading risk mitigation
to exclusion from procurement or institutional investment
processes. Network shutdowns and blocking also limit core
business which may negatively affect revenues.
41
DIRECTORS REPORT
RISKS AND UNCERTAINTIES Annual and Sustainability Report 2016
Children online Children and young people are active users of Telia Companys Blocking child sexual abuse material
services. However, children are particularly vulnerable to online (CSAM) in customer networks and de-
threats such as cyber bullying and inappropriate content. Telia tecting and reporting CSAM in internal
Companys services may also be used for distributing or access- IT system
ing child sexual abuse material. Regular follow up our performance
against a number of industry self-
Potential impact regulatory initiatives in the area of
Telia Company may indirectly be complicit in violating childrens protection of children online
rights if products and services as well as network filters are not Understanding childrens perspec-
properly assessed. Actual or perceived failure to create a safe tives on online life through a Childrens
online experience for children and young people may negatively Advisory Panel
affect brand perception, incurring loss of business. Assessing impact on childrens rights
in all relevant business activities
Occupational The most significant accident risks related to occupa- Implementation of OHSAS 18001 oc-
health and safety tional health and safety (OHS) are linked to construction and cupational health and safety manage-
(OHS) maintenance work carried out primarily by contractors. Telia ment system in all major operations
Company employees work mainly in office or retail environ- OHSAS 18001 implementation activi-
ments where the main risks relate to psychosocial well-being ties include risk assessments, training,
and ergonomics. investments and support to employ-
ees wellbeing
Potential impact OHS KPI s to follow fatalities, rate
Failure to maintain a healthy and safety working environment of lost time, injuries and sickness
may lead to increasing sick leave, low employee engage- absence followed up quarterly locally
ment and a higher number of accidents and injuries, incurring and on group level
increased costs and potential loss of critical competence.
Ability to recruit People is at the core of everything that we do and it is the Efforts to build a strong employer
and retain skilled people with all their talents that will enable us to execute on brand to ensure talent attraction
employees our strategy. There is an increased demand for talents in the Establish a modern and efficient
area of ICT and the competition is getting tougher. In order to global recruitment process
win the battle of talents Telia Company needs be great at at- Providing internal growth
tract, recruit, and retain highly skilled employee to ensure the opportunities
demand and supply. Continuous improvements and follow
up of the results from yearly employee
Potential impact survey
Failure to recruit and retain necessary skilled employees may
impact the ability to develop new or high growth business
areas and thereby deliver on the strategy.
Environment Climate change is increasingly driving regulation and taxation Work to increase energy efficiency
related to reduction of greenhouse gas emissions and the use and improve waste management
of fossil fuels. Purchasing green electricity in
regions Sweden and Europe
Potential impact Buy-back and recycling programs for
Increasing scarcity of natural resources, particularly rare mobile devices
minerals used in network and consumer technology hardware, Implementation of ISO 14001 environ-
may lead to increased hardware costs. Increasing energy mental management system in regions
costs, greenhouse gas emissions taxation and price increases Sweden and Europe
caused by natural resource scarcity may incur additional
costs. As a consequence of climate change, extreme weather
conditions might be more common which may negatively
impact network performance and customer satisfaction.
42
DIRECTORS REPORT
Customer service Telia Company focuses on offering high-quality services and Ensuring network resilience through
and network networks, which is fundamental to customer perception now a combination of sound risk manage-
quality and in the future. The ambition to create a service company ment, business continuity planning
on the customers terms requires a major internal change of and incident management
processes, attitude and focus in many parts of the company. A group wide crisis management
Additionally, Telia Company currently outsources many of organization handles unexpected and
its key support services, including network construction and critical incidents negatively affecting
maintenance in most of its operations. our operations
Continuous work to improve internal
Potential impact as well as outsourced operational pro-
Extreme weather conditions and natural disasters may cause cesses to fulfil customer expectations
serious problems to network quality and availability. The Customer satisfaction is continuously
limited number of outsourced service suppliers, and the terms measured both to improve our under
of Telia Companys arrangements with current and future sup- standing of, and fulfil, customers
pliers, may restrict its operational flexibility and incur unneces- expectations
sary costs. Failure to meet customers quality requirements
or expectations may have an adverse impact on customer
retention and acquisition.
Corruption and Some of the countries in which Telia Company operates are Anti-bribery and corruption (ABC)
unethical business ranked as having high levels of corruption. The telecom- program, based on Telia Companys
practices munications industry is particularly susceptible to a range of compliance framework, implemented
corrupt practices as it requires government approvals and in all parts of the organization
necessitates large investments. Key areas where the threat of Responsible exit plan for region
corruption is significant include the licensing process, market Eurasia containing actions to ensure
regulation and price setting, the supply chain, and third-party continued third party due care activi-
management and customer services. ties to prevent, detect and remedy
ABC risks
Potential impact Education and communication efforts
Actual or perceived corruption or unethical business practices on ABC to targeted audiences, spe-
may damage the perception of Telia Company and result in cifically high-risk roles
financial penalties and debarment from procurement and insti-
tutional investment processes. Related fraud may significantly
impact financial results. Ongoing divestment processes may
in themselves pose risks of corruption, fraud and unethical
business practices.
Responsible Telia Company relies on a vast number of suppliers and sub- A standardized risk-based supplier
procurement suppliers, many of which are located in countries or indus- due diligence process implemented
tries with challenges in upholding ethical business practices, and performed prior to signing new or
human and labour rights, health and safety and environmental renewed contract
protection. Despite efforts to conduct due diligence and onsite Supplier code of conduct, which stip-
audits, suppliers and sub-suppliers may be in violation of Telia ulates our expectations on sustainable
Companys supplier requirements and/or national and interna- business practices, is included in new
tional laws, regulations and conventions. supplier contracts
Security directives are included in
Potential impact contracts where supplier handle
Failure or perception of failure of Telia Companys suppliers to customer data
adhere to these rules and regulations may damage customers
or other stakeholders perception of Telia Company. Violations
of laws and regulations puts suppliers and sub-suppliers at
risk of needing to limit or terminate their operations, which
may negatively affect how Telia Company is able to deliver
its services. Severe violations may lead to Telia Company
needing to seek new suppliers, which may negatively impact
procurement costs and delivery times.
43
DIRECTORS REPORT
Global financial Changes in the global financial markets are difficult to predict Maintaining a strong Investment grade
markets unrest but are affected by macroeconomics as well as political and rating is key to ensure a good access
geopolitical developments. Telia Company operates in a to diversified debt investors and bank
relatively non-cyclical or late cyclical industry and strongly funding
favor having a strong balance sheet, which is very important Important to forecast and manage
through difficult times. liquidity carefully to avoid any liquidity
shortage. By ensuring a smooth and
Potential impact reasonably sized maturity profile of
A severe or long-term financial crisis may have an impact on the debt portfolio the refinancing risk
customers purchasing power and spending on ICT invest- is limited
ments and services, which may negatively affect growth and The main sources of funding is the
results of operations. Unfavorable changes in the global finan- free cash flow from operations and
cial markets could limit the access to capital market funding issuance in the capital markets. By
and may increase Telia Companys cost of funding. Unusually constantly monitoring the capital mar-
high volatility in the foreign exchange market with fluctuations kets and take the opportunity to fund
of the currency rates have effects on the balance sheet and in advance when market conditions
the income statement. are favorable, the cost of funding can
be managed in an efficient and risk
adverse way
Telia Company has a committed
revolving credit facility supported by
13 core banks as a back-up for any
unexpected liquidity needs
Competition and Telia Company is subject to substantial and historically Actively monitor changes in customer
price pressure increasing competition and price pressure. Competition has and market behaviour to create and
from time to time led to increasing customer churn, decreasing execute mitigation plans
customer bases and to declines in the prices, Telia Company Business transformation programs
charges for its products and services, and may have similar and new business initiatives in line
effects in the future. Transition to new business models in with our business strategy
the ICT industry may lead to structural changes and different Continuously exploring opportunities
competitive dynamics. close to our core services to create
new revenues
Potential impact
Failure to anticipate and respond to industry dynamics, and
to drive a change agenda to meet mature and developing
demands in the marketplace, may affect Telia Companys cus-
tomer relationships, service offerings and position in the value
chain. Competition from a variety of sources, including current
market participants, new entrants and new products and
services, may also adversely affect Telia Companys results of
operations.
44
DIRECTORS REPORT
Emerging Telia Company has made significant investments in telecom A decision has been made to divest
markets operators in Eurasia (Kazakhstan, Azerbaijan, Uzbekistan, our operations in Eurasia. The divest-
Tajikistan, Georgia, Moldova, Nepal), Russia, Turkey and ment process is ongoing
Afghanistan. In September 2015, Telia Company announced The divestment of Ncell in Nepal was
its decision to reduce the presence in, and over time leave, completed on April 11, 2016
region Eurasia. Historically, the political, economic, legal and An agreement to sell Tcell in Tajikistan
regulatory systems in these countries have been less predict- has been signed and closing activities
able than in developed markets. The nature of these markets, are ongoing
including potential government intervention, combined with Focus on management of foreign
the fact that the assets are not fully-owned and there are un- exchange and counterparty risk
dertakings and obligations in various shareholder agreements, exposure, combined with continued
reputational issues regarding the assets and fewer potential development financial policies and
buyers than in more mature markets, makes the complexity of risk management processes
these divestments processes high. Efforts to ensure tax, legal and regula-
tory compliance at local level, with
Potential impact compliance oversight at regional and
The political situation in these emerging markets may remain group level
or become increasingly unpredictable, even to the extent that
Telia Company will be forced to exit a country or a specific
operation within a country. There may be unexpected or
unpredictable litigation cases under civil or tax legislation.
Foreign exchange restrictions or administrative issues may
effectively prevent Telia Company from repatriating cash, e.g.
by receiving dividends and repayment of loans, or from selling
its investments. Another risk is the potential establishment
of foreign ownership restrictions or other formal or informal
possible actions against entities with foreign ownership. Such
negative developments or weakening of the local economies
or currencies may have a significantly negative effect on Telia
Companys results of operations. The nature of these markets
with significant uncertainties and complexity may affect the
sales process regarding both expected outcome and timing.
The sanctions against the Russian Federation may negative-
ly affect the Russian ruble and the Russian economy, which
in turn may impact countries whose economies are closely
linked to the Russian economy, such as a number of region
Eurasia countries.
45
DIRECTORS REPORT
Investments Telia Company is currently investing in business transforma- Savings and business transformation
in business tion and future growth through, for example, initiatives to in- programs ensuring competitive cost
transformation crease competitiveness and reduce cost as well as to improve levels as well as ensuring capabilities
and future growth capacity and access. In order to attract new customers, Telia for future growth
Company has previously engaged in start-up operations and Focused execution on Telia Compa-
may decide to do so also in the future, which would require nys business strategy with the aim of
additional investments and expenditure in the build-up phase. becoming a New Generation Telco
Further, Telia Company normally has to pay fees to acquire
new telecom licenses and spectrum permits or to renew or
maintain existing ones.
Potential impact
Success in business transformation and growth will depend
on a variety of factors beyond Telia Companys control, includ-
ing the cost of acquiring, renewing or maintaining telecom
licenses and spectrum permits, the cost of new technology,
availability of new and attractive services, the costs as-
sociated with providing these services, the timing of their
introduction, the market demand and prices for such services,
and competition. Failing to reach the targets set for business
transformation, customer attraction and future growth may
negatively impact the results of operations.
46
DIRECTORS REPORT
Associated Telia Company conducts some of its activities through associ- Monitoring of the associates perfor-
companies and ated companies, the major ones being MegaFon in Russia and mance and development
joint operations Turkcell in Turkey, in which Telia Company does not have full Active board work in our associated
ownership or controlling interest and are due to that not in full compnaies (e.g. MegaFon), driving
control but still have significant influence over the conduct of issues of key importance to Telia
these businesses. In turn, these associated companies own Company
stakes in numerous other companies. Under the governing Continuous work to solve the dead-
documents for certain of these associated companies, Telia lock between the main shareholders
Companys partners have control over or share control of key of Turkcell
matters such as the approval of business plans and budgets,
and decisions as to the timing and amount of cash, as well
as protective rights in matters such as approval of dividends,
changes in the ownership structure and other shareholder-
related matters. The risk of actions outside Telia Companys or
its associated companies control and adverse to their inter-
ests is inherent in associated companies and jointly controlled
entities.
Potential impact
The financial performance of these associated companies may
have a significant impact on Telia Companys short- and long-
term results. As part of its strategy, Telia Company may want
to increase or decrease its shareholdings in some of its as-
sociated companies. This may be complicated due to a variety
of factors, including factors beyond Telia Companys control,
such as willingness on the part of other existing shareholders
to dispose or accept dilution of their shareholdings and, in the
event Telia Company gains greater control, its ability to suc-
cessfully manage the relevant businesses. As they are jointly
controlled, there is a risk that the partners may disagree on
important matters, including funding of the operations which
may affect Telia Companys position to act as planned. A
disagreement or deadlock or a breach by one of the parties of
the material provisions of the co-operation arrangements may
have a negative effect on Telia Company.
47
DIRECTORS REPORT
Impairment losses Factors generally affecting the telecom markets as well as Management constantly reviews and
and restructuring changes in the economic, regulatory, business or political refines the business plans, and may
charges environment may negatively change managements expecta- make exit decisions or take other ac-
tion of future cash flows attributable to certain assets. Telia tions in order to effectively execute on
Company may then be required to recognize asset impairment business strategy
losses, including but not limited to goodwill and fair value Restructuring and streamlining initia-
adjustments recorded in connection with historical or future tives, which have resulted in substan-
acquisitions. Telia Company also has significant deferred tax tial restructuring and streamlining
assets resulting from earlier recorded impairment losses and charges. Similar initiatives may be
restructuring charges. undertaken in the future
Potential impact
Significant adverse changes in the economic, regulatory, busi-
ness or political environment, as well as in Telia Companys
business plans, may affect Telia Companys financial position,
and results of operations, impairment losses, restructuring
charges which may adversely affect Telia Companys ability to
pay dividends. In addition, these effects may limit us to use
tax assets in full to reduce its future tax obligations, conse-
quently leading to an additional tax charge when such tax
asset is derecognized.
Regulation and Telia Company operates in a highly regulated industry, and Proactive work in shaping the new
licenses regulations impose significant limits on Telia Companys flex- EU Telecom Framework, by sharing
ibility to manage its business. In a number of countries, Telia detailed solutions with relevant stake-
Company entities are designated as a party with significant holders within the EU
market power in one or several telecom submarkets. As a Continiously exploring options to
result, Telia Company is required to provide certain services on rebalance increased costs and loss of
regulated terms and prices, which may differ from the terms revenues due to regulatory changes
on which it would otherwise have provided those services.
Effects from regulatory intervention may be both retroactive
and prospective.
Potential impact
Changes in regulation or government policy affecting Telia
Companys business activities, as well as decisions by
regulatory authorities or courts, including granting, amending
or revoking of telecom licenses and spectrum permits, may
adversely affect Telia Companys possibility of carrying out
business and subsequently results of operations.
48
DIRECTORS REPORT
Review of Eurasian In late 2012, the then Board of Directors appointed Swedish Telia Company will continue its nego-
transactions law firm Mannheimer Swartling (MSA) to investigate allega- tiations with the authorities
tions of corruption related to Telia Companys investments Telia Company cooperate with and
in Uzbekistan. MSAs report was made public on February 1, continuously hand over information to
2013. In April 2013, the Board of Directors assigned the inter- law enforcement agencies, who are
national law firm Norton Rose Fulbright (NRF) to review trans- better equipped to assess whether
actions and agreements made in Eurasia by Telia Company in any criminal acts have occurred
the past years with the intention to give the Board a clear pic-
ture of the transactions and a risk assessment from a business
ethics perspective. For advice on implications under Swed-
ish legislation, the Board assigned two Swedish law firms. In
consultation with the law firms, Telia Company has promptly
taken steps, and will continue to take steps, in its business
operations as well as in its governance structure and with its
personnel which reflect concerns arising from the review. The
Swedish Prosecution Authoritys investigation with respect
to Uzbekistan is still ongoing and Telia Company continues
to cooperate with and provide assistance to the Prosecutor.
If continued assessments and investigations would lead to
new observations and findings, it cannot be excluded that the
consequences of such findings would be that the results of
operations and financial position in Telia Companys opera-
tions in the Eurasian jurisdictions are adversely impacted.
Another risk is presented by the Swedish Prosecution
Authoritys notification in the beginning of 2013 within the in-
vestigation of Telia Companys transactions in Uzbekistan, that
the Authority is separately investigating the possibility of seek-
ing a corporate fine against Telia Company, which under the
Swedish Criminal Act can be levied up to a maximum amount
of SEK 10 million per instance, and forfeiture of any proceeds
to Telia Company resulting from the alleged crimes.
49
DIRECTORS REPORT
Review of Eurasian The Swedish Prosecution Authority may take similar actions
transactions with respect to transactions made or agreements entered into
Continued by Telia Company relating to operations in its other Eurasian
markets, but it could be noted that the Swedish prosecutor
made a public statement in May 2016, that it had decided
not to investigate any other of Telia Companys operations in
Eurasia. Further, actions taken, or to be taken, by the police,
prosecution or regulatory authorities in other jurisdictions
against Telia Companys operations or transactions, or against
third parties, whether they be Swedish or non-Swedish indi-
viduals or legal entities, might directly or indirectly harm Telia
Companys business, results of operations, financial position,
cash flows or brand reputation. As examples, investigations
concerning bribery and money laundering in connection with
the transactions in Uzbekistan are conducted by the Dutch
prosecutor and police authorities, and by the US Department
of Justice and the US Securities and Exchange Commission.
As requested by the Dutch authorities, Telia Company has
provided a bank guarantee of EUR 10 million as collateral for
any financial claims which may be decided against one of its
Dutch subsidiaries. Telia Company is cooperating fully with
the Dutch and US authorities and has done so since it was
informed of the investigations in March 2014 and has engaged
leading US and Dutch law firms as legal counsel for advice
and support. On September 14, 2016, Telia Company received
a proposal from the US and the Dutch authorities for financial
sanctions amounting to a total of approximately USD 1.45
billion or approximately SEK 12.5 billion at that point in time.
It is not at present possible to assess when the investigations
will be finally resolved. Telia Company has received requests
to make public the reviews made by NRF and other law firms.
However, despite risking criticism, it is not possible to publish
the reviews with respect to people, companies, business
agreements, privacy and thus the risk of Telia Company incur-
ring lawsuits as the law firms views are not necessarily shared
by those implicated.
50
Annual and Sustainability Report 2016 CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE
STATEMENT
STATEMENT OF MATERIALITY AND SIGNIFICANT AUDIENCES

Telia Company AB is registered in Sweden and is bound by the Swedish Companies Act (2005:551). The act
requires the Board of Directors to govern the company in a way that is profitable and creates value for its share-
holders. It is Telia Companys firm belief that the best way of ensuring sustainable growth and profitability is
integrating sustainable, responsible business practices into all parts of business and strategy, to create long term
shared value for the company, its stakeholders and society.
Telia Company has adopted a stakeholder based approach to identify and manage the most material business
aspects, including related risks and opportunities. The approach involves engaging with significant stakeholder
groups to understand Telia Companys current and future impact on its stakeholders, the environment and
society. Material aspects guide how Telia Company develops and drives its business strategy, including how the
company contributes to the fulfillment of the UN Sustainable Development Goals.
Significant stakeholder groups include:

Shareholders
Consumers
Business customers
Employees
Investors
Suppliers
Society
The Annual General Meeting is the primary forum for shareholder engagement. Telia Company continuously
engages with other stakeholders in many ways. See Trends and strategy for more information about stakeholder
engagement.
Telia Company is committed to a number of international guidelines on human rights, labor rights, anti-corruption
and environmental responsibility. These include:
The UN Universal Declaration of Human Rights
The core conventions of the International Labour Organization (ILO)
The OECD Guidelines for Multinational Enterprises
The UN Global Compact
The UN Guiding Principles on Business and Human Rights
The Childrens Rights and Business Principles
These guidelines form the foundation of the Code of Responsible Business Conduct which is approved by the
Board of Directors. The requirements set by the Code, which go beyond legal compliance and apply to all em-
ployees, lay out how to engage with stakeholders in a way that ensures the highest degree of ethical business
practices and behavior.
Telia Company monitors and discloses the progress on these material business aspects through this combined
Annual and Sustainability Report. The group reports its financial and operational performance on a quarterly ba-
sis, and its sustainability work on a semi-annual basis.
51
CORPORATE GOVERNANCE STATEMENT Annual and Sustainability Report 2016
COMPLIANCE TELIA COMPANY'S GOVERNING BODIES
This Corporate Governance Statement was adopted by

Shareholders
the Board of Directors at its meeting on March 8, 2017. It
was prepared according to the Swedish Corporate Gov-
Nomination General Meeting External auditors
ernance Code and the Swedish Annual Reports Act and Committee
has been examined by the external auditors. The State-
ment presents an overview of Telia Companys corporate Remuneration
Committee
governance model and includes the Board of Directors Board of Directors Audit Committee
description of the internal control environment and risk Sustainability and
Ethics Committee
management regarding financial reporting.
It is the opinion of the Board of Directors that Telia Com-
Group
pany in all respects complied with the Swedish Corporate Ethics & Compliance
Governance Code during 2016. President & CEO Internal Audit
Further, there was no infringement of applicable stock ex-
change rules and no breach of good practice on the securi-
ties market reported by the Nasdaq Stockholm Disciplinary Group Finance Group Legal Affairs
Committee or the Swedish Securities Council.
Group Group
Communications Human Resources
Updated information required by the Swedish Corporate Govern-
ance Code is available at: www.teliacompany.com/en/about-the-
Division X Group Corporate
company/corporate-governance/corporate-governance/ Development
(Information on the Telia Company website does not form part of
this Statement)
Global Services
and Operations
GOVERNING BODIES Region Sweden Region Europe Steering Board

Telia Companys main governing bodies are:
The Shareholders at the General Meeting
Country Country Region Eurasia
The Board of Directors
The CEO, assisted by Group Executive Management
Country
SHAREHOLDERS Note: Organization structure changed as of January 1, 2017

Telia Company is a Swedish public limited liability com-
pany and is bouned by the Swedish Companies Act, the acts in dialogue with other owners to promote application
Nasdaq Stockholm Rule Book for Issuers, the Swedish of the policy.
Corporate Governance Code and the companys Articles The Telia Company share is listed on Nasdaq Stockholm
of Association. The Annual General Meeting is the com- and Nasdaq Helsinki. For more information on the Telia
panys highest decision-making forum where the owners Company share and the shareholder structure, see the
exercise their shareholder power. Board of Directors Report.
Annual General Meetings 2016

For further information regarding:
Swedish Companies Act (2005:551), Annual Reports Act The Annual General Meeting 2016 was held in Stockholm
(1995:1554), Securities Market Act (2007:528): www.riksdagen. on April 12, 2016, and decided, among other issues, upon
se/en, www.government.se the following:
Nasdaq Stockholm (issuer rules and surveillance): Composition of the Board of Directors
www.nasdaqomx.com/listing/europe/surveillance/stockholm
Swedish Corporate Governance Code and specific features of
Election of auditors
Swedish corporate governance: Composition of the Nomination Committee
www.corporategovernanceboard.se Appropriation of earnings
Remuneration policy for the executive management
Telia Company has only one type of shares. Each Telia Com- Authorization for the Board to decide upon acquisitions
pany share represents one vote at the Annual General Meet- of the companys shares within certain limits
ing. As of December 31, 2016, Telia Company had 512,841 Amendment of the companys articles of association
shareholders. (change of the company name)
The Swedish State is the single largest shareholder, Long-term incentive program for key employees
owning a 37.3 percent stake at year-end. For companies
with State ownership, the Swedish Government has issued
Telia Companys Articles of Association are available at:
an ownership policy. Among others, the policy sets forth www.teliacompany.com/en/about-the-company/corporate-
requirements related to remuneration, sustainable busi- governance/articles-of-association/, and AGM minutes and related
ness, diversity and gender equality. In companies where documents at: www.teliacompany.com/en/investors/annual-gen-
the State does not have a majority ownership, the State eral-meeting/ (Information on the Telia Company website does not
form part of this Statement)
52
NOMINATION COMMITTEE Code and that it intends to report its activities at the An-
nual General Meeting and on the companys website. In its
Telia Companys Nomination Committee consists of repre- deliberations, the Nomination Committee has specifically
sentatives of the companys in terms of votes four largest discussed the Corporate Governance Codes requirements
shareholders at the turn of the month before the notice on diversity and equal gender distribution in the Board.
of the Annual General Meeting and which also wish to The Nomination Committee reviews its Instruction annually
participate in the nomination process (Nominating Share- and as necessary proposes changes thereto to the Annual
holders), and the Chair of the Board of Directors. The General Meeting.
members of the Nomination Committee carefully consider
potential conflicts of interest before accepting the assign-
Shareholders are welcome to send nomination proposals to the
ment. The Nomination Committee presently consists of: Nomination Committee. Proposals can be sent by e-mail to:
Daniel Kristiansson, Chair (the Swedish State) forslagtill-styrelseledamot@teliacompany.com
Kari Jrvinen (Solidium Oy)
Johan Strandberg (SEB Funds)
Anders Oscarsson (AMF and AMF Funds)
Marie Ehrling, Chair of the Board BOARD OF DIRECTORS
Responsibilities
In accordance with its instruction as adopted by the An- The Board of Directors is responsible for the organization
nual General Meeting, the Nomination Committee shall: of the company and the administration of the companys
Propose the number of Board members elected by the affairs. The Board regularly assesses the companys and
Annual General Meeting the groups financial position and ensure that the company
Nominate the Chair, the Vice-Chair and other members is organized so that accounting, management of funds
of the Board of Directors and the companys financial conditions in general are
Propose the Board remuneration that is divided among controlled in a satisfactory manner. In this role the Board
the Chair, the Vice-Chair and other members and remu- makes and if applicable subsequently supervises the
neration for serving on committees implementation of decisions on inter alia:
Nominate the Chair of the Annual General Meeting The groups strategic direction and key strategic
Nominate the external auditors and propose remunera- initiatives
tion payable to the auditors Major investments
Nominate members of the Nomination Committee until The capital structure and dividend policy
the next Annual General Meeting Appointment and dismissal of the CEO
The delegation of authority
The Nomination Committee performs interviews and The development of group policies
receives information from the Chair of the Board, other The overall organization of the group
Board members, including employee representatives, The groups internal control environment and risk
and the CEO on internal work of the Board, Telia Com- management model
panys position and strategic direction, and other relevant The core content of the groups external communication
circumstances. Based on this information, the Committee Sustainability and responsible business conduct
assesses the functioning of the Board and the compe-
tences needed in the Board as a whole. The Committee Instructions for the work of the Board of Directors are set
has concluded that competences currently needed are forth in its rules of procedure, which are reviewed and
experiences from: adopted at least once a year include the rules of procedure
The telecommunications industry and industries closely detail matters to be addressed at ordinary board meet-
related to it ings and regulate the number of ordinary board meetings,
Digitalization agenda items for ordinary board meetings, the duties of
Relevant markets the Chair of the Board and the allocation of responsibili-
Consumer oriented operations and markets ties between the Board and the CEO as well as the CEOs
Operational sustainability work reporting to the Board. The rules of procedure also include
Board work in listed companies instructions for the work in board committees, inter alia
Work in executive positions stipulating the committees duties, the number of commit-
Structural changes and change processes tee meetings, the matters to be addressed at the meetings
and how the committees shall report to the Board.
On the basis of these competence needs, the Nomina-
tion Committee evaluates the competences of the present Members and independence
Board members and the composition of the Board. The Board of Directors consists of eight members elected
Taking into account the competences needed in the by the Annual General Meeting, serving one-year terms,
future, diversity, the gender distribution on the Board, the and three employee representatives (with three depu-
competences of present Board members and the present ties) from the Swedish operations. A Finnish employee
Board members availability for re-election, the Committee representative is present at the Board meetings, but
nominates Board members to the Annual General Meeting. without voting rights. Marie Ehrling is Chair of the Board.
The Nomination Committee has reported that it complies The other members of the Board, elected by the Annual
with the provisions of the Swedish Corporate Governance General Meeting, are Olli-Pekka Kallasvuo (Vice-Chair),
53
Susanna Campbell, Mikko Kosonen, Nina Linander, Martin Q3 report meeting

Lorentzon, Anna Settman and Olaf Swantee. An ordinary Board meeting is held to approve the interim
In accordance with the guidelines of the Swedish Corpo- financial report and review the risk report for the third
rate Governance Code, all members elected by the Annual quarter of the year and to discuss the second step of the
General Meeting 2016 are considered to be independent in strategic planning process the strategic options. This
relation to the company, to the administration of the com- meeting is also devoted to the annual evaluation of the
pany and to major shareholders. Boards internal work.
The members of the Board of Directors are presented in
more detail, including meeting attendance, remuneration Business and financial plan meeting
and holdings of Telia Company shares, at the end of this As the final step of the strategic planning process, an
Statement. ordinary meeting is held for the Board to approve manage-
ments business and financial plan and to discuss target
Annual work cycle setting for executive management. This meeting also
The work of the Board follows an annual cycle. This ena- comprises an annual review of the capital structure and
bles the Board to appropriately address each of its duties dividend policy.
and to keep strategic issues, risk assessment and value
creation high on the agenda. Q4 report and full-year financial results meeting
Board meetings are normally held in Stockholm, but the Following the end of the calendar year, this ordinary Board
Board has an ambition to hold at least one other meeting meeting focuses on the financial results of the entire year
elsewhere to be able to discuss local issues more deeply, and the fourth-quarter financial report and risk report, also
make specific site visits, etc. In 2016, the Board conducted including a final decision on target setting for executive
a study and strategy trip to San Francisco (Palo Alto, Sili- management and the dividend proposal for the year.
con Valley) to meet with key players within the IT industry.
Annual and Sustainability Report meeting
Inaugural meeting This ordinary meeting closes the annual work cycle of
The annual cycle starts with the inaugural Board meet- the Board of Directors by an approval of the Annual and
ing which is held immediately after the Annual General Sustainability Report.
Meeting. At this meeting, members of the Committees
are appointed and the Board resolves on matters such as THE BOARDS ANNUAL WORK CYCLE
signatory powers.
Business and Q4 report and full-
financial plan year results meeting
Q1 report meeting meeting
At the next ordinary meeting, the Board approves the
Q4 Q1
interim financial report and reviews the risk report for the Dec Jan Annual and
first quarter of the year. Q4 Q1 Sustainability
Nov Feb Report meeting
Strategy input meeting Q3 report Q4 Q1

At the third ordinary meeting, the Board is updated on and meeting Oct Mar
Ordinary board
discusses various strategic issues. meetings Inaugural
annual cycle meeting
Q3 Q2
Q2 report meeting First Sep Apr
strategic Q1 report
The Board convenes to approve the interim financial report planning meeting
meeting Q3 Q2
and review the risk report for the second quarter of the year. May
Aug
Q3 Q2
First strategic planning meeting Jul Jun
Strategy input
An ordinary Board meeting focused on the first step of the meeting
Q2 report meeting
strategic planning process by discussing the scope and
key assumptions.
ORGANIZATION OF THE BOARD WORK
Board of Directors
11 members (of which 3 are employee representatives)
Remuneration Committee Audit Committee Sustainability and Ethics Committee

3 members 3 members 3 members
Oversight over Oversight over Oversight over
Executive compensation Financial reporting Sustainability strategy
Incentive programs Internal controls Action and implementation plans
Succession planning Auditing Reporting
Group policies, processes and systems Group policies, processes and systems Group policies, processes and systems
54
In addition, ordinary Board meetings include: Capital structure of the group

An integrated management report by the CEO, Operating model and organizational issues
comprising: Human Resources issues, in particular succession plan-
Comments on progress towards the long-term ning and performance management
ambitions in terms of customers, shareholders,
people and sustainability Further, the Board of Directors evaluated its internal work
Financial performance and an operational update during 2016 by self-assessment, based on individually re-
covering competitor, commercial, technology, people, sponding to formal surveys and bilateral interviews with the
and legal issues Chair of the Board and the Nomination Committee, the lat-
Updates on strategy issues and on M&A activities, ter to which the result of the evaluation was also reported.
internally as well as industry developments
Reports on committee work by the respective Commit- Committees and committee work in 2016
tee Chair To improve board work efficiency, the Board of Direc-
A closed session without management being present tors has appointed a Remuneration Committee, an Audit
Committee and a Sustainability and Ethics Committee. The
Board work in 2016 committees prepare recommendations for the Board.
In 2016, the Board of Directors held 8 ordinary meetings The Remuneration Committee handles issues regard-
(whereof one inaugural meeting) and 6 extra meetings. In ing salary and other remuneration to the CEO and Group
addition to following up on the day-to-day business of the Executive Management, incentive programs that target
group, the Board of Directors paid special attention to: a broader group of employees and succession planning.
Strategic options, with specific review of the changing The Remuneration Committee has the authority to approve
business environment in the telecom industry remuneration to the members of Group Executive Manage-
Assessment of the operations in region Eurasia, focusing ment, except for the CEO remuneration which is decided
both on business and compliance issues by the entire Board of Directors.
Follow-up of major strategic initiatives within the busi- The Audit Committee reviews for example financial state-
ness operations ments, accounting, internal controls over financial report-
Review of the overall sustainability risks for the group, ing and auditing. The Audit Committee has the authority
including decisions on new or updated group policies to decide on audit scope and audit fees and to approve
Continued close monitoring and control of the investiga- purchase of other services from the external auditors.
tions of the severe corruption and money-laundering The Sustainability and Ethics Committee primarily reviews
allegations related to the investments in Uzbekistan, the sustainability strategy, the progress of the Sustain-
by the Swedish Prosecution Authority, by the Dutch ability Priority Action Plan and the Ethics and Compliance
prosecutor and police authorities, and by the US Depart- programs as well as the external sustainability reporting.
ment of Justice and the US Securities and Exchange
Commission Remuneration Committee
Follow-up and review of the Telia Companys exit pro- Marie Ehrling is Chair of the Remuneration Committee. In
cess from Eurasia 2016, the Committee held 6 meetings. At each Board meet-
Divestments of Yoigo and of Sergel Group, as well as ing following a Committee meeting, the Committee Chair
other M&A activities reported on key discussion items and brought proposals on
Reviewing efficiency initiatives and cost-reduction decision items. Committee work included, amongst others,
programs the following issues:
Regulatory developments in the telecom industry Structure for target model and financial targets
Potential acquisitions, joint ventures and increase of Succession planning
ownership in subsidiaries Performance management
Investments in telecom licenses and frequency permits Long-term incentive programs
Follow-up of CAPEX, in particular related to network Remuneration to the CEO and Group Executive
investments Management
Developments in the associated companies in Turkey As part of the Board of Directors overall assessment, the
and Russia Remuneration Committee evaluated its internal work during
2016 by self-assessment.
MEMBERS OF THE BOARD COMMITTEES
Members of the Committees of the Board of Directors in 2016
Remuneration Committee Audit Committee Sustainability and Ethics Committee

Marie Ehrling (Chair) Nina Linander (Chair) Mikko Kosonen (Chair)
Susanna Campbell Marie Ehrling Marie Ehrling
Olli-Pekka Kallasvuo Olaf Swantee Anna Settman
55
Audit Committee included, amongst others, the following issues:

Nina Linander is Chair of the Audit Committee. In 2016, the Review of the sustainability strategy
Committee held 7 meetings. At each Board meeting follow- Map and review of the status of ongoing ethics, compli-
ing a Committee meeting, the Committee Chair reported a ance and sustainability initiatives in Telia Company
summary of the issues raised, decision proposals as well Approval of the sustainability priority action plan and
as assessments and reviews performed by the Committee. regular follow-up, with special attention on status and
When identifying risk areas related to financial reporting, actions of the anti-bribery and corruption program,
the Committee collaborates with the CEO and CFO, the including e.g. corruption risk-assessment by country,
external auditors as well as the internal audit and inter- instructions and training, whistle-blowing tools, etc.
nal control functions. Information gathered hereby forms Reviews of sustainability-related risks in the quarterly
the basis when deciding on future focus areas. Commit- risk reports
tee work in 2016 included, amongst others, the following Review of Telia Companys external sustainability
issues: reporting
Overseeing improvements of financial reporting and
financial processes, with specific focus on risk identifica- As part of the Board of Directors overall assessment, the
tion and assessment of the internal control environment Sustainability and Ethics Committee evaluated its internal
Assessment and review of the quality and integrity of risk work during 2016 by self-assessment.
management, risk assessment and risk reporting as well
as review and follow-up of whistle-blower reports
Reviews of the companys external financial reporting CEO AND GROUP EXECUTIVE
Reviews of important risk areas, e.g. treasury, procure-
ment, taxes, litigation, insurance and IT systems MANAGEMENT
Review of the CAPEX process and quarterly follow-up of The CEO is responsible for the companys business devel-
CAPEX programs opment, and leads and coordinates the day-to-day opera-
Reviews of significant accounting policies and key tions in accordance with the Board of Directors instruc-
sources of estimation uncertainty, e.g. accounting for tions for the CEO and other decisions made by the Board.
discontinued operations and assets held for sale, rev- Headed by the CEO, Group Executive Management cur-
enue recognition, valuation of pension obligations, and rently comprises the CEO, CFO, General Counsel, Head
asset valuation, including the annual impairment testing of Group Human Resources, Head of Group Communica-
process and setting of significant testing parameters tions, Head of Group Corporate Development, Head of
With regards to the external auditors: reviews of audit Global Services and Operations and the Heads of regions
reports and follow-up of recommended actions, as- Sweden and Europe. Group Executive Management meets
sessment and approval of audit plans, closed sessions on a monthly basis. The meetings are devoted to follow-
without management being present, independence and up on strategic and business performance, major change
performance assessment, and submitting a nomina- programs, risks and other issues of strategic nature and
tion proposal for auditor election to the Nomination group-wide importance. The members of Group Execu-
Committee tive Management are presented in more detail, including
With regards to the internal auditors: reviews of audit remuneration and holdings of Telia Company shares, at the
reports and follow-up of recommended actions, as- end of this Statement.
sessment and approval of audit plans, closed sessions As established in 2015, a separate Steering Board,
without management being present, and performance chaired by the CEO, has the overall strategic responsibility
assessment for region Eurasia. The Head of region Eurasia presents the
operations of the region to the Steering Board. The model
As part of the Board of Directors overall assessment, the ensures continued strong governance and alignment within
Audit Committee evaluated its internal work during 2016 by the group, while allowing Group Executive Management to
self-assessment. focus on the New Generation Telco agenda and the home
markets in regions Sweden and Europe.
Sustainability and Ethics Committee See also section Governance, Risk, Ethics and Compli-
Mikko Kosonen is Chair of the Sustainability and Ethics ance (GREC) meetings.
Committee. The Committee held 5 meetings during 2016. Note that the organization structure changed as of Janu-
At each Board meeting following a Committee meeting, ary 1, 2017. For further information, see www.teliacompany.
the Committee Chair reported on key discussion items com.
and brought proposals on decision items. Committee work
56
GROUP-WIDE GOVERNANCE Customer loyalty through convergence create a

seamless experience across technologies, services and
FRAMEWORK channels
Competitive operations simplify operations and trans-
GROUP-WIDE GOVERNANCE FRAMEWORK STRUCTURE
form legacy to create agility and cost efficiency
Deciding what we shall achieve
Explore opportunities in adjacent areas close to the core
in internet of things, e-healthcare, security and media

Operational and financial targets

Setting the boundaries for how we act Operational and financial targets are set for the group as a
whole and for each region, country and business unit.

Follow-up of our performance

Setting the boundaries for how we act
Telia Companys group-wide governance framework has GROUP-WIDE GOVERNANCE FRAMEWORK STRUCTURE
been approved by the Board of Directors. It is designed
to ensure that operational results correspond to decisions Deciding what we shall achieve
made, and is structured to encourage all employees to

strive, within set boundaries, towards the same goals, with
a common clear understanding of purpose, set of values, Setting the boundaries for how we act
roles, responsibilities and authority to act.
Set of values
Code of responsible business conduct
Sustainability work governance
Deciding what we shall achieve Policy framework
Organization
Delegation of obligations and authority

Deciding what we shall achieve
Purpose Follow-up of our performance
Strategic priorities
Operational and financial targets
The Board of Directors sets the boundaries on how the

employees shall act. Key elements are Telia Companys

Setting the boundaries for how we act set of values, the code of reponsible business conduct,
governance of the sustainability work, group policies,

organizational structure and delegation of obligations and

authority.
Set of values
In order to provide overall guidance to the employees, the Telia Companys set of values Dare, Care and Simplify
Board of Directors has approved a Telia Company purpose is the compass that leads us in how we act and behave in
statement. Further, the Board yearly adopts a strategy, our daily work.
setting more specific directions for the coming three-year We dare to innovate by sharing ideas, taking risk and
period as well as yearly operational and financial targets. continuously learn; lead by engaging with our custom-
ers and challenging ourselves; speak up by expressing
Purpose: Bringing the world closer on the customers opinions and concerns
terms We care for our customers by providing solutions that
Our ambition is to take Telia Company to the next level, are adapted to their needs; each other by being support-
to become a New Generation Telco. To grow our business ive, respectful and honest; our world by acting responsi-
and to stay inspired in our daily work, we need to be truly bly and in accordance with our ethical standards
relevant to our consumer and business customers. Our We simplify execution by taking actionable deci-
purpose that shows us how we will get there is therefore sions and deliver with speed; teamwork by transparent
from the customer perspective. communication, active collaboration and knowledge
sharing; our operations by efficient processes and clear
Strategic priorities ownership
Our strategic priorities are:
Value through superior network connectivity secure Code of Responible Business Conduct
the transition from voice to data through future proof Telia Company launched a new Code of Responsible
network access to end customers Business Conduct in September 2016, replacing the
previous code of ethics and conduct. The Code, issued
57
Group policies issued by the Board area and purpose

Financial management To set the rules for managing financial risks and for counterparty credit ratings
Financial accounting To require that proper accounting and reporting standards are prepared, regularly updated and
and reporting made available to consolidated entities and applied by the entities when reporting to the group
Procurement To provide a single point of reference and direction for procurement activities and a clear under-
standing of the procurement principles
Enterprise risk management To define the enterprise risk management framework
Environment To ensure pro-active management of environmental impacts throughout the full life cycle of deliv-
ering products and services
Electromagnetic fields (EMF) To define the elements of the serious approach towards EMF-related health concerns
Security To ensure that security measures are characterized by appropriate security and risk awareness,
prevention, preparedness, and the ability to respond to, and recover from, incidents and environ-
mental changes
Customer privacy To set high and consistent standards to respect and protect customer privacy
Communication To ensure that all communication is accurate and provided in a professional and timely manner
Freedom of expression To reduce human rights risks, and to ensure that customers feel confident that we will, whenever
in telecommunications possible, support, respect and safeguard their freedom of expression when we receive requests
or demands from governments regarding surveillance of communications
Anti-bribery and corruption To set common standards regarding compliance with the zero tolerance policy towards any form
of bribery and corruption, and compliance with local laws
People To define employer expectations on the employees as well as what expectations employees
should have on each other
Occupational health To make the health and safety culture part of all employees everyday working life and to achieve
and safety a safe and legally compliant workplace for employees, vendors and visitors
Remuneration To set the strategic direction and clarify the approach on designing and implementing remunera-
tion practices for employees at all levels
Recruitment To ensure that all recruitments are based on respect for the individual, that demands stated in job
profiles are based on our common values and that the selection processes are fair
Pensions To assist in providing pension benefits by clarifying the structure, design and management of pen-
sion plans
Competition To set the principle of not engaging in any practices or conducting business activities that are in
breach of relevant competition or antitrust legislation
Inside information and insider To ensure correct handling of inside information and a high standard of ethical behaviour towards
trading the capital markets
by the Board of Directors, provides guidance on Telia Sustainability governance

Companys framework of policies and instructions. It helps Sustainability in Telia Company covers how the company
create a Telia Company way of doing business by defining accounts for its long-term impact on society and the
a common ethical compass, setting clear standards and environment. The work is focused on ensuring ethical, re-
expectations on how to act and helps in recognizing that sponsible business practices and on creating shared value
doing business with integrity is a shared responsibility. The by aligning core business with solving societal challenges
17 chapters of the Code reflect group policies and instruc- as laid out by the UN Sustainable Development Goals. The
tions and provide practical and instructional information approach is guided by international guidelines and frame-
with respect to its interpretation. The Code applies to all works, such as the UN Universal Declaration of Human
Telia Company employees, directors and board members. Rights, the UN Guiding Principles on Business and Human
All contractors and consultants working as part of Telia Rights, the UN Global Compact principles, the core con-
Companys operations must also follow the Code. The ventions of the ILO (International Labour Organization) and
Code is available in 12 languages in a printed newspaper the OECD Guidelines for Multinational Enterprises.
format document and on the intranet. Group Executive Management and GREC are the
decision-making forums, with oversight by the Board of
Directors Sustainability and Ethics Committee. The Head
The Telia Company Code of Responsible Business is available at: of Sustainability Strategy and the Chief Ethics and Compli-
http://dontdothisatwork.teliacompany.com/
ance Officer are responsible for coordination and develop-
(Information on the Telia Company website does not form part of
this Statement) ment of the sustainability work.
58
Policy framework Group functions

The heads of group functions and departments secure that The group functions assist the CEO in setting the frame-
necessary group policies and instructions are issued within work for the activities of the countries and provide the
their respective area of responsibility. countries with process development support and com-
Group policies are relatively short and mainly principle- mon platforms within the areas communication, corporate
based. Group instructions are normally more detailed and development (including M&A), finance (including procure-
operational. All group policies and instructions are binding ment and real estate), human resources, legal affairs,
for all entities in which Telia Company has management group-wide commercial (including the international carrier
responsibility. operations) and technology (including IT) issues, CEO
Group policies are approved by the Board of Directors, at Office (also responsible for the holdings in MegaFon and
least on an annual basis, after a preparatory review by the Turkcell), Ethics and Compliance Office and Internal Audit.
relevant board committee. Group instructions are approved
by the CEO or the head of the relevant group function or Delegation of obligations and authority
department, after being reviewed at a group GREC or GEM The CEO has issued a Delegation of Obligations and
meeting. All valid policies and instructions on group level Authority (the DOA), which defines the obligations imposed
are published on a common governance documents data- on the heads of regions and group functions, and within
base available to all employees. The database provides a which limits they may make decisions. Within this frame-
complete audit trail of the entire document lifecycle. work, obligations and decision authorities are further
In addition to the overall policy document Telia Company delegated person-to-person via solid reporting lines based
Code of Responsible Business Conduct, the Board has cur- on the roles in the operational organization.
rently issued the group policies presented in the table above.
Certain group policies are public documents available at:
www.teliacompany.com/en/about-the-company/public-policy/
public-policy/
(Information on the Telia Company website does not form part of Deciding what we shall achieve
this Statement)

Organization Setting the boundaries for how we act
Telia Companys largest businesses are mobile, broadband,

TV and fixed-line operations in the Nordics and Baltics, and

mobile operations in Eurasia.
The guiding principle for Telia Companys organizational
Business reviews
structure is to provide clarity, accountability and to support
Risk and compliance reviews
a customer-centric operating model. The operating model Individual performance management - YouFirst
is country-based with strong commercial and technology
functions on group level. Countries are grouped in three
geographical regions. Performance follow-up is essential in order to be able to
Note that the organization structure changed as of January take corrective measures and plan for the future. Perfor-
1, 2017. For further information see www.teliacompany.com. mance follow-up is applied on organizational units as well
as on individuals.
Region Sweden
The region comprises Telia Companys mobile, broadband, Business reviews
TV and fixed-line operations in Sweden. The region Head The CEO sets goals for the operations based on the deci-
reports to the CEO and is a member of Group Executive sions of the Board of Directors. To ensure performance,
Management. managers have annual targets for their respective opera-
tion. The plan for each business is documented in annual
Region Europe operating plans and follow-up is conducted on a monthly
The region comprises Telia Companys mobile, broadband, basis, complemented with quarterly forecasts.
TV and fixed-line operations in Finland, Norway, Denmark, Business reviews are meetings held on a monthly basis
Lithuania, Latvia and Estonia (the operation in Spain was and include financial and business reviews for the report-
divested during 2016). The region Head reports to the CEO ing period and forecast period as well as reviewing of risks
and is a member of Group Executive Management. and operations performance metrics on customer service
levels, network quality, etc. The business reviews allow for
Region Eurasia frequent follow-up of operational key performance indica-
The region comprises Telia Companys mobile operations tors (KPIs) on country and region level. The operational
in Kazakhstan, Azerbaijan, Uzbekistan, Georgia and Mol- KPIs are a key part of the follow-up and consist of several
dova (the operation in Nepal was divested and an agree- measurements which give management a good overview
ment was signed to divest Tcell in Tajikistan during 2016). of current state and progress over time. The Net Promoter
The region Head reports to a Steering Board, headed by Score (NPS) framework is used to monitor and improve
the CEO (for additional information, see section CEO and the customer experience that Telia Company provides.
Group Executive Management). At the region review meetings, the CEO, CFO, Head of
59
INDIVIDUAL PERFORMANCE MANAGEMENT KEY COMPONENTS
Assess
Connect
Connect to the
big picture
Set expectations
on what and how
Frequent
check-ins
Provide recognition,
coaching and feedback
Assess contribution
clear link to outcome
The Board of Directors Remuneration Committee reviews the individual performance of Group
Executive Management members on a yearly basis.
Corporate Control, Head of Investor Relations and selected recognition, coaching and feedback with self-leadership as
members of Group Executive Management attend, in addi- a key component.
tion to the respective region management. To ensure execution of strategy and cultural change, the
The Board of Directors receives reports on operational individual objectives are connected to the strategic areas
performance on a monthly basis, and at each ordinary and to the key behaviours stated in Telia Companys values
Board meeting the groups operational and financial per- Dare, Care and Simplify. Total contribution is assessed
formance is presented in detail by the CEO and the CFO, and it is equally important that expectations are met re-
respectively (see also the Boards annual work cycle as garding both objectives and behaviours. The assessment of
described in section Board of Directors). the total contribution is integrated in all relevant processes
such as development activities, salary review and variable
Risk and compliance reviews pay.
GREC meetings on group, region and country level are the The frequent coaching and feedback enable and reinforce
primary governing bodies for risk and compliance follow- a more dynamic and business oriented way of working with
up. For further information, see section Governance, Risk, expectations and priorities to ensure focus on what matters
Ethics and Compliance (GREC) meetings. most: to challenge and stretch performance and create ac-
countability for key results.
Individual performance management YouFirst
Telia Company is developing a purpose and value based
performance culture in order to outperform competition ENTERPRISE RISK MANAGEMENT
and reach challenging goals. Setting individual objectives
linked to strategic business goals and providing frequent (ERM) FRAMEWORK
feedback are crucial activities for managers at all levels. Operating in a broad range of geographical product and
Telia Company applies a group-wide model for individual service markets in the highly competitive and regulated
performance management YouFirst where what you do telecommunications industry, Telia Company is subject
and how you do it are equally important. to a variety of risks and uncertainties. Telia Company has
Telia Companys performance management approach is defined risk as anything that could have a material adverse
a key component to drive the right objectives and behav- effect on the achievement of Telia Companys goals. Risks
iours towards becoming a New Generation Telco, where can be threats, uncertainties or lost opportunities relating
everyones performance matters and all activities support to Telia Companys current or future operations or activities.
the strategic direction. The shift is from an annual event- Risks and uncertainties related to business and sustainabil-
driven process to a dynamic, ongoing set-up, integrated ity as well as to shareholder issues are described in Risks
with the daily work through frequent dialogue meetings. and uncertainties and financial risks in Note C26 to the
These frequent check ins are held in an environment of consolidated financial statements.
60
Three-line defense integrated governance, risk RISK MANAGEMENT PROCESS FLOW

management and compliance Risk management flow
Telia Companys risk management may be illustrated as Risk assessment Risk treatment
a three-line defense being an integral part of the groups Risks to Accept risk
Identify risk be treated Mitigate risk
operational activities, business planning process and Analyze risk
Reporting &
Evaluate risk
monitoring of business performance. Risks that may pose escalation
a threat to achieving business objectives are identified and
assessed, and measures are implemented to mitigate and Continous monitoring
Risks/activities
monitor the identified risks. The aim is not only to focus on Threats/ decided to
opportunities Follow-up be monitored
risks from a negative perspective, but also to acknowledge Compliance
assessments
that successful risk management is essential for strategy
execution and sustainable growth.
The objective of the continuous risk management process
ENTERPRISE RISK MANAGEMENT LINES OF DEFENSE is that all risks that may help or hinder the achievement of
Telia Companys objectives are regularly assessed, treated
Risks and uncertainties and monitored.
Risk management shall be fully integrated into the busi-
Operational Risk Group internal ness processes. The risk management procedures shall
management management audit
practice be transparent, feasible and traceable. Management shall
Ethics and
2nd line
3rd line
1st line
Internal controls compliance ensure that a personal sense of responsibility and com-
Revenue External audit mon view on and awareness of risk is established among
assurance Regulatory the employees, as well as facilitate accountability for risks
supervision
in daily decision-making. Risk reporting is integrated into
the business planning process and risks shall be re-
The defense-line roles and responsibilities include: viewed at business reviews and escalated through the line
First-line defense: The line organization owns its op- organization.
erational risks and is responsible and accountable for Quarterly, the Audit Committee and the Board of Direc-
assessing, controlling and mitigating the risks as well as tors receive a consolidated risk report, aligned with the
for internal control activities and assurance Boards annual work cycle as described in section Board
Second-line defense: Comprises the group-level enter- of Directors. The consolidated report is divided into four
prise risk management (ERM) function, the group risk categories:
area coordinators, the internal controls function within Financial risks
Group Finance, the Group Ethics and Compliance Of- Operational and societal risks
fice and the Governance, Risk, Ethics and Compliance Strategic and emerging risks
(GREC) meetings Legal and regulatory risks
Third-line defense: The group internal audit function
provides independent assurance on the risk manage- Under each of these categories, risks are presented either
ment process and internal control environment. External as group-wide or by region with a:
parties, such as the external auditors and regulatory Risk description
bodies, provide assurance related to specific statutory Description of risk mitigating activities and status of
requirements, e.g. information presented in the consoli- execution
dated financial statements or reported to the Swedish Potential financial impact when possible
Financial Supervisory Authority Probability grading (low, medium, high and very high risk)
Risk management process In addition, the Audit Committee quarterly receives a

As a basis for first-line defense, Telia Companys group consolidated litigation report with short-form details of
instructions on risk management define roles and re- ongoing, pending and threatened legal and administrative
sponsibilities as well as the main components of the risk proceedings. Each case description also includes alleged
management process, which are risk assessment, risk nominal and estimated financial impact when possible and
response and continuous monitoring. a probability grading (low, medium and high risk).
Management shall conduct risk and compliance evalua-
tions and assessments proactively, regularly and timely in
order to ensure that all employees are aware of and take
steps to comply with the relevant requirements. Compli-
ance means conforming to external as well as internal
requirements, such as:
Applicable legislation and regulation
Customer agreements
International standards and norms
Group policies and group instructions
61
The most significant risk areas are monitored by the risk COMPLIANCE FRAMEWORK
management function including the GREC meetings (see
sections Group-level enterprise risk management (ERM)
function, and Governance, Risk, Ethics and Compliance
(GREC) meetings), the internal controls function within
Group Finance (see section Internal controls over financial
reporting) and the Group Ethics and Compliance Office Monitoring, Risk and
(see section Compliance framework and programs).
E
improvement, compliance
AT
audit & report assessment
TIG
Group-level enterprise risk management (ERM) 1
I NVES
8
Special
function investigation & Resources
and
PREVENT
disciplinary
The Head of the ERM function, within group function /corrective 7 2 capabilities
Responsible
Corporate Development, acts as the owner of the group- actions Leadership
common ERM process to ensure a structured approach
Internal 6 3
towards risk management, compliance and reporting reporting
4 Policies &
within the group. Function responsibilities include to: /Speak-up line
instructions
/Non-retaliation
Own, govern, coordinate and monitor the ERM process Education &
to ensure a structured approach towards risk manage- communication
ment, compliance and reporting in the group t
DE
5 en
EC Du ge
m
T
Own the group framework for ERM, policies and in- T eC
are a na
Business Partner M
structions within his/her areas of responsibility and to
monitor compliance herewith and support group wide
implementation
Oversee the operational effectiveness of the ERM
processes across the group and propose actions for
improvement Prioritized risk areas are identified based on risk as-
Monitor the risk level as well as the nature of specific risk sessments. The most significant risks are monitored by
matters across the group. As part of that responsibility, the Group Ethics and Compliance Office and managed
the CRO will collect and aggregate the respective reports according to the framework through subject-specific
from countries and group functions in order to give the compliance programs to ensure consistency and follow-up
CEO and the Board a consolidated and holistic view on in implementation and reporting. Currently prioritized risk
the groups risk level and individual, material risks areas are reflected by the following ongoing programs:
Facilitate and organize the governance forum for Risk Anti-bribery and corruption
Management and Compliance (GREC) on group level Freedom of expression
Customer privacy
Compliance framework and programs Occupational health and safety
Also supporting first-line defense, Telia Company has Responsible procurement
established a framework to enable systematic work with Environment
compliance issues. The compliance framework consists
of eight elements that are founded on a sound and clear For additional information on the approach and work in the
tone from the top. It is designed to adhere to international respective area, see Sustainability Work, sections Sus-
standards and is based on prevent, detect and investigate tainability in Telia Company, Anti-bribery and corruption,
principles. Freedom of expression and privacy, Customer privacy
and Occupational health and safety.
GREC MEETING (GROUP LEVEL) - PARTICIPANTS AND RISK CATEGORIES
Head of Region Heads

CEO and Head of Head of Enterprise Heads of Head of Group
Group Ethics and Sweden, Europe
CEO Office Risk Management Group Functions Internal Audit
Compliance Office and Eurasia
Strategic and emerging risks Financial risks Operational and societal risks Legal and regulatory risks
Risks that can have a Risks that can cause unex- Risks that may affect or Risks related to legal or
material impact on the pected variability or volatility compromise execution of governmental actions that
strategic objectives in net sales, margins, earnings business functions or have an can have a material impact
arising from internal or per share, returns or market impact on the society on the achievement of
external factors capitalization business objectives
62
GOVERNANCE, RISK, ETHICS AND COMPLIANCE MEETINGS
Group GREC
Group Executive Management
Sweden Europe ERM
Global Services CEO Office

and Operations
Corporate Human
Development CEO Resources
Communications Finance
Legal Ethics & Internal

Affairs Compliance Audit
Region GREC
Region Management
Sweden Europe ERM

Implementation
and roll-out and Operations
Corporate CEO Human

development Resources
Communi Finance
Country GREC cations
Country Management Legal Ethics & Internal

Sweden Europe ERM

and Operations
Follow-up and
compliance
Corporate CEO Human
development Resources
Communi Finance
cations
Legal Ethics & Internal

Governance, Risk, Ethics and Compliance (GREC) GREC meetings are held on group, region and country
meetings level. On group level, the GREC meeting is chaired by
The purpose of the GREC meetings is to act as the pri- the CEO and consists of Group Executive Management
mary governing bodies within risk and compliance and to extended with the Head of CEO Office, the Head of ERM,
evaluate risk levels and propose risk-mitigation actions. the Chief Ethics and Compliance Officer as well as the
At the GREC meetings, which are held at least quarterly, Head of Group Internal Audit. The purpose, agenda and
management meets to update, discuss, decide and follow- participants of local GREC meetings mirror the group-level
up on ongoing activities and initiatives within the different meetings. For region Eurasia, GREC issues on group level
risk areas and sustainability focus areas. The purpose of are addressed by a Steering Board, headed by the CEO
the GREC meetings is to: and reported to group GREC (for additional information,
Consolidate risk reporting from regions, countries and see section CEO and Group Executive Management).
units
Assess country, regional and group wide risks Whistle-blowing process
Review risk levels in relation to risk appetite Speak-Up Line
Recommend and decide on risk mitigation actions 2016 was the second full year of operations of Telia Com-
Escalate and report risks and follow up on mitigation panys Speak-Up Line, the whistle-blowing tool enabling
actions employees and others to anonymously report violations of
Monitor compliance for key risk areas proper accounting, reporting or internal controls, as well as
Build risk awareness culture non-compliance with local laws or breaches of Telia Com-
Monitor and respond to non-compliance against internal panys policies and ethical instructions. Telia Company has
and external requirements a group-wide standard for performing internal investiga-
Ensure communication and feed-back to all relevant tions. The guiding principle is to ensure that investigations
stakeholders
63
are conducted objectively and impartially; are carried out legations of certain significance, progress of investigations
in a way to swiftly establish the facts with minimum disrup- and the final results of the investigations. All case closure
tion to the business or the personal lives of employees; reports were submitted to the Group Ethics Forum for
and to make sure that confidentiality and non-retaliation oversight and decisions on disciplinary action.
are respected at all times.
Internal investigation KPIs Target 2016 2015
To the reader of this Statement: If you believe there are deficien- Whistle-blowing cases closed
cies in Telia Companys financial reporting or if you suspect any within eight weeks 80% 83% 72%
misconduct within the Telia Company group, you may report your Disciplinary decisions implemented within
concerns at: www.speakupline.ethicspoint.com four weeks after Group Ethics Forum decision 100% 70% 53%
Speak-Up Line 2016 INTERNAL CONTROLS OVER

Number of whistle-blowing case
reports during 2016 123
FINANCIAL REPORTING
Investigations opened by the Special Investigations Office
In accordance with the Swedish Companies Act and the
of Group Ethics and Compliance 35 (27) Swedish Corporate Governance Code, the Board of Direc-
Reports related to HR matters (handled jointly with Group tors is responsible for internal controls over financial report-
HR) 19 (42) ing. The Board continuously reviews the performance of
Reports sent for information to other departments internal controls and initiates activities to foster continuous
(e.g. customer or supplier complaints), or closed after an
initial review and response to the whistle-blower concerned improvement of internal controls.
(e.g. in cases of ethical reproach) 69 (72) Telia Companys risk management framework includes
internal controls over financial reporting, and is in line with
the COSO framework for internal controls. It consists of
Reporting channel %
interrelated areas, which are control environment, risk
Speak-Up Line portal 50
assessment, control activities, information and communi-
Line managers 18
cation, and monitoring. To establish a consistent approach
Direct contact with ethics and
compliance officers at group or local level 17 to and a group-common view of risks related to incorrect
Sent to the Speak-Up Line e-mail address 12 financial reporting, group-wide risk catalogues have been
Telia Companys executive management 2 implemented in all major entities in which Telia Company
has management responsibility. The internal controls func-
Share of all reports that was submitted anonymously or by tion within Group Finance is responsible for developing
reporters requesting to be anonymous 26 percent (40). and maintaining the IT-based tool for managing the risk
catalogues.
Internal control is an integral part of Telia Companys
Origins of reports during 2016 (2015) %
corporate governance and enterprise risk management
Region Eurasia 56 (74)
which involves boards of directors, executive management
Nordics 33 (22)
and employees on all organizational levels. It is a process
Other group companies 11 (4)
which includes methods and processes to:
Safeguard the groups assets
During 2016, customer complaints or enquiries, conflicts Ensure the reliability and correctness of financial
of interest and ethical concerns or reproaches against reporting
management were the most commonly reported matters, Secure compliance with applicable legislation and
in particular from region Eurasia. Other significant issues guidelines
included improper third party relationships, abuse of posi- Ensure that objectives are met and continuous improve-
tion, discrimination and harassment. Several suppliers ment of operational efficiency
complained about biased tender results. Several employ-
ees complained about wrongful termination. The objective for Telia Companys financial reporting is to
In 2016, 24 (13) investigations were requested by man- be in line with the highest professional standards and to be
agers. This increase is viewed positively as it shows that full, fair, accurate, punctual and understandable.
employees feel comfortable addressing concerns directly
with their managers. Control environment
Where allegations were substantiated, 10 (17) discipli- The most essential parts of Telia Companys control
nary decisions were taken by the Group Ethics Forum. environment are the group policies with related group
The majority of the decisions resulted in terminations of instructions and detailed group directives. Management at
employments, but warnings were issued in some cases. all levels is responsible for ensuring that the organization
Consolidated case reports were presented to the Audit complies with the Delegation of Obligations and Authority
Committee throughout the year. The reports included al- issued by the CEO, the financial governing documents, the
64
reporting framework and other group requirements. Group tinuously engage in internal training activities to ensure
Finance staff is responsible for monthly monitoring and, if harmonization within important areas such as revenue
significant, communication of changes in legislation, listing recognition, distinction between capital and operating
requirements and financial reporting standards affecting expenditure, etc.
financial group instructions or directives. The internal controls function within Group Finance are
Management in each entity or group function is respon- continuously performing monitoring activities and compile
sible for ensuring that: and share the results with management teams on region
Monthly and quarterly financial statements comply with and country level. Sharing gives a good opportunity for
Telia Companys accounting policies benchmarks and learning.
Financial reports are delivered on time Telia Company promotes an open, honest and transpar-
Activities to mitigate the risks, as specified in the ent flow of information, especially regarding the perfor-
group risk catalogues, have been implemented and are mance of internal controls. Control performers are encour-
performed aged to disclose any issues concerning their controls in
Required reconciliations are properly performed the monthly reporting, so that a problem can be taken care
Material business and financial risks are identified and of before it, possibly, causes errors or misstatements.
reported
Monitoring
The Telia Company financial shared services unit supports Telia Company has implemented a structured process for
harmonized and standardized financial accounting pro- performance monitoring of internal controls over financial
cesses and controls across large wholly-owned business reporting. This process includes all countries, regions and
units. group functions and consists of a self-assessment of the
risk mitigating activities. The internal controls function
Risk assessment within Group Finance monitors the process on a monthly
Telia Company has a risk-based approach towards internal basis. On behalf of Group Executive Management, the
controls over financial reporting. Risk management related internal controls function carries out an annual risk-based
to financial reporting is incorporated in the group-common compliance review of key risks in order to evaluate the
risk management framework as described in section quality of self-assessments, risk mitigation and the overall
Enterprise risk management (ERM) framework. As such, internal control environment.
assessment and management of risks that may result in The results of the self-assessments and the compli-
inaccurate financial reporting is a natural part of the daily ance review are communicated to the management of all
work. The group risk catalogues are used as a baseline. relevant entities, to the GREC meetings and to the Board
Risk assessments are performed from both a top-down of Directors Audit Committee. The Audit Committee also
and a bottom-up perspective. The results of the risk as- receives reports directly from both external and internal
sessments are documented in the group risk catalogues. auditors. The reports are discussed and follow-up obser-
vations are made by the Committee. Both the external and
Control activities internal auditors are present at the Committee meetings.
All business processes across Telia Company include At least once a year, the entire Board of Directors meets
controls regarding the initiation, approval, recording and with the external auditors, in part without the presence of
accounting of financial transactions. Major processes, management.
including related risks and key controls, are described and
documented in a common and structured way, based on
the requirements set in the group risk catalogues. Controls GROUP INTERNAL AUDIT
are either automated or manual and designed to ensure The group internal audit function reviews the group opera-
that necessary actions are taken to either prevent or tions and makes proposals aiming at improving the internal
detect material errors or misstatements and to safeguard control environment as well as efficiency in processes and
the assets of the company. Controls for the recognition, systems. Through operational reviews, a systematic and
measurement and disclosure of financial information are disciplined approach is used to evaluate and improve the
included in the financial closing and reporting process, effectiveness of governance within the group.
including controls for IT applications used for accounting The direction of the work of the internal audit function
and reporting. is stated in the annual audit plan. In order to reflect the
overall business objectives and risks, the audit plan is
Information and communication aligned with the group business plan and strategy. The
Group policies, instructions and directives, the reporting audit plan determines priorities and resource allocation. It
framework guidelines and other requirements regarding is approved by the Board of Directors Audit Committee
accounting and reporting as well as performing internal and presented to the external auditors on an annual basis.
controls are made accessible to all employees concerned, Within the audit plan, the detailed audit assignments are
through the use of Telia Companys regular internal com- defined on a quarterly basis. The quarterly audit assign-
munication channels. Employees at group level con- ments are discussed with the external auditors in order to
65
share risk assessments and audit findings. Besides the audit report submitted to the shareholders at
In 2016, audits were performed in group functions and all each Annual General Meeting, the auditors also issue a
regions. Important focus areas were: review report on the second-quarter consolidated financial
Transformation to New Generation Telco statements. The auditors submit a report on Telia Compa-
Information security and privacy nys financial statements quarterly to the Audit Committee
Supply chain and outsourced business and Group Executive Management and, in November each
Customer experience and operational excellence year, a report on internal controls within financial reporting
Sustainable business and IT. For further information on the contacts between the
Board and the auditors, see sections Board of Directors
The Head of Group Internal Audit reports administratively and Internal controls over financial reporting.
to the CEO and functionally to the Audit Committee. The In addition, the auditors perform an annual limited assur-
results from each specific audit assignment are reported ance of the information presented in Sustainability Work
to the line manager responsible for the audited area or and GRI Index.
unit, and in addition to the relevant function-related area
manager and to the external auditors. A summary of audit Current auditors and fees
findings is reported to the Audit Committee on a quarterly At the Annual General Meeting 2016, Deloitte AB was
basis. elected as auditor until the end of the Annual General
The Head of Group Internal Audit is also responsible, Meeting 2017. Deloitte AB has appointed Jan Nilsson
together with two external members acting within the (born 1962), Authorized Public Accountant, to serve as
Equality of Access Board, for overseeing developments in auditor in charge. Deloitte AB is often engaged by Telia
relation to equal treatment of internal and external whole- Companys largest shareholder, the Swedish State, for
sale customers in Sweden. The CEO decided to end the both audit and advisory services. Jan Nilsson does not
activity of the Equality of Access Board by December 31, hold any shares in Telia Company AB.
2016, primarily due to the changed market conditions as For information on fees paid for audit-related and other
well as changes in the regulatory environment. services, see Note C32 to the consolidated financial
During the second half of 2015, the Head of Group Inter- statements.
nal Audit temporarily assumed an operational role as CFO
of the Swedish organization and has therefore during the
entire year of 2016 been withdrawn from audit work related
to Sweden.
AUDITORS
Number of auditors and duties
According to its Articles of Association, Telia Company
AB shall have no less than two and no more than three
auditors and no more than the same number of deputy
auditors. The Annual General Meeting can also appoint
only one auditor, if the auditor in question is a public ac-
counting firm. The auditors report to the shareholders at
General Meetings. The duties of the auditors include:
Updating the Board of Directors on the planning, scope
and content of the annual audit
Examining financial statements to assess accuracy and
completeness of the accounts and adherence to applica-
ble financial reporting standards
Examining the Board of Directors and the Presidents
administration of the company
Conducting a statutory examination of this Corporate
Governance Statement
Advising the Board of Directors of non-audit services
performed, the consideration paid and other issues
determining the auditors independence
66
BOARD OF DIRECTORS
Marie Ehrling Olli-Pekka Kallasvuo Susanna Campbell Mikko Kosonen

Born 1955. Chair of the Board. Born 1953. Vice-Chair of the Board. Born 1973. Elected to the Board Born 1957. Elected to the Board
Elected to the Board of Directors in Elected to the Board of Directors of Directors in 2016. Susanna of Directors in 2013. Mr. Kosonen
2013. Ms. Ehrling was President of in 2012. Mr. Kallasvuo was CEO Campbell is former CEO of Ratos. is since 2008 the president of the
TeliaSoneras Swedish operations and board member of Nokia Oyj Prior to that she held positions Finnish Innovation Fund Sitra.
between 2002 and 2006. During from 2006 to 2010. Previously, he at McKinsey and Alfred Berg Prior to that, he held several
19822002, she worked for SAS held various executive positions Corporate Finance. Ms. Campbell leading positions at Nokia between
Group, holding various executive at Nokia, including the positions has an Master of Science of 1984 and 2007, where his final
positions including Deputy CEO of COO, CFO, Head of Mobile Business and Administration. role was that of Senior Vice
and Head of SAS Airline. Ms. Phones Division and Head of Nokia Shares in Telia Company: 10,000 President, Strategy and Business
Ehrling is Chair of Securitas AB, Americas. Mr. Kallasvuo is today Infrastructure. He is a member of
Vice-Chair of Nordea Bank AB and Chair of Veikkaus Oy, Chair of the board of Technology Academy
Vice-Chair of Axel Johnson AB. Zenterio AB and Vice-Chair of SRV Finland, Foundation for Economic
She is selected member of Royal Group Plc., and he is also a board Education and Vice-Chair of Aalto
Swedish Academy of Engineering member of Cleantech Industries University Board. Mr. Kosonen
Sciences (IVA) and Chair Advisory Global N.V., Entrada Oy, Limestone holds a doctorate degree in
Board Stockholm School of Platform AS and Foundation for economics/International business.
Economics. Ms. Ehrling holds a Economic Education. Mr. Kallasvuo Shares in Telia Company: 2,000
BSc in Business and Economics holds a Master of law and an
and an Honorary Doctorate. honorary doctorate.
Shares in Telia Company: 20,000 Shares in Telia Company: 35,896
Nina Linander Martin Lorentzon Anna Settman Olaf Swantee

Born 1959. Elected to the Board Born 1969. Elected to the Board Born 1970. Elected to the Board of Born 1966. Elected to the Board of
of Directors in 2013. Ms. Linander of Directors in 2013. Mr. Lorentzon Directors in 2016. Anna Settman is Directors in 2016. Mr. Swantee is
is former partner at Stanton Chase is founder and Vice-Chair of the founder of the investment company CEO of Sunrise and previously he
International between 2006 and Board of Spotify AB. He was also The Springfield Project and has was the CEO of the UK's mobile
2012 and prior to that SVP and founder of TradeDoubler AB where prior to that gained significant telecoms business EE. Prior to
Head of Treasury at Electrolux he also served as a board member. experience from the media sector, joining EE, he held a number of
AB 20012005. Nina Linander Mr. Lorentzon holds a Master of mainly from Aftonbladet where she Executive Board roles for Orange
is currently a board member of Science Engineering. served as CEO. Anna Settman is a Group, as well as senior leadership
AB Industrivrden, Skanska AB, Shares in Telia Company: 1,100,000 member of the board of Directors roles within Hewlett Packard,
Castellum AB, Awa Holding AB and of Nordnet Bank AB and Anticimex Compaq and Digital Equipment
OneMed AB. Ms. Linander holds AB. Ms. Settman studied marketing Corporation, across Europe and the
a BSc degree in Economics and a strategy and economics at the United States. Mr. Swantee holds
MBA (IMD) degree. Berghs School of communications an European MBA.
Shares in Telia Company: 5,700 and completed the IFL Executive Shares in Telia Company: 0
Management Program at the
Stockholm School of Economics.
Shares in Telia Company: 0
67
Agneta Ahlstrm Stefan Carlsson Eva-Marie Penttil Peter Wiklund

Born 1960. Employee Born 1956. Employee repre- Born 1977. Finnish employee Born 1968. Employee
representative, appointed by sentative, appointed by the trade representative without voting rights, representative, appointed by
the trade union to the Board of union to the Board of Directors in appointed by Trade Union Pro. the trade union to the Board of
Directors in 2007. She is Chair of 2009. He is deputy Chair of the Shares in Telia Company: 0 Directors in 2014. In addition, Mr.
the Swedish Union for white-collar Swedish Union for white-collar Wiklund is the Chair of the Union
workers in the private labour workers in the private labour of Service and Communication
market, Telecommunications market, Telecommunications Employees within Telia Company,
section (Unionen-Tele). section (Unionen-Tele) and member SEKO klubb Telia.
Shares in Telia Company: 200 of the board of Unionen. Previously, Shares in Telia Company: 0
he was second deputy Chair of SIF
and Unionen.
Shares in Telia Company: 650
Deputy employee representatives

Hans Gustavsson (born 1954), SEKO klubb Telia Company. Shares in Telia Company: 1102
Marianne Johansson (born 1957), Unionen-Tele. Shares in Telia Company: 1,5002
Arja Kovin (born 1964), Unionen-Tele. Shares in Telia Company: 02
REMUNERATION DURING 2016, ATTENDANCE AND NUMBER OF SHARES

Meeting attendance
Total
Sustaina- remu-
Remu- bility & neration Shares
Elected neration Audit Ethics (SEK in Telia
Name year Position Board Committee Committee Committee thousand)1 Company2
Marie Ehrling 2013 Chair of the Board and 15/15 5/5 7/7 5/5 1,855 20,000
Chair of the Remuneration
Committee
Olli-Pekka Kallasvuo 2012 Vice-Chair of the Board 15/15 5/5 817 35,896
Susanna Campbell 2016 Director 12/12 4/4 428 10,000
Mikko Kosonen 2013 Director and Chair of the 15/15 5/5 633 2,000
Sustainability and Ethics
Committee
Nina Linander 2013 Director and Chair of the 15/15 7/7 727 5,700
Audit Committee
Martin Lorentzon 2013 Director 14/15 2/2 2/2 597 1,100,000
Anna Settman 2016 Director 12/12 3/3 428 0
Olaf Swantee 2016 Director 10/12 5/5 500 0
Agneta Ahlstrm 2007 Employee representative 14/15 - 200
Stefan Carlsson 2009 Employee representative 12/15 - 650
Peter Wiklund 2014 Employee representative 14/15 - 0
All Board members elected by the Shareholders' General Meeting are considered to be independent in relation to the company, to the administration of the
company and to major shareholders
1) See also Note C31 to the consolidated financial statements.
2) Shares in Telia Company include shareholdings by spouse and/or affiliated persons when appropriate. Mr. Lorentzon's shares are held through companies.
Holdings as of the date of this Annual and Sustainability Report.
68
GROUP EXECUTIVE MANAGEMENT
Johan Dennelind Robert Andersson Hlne Barnekow Jonas Bengtsson

Born 1969. President and Chief Born 1960. Executive Vice Born 1964. Executive Vice Born 1970. Senior Vice President
Executive Officer. Between 2010 President and Head of Corporate President and Head of Telia and Group General Counsel. Prior
and 2013, Mr. Dennelind was Holdings. Prior to joining Telia Sweden. Ms. Barnekow has several to joining Telia Company, Mr.
International CEO South Africa Company, Mr. Andersson held years of experience from the mobile Bengtsson was the Group General
at Vodacom. Previously he had several managerial positions within and IT business, most recently as Counsel at Tele2 between 2007 and
several managerial positions at Nokia in different international head of Worldwide Field & Partner 2013. Mr. Bengtsson has almost 20
Telenor in Sweden and Malaysia, i business and support roles, Marketing at EMC Corporation. years experience as a commercial
a CEO of DiGi Telecommunications including Executive Vice Presi- Prior to that she held several lawyer, of which approximately 15
Malaysia between 2008 and dent of Customer and Market managerial positions at Sony years as a General Counsel in the
2010. Prior to that he had several Operations, Executive Vice Ericsson Mobile Communications telecom industry and has worked
managerial positions at Telia. Mr. President, Devices Finance, between 2001 and 2009. She has for, inter alia, Telenor Sweden,
Dennelind is a board member Strategy and Sourcing and Senior also been working at Ericsson. Utfors and lawfirm Mannheimer
of GSMA and World Childhood Vice President Corporate Alliances Ms. Barnekow holds a Master of Swartling. Mr. Bengtsson holds a
Foundation. Mr. Dennelind holds and Business Development. He Science in International Business. law degree.
a Master of Science Business is a member of the board of PAO Shares in Telia Company: 12,000 Shares in Telia Company: 20,500
Administration. MegaFon. Mr. Andersson holds a
Shares in Telia Company: 154,500 Master of Science in Economics
degree and a Master in Business
Administration.
Shares in Telia Company: 10,000
Peter Borsos Abraham Foss Christian Luiga Cecilia Lundin

Born 1969. Senior Vice Born 1964. Senior Vice President Born 1968. Executive Vice Born 1970. Senior Vice President
President and Head of Group and CEO of Telia Norway since President and Chief Financial and Head of People and Brand.
Communications and Chair of 2015. He has a wide national and Officer. Prior to that he was Head Previously, Ms. Lundin was Head
Division X. Previously Mr. Borsos international managing experience of Corporate Control. Before joining of Human Resources at Investment
was Executive Vice President and of different industries, amongst oth- Telia Company, Mr. Luiga was AB Kinnevik. Prior to that she held
Director of Communications at ers as head of the business market CFO of Teleca AB since 2004 and positions as human resources
Swedbank Group. Prior to that he for the largest operator in Malaysia, between 2002 and 2004 he served executive at Novartis in the Nordics,
held various managerial positions Maxis Berhad. as CFO of Framfab AB. Mr. Luiga Tele2 and Billerud, respectively.
within Swedbank and Bank of Mr. Foss has previously been has his background as controller Cecilia Lundin holds a Master of
land. He started his career at manager for, amongst others, in several companies. Mr. Luiga is Science in Economics.
Nordiska Fondkommission AB. Mr. Telenor, Innovasjon Norge and a member of the board of Fintur Shares in Telia Company: 1,000
Borsos holds a Master of Science Sparebank 1. Mr. Foss holds an Holdings B.V. Mr. Luiga holds a
in Management and Economics MBA and has studied Russian. Bachelor of Science in Economics.
degree. Shares in Telia Company: 0 Shares in Telia Company: 52,859
69
Anders Olsson Ingrid Stenmark Henriette Wendt Stein-Erik Vellan

Born 1969. Senior Vice President, Born 1966. Senior Vice President, Born 1969. Senior Vice President Born 1965. Senior Vice President
COO and Head of Global Services Head of CEO Office; Strategy and Head of Cluster. Previously and CEO of Sonera Finland. Mr.
and Operations. Prior to joining & Responsible Business. Ingrid Ms. Wendt was Head of Corporate Vellan has worked with Telenor
Telia Company, Mr. Olsson worked Stenmark is responsible for Group Strategy and Participation Group since 2001 in various
at Tele2 where he had several Strategy, Risk Management, and Management at Swisscom. Prior managerial positions in Norway and
managerial positions including also overseeing Internal Audit. to that she held various managerial internationally, including CEO of
Executive Vice President, CCO and Since joining Telia Company in positions within Motorola. She Telenors operations in India, Serbia
Head of Region Central Europe 1994, she has held a number of started her career as a strategy and Bulgaria, respectively. He is
and Benelux. He is member of the senior positions in the Group, consultant with Monitor Company Chair of Onsagers A/S. Mr. Vellan is
board of BIMA. Mr. Olsson holds including Head of Group Regulatory and other technology companies. marketing candidate.
a Master of Science in Business affairs, acting General Counsel, Ms. Wendt holds a Masters Degree Shares in Telia Company: 0
Administration and Economics. and responsible for the associates in Business Administration.
Shares in Telia Company: 140,000 Turkcell and MegaFon. Ms. Shares in Telia Company: 8,500
Stenmark serves as a board
member of MegaFon and Kcell. Ms.
Stenmark holds a Master of law.
Information on the members of Group Executive Management is also available at www.teliacompany.com/Corporate-Governance.

Shares in Telia Company include shareholdings by spouse and/or affiliated persons when appropriate. Holdings as of the date of this
Annual and Sustainability Report.
REMUNERATION AND OTHER BENEFITS DURING 2016,

CAPITAL VALUE OF PENSION COMMITMENTS
Total Capital value
Base Other Other Pension remuneration of pension
SEK thousand salary remuneration benefits expense and benefits commitment
Johan Dennelind, CEO 15,794 1,358 75 6,204 23,431 -
Other members of Group
Executive Management
(8 individuals) 41,507 3,371 1,383 12,835 59,095 1,351
See also Note C31 to the consolidated financial statements and the Board of Directors Report, section Remuneration to executive management.
70
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 SUSTAINABILITY IN TELIA COMPANY
SUSTAINABILITY
IN TELIA COMPANY
Digitalization is fundamentally impacting people and businesses every-
where, and it is a key factor in societal development and sustainable eco-
nomic growth. We aim to capture the business opportunities of digitalization
and run our business in a responsible way to create value for our company
and for society as a whole.
OUR APPROACH TO SUSTAINABILITY
ALL IN SHARED VALUE CREATION
CONNECTING THE A HEALTHY AND EDUCATION DIGITAL INNOVATION

UNCONNECTED SAFE SOCIETY FOR ALL AND ENTREPRENEURSHIP
RESPONSIBLE BUSINESS
$
ANTI-BRIBERY RESPONSIBLE FREEDOM OF OCCUPATIONAL C USTOMER CHILDREN ENVIRONMENTAL
AND PROCUREMENT EXPRESSION HEALTH AND PRIVACY ONLINE RESPONSIBILITY
CORRUPTION SAFETY
Our approach is based on two elements: the All in strategy we comply with legal requirements and voluntary commit-
for shared value creation and the Responsible Business ments and also meet our own and stakeholder expecta-
programs to ensure sustainable operations and ethical tions of ethical business practices. This responsibility
business practices. Shared value creation is integrated in extends throughout our value chain.
our business strategy by leveraging our purpose, expertise To find out more about how we create economic, social
and assets to address societal and environmental chal- and environmental value, see Our Company, section How
lenges while creating business value. By conducting our we create value.
business in a responsible way throughout our operations,
71
SUSTAINABILITY WORK
SUSTAINABILITY IN TELIA COMPANY Annual and Sustainability Report 2016
Supporting the Sustainable Development Goals UNDERSTANDING STAKEHOLDERS

Our approach contributes directly to a number of the UN
Sustainable Development Goals (SDGs) as digitalization To ensure that we focus on the most material issues and
is at the heart of the transformational change needed to our ability to impact, we regularly review our priorities with
reach the goals. Through Responsible Business, we con- our stakeholders. For more information about stakeholder
tribute to several of the targets of SDG16: Peace, justice engagement, see Our Company, section Trends and
and strong institutions such as to reduce corruption and strategy.
bribery and ensure public access to information. The All in In 2014, we conducted a sustainability materiality review
focus areas contribute directly to SDG3: Good health and through internal and external workshops and interviews.
well-being, SDG4: Quality education and SDG9: Industry, The results confirmed our responsible business focus
innovation and infrastructure. By reducing our own envi- areas and determined our shared value creation strategy
ronmental footprint and developing services that increase focus areas. It also highlighted other areas that we need
resource efficiency and reduce greenhouse gas emissions, to actively manage, such as protection of children online.
we contribute to SDG13: Climate action. See 2014 Annual and Sustainability Report, Sustainability
Work, section Stakeholder engagement for more infor-
mation. An in-depth materiality review will be conducted in
OUR COMMITMENTS 2017 to ensure the right focus as we leave region Eurasia.
We are committed to a number of international principles In 2015, to better understand internal and external views
and charters, including: on our sustainability work, we introduced two survey-
The UN Universal Declaration of Human Rights based indexes: the Sustainability Perception Index (SPI)
The core conventions of the International Labour and the Responsible Business Index (RBI).
Organization (ILO) In 2016, SPI surveys were sent out twice to all key stake-
The OECD Guidelines for Multinational Enterprises holder groups in regions Sweden and Europe. According
Signatory to the United Nations Global Compact to the survey results, 43 percent of the some 2400 external
stakeholders who responded perceive that we are contrib-
We seek to respect human rights including children's ute positively to society and the environment, and run our
rights, as laid out in the UN Guiding Principles on Business business in an ethical way. 8 percent perceive that we do
and Human Rights and the Children's Rights and Business not. A large share of respondents, 30 percent, answered
Principles. that they don't know about our work and impact. Increas-
These commitments are incorporated into our Code of ing stakeholders' awareness is a priority going forward.
Responsible Business Conduct that is applicable to all The RBI survey was not conducted in 2016, but will be
employees and companies where we have management conducted in early 2017, to better measure the effect of
control. For more information about the Code and the the roll-out of the new Code.
policy framework, see Corporate Governance, section
Group-wide governance framework.
SUSTAINABILITY PERCEPTION INDEX
According to the survey, the majority of external stakeholders that are aware of our contribution
perceives it positively. Almost a third responded that they don't know about our work or impact.
Percentage of external stakeholders who Employees and external stakeholders

perceive that we contribute positively to society want us to increase our focus mainly on:
and the environment, and run our business in an
ethical way: DIGITAL INCLUSION
Connecting the unconnected, geographically
43%
or otherwise, to the digital society
PRODUCT AND SERVICE

RESPONSIBILITY
Safe products and services, customer privacy
72
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 SUSTAINABILITY IN TELIA COMPANY

In the annual Purple Voice employee survey, 73 percent of
employees said that they are proud of the way Telia Com-
pany contributes to a better society, up from 65 percent in In the annual Purple
2015.
Voice employee survey,
GOVERNANCE AND 73 percent of employees
ORGANIZATION said that they are proud of the way
The illustration below describes sustainability-related Telia Company contributes to a
decision-making and reporting. The ultimate responsibility better society.
for sustainability issues lies with the Board of Directors.
The Heads of Sustainability Strategy and Enterprise Risk
Management report to the Head of Corporate Develop-
ment, who is a member of Group Executive Management,
and the Group Governance, Risk, Ethics and Compliance
(GREC) meeting. The Chief Ethics and Compliance Officer,
who is Head of Group Ethics and Compliance Office,
reports directly to the CEO and is a member of GREC.
For more information about the governance of specific
focus areas, see the respective focus area,section Govern-
ance. For group governance, see Corporate Governance,
sections Group-wide governance framework and Enter-
prise risk management (ERM) framework.
SUSTAINABILITY GOVERNANCE
Board of Directors Monitors sustainability work

Follows up on risks, opportunities and
compliance
Sustainability and Approves policies
Audit Committee
Ethics Committee
Group Executive Management Sets strategic ambition and direction

Ensures focus and resourcing
Approves instructions
Governance, Risk,
Ethics and Compliance (GREC)
Develops and integrates sustainability

strategy with business strategy
Sustainability Group Ethics & Enterprise Risk
Monitors performance of and reports on
Strategy Compliance Management
sustainability work
Ensures consistent approach to compli-
ance and risk management
Country Implements sustainability strategy and

Group Other compliance programs
organizations
functions subsidiaries Creates awareness and builds expertise in
and Eurasia
our sustainability approach
Reports to group
73
SUSTAINABILITY WORK
SUSTAINABILITY FOCUS AREA SUMMARY Annual and Sustainability Report 2016
SUSTAINABILITY FOCUS
AREA SUMMARY
In 2016, our sustainability work focused on the areas below.
See the respective focus area section for more information,
including goals and outcomes.
2018 2016 2017

STRATEGIC OBJECTIVE
GOALS PROGRESS PLANNED ACTIVITIES
All in - shared value Shared value creation an ex- Published Accelerating Sus- Internal trainings and work-
plicit part of Telia Company's tainable Growth report. shops to ensure integration into
creation culture, purpose and values. Accelerator programs and company processes.
All in integrated in all relevant events to support innovation Active public dialog on societal
Connecting the unconnected. company processes such as and entrepreneurship. impact of digitalization.
A healthy and safe society. business planning. Products and services to con- Local All in activities running
Education for all. Reporting on clear metrics for nect the unconnected, such as according to business plans.
Digital innovation and entre- shared value creation. Telia Sense and M2M in a box. Employee volunteering pro-
preneurship. 20,000 days of employee Growth in education program launched.
volunteer work connected to grams.
All in strategic objectives.
Anti-bribery and All employees are aware of our Over 2,000 employees Develop local plans for ABC
ABC requirements. received ABC face to face program implementation.
corruption All employees are familiar training, and over 4,300 com- Develop training plan for roles
with the channels for report- pleted ABC e-learning. exposed to high corruption
Best in class anti-bribery and ing concerns and potential Review of compliance and bribery risks.
corruption (ABC) program. violations. framework and ABC program ABC training as part of the roll-
Zero tolerance for unethical Certified ethics and compli- carried out by Ethisphere. out of the new Code.
business conduct. ance professionals in all region Due to the relocation of two Improve the ABC risk self-
Eurasia markets (by end of region Eurasia ethics and assessment tool and the
2016). compliance officers to group competence to carry out local
level, the number of markets self-assessments.
with certified professionals Third party due care capacity
remained at three. building in region Eurasia.
Freedom of All markets covered in law Eight countries covered in Continue contributing to shared
enforcement disclosure reports law enforcement disclosure learning and standardization of
expression with regard to number of con- reports with regard to number reporting within the ID and GNI.
ventional requests and informa- of conventional requests. Improve governance and train-
Enable, respect and support tion on local legislation. Five countries covered with ing to speed up assessments
freedom of expression and All closed unconventional regard to information on local and escalations, especially re-
privacy. requests challenged. legislation. garding direct access requests.
Telia Company is trusted as an Contribute actively to the work Almost half of closed uncon- Implement human rights
ICT industry leader in human of the Telecommunications ventional requests challenged, remedy and grievance mecha-
rights. Industry Dialogue (ID) and its often by transparency. nisms.
collaboration with the Global Contributed to the ID and GNI Review and implement recom-
Network Initiative (GNI). joining forces. mendations from BSR's HRIAs.
Customer Privacy by design imple- Privacy Impact Assessment Execute GDPR risk migitation
mented in all relevant project process implemented in Telia activities according to local and
privacy management processes. Companys project model. group-level mitigation plans.
All employees aware of the Group-common Privacy Strengthen privacy govern-
Respect and protect our privacy requirements related Notice model created. ance, including carrying out
customers privacy. to their work duties. Local gap assessments training to increase awareness
We are regarded as a trusted Clear and easy to understand against GDPR completed of privacy requirements.
actor in handling personal information about processing and risk mitigation roadmaps Revise relevant group policies
data on the customers terms. personal data readily available developed in regions Sweden and instructions to ensure they
to customers. and Europe. reflect GDPR requirements.
Mitigation of EU Data Protection Strengthened governance
Regulation (GDPR) compliance and resources to meet GDPR
risks. requirements.
74
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 SUSTAINABILITY FOCUS AREA SUMMARY
2018 2016 2017

STRATEGIC OBJECTIVE
GOALS PROGRESS PLANNED ACTIVITIES
Occupational health Lost-Time Injury Frequency LTIF: 0.36 (0.41). Local companies not yet
(LTIF) maximum 0.52. SAR: 2.4 percent (2.2). OHSAS 18001 certified continue
and safety Sickness Absence Rate (SAR) No fatal accidents (0). working towards certification.
maximum 1.9 percent. Operations in Finland, Begin transition from OHSAS
An occupational health and No fatal accidents. Norway, Estonia, Azerbaijan, 18001 to ISO 45001.
safety culture that supports OHSAS 18001 implemented Uzbekistan and Kazakhstan Focus on employee well-being
the ambition of Telia Company in all major companies (by end OHSAS 18001 certified. and engagement in regions
as THE place to work. of 2016). Engagement Index: 80 percent Sweden and Europe.
Engagement index: 83 percent. (78).
Responsible 75 percent of assessed suppli- 60 percent (58) of suppliers Continued work within the
ers compliant with the supplier assessed through audits or focus area programs.
procurement code of conduct. EcoVadis compliant with the Further develop the due dili-
25 percent reduction of sup- supplier code of conduct. gence platform.
All suppliers comply with our plier base (baseline 2015). Launched a standardized sup- Training and capacity building
sustainability requirements. plier due diligence platform, of suppliers, to better under-
All suppliers have signed our 1,443 due diligence assess- stand and meet our supplier
supplier code of conduct. ments carried out. code of conduct and security
169 on-site audits carried out. directives requirements.
Launched focus area pro- Strengthen local due diligence
grams in seven critical supply expertise in region Eurasia, to
chain areas. enable local sustainability risk
evaluation.
Environmental All major operations in regions ISO 14001 certification in Telia Continued ISO 14001 imple-
Sweden and Europe ready for in Sweden and Sonera in mentation in regions Sweden
responsibility ISO 14001 certification (by Finland. and Europe.
end of 2017). 85,000 devices collected Strengthen expertise, govern-
Minimize negative and maxi- Buy-back programs for mobile through buy-back programs. ance and local resources
mize positive environmental devices established in region 28.8 kWh per subscription responsible for environmental
impact throughout our value Europe (by end of 2017). equivalent (28.2). management.
chain. 10 percent lower energy 1.9 kg CO2e emissions per EU Energy Efficiency Directive
consumption per subscription subscription equivalent (2.5). assessments and reporting.
equivalent.
33 percent lower CO2e
emissions per subscription
equivalent.
Children online Understand impact on Initiated assessment for Chil- Implement the action plan
childrens rights in relevant drens Rights and Business based on the Children's Rights
business activities. Principles. and Business Principles
Respect and support
Block child sexual abuse Implemented blocking of assessment.
childrens rights.
material (CSAM) in regions CSAM in regions Sweden and Share and present CAP find-
Sweden and Europe. Europe. ings, and use the results to im-
Detect and report CSAM in Implemented detection and prove our approach to children
internal IT systems in regions reporting of CSAM in internal as users of our services.
Sweden and Europe. IT systems in six countries and Further cooperation to improve
Establish Childrens Advisory in Telia Carrier. detection and blocking of
Panel. Introduced Childrens Advisory CSAM, and encourage other
Panel in regions Sweden and organizations to do the same.
Europe.
75
SUSTAINABILITY WORK
NEW CODE OF RESPONSIBLE BUSINESS CONDUCT Annual and Sustainability Report 2016
NEW CODE OF RESPONSIBLE

BUSINESS CONDUCT
In September, we launched our new Code of C O DE OF RESPON SIB LE BUSIN E SS C ON DU C T T E LIA C OM PAN Y 01
Responsible Business Conduct that replaces

the previous code of ethics and conduct. DONT DO
THIS AT WORK
The Code is a tool to raise awareness and engagement
regarding ethics, values, dilemmas, culture and leadership.
The new Code more clearly reflects the tone from the top
and the expectations of employees and management as
well as the consequences of non-compliance. Its 17 chap-
ters reflect group policies and instructions and also pro-
vide practical, instructional information on how to interpret
the Code requirements. It also includes information about
contact points for raising concerns and whistle-blowing
through the externally available Speak-Up Line.
The Code is available in English, Russian, Kazakh, Azeri,
Romanian, Georgian and all Nordic and Baltic languages
both online and in a printed newspaper-format document.
Roll-out of the Code

The roll-out of the Code started in Sweden and continued
with management teams in local companies, covering ten
countries by year-end. Participants took part in an interac- Code of Responsible Business Conduct
tive dilemma game based on real Telia Company cases.

The game allows people to discuss different approaches to
SOR220124 160503 Telia Ethics Newspaper print master ENG.indd 1 2016-09-01 10:59
and the consequences of ethical dilemmas. At the end of The Code is available online and
each session, participants anonymously submit their own in printed newspaper format
dilemmas to be used in updated versions of the game.
Feedback from employees has been positive and many
have commented that the new Code addresses serious
matters in a fun, lighthearted way that is easy to under-
stand and apply. We aim to conduct face-to-face training
on the Code and ethical dilemmas with employees in 2017.
E-learning program
The launch of the Code was complemented by an e-
learning program that was introduced in December. This
program is compulsory for all employees. The main mod-
ule covering the Codes purpose, expectations of employ-
ees and our speak-up culture will be followed by topical
e-learning courses to be rolled out during 2017.
The Code is available at dontdothisatwork.teliacompany.
com. If you have feedback or would like to know more, just
contact us at ask-us (at) teliacompany.com.
Chapter 1:
Don't accept
shiny gifts
76
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 HUMAN RIGHTS IMPACT ASSESSMENTS
HUMAN RIGHTS IMPACT

ASSESSMENTS
Human rights impact assessments give us insights into the
local and group-level impacts, risks and opportunities, and for
people affected by our daily operations.
REGION EURASIA The amount of space available for civil society organi-
zations is a key variable in the extent of human rights
In 2015, Telia Company commissioned the independent leverage.
non-profit organization BSR to undertake human rights Increased dialog with local stakeholders on topics such
impact assessments (HRIAs) of the companies in region as telecommunications policy reform and economic de-
Eurasia as part of ensuring local human rights due diligence velopment may help establish a more supportive policy
and a responsible exit from the region. BSR undertook context.
these HRIAs between October 2015 and May 2016 using Significant human rights challenges remain and the
a methodology based on the UN Guiding Principles on prospects of addressing them will depend on the human
Business and Human Rights. No assessment was carried rights commitment of the purchasing entity or entities.
out for Ncell in Nepal, as a divestment was announced in
December 2015. Recommendations and next steps
The summary report presents recommendations in three
General conclusions categories: Company-specific management and mitiga-
The six stand-alone HRIA reports identified actual and tion plans to integrate human rights into local company
potential human rights impacts, risks and opportunities for management by current and future owners, a responsible
each company related, for example, to security and privacy, divestment plan, and how Telia Company can improve its
freedom of expression and childrens rights. BSRs HRIA group-wide human rights approach.
summary report drew the following general conclusions: The responsible divestment plan included, among other,
On group level, Telia Company has made substantial the following recommendations:
progress in addressing human rights since the last im- Undertaking pre-sale due diligence on potential purchas-
pact assessment was undertaken in 2013. ing entities.
On the local level, each subsidiary has undertaken Attaching human rights conditions to sales conditions.
proactive action to respect human rights, with many Undertaking post-sale activities designed to enhance
company leaders displaying a strong commitment to respect for human rights after Telia Companys exit.
international standards of business conduct.
The regional corruption and human rights context pre- The group-wide approach recommendations were:
sents significant systemic challenges to applying Telia Establishing a single human rights policy.
Companys human rights infrastructure. Identifying likely remedy options for potential human
Active and engaged ownership is a pre-condition for rights grievances.
advancing respect for human rights in local markets.
Ownership transparency has a material influence on hu- Local challenges differ between markets, but are in es-
man rights leverage. sence connected to complexities in the local operating
Law enforcement disclosure reports are influential. environment, resources and prioritizations. Each local com-
Some significant challenges, for example direct govern- pany, guided by region and group experts, is developing an
ment access to networks (e.g. SORM), are similar across action plan based on BSRs recommendations that will be
former Soviet republics. embedded in local business operations. Quarterly updates
Diplomacy, collaboration and advocacy present the most on the execution of these action plans will be presented
promising opportunities for sustained impacts over time. at local governance, risk, ethics and compliance (GREC)
77
SUSTAINABILITY WORK
HUMAN RIGHTS IMPACT ASSESSMENTS Annual and Sustainability Report 2016
On group level, Telia

Company has made
substantial progress in
addressing human rights since the
last impact assessment was under-
taken in 2013.
meetings and monitored by group experts. As to the There are opportunities for Telia to address human rights
responsible divestment recommendations, the main chal- deep in the local supply chain.
lenges on the group level are connected to the complexity Telias efforts to comply with the General Data Protec-
of the divestment processes. tion Regulation (GDPR) will significantly enhance privacy
The local BSR HRIA report and insights on the local protection.
human rights context were shared with AKFED during the Telias success in big data analytics and other adjacent
divestment process (to be finalized) of Tcell in Tajikistan. market opportunities will rely on users trust that Telia will
protect and use personal data fairly.
There are opportunities for Telia to comment on govern-
LITHUANIA AND SWEDEN ment policies and proposals in ways that address human
We further commissioned BSR to carry out HRIAs for rights risks and opportunities, as well as to lead by
operations in Lithuania and Sweden, which were finalized example on human rights.
in September and December respectively. Some of the
general conclusions were: Recommendations and next steps
The HRIA reports outlined recommendations in customer
Lithuania privacy, freedom of expression, anti-discrimination and
Telia Company's group policies and instructions are well vulnerable groups, labor rights and public policy. These
understood and implemented. recommendations include proactive engagement with the
The current geopolitical situation may cause increased government on regulatory issues regarding freedom of ex-
human rights risks for local operations related, for pression and customer privacy, undertaking discrimination
example, to limiting freedom of expression for national awareness and unconscious bias trainings, paying particu-
security reasons. lar emphasis on non-discrimination of vulnerable groups,
Social attitudes, which are sometimes reinforced by and enhancing responsibility over the supply chain.
discriminatory laws, constrain a number of human rights Telia in Lithuania and Sweden will prepare action plans
protections, especially in the area of non-discrimination. for implementing BSRs recommendations in 2017 and on-
There are opportunities to increase multi-stakeholder wards. We are looking into possibilities to undertake HRIA
dialog and collaboration, as well as to push the bounda- in other markets in region Europe with a slightly modified
ries of transparency. methodology that might not involve full-scale stakeholder
Telia (and Telia Company) may face new human rights engagement and extended country visits.
dilemmas in the media industry arising from offering new
media content. More information
BSR's summary report of HRIAs in region Eurasia is avail-
Sweden able at www.teliacompany.com/sustainability/reporting.
Swedens status as an established liberal democracy is
the source of significant human rights protections and
substantially reduces the severity of Telias human rights
risks.
While many meaningful protections are in place, there
are a number of shortcomings in the privacy oversight
and protections in Swedens legal framework governing
law enforcement and national security.
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SUSTAINABILITY WORK
Annual and Sustainability Report 2016 ALL IN SHARED VALUE CREATION
ALL IN - SHARED VALUE

CREATION
To leverage our core competencies and business to create shared
value combining social good with business benefits we have
created All in.
The development and use of information and communica- "ACCELERATING SUSTAINABLE

tions technology (ICT) has many positive effects on societal
development. According to studies1 ICT development posi- GROWTH" REPORT
tively correlates to a countrys social progress, and there is In this report by Deloitte UK, commissioned by Telia
evidence2 that mobile and fixed network coverage directly Company and released in September, Deloitte has taken a
and positively affects GDP growth. Digitalization can have closer look at how the services made possible by digitaliza-
a fundamental impact on progress on the UN Sustainable tion can accelerate more sustainable growth in the Nordics
Development Goals (SDGs) by improving quality of life, and Baltics.
fostering equitable growth and protecting the environment3. The Nordic countries have historically performed well but
All in is our approach to integrating shared value creation are currently facing a number of socio-economic challeng-
in business strategy in core markets. It focuses on the es. These include low economic and productivity growth,
biggest opportunities for positive societal impact and pro- high unemployment especially among young people,
viding solutions to reach the UN SDGs, and potential new and the rising cost of healthcare for a growing and aging
business. It focuses on four areas: population. The Baltic countries face similar economic
Connecting the unconnected challenges as the Nordic countries and lag behind other EU
Education for all countries income and productivity.
A healthy and safe society According to the report, increasing the scope and scale
Digital innovation and entrepreneurship of digitalization in the Nordics and Baltics could add up to
EUR 100 billion to their economies in 2021, while also con-
During the year, local companies in regions Sweden and tributing to all UN dimensions of sustainable development.
Europe further integrated All in in their business planning
processes and carried out activities to support its objec-
tives. We also released the Accelerating Sustainable
Growth report, to use as a tool to create awareness of the NEW SOURCES OF GROWTH ARE NEEDED TO OVERCOME
opportunities of digitalization in our core markets. ECONOMIC CHALLENGES IN THE REGION
7% 20%
tax increase historically high
needed to balance
the budget in
1% rate of youth
unemployment
productivity growth
Finland in Sweden
in the Nordics
over the last
Significant five years High levels of
pressure on public unemployment in
finances in most of most of the Nordics
the region Productivity growth and Baltics
in the Nordics at or
below EU average
1) ICT Development Index and Social Progress Index correlation, and falling
Zev Likwornik, 2013
2) Value of connectivity report, Deloitte, 2014
3) #System Transformation report, GeSI, 2016
Source: Eurostat, Deloitte analysis
79
SUSTAINABILITY WORK
ALL IN SHARED VALUE CREATION Annual and Sustainability Report 2016
The report highlights three critical areas:
1. B
OOSTING SUSTAINABLE ENHANCED USE OF DIGITALIZATION IN THE NORDICS AND
BALTICS COULD UNLOCK GROWTH IN THE REGION
GROWTH
Enhanced use of digital solutions among governments, Nordics Baltics
businesses and consumers could increase productivity
by 3.5 percent on average across the Nordics and Baltics PRODUCTIVITY +3.1% +7.8%
while creating up to 470,000 additional jobs.
EMPLOYMENT +330k +140 k

(2.5%) (4.4%)
G.D.P. +82.7bn +13.5bn

(5.7%) (2.7%)
WAGES PER EMPLOYEE +2.6k +1.8k

Estimated effects realized in 2021. (3.8%) (9.6%)
Source: Deloitte analysis
UP TO 20 PERCENT ANNUAL* GREENHOUSE GAS EMISSIONS

2. PROTECTING THE SAVINGS THROUGH ENHANCED DIGITALIZATION IN 2021
ENVIRONMENT
11,395
41,913 kton
Increased digitalization of the Nordic and Baltic economies
could reduce greenhouse gas emissions by up to 20
percent. This is equal to taking nearly nine million cars off
10,720
the road for a year.
8,522
8,860,000 cars
4,282 not driven for
one year
2,845
2,153
1,996
*Estimation based on 2013 values

IA IA EN IA D AY K AL
across all sectors, kton GHG
AN TV ED ON AN AR OT
Source: Eurostat/EEA, GeSI U LA T NL O RW M T
TH SW ES FI N DE
N
#SystemTransformation LI
3. IMPROVING E-HEALTH COULD SAVE LIVES AND REDUCE CARE

RELATED COSTS
PEOPLES LIVES
Estimated thousands
Up to 23,000 premature deaths could be avoided through of premature deaths
avoided in 2021
e-healthcare while connected smart transportation could
Cost savings from
save up to 1,000 lives annually on our roads in 2021. telemedicine devices
in 2021 4k
7k
3k 810m
1.6bn 1k
1.1bn
1k 70m
4k
1k 90m
200m
1.0bn
Differences due to rounding. E-Health gross savings opportunity as share of health expenditure:
Source: Eurostat/EEA, Statistics
Norway, Deloitte analysis >8% 5%8% 2.5%5% <2.5%
80
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 ALL IN SHARED VALUE CREATION

OVERCOMING THE BARRIERS
While digitalization may unlock new more sustainable eco- Digitalization can have
nomic growth, a number of significant barriers still need to
a fundamental impact
be overcome to realize the opportunities of digital services.
These include development of the regulatory environment on progress on the UN
for complex issues such as privacy, data security, taxation Sustainable Development Goals by
of shared assets and liability for machine actions.
Download the full report at www.teliacompany.com/ improving quality of life, fostering
accelerating-sustainable-growth. If you have any questions equitable growth and protecting the
or for more information, contact sustainability-group (at)
teliacompany.com. environment.
Source: Accelerating sustainable growth
ACTIONS NEEDED TO INCREASE DIGITALIZATION

AND UPTAKE IN THE NORDICS AND BALTICS
Policy barriers Supply barriers Demand barriers
1. Developing the regulatory environment 1. Furthering cross-industry 1. Improving ICT literacy and digital skills
to facilitate increased digitalization collaborations
2. Addressing the affordability of neces-
2. Increasing available capital for financ- sary devices, sensors and software
2. Increasing awareness among stake-
ing of digital solutions to sustainable
holders about ICT's potential in acceler- 3. Ensuring more local content in digital
growth challenges
ating more sustainable growth applications
3. Achieving integrated standards
3. Creating effective investment and 4. Increasing awareness among busi-
across technologies
financing incentives nesses and consumers about ICT's
potential in accelerating more sustain-
able growth
Sources: Telia Company, GeSI #SystemTransformation
81
SUSTAINABILITY WORK
ALL IN SHARED VALUE CREATION Annual and Sustainability Report 2016
CASE CASE
INCREASING EFFICIENCY
OF IRRIGATION SYSTEMS
TELIA APP MARKET SAVING WATER IN FARMING
Reducing the cost of doing business with Smart irrigation addresses the need for
cloud computing increased resource efficiency in farming
Telia App Market has gathered a number of Telia in Norway has launched a Smart Farming
business applications to provide any organiza- service based on NB-IoT (Narrow-Band Internet of
tion with Software-as-a-Service (SaaS) through Things). The service provides farmers with an in-
cloud computing to make it more efficient. Cloud telligent system for monitoring irrigation systems.
computing refers to access of digital services and The "smart irrigation" service has been devel-
applications virtually, including data storage. The oped in collaboration with the Norwegian compa-
capacities and servfices used can be adjusted ny 7Sense. The result is a system for monitoring
on-demand by the user/organization. of irrigation systems used in agriculture, making
Remote access to IT infrastructure hardware the systems better and more precise. The water
(IaaS), software platforms (PaaS) and applications sprinkler has a sensor that registers the position
(SaaS) in the cloud, can enable new business using GPS, alerts in case of falling pressure and
models, increase business agility and reduce provides the operating status of the irrigation
costs. Cloud services normally also include system using various sensors. The sensor unit is
pooling IT resources with others and thus saves connected to the mobile network with a NB-IoT
energy and materials consumption, which can module and sends data at regular intervals. Using
reduce negative environmental impact. These ICT technology such as IoT devices, helps farm-
benefits may be realized by both private sector ers to accurately assess how much irrigation and
businesses and public sector organizations. fertilizer is needed, saving emissions and water
According to the "Accelerating sustainable consumption.
growth" report, cloud services such as IaaS and The factors driving the smart irrigation market
SaaS, could help create up to 23,000 new small are increasing demands within food production,
and medium sized enterprises by 2021 in the Nor- resource efficiency to reduce costs, and increas-
dics and Baltics, mainly through reducing upfront ing concerns over water conservation. Accord-
IT capital expenditure required of entrepreneurs ing to market research by Irrigation Controller,
to operate their businesses. the global smart irrigation market is expected to
The use of PaaS could also allow easier access reach USD 1,500 million by 2022, at a CAGR of
to markets through e-commerce, which in turn 17.2% between 2016 and 2022.
could spur more economic growth in the region. Smart irrigation addresses targets in the
Telia App Market addresses targets in the UN United Nations Sustainable Development Goals
Sustainable Development Goals 8, 9, 12 and 13. 6 and 12.
82
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 ANTI-BRIBERY AND CORRUPTION
ANTI-BRIBERY AND
CORRUPTION
Some of our markets are among the most challenging in the
world when it comes to doing business due to bribery and
corruption. In addition, the telecommunications industry is
exposed to a high risk of corruption. We are committed to
$
fighting corruption in all of its forms and to doing business
with the highest sense of transparency and integrity. We do
not accept bribery or corruption in any form.
STRATEGIC OBJECTIVE 2018 GOALS 2016 PROGRESS
Best in class anti-bribery and All employees are aware of our Over 2,000 employees received
corruption (ABC) program. ABC requirements. ABC face to face training, and over
Zero tolerance for unethical All employees are familiar with the 4,300 completed ABC e-learning.
business conduct. channels for reporting concerns Review of compliance framework
and potential violations. and ABC program carried out by
Certified ethics and compliance Ethisphere.
professionals in all region Eurasia Due to the relocation of two region
companies (by end of 2016). Eurasia ethics and compliance of-
ficers to group level, the number of
markets with certified professionals
remained at three.
In the last few years, we have come to understand the

scale of the unethical and possibly illegal business prac- GOVERNANCE
tices in region Eurasia. The way that these markets were The ABC program
entered, for example by selecting partners with unclear Telia Company's Board of Directors, Group Executive
ultimate beneficial owners, is not in line with our current re- Management and chief ethics and compliance officer set
sponsible business practices. We have worked extensively the tone from the top and are responsible for the govern-
to analyze our corruption risks, investigate potential fraud ance and compliance frameworks required to implement
and corruption schemes, educate employees and build a the ABC program.
culture where people are expected to speak up when they The ABC program provides a systematic way of imple-
see potential or actual corrupt practices. Our work to fight menting the group ABC policy and instructions. The pro-
corruption continues in the region by ensuring that suf- gram is based on our compliance framework and includes
ficient capacity and knowledge is in place to continue this the key elements of an effective compliance program and
work under new ownership. adequate procedures as set forth in the U.S. Sentencing
Although risks are lower in regions Sweden and Europe, Guidelines and the UK Bribery Act Adequate Procedures.
we need to ensure solid anti-bribery and corruption (ABC) We have since its launch in 2013 taken firm action to bet-
practices throughout our own operations and supply chain. ter understand and improve control of risks and contextual
As we mature, we are moving beyond awareness and challenges by increasing awareness of ABC risks, imple-
training to process development and implementation. This menting control mechanisms, improving third party en-
supports the integration of ethical business conduct into gagement and other processes, and carrying out extensive
everyday work and decision-making. training. The ABC program is supported by the group-wide
whistle-blowing process and Speak-Up Line.
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ANTI-BRIBERY AND CORRUPTION Annual and Sustainability Report 2016

The program is implemented using a risk-based approach,
still focused in 2016 on region Eurasia. Regions Sweden
and Europe started implementation in 2015 and are follow- Telia Company has made
ing the same implementation framework but with appropri-
incredible progress since
ate adjustments for the level of risk. The roll-outs shall be
completed group-wide by 2018. 2013 in developing its
ethics and compliance program,
Ethics and compliance network
The ABC program is managed by the group ethics and most notably its anti-corruption
compliance office, which is responsible for the program program. Telia Company appears
design and annual plan as well as follow-up and reporting
to the group Governance, Risk, Ethics and Compliance to be very engaged in implement-
(GREC) meetings and to the Board of Directors. ing a best practice ethics and com-
Program implementation is the responsibility of local line
organizations as well as group functions, with strong sup- pliance program.
port from the ethics and compliance network. This network
includes group and regional ethics and compliance officers, Source: Ethisphere Institute
dedicated officers or coordinators in each local company
who act as focal points for other compliance activities in-
cluding GREC meetings, due diligence experts in high risk
markets and the group special investigations office which
handles internal investigations related to potential corrup- Policies and instructions
tion or fraud. Local companies in region Eurasia established a framework
All country ethics and compliance officers are required to for continuous self-monitoring of the adoption and imple-
complete anti-bribery or compliance certification through mentation of group policies and instructions. Compliance
TRACE or SCCE, and due diligence experts are encour- status is reported quarterly in country and regional GREC
aged to do the same. By the end of 2016, a total of seven meetings. This effort will be extended to regions Sweden
group and three country ethics and compliance officers, and Europe in 2017.
and one third party due diligence specialist, had been
certified. Third party due care
The purpose of third party due care is to enforce our ABC
principles throughout the supply chain and to all third par-
WORK DURING THE YEAR ties we engage with. Our ABC policy requires risk-based
ABC risk assessments due diligence on third parties and inclusion of an anti-cor-
Region Eurasia companies received prority in the execution ruption clause in high risk engagement contracts.
of independent country, institutional and operational ABC During 2016, we continued the backlog projects which
risk assessments in 2013 and 2014. Risk mitigation action started in 2014 in region Eurasia. The projects reviewed
plans were formulated and implemented in the region third party engagements that we entered into prior to the
during 2015. In 2016, follow-up first generation self-risk implementation of an adequate due care process. The pro-
assessments were conducted in region Eurasia, and action jects applied a risk-based approach to third-party screen-
plans updated. Self-risk assessments were also carried ing and payment analysis, to ensure that business relations
out in regions Sweden and Europe for the first time. These with high risk third parties were thoroughly reviewed and
will be reviewed and supplemented during 2017. where necessary investigated, and that remedial actions
The results from the risk assessments were analyzed - which could include freezing payments, terminating or
together with input from third party due care processes and re-negotiating contracts and permanent blocking - were
Speak-Up Line cases. Risk areas and action points were: taken as required.
Review the level of understanding of and compliance By the end of the year, the backlog processes were
with policies and instructions regarding sponsorships, completed or closing off in Kcell in Kazakhstan, Azercell
donations, gifts and hospitality. in Azerbaijan, Ucell in Uzbekistan and Tcell in Tajikistan.
Quantify and fulfil resource and capacity building require- Backlog cases raising potential corruption concerns were
ments for effective third party ABC risk management. referred to the special investigations office for attention.
Improve the quality of ABC training for employees and Geocell in Georgia and Moldcell in Moldova will carry out
third parties. their backlog projects in 2017.
Extend the rollout of the conflict of interest (COI) registra- The ABC program in region Eurasia was also strength-
tion tool, implement COI analysis and monitoring, and ened by the implementation of the third party due care
ensure that information can be accessed and shared for processes covering new and renewed third party engage-
COI risk management purposes. ments. Read more in "Responsible procurement".
Identify ABC risks in the customer due diligence process.
84
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 ANTI-BRIBERY AND CORRUPTION
Continuous improvement PLANNED WORK IN 2017

In June, we engaged the Ethisphere Institute to review our
ABC program and compliance framework. The best prac- Work in 2017 will include:
tice review was based on interviews, document review and Based on learning from 2016, improve the ABC risk self-
benchmarking against peer groups, US and UK anti-bribery assessment tool and the competence of local ethics and
legislation and guidelines, UN and OECD guidance among compliance officers to carry out the assessment.
others. According to Ethispheres assessment: Local ethics and compliance officers guided by the
group ABC program lead will develop an annual plan
Telia Company has made incredible progress since 2013 for the ABC program for their operations. The group
in developing its ethics and compliance program, most program lead monitors the progress of the program
notably its anti-corruption program. Telia Company appears implementation on the local and regional levels.
to be very engaged in implementing a best practice ethics Multi-year advanced training plan for roles exposed to
and compliance program. high corruption risks, to create a better understanding
how to prevent, detect and report such risks.
Ethispheres recommendations will inform the planning of Basic ABC e-learning included as part of roll-out of the
ABC program activities in 2017. new Code of Responsible Business Conduct.
Expand ABC training to third parties.
External collaboration Accelerated capacity building for third party due care in
In May, we hosted the first Telecommunications Indus- region Eurasia.
try Integrity Initiative forum together with Transparency Certification of the remaining ethics and compliance of-
International Hungary. Eight companies including Orange, ficers in region Eurasia and other ethics and compliance
Vodafone, Ericsson and Nokia participated. The second professionals elsewhere in the group.
meeting was held at Orange in January 2017. On the Testing the design, implementation and effectiveness of
agenda were matters such as new bribery and corruption the ABC program.
legislation, best practices sharing and drafting a charter
for the Initiative. The initiative will be open for additional
telecom companies to join.
Telia Company is also a member of TRACE International.
We sponsored the TRACE scholarship program which
fully funds one student from the CIS region to pursue ABC
studies in the the US or the UK for one year.
85
SUSTAINABILITY WORK
FREEDOM OF EXPRESSION Annual and Sustainability Report 2016
FREEDOM OF
EXPRESSION
Telecommunications enable access to infor-
mation and the exchange of ideas in a way
that supports openness and transparency. It is
our duty to respect our customers' and users'
freedom of expression and privacy.
Enable, respect and support All markets covered in law enforce- Eight countries covered in law
freedom of expression and ment disclosure reports with regard enforcement disclosure reports with
privacy. to number of conventional requests regard to number of conventional
Telia Company is trusted as an and information on local legislation. requests.
ICT industry leader in human All closed unconventional requests Five countries covered with regard
rights. challenged. to information on local legislation.
Contribute actively to the work of Almost half of closed unconven-
the Telecommunications Industry tional requests challenged in some
Dialogue (ID) and its collaboration way, often by transparency.
with the Global Network Initiative Contributed to the ID and GNI join-
(GNI). ing forces.
Issues related to freedom of expression and privacy pose human rights harms of network shutdowns reinforce each
a high risk to users of telecom services globally. Such risks other. By pushing back on network shutdowns and block-
include mass surveillance (e.g. direct access), network and ing of sites, we seek to also reduce societal costs while
services shutdowns, localization of mobile devices and maintaining our core business.
blocking or restriction of certain content. Through legisla-
tion and decisions from authorities, states define the scope
of surveillance of communications and limitations to the GOVERNANCE
free flow of information. We see growing debate as legisla- Frameworks guide our work
tors seek additional surveillance measures to fight crime We aim to fulfill our responsibility and commitment to re-
and terrorism. spect freedom of expression and privacy as laid out in the
The right to customer privacy is widely understood as an UN Guiding Principles for Business and Human Rights. Our
essential requirement for the right to freedom of expres- objective is to limit potential harm to individuals by seeking
sion. This is why we have direct commitments both as to active measures to support the rights of individuals where
surveillance privacy (when authorities require access to we believe that these are at risk. Our work is also guided
user data) and customer privacy (processing customer data by the Telecommunications Industry Dialogue Principles on
for our own needs). Read more about our customer privacy Freedom of Expression and Privacy.
work in Customer privacy. The group policy on freedom of expression in telecom-
munications addresses our commitments in relation to
The societal value of upholding freedom of unconventional requests or demands that could poten-
expression tially have serious impacts on freedom of expression in
Recent assessments estimate that network shutdowns telecommunications ("major events"), such as:
cost countries billions of dollars in GDP loss globally on Mass surveillance where authorities demand direct
an annual basis. As stated by the GNI, the economic and access
86
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 FREEDOM OF EXPRESSION
Shutdown of all or parts of a network dialog will continue in 2017.

Blocking or restricting access to specific content During the divestment process of Tcell in Tajikistan, we
Blocking or restricting access to services or network met with Akfed, the buyer, to inform it of our work and
Obligations to transmit mandatory communications share our experiences. Tcells escalations of major events
Potentially overbroad proposals for new laws or signifi- continued after signing the divestment agreement.
cant operational changes in the area of surveillance
Law enforcement disclosure reporting
The revised policy, which was approved in September We believe that the transparency of surveillance activities
2015, has been formally adopted and implemented in contributes to a world where freedom of expression and
all subsidiaries except Ucell in Uzbekistan where formal privacy is more strongly enforced. This is why we publish
adoption is planned for the first half of 2017. law enforcement disclosure reports (LEDR) twice a year.
These reports can be found at www.teliacompany.com/en/
Assessment and escalation sustainability/reporting/law-enforcement-disclosure-report.
A group instruction sets out practical steps regarding The most recent report, which was released with this An-
assessments and escalation that are to be carried out nual and Sustainability Report, includes statistics covering
whenever a local company receives a request or demand conventional (day-to-day) requests from the police and oth-
that may have potentially serious impacts on the freedom er authorities in eight countries. The statistics, presented in
of expression of individuals. Guidance is provided in a the table below, show the number of authority requests in
form for assessments and escalation, a tool that we have each country based on a court order or other legal demand
shared publicly and that is included in the GSMAs Policy by the police or other authority. These statistics are subject
Handbook. to limited assurance by Deloitte.
Unconventional government requests are to be assessed
by the local company and escalated within Telia Company Authority requests* 2016
for informed decision-making, including considerations
from outside of the often complex and stressed specific
Sub- Challenged
local context, on if and how to perform a point of chal- Lawful Historical scription /rejected
lenge". This means adherling to local legislation while at the Country interception data data requests
same time seeking to carry out measures to respect and Denmark 5,940 2,089 9,649 3
support the rights of our users. Most often, what we can do Estonia 3,4031 1,870 275,4312 1,5833
is seek to share as much information as possible about the Finland 3,513 2,070 7,301 19
request publicly. While the process is intended to identify Georgia No statistics available 558 276 403
and mitigate potential violations to individuals freedom Moldova No statistics available 10,296 5,462 179
of expression and privacy, the actual outcome heavily de- Norway 2,273 6,382 9,781 129
pends on local laws, the safety and the capabilities of local Spain4 9,464 12,825 17,265 312
employees. Sweden 3,425 2,425 1,885 165
* As explained below, direct access is not included in the statistics.

WORK DURING THE YEAR 1) In Estonia, a direct access system is used. Telia in Estonia has full visibility into
the number of requests.
Industry Dialogue and Global Network Initiative 2) This figure includes all requests for Subscription data. For other countries the cor-
The Industry Dialogue (ID), which in December 2016 responding figure only covers requests that are handled by authorized personnel,
and automated requests that refer to a criminal case.
included eight international telecom companies, adds 3) This figure includes all requests to which we were not able to answer, most often
leverage to advocacy promoting freedom of expression and because the requested information was about a customer not of our operations but
of another operator.
privacy in the telecommunications industry. A description of
4) Figures cover the first and second quarter.
the IDs activities in which we actively contributed to shared
learning during the year is available at www.telecomindus- Telia Company and Telia in Lithuania have not been granted permission to publish
statistics regarding how many requests we have received in Lithuania. For further
trydialogue.org. More information on how we implement information, see the full Law Enforcement Disclosure Report.
the ID principles is available in a separate document.
The ID has a formal collaboration with the multi-stake- Differences in market share as well as the working methods
holder Global Network Initiative (GNI). By working together, of both authorities and within Telia Company make it dif-
the two initiatives provide a common platform for shared ficult to compare statistics between countries. For defini-
learning and leverage to advance freedom of expression tions of the categories, please see the LEDR.
and privacy rights in the ICT sector more effectively. In Feb- It is important to note that the figures show the number
ruary, the ID and GNI agreed to merge and Telia Company of requests from authorities, not the number of individu-
entered with observer status within the GNI. We have con- als that have been targeted. Pertaining to requests for cell
tinually been active in promoting the collaboration, which is tower dumps (i.e. requests that oblige the local operator
intended to take full effect in March 2017. to disclose data about the identity, activity and location of
any device that connects to targeted cell towers over a set
Stakeholder engagement span of time), however, the number of affected individuals
We have promoted the ID principles at Turkcell, informing will naturally become larger than the number of requests.
them of our work and inviting them to ID meetings and Depending on the scope of the request, Telia Company
external events on freedom of expression and privacy. This is required to hand out varying amounts of customer
87
SUSTAINABILITY WORK
FREEDOM OF EXPRESSION Annual and Sustainability Report 2016
data. This depends on the timeframe of the request as

well as where the cells within the scope of the request are
CASE
situated. In urban areas, the amount of disclosed data is
naturally higher.
Our reporting on country local laws on freedom of ex- UNDERSTANDING AND
pression and privacy in telecommunications is performed
through contributions to the ID database on country legal EMBEDDING FREEDOM
frameworks. The database is available at www.telecomin-
dustrydialogue.org/resources/country-legal-frameworks/.
OF EXPRESSION
Additionally, the LEDR includes links to national laws that Freedom of expression and privacy issues are
provide governments with direct access to information often complex, not the least in the local context.
about our customers and their communication without hav- Starting in October 2015, the independent non-
ing to request information from Telia Company. profit organization BSR conducted human rights
Regarding governments direct access, i.e. signals intelli- impact assessments of our respective operations
gence (intelligence gathering through analysis and process- in Eurasia, Lithuania and Sweden. BSRs general
ing of communication signals) and real-time access without recommendations1 how to continue embedding
requests (technical systems for more extensive monitoring freedom of expression in our operations during
of telecommunications), Telia Company has no insight into 2017 and onwards are:
the extent of such surveillance (when, who and what) and
cannot provide any statistics beyond those provided within Consider the possibility of the ID/GNI to con-
this report. vene in a Eurasian country.
Continue transparent reporting on unconven-
Unconventional requests tional requests (major events).
In addition to reporting statistics on conventional requests, Whenever possible, participate in policy legisla-
we seek to publish information on unconventional requests tive and regulatory consultation processes on
or demands from governments (major events). During telecoms and related laws.
2016, we closed some 40 such unconventional requests Consider training of decision-makers in ICT and
or demands from governments across our operations. To how freedom of expression and privacy can be
ensure consistency, group level experts facilitated local supported or harmed.
assessments and escalations. Points of challenge, where Continue to actively contribute to drafting and
possible to establish and most often by being transpar- using the ID and GNI position papers.
ent, were defined jointly by local, regional and group Continue collecting and reporting statistics on
management. the number of conventional requests.
There are challenges when seeking to be transparent. Collect and update information on laws on
Local laws that sometimes lack full clarity determine what direct access.
can be published. There may be confidentiality provi- Investigate new human rights risks that may
sions and/or constraints based on our duty to protect the arise in the TV and entertainment sector that
safety of our employees. Issues regarding direct access may not be foreseen by the existing freedom of
are closely related to national security and are therefore expression policy.
complex and challenging to communicate. Counting the
number of unconventional requests is difficult and subjec- Read more about the HRIAs and the findings in
tive as they range from a demand to block one or several Human rights impact assessments.
websites or shutting down a network locally to requests
regarding direct access. 1) Specific local recommendations have been omitted here.
PLANNED WORK IN 2017

In 2017, our work includes to:
Continue contributing to shared learning and standardi-
zation of reporting within the ID and GNI.
Improve governance and training to make internal pro-
cess of assessments and escalations swifter, especially
regarding requests and demands for direct access.
Implement human rights remedy and grievance
mechanisms.
Develop a human rights policy to put freedom of expres-
sion and privacy into a clearer context of human rights
commitments.
Review and implement the recommendations from
BSR's Human Rights Impact Assessments. See case.
88
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 CUSTOMER PRIVACY
CUSTOMER
PRIVACY
Vast amounts of data are generated when our
customers use our services and networks.
Customer privacy is becoming more important
to manage as customer expectations increase
and legislation is strengthened.
Respect and protect our cus- Privacy by design implemented Privacy Impact Assessment process
tomers privacy. in all relevant project management implemented in Telia Companys
We are regarded as a trusted ac- processes. project model.
tor in handling personal data on All employees aware of the privacy Group-common Privacy Notice
the customers terms. requirements related to their work model created.
duties. Local gap assessments against
Clear and easy to understand infor- GDPR completed and risk mitiga-
mation about processing personal tion roadmaps developed in regions
data readily available to customers. Sweden and Europe.
Mitigation of EU Data Protection Strengthened governance
Regulation (GDPR) compliance and resources to meet GDPR
risks. requirements.
The EU Data Protection Regulation (GDPR) was approved GOVERNANCE

in April and will come into effect in May 2018. The new re-
quirements will have a fundamental impact on our industry Our work is guided by the group customer privacy policy
as the amount of personal data processed is increasing that defines principles regarding collecting, processing and
exponentially, cloud-based services and cross-border retaining personal data as well as customers rights. The
data transfers are becoming increasingly common, threat group security policy defines measures to safeguard the
landscapes are rapidly changing and customer trust is a confidentiality and integrity of customers personal data. In
cornerstone for business. addition, the GDPR sets new requirements.
In light of events in recent years, there is a growing Group-wide governance for driving GDPR compliance
focus on privacy from the societal, operator and customer and risk mitigation is led by a steering committee chaired
perspectives. We foresee that customer privacy risks are by Telia Companys Chief Operating Officer. This ensures
becoming increasingly important to manage as customer strong group-level oversight and control over GDPR risk
expectations grow and legislation is strengthened in the EU mitigation activities.
and other markets. In addition, this area can also present Country organizations and group functions are responsi-
new business opportunities. ble for ensuring GDPR compliance and risk mitigation. This
work is led by privacy officers appointed in each country
and group function. Progress is regularly reported to lo-
cal and regional GREC meetings and to Group Executive
Management.
89
SUSTAINABILITY WORK
CUSTOMER PRIVACY Annual and Sustainability Report 2016
A group level privacy team, led by the group privacy

officer, provides harmonized GDPR interpretations and
CASE
guidance to local units, oversees risk mitigation status,
performs reviews, and steers and follows up closely on
implementation. In addition, external resources support TELIA IN NORWAY
development of processes and IT architecture as well as
security safeguards in line with GDPR requirements. DEVELOPS "TRUST
AS A SERVICE"
WORK DURING THE YEAR
GDPR gap assessments and mitigation plans The GDPR is the biggest change in privacy
In 2016, the main focus was on preparing for the GDPR. regulation in over 20 years in Europe. As a mem-
Initial gap assessments were carried out by local privacy ber of the EEA, Norway will also implement the
officers in regions Sweden and Europe, and on group level. regulation.
The assessments focused on defining actions to ensure Telia in Norway is developing a consent man-
timely implementation of the requirements and appropri- agement solution with the goal of providing Trust
ate risk mitigation. Group-level interpretations of the new as a Service between end-users and the applica-
requirements were developed and all privacy officers were tions they interact with. The service enables users
trained in them. A specific data-mapping project was to access their online personal data, focusing
carried out to strengthen information asset and vendor on the users right to control who gains access
management as well as to deliver an overview of data to their data and for what processing purposes.
processing activities. The solution is part of Telia Norways developer
platform and will be available to any internal or
Privacy impact assessment integration external service provider in early 2017.
Privacy by design taking privacy into account at the The service allows service providers that is,
earliest possible stage of projects, initiatives and product any site, application or service to create dialogs
development is one of Telia Companys key privacy policy between them and end-users with regard to
principles. The privacy impact assessment model facilitates asking for consent for data processing. Once the
a privacy by design approach by proactively ensuring that user gives consent, the agreement is delivered to
the target design of a project or other initiative is compliant both parties in a format that links the agreed data
with laws and internal requirements from the early stages. processing into a human- and machine-readable
The privacy impact assessment process was integrated format.
into Telia Companys main project model as a manda- Apart from the legal need to be compliant,
tory activity. Project managers were also trained in the privacy is rapidly becoming a defining issue of the
requirements. digital era where consumer trust is essential for
our success. To deliver on our brand promise on
Transparency of data processing the customers terms, we must see GDPR as a
To increase the transparency of the collection and use of business opportunity, says Linn Hege M. Bade,
personal data, a group common privacy notice model Engineering Lead for User and Privacy Manage-
was created to set a standard for how Telia Company ment at Telia in Norway.
provides information on data processing to customers.
The privacy notice contains information on, for example,
the reasons that personal data is processed and the rights
customers have. Several local privacy notices were aligned
with the common privacy notice model in regions Sweden
and Europe.

In 2017, the focus will be on executing GDPR risk mitiga-
tion activities in accordance with local and group-level miti-
gation plans. These include changes in our IT environment,
processes and data processing practices as well as activi-
ties to continuously increase awareness and strengthen pri-
vacy governance. Relevant group policies and instructions
will be revised to reflect the new GDPR requirements.
90
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 OCCUPATIONAL HEALTH AND SAFETY
OCCUPATIONAL
HEALTH AND SAFETY
Ensuring health, safety and well-being is
not only our responsibility, but also vital to
ensure employee engagement and make
Telia Company THE place to work.
An occupational health and Lost-Time Injury Frequency1 (LTIF) LTIF: 0.36 (0.41).
safety culture that supports the maximum 0.52. SAR: 2.4 percent (2.2).
ambition of Telia Company as Sickness Absence Rate2 (SAR) No fatal accidents (0).
THE place to work. maximum 1.9 percent. Operations in Finland, Norway,
No fatal accidents. Estonia, Azerbaijan, Uzbekistan and
OHSAS 18001 implemented in all Kazakhstan OHSAS 18001 certified.
major companies (by end of 2016). Engagement Index: 80 percent (78).
Engagement index: 83 percent.
1) Lost-Time Injury Frequency: the total number of lost-time injuries per million possible working hours.
2) Sickness Absence Rate: the total number of hours of sickness absence per possible working hours (full-year average).
For more information, see the GRI Index, G4-LA6.
Work environment defines OHS risks GOVERNANCE

The most significant accident risks related to occupational
health and safety (OHS) are linked to construction and As stated in the group OHS policy, our approach consists
maintenance work carried out primarily by contractors. of promoting good health, identifying and reducing or
Telia Company employees work mainly in office or retail preventing risks and rapidly reacting to ill health in all of our
environments where the main risks relate to psycho-social operations. We believe that all accidents, incidents, injuries,
well-being and ergonomics. Particularly in region Eurasia, work-related illnesses and unsafe actions and conditions
we work with suppliers who meet few of our OHS require- are preventable.
ments and lack key elements such as risk identification, All local companies are required to implement the OHSAS
safety equipment and training. 18001 management system. A network of local OHS coor-
dinators is responsible for OHSAS 18001 implementation
Building a common OHS approach and meets regularly to share best practices. The group HR
A great deal of progress has been made since 2014 when function is responsible for coordinating and reporting on
we established our common OHS management model. progress to the group-level GREC meeting.
Although all companies now have our OHS management
model in place, much work remains to continue improving
it and to shift focus from health and safety to well-being
and employee engagement.
91
SUSTAINABILITY WORK
OCCUPATIONAL HEALTH AND SAFETY Annual and Sustainability Report 2016
WORK DURING THE YEAR CASE

OHS 18001 certification
Telia in Estonia, Sonera in Finland, Azercell in Azerbaijan
and Telia in Norway received OHSAS 18001 certification WELL-BEING@WORK
during 2016. Ucell in Uzbekistan and Kcell in Kazakhstan
have been certified since 2015.
IN SWEDEN
Regional activities In November, Telia in Sweden launched the online
Below is a description of some of the activities that were portal Well-being@Work. Based on our values
carried out during the year. Risk assessment, training and Dare, Care and Simplify, it is one of several strate-
communication within the scope of OHSAS 18001 was gic initiatives launched at create a more employee
ongoing in all companies. engagement, a better work environment and
improved performance.
Region Sweden Well-being@Work is an individual and team
OHS was renamed health and well-being and the Well- based activity challenge for all employees and
being@Work concept was launched as described in more consultants. There are four activity challenges
detail in the case below. The move of 3,500 employees to each year on topics such as good sleep, adapting
the new head office in Stockholm put ergonomics and work to change and dietary habits. Each topic has a
environment into focus, as we transition to an activity- mix of to-dos and training through short films and
based way of working. text. The first activity challenge was daily exer-
cise, since there is a well documented correlation
Region Europe between physical activity and lower sick leave.
Telia in Norway developed local OHS KPIs for bi-weekly Over 1,500 employees participated, logging 7.5
management follow-up, an OHS on the Agenda tool to laps around the globe.
work with and follow up on OHS risks, goals and activi- Other activities carried out in Sweden that sup-
ties, and a new online OHS handbook for easy access to port well-being and engagement were imple-
information and guidelines. mentation of a support system for managers in
Telia in Denmark offered pre-natal counseling to preg- alcohol and drug prevention that include rehabili-
nant women and their partners. This led to a decrease in tation if needed, and mandatory OHS training for
pregnancy-related sick leave from 30 sick days per preg- all managers which will be carried out in 2017.
nant woman per year to only five days.
Region Eurasia
Local OHS coordinators supported group procurement
auditors in supplier audits. All companies organized first aid
and other training, fire drills and other emergency exercises
based on local risks such as earthquakes. Most companies
also invested in infrastructure safety measures such as
automatic firefighting systems, first aid kits and new alarm
systems.

OHSAS 18001 certification
Local companies that failed to meet the goal of being certi-
fied at the end of 2016, are working to be certified in 2017.
Several companies are preparing to transition from the old
OHSAS 18001 standard to the new ISO45001 standard.
The new standard is better suited to our office environment
and the change is expected to be straight-forward.
Focus on well-being in regions Sweden and Europe

In regions Sweden and Europe, the focus will be on pro-
moting and increasing employee well-being and engage-
ment through initiatives such as Well-being@Work.
92
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 RESPONSIBLE PROCUREMENT
RESPONSIBLE
PROCUREMENT
Telia Company purchases goods and services
from tenths of thousands of suppliers. Choosing
suppliers with sustainable operations is a way for
us to create positive impacts that extend beyond
our own operations.
All suppliers comply with our 75 percent of assessed suppliers 60 percent (58) of suppliers as-
sustainability requirements. compliant with the supplier code of sessed through audits or Eco-Vadis
All suppliers have signed our conduct. compliant with the supplier code of
supplier code of conduct. 25 percent reduction of supplier conduct.
base (baseline 2015). Launched a standardized supplier
due diligence platform, 1,443 due
diligence assessments carried out.
169 on-site audits carried out.
Launched focus area programs in
seven critical supply chain areas.
Telia Company relies on a vast number of suppliers and GOVERNANCE

sub-suppliers, many of which are located in countries or
industries with challenges in upholding ethical business The supplier code of conduct is the guiding document
practices, human and labor rights, health and safety, and that outlines our sustainability requirements and shall be
environmental protection. Despite our efforts, we know included in all new or renegotiated contracts. Exceptions
that some of our suppliers and sub-suppliers violate Telia can be made when a supplier has demonstrated that cor-
Companys supplier requirements or national and interna- responding or higher requirements are already in place.
tional laws, regulations and conventions. Other governing documents such as the security directives
Ensuring that suppliers live up to our requirements and that specify IT security requirements for suppliers handling
implementing common ways of working with responsible customer data are used for certain products and services.
procurement across Telia Company will take several years. Supplier sustainability due diligence is part of the sup-
It requires joint efforts that are only possible if suppliers, plier due care process and is carried out in high-risk cat-
sub-suppliers and distributors are transparent about their egories such as network maintenance and manufacturing
challenges. of electronics before suppliers and contractual agreements
are approved. A dedicated team in group sourcing and
procurement is responsible for evaluating and developing
suppliers sustainability performance, for example through
on-site audits and training. Local procurement teams are
responsible for initiating the due diligence process.
93
SUSTAINABILITY WORK
RESPONSIBLE PROCUREMENT Annual and Sustainability Report 2016
SUPPLIER DUE CARE PROCESS
Expectations Pre-qualification Performance assessment and supplier development
Supplier
Corrective dialog
Requirements Due diligence Audits Follow-up
actions
Supplier code Supplier risk Telia Company Corrective Supplier training

of conduct identification audits action plan Supplier dialog
Security directives Supplier evaluation JAC audits management
Prohibited Information
substances (black research
and grey lists) Supplier risk
analysis
WORK DURING THE YEAR in 24 countries. Audits are selected mainly based on sup-
plier risk category, spend and the focus area programs.
Developing common processes The audit focus was on supplier code compliance, OHS,
A high priority in 2016 was to further develop and imple- quality and security. Out of the audits compliant with
ment a common process and governance framework for Telia Company's standardized scoring methodology, 13
procurement throughout the group. By using a com- audited suppliers met the requirements, and 57 had minor
mon process and standardized contracts that include deviations but were still approved. 29 suppliers did not
our supplier code and improving the supplier approval meet critical requirements within areas such as illegal
process, we increased control of payees and decreased overtime, financial punishment or forced labor and were
administration. not approved. Corrective action plans are monitored and
continuously followed up.
New due diligence platform For the remaining 152 audits, Telia Company's standard-
To strengthen the due diligence assessment process, we ized scoring methodology was not applied. Standardiza-
developed and implemented a due diligence platform tion of audit evaluations will be carried out in 2017.
based on an online supplier self-evaluation questionnaire During the year we closed 661 compliance deviations
available in several languages. The platform, which evalu- identified during audits in 2016 or earlier.
ates supplier fulfillment of the requirements in the sup-
plier code and security directives, replaces previous due Supplier assessments
diligence processes that were carried out mainly manually Supplier assessments (cumulative) 2016 2015
using different templates. It was implemented in region Due diligence 2,478 1,035
Eurasia during the year and will be gradually introduced in Self assessments 608 573
regions Sweden and Europe in 2017. For potential high- Audits 537 289
risk suppliers, an extended due diligence is performed Total 3,623 1,897
to identify specific risks related to the supplier and its
owners.
We performed 1,443 due diligence assessments based Supplier audits
on supplier self-evaluations. 102 of these indicated Supplier and sub-supplier audits 2016 2015
major deviations from our requirements, mainly related to Audits performed by Telia Company 169 140
potential risks in the areas of information security and cor- Audits performed by JAC 79 61
ruption. 18 suppliers that did not meet our requirements Total 248 201
were given conditional approval before contracting with
Telia Company, complemented by a plan for risk mitigating
activities. Focus area programs
As the new due diligence platform was implemented, we Based on findings from audits conducted in 2015, industry
begun phasing out the EcoVadis supplier assessment tool. discussions, new customer requirements and new EU
35 EcoVadis assessments were carried out during the year. guidelines, we defined the following focus area programs
for 2016 and onwards. Considering the scope and nature
Supplier audits of the challenges, some of these programs will take several
169 on-site supplier audits by Telia Company and another years to complete.
79 by the Joint Audit Cooperation (JAC) were carried out
94
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 RESPONSIBLE PROCUREMENT
Occupational health and safety (OHS) in region Eurasia to enable local companies to conduct
The program aims to support suppliers performing hazard- sustainability risk evaluation prior to contracting vendors.
ous work in achieving OHSAS 18001 certification or the There is need for further development of common sys-
equivalent and to improve their reporting of work-related tems, templates, definitions and reporting processes, to
accidents and fatalities. In 2016, a number of site visits to ensure that we measure and report internally and external-
increase expertise in OHSAS 18001 requirements within ly in a consistent way. Alongside this we aim to revise the
Telia Company and with local suppliers were carried out 2018 goals, to ensure that they are aligned with strategic
mainly in region Europe. and organizational changes in sourcing and procurement.
Mapping and managing privacy risk

The program aims to prepare our supply chain for the new
EU privacy and data security regulations (GDPR). In 2016,
we focused on taking inventory of processes and systems
where suppliers handle customer data and identifying sup-
pliers where we will conduct audits and training in 2017 to
prepare them for the new requirements.
Financial punishment
Financial punishment, for example withholding salary for
CASE
lack of performance, is a widespread disciplinary measure
found in our supply chain in almost all regions where we
have performed audits. In 2017, we will focus on training
and strengthening requirements to reduce this practice ADDRESSING BOND
where it is in conflict with national laws.
CONTRACTS IN THE
Overtime at suppliers in China
In eight out of ten audits of Chinese suppliers in 2015 and
INDIAN IT SECTOR
2016, we identified consistent use of overtime in violation
of Chinese labor law and our supplier code requirements. In 2015, audits of Indian IT service suppliers
In 2017, we will engage in dialogs and training with these revealed the use of bond contracts between the
suppliers. suppliers and recent IT graduates. This practice
seems to be common and may be in violation
SIM card suppliers in China of national labor laws, and at the moment, labor
In a pre-assessment for a SIM card tender in 2015, we unions to protect labor rights barely exist in the
conducted audits of manufacturers in China. We identified Indian IT sector.
several serious compliance deviations from our supplier According to these bond contracts, compa-
code as well as security and quality requirements. This nies may offer two-year employee contracts that
program has addressed these deviations and we now have stipulate the employees right to training to carry
a list of four pre-qualified suppliers and two more to audit out work tasks. If the employee terminates the
before the program is completed. contract, he or she may be forced to pay back
training fees and accumulated earned salary.
Responsible sourcing of minerals In seven out of eight audits conducted, we
We aim to strengthen our supplier code requirements to found evidence of such bond contracts. We
ensure that our supply chain sources minerals respon- initiated audits of all eleven main suppliers and
sibly and does not contribute to potential human rights found this practice at nine of them. In response,
violations in high-risk regions. Fulfillment of revised we initiated a joint effort with these suppliers to
requirements will be evaluated through the due diligence develop a training program to address the issue.
platform. The program focuses on identifying solutions to
maintain employee motivation without the use of
Bond contracts in India bond contracts and to create top management
See case. commitment to these solutions.
Tackling this and other labor rights challenges is
complex and requires multi-stakeholder collabo-
PLANNED WORK IN 2017 ration to arrange recurring training sessions and
In addition to the focus area programs, we will continue to knowledge sharing. We have initiated a dialog
develop our suppliers capacity to meet our requirements with the Birmingham Business School and Advi-
through audit programs and supplier training covering our sory for Sustainable and Responsible Business
supplier code and security directives. The due diligence in India to explore potential ways of reducing the
platform will be improved, based on internal and external use of bond contracts in the ICT supply chain.
feedback, mainly to increase ease of use and scope. We
aim to strengthen local due diligence expertise especially
95
SUSTAINABILITY WORK
ENVIRONMENTAL RESPONSIBILITY Annual and Sustainability Report 2016
ENVIRONMENTAL
RESPONSIBILITY
Telia Companys services are key enablers of an environmen-
tally sustainable economy. Cloud hosting, machine-to-machine
services, tools that enable remote working and other services
can contribute positively to disconnecting economic growth
from negative environmental impact.
Minimize negative and maximize All major operations in regions ISO 14001 certification in Telia
positive environmental impact Sweden and Europe ready for in Sweden and Sonera in Finland.
throughout our value chain. ISO14001 certification (by end of 85,000 devices collected through
2017). buy-back programs.
Buy-back programs for mobile 28.8 kWh per subscription equiva-
devices established in region lent (28.2).
Europe (by end of 2017). 1.9 kg COe emissions per sub-
10 percent lower energy consump- scription equivalent (2.5).
tion per subscription equivalent.1
33 percent lower COe emissions
per subscription equivalent.
1) Subscription equivalent is based on energy consumption for different subscriptions. Targets are based on total energy consumption and scope 1 + 2 emissions.
Baseline 2015. Figures exclude energy consumption and emissions from region Eurasia, Telia Carrier and Yoigo in Spain.
Global challenges related to climate change, resource and our own operations. The largest share of our total envi-
energy scarcity and developing the circular economy rely ronmental impact is in the value chain of delivering an ICT
on ICT solutions for solving these challenges. The GeSI service, particularly from the production and use phase of
SMARTer2030 report highlights that in 2030, ICT will have consumer electronics (see case below).
the potential to hold global greenhouse gas (GHG) emis-
sions at 2015 levels while increasing resource efficiency Regional differences define our approach
in, for example, agriculture, transportation and electricity Significant regional differences define our approach. The
distribution. According to the report, the ICT industry has biggest challenges are found in region Eurasia - weak leg-
a GHG emissions abatement potential of 20 percent of islation, lack of waste management infrastructure and low
global emissions, more than the combined emissions of the levels of interest from customers. In regions Sweden and
EU and the US. According to the Accelerating sustainable Europe, customers expect us to be proactive in our work
Growth report by Deloitte UK, which was commissioned and the solutions we offer, to show how we act responsibly
by Telia Company, increased digitalization of the Nordic and and help them understand how our services reduce their
Baltic economies could enable a reduction of the regions own environmental impacts.
greenhouse gas emissions by up to 20 percent, equal to
taking nearly nine million cars off the roads for one year.
GOVERNANCE
Key environmental impacts According to the group environmental policy, we adopt
Energy, GHG emissions and waste, particularly electronic a structured management approach to managing key
waste, are the key environmental impacts to manage in environmental impacts. We do this by implementing ISO
96
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 ENVIRONMENTAL RESPONSIBILITY
14001 environmental management systems (EMS) in all

large subsidiaries in regions Sweden and Europe. The local
companies set targets aligned with group environmental Focus will be on continued ISO 14001 implementation with
goals and related to their key environmental impacts. Local the goal for all larger operations in regions Sweden and
companies in region Eurasia are exempt from the require- Europe to be ready for certification by the end of 2017.
ment to implement ISO 14001. The EU Energy Efficiency Directive will also require local
The group environmental manager has the overall respon- assessments and reporting of energy consumption, which
sibility for developing and implementing the group policy. we aim to combine with ISO 14001 impact assessments.
Local companies implementing ISO 14001 have a clearly
appointed function responsible for managing the local EMS.
WORK DURING THE YEAR

ISO 14001 certification in Finland and Sweden
In September, Sonera in Finland received ISO 14001 certi-
fication and it is now the only ISO 14001 certified operator
in the country. The EMS covers all of Soneras operations
and focuses on two of the groups key environmental
aspects: energy and waste. The greatest positive oppor-
CASE
tunities were identified in increasing energy efficiency and
improving waste recycling.
In addition, Telia in Sweden's enterprise customers
organization is ISO 14001 certified since earlier. DECOUPLING OF
Buy-back programs extend the life of mobile devices ENVIRONMENTAL
Buy-back programs, also known as take-back or upgrade
programs, extend the lifetime of mobile devices that are
FOOTPRINT FROM DATA
often in good working condition. In April, Telia in Estonia GROWTH IN SWEDEN
launched its buy-back program. This means that all com-
panies in regions Sweden and Europe except Sonera in
Finland now have buy-back programs in place. During the In August, the Royal Institute of Technology (KTH)
year, 85,000 mobile devices were bought back through published a research paper on the environmental
customer channels. Through its leasing agreements, Telia footprints of the ICT and E&M (entertainment and
Finance took back another 18,700 mobile devices, comput- media) sectors in Sweden. Using a life-cycle as-
ers and other hardware. sessment approach, researchers at Telia Com-
pany and Ericsson examined the total energy use
Procuring and producing renewable electricity and related GHG emissions of production, use
As part of a new procurement instruction on electricity, and end of life treatment for both sectors, includ-
regions Sweden and Europe shall purchase electricity from ing consumer electronics, from 2010 to 2015.
renewable sources, either through a green contract or The study identifies a clear decoupling of
by purchasing Renewable Energy Certificates (REC). In increased data volumes from energy use and
contracts where we are the tenant or co-host, we will strive total environmental footprint in these sectors. In
to influence the electricity contract owner to use renew- total the ICT and E&M sectors account for ap-
able energy. In total, we purchased 782 GWh of renewable proximately seven percent of Swedens annual
electricity during the year, 85 percent (70) of total electricity electricity usage, which in absolute terms is lower
consumption in regions Sweden and Europe. than in 2010 as reported in a previous study pub-
Ucell in Uzbekistan and Tcell in Tajikistan produced 2 lished in 2013. During the period data volumes
GWh of solar energy at base stations equipped with solar continued to increase - fivefold in 2015 compared
panels. to 2010. The largest share of the environmental
impact from the sectors relates to embedded
SMARTer2030 Action Coalition emissions in electronics produced in countries
Together with GeSI and some of its members, Telia Com- where energy is dirtier than in Sweden.
pany signed the SMARTer2030 Action Coalition that was The researchers expect to find similar correla-
launched at the COP22 climate conference held in Mar- tion in other countries where the level of "ICT
rakech in November. The coalition highlights the ICT indus- maturity" is increasing.
trys commitment to both minimize its own environmental
impacts and develop services that contribute to global Read more at www.kth.se/cesc
GHG emissions reductions, thereby contributing to the
UN Sustainable Development Goal 13: Climate Action.
97
SUSTAINABILITY WORK
CHILDREN ONLINE Annual and Sustainability Report 2016
CHILDREN ONLINE
Children and young people are active users of our

services. We recognize our responsibility to empower
and protect children, their parents and caretakers according
to the Children's Rights and Business Principles.
Respect and support childrens Understand impact on chil- Initiated assessment for Childrens
rights. drens rights in relevant business Rights and Business Principles.
activities. Implemented blocking of CSAM in
Block CSAM* in regions Sweden regions Sweden and Europe.
and Europe. Implemented detection and
Detect and report CSAM in internal reporting of CSAM in internal IT
IT systems in regions Sweden and systems in six countries and in
Europe. Telia Carrier.
Establish Childrens Advisory Panel. Introduced Childrens Advisory
Panel in seven markets.
* Child sexual abuse material.
The internet enriches childrens lives and provides them WORK DURING THE YEAR
with opportunities to improve their digital skills as well as
to socialize, play and learn. Children, however, are particu- Childrens Advisory Panel
larly vulnerable to online threats such as cyber bullying and To better understand childrens own perspectives on the
inappropriate content. online and digital aspects of their lives, we partnered
with childrens rights organizations and schools to set
up a Childrens Advisory Panel (CAP) in regions Sweden
GOVERNANCE and Europe. Approximately 700 children participated in
Our work is guided by group policies where children's workshops and contributed with their ideas and knowl-
rights shall be taken into consideration, by the Children's edge about their lives online, and more than 50 children
Rights and Business Principles, and by what we consider were interviewed in depth. Through the CAP, we aim to
important societal challenges related to our services. Most identify qualitative opportunities and the benefits of online
of the practical implementation of our commitments is activity for children and young people. More information is
integrated in local operations, with group level oversight provided in the case below.
and coordination. In early 2017, Children's rights became a
Responsible business focus area. Fighting online child sexual abuse material
We are also a signatory of several self-regulatory industry We actively participate in the fight against child sexual
initiatives covering areas such as parental control, child abuse material (CSAM) online. During the year, we ensured
sexual abuse content, education and awareness. blocking of websites defined by law enforcement as illegal
for hosting CSAM in regions Sweden and Europe. As Telia
Company stands for and promotes an open internet, this
is the only area where we have taken an active stand for
voluntary blocking.
In regions Sweden and Europe, we activated technology
that provides an alert if CSAM is detected anywhere in
98
SUSTAINABILITY WORK
Annual and Sustainability Report 2016 CHILDREN ONLINE

Telia Companys own IT equipment. If CSAM is detected,
a police report is filed and a criminal investigation is car-
ried out. We are cooperating with other industry partners, Imagine the impact that
law enforcement and NGOs such as ECPAT to develop
could be achieved if all
this area further. During the year, we also ran a number of
activities where we presented our approach and called for Communication Service
other companies to start similar detection. Providers globally worked this way
Child-safeguarding services with blocking. An ethical, respon-
In regions Sweden and Europe, we offer child-safeguard- sible business model like that used
ing services that enable caregivers to set time restric-
tions for browsing and block websites with inappropriate by Telia Company and the global
content. We also offer mechanisms that enable caregivers work of ECPAT are key parts of the
to limit exposure to unsuitable TV content.
solution. Well done, Telia Company
Child helplines and ECPAT children are safer
During 2016, we focused on supporting the development
of solutions for children to reach helplines via chat on
because of you.
mobile devices, as this seems to be the preferred way for Neil Walsh, United Nations Chief of the Global
children to communicate. Programme on Cybercrime
Fighting cyber bullying

In many of our markets, we educate children and par-
ents on how to deal with cyber bullying and disrespect-
ful behavior online. Activities include information in our
stores, educational sessions at childrens summer camps
and marketing campaigns such as the Swedish campaign
Hata hat (Hate the hate). CASE
Childrens Rights and Business Principles
We partnered with Save the Children Centre for Child
Rights and Business for an assessment based on the
CHILDRENS ADVISORY
Childrens Rights and Business Principles of how our PANEL IN SWEDEN
operations impact childrens rights. Material and insights
were collected through workshops, an online survey and In Sweden, three partner schools hosted co-cre-
interviews with key employees. ation workshops where 6th and 9th grade students
were given a challenge related to real life and the
Partnerships internet and had to work together to come up
Telia Company is a co-founder of the World Childhood with solutions. The workshops were led by the
Foundation. During the year, the partnership was devel- local childrens organization Friends.
oped to focus on keeping children safe and in control First, the pupils had to think about what they
online. We have also formed country level partnerships would save from the internet if everything online
with NGOs with regard to child safety issues. disappeared. The 9th graders at Ersngsskolan
in Ume proposed a long list of apps to rebuild.
Among the must have apps were a communica-
PLANNED WORK IN 2017 tion app, a buy-and-sell app and video and film
The assessment based on the Childrens Rights and Busi- apps. After the ranking, the students discussed
ness Principles will result in an action plan to be imple- issues related to values spread online, net hate
mented in all operations to ensure that Telia Company and the capacity of the internet to enable cultural
respects and supports childrens rights. exchange.
The CAP findings will be shared through reports, semi- The students we met stressed solidarity, con-
nars and online for further discussion in the industry and sideration, inclusion and democracy. And there is
society about children as online citizens. They will also be a concrete demand for language apps to facilitate
used to improve our own approach to childrens rights as integration, says Olle Cox of Friends.
users of our technology. It will be very interesting to analyze the material
We will cooperate with other industry partners, law to identify opportunities for improvement, both
enforcement and NGOs to develop the fight against CSAM as a company and as an industry and society at
online and to promote the work against online CSAM in the large, says Marie Trogstam, Head of Sustainabil-
private sector as part of the work of supporting UN Sustain- ity Strategy at Telia in Sweden.
able Development Goals 16:2: End abuse, exploitation,
trafficking and all forms of violence against and torture of
children.
99
FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS Annual and Sustainability Report 2016
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
SEK in millions, except per share data Note JanDec 2016 JanDec 2015
Net sales C1, C5, C6 84,178 86,498
Cost of sales C7 -50,691 -52,710
Gross profit C1 33,487 33,788
Selling and marketing expenses C1, C7 -13,507 -14,269
Administrative expenses C7 -5,620 -5,826
Research and development expenses C7 -173 -147
Other operating income C8 5,490 1,124
Other operating expenses C8 -1,397 -3,457
Income from associated companies and joint ventures C14 2,810 3,394
Operating income C5 21,090 14,606
Finance income C9 803 609
Finance costs C9 -2,644 -3,526
Income after financial items 19,249 11,689
Income taxes C10 -2,816 -2,157
Net income from continuing operations 16,433 9,532
Net income from discontinued operations 1 C34 -9,937 673
Total net income 6,496 10,205
Items that may be reclassified to net income:
Foreign currency translation differences from continuing operations C11 1,303 -6,868
Foreign currency translation differences from discontinued operations C11, C34 868 -5,478
Income from associated companies C11, C14 -340 -2
Cash flow hedges C11 -128 614
Available-for-sale financial instruments C11 134 -2
Income taxes relating to items that may be reclassified C10, C11 668 -667
Items that will not be reclassified to net income:
Remeasurements of defined benefit pension plans C21 -1,297 4,322
Income tax relating to items that will not be reclassified C10 276 -922
Associates' remeasurements of defined benefit pension plans C14 -20 6
Other comprehensive income 1,463 -8,997
Total comprehensive income 7,959 1,208
Net income attributable to:

Owners of the parent 3,732 8,551
Non-controlling interests C19 2,764 1,654
Total comprehensive income attributable to:
Owners of the parent 4,833 987
Non-controlling interests C19 3,125 221
Earnings per share (SEK), basic and diluted, total C19 0.86 1.97
Earnings per share (SEK), basic and diluted, continuing operations 3.76 2.16
Earnings per share (SEK), basic and diluted, discontinued operations -2.90 -0.19
1) Includes expenses for the provision for the settlement amount proposed by the US and Dutch authorities, see Note C34.
100
Annual and Sustainability Report 2016 CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL POSITION
SEK in millions Note Dec 31, 2016 Dec 31, 2015
Assets
Goodwill C12 57,923 54,938
Other intangible assets C12 13,024 12,995
Property, plant and equipment C13 58,107 55,093
Investments in associated companies and joint ventures C14 22,698 23,341
Deferred tax assets C10 4,366 5,054
Pension obligation assets C21 3,380 3,773
Long-term interest bearing receivables C15 18,120 16,368
Other non-current assets C1, C15 1,856 2,287
Total non-current assets C1 179,475 173,850
Inventories C16 1,792 1,871
Trade and other receivables C1, C17 16,839 17,090
Current tax receivables 628 69
Interest-bearing receivables C1, C18 11,143 10,679
Cash and cash equivalents C1, C18 14,510 14,647
Assets classified as held for sale 2,4 C34 29,042 35,812
Total current assets 73,955 80,167
Total assets 1 253,430 254,017
Equity and liabilities
Equity attributable to owners of the parent 89,833 97,884
of which capital 35,520 35,496
of which reserves and retained earnings 54,313 62,388
Equity attributable to non-controlling interests C19 5,036 4,318
Total equity 94,869 102,202
Long-term borrowings C20 83,161 91,646
Deferred tax liabilities C10 10,567 10,627
Provisions for pensions and employment contracts C21 2,109 1,824
Other long-term provisions 3,4 C22 5,173 4,375
Other long-term liabilities C23 725 702
Total non-current liabilities 101,734 109,175
Short-term borrowings C20 11,307 9,337
Short-term provisions 5
C22 13,673 847
Current tax payables 19 85
Trade payables and other current liabilities C24 18,200 20,774
Liabilities directly associated with assets classified as held for sale 4 C34 13,627 11,598
Total current liabilities 56,826 42,641
Total equity and liabilities 253,430 254,017
1) The sales price for Telia Companys 60.4 percent direct ownership in Ncell and Telia Companys share in the holding company Reynolds Holding and Telia Companys
sales price for the economic interest in the 20 percent local shares in Ncell are included in continuing operations.
2) The minority owner Visors share of the sales price for Visors 19.6 percent ownership in Ncell and Visors share in the holding company Reynolds Holding were retained
within discontinued operations and classified as assets held for sale. The major part of the price has been distributed to Visor during the third quarter of 2016 and SEK
0.3 billion remains within cash and cash equivalents of discontinued operations as of December 31, 2016.
3) Includes provisions for transaction warranties relating to the divestment of Ncell in Nepal.
4) For more information on the divestment of Ncell in Nepal, see Notes C4 and C34.
5) S hort-term provisions as of December 31, 2016, include the provision for the settlement amount proposed by the US and Dutch authorities, see Notes C22, C29 and
C34.
101
CONSOLIDATED STATEMENTS
OF CASH FLOWS
SEK in millions Note JanDec 2016 JanDec 2015
Net income 6,496 10,205
Adjustments for:
Amortization, depreciation and impairment losses 13,662 21,705
Capital gains/losses on sales/disposals of non-current assets and operations -6,275 283
Income from associated companies and joint ventures, net of dividends received C14 -701 3,471
Pensions and other provisions 11,981 -487
Financial items 147 -290
Income taxes 649 1,537
Miscellaneous non-cash items 4 -239
Cash flow before change in working capital 25,964 36,184
Increase (-)/Decrease (+) in operating receivables -1,943 146
Increase (-)/Decrease (+) in inventories 61 -384
Increase (+)/Decrease (-) in operating liabilities 1,888 -698
Change in working capital 6 -935
Cash flow from operating activities C30 25,970 35,249
of which from discontinued operations 3,460 8,121
Intangible assets and property, plant and equipment acquired -18,703 -18,699
Intangible assets and property, plant and equipment divested 173 153
Business combinations and other equity instruments acquired C30, C33 -94 -6,248
Operations and other equity instruments divested C30 12,084 4,724
Loans granted and other similar investments C1 -6,198 -11,764
Repayment of loans granted and other similar investments 3,272 1,218
Compensation from pension fund 500
Net change in short-term investments 1,538 1,631
Cash flow from investing activities 1,2 C1 -7,428 -28,985
of which from discontinued operations 2 -1,508 -4,823
Cash flow before financing activities C1 18,542 6,264
Repurchased treasury shares including transaction costs -5 -14
Acquisition of non-controlling interests -356
Dividends paid to owners of the parent -12,990 -12,990
Dividends paid to holders of non-controlling interests C30 -2,376 -781
Proceeds from long-term borrowings 1,523 8,437
Repayment of long-term borrowings -6,898 -8,307
Net change in short-term borrowings -3,484 3,934
Settlement of derivative contracts for economic hedges and CSA 1,180 450
Cash received for repurchase agreements 6,975
Cash paid for repurchase agreements -6,416
Cash flow from financing activities -22,491 -9,628
of which from discontinued operations -1,976 422
Net change in cash and cash equivalents -3,949 -3,363
of which from discontinued operations -24 3,719
Cash and cash equivalents, opening balance C1 25,334 28,735
Net change in cash and cash equivalents for the year -3,949 -3,363
Exchange rate differences in cash and cash equivalents 1,523 -38
Cash and cash equivalents, closing balance C18 22,907 25,334
of which from continuing operations (including Sergel and Yoigo) 1 14,605 14,647
of which from discontinued operations (Eurasia) 2 C34 8,302 10,687
1) Includes sales price paid in cash for Telia Companys 60.4 percent ownership in Ncell, Telia Companys share in the holding company Reynolds Holding and Telia
Companys economic interest in the 20 percent local shares in Ncell. For more information, see Note C34.
2) Includes sales price paid in cash in for minority owner Visors share of Ncell and Visors share in the holding company Reynolds Holding. The major part of the price has
been distributed to Visor during the third quarter of 2016 and SEK 0.3 billion remains within cash and cash equivalents of discontinued operations as of December 31,
2016. For more information, see Note C34.
102
CHANGES IN EQUITY
Other Foreign Equity Total Non-
con- Fair currency Revalu transac- owners con-
Share tributed Hedging value translation ation Inflation tions in Retained of the trolling Total
SEK in millions Note capital capital reserve reserve reserve reserve reserve associates earnings parent interests equity
Closing balance,
December 31, 2014 13,856 21,630 102 6 -15,372 266 4,909 -1,725 87,711 111,383 4,981 116,364
Dividends C19 -12,990 -12,990 -835 -13,825
Non controlling
interest acquired -309 -309 -47 -356
Share-based
payments C31 23 23 23
Other transactions
with owners C19 -14 -14 -14
Total transactions
with owners 10 -13,299 -13,289 -882 -14,171
Net income C19 8,551 8,551 1,654 10,205
Other comprehensive
income C11, C19 480 4 -11,455 3,407 -7,564 -1,433 -8,997
Total comprehensive
income 480 4 -11,455 11,958 987 221 1,208
Effect of Turkcells
acquisition of NCI C14 -1,197 -1,197 -1,197
Closing balance,
December 31, 2015 13,856 21,640 582 10 -26,827 266 4,909 -2,922 86,370 97,884 4,318 102,202
Dividends C19 -12,990 -12,990 -2,365 -15,355
Changes in non
controlling interests 42 42 -43 0
Share-based
payments C31 28 28 28
Other transactions
with owners C19 -5 -5 -5
Total transactions
with owners 24 -12,948 -12,924 -2,408 -15,331
Net income C19 3,732 3,732 2,764 6,496
Other comprehensive
income C11, C19 -100 105 2,137 -1,042 1,101 362 1,463
Total comprehensive
income -100 105 2,137 2,691 4,833 3,125 7,959
Effect of Turkcells
acquisition of
treasury shares C14 39 39 39
Closing balance,
December 31, 2016 13,856 21,664 482 115 -24,690 266 4,909 -2,883 76,114 89,833 5,036 94,869
103
NOTES TO CONSOLIDATED
CONTENTS
Note Page
C1. Basis of preparation 105
C2. Key sources of estimation uncertainty 108
C3. Significant accounting policies 111
C4. Changes in group composition and events after the reporting period 121
C5. Segment information 122
C6. Net sales 124
C7. Expenses by nature 125
C8. Other operating income and expenses 126
C9. Finance costs and other financial items 127
C10. Income taxes 128
C11. Other comprehensive income 131
C12. Goodwill and other intangible assets 132
C13. Property, plant and equipment 135
C14. Investments in associated companies and joint ventures 136
C15. Other non-current assets 139
C16. Inventories 139
C17. Trade and other receivables 140
C18. Interest-bearing receivables, cash and cash equivalents 141
C19. Equity and earnings per share 142
C20. Long-term and short-term borrowings 144
C21. Provisions for pensions and employment contracts 145
C22. Other provisions 148
C23. Other long-term liabilities 149
C24. Trade payables and other current liabilities 150
C25. Financial assets and liabilities by category and level 151
C26. Financial risk management 153
C27. Leasing agreements 160
C28. Related party transactions 162
C29. Contingencies, other contractual obligations and litigation 163
C30. Cash flow information 165
C31. Human resources 166
C32. Remuneration to audit firms 172
C33. Business combinations 173
C34. Discontinued operations and assets classified as held for sale 174
104
C1 BASIS OF PREPARATION
General Segments
The annual report and consolidated financial statements The former segment region Eurasia is classified as held
have been approved for issue by the Board of Directors for sale and discontinued operations since December 31,
on March 8, 2017. The income statement and the balance 2015, and is therefore not included in the segment informa-
sheet of the parent company and the statement of com- tion. See Note C5 Segment information. For inormation
prehensive income and the statement of financial position on discontinued operations, see Note C34 Discontinued
of the group are subject to adoption by the Annual General operations and assets classified as held for sale.
Meeting on April 5, 2017.
Telia Companys consolidated financial statements have Recently issued accounting standards
been prepared in accordance with International Financial New and amended standards and interpretations
Reporting Standards (IFRSs) as adopted by the Euro- effective in 2016
pean Union (EU). In addition, concerning purely Swedish As of January 1, 2016, the following new or amended
circumstances, the Swedish Financial Reporting Board standards became applicable:
has issued standard RFR 1 Supplementary Accounting The amendment to IFRS 11 Accounting for acquisitions
Rules for Groups and other statements. The standard is of interests in joint operations clarifies that the principles
applicable to Swedish legal entities whose securities are and disclosure requirements in IFRS 3 Business Com-
listed on a Swedish stock exchange or authorized equity binations also are applicable to an acquired share in a
market place at the end of the reporting period and speci- joint operation. The amendment has been applied since
fies supplementary rules and disclosures in addition to January 1, 2016, and has not had any material affect on
IFRS requirements, caused by provisions in the Swedish Telia Companys consolidated financial statements.
Annual Reports Act. The following amendments has been applied since
January 1, 2016:
Measurement bases and accounting policies Amendments to IAS 16 and IAS 38 Clarification of ac-
The consolidated financial statements have been prepared ceptable methods of depreciation and amortisation,
mainly under the historical cost convention. Other meas- Disclosure Initiative
urement bases used and applied accounting policies are Amendments to IAS 1 Disclosure Initiative
described below. Annual Improvements to IFRSs 2012-2014 cycle
Amounts and dates The amendments relevant to Telia Company are in certain
Unless otherwise specified, all amounts are in millions of cases in line with already applied interpretations and
Swedish kronor (SEK) or other currency specified and are otherwise have had no or very limited impact on results or
based on the twelve-month period ended December 31 for financial position.
items related to comprehensive income and cash flows,
and as of December 31 for items related to financial posi- New or revised/amended standards and interpretations
tion. Rounding differences may occur. effective on or after January 1, 2017
Telia Company has not pre-adopted any of the new or
Correction of prior period classification errors revised/amended standards effective on or after January1,
Prior periods have been restated to reflect the discovery 2017.
of certain classification errors between net sales and cost IFRS 15 Revenue from Contracts with Customers is ef-
of sales referring to insurance sales in region Europe. The fective January 1, 2018, with earlier application permitted,
corrections were as follows: and among others gives detailed guidance on the account-
ing for:
Condensed consolidated statement Bundled offerings: Telia Companys current account-
of comprehensive income ing and recognition of revenue for bundled offerings and
allocation of the consideration between equipment and
2015
service is in line with IFRS 15. A detailed analyzis of the
SEK in millions Reported Restatement Restated performance obligations and the revenue recognition for
Net sales 86,569 -71 86,498 each type of customer contract is being performed and
Cost of sales -52,782 71 -52,710 possibly the model currently used must be refined.
Gross profit 33,788 33,788 Incremental costs for obtaining a contract: Sales com-
missions and equipment subsidies granted to dealers for
obtaining a specific contract should be capitalized and
deferred over the contract term if the contract is beyond
105
one year. Deferral related to contracts with shorter terms impairment model however includes some simplifications
is allowed but not mandatory. Telia Company currently for trade receivables that do not have a significant financ-
does not capitalize such costs. The potential effects are ing component and a policy choice for trade receivables
dependent on to what extent current commissions and which contain a significant financing component and lease
subsidies are incremental, etc. and are being analyzed receivables, to either apply the simplified approach, or
further. to apply the general model. In some cases the model will
Financing: If the period between payment and transfer probably result in earlier recognition of losses than cur-
of goods and services is beyond one year, adjustments for rently for Telia Company. In addition, extensive disclosures
the time value of money should be made at the prevail- are required to identify and explain amounts that arise
ing interest rates in the relevant market. Telia Company from expected credit losses and the effect of decline and
currently apply discounting, using the groups average bor- improvement in credit risk.
rowing rate. This discount rate might have to be adjusted. Hedge accounting: IFRS 9 applies to all hedge relation-
The potential effects are being analyzed further. ships, with the exception of fair value macro hedges. The
Contract modifications: Guidance is included on when to IASB is working on a project to address macro hedging,
account for modifications retrospectively or progressively. so in the meantime IFRS 9 provides an accounting policy
The effects, if any, are being analyzed further. choice for hedge accounting: either to continue to apply
Disclosures: IFRS 15 adds a number of disclosure re- the requirements of IAS 39 until the macro hedging project
quirements in annual and interim reports, e.g. to disaggre- is finalized, or apply IFRS 9. The hedge accounting require-
gate revenues into categories that depict how the nature, ments in IFRS 9 retain the three hedge accounting mecha-
amount, timing and uncertainty of revenues and cash flows nisms but introduces greater flexibility in the types of trans-
are affected by economic factors. actions eligible for hedge accounting, the risks that can be
Transition methods: Either a full retrospective approach hedged, and the instruments that can be used as hedging
with adjustments to all periods presented or a modified instruments. The new hedge accounting model enables
approach with only the current period adjusted which a better reflection of risk management activities in the
however requires disclosures of all financial statement line financial statements. The current 80-125 percent threshold
items in the year of adoption as if prepared under current effective-test is not carried over to IFRS 9. Instead, there
standards, i.e. effectively requiring two sets of accounting should be an economic relationship between the hedged
records during the year of adoption. item and the hedging instrument, with no quantitative
The IFRS 15 project has continued during the year and is threshold. Telia Company expects no major effects based
proceeding according to plan. Telia Company is continu- on current hedging activities. On the contrary, IFRS 9 is
ing to assess the total impact of IFRS 15 on the financial assumed to make it easier to achieve hedge accounting.
statements of the group and additional effects may be However, the increased hedge accounting possibilities also
identified. require increased disclosures about the risk management
IFRS 9 Financial Instruments is effective as of Janu- strategy, cash flows from hedging activities and the impact
ary 1, 2018, and replaces IAS 39 Financial Instruments: of hedge accounting on the financial statements. In addi-
Recognition and Measurement. The standards three tion, consequential amendments have been made to IFRS
main projects have been classification and measurement, 7 Financial Instruments: Disclosures.
impairment and hedge accounting. Telia Companys IFRS 9 project is proceeding according
Classification and measurement: Depending on how to plan and the assessment of the IFRS 9 impact contin-
certain specified conditions are met after assessing the ues. Additional effects may be identified.
assets contractual cash flow characteristics and the IFRS 16 Leases replaces the current IAS 17 Leases
entities business model for managing the asset, financial and its associated interpretative guidance. The new stand-
assets are classified and measured at any of the following ard is effective as of January 1, 2019. IFRS 16 applies a
three categories: Amortized Cost (AC); Fair Value through control model to the identification of leases, distinguish-
Other Comprehensive Income (FVOCI); or Fair Value ing between leases and service contracts on the basis
through Profit or Loss (FVPL). The classification of financial of whether there is an identified asset controlled by the
liabilities is more or less unchanged from existing require- customer. The new standard removes the classification of
ments. Preliminary, for Telia Companys financial assets, leases as operating leases or finance leases as is required
the change into three categories will in most cases have by IAS 17 and, instead introduces a single accounting
no major effect on the measurement of a specific financial model. According to the new model all leases result in the
asset since the measurement bases are already today lessee obtaining the right to use an asset at the start of
amortized cost or fair value, and, for financial liabilities, the the lease and, if lease payments are made over time, also
changes will not impact Telia Company. obtaining financing. The lessee is required to recognize: a)
Impairment: IFRS 9 introduces a general three-stage assets and liabilities for all leases with a term of more than
model for impairment (expected credit losses) based on 12 months, unless the underlying asset is of low value; and
changes in credit quality since initial recognition. Calcula- b) depreciation of lease assets separately from interest on
tion of amortized cost/effective interest differs between the lease liabilities in the income statement. The new standard
stages; it either includes or excludes the allowance. The does not include significant changes to the requirements
106
for accounting by lessors. When the new standard is assets are housed in a subsidiary. The effective date of
implemented, Telia Companys long term operating leases these amendments has been postponed indefinitely. The
will be recognized as non-current assets and financial amendments may have an impact on Telia Companys
liabilities in the consolidated statement of financial posi- consolidated financial statements in future periods if such
tion. Instead of operating lease expenses, Telia Company transactions should arise.
will recognize depreciation and interest expenses in the IFRIC 22 Foreign currency transactions and advance
consolidated income statement. Telia Company is assess- considerations is effective January 1, 2018. The new in-
ing the effects of IFRS 16 and cannot provide an estimate terpretation provides requirements about which exchange
of the effects of the new lease standard until the group has rate to use in reporting foreign currency transactions (such
performed a detailed review. as revenue transactions) when payment is made or re-
Amendments to IAS 7 Disclosure Initiative are effective ceived in advance. The interpretation may have an impact
January 1, 2017. Comparative information for earlier peri- on Telia Companys consolidated financial statements in
ods are not required. The objective of the amendments is future periods if such transactions should arise.
to improve the information about financing activities in the The following amendments, which will be applicable for
cash flow statements. The amendments require disclo- Telia Company, are expected to have no or very limited
sure of information enabling users of financial statements impact on Telia Companys financial statements when they
to evaluate changes in liabilities arising from financing are applied for the first time:
activities, including both changes arising from cash flows Amendments to IAS 12 Recognition of deferred tax as-
and non-cash changes. When applying the changes Telia sets for unrealised losses, effective January 1, 2017.
Company expects to extend cash flow disclosures relating Amendments to IFRS 2 Classification and measurement
to financing activities in the consolidated financial state- of share-based payment transactions, effective January
ments. 1, 2018.
Amendments to IFRS 10 and IAS 28 Sale or contribu- Annual Improvements to IFRSs 2014-2016 cycle, effec-
tion of assets between an investor and its associate or joint tive January 1, 2017 and 2018.
venture address an acknowledged inconsistency between
the requirements in IFRS 10 and those in IAS 28 (2011), in Other issued amendments are deemed not applicable for
dealing with the sale or contribution of assets between an Telia Company.
investor and its associate or joint venture. According to
the amendments a full gain or loss is recognized when a EU endorsement status
transaction involves a business (whether it is housed in a As of the beginning of March 2017, all standards, amend-
subsidiary or not). A partial gain or loss (only to the extent ments to standards and interpretations mentioned above
of the unrelated investors interests in that associate or had been adopted by the EU, except for IFRS 16, amend-
joint venture) is recognized when a transaction involves ments to IAS 7, IFRS 10/IAS 28, IAS 12, IFRS 2, Annual
assets that do not constitute a business, even if these improvments 2014-2016 cycle, clarification to IFRS 15 and
IFRIC 22.
107
C2 KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of financial statements requires man- Income taxes
agement and the Board of Directors to make estimates Significant management judgment is required in determin-
and judgments that affect reported amounts of assets, ing current tax liabilities and assets as well as provisions for
liabilities, revenues and expenses, and related disclosure deferred tax liabilities and assets, in particular as regards
of contingent assets and liabilities. These estimates are valuation of deferred tax assets. As part of this process, in-
based on historical experience and various other as- come taxes have to be estimated in each of the jurisdictions
sumptions that management and the Board believe are in which Telia Company operates. The process involves
reasonable under the circumstances, the results of which estimating the actual current tax exposure together with
form the basis for making judgments about the carrying assessing temporary differences resulting from the differ-
values of assets and liabilities that are not readily apparent ent valuation of certain assets and liabilities in the financial
from other sources. Actual results may differ from these statements and in the tax returns. Management must also
estimates under different assumptions or conditions, sig- assess the probability that the deferred tax assets will be
nificantly impacting Telia Companys earnings and financial recovered from future taxable income.
position. Actual results may differ from these estimates due to,
Management believes that the following areas comprise among other factors, future changes in business environ-
the most difficult, subjective or complex judgments it has ment, currently unknown changes in income tax legisla-
to make in the preparation of the financial statements. tion, or results from the final review of tax returns by tax
For information on accounting policies applied, see the authorities or by courts of law. For additional information
respective sections of Note C3 Significant accounting on deferred tax assets and liabilities and their carrying
policies. values as of the end of the reporting period, see Note C10
Income taxes.
Revenue recognition
For a telecom operator, if and when revenue should be Valuation of intangible and other non-current assets
recognized requires management judgment in a number of Intangible assets, and property, plant and equipment rep-
cases. resent a significant part of Telia Companys total assets.
Principal or agent gross versus net presentation Useful lives

When the group acts as a principal, income and payments Determination of the useful lives of asset classes involves
to suppliers are reported on a gross basis in revenue and taking into account historical trends and making assump-
operating costs. If the group sells goods or services as an tions related to future socio-economic and technological
agent (mainly content services) revenue and payments to development and expected changes in market behavior.
suppliers are recorded in revenue on a net basis, repre- In 2016 and 2015, amortization, depreciation and impair-
senting the margin/commission earned. Whether the group ment losses totaled SEK 11,533 million and SEK 12,780
is considered to be principal or agent in a transaction de- million, respectively. For additional information on intangi-
pends on analysis by management of both the legal form ble and tangible assets subject to amortization and depre-
and substance of the agreement between the group and ciation and their carrying values as of the end of the report-
its business partners; such judgments impact the amount ing period, see Note C12 Goodwill and other intangible
of reported revenue and operating expenses but do not assets and Note C13 Property, plant and equipment.
impact net income or cash flows. Features indicating that
the group is acting as a principal include: responsibility Impairment testing
for providing the goods or services and the group has A number of significant assumptions and estimates are
latitude in establishing prices or provides additional goods involved when measuring value in use and fair value less
and services. Features indicating that the group is acting costs of disposal based on the expected future discounted
as an agent include: the group does not have exposure cash flows attributable to an asset, for example with respect
to significant risks and rewards associated with the sale to factors such as market growth rates, revenue volumes,
of goods or services or the amount the group earns is market prices for telecommunications services, costs to
predetermined, being either a fixed fee per transaction or a maintain and develop communications networks and work-
stated percentage of the amount billed to the customer. ing capital requirements. Forecasts of future cash flows
are based on the best estimates of future revenues and
Bundling of products and services operating expenses using historical trends, general market
In bundling of products and services, determining fair val- conditions, industry trends and forecasts and other available
ues and if or when revenue should be recognized requires information. These assumptions are prepared by manage-
management judgment. Revenue is allocated between ment and subject to review by the Audit Committee of the
the goods and services using relative fair values. The fair Board of Directors. The cash flow forecasts are discounted
values determined for goods or services may impact the at the weighted average cost of capital for the relevant cash-
timing of the recognition of revenue. Determining the fair generating unit. For Denmark the key assumptions on sales
value of each element can require complex estimates but growth and EBITDA margin development in the forecasts
is mainly based on expected cost plus a margin. are deviating from historical trends. For the forecast period
108
Telia Company has clear and committed plans for sales ini- unexpected market development affecting forecasted rev-
tiatives, cost reductions and working capital improvements. enue which could result in an impairment loss. For additional
Despite firm business plans, there is a risk that forecasted information on goodwill and its carrying value as of the end
performance for Denmark could be impacted by operational of the reporting period, see Note C12 Goodwill and other
factors as well as external factors like WACC increase or intangible assets.
Currently, the following amortization and depreciation rates are applied.
Trade names Individual evaluation, minimum 10 percent

Telecom and frequency licenses, numbering rights Remaining license period, minimum 5 percent
Interconnect and roaming agreements Agreement term, based on the remaining useful life of the related license
Customer relationships Individual evaluation, based on historic and projected churn
Capitalized development expenses 20 percent or individual evaluation
Other intangible assets 2033 percent or individual evaluation
Buildings 210 percent
Land improvements 2 percent
Capitalized improvements on leased premises Remaining term of corresponding lease
Mobile networks (base stations and other installations) 14.520 percent
Fixed networks
Switching systems and transmission systems 1020 percent
Transmission media (cable) 510 percent
Equipment for special networks 10 percent
Usufruct agreements of limited duration Agreement term or time corresponding to the underlying asset
Other installations 233 percent
Equipment, tools and installations 1033 percent
Customer premises equipment under service arrangements 33 percent, or agreement term if longer
Collectability of trade receivables Provisions for restructuring activities, contingent

Telia Companys allowance for doubtful receivables reflects liabilities and litigation
estimated losses that result from the inability of customers Telia Company has engaged, and may in the future need to
to make required payments. Management determines the engage, in restructuring activities, which require manage-
size of the allowance based on the likelihood of recover- ment to make significant estimates related to expenses for
ability of accounts receivable taking into account actual severance and other employee termination costs, lease
losses in prior years and current collection trends. Should cancellation, site dismantling and other exit costs and to
economic or specific industry trends worsen compared realizable values of assets made redundant or obsolete
to management estimates, the allowance may have to be (see section Valuation of intangible and other non-current
increased, negatively impacting earnings. See section assets above). Should the actual amounts differ from
Credit risk management in Note C26 Financial risk man- these estimates, future results could be materially im-
agement for a description of how risks related to trade pacted.
receivables are mitigated. For additional information on the Determination of the treatment of contingent assets and
allowance for doubtful receivables and its carrying value liabilities in the financial statements is based on manage-
as of the end of the reporting period, see Note C17 Trade ments view of the expected outcome of the applicable
and other receivables. contingency. Management consults with legal counsel on
matters related to litigation and other experts both within
Provisions for pensions and employment contracts and outside the company with respect to matters in the
The most significant assumptions that management has ordinary course of business. There are ongoing investiga-
to make in connection with the actuarial calculation of tions in Sweden, the Netherlands and the US regarding
pension obligations and pension expenses affects the Telia Companys operations in Uzbekistan and suspected
discount rate, the expected annual adjustments to pen- irregularities related to those and to the market entry into
sions, and the longevity. Changes in any of these key as- Uzbekistan. As announced on September 15, 2016, Telia
sumptions may have a significant impact on the projected Company received a proposal from the authorities for reso-
benefit obligations, funding requirements and periodic lution of the pending investigations. The authorities have
pension cost. proposed a global resolution that includes a total financial
For additional information on assumptions made, sanction of USD 1.45 billion. Without certainty as to the
sensitivity analysis related to change in assumptions and timing and amount that may be paid at the time of a final
pension obligations and their present values as of the end resolution, Telia Company has recorded a USD 1.45 billion
of the reporting period, see Note C21 Provisions for pen- (SEK 13.2 billion) provision at the balance sheet date. For
sions and employment contracts. more information on these investigations, see Note C34
109
Discontinued operations and assets classified as held risks in the different countries. Fair value is the price that
for sale and Risks and uncertainties section Review of would be received to sell the discontinued operations in
Eurasian transactions. an orderly transaction between market participants at the
For additional information on restructuring provisions, measurement date under current market conditions. There
including their carrying values as of the end of the report- are no directly observable prices for Telia Companys
ing period, and on contingencies and litigation, see Notes discontinued operations and fair values have therefore
C22 Other provisions and C29 Contingencies, other been estimated using other valuation techniques which
contractual obligations and litigation, respectively. require the use of judgement. For the Eurasian operations
the estimated fair values are based on agreed sales prices,
Classification as held for sale and indicative bids received, valuation discussions with po-
discontinued operations tential buyers and for Uzbekistan the combined results of
Non-current assets and disposal groups are classified different valuation models. Apart from the normal business
as held-for-sale if their carrying value will be recovered risks, there are a number of specific risks related to the
principally through a sale transaction rather than through valuation of the different Eurasian operations such as cash
continuing use. The determination if and when non-current repatriation issues, foreign exchange risks, unstable regu-
assets and disposal groups should be classified as held- latory environment, owner structure and finding the right
for-sale requires management judgment considering all buyer from a sustainability point of view. Given the lack of
facts and circumstances relating to the transaction, the precedents and factual evidence, it is difficult to quantify
parties and the market and entities can come to different the valuation impact of all such risks. Any potential dis-
conclusions under IFRS. count, moreover, will be highly subject to the specific views
One of the conditions that must be satisfied for classi of an interested buyer. The specific risks of each country
fication as held for sale is that the sale is highly probable have also been factored in to the fair value estimates. See
within one year. One criteria for the sale to qualify as highly Note C34 Discontinued operations and assets classified
probable is that the appropriate level of management must as held for sale and Risks and uncertainties for more
be committed to a plan to sell the assets or disposal group information on discontinued operations and risks that may
in its present condition. In the telecom industry acquisi- affect the estimated fair values.
tions often require regulatory approval. If the buyer is a
telecom operator in the same market entities often have to Unquoted equity instruments
agree to a number of remedies to get the approval. If the Unquoted equity instruments are measured at fair value
buyer is expected to be a telecom operator in the same with fair value changes recognized in other comprehensive
market and significant remedies are expected, a sale is income. Telia Companys primary valuation technique for
usually not regarded as highly probable and consequently unquoted equity instruments is based on the most recent
the assets are not classified as held for sale by Telia Com- transaction for the specific company if such transaction
pany, until the remedies are agreed upon and accepted by has been recently done. Adjustments to the carrying value
management. is made to reflect significant changes in circumstances
Former segment region Eurasia is classified as held for since the transaction date if Telia Company assess that the
sale and discontinued operations since December 31, change will have a material impact on the fair value. The
2015. Telia Company is still committed to the plan to divest estimated fair value for material unquoted equity instru-
the remaining parts of Eurasia and the delay during 2016 ments is verified by applying other valuation models in the
in the sales process was caused by events and circum- form of valuation multiples from peers on relevant financial
stances beyond Telia Companys control. The remaining and operational metrics. Although Telia Company uses its
Eurasian parts are available for immediate sale and divest- best judgement, and cross references results of the primary
ment of these units are deemed highly probable within one valuation model against other models in estimating the
year. Due to the specific circumstances in each market and fair value of unlisted equity instruments, there are inher-
the complex owner structures there is some uncertainty ent limitations in any estimation techniques. The fair value
relating to the timing of the divestment of Eurasia. See estimates presented herein are not necessarily indicative
Note C34 Discontinued operations and assets classified of an amount that Telia Company could realize in a current
as held for sale and Risks and uncertainties for more transaction. Future confirming events will also affect the
information on discontinued operations and risks that may estimates of fair value. The effect of such events on the
affect the timing of divestment. estimates of fair value could be material. Unlisted equity
instruments for which the fair value cannot be reliably
Fair value estimates discontinued operations measured are measured at cost less any impairment. For
In accordance with IFRS 5, the discontinued operations are information on unquoted equity instruments, see section
measured at the lower of carrying value and estimated fair Fair value measurement of Level 3 financial instruments in
value less costs to sell. The valuation is based on an overall C25 Financial assets and liabilities by category and level.
assessment of the input from the sales process and the
110
C3 SIGNIFICANT ACCOUNTING POLICIES

Consolidated financial statements Disposals of non-controlling interests resulted in capital
General Subsidiaries gains or losses which were recognized in net income.
The consolidated financial statements comprise the parent Purchases of non-controlling interests resulted in goodwill,
company Telia Company AB and all entities over which being the difference between any consideration paid and
Telia Company has control. The group controls an entity the relevant share acquired of the groups carrying value
when the group is exposed to, or has rights to, variable of net assets of the subsidiary. Prospectively as of 2010,
returns from its involvement with the entity and has the transactions with non-controlling interests are treated
ability to affect those returns through its power over the as equity transactions, including any transaction-related
entity. The existence and effect of potential voting rights costs. Gains or losses on disposals as well as any excess
that are currently exercisable or convertible, including po- or deficit of consideration paid over the carrying amount of
tential voting rights held by another entity, are considered non-controlling interests when acquiring additional shares
when assessing whether an entity is controlled or not. Telia in a subsidiary are recognized in retained earnings. Consid-
Company is assumed to have control if the group owns the eration paid for a call option or other similar contract giving
majority of shares and the shares have equal voting rights Telia Company the right to acquire a fixed non-controlling
attached, and a proportionate entitlement to a share of the interest in exchange for a fixed amount of cash or another
returns of the entity and decisions about relevant activi- financial asset is deducted from retained earnings.
ties are determined by majority votes. Telia Company is Commitments to purchase non-controlling interests (NCI)
also assumed to have control if Telia Company selects the made prior to 2010 and put options granted to holders of
majority of the board contractually even if not holding the non-controlling interests (taking into account any sub-
majority of the shares, see Notes C4 Changes in group sequent capital contributions from or dividends to such
composition and events after the reporting period and shareholders) prior to 2010 are recognized as contingent
C19 Equity and earnings per share. consideration (provisions). Where the amount of the liability
Acquisitions are accounted for using the acquisition exceeds the amount of the non-controlling interest, the
method which measures goodwill at the acquisition date difference is recorded as goodwill. Subsequent changes in
as: the fair value of the consideration transferred; plus the value of put option liabilities are recognized as an ad-
the amount of any non-controlling interest in the acquiree justment to goodwill. Commitments entered into on or after
recognized in the transaction; plus if the business combi- 2010 are considered financial liabilities with subsequent
nation is achieved in stages, the fair value of the previously changes in the value recognized as other operating income/
held equity interest in the acquiree; less the net recognized expense. For each business combination the group elects
amount of the identifiable assets acquired and liabilities to measure any non-controlling interest in a subsidiary
assumed. When the difference is negative, a bargain either at fair value (goodwill recognized on non-controlling
purchase gain would be recognized in net income. Costs interest) or only at the proportionate share of the identifiable
related to the acquisition are expensed as incurred. net assets (goodwill recognized only on acquired interest).
Any contingent consideration payable would be rec- If Telia Company has a commitment of a NCI option linked
ognized at fair value at the acquisition date. If the contin- to a receivable from the same counter party and the shares
gent consideration would be classified as equity, it is not are held as collateral for the receivable, then the receivable
remeasured and settlement is accounted for within equity. and liability is recognized and offset in the statement of
Otherwise, subsequent changes to the fair value of the financial position. The change in fair value of the option is
contingent consideration are recognized in net income. Ac- assumed to equal the return on the shares held as collat-
quisition of additional shares in a subsidiary after obtaining eral, see Note C26 Financial risk management.
control as well as a partial disposal of shares in a subsidi-
ary while retaining control are accounted for as equity Joint arrangements
transactions with owners. See section Non-controlling Joint arrangements are entities over which the group has
interests below. joint control by virtue of contractual arrangements. Joint
Assets (including any goodwill and fair value adjust- arrangements are classified as either joint operations or
ments) and liabilities for entities acquired or divested joint ventures. Joint operations are arrangements whereby
during the year are included in the consolidated financial Telia Company has the right to the assets and obligation
statements from the date on which control is obtained and for the liabilities and accounts for its share of the assets,
excluded from the date on which control is lost. liabilities, revenue and expenses of the joint operation line
Intra-group sales and other transactions have been by line in the consolidated financial statements. The joint
eliminated in the consolidated financial statements. Profits operations are primarily designed for providing output to
and losses resulting from intra-group transactions are the shareholders.
eliminated unless a loss indicates impairment. Joint ventures on the other hand are arrangements where
Telia Company has right to the net assets of the arrange-
Non-controlling interests ment and the investment is accounted for under the equity
Prior to 2010, transactions involving non-controlling inter- method (similar to associated companies - see section
ests were treated as transactions with non-related parties. below). Joint arrangements acquired or divested during
111
the year are included in the consolidated financial state- the Swedish pension fund, payments related to leasing
ments from the date on which joint control is obtained and receivables, as well as other investments with maturities
excluded from the date on which joint control is lost. over 3 months.
Cash flows from financing activities include dividends
Associated companies paid to owners of the parent and to holders of non-con-
Associated companies are entities over which the group trolling interests, payments and receipts from changes in
has significant influence but not control. If the group holds, ownership of non-controlling interest and cash flows from
directly or indirectly (eg through subsidiaries), 20percent settlement of foreign exchange derivative contracts used
or more of the voting power of the investee, it is presumed for economic hedges of cash-pool balances including any
that the group has significant influence, unless it can be payments or receipts from CSA. Proceeds from and repay-
clearly demonstrated that this is not the case. Holdings in ment of long-term borrowings include cash flows from
associated companies are accounted for using the equity derivatives hedging such borrowings.
method and are initially recognized at cost, including any Cash and cash equivalents include cash at hand, bank
transaction costs. The groups share of net income in deposits and highly-liquid short-term investments (includ-
associated companies is included in operating income ing blocked amounts) with maturities up to and including 3
because the operations of these companies are related months.
to telecommunications and it is the groups strategy to Cash flows of a foreign entity are translated at the aver-
capitalize on industry know-how by means of investing in age exchange rate for the reporting period, except for cer-
partly owned operations. The share of net income is based tain transactions like dividends from associates, dividends
on the entitys most recent accounts, adjusted for any paid to holders of non-controlling interests, acquisitions or
discrepancies in accounting policies, and with estimated disposals of subsidiaries and associated companies, and
adjustments for significant events and transactions up to other major non-recurring transactions which are trans-
Telia Companys close of books. lated at the rate prevailing on the transaction day.
The line item Income from associated companies and
joint ventures also includes amortization of fair value ad- Segment reporting
justments and other consolidation adjustments made upon The groups businesses are managed on a geographical
the acquisition of associated companies as well as any basis. Countries are grouped in two geographical regions:
subsequent impairment losses on goodwill and other in- Sweden and Europe. Operating segments that are not
tangible assets, and capital gains and losses on disposals individually reportable, the associates MegaFon and Turk-
of stakes in such companies. TeliaCompanys share of any cell, and certain group functions are combined into Other
gains or losses resulting from transactions with associated operations. The former segment region Eurasia is clas-
companies is eliminated. sified as held for sale and discontinued operations since
Dividend received reduces the carrying amount of an December 31, 2015, and is therefore not included in the
investment. Negative equity participations in associated segment information. For additional information, see Note
companies are recognized only to the extent contractual C5 Segment information. Segments are consolidated
obligations to contribute additional capital exist and are based on the same accounting principles as for the group
then recorded as Other provisions. as a whole. When significant operations are transferred be-
The groups share of associated entities equity transac- tween segments, comparative period figures are restated.
tions such as the acquisition or sale of treasury shares
from third parties are recognized directly in equity. Foreign currency translation and inflation
adjustments
Cash flow reporting Currency translation is based on market rates with informa-
Cash flows from operating activities are reported using the tion from major market providers and are fixed daily.
indirect method and include dividends received from as- Separate financial statements of a group entity are
sociated companies and other equity instruments, interest presented in the entitys functional currency, being the
paid or received (except for paid interest capitalized as part currency of the primary economic environment in which
of the acquisition or construction of non-current assets the entity operates, normally the local currency. In prepar-
and therefore included in cash flows from investing activi- ing the financial statements, foreign currency transactions
ties), provisions and taxes paid or refunded. Changes in are translated at the exchange rates prevailing at the date
non-interest bearing receivables and liabilities are reported of each transaction. At the end of each reporting period,
in working capital, except for IRU-related prepayments monetary assets and liabilities denominated in foreign
made or received which are included in cash flows from currencies are translated at the closing rates existing at
investing activities. Terminal financing receivables are also that date. Exchange rate differences arising from operating
included in working capital. receivables or liabilities are recognized in operating income,
Cash flows from investing activities include CAPEX, pay- while differences attributable to financial assets or liabilities
ments to acquire or receipts from the sale of joint ventures, are recognized in finance items. Exchange rate differences
associates, subsidiaries (obtaining or losing control) net on available-for-sale equity instruments and on cash flow
of cash and cash equivalents acquired or disposed of and hedges are recognized in other comprehensive income.
other equity instruments. Further, cash flows from investing The consolidated financial statements are presented in
activities include compensation from or contributions to Swedish krona (SEK), which is the functional currency of
112
the parent company. For consolidation purposes, income fees are separately recognized at completion of connec-
and expenses of foreign operations (subsidiaries, joint tion, if the fees do not include any amount for subsequent
ventures and associated companies, and branch offices) servicing but only cover the connection costs. Amounts for
are translated at the average exchange rates for the period. subsequent servicing are deferred.Revenue from equip-
However, for items related to dividends, gains or losses on ment sales is recognized when delivery has occurred and
disposal of operations or other major transactions or if ex- the significant risks and rewards have been transferred to
change rates fluctuated significantly during the period, the the customer, i.e. normally on delivery and when accepted
exchange rates at the date of the transactions are used. by the customer.
Assets and liabilities, including goodwill and fair value Under customer loyalty programs, customers are entitled
adjustments arising on acquisition of foreign operations, to certain discounts (award credits) relating to services
are translated at closing rates at the end of the reporting and goods provided by Telia Company. Based on relative
period except for equity components, which are translated fair values, proceeds are allocated between services and
at historical rates. Translation differences are recognized goods provided and the award credits for future services
in other comprehensive income and accumulated in equity and goods. For the proportion of award credits expected
attributable to owners of the parent or to non-controlling to be redeemed, revenue is deferred and subsequently
interests, as appropriate. recognized when the award credits are redeemed and the
When a foreign operation is disposed, any related cumu- obligations to supply the awards are fulfilled. For recogni-
lative exchange rate difference is recycled to net income tion of customer acquisition costs, see section Operating
as part of the gain or loss on the sale, except for accumu- expenses below.
lated exchange rate differences related to non-controlling Telia Company may bundle services and products into
interests which are derecognized but not recycled to one customer offering. Offerings may involve the delivery
net income. However, if Telia Company would dispose or performance of multiple products, services, or rights
of a non-controlling interest in a foreign operation while to use assets (multiple deliverables). In some cases, the
retaining control, the relevant proportion of the cumulative arrangements include initial installation, initiation, or activa-
amount is reattributed to non-controlling interests. tion services and involve consideration in the form of a
When the functional currency for a foreign operation is fixed fee or a fixed fee coupled with a continuing payment
the currency of a hyperinflationary economy, prior to trans- stream. The revenue is allocated to equipment and ser-
lating the financial statements, the reported non-monetary vices in proportion to the fair value of the individual items.
assets and liabilities, and equity are restated in terms Services invoiced based on usage are not included in the
of the measuring unit current at the end of the reporting allocation. Customized equipment that can be used only
period. in connection with services or products provided by Telia
Company is not accounted for separately and revenue is
Revenue recognition deferred over the total service arrangement period.
Net sales principally consist of traffic charges including To corporate customers, Telia Company offers long-term
interconnect and roaming, subscription fees, connection functional service agreements for total telecom services,
and installation fees, service charges and equipment sales. which may include switchboard services, fixed telephony,
Sales revenues are recognized at fair value of the consid- mobile telephony, data communication and other custom-
eration received, normally being the sales value, adjusted ized services. There are generally no options for the cus-
for rebates and discounts granted and sales-related taxes. tomer to acquire the equipment at the end of the service
Revenue is recognized in the period in which the service is contract period. Revenue for such functionality agree-
performed, based on actual traffic or over the contract term, ments is recognized over the service period but part of the
as applicable. Revenue from rendering of services is recog- periodic fixed fee is deferred to meet the costs at the end
nized when it is probable that the economic benefits associ- of the contract period (maintenance and up-grades).
ated with a transaction will flow to Telia Company, and the Service and construction contract revenues are recog-
amount of revenue, and the associated costs incurred, or to nized using the percentage of completion method. The
be incurred, can be measured reliably. Revenue from voice stage of completion is estimated using measures based on
and data services is recognized when the services are used the nature and terms of the contracts. When it is probable
by the customer. Revenue from interconnect traffic with that total contract costs will exceed total contract revenue,
other telecom operators is recognized at the time of transit the expected loss is immediately expensed.
across Telia Companys network. When invoicing end-cus- Within the international carrier operations, sales of Inde-
tomers for third-party content services, amounts collected feasible Rights of Use (IRU) regarding fiber and duct are
on behalf of the principal are excluded from revenue. recognized as revenue over the period of the agreement
Subscription fees are recognized as revenue over the (see also section Telia Company as operating lessor
subscription period. Sales relating to pre-paid phone below).
cards, primarily mobile, are deferred and recognized as
revenue based on the actual usage of the cards. For open Operating expenses
access fiber installed at customers premises, non-refund- Telia Company presents its analysis of expenses using a
able customer fees and related installation costs, including classification based on function. Cost of sales comprises
planning, trenching, cabling, splicing, mounting, connec- all costs for services and products sold as well as for
tion, cross connect equipment and media converter, are installation, maintenance, service, and support. Selling
recognized when the installation is finalized. Connection and marketing expenses comprise all costs for selling and
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marketing services and products and includes expenses est rate swaps as well as changes in fair value of interest
for advertising, PR, pricelists, commission fees, credit rate swaps. The initial difference between nominal value
information, debt collection, etc. Bad debt losses as well and net present value of borrowings with an interest rate
as doubtful debt allowances are also included. Recovery different to market rate (day 1 gain) is amortized until
of receivables written-off in prior years is included in Other due date and recognized as Other interest income. The
operating income. Research and development expenses interest component of changes in the fair value of bor-
(R&D) include expenses for developing new or substantially rowings measured at fair value and of derivatives hedging
improving already existing services, products, processes loans and borrowings (see section Derivatives and hedge
or systems. Maintenance and minor adjustments to already accounting below) are included in Other interest income
existing services, products, processes or systems are (gains) or in Interest expenses (losses). Exchange rate dif-
not included in R&D. Expenses that are related to specific ferences on financial transactions also comprise changes
customer orders (customization) are included in Cost of in fair value of the currency component of cross currency
sales. Amortization, depreciation and impairment losses interest rate swaps and of forward contracts hedging cur-
are included in each function to the extent referring to rency risks in external borrowings.
intangible assets or property, plant and equipment used Dividend income from equity investments is recognized
for that function. when Telia Companys rights to receive payment have been
Costs for retailer commissions, other customer acqui- established. Income and expenses relating to guarantee
sition costs, advertising, and other marketing costs are commissions are included in Other interest income and
expensed as incurred. Interest expenses, respectively. Interest expenses include
All pension benefit costs except for the interest compo- funding-related bank fees and fees to rating institutions and
nent are recognized as personnel expenses. For equity- market makers. Further the net interest on the net defined
settled share-based payments to employees, such as Telia benefit liability (asset) is recognized as part of finance
Companys Performance Share Programs, cost, being the costs.
fair value at the allotment date of the equity instruments
allotted, is recognized as personnel expenses allocated Income taxes
over the vesting period and with a corresponding increase Incomes taxes comprise current and deferred tax. Current
in equity. Cost is based on the best available estimate of and deferred income taxes are recognized in net income
the number of equity instruments to vest. If necessary, the or in other comprehensive income, to the extent relating to
estimate is revised during the vesting period and finally items recognized in other comprehensive income. Deferred
revised at the end of the vesting period. income taxes are provided in full, using the balance sheet
liability method, on temporary differences arising between
Other operating income and expenses the tax bases of assets and liabilities and their carrying
Other operating income and other operating expenses values in the consolidated financial statements and on
include gains and losses, respectively, on disposal of unutilized tax deductions or losses. Where a subsidiary
shares or operations in subsidiaries (see section Associ- has a history of tax losses, Telia Company recognizes a
ated companies above) and on disposal or retirement of deferred tax asset only to the extent that the subsidiary
intangible assets or property, plant and equipment. has sufficient taxable temporary differences or there is
Also included in other operating income and expenses convincing other evidence that sufficient taxable profit will
are impairment losses of goodwill, government grants, be available.
exchange rate differences on operating transactions, results On initial recognition of assets and liabilities, deferred
from court-settled disputes with other operators regard- taxes are not recognized on temporary differences in trans-
ing historical interconnect and roaming fees, restructuring actions that are not business combinations. Deferred tax li-
costs and other similar items. Government grants are initially abilities for undistributed earnings or temporary differences
measured at fair value and recognized as income over the related to investments in subsidiaries, joint ventures and
periods necessary to match them with the related costs. associated companies are not recognized because such re-
Exchange rate differences from operating transactions also tained earnings can be withdrawn as non-taxable dividends
include effects from economic hedges and value changes and the companies can be sold without tax consequences.
in derivatives hedging operational transaction exposure (see However, some foreign jurisdictions impose withholding
section Derivatives and hedge accounting below). tax on dividends. In such cases, a deferred tax liability is
recognized, calculated by applying the respective withhold-
Finance costs and other financial items ing tax rate on undistributed earnings. In certain countries,
Interest income and expenses are recognized as incurred, income tax is not levied on profits, but on dividends paid or
using the effective interest rate method, with the exception declared. In those cases, since current and deferred taxes
of borrowing costs directly attributable to the acquisition, should be recognized at the rate of undistributed earnings,
construction or production of an asset, which are capi- no deferred tax is recognized and current tax is recognized
talized as part of the cost of that asset (see also section in the period when dividends are declared.
Intangible assets, and property, plant and equipment Current and deferred income tax is determined using tax
below). Increases in provisions due to passage of time are rates and tax legislation that have been enacted or sub-
recognized as interest expenses. stantively enacted at the end of the reporting period and in
Interest income and expenses also include changes in the case of deferred tax that are expected to apply when
fair value of the interest component of cross currency inter- the related deferred income tax asset or liability is set-
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tled. Effects of changes in tax rates are recognized in the plant and machinery. Property and plant under construc-
period when the change is substantively enacted. Deferred tion is valued at the expense already incurred, including
tax assets are recognized to the extent that the ability of interest during the installation period. To the extent a
utilizing the tax asset is probable. Deferred tax assets and legal or constructive obligation to a third party exists, the
liabilities are offset when a legally enforceable right exists acquisition cost includes estimated costs of dismantling
to set off current tax assets against current income tax and removing the asset and restoring the site. The cost of
liabilities and the deferred taxes relate to the same taxable replacing a part of an item of property, plant and equip-
entity and the same taxation authority. ment is recognized in the carrying value of the item if it
Interest on current tax payable or refundable calculated is probable that the future economic benefits embodied
by tax authorities is classified as Interest expenses and within the item will flow to Telia Company and the cost of
Other interest income, respectively. the item can be measured reliably. All other replacement
costs are expensed as incurred. A change in estimated
Intangible assets, and property, plant and expenditures for dismantling, removal and restoration is
equipment added to and/or deducted from the carrying value of the
Measurement bases related asset. To the extent that the change would result
Goodwill is measured, after initial recognition, at cost, in a negative carrying value, this effect is recognized in net
less any accumulated impairment losses. Goodwill is not income. The change in depreciation charge is recognized
amortized but tested for impairment at least annually. Im- prospectively.
pairment losses are not reversed. Based on management Fair values for property, plant and equipment acquired
analysis, goodwill acquired in a business combination is in a business combination are determined as follows.
for impairment testing purposes allocated to the groups Commercial real estate is normally valued using an income
of cash-generating units that are expected to benefit from or market approach, while technical buildings, plant and
the synergies of the combination. Each group represents equipment are normally valued using a cost approach,
the lowest level at which goodwill is monitored for internal in which the fair value is derived based on depreciated
management purposes and it is never larger than an oper- replacement cost for the asset.
ating segment. Capitalized interest is calculated, based on the groups
Other intangible assets are measured at cost, including estimated average cost of borrowing. However, actual bor-
directly attributable borrowing costs, less accumulated rowing costs are capitalized if individually identifiable, such
amortization and any impairment losses. Direct external as interest paid on construction loans for buildings.
and internal development expenses for new or substan- Government grants received as compensation for
tially improved products and processes are capitalized, the cost of an asset are initially measured at fair value,
provided that future economic benefits are probable, costs normally being the consideration received. A government
can be measured reliably and the product and process is grant reduces the carrying value of the related asset and
technically and commercially feasible. Activities in projects the depreciation charge recognized over the assets useful
at the feasibility study stage as well as maintenance and life.
training activities are expensed as incurred.
Intangible assets acquired in a business combination Amortization and depreciation
are identified and recognized separately from goodwill Amortization of intangible assets other than goodwill and
where they satisfy the definition of an intangible asset depreciation on property, plant and equipment is based
and their fair values can be measured reliably. The cost of on cost, less residual values, and taking into account the
such intangible assets is their fair value at the acquisition estimated useful lives of various asset classes or individual
date. Subsequent to initial recognition, intangible assets assets. Land is not depreciated. For assets acquired dur-
acquired in a business combination are measured on the ing a year, amortization and depreciation is calculated from
same basis as intangible assets acquired separately. Fair the date of acquisition. Amortization and depreciation is
values of intangible assets acquired in a business combi- mainly recognized on a straight-line basis.
nation are determined as follows. Patents and trademarks Mobile and fixed telecommunication licenses to operate a
are valued based on the discounted estimated royalty pay- specific network are regarded as integral to the network and
ments that have been avoided as a result of the patent or amortization does not commence until the related network
trademark being owned. Customer relationships are valued is ready for use. Amortization of network-independent
using the multi-period excess earnings method. For other licenses to use specific radio frequencies (spectrum) com-
intangible assets, income, market and cost approaches mences when the related frequency block is available for
are considered in a comprehensive valuation analysis, use. License fees based on future services, i.e. relating to
by which the nature of the intangible asset, any legal and the on-going performance of the entity are not capitalized
contractual circumstances and the availability of data will but expensed as incurred.
determine which approach(es) ultimately to be utilized to
derive each assets fair value. Impairment testing
Property, plant and equipment are measured at cost, Goodwill and other intangible assets (currently none exist-
including directly attributable borrowing costs, less accu- ing) with indefinite useful lives and intangible assets not
mulated depreciation and any impairment losses. Software yet available for use are tested for impairment annually,
used in the production process is considered to be an and whenever there is an indication that the asset may be
integral part of the related hardware and is capitalized as impaired. Intangible assets with a finite life and tangible
115
assets are tested for impairment whenever events or Category Financial liabilities measured at amortized cost
changes in circumstances indicate that the carrying value comprises all other financial liabilities, such as borrow-
of an asset may not be recoverable. Where it is not pos- ings, trade payables, accrued expenses for services and
sible to estimate the recoverable amount of an individual goods, and certain provisions settled in cash. Liabilities
asset, the recoverable amount of the cash-generating unit included in the categories are reported under the state-
to which the asset belongs is tested for impairment. If an ment of financial position items Long-term and short-term
analysis indicates that the carrying value is higher than its borrowings (Note C20), Other provisions (Note C22), Other
recoverable amount, which is the higher of the fair value long-term liabilities (Note C23) and Trade payables and
less costs to sell and value in use, an impairment loss is other current liabilities (Note C24).
recognized for the amount by which the carrying amounts
exceeds the recoverable amount. Transaction costs, impairment and derecognition
Value in use is measured based on the expected future Financial assets and financial liabilities are initially recog-
discounted cash flows (DCF model) attributable to the asset. nized at fair value plus transaction costs that are directly
attributable to the acquisition or issue of the financial asset
Financial instruments or financial liability. However, transaction costs related
Categories to assets or liabilities held for trading are expensed as
Financial instruments are for measurement purposes incurred. A financial asset is considered impaired if objec-
grouped into categories. The categorization depends on tive evidence indicates that one or more events have had
the purpose or by definition in IAS 39 and is determined a negative effect on the estimated future cash flow of that
at initial recognition. Category Financial assets at fair asset. Individually significant financial assets are tested for
value through profit and loss comprises derivatives not impairment on an individual basis. The remaining financial
designated as hedging instruments (held-for-trading) with assets are assessed collectively. Evidence of impairment
a positive fair value and investments held-for-trading. includes that debtors, individually or collectively, default in
Category Held-to-maturity comprises non-derivative payments or other indications that they experience signifi-
financial assets with fixed or determinable payments cant financial difficulty, including the probability of entering
and fixed maturity that Telia Company has the positive bankruptcy or other financial reorganization.
intention and ability to hold to maturity. This category A financial asset (or, where applicable, a part of a finan-
includes commercial papers, certain government bonds cial asset or part of a group of similar financial assets) is
and treasury bills. Category Loans and receivables derecognized when Telia Company has transferred its
comprises non-derivative financial assets with fixed or rights to receive cash flows from the asset and has trans-
determinable payments that are not quoted in an active ferred substantially all the risks and rewards of the asset,
market. This category includes trade receivables, accrued or has transferred control of the asset. A financial liability is
revenues for services and goods, loan receivables, bank derecognized when the obligation under the liability is dis-
deposits and cash at hand. Category Available-for-sale charged or canceled or expires. When an existing financial
financial assets comprises non-derivative financial assets liability is replaced by another from the same lender on sub-
that are designated to this category or not to any of the stantially different terms, or the terms of an existing liability
other categories. This category currently includes equity are substantially modified, such an exchange or modifica-
instruments and convertible bonds. Assets included in the tion is treated as a derecognition of the original liability
categories are reported under the statement of financial and the recognition of a new liability, and the difference
position items Other non-current assets (Note C15), Trade between the carrying amounts is recognized in net income.
and other receivables (Note C17), Interest-bearing receiva-
bles, cash and cash equivalents (Note C18). Fair value hierarchy levels
Category Financial liabilities at fair value through profit The carrying values of classes of financial assets and li-
and loss comprises derivatives not designated as hedg- abilities measured at fair value were determined based on
ing instruments (held-for-trading) with a negative fair value. a three-level fair value hierarchy, as follows.
Level Fair value determination Comprises
1 Quoted (unadjusted) prices in active markets for identical assets Primarily quoted equity instruments classified as available-for-sale or
or liabilities held-for-trading
2 Inputs other than quoted prices included in level 1 that are observ- Derivatives designated as hedging instruments or held-for-trading
able for the asset or liability, either directly (prices) or indirectly and borrowings in fair value hedge relationships
(derived from prices)
3 Inputs for the asset or liability that are not based on observable Unquoted equity instruments classified as available-for-sale or held-
market data (unobservable inputs) for-trading
Inputs for fair value measurements disclosed for assets and liabilities that are not carried at fair value are categorized to fair level hierarchy 2.
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Fair value estimation assumptions about the decline in value to determine

The fair values of financial instruments traded in active whether it is an impairment that should be recognized in
markets are based on quoted market prices at the end of profit or loss. Evidence of impairment is a significant or
the reporting period. For financial assets, the current bid prolonged decline in the fair value below the cost of the
price is used. The fair values of financial instruments that instrument. Unquoted equity instruments are measured
are not traded in active markets are determined by using at fair value with fair value changes recognized in other
valuation techniques. Management uses a variety of meth- comprehensive income. Telia Companys primary valua-
ods and makes assumptions that are based on market tion technique for unquoted equity instruments is based
conditions existing at the end of the reporting period. on the most recent transaction for the specific company if
Quoted market prices or dealer quotes for similar instru- such transaction has been recently done. Adjustments to
ments are used for long-term debt. Other techniques, the carrying value is made to reflect significant changes in
such as estimated discounted cash flows (DCF analyses), circumstances since the transaction date if Telia Company
are used to determine fair value for the remaining finan- assess that the change will have a material impact on the
cial instruments. DCF analyses are performed using the fair value. The estimated fair value for material unquoted
applicable yield curve for the duration of the instruments equity instruments is verified by applying other valuation
for non-optional derivatives, and option pricing models models in the form of valuation multiples from peers on
for optional derivatives. Forward exchange contracts are relevant financial and operational metrics. Unquoted equity
measured using quoted forward exchange rates and yield instruments whose fair value cannot be reliably determined
curves derived from quoted interest rates matching maturi- are valued at cost less any impairment. An impairment
ties of the contracts. Interest rate swaps are measured loss on an unquoted equity instrument is calculated as the
at the present value of future cash flows, estimated and difference between the carrying amount and the present
discounted based on the applicable yield curves derived value of estimated future cash flows discounted at the
from quoted interest rates. current market rate of return for a similar financial asset.
The carrying value less impairment provision of trade Impairment losses on equity investments carried at cost
receivables and payables are assumed for disclosure are not subsequently reversed and impairment losses on
purposes to approximate their fair values. The fair value of equity instruments classified as available-for-sale are never
financial liabilities is for disclosure purposes estimated by reversed through net income. Holdings in venture capital
discounting the future contractual cash flows at the current entities are measured at fair value with changes in fair
market interest rate that is available for similar financial value recognized in net income.
instruments with adjustment for credit purposes based Government bonds and treasury bills held-to-maturity
on known credit spreads from exchange traded Telia are initially recognized at fair value and subsequently
Company bonds. The fair value of loans and receivables measured at amortized cost, using the effective interest
is for disclosure purposes estimated by discounting the rate method, less impairment. Bonds available for sale are
future contractual cash flows at the current market interest measured at fair value (quoted market prices) with unreal-
rate that is available for similar financial instruments with ized changes in fair value recognized in other compre-
adjustment for credit purposes based on known credit hensive income. Receivables arising from own lending,
spreads, where available and if not available, individual except for short-term receivables where the interest effect
estimates. is immaterial, are measured at amortized cost, using the
effective interest rate method, less impairment. An impair-
Current/non-current distinction, offsetting ment loss on government bonds and treasury bills held-to-
Financial assets and liabilities maturing more than one maturity and on receivables from own lending is calculated
year from the end of the reporting period are considered as the difference between the carrying amount and the
to be non-current. Other financial assets and liabilities are present value of the estimated future cash flow discounted
recognized as current. Financial assets and liabilities are at the original effective interest rate.
recognized and derecognized applying settlement date Short-term investments with maturities over 3 months
accounting. comprise bank deposits, commercial papers issued by
Financial assets and liabilities are offset only if there is an banks, bonds and investments held-for-trading. Cash and
enforceable legal right to offset the recognized amounts cash equivalents include cash at hand and bank deposits
and there is an intention to settle on a net basis, or to real- as well as highly-liquid short-term investments with maturi-
ize the assets and settle the liabilities simultaneously. ties up to and including 3 months, such as commercial pa-
pers issued by banks. All instruments are initially measured
Financial assets measurement at fair value and subsequently at fair value if categorized as
Quoted equity instruments are measured at fair value, held-for-trading, otherwise at amortized cost.
being the quoted market prices. Unrealized gains and
losses arising from changes in fair value other than impair- Financial liabilities measurement
ment losses up to the date of sale are recognized in other Financial liabilities (interest-bearing loans and borrowings),
comprehensive income and accumulated in the fair value except for short-term liabilities where the interest effect is
reserve. If the fair value of a quoted equity instrument clas- immaterial, are initially recognized at fair value and subse-
sified as availabe for sale declines, management makes quently measured at amortized cost, using the effective
117
interest rate method. Liabilities that are hedged against and interest rate swaps and cross currency interest rate
changes in fair value are, however, measured at hedged fair swaps as interest-bearing items. For classification in the
value. Any difference between the proceeds (net of transac- statement of comprehensive income, see sections Other
tion costs) and the settlement or redemption of borrow- operating income and expenses and Finance costs and
ings is recognized over the term of the loan or borrowings. other financial items above.
Borrowings with an interest rate different to market rate are Hedging instruments are designated as hedges in eco-
initially measured at fair value, being the net present value nomic hedges, see below or in either fair value hedges,
applying the market interest rate. The difference between cash flow hedges, or hedges of net investments in foreign
the nominal value and the net present value is amortized operations. Hedges of foreign exchange risk on firm com-
until due date. mitments are accounted for as cash flow hedges. Docu-
Financial guarantee liabilities are contracts that require a mentation on hedges includes: the relationship between
payment to be made to reimburse the holder for a loss it in- the hedging instrument and the hedged item; risk man-
curs because the specified debtor fails to make a payment agement objectives and strategy for undertaking various
when due in accordance with the terms of a debt instru- hedge transactions; and whether the hedging instrument
ment. Financial guarantee contracts are recognized initially used is highly effective in offsetting changes in fair values
as a liability at fair value, adjusted for transaction costs or cash flows of the hedged item.
that are directly attributable to the issue of the guarantee. For fair value hedges, the effective and ineffective por-
Subsequently, the liability is measured at the higher of tions of the change in fair value of the derivative, along with
the best estimate of the expenditure required to settle the the gain or loss on the hedged item attributable to the risk
present obligation at the end of the reporting period and being hedged, are recognized in net income.
the amount initially recognized. For cash flow hedges, the effective portion of the
change in fair value of the derivative is recognized in other
Trade receivables and trade payables measurement comprehensive income until the underlying transaction is
Trade receivables are initially recognized at fair value, nor- reflected in net income, at which time any deferred hedg-
mally being the invoiced amount, and subsequently carried ing gains or losses are recycled to net income. The inef-
at invoiced amount less impairment (bad debt losses), fective portion of the change in fair value of a derivative
which equals amortized cost since the terms are generally used as a cash flow hedge is recognized in net income.
30 days and the recognition of interest would be immate- However, when the hedged forecast transaction results
rial. An estimate of the amount of doubtful receivables is in the recognition of a non-financial asset or liability, the
made when collection of the full amount is no longer prob- gains and losses are included in the initial measurement
able. An impairment loss on trade receivables is calculated of the cost of the asset or liability.
as the difference between the carrying amount and the Hedges of net investments in foreign operations are
present value of the estimated future cash flow. Bad debts accounted for similarly to cash flow hedges. Any gain or
are written-off when identified and charged to Selling and loss on the hedging instrument relating to the effective
marketing expenses. Accrued trade payables are recog- portion of the hedge is recognized in other comprehensive
nized at the amounts expected to be billable. income. The gain or loss relating to the ineffective portion
Trade payables are initially recognized at fair value, is recognized in net income. Gains and losses deferred in
normally being the invoiced amounts, and subsequently the foreign currency translation reserve are recycled to net
measured at invoiced amounts, which equals amortized income on disposal of the foreign operation.Changes in
cost, using the effective interest rate method, since the fair value of derivative instruments that do not meet the
generally the payments terms are such that the impact of criteria for hedge accounting are recognized in net income.
discounting would be immaterial. Hedge accounting is not applied to derivative instru-
ments that economically hedge monetary assets and
Derivatives and hedge accounting measurement and liabilities denominated in foreign currencies (economic
classification hedges) or that are initiated in order to manage e.g. the
Telia Company uses derivative instruments, such as overall interest rate duration of the debt portfolio. Changes
interest and cross currency interest rate swaps, forward in the fair value of economic hedges are recognized in net
contracts and options, primarily to control exposure to income as exchange rate differences, offsetting the ex-
fluctuations in exchange rates and interest rates. For hedg- change rate differences on monetary assets and liabilities.
ing of net investments in foreign operations, Telia Company Changes in the fair value of portfolio management deriva-
also uses financial liabilities. tives are recognized in net income as Finance costs.
Derivatives and embedded derivatives, when their
economic characteristics and risks are not clearly and Repurchase agreements
closely related to other characteristics of the host contract, Repurchase agreements, means that the parties have
are recognized at fair value. Derivatives with a positive fair agreed on sale and repurchase of a certain security, at a
value are recognized as non-current or current receivables predetermined price and point in time. Since the group
and derivatives with a negative fair value as non-current or remains exposed to the risk and rewards of the asset dur-
current liabilities. Currency swaps, forward exchange con- ing the transaction period, securities remains accounted
tracts and options are classified as non-interest-bearing for in the balance sheet as financial assets. Received cash
118
is accounted for as financial liabilities. Sold securities are is reduced by reimbursements to shareholders made in
also disclosed as pledged assets. accordance with separately decided and communicated
capital repayment programs (e.g. through purchasing own
Inventories shares or extraordinary dividends). The hedging reserve
Inventories are carried at the lower of cost and net realiz- as well as the fair value reserve and the foreign currency
able value. Costs, including an appropriate portion of translation reserve are reclassified to net income. Cash
fixed and variable overhead expenses, are assigned to flow hedges may also adjust the initial cost of a non-finan-
inventories held by the method most appropriate to the cial asset or liability. The revaluation reserve is used in con-
particular class of inventory, with the majority being valued nection with step acquisitions made before 2010 and the
on a first-in-first-out basis. Net realizable value represents inflation adjustment reserve when accounting for opera-
the estimated selling price for inventories less all estimated tions in hyperinflationary economies. Equity transactions in
costs of completion and costs necessary to make the sale. associates are the effect on the group from equity transac-
Obsolescence is assessed with reference to the age and tions such as buyback of shares from third parties by an
rate of turnover of the items. The entire difference between associated entity. All other equity is retained earnings.
the opening and closing balance of the obsolescence al- Dividend payments are proposed by the Board of Direc-
lowance is charged to cost of sales. The fair value of inven- tors in accordance with the regulations of the Swedish
tories acquired in a business combination is determined Companies Act and decided by the General Meeting of
based on the estimated selling price less the estimated shareholders. The proposed cash dividend for 2016 will be
cost of sale and a reasonable profit margin. recorded as a liability immediately following the final deci-
sion by the shareholders.
Assets held for sale
Non-current assets and disposal groups are classified Provisions for pensions and employment contracts
as held for sale if their carrying value will be recovered Telia Company provides defined contribution or defined
principally through a sale transaction rather than through benefit pension plans to its employees. Contributions to
continuing use. An asset held for sale is measured at the defined contribution plans are normally set at a certain per-
lower of its previous carrying value and fair value less costs centage of the employees salary and are expensed as in-
to sell. curred. Telia Company pays fixed contributions to separate
One of the conditions that must be satisfied for an asset legal entities and will have no legal or constructive obliga-
to be classified as held for sale is that the sale is highly tion to pay further amounts if the fund does not hold suf-
probable and the asset (or disposal group) is available for ficient assets to pay all employee benefits. Contributions to
immediate sale in its present condition. One criteria for the defined contribution plans are expensed when employees
sale to qualify as highly probable is that the appropriate provide services entitling them to the contribution.
level of management must be committed to a plan to sell Defined benefit pension plans, provided to part of Telia
the assets or disposal group in its present condition. In the Company employees in Sweden, Finland and Norway,
telecom industry acquisitions often require regulatory ap- means that the individual is guaranteed a pension equal
proval. If the buyer is a telecom operator in the same mar- to a certain percentage of his or her salary. The pension
ket parties often have to agree to a number of remedies to plans mainly include retirement pension, disability pension
get the approval. If the buyer is expected to be a telecom and family pension. The present value of pension obliga-
operator in the same market and significant remedies are tions and pension costs are calculated annually, using the
expected, a sale is usually not regarded as highly probable projected unit credit method, which distributes the cost
and consequently the assets are not classified as held for over the employees service period. The pension cost is
sale by Telia Company, until the remedies are agreed upon recognized in three components, service cost, net inter-
and accepted by management. The determination if and est and remeasurements. Service cost is recognized in
when non-current assets and disposal groups should be operating income and net interest, based on discount rate,
classified a as held for sale requires management judg- on defined benefit obligation and plan assets is reported
ment considering all facts and circumstances relating to as interest income or interest expenses in financial items.
the transaction, the parties and the market and entities can Changes in actuarial assumptions and experience adjust-
come to different conclusions under IFRS. ments of obligations and changes in fair value of plan
assets, deviations from discount rate, results in remeasure-
Equity attributable to owners of the parent ments and are recognized in Other Comprehensive Income
Equity attributable to owners of the parent is divided into at the end of the reporting period.
share capital, other contributed capital, hedging reserve, Actuarial assumptions are determined at the end of the
fair value reserve, foreign currency translation reserve, reporting period. The assets of Telia Companys pension
revaluation reserve, inflation adjustment reserve, equity funds constitute pension plan assets and are valued at fair
transaction in associates and retained earnings. Share value at the end of the reporting period.
capital is the legally issued share capital. Other contributed Net provisions or assets for post-employment benefits
capital comprises contributions made by shareholders in in the statement of financial position represent the present
the form of share premiums in connection with new share value of obligations at the end of the reporting period less
issues, specific share holder contributions, etc. This item the fair value of plan assets.
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Other provisions and contingencies environmental restoration, litigation, onerous contracts not
A provision is recognized when Telia Company has a pre- related to restructuring activities, etc. These provisions
sent obligation (legal or constructive) as a result of a past are recognized as Cost of sales, Selling and marketing
event; it is probable that an outflow of resources embody- expenses, Administrative expenses or Research and devel-
ing economic benefits will be required to settle the obliga- opment expenses as applicable.
tion; and a reliable estimate can be made of the amount of
the obligation. If the likelihood of an outflow of resources Leasing agreements
is less than probable but more than remote, or a reliable Leases are classified as finance leases whenever the terms
estimate is not determinable, the matter is disclosed as a of the lease transfer substantially all the risks and rewards
contingency provided that the obligation or the legal claim of ownership to the lessee. All other leases are classified
is material. as operating leases.
Provisions are measured at managements best esti-
mate, at the end of the reporting period, of the expenditure Telia Company as lessee
required to settle the obligation, and are discounted to As a lessee, Telia Company has entered into finance and
present value where the effect is material. From time to operating leases and rental contracts. For a finance lease
time, parts of provisions may also be reversed due to bet- agreement, the leased asset is recognized as a tangible
ter than expected outcome in the related activities in terms non-current asset and the future obligation to the les-
of cash outflow. sor as a liability, capitalized at the inception of the lease
Where there are a number of similar obligations, e.g. at the lower of the fair value of the leased property or the
product warranty commitments, the probability that an present value of the minimum lease payments. Initial direct
outflow will be required in settlement is determined by costs are added to the capitalized amount. Minimum lease
considering the class of obligations as a whole. A provi- payments are apportioned between the finance charges
sion is recognized even if the likelihood of an outflow with and reduction of the lease liability to produce a constant
respect to any one item included in the same class may be rate of interest on the remaining balance of the liability.
small but it is probable that some outflow of resources will Finance charges are charged directly to net income. Other
be needed to settle the class of obligations as a whole. agreements are operating leases, with the leasing costs
Other provisions comprise contingent consideration recognized evenly throughout the period of the agreement.
resulting from business combinations or from put options
granted to holders of non-controlling interests in existing Telia Company as finance lessor
subsidiaries (for additional information, see section Con- Telia Company owns assets that it leases to custom-
solidated financial statements Non-controlling interests ers under finance lease agreements. Amounts due from
above) as well as restructuring provisions which include lessees are recorded as receivables at the amount of the
termination benefits, onerous contracts and other expens- net investment in the leases, which equals the net present
es related to cost reduction programs, post-acquisition value. Initial direct costs are included in the initial meas-
integration programs, closing-down of operations, etc. urement of the financial lease receivable and reduce the
Restructuring provisions are mainly recognized as Other amount of income recognized over the lease term. Income
operating expenses, since they are not expenses for post- is recognized over the lease term on an annuity basis.
decision ordinary activities.
Termination benefits are recognized at the earlier of Telia Company as operating lessor
when Telia Company no longer can withdraw the offering Rental revenues from operating leases are recognized on
of those benefits or when Telia Company has made an a straight-line basis over the term of the relevant lease.
appropriate public announcement, specifying the terms of Initial direct costs incurred in negotiating and arranging
redundancy and the number of employees affected, or af- an operating lease are added to the carrying value of the
ter individual employees have been advised of the specific leased asset and are recognized on the same basis as the
terms. lease revenues.
Onerous contracts are recognized when the expected Fiber and duct are sold as part of the operations of Telia
benefits to be derived by from a contract are lower than Companys international carrier business. Telia Company
the unavoidable cost of meeting the obligations under the has decided to view these as integral equipment to land.
contract. The provision is measured at the present value of Under the agreements, title is not transferred to the lessee.
the lower of the expected cost of terminating the contract The transactions are therefore recorded as operating lease
and the expected net cost of continuing with the contract. agreements. The contracted sales price is mainly paid in
Before a provision is established, any impairment loss on advance and sales that are not recognized in income are
the assets associated with that contract is provided for. recorded as long-term liabilities or short-term deferred
Other provisions also include warranty commitments, revenues.
120
CHANGES IN GROUP COMPOSITION AND

C4 EVENTS AFTER THE REPORTING PERIOD
Group composition Telenor (TT) and DNA (Suomen Yhteisverkko). Telia

Subsidiaries Company holds 50 percent of the shares in both SUNAB
Telia Companys principal operating subsidiaries as of and TT. Telia Company owns 51 percent of the shares in
December 31, 2016, are disclosed in Where we operate. Suomen Yhteisverkko, but based on the shareholders
Ownership in addition to shares held directly or indirectly agreement the company is jointly controlled and equally
by TeliaCompany takes into account shares held by as- governed by the consensus principle.
sociated companies. Consolidated share also includes
commitments to acquire shares from holders of non-con- Business combinations
trolling interests. Subsidiaries in continuing operations with There have been no material business combinations during
material non-controlling interests are disclosed in Note C19 2016. See Note C33 Business combinations for further
Equity and earnings per share. Subsidiaries in discon- information on other minor business combinations and
tinued operations with material non-controlling interests business combinations after the reporting period.
are described in Note C34 Discontinued operations and
assets classified as held for sale. Disposals
On April 11, 2016, Telia Company completed the divest-
Associated companies ment of its holdings i Ncell in Nepal. On October 5, 2016,
Material associated companies are disclosed in Note C14 Telia Company divested all its holdings in the Span-
Investments in associated companies and joint ventures. ish operator Yoigo. For more information see Note C34
Discontinued operations and assets classified as held for
Joint arrangements sale.
Telia Company owns three joint arrangements that are
classified as joint operations, Svenska UMTS-nt AB Events after the reporting period
(SUNAB) in Sweden, TT-Netvrket P/S (TT) in Denmark No events occurred after the reporting period that will
and Suomen Yhteisverkko Oy in Finland. The compa- have any material effect on the financial statements of the
nies are network-sharing operations with Tele2 (SUNAB), Telia Company group.
121
C5 SEGMENT INFORMATION
Telia Companys operating model is based on geographical Segment information is based on the same account-
areas. The groups operations are managed and reported ing principles as for the group as a whole. Inter-segment
by the two operating segments; region Sweden and region transactions are based on commercial terms. Besides Net
Europe. The regions are country-based organizations and sales and Operating income, principal segment control and
the head of each region reports directly to the CEO. Other reporting concepts are EBITDA excluding non-recurring
operations are collectively reported. The former segment items, Investments in associated companies and joint
region Eurasia is classified as held for sale and discontin- ventures, Other operating segment assets and Operating
ued operations since December 31, 2015, and is therefore segment liabilities, respectively (see Definitions).
not included in the segment information. The Sergel com- Operating segment assets comprise total assets less
panies (Sergel) are included in continuing operations but non-operating interest-bearing receivables, long term and
classified as assets held for sale since June 30, 2016. See short term investments, pension obligation assets, foreign
Note C34 Discontinued operations and assets classified currency derivatives, accrued interest, tax assets and cash
as held for sale for more information. and cash equivalents. Operating segment liabilities contain
total liabilities less non-operating interest-bearing liabilities,
Region Sweden comprises Telia Companys mobile, provisions for pensions and employment contracts, foreign
broadband, TV and fixed-line operations in Sweden. currency derivatives, accrued interest and tax liabilities.
Region Europe comprises Telia Companys mobile, For information on distribution of goodwill by reportable
broadband, TV and fixed-line operations in Finland, Nor- segments, see Note C12 Goodwill and other intangible
way, Denmark, Lithuania, Latvia, and Estonia. Spain was assets.
part of the reportable segment region Europe up until the Telia Company will have a revised organizational setup as
deal was closed on October 5, 2016. of January 1, 2017. Based on the new operating model Telia
Other operations include the international carrier opera- Company will report the following six operating segments
tions, customer financing and dunning operations, Telia separately from 2017: Sweden, Finland, Norway, Denmark,
Company Holding, Telia Companys shareholding in the Lithuania and Estonia. Other operations will include Latvia,
associates Russian MegaFon and Turkish Turkcell as the international carrier operations, Telia Companys share-
well as Group functions. holding in the associates Russian MegaFon and Turkish
Turkcell as well as Group functions.
122
JanuaryDecember 2016 or December 31, 2016

Discontinued
operations
and assets
and liabilities
SEK in millions Sweden Europe Other held for sale Eliminations Group
Net sales 37,251 41,746 7,468 -2,287 84,178

External net sales 36,938 41,350 5,891 84,178
EBITDA excluding non-recurring items 14,455 11,036 345 25,836
Non-recurring items -209 4,321 -134 3,977
Amortization, depreciation and impairment losses -4,887 -5,943 -705 -11,534
of which impairment losses
Income from associated companies and joint ventures 1 115 2,695 2,810
Operating income 9,360 9,529 2,201 21,090
Financial items, net -1,841
Income taxes -2,816
Net income from continuing operations 16,433
Investments in associated companies and joint ventures 6 806 21,887 22,698
Other operating segment assets 46,151 95,949 11,791 -1,849 152,042
Current and deferred tax assets 4,994
Other unallocated assets 44,653
Assets classified as held for sale 29,042 29,042
Total assets 253,430
Operating segment liabilities 11,304 8,294 20,937 -1,855 38,680
Current and deferred tax liabilities 10,586
Other unallocated liabilities 95,668
Liabilities directly associated with assets classified as held for sale 13,627 13,627
Total non-current and current liabilities 158,560
Investments, continuing operations 7,224 5,867 3,016 16,108
of which CAPEX, continuing operations 7,119 5,602 2,905 -1 15,625
Number of employees 6,720 11,093 3,217 4,987 26,017
JanuaryDecember 2015 or December 31, 2015

Discontinued
operations
and assets
and liabilities
SEK in millions Sweden Europe Other held for sale Eliminations Group
Net sales 37,336 43,658 7,753 -2,249 86,498

External net sales 37,051 43,238 6,210 86,498
EBITDA excluding non-recurring items 14,267 10,584 430 25,281
Non-recurring items -495 -601 -194 -1,289
Amortization, depreciation and impairment losses -4,468 -7,728 -583 -12,780
of which impairment losses 0 -1,917 -3 -1,920
Income from associated companies and joint ventures -20 119 3,295 3,394
Operating income 9,284 2,375 2,948 14,606
Financial items, net -2,917
Income taxes -2,157
Net income from continuing operations 9,532
Investments in associated companies and joint ventures 5 783 22,553 23,341
Other operating segment assets 42,510 95,235 11,206 -1,859 147,092
Current and deferred tax assets 5,123
Other unallocated assets 42,649
Assets classified as held for sale 35,812 35,812
Total assets 254,017
Operating segment liabilities 11,123 11,626 5,692 -1,868 26,573
Current and deferred tax liabilities 10,712
Other unallocated liabilities 102,933
Liabilities directly associated with assets classified as held for sale 11,598 11,598
Total non-current and current liabilities 151,816
Investments, continuing operations 6,337 10,441 3,634 20,413
of which CAPEX, continuing operations 6,179 5,823 2,593 0 14,595
Number of employees 6,718 11,323 3,301 5,553 26,895
123
C6 NET SALES
External net sales were distributed by product area as follows.
SEK in millions JanDec 2016 JanDec 2015
Mobile services 39,049 39,784

Fixed services 31,526 32,075
Other services 941 1,048
Equipment 12,663 13,591
Total 84,178 86,498
Fixed services mainly include telephony, broadband, data Net sales by SEK -71 million, Mobile services by SEK -206
and TV services. Prior period has been restated to reflect million, Fixed services by SEK 101 million, Other services
the discovery of certain classification errors between by SEK 107 million and Equipment by SEK -74 million.
net sales and cost of sales referring to insurance sales in Net sales by external customer location and intangible
region Europe. fixed assets and property, plant and equipment, respec-
2015 has also been restated to reflect a new product tively, were distributed among individually material coun-
classification. The total restatements have affected Total tries as follows.
JanDec 2016 JanDec 2015 Dec 31, 2016 Dec 31, 2015
Intangible assets and
Net sales property, plant and equipment
SEK in SEK in SEK in SEK in
millions Percent millions Percent millions Percent millions Percent
Sweden 36,696 43.6 36,782 42.5 38,705 30.0 35,119 28.5

Finland 12,816 15.2 12,945 15.0 43,169 33.4 40,843 33.2
Norway 9,196 10.9 9,202 10.7 25,977 20.1 23,526 19.1
Denmark 5,835 6.9 6,179 7.1 6,269 4.9 5,895 4.8
Spain 6,133 7.3 8,035 9.3 0 0.0 3,547 2.9
All other countries 13,502 16.0 13,357 15.4 14,934 11.6 14,095 11.5
Total 84,178 100.0 86,498 100.0 129,054 100.0 123,026 100.0
Net sales by external customer location were distributed among economic regions as follows.
JanDec 2016 JanDec 2015

SEK in SEK in
millions Percent millions Percent
European Economic Area (EEA) 81,141 96.4 82,996 96.0

of which European Union (EU) member states 71,851 85.4 73,786 85.2
Rest of Europe 738 0.9 1,292 1.5
North-American Free Trade Agreement (NAFTA) 791 0.9 1,052 1.2
Rest of world 1,508 1.8 1,158 1.3
Total 84,178 100.0 86,498 100.0
The Telia Company group offers a diversified portfolio of mass-market services and products in highly competitive mar-
kets. Hence, the groups exposure to individual customers is limited.
124
C7 EXPENSES BY NATURE
Operating expenses are presented on the face of the statement of comprehensive income using a classification based on
the functions Cost of sales, Selling and marketing expenses, Administrative expenses and Research and develop-
ment expenses. Total expenses by function were distributed by nature as follows.
Goods and sub-contracting services purchased -17,441 -18,176

Interconnect and roaming expenses -7,971 -9,042
Other network expenses -4,695 -4,949
Change in inventories -3,470 -3,763
Personnel expenses (see also Note C31) -12,105 -12,171
Marketing expenses -4,319 -4,847
Other expenses -8,456 -9,124
Amortization, depreciation and impairment losses -11,533 -10,880
Total -69,991 -72,953
Prior period has been restated to reflect the discovery of certain classification errors between net sales and cost of sales
referring to insurance sales in region Europe affecting Goods and sub-contracting services purchased by SEK 71 million.
2015 has also been restated to reflect a new cost classification affecting Interconnect and roaming expenses by SEK 71
million and Goods and sub-contracting services purchased by SEK -71 million. The main components of Other expenses
are rent expenses, consultant expenses, IT expenses and energy expenses.
Amortization, depreciation and impairment losses by function were as follows.
Cost of sales -9,959 -9,353

Selling and marketing expenses -1,019 -1,004
Administrative expenses -509 -499
Research and development expenses -47 -23
Total -11,533 -10,880
Total amortization, depreciation and impairment losses for and other intangible assets and C13 Property, plant and
2016 amounted to SEK 11,533 million, all allocated to the equipment. Amortization, depreciation and impairment
functions above. For more information on amortization, de- losses are broken down by reportable segment in Note C5
preciation and impairment losses see Notes C12 Goodwill Segment information.
125
C8 OTHER OPERATING INCOME AND EXPENSES

Other operating income and expenses were distributed as follows.
Other operating income

Capital gains 4,686 95
Exchange rate gains 522 509
Commissions, license and patent fees, etc. 70 88
Grants 25 27
Recovered accounts receivable 91 266
Court-settled fees with other operators 17 73
Damages received 79 66
Total other operating income 5,490 1,124
Other operating expenses
Capital losses -84 -69
Transaction costs in business combinations -2 -15
Provisions for onerous contracts 0 0
Exchange rate losses -561 -568
Restructuring costs -594 -811
Impairment losses -1,900
Court-settled fees with other operators -128 -83
Damages paid -28 -11
Total other operating expenses -1,397 -3,457
Net effect on income 4,092 -2,333
of which net exchange rate losses on derivative instruments held-for-trading 10 1
In the first quarter of 2016, the capital gain was affected by more information on impairment losses, see Notes C12
a divestment of real estate amounted to SEK 152 million Goodwill and other intangible assets and C13 Property,
and in the last quarter of 2016, by the disposal of Xfera plant and equipment. Restructuring costs mainly com-
Mviles S.A, (Yoigo) amounted to SEK 4,504 million. For prised staff redundancy costs.
126
C9 FINANCE INCOME AND FINANCE COSTS

Finance income and finance costs were distributed as follows.
Finance income
Interest income 329 475
Interest income on finance leases 98 91
Changes in fair value of held-for-trading-investments -15
Net exchange rate gains 184
Net interest on the net defined benefit liability (asset) 97
Other finance income 15
Unwinding of discounts, receivables 80 59
Total finance income 803 609
Finance costs
Interest expenses -2,669 -3,089
Interest expenses on finance leases -3 -3
Unwinding of provision discounts -30 -45
Capitalized interest 91 83
Changes in fair value of held-for-trading-investments -8
Credit losses on finance leases -25
Net exchange rate losses -265
Net interest on the net defined benefit liability (asset) -72
Other finance costs -137
Total finance costs -2,644 -3,526
Net effect on income -1,841 -2,917
Details on interest expenses, net exchange rate gains and losses and interest income related to hedging activities, loan
receivables and borrowings were as follows.
JanDec JanDec JanDec JanDec JanDec JanDec

2016 2015 2016 2015 2016 2015
Net exchange rate
SEK in millions Interest expenses gains and losses Interest income
Fair value hedge derivatives 387 -1,648 130 -41

Cash flow hedge derivatives 10 -34 -457 95
Derivatives held-for-trading 695 1,117 125 -55
Held-to-maturity investments 13 10
Loans and receivables 1,364 -1,125 128 416
Borrowings in fair value hedge relationships -1,415 -1,450 -3,190 1,991
Borrowings and other financial liabilities at amortized cost -2,308 -1,061 2,212 -1,137
Other -39 -12 7 187 50
Total -2,669 -3,089 184 -265 329 475
Borrowings at amortized cost include items in cash flow hedge relationships as well as unhedged items.
127
C10 INCOME TAXES

Tax items recognized in comprehensive income and directly in equity
Tax items recognized in comprehensive income and directly in equity were distributed as follows.
Tax items recognized in net income

Current tax -2,160 -1,391
Adjustment of current tax related to prior years 6 -17
Deferred tax -577 -666
Adjustment of deferred tax related to prior years -68 -55
Effect on deferred tax from changes in tax rates -17 -28
Total tax expense recognized in net income -2,816 -2,157
Tax items recognized in other comprehensive income
Current tax 640 -538
Deferred tax 304 -1,051
Total tax recognized in other comprehensive income 944 -1,589
Tax items recognized directly in equity
Deferred tax related to treasury share repurchase made by associated company -4
Total tax recognized directly in equity -4
Income before taxes was SEK 19,249 million in 2016 and SEK 11,689 million in 2015. The difference between the nominal
Swedish income tax rate and the effective tax rate comprises the following components.
Percent JanDec 2016 JanDec 2015
Swedish income tax rate 22.0 22.0

Effect of higher or lower tax rates in subsidiaries -0.4 -0.2
Withholding tax on earnings in subsidiaries and associated companies1 1.1 -1.7
Prior year adjustment of current tax expense 0.0 0.1
Prior year adjustment of deferred taxes 0.4 0.5
Effect on deferred tax expense from changes in tax rates 0.1 0.2
Income from associated companies -3.2 -6.5
Current year losses for which no deferred tax asset was recognized 0.4 0.1
Non-deductible expenses2 0.5 5.7
Tax-exempt income3 -6.3 -1.7
Effective tax rate in net income 14.6 18.5
Effective tax rate excluding effects from associated companies 17.6 26.8
1) Withholding tax on earnings in subsidiaries and associated companies is impacted by an intragroup restructuring in Q1 2015. The intragroup restructuring resulted in a
revaluation and one-off effect of the withholding tax provision and a decrease of the deferred tax liability.
2) Non-deductible expenses are impacted by non-tax deductible goodwill impairment in Denmark in 2015.
3) Tax-exempt income is influenced by non taxable capital gain related to the divestment of Xfera Mviles S.A., (Yoigo) in 2016.
128
Deferred tax assets and liabilities

Movement in deferred tax assets and liabilities were as follows.
SEK in millions Dec 31, 2016 Dec 31, 2015

Deferred tax assets
Opening balance 5,054 5,955
Change recognized in comprehensive income -359 -1,346
Operations acquired 1,054
Operations divested -510
Reversals of offset tax liabilities/assets, other reclassifications -50 -256
Change in tax rate 1 -17 -72
Exchange rate differences 266 -173
Reclassification to assets classified as held for sale -18 -108
Deferred tax assets, closing balance 4,366 5,054
Deferred tax liabilities
Change recognized in comprehensive income -19 895
Change of withholding taxes recognized directly in equity 4
Operations acquired 743
Reversals of offset tax assets/liabilities, other reclassifications -32 -158
Change in tax rate 1 0 -45
Reclassification to liabilities directly associated with assets classified as held for sale 0 -1,245
Deferred tax liabilities, closing balance 10,567 10,627
1) The effect of change in tax rate relates to the reduction of the Norwegian corporate income tax rate effective from January 1, 2017. The change triggered a recalculation
of existing deferred tax assets and liabilities in Telia Companys Norwegian operations, resulting in a net deferred tax expense of SEK 17 million in 2016.
Deferred tax asset and liabilities are allocated to the following temporary differences and tax loss carry-forwards.

Gross deferred tax assets
Non-current assets 3,408 3,283
Provisions 1,034 1,033
Accounts receivables and other current assets 13 115
Interest expense carry-forwards 199 92
Tax loss carry-forwards, continuing operations 1,843 4,308
Tax loss carry-forwards reclassification to assets classified as held for sale 440
Subtotal 6,497 9,271
Valuation allowances
Non-current assets -4 -4
Accounts receivables and other current assets -3 -17
Tax loss carry-forwards, continuing operations -1,569 -3,192
Tax loss carry-forwards reclassification to assets classified as held for sale -407
Subtotal -1,576 -3,620
Offset deferred tax liabilities/assets -537 -489
Reclassification to assets classified as held for sale -18 -108
Total deferred tax assets 4,366 5,054
Withholding taxes subsidiaries and associated companies 1,210 1,561
Provisions 1,062 1,354
Accounts receivables and other current assets 272 13
Profit equalization reserves 1,941 2,796
Subtotal 11,104 12,361
Offset deferred tax assets/liabilities -537 -489
Reclassification to liabilities associated with assets classified as held for sale -1,245
Total deferred tax liabilities 10,567 10,627
Net deferred tax assets (+)/liabilities (-) -6,201 -5,573
Net increase (+)/decrease (-) in valuation allowance -2,044 79
129
Unrecognized deferred tax

Unrecognized deferred tax assets, as reflected by the valuation allowance at December 31, 2016, were expected to expire
as follows.
Expected expiry, SEK in millions 2017 2018 2019 2020 2021 2022-2025 Unlimited Total
Unrecognized deferred tax assets 0 0 0 0 0 811 758 1,569
As of December 31, 2016 and 2015, unrecognized deferred losses in the international carrier operations refer mainly
tax liabilities for undistributed earnings in subsidiaries, to impairment losses on plant and machinery incurred
including estimated such income tax that is levied on in 2002. Telia Companys accumulated tax loss carry-
dividends paid, totaled SEK 52 million and SEK 122 million forwards were SEK 6,711 million in 2016 and SEK 16,662
respectively. million in 2015. The decrease is mainly related to the
divestment of Xfera Mviles S.A., (Yoigo).
Tax loss carry-forwards
Deferred tax assets originating from tax loss carry-for- Tax loss carry-forwards as of December 31, 2016 are
wards mainly related to international carrier operations. Tax expected to expire as follows.
Expected expiry, SEK in millions 2017 2018 2019 2020 2021 2022-2036 Unlimited Total
Tax loss carry-forwards 0 0 0 0 2 3,734 2,975 6,711
130
C11 OTHER COMPREHENSIVE INCOME

Other comprehensive income was distributed as follows.
SEK in millions Equity component JanDec 2016 JanDec 2015
Other comprehensive income that may be reclassified to net income

Foreign currency translation differences
Translation of foreign operations, continuing operations Foreign currency translation reserve 4,293 -9,277
Translation of foreign operations, discontinued operations Foreign currency translation reserve 555 -4,081
Translation of foreign non-controlling interests, continuing operations Non-controlling interests 48 -36
Translation of foreign non-controlling interests, discontinued operations Non-controlling interests 313 -1,396
Hedging of foreign operations Foreign currency translation reserve -3,039 2,445
Income tax effect Foreign currency translation reserve 669 -538
Total foreign currency translation differences 2,839 -12,884
of which attributable to non-controlling interests 361 -1,433
Income from associated companies
Net changes in fair value of cash flow hedges Hedging reserve 0 1
Translation of foreign operations Foreign currency translation reserve -340 -3
Total income from associated companies -340 -2
Cash flow hedges
Net changes in fair value Hedging reserve 214 621
Transferred to finance costs in net income Hedging reserve -343 -7
Income tax effect Hedging reserve 28 -135
Total cash flow hedges -101 479
Available-for-sale financial instruments
Net changes in fair value Fair value reserve 134 -2
Disposals transferred to other financial items in net income Fair value reserve
Income tax effect Fair value reserve -29 6
Total available-for-sale financial instruments 105 4
Total other comprehensive income that may be reclassified to net income 2,504 -12,404
of which total income tax effects (see also Note C10) 668 -667
of which attributable to non-controlling interests 362 -1,433
Other comprehensive income that will not be reclassified to net income

Remeasurements of defined benefit pension plans Retained earnings -1,297 4,322
Income tax relating to items that will not be reclassified Retained earnings 276 -922
Associates remeasurements of defined benefit pension plans Retained earnings -20 6
Total other comprehensive income that will not be
reclassified to net income -1,042 3,407
of which total income tax effects (see also Note C10) 276 -922
Total other comprehensive income 1,463 -8,997

of which attributable to non-controlling interest, continuing operations 48 -36
of which attributable to non-controlling interest, discontinued operations 313 -1,396

The hedging reserve comprises gains and losses on 2017, 2018, 2019 and later, when the hedged items mature.
derivatives hedging interest rate and foreign currency ex- See also section Financial instruments in Note C3 Signi
posure, with a net effect in equity of SEK -100 million as of ficant accounting policies. See Note C21 Provisions
December 31, 2016, and SEK 479 million as of December for pensions and employment contracts for details of
31, 2015. Future gains or losses will affect net income in Remeasurements of defined benefit pension plans.
131
C12 GOODWILL AND OTHER INTANGIBLE ASSETS

The total carrying value was distributed and changed as follows.
Dec 31, 2016 Dec 31, 2015 Dec 31, 2016 Dec 31, 2015
SEK in millions Goodwill Other intangible assets
Accumulated cost 66,974 63,316 39,842 38,750

Accumulated amortization -25,347 -24,235
Accumulated impairment losses -9,051 -8,378 -1,471 -1,520
Advances
Carrying value 57,923 54,938 13,024 12,995
of which work in progress 1,296 886
Carrying value, opening balance 54,938 70, 895 12,995 15,266
Investments 2,786 3,106
of which capitalized interest 21 17
Sales and disposals -552 -21
Operations acquired 34 1,769 8 2,882
Reclassifications 0 121 63
Adjustments related to put options and contingent consideration -198
Amortization for the year, continuing operations -2,620 -2,532
Amortization for the year, discontinued operations -922
Impairment losses for the year, continuing operations -1,900 -3 -6
Impairment losses for the year, discontinued operations -1,628 -293
Advances 155
Exchange rate differences 3,527 -6,573 570 -1,308
Reclassification to assets classified as held for sale -24 -7,427 -15 -3,395
Carrying value, closing balance 57,923 54,938 13,024 12,995
In 2016 and 2015, investments in telecom licenses and Apart from goodwill, there are currently no intangible
frequency permits amounted to SEK 609 million and SEK assets with indefinite useful lives. No general changes of
307 million, respectively. Operations acquired in 2015 were useful lives were made in 2016. For amortization rates ap-
primarly related to the acqusition of Tele2s Norweigan plied, see section Useful lives in Note C2 Key sources of
mobile operations. In 2015, a goodwill write down of SEK estimation uncertainty. In the statement of comprehensive
1,900 million was recognized in the cash-generating unit income, amortization and impairment losses are included
Denmark, as a result of updated earnings projections fol- in all expense line items by function as well as in line item
lowing the decision to withdraw from the proposed joint Other operating expenses.
venture with Telenor. For information on discontinued The total carrying value of goodwill was distributed by
operations, see Note C34. reportable segments and cash generating units with sig-
nificant goodwill amounts as follows.

Region Europe 56,871 53,893
of which Finland 30,493 29,082
of which Norway 18,110 16,422
of which Denmark 2,126 2,020
of which Lithuania 2,698 2,574
of which Estonia 2,465 2,351
of which other countries 979 1,445
Region Sweden 950 922
Other operations 102 122
Total goodwill 57,923 54,938
132
The total carrying value of other intangible assets was distributed by asset type as follows.
Trade names 57 82
Telecom licenses and frequency permits 5,049 5,314
Customer and vendor relationships, interconnect and roaming agreements 3,135 3,142
Capitalized development expenses 2,899 2,562
Patents, etc. 35 2
Leaseholds, etc. 552 1,012
Work in progress, advances 1,297 881
Total other intangible assets 13,024 12,995
Capitalized development expenses mainly refer to IT sys- reflect past experience, forecasts in industry reports, and
tems, supporting the selling and marketing, and administra- other externally available information. For Denmark the
tive functions. sales growth and EBITDA margin development in the fore-
casts are deviating from historical trends. This is due to that
Impairment testing, continuing operations Telia Company for the forecast period has clear and com-
The impairment testing for continuing operations is de- mitted plans for sales initiatives, cost reductions and work-
scribed below. For information regarding measurement ing capital improvements in Denmark. Management believes
of discontinued operations, see Note C34 Discontinued that value in use based on own business plan better reflects
operations and assets classified as held for sale. the value for Telia Company and of the long-term valuation,
Goodwill is, for impairment testing purposes, allocated to compared to the current equity market values that in some
cash generating units in accordance with Telia Companys cases can be below the recoverable amount derived from
business organization. In most cases, each country within Telia Companys own long-term business plans.
the respective reportable segment constitutes a cash- The forecasted cash flows were discounted at the
generating unit (CGU). Carrying values (for impairment weighted average cost of capital (WACC) for the relevant
testing purposes defined as segment operating capital cash-generating unit. The WACC is derived from the
and allocated common assets from Global Services and risk free interest rate in local currency, the country risk
Operations less deferred tax on fair value adjustments and premium, the business risk represented by the estimated
notionally adjusted for non-controlling interests in goodwill) beta, the local equity market risk premium and an esti-
of all cash-generating units are annually tested for impair- mated reasonable cost of borrowing above the risk free
ment. For definition of segment operating capital, see Note rate. The pre-tax discount rate typically cannot be directly
C5 Segment information and Definitions. The recoverable observed or measured. It is calculated by iteration by first
amounts (that is, the higher of value in use and fair value running DCF calculation using post-tax cash flows and a
less cost to sell) are determined on the basis of value in use, post-tax discount rate, and then determining what the pre-
applying discounted cash flow calculations. In the recover- tax discount rate would need to be to cause value in use
able amount calculations, management used assumptions determined using pre-tax cash flows to equal the value in
that it believes are reasonable based on the best informa- use determined by the post-tax DCF calculation.
tion available. The key assumptions in the value in use cal- The forecast periods, WACC rates and the terminal
culations were sales growth, EBITDA margin development, growth rates of free cash flow used to extrapolate cash
the weighted average cost of capital (WACC), CAPEX-to- flows beyond the forecast period varied by cash generat-
sales ratio, and the terminal growth rate of free cash flow. ing unit as presented below. In all cases management be-
The value in use calculations were based on forecasts lieves the terminal growth rates do not exceed the average
approved by management, which management believes growth rates for markets in which Telia Company operates.
2016
Years/Percent Sweden Finland Norway Denmark Lithuania Latvia Estonia Spain Telia Carrier
Forecast period, years 5 5 5 5 5 5 5 5

Post-tax WACC rate, % 4.6 4.5 5.5 4.4 5.1 4.9 5.0 5.0
Pre-tax WACC rate, % 5.4 5.4 7.1 5.5 5.7 5.7 6.1 5.9
Terminal growth rate
of free cash flow, % 2.1 2.0 2.5 2.0 2.2 2.0 2.2 2.1
2015
Years/Percent Sweden Finland Norway Denmark Lithuania Latvia Estonia Spain Telia Carrier
Forecast period, years 5 5 5 5 5 5 5 5 5

Post-tax WACC rate, % 4.2 4.3 4.9 4.3 4.9 4.9 5.7 5.0 4.5
Pre-tax WACC rate, %1 4.9 5.3 6.4 5.4 5.6 5.7 7.1 6.4 5.9
Terminal growth rate
of free cash flow, % 2.0 1.8 1.9 2.0 2.1 2.0 2.7 1.9 2.0
1) Disclosures of pre-tax WACC rate 2015 have been restated, but with no effect on the 2015 impairment test.
133
Sensitivity analysis
The estimated recoverable amounts for Finland, Norway The impairment tests assumed, in addition to the post-tax
and Denmark were in proximity of the carrying values as WACC rates and the terminal growth rates stated above,
of December 31, 2016. As of December 31, 2015, the esti- the following sales growth, EBITDA margin and CAPEX-to-
mated recoverable amounts for Finland and Estonia were sales ranges during the next 5 years for the cash generat-
in proximity of the carrying values and for Denmark the ing units (CGUs) that are sensitive to reasonable changes
recoverable amount equaled the carrying value. in assumptions.
2016
5-year period/Percent Finland Norway Denmark
Sales growth, lowest in period (%) 0.6 0.2 1.1

Sales growth, highest in period (%) 1.9 1.6 2.3
EBITDA margin, lowest in period (%) 31.4 34.1 11.5
EBITDA margin, highest in period (%) 33.8 36.2 14.4
CAPEX-to-sales, lowest in period (%) 13.3 12.2 7.2
CAPEX-to-sales, highest in period (%) 22.5 23.7 17.7
2015
5-year period/Percent Finland Norway Denmark
Sales growth, lowest in period (%) -2.7 2.3 -0.9

Sales growth, highest in period (%) 1.9 4.5 1.5
EBITDA margin, lowest in period (%) 31.3 32.1 11.7
EBITDA margin, highest in period (%) 33.8 35.0 14.3
CAPEX-to-sales, lowest in period (%) 12.2 8.7 7.1
CAPEX-to-sales, highest in period (%) 16.2 16.1 17.0
The upper part of the following table sets out how many units, should there be a one percentage-point upward
percentage points each key assumption approximately shift in WACC. Finally, it sets out the absolute SEK billion
must change, all else being equal, in order for the recover- change of the recoverable value that would equal carring
able value to equal carrying value for the respective cash value for the respective cash generating unit. The decrease
generating unit. in headroom between the recoverable amount and the car-
The lower part of the table first shows the SEK billion rying value for Norway to SEK 6.0 billion (15.8) is primarily
effect on the recoverable values of the cash generating due to higher WACC and more conservative assumptions
regarding CAPEX.
2016
Percentage points, SEK in billions Finland Norway Denmark
Sales growth each year in the 5-year period (%) -2.1 -2.0 0.0
EBITDA margin each year in the 5-year period and beyond (%) -2.5 -2.6 0.0
CAPEX-to-sales ratio each year in the 5-year period and beyond (%) 2.9 2.5 0.1
Terminal growth rate (%) -0.8 -0.9 0.0
Post-tax WACC rate (%) 0.7 0.8 0.0
Effect of a one percentage-point upward shift in WACC (SEK in billions) -13.5 -7.4 -1.3
Change in the recoverable value to equal the carrying value (SEK in billions) -10.6 -6.0 0,0
2015
Percentage points, SEK in billions Finland Norway Denmark
Sales growth each year in the 5-year period (%) -2.1 -5.5 0.0
EBITDA margin each year in the 5-year period and beyond (%) -2.7 -6.6 0.0
CAPEX-to-sales ratio each year in the 5-year period and beyond (%) 2.6 6.3 0.0
Terminal growth rate (%) -0.8 -2.8 0.0
Post-tax WACC rate (%) 0.7 2.3 0.0
Effect of a one percentage-point upward shift in WACC (SEK in billions) -13.9 -9.2 -1.9
Change in the recoverable value to equal the carrying value (SEK in billions) -10.6 -15.8 0.0
134
C13 PROPERTY, PLANT AND EQUIPMENT

The carrying value was distributed and changed as follows.
Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31,
2016 2015 2016 2015 2016 2015 2016 2015
Equipment, tools and
SEK in millions Property Plant and machinery installations Total
Accumulated cost 8,049 7,702 183,301 181,877 7,659 7,470 199,009 197,050
Accumulated depreciation -4,411 -4,158 -119,999 -120,117 -4,990 -4,931 -129,401 -129,205
Accumulated impairment losses -515 -751 -10,885 -11,920 -104 -162 -11,504 -12,833
Advances 3 81 0 3 82
Carrying value 3,124 2,794 52,419 49,922 2,565 2,378 58,107 55,093
of which assets under construction 6,759 5,621 6,759 5,621
Carrying value, opening balance 2,794 4,216 49,922 62,458 2,378 2,996 55,093 69,669
Investments 365 183 11,581 14,477 893 758 12,838 15,418
of which capitalized interest 70 66 70 66
Sales and disposals -1 -39 -215 -337 -7 -55 -223 -431
Dismantling and restoration -4 218 295 -3 211 295
Operations acquired 2 0 21 288 0 52 23 340
Operations divested -2 -2,231 -50 -2,283
Grants received -3 -4 -18 -4 -21
Reclassifications 78 211 -491 -555 297 292 -117 -53
Depreciation for the year, continuing
operations -224 -206 -7,660 -7,197 -998 -926 -8,882 -8,329
Depreciation for the year, discontinued
operations -81 -2,502 -120 -2,703
Impairment losses for the year, continuing
operations -1 -24 -14 -4 0 -28 -14
Impairment losses for the year,
discontinued operations -3,378 -3,378
Advances -4 -29 13 -20
Exchange rate differences 118 -561 1,301 -4,511 66 -229 1,485 -5,301
Reclassification to assets classified as held
for sale -922 -9,054 -6 -404 -6 -10,379
Carrying value, closing balance 3,124 2,794 52,419 49,922 2,565 2,378 58,107 55,093
No general changes of useful lives were made in 2016. Property

For depreciation rates applied, see section Useful lives Telia Companys real estate holdings include approximately
in Note C2 Key sources of estimation uncertainty. In the 3,800 properties, mainly in Sweden and Finland. The
statement of comprehensive income, depreciation and substantial majority is used solely for technical facilities,
impairment losses are included in all expense line items by like network installations, computer installations, research
function as well as in line item Other operating expenses, centers and service outlets.
see Notes C7 Expenses by nature and C8 Other operat- The total carrying value of property was distributed by
ing income and expenses. For information on contractual depreciable/non-depreciable assets as follows.
obligations regarding future acquisitions of property, plant
and equipment, see Note C29 Contingencies, other con-
tractual obligations and litigation.
Depreciable property (buildings, etc.) 2,755 2,456

Non-depreciable property (land) 369 338
Total property 3,124 2,794
135
C14 INVESTMENTS IN ASSOCIATED COMPANIES

AND JOINT VENTURES
The total carrying value was distributed as follows.
Interests in associated companies 22,673 23,313

Interests in joint ventures 26 28
Total carrying value 22,698 23,341
Items recognized in net income and in total comprehensive income were as follows.
JanuaryDecember
Share of income from associated companies 2,809 3,422

Gains/losses net from disposals of shares in associates -5 -19
Income from joint ventures 6 -9
Recognized in net income 2,810 3,394
Other comprehensive income from associated companies -361 4
Recognized in total comprehensive income 2,450 3,398
Details of material associated companies mobile operators. MegaFon and Turkcell, reported in Telia
Telia Company has two material associated companies, Companys financial statements using the equity method,
PAO MegaFon and Turkcell Iletisim Hizmetleri A.S. PAO are publicly listed companies and therefore included with
MegaFon has its operations mainly in Russia. The own- a one-quarter lag with adjustments made for the effects of
ership interest and voting power is 25 percent and the significant transactions or events that occur between Telia
consolidated share is 26 percent (25 percent/26 percent). Companys closing date and the date of the respective
MegaFons holding of treasury shares is included in Telia companys financial statements. For more information, see
Companys consolidated share. Turkcell Iletisim Hizmetleri Risks and uncertainties, section Associated companies
A.S, in which TeliaCompanys ownership and voting power and joint operations. Market values of Telia Companys
as well as consolidated share is 38 percent (38 percent), op- holdings at year-end were:
erates in Turkey, Ukraine and Belarus. Both companies are
PAO MegaFon, Russia 13,387 15,145

Turkcell Iletisim Hizmetleri A.S., Turkey 21,088 23,770
136
The following table summarizes the financial information of companies. Information on other, non-material, associated
MegaFon and Turkcell as included in the companies own companies and joint ventures are not disclosed separately.
financial statements adjusted for fair value adjustments Telia Company has three joint arrangements classified as
at acquisition and differences in accounting policies. The joint operations. For additional information on those, see
table also reconciles the summarized financial informa- Note C4 Changes in group composition and events after
tion to the carrying amount of the groups interests in the the reporting period.
December 31
MegaFon Turkcell Total
Statements of financial position
SEK in millions 2016 2015 2016 2015 2016 2015
Non-current assets 51,283 41,101 63,279 47,861 114,562 88,961

Current assets 12,418 8,656 14,592 8,618 27,010 17,274
Non-current liabilities 35,447 20,206 16,710 1,671 52,157 21,877
Current liabilities 12,866 12,921 21,553 14,852 34,419 27,774
Net assets (100 percent) 15,388 16,629 39,608 39,955 54,996 56,582
Non-controlling interests -5 11 388 -199 383 -188
Net assets excluding non-controlling interests 15,383 16,641 39,996 39,756 55,379 56,394
Adjustment for differences in accounting principles 5 -569 -377 1,236 -372 667
Net assets after adjustments 15,388 16,071 39,619 40,992 55,007 57,064
Groups share 4,032 4,211 15,119 15,593 19,150 19,804
Adjustment, Turkcell part of Fintur equity -1,370 -1,406 -1,370 -1,406
Adjustment, fair values 702 396 3,334 3,484 4,036 3,880
Carrying value of interests in MegaFon and Turkcell 4,733 4,606 17,082 17,672 21,816 22,278
Carrying value of other associated companies not
individually material (groups share) 857 1,035
Carrying value of joint ventures (groups share) 26 28
Total carrying value of interests in associated
companies and joint ventures 22,698 23,341
JanuaryDecember
2016 2015 2016 2015 2016 2015
Statements of comprehensive income
SEK in millions MegaFon Turkcell Total
Net sales 39,318 46,450 39,121 28,224 78,439 74,674

Net income 3,432 5,395 5,021 5,537 8,453 10,931
Other comprehensive income -142 -118 -847 89 -989 -29
Total comprehensive income (100 percent) 3,290 5,277 4,173 5,625 7,464 10,902
Total comprehensive income (groups share) 862 1,382 1,597 2,140 2,459 3,522
Adjustment Turkcell part of Fintur total comprehensive income -115 -314 -115 -314
Total comprehensive income after adjustments, groups share 862 1,382 1,481 1,826 2,343 3,208
Other associated companies not individually material
Net sales (100 percent) 2,107 1,866
Net income (groups share) 105 218
Total comprehensive income from other associated companies 105 218
Gains/losses from sale of shares in other associates -5
Joint ventures not individually material
Net income (groups share) 6 -28
Total comprehensive income joint ventures (groups share) 6 -28
Groups share of total comprehensive income for associated
companies and joint ventures 2,450 3,398
Dividends received from MegaFon and Turkcell 1,700 1,607 77 5,150 1,777 6,756
Dividends received from other associated companies 341 140
Total dividends received from associated companies
and joint ventures 2,117 6,896
137
The carrying value was distributed and changed as follows.
Goodwill and fair value adjustments 3,822 4,110

Share of equity 18,876 19,231
Carrying value 22,698 23,341
Carrying value, opening balance 23,341 32,793
Shareholder contributions
Share of net income for the year 2,821 3,453
Share of other comprehensive income for the year -20 6
Amortization and write-downs of fair value adjustments -6 -9
Dividends received -2,117 -6,896
Acquisitions and operations acquired 43
Divestments and operations divested -9 15
Transactions in equity 39 -1,197
Reclassifications 23 22
Exchange rate differences -1,372 -4,669
Reclassification to assets classified as held for sale -220
Carrying value, closing balance 22,698 23,341
The carrying value is broken down by reportable segment in Note C5 Segment Information and by company as follows.
Equity participation in Carrying value in the

consolidated accounts parent company
2016 2015 2016 2015
Participa- Number of
Company, corp. reg. no., registered office tion (%) shares SEK in millions
Parent company holdings

Swedish companies
Overseas Telecom AB, 556528-9138, Stockholm 65 1,180,575 25 225 21 198
Springworks AB, 556915-3983, Stockholm 30 21,429 28 29 32 32
SNPAC Swedish Number Portability Administrative Centre AB,
556595-2925, Stockholm 20 400 6 5 1 1
Non-Swedish companies
Yoga AS, 11486721, Tallinn 25 1,013,333 7 7 0 8
ZeroGroup Holding O, 11536594, Tartu 25 1 8 11 0 12
Other operating, dormant and divested companies 0 10 0 15
Total parent company 54 267
Subsidiaries holdings
Swedish companies
Other operating, dormant and divested companies
AS Sertifitseerimiskeskus, 10747013, Tallinn 50 32 16 14
SIA Lattelecom, 00030527, Riga 49 71,581,000 766 732
Turkcell Holding A.S., 430991, Istanbul 47 214,871,670 10,796 11,189
Turkcell Iletisim Hizmetleri A.S., 304844, Istanbul 14 308,531,984 6,286 6,483
OCH A/S, 18936909, Copenhagen 25 250 0 3
PAO MegaFon, 1027809169585, Moscow 25 156,080,311 4,733 4,606
4T af 1. oktober 2012 ApS, 32348882, Copenhagen 25 7 9
Suomen Numerot NUMPAC Oy, 1829232-0, Helsinki 25 3,000 1 1
SCF Huolto Oy, 1892276-7, Loimaa 20 20 0 0
Strex AS, 985867569, Oslo 49 49,001 19 9
Other operating, dormant and divested companies 0 7
Total group 22,698 23,341
The share of voting power in Overseas Telecom AB is For additional information related to associated compa-
42 percent. Turkcell Holding A.S. owns 51 percent of the nies, see Note C28 Related Party Transactions, and Note
shares in Turkcell Iletisim Hizmetleri A.S. C29 Contingencies, other contractual obligations and
litigation.
138
C15 OTHER NON-CURRENT ASSETS

For other non-current assets, fair values equal carrying values. The total carrying values of other non-current assets were
distributed as follows.
Carrying value
Equity instruments available-for-sale 1,162 1,053

Equity instruments held-for-trading 26 35
Other derivatives held-for-trading 65
Bonds available-for-sale 10,185 8,841
Interest rate and cross currency interest rate swaps at fair value 4,453 4,742
of which designated as fair value hedges 1,039 1,153
of which held-for-trading 2,116 1,917
of which designated as cash flow hedges 1,298 1,671
Subtotal (see Fair value hierarchy levels Note C25) 15,825 14,736
Government bonds and treasury bills held-to-maturity 9 29
Loans and receivables at amortized cost 2,997 2,549
Subtotal (see Categories Note C25) 18,830 17,315
Finance lease receivables 712 546
Subtotal (see Credit risk Note C26) 19,542 17,860
Equity instruments at cost 48 44
Deferred expenses 387 751
Total other non-current assets 19,976 18,655
of which interest-bearing 18,120 16,368
of which non-interest-bearing 1,856 2,287
For loans and receivables fair value is estimated at the present value of future cash flows discounted by applying market
interest rates as of the end of the reporting period (fair value hierarchy level 2). As of December 31, 2016, contractual cash
flows for Government bonds and treasury bills and Loans and receivables represented the following expected maturities.
Expected maturity, SEK in millions 2018 2019 2020 2021 Later years Total
Government bonds and treasury bills 9 9

Loans and receivables 1,801 335 212 128 520 2,997
For more information on financial instruments by category/fair value hierarchy level and exposed to credit risk, see Note
C25 Financial assets and liabilities by category and level and section Credit risk management in Note C26 Financial
risk management, respectively. For information on leases, see Note C27 Leasing agreements.
C16 INVENTORIES
Goods for resale 1,637 1,708

Other inventories and expense incurred on construction contracts 155 163
Total 1,792 1,871
Other inventories include purchased supplies that are mainly intended for use in constructing Telia Companys own instal-
lations and for repair and maintenance. Inventories carried at net realizable value totaled SEK 195 million in 2016 and SEK
170 million in 2015.
139
C17 TRADE AND OTHER RECEIVABLES

The total carrying value of trade and other receivables was distributed as follows.
Currency swaps, forward exchange contracts and currency options held-for-trading 259 351
Subtotal (see Fair value hierarchy levels Note C25) 259 351
Accounts receivable at amortized cost 9,676 10,549
Subtotal (see Categories Note C25 and Credit risk Note C26) 13,670 14,639
Other current receivables 1,021 667
Deferred expenses 2,147 1,784
Total trade and other receivables 16,839 17,090
For accounts receivable and loans and receivables, pany offers a diversified portfolio of mass-market services
including claims on associated companies, the carrying and products in a number of highly competitive markets,
values equal fair value as the impact of discounting is resulting in a limited credit risk concentration to individual
insignificant. Loans and receivables mainly comprise ac- markets and customers.
crued call, interconnect and roaming charges. Telia Com-
For accounts receivable and loans and receivables, as of the end of the reporting period, concentration of credit risk by
geographical area and by customer segment was as follows.
Geographical area
Nordic countries 10,726 10,862
Baltic countries 1,765 1,513
Other countries 920 1,913
Customer segment
Consumers 3,737 6,520
Business customers 7,532 5,551
Other operators 1,947 2,048
Distributors 195 169
The geographic concentration to the Nordic operations and level and section Credit risk management in Note
reflects a relatively higher share of post-paid customer C26 Financial risk management for more information
contracts. In most cases, customers are billed in lo- on financial instruments classified by category/fair value
cal currency. Receivables from and payables to other hierarchy level and exposed to credit risk, respectively.
operators for international fixed-line traffic and roaming As of the end of the reporting period, allowance for
are normally settled net through clearing-houses. Refer doubtful and ageing of accounts receivable, respectively,
to Note C25 Financial assets and liabilities by category were as follows.
Accounts receivable invoiced 10,517 11,710

Allowance for doubtful accounts receivable -841 -1,161
Total accounts receivable 9,676 10,549
Accounts receivable not due 7,062 7,411
Accounts receivable past due but not impaired 2,614 3,138
of which less than 30 days 1,798 1,559
of which 30180 days 640 647
of which more than 180 days 176 932
Total accounts receivable 9,676 10,549
140
As of the end of the reporting period, ageing of loans and receivables were as follows.
Loans and receivables not due 3,518 3,332

Loans and receivables past due but not impaired 217 407
of which less than 30 days 123 211
of which 30180 days 67 118
of which more than 180 days 27 78
Total loans and receivables 3,735 3,739
Receivables past due as of the end of the reporting pe- Total bad debt expenses were SEK 455 million in 2016,
riod were not provided for as there had been no signifi- excluding assets classified as held for sale, and SEK 481
cant change in credit quality and the amounts were still million in 2015. Recovered accounts receivable were SEK
considered recoverable. See also section Credit risk 21 million in 2016, excluding assets classified as held for
management in Note C26 Financial risk management sale, and SEK 266 million in 2015. Refer to note C8 Other
for information on mitigation of risks related to accounts operating income and expenses for more information on
receivable. recovered accounts receivables.
The allowance for doubtful accounts receivable changed as follows.

Net of charges for doubtful receivables in the period and receivables written off -47 29
Operations acquired and divested -303 3
Unused allowances reversed -18 -46
Reclassification to assets classified as held for sale -196
Closing balance 841 1,161
C18 ICASH
NTEREST-BEARING RECEIVABLES, CASH AND
EQUIVALENTS
Interest-bearing receivables
The total carrying value of interest-bearing receivables was distributed as follows.
Interest rate swaps and cross currency interest rate swaps at fair value 984 804
of which designated as fair value hedges 301
of which held-for-trading 683 804
Short-term investments with maturities over 3 months 5,660 5,635
of which bonds available for sale 5,181 5,635
of which bank deposits at amortized cost 479
Finance lease receivables 165 324
Total (see Credit risk Note C26) 11,143 10,679
Carrying values for items measured at amortized cost management in Note C26 Financial risk management
and finance lease receivables are assumed to ap- for more information on financial instruments classified
proximate fair values as the risk of changes in value is by category/fair value hierarchy level and exposed to
insignificant. Refer to Note C25 Financial assets and credit risk, respectively. For information on leases, see
liabilities by category and level and section Credit risk Note C27 Leasing a greements.
141
Cash and cash equivalents

Cash and cash equivalents were distributed as follows.
Short-term investments with maturities up to and including 3 months 8,656 3,718

of which bank deposits at amortized cost 4,846 2,456
Cash and bank 5,854 10,929
Total (see Categories Note C25 and Credit risk Note C26) 14,510 14,647
The carrying values are assumed to approximate fair val- nancial instruments classified by category and exposed to
ues as the risk of changes in value is insignificant. Refer to credit risk, respectively, and to Note C29 Contingencies,
Note C25 Financial assets and liabilities by category and other contractual obligations and litigation for information
level and section Credit risk management in Note C26 on blocked funds in bank accounts.
Financial risk management for more information on fi-
C19 EQUITY AND EARNINGS PER SHARE

Share capital
According to the articles of association of Telia Company AB, the authorized share capital shall amount to no less than
SEK 8 billion and no more than SEK 32 billion. All issued shares have been paid in full and carry equal rights to vote and
participate in the assets of the company. Since December 31, 2005, the issued share capital changed as follows.
Issued share Number of Quotient value

capital (SEK) issued shares (SEK/share)
Issued share capital, December 31, 2005 14,960,742,621 4,675,232,069 3.20

Cancellation of shares repurchased in 2005, September 6, 2006 -591,279,539 -184,774,856 3.20
Issued share capital, December 31, 2007, 2008 and 2009 14,369,463,082 4,490,457,213 3.20
Cancellation of shares repurchased in 2011, July 19, 2011 -513,191,783 -160,372,432 3.20
Issued share capital, December 31, 2011, 2012, 2013, 2014 and 2015 13,856,271,299 4,330,084,781 3.20
Treasury shares subsidiary are based on those included in the consolidated

As of December 31, 2015, 4,588 Telia Company shares financial statements before inter-company eliminations
were held by the company itself and the total numbers and only the net asset in which the NCI has a share. Other
of issued and outstanding shares were 4,330,084,781 comprehensive income (OCI ) only comprises exchange
and 4,330,080,193, respectively. On April 29, 2016 Telia rate differences arising on translation to SEK.
Company AB acquired additional 118,398 own shares at The NCI in TEO LT, AB is 11.8 percent. The group holds
an average price of SEK 38.6519 to cover commitments 49 percent of the shares in Latvijas Mobilais Telefons SIA
under the Long term Incentive Program 2013/2016. Dur- (LMT). However, according to shareholders agreements
ing the second quarter of 2016, Telia Company distributed Telia Company has the board majority in LMT and the
122,986 shares to the incentive program participants. As company is therefore regarded as a subsidiary. In addition,
of December 31, 2016, no Telia Company shares were LMT is held partly by the associated company Lattelecom
held by the company itself or by its subsidiaries. The SIA which decreases NCI to 39.7 percent.
total numbers of issued and outstanding shares were Former segment region Eurasia is classified as held for
4,330,084,781. sale and discontinued operations since December 31, 2015.
For information regarding subsidiaries in discontinued
Subsidiaries in continuing operations with operations with material non-controlling interests, see Note
material non-controlling interests C34 Discontinued operations and assets classified as held
Summarized financial information on subsidiaries in con- for sale.
tinuing operations with material non-controlling interests Dividends paid to NCIs are disclosed in Note C30 Cash
(NCI) is presented below. The amounts disclosed for each flow information.
142
Latvijas Other
Dec 31, 2016 Mobilais subsidiaries,
SEK in millions, TEO LT, AB, Telefons SIA, continuing Discontinued
except percentages Lithuania Latvia operations operations Total
Assets
Current assets 702 639
Liabilities
Non-current liabilities -1,040 -678
Current liabilities -817 -566
Net assets 2,471 1,074
NCI percentage 11.8 39.7
Carrying amount of NCI 293 427 213 4,104 5,036
Net sales 1,965 1,196
Net income 296 97
Net income allocated to NCI 35 39 64 2,626 2,764
Cash flows from operating activities 693 501

Free cash flow 339 237
Latvijas Other
Dec 31, 2015 Mobilais subsidiaries,
SEK in millions, TEO LT, AB, Telefons SIA, continuing Discontinued
except percentages Lithuania Latvia operations operations Total
Assets
Current assets 445 559
Liabilities
Non-current liabilities -85 -637
Current liabilities -391 -438
Net assets 2,125 1,077
NCI percentage 11.8 39.7
Carrying amount of NCI 252 428 136 3,502 4,318
Net sales 1,914 1,127
Net income 320 101
Net income allocated to NCI 38 40 92 1,484 1,654
Cash flows from operating activities 601 323

Free cash flow 284 41
Earnings per share and dividends
Net income attributable to owners of the parent (SEK million) 3,732 8,551
Average number of outstanding shares, basic and diluted (thousands) 4,330,083 4,330,082
Earnings per outstanding share, basic and diluted (SEK) 0.86 1.97
Ordinary cash dividend (for 2016 as proposed by the Board of Directors)
Per share (SEK) 2.00 3.00
Total (SEK million) 8,660 12,990
143
C20 LONG-TERM AND SHORT-TERM BORROWINGS

Open-market financing programs
Telia Companys open-market financing (excluding debt derivatives) entails the following programs.
Dec 31, 2016 Dec 31, 2015

Interest rate type
Average
Limit Utilized Floating Fixed maturity Limit Utilized
Limit
Program Characteristics currency (in millions) (years) (in millions)
Telia Company Euro Medium Uncommitted, Interna-

AB Term Note (EMTN) tional, Long-term EUR 12,000 8,611 629 7,981 8.46 12,000 9,408
Telia Company Euro Commercial Uncommitted, Interna-
AB Paper (ECP) tional, Short-term EUR 1,000 1,000
Telia Company Flexible Term Uncommitted, Swed-
AB Note (FTN) ish domestic, Short-
term and long-term SEK 8,000 12,000
Borrowings
Long-term and short-term borrowings were distributed as follows.
Dec 31, 2016 Dec 31, 2015

SEK in millions Carrying value Fair value Carrying value Fair value
Long-term borrowings
Open-market financing program borrowings in fair value hedge relationships 37,189 46,135 37,672 41,021
Interest rate swaps at fair value 37 37 627 627
of which designated as hedging instruments 18 18 591 591
of which held-for-trading 18 18 36 36
Cross currency interest rate swaps at fair value 2,648 2,648 1,694 1,694
of which hedging net investments 1,778 1,778 1,333 1,333
Subtotal (see Fair value hierarchy levels Note C25) 39,873 48,819 39,993 43,342
Open-market financing program borrowings at amortized cost 41,334 45,209 47,908 53,577
Other borrowings at amortized cost 1,733 1,733 3,699 3,699
Subtotal (see Categories Note C25) 82,940 95,761 91,600 100,618
Finance lease agreements 221 221 46 46
Total long-term borrowings 83,161 95,982 91,646 100,664
Short-term borrowings
Open-market financing program borrowings in fair value hedge relationships 7,486 7,551
Interest rate swaps designated as hedging instruments 43 43
Interest rate swaps held for trading 3 3 7 7
Cross currency interest rate swaps held-for trading 191 191 21 21
Subtotal (see Fair value hierarchy levels Note C25) 7,679 7,744 72 72
Utilized bank overdraft and short-term credit facilities at amortized cost 0 0 9 9
Open-market financing program borrowings 2,258 2,265 5,627 5,648
of which hedging net investments 1,583 1,589
of which at amortized cost 2,258 2,265 4,043 4,059
Repurchase agreement liabilities 559 559
Other borrowings at amortized cost 801 801 3,623 3,623
Subtotal (see Categories Note C25) 11,297 11,368 9,330 9,351
Finance lease agreements 10 10 7 7
Total short-term borrowings 11,307 11,378 9,337 9,358
The fair values of borrowings above relate to hierarchy level 2. For a description of valuation techniques, see Note C3
Significant accounting principles, section Fair value estimation.
144
Normally, borrowings by Telia Company denominated in international operations or selective hedging of net invest-
foreign currencies are swapped into SEK. The exceptions ments abroad.
typically include funds borrowed to finance the groups
Nominal portfolio value 89,621 77,847

of which intended for overall management of the funding portfolio structure
and hence not included in hedge relationships
Note that the nominal amounts are outstanding absolute values. The net amounts are SEK 676 million (286).
Refer to Note C25 Financial assets and liabilities by category and level for more information on financial instruments
classified by category/fair value hierarchy level and to Note C26 Financial risk management for information on maturities
and management of liquidity risk, currency risk, interest rate risk and financing risk, respectively.
C21 PROVISIONS FOR PENSIONS AND EMPLOYMENT CONTRACTS

Post-employment benefits have additional pension coverage through a supplemental
Telia Company provides defined benefit pension plans to pension plan. In Finland, a part of the pension is funded
most of its employees in Sweden, Finland and Norway. in advance and the remaining part financed as a pay-as-
The pension plans mainly include retirement pension, dis- you-go pension (i.e. contributions are set at a level that is
ability pension and family pension. expected to be sufficient to pay the required benefits fall-
Employees in Telia Company AB and most of its ing due in the same period).
Swedish subsidiaries are eligible for retirement benefits Telia Norway operates a defined benefit pension, which
under the ITP-Tele (ITP 2 plan) defined benefit plan. How- was closed for new entrants in 2011.
ever, all employees born in 1979 and later are covered by a The pension obligations are secured mostly by pension
defined contribution pension plan (the ITP1 plan). The part funds, but also by provisions in the statements of financial
of the swedish ITP2 multi-employer pension plan that is position combined with pension credit insurance.
secured by paying pension premiums to Alecta is account- Telia Companys defined benefit plan members are
ed for as a defined contribution plan as the plan adminis- approximately divided between the following groups; 22
trator does not provide sufficient information necessary percent active members, 42 percent vested deferreds and
to account for the plan as a defined benefit plan. Telia 37 percent retirees.
Companys portion of total premiums in the Alecta ITP2 Telia Companys employees in many other countries are
plan is 0.15 percent and the share of total number of active usually covered by defined contribution pension plans.
insured in ITP2 is 0.9 percent. Expected contribution to the Contributions to the latter are normally set at a certain
ITP2 plan for 2017 is SEK 37 million. percentage of the employees salary and are expensed as
Telia Companys employees in Finland are entitled to incurred.
statutory pension benefits pursuant to the Finnish Em-
ployees Pensions Act, a defined benefit pension arrange- Pension obligations and pension expenses
ment with retirement, disability, unemployment and death Total amounts recognized in the statements of financial
benefits (TyEL pension). In addition, certain employees position for pension obligations were as follows.
Present value of funded pension obligations 23,413 21,888

Fair value of plan assets -26,146 -25,110
Surplus/Deficit of funded plans -2,733 -3,222
Present value of unfunded pension obligations 1,462 1,274
Net assets (-)/provisions (+) for pension obligations -1,271 -1,949
of which recognized as provisions 2,109 1,824
of which recognized as assets -3,380 -3,773
145
Total pension expenses were distributed as follows.
Current service cost 297 368

Curtailment of pension obligations -48 -32
Termination benefits 6 7
Pension premiums, defined benefit/defined contribution pension plans and pay-as-you-go systems 869 795
Pension-related social charges and taxes, other pension expenses 63 183
Less termination benefits (incl. premiums and pension-related social charges) reported as restructuring charges -31 -23
Total pension expenses in operating income from continuing operations 1,156 1,298
of which defined benefit pension plans 249 336
of which pension premiums paid to the ITP pension plan 36 32
Total pension expenses in operating income, discountinued operations 2 2
Net interest on the net defined benefit liability (asset) -97 72
Total pension expenses (+)/income (-) in financial items -97 72
Remeasurement gains (-)/losses (+)
Gain/loss from change in financial assumptions 2,333 -4,184
Experience gains/losses -451 -423
Gain/loss from change in demographic assumptions -62 317
Return on plan assets (excluding interest income) -523 -32
Total pension expenses recorded in OCI, defined benefit pension plans 1,297 -4,322
Specifications to defined benefit obligations and fair value of plan assets

Movements in the present value of defined benefit obligations were as follows.
Opening balance, present value of pension obligations 23,162 27,734

Interest expenses 811 787
Benefits paid -1,143 -1,149
Benefits paid, early retirement -4 -4
Curtailment of pension obligations -48 -32
Gain/loss from change in financial assumptions 2,333 -4,184
Experience gains/losses -451 -423
Gain/loss from change in demographic assumptions -62 317
Reclassification to liabilities directy associated with assets classified as held for sale -205
Closing balance, present value of pension obligations 24,875 23,162
Movements in the fair value of plan assets were as follows.
Opening balance, fair value of plan assets 25,110 24,519

Interest income 908 715
Contribution to pension funds 79 81
Payment from pension funds -616 -80
Return on plan assets (excluding interest income) 523 32
Reclassification to liabilities directy associated with assets classified as held for sale -57
Closing balance, fair value of plan assets 26,146 25,110
146
Principal actuarial assumptions sion obligations. The management of Telia Company then
The actuarial calculation of pension obligations and pen- adjust the difference between the long-term inflation target
sion expenses is based on the following principal as- of the central bank and the actual market inflation at the
sumptions, each presented as a weighted average for the end of the period. The discount rate for Finland is based on
different pension plans. These assumptions are the most high-quality corporate bonds with long duration. Norway
significant ones in terms of the risk for changes in Telia sets the discount rate on the same basis as Sweden.
Companys pension obligations. The discount rate reflects The expected annual adjustments and increased lon-
the interest rate level at which the pension liabilities could gevity have an impact on future pension payments and
be effectively settled and affects the value of the defined therefore the pension obligation. For Sweden and Norway,
benefit obligations. management has chosen to use the annual inflation target
As in previous years the discount rate for Sweden is rates set by the national and European central banks. For
determined by the covered bond market. Since the com- Finland, the inflation assumption is derived from long-term
mitment has a longer duration than most covered bonds, inflation swaps. See below for a sensitivity analysis related
an extrapolation of the yield curve is performed and used to a change in the significant assumptions used in calculat-
with the corresponding duration of Telia Companys pen- ing the pension provision.
Percentages, except longevity Dec 31, 2016 Dec 31, 2015
Discount rate 2.99 3.57

Annual adjustments to pensions 1.81 1.81
Longevity
life expectancy 65 year old male (year) 20 20
life expectancy 65 year old female (year) 23 23
The sensitivity of the defined benefit obligations to changes in the weighted principal assumptions was as follows.
Impact on defined
Change in benefit obligation
assumption (p.p.) (SEK in millions)
Discount rate +0.50 -2,285

Discount rate -0.50 2,598
Annual adjustments to pensions +0.50 2,477
Annual adjustments to pensions -0.50 -2,179
Longevity +1 year 744
The sensitivity analyses are based on a change in an as- For the Swedish pension fund (Swedish Fund) which
sumption while holding all other assumptions constant. In represents approximately 85 percent of the total group plan
practice, this is unlikely to occur, and changes in some of assets, Telia Company apply a minimum funding require-
the assumptions may by correlated. ment. The allocation was successful and the portfolios per-
formance was positive throughout the year. As of December
Investment strategy 31, 2016, the strategic asset allocation decided by the Board
The assets of Telia Company pension funds constitute of the Swedish Fund, was 54 percent fixed income, 27
pension plan assets and are valued at fair value. These percent equities and 19 percent alternative investments. The
assets are used as prime funding source for the pension Alternative investments include Hedge Funds and Private
obligations, and exist primarily in Sweden and Finland. The Equity. The actual allocation may deviate from the strategic
pension funds invest the assets in such a manner that the allocation in a range up to a specified risk limit. The work
liquidity of the pension funds is ensured. The investment to improve balance between risk and return in the Swed-
horizons are long-term, and aimed to cover the growth of ish Pension Fund continues. Reduced allocation to fixed
pension liability. The weighted average duration for the income in favor of equity and real estate enhanced the risk
pension obligation plans is approximately 19 years. Invest- and return during 2016. Implications of changes during 2016
ment plans are approved by the boards of the pension are both enhanced diversification, lower cost and increased
funds. The investment activities comply with the rules and performance.
regulations issued by the authorities governing pension
foundations.
147
Total plan-asset allocation

As of the end of the reporting period, plan assets were allocated as follows.
Dec 31, 2016 Dec 31, 2015

SEK in millions
Asset category Quoted Unquoted Total Percent Quoted Unquoted Total Percent
Equity instruments 8,500 216 8,716 33 6,925 142 7,067 28
Debt instruments 12,062 371 12,433 48 13,185 419 13,604 54
Real estate 1,014 1,014 4 283 283 1
Cash and cash equivalents 274 111 385 1 286 83 368 1
Alternative investments 185 3,255 3,440 13 177 3,462 3,639 15
Other 158 158 1 149 149 1
Total 21,021 5,125 26,146 100 20,573 4,538 25,110 100
of which shares in Telia Company AB 14 14 0.1 15 15 0.1
Future contributions company can choose if and when to contribute to the

For companies in Sweden, pension liabilities are secured pension fund or otherwise to recognize a provision. To
also by pension credit insurance. This means that, should pension funds outside Sweden, Telia Company expects
the net provision for pension obligation increase, each to contribute SEK 99 million in 2017.
C22 OTHER PROVISIONS

Changes in other provisions were as follows.
December 31, 2016

Put options and Asset
contingent Restructuring retirement Other
SEK in millions consideration provisions obligations provisions Total
Opening balance 850 672 2,896 805 5,222

of which financial liabilities at amortized cost 287 287
Provisions for the period 608 243 15,280 16,131
Operations divested -881 -74 -339 -1,294
Utilized provisions -889 -95 -78 -1,062
Reversals of provisions -7 -1 -251 -259
Reclassifications -7 -8 -15
Timing and interest-rate effects 7 1 8
Exchange rate differences 31 10 55 20 116
Reclassification to liabilities directly associated
with assets classified as held for sale -1 -1
Closing balance 0 387 3,023 15,436 18,846
of which non-current portion 83 3,015 2,076 5,173
of which current portion 304 8 13,361 13,673
of which financial liabilities at amortized cost
(see Notes Categories C25 and Credit risk C26)
Other provisions include the provision for the settlement amount proposed by the US and Dutch authorities, see Note C34
for more information. For financial liabilities, the carrying value equals fair value as provisions are discounted to present
value. Refer to Note C25 Financial assets and liabilities by category and level for more information on financial instru-
ments classified by category.
148
Put options and contingent consideration pregnated with creosote or arsenic and to dismantling and
The closing balance as of December 31, 2015 in total restoration of mobile and fixed network sites. Remaining
SEK 850 million, was related to Yoigo in Spain, which was provisions as of December 31, 2016, are expected to be
divested in the fourth quarter of 2016. See Note C34 for fully utilized in the period 20172045, depending on factors
information on sale of Yoigo in Spain and on put options in such as any contractual renewal options for site leases and
discontinued operations. dismantling plans decided by management.
Other provisions include provisions for damages and
Restructuring provisions court cases, including the provision for the settlement
The restructuring provisions represent the present value amount proposed by the US and Dutch authorities. Other
of managements best estimate of the amounts required provisions also include provisions for future onerous and
to settle the liabilities. The estimates may vary as a result other loss-making contracts, insurance provisions, payroll
of changes in the actual number of months an employee taxes on future pension payments, estimated expenses
is staying in redeployment before leaving and in the actual related to fulfilling representations made and warranties, i
outcome of negotiations with lessors, sub-contractors and e transaction warranties, and for potential litigation etc. in
other external counterparts as well as the timing of such connection with disposals and winding-up of group enti-
changes. The restructuring provisions are mainly related to ties, associated companies and other equity holdings as
workforce reduction as a result of ongoing optimization of well as provision for buy back commitments for sold equip-
the business in the Nordics and Group functions. ment in certain markets. Full utilization of these provisions
is expected in the period 20172028.
Asset retirement obligations and other provisions The provisions represent the present value of manage-
Asset retirement obligations mainly refer to handling ments best estimate of the amounts required to settle the
hazardous waste such as worn-out telephone poles im- liabilities.
C23 OTHER LONG-TERM LIABILITIES

Other long-term non-interest-bearing liabilities were distributed as follows.
Danish license fee liabilities at amortized cost 42 78

Finnish license fee liabilities at amortized cost 162 48
Other liabilities at amortized cost 51 37
Liabilities at amortized cost (see Categories Note C25) 255 163
Prepaid operating lease agreements 297 332
Other liabilities 172 207
Total other long-term liabilities 725 702
For liabilities at amortized cost, the carrying value approxi- instruments classified by category and to Note C26 Finan-
mates fair value as the impact of discounting using market cial risk management on management of liquidity risk.
interest rates at the end of the reporting period was insig- As of December 31, 2016, contractual undiscounted cash
nificant. Refer to Note C25 Financial assets and liabilities flows for liabilities at amortized cost represented the fol-
by category and level for more information on financial lowing expected maturities.
Expected maturity Later Carrying

SEK in millions 2018 2019 2020 2021 years Total value
Liabilities at amortized cost 108 54 51 48 11 271 255
149
For information on leases, see Note C27 Leasing agreements. Other liabilities mainly comprise customer advances for
broadband build-out. Further included was deferred day 1 gains which changed as follows.
Opening balance 46 73
Recognized in net income -14 -19
Closing balance 46
of which current portion 19
C24 TRADE PAYABLES AND OTHER CURRENT LIABILITIES

Trade payables and other current liabilities were distributed as follows.
Accounts payable at amortized cost 6,610 8,685
Current liabilities at amortized cost 2,170 2,296
Other current liabilities 4,815 5,941
Deferred income 3,911 3,751
Total trade payables and other current liabilities 18,200 20,774
For accounts payable and current liabilities, the carrying and to Note C26 Financial risk management on manage-
value equals fair value as the impact of discounting is insig- ment of liquidity risk.
nificant. Refer to Note C25 Financial assets and liabilities As of December 31, 2016, contractual cash flows for
by category and level for more information on financial liabilities at amortized cost represented the following
instruments classified by category/fair value hierarchy level expected maturities.
Expected maturity JanMar AprJun JulSep OctDec

SEK in millions 2017 2017 2017 2017 Total
Liabilities at amortized cost 8,370 69 68 273 8,780
Corresponding information for currency derivatives held- ing charges, while other current liabilities mainly entail
for-trading are presented in section Liquidity risk manage- value-added tax, advances from customers and accruals
ment to Note C26 Financial risk management. of payroll expenses and social security contributions.
The main components of current liabilities are accrued Deferred income mainly relate to subscription and other
payables to suppliers and accrued interconnect and roam- telecom charges.
150
C25 FINANCIAL ASSETS AND LIABILITIES BY CATEGORY AND LEVEL

Categories
Carrying values of classes of financial assets and liabilities were distributed by category as follows. Excluded are financial
instruments which are discussed in Note C27 Leasing agreements.
Financial assets
Derivatives designated as hedging instruments C15, C18 2,637 2,824
Financial assets at fair value through profit and loss 3,084 3,172
of which derivatives not designated as hedging instruments (held-for-trading) C15, C17, C18 3,058 3,137
of which other held-for-trading investments C15 26 35
Held-to-maturity investments C15, C18 9 29
Loans and receivables C15, C17, C18 31,920 34,138
Available-for-sale financial assets C15, C18 20,348 16,792
Total financial assets by category 57,999 56,955
Financial liabilities
Derivatives designated as hedging instruments C20, C24 2,346 2,165
Derivatives not designated as hedging instruments C20, C24 1,226 329
Financial liabilities measured at amortized cost C20, C22, C23, C24 100,394 108,098
Financial guarantees C22 287
Total financial liabilities by category 103,966 110,879
Fair value hierarchy levels

The carrying values of classes of financial assets and liabilities measured at fair value were distributed by fair value
hierarchy level as follows.
December 31, 2016 December 31, 2015

of which of which
Carrying Carrying
SEK in millions Note value Level 1 Level 2 Level 3 value Level 1 Level 2 Level 3
Financial assets at fair value

Equity instruments available-for-sale C15 1,162 1,162 1,053 1,053
Equity instruments held-for-trading C15 26 26 35 35
Long- and short-term bonds available-for-sale C15, C18 19,186 19,186 15,739 15,739
Derivatives designated as hedging instruments C15, C18 2,637 2,637 2,824 2,824
Derivatives held-for-trading C15, C17, C18 3,058 3,058 3,137 3,072 65
Total financial assets at fair value by level 26,069 19,186 5,696 1,188 22,789 15,739 5,896 1,153
Financial liabilities at fair value
Derivatives designated as hedging instruments C20, C24 2,346 2,346 2,165 2,165
Derivatives held-for-trading C20, C24 1,226 1,226 329 329
Total financial liabilities at fair value by level 3,572 3,572 2,494 2,494
There were no transfers between Level 1 and 2 in 2016 and 2015.
151
Fair value measurement of Level 3 financial development stage, geographic area and strategy. The
instruments multiple is calculated by dividing the enterprise value of the
Investments classified within Level 3 make use of signifi- comparable company by the relevant metric. The multiple
cant unobservable inputs in deriving fair value, as they is then adjusted for discounts/premiums with regards to
trade infrequently. As observable prices are not available differences, advantages and disadvantages between Telia
for these equity instruments, Telia Company has a market Companys investment and the comparable public compa-
approach to derive the fair value. nies based on company specific facts and circumstances.
Telia Companys primary valuation technique used for Although Telia Company uses its best judgment, and
estimating the fair value of unlisted equity instruments in cross-references results of the primary valuation model
Level 3 is based on the most recent transaction for the against other models in estimating the fair value of unlisted
specific company if such transaction has been recently equity instruments, there are inherent limitations in any
done. If there has been significant changes in circumstanc- estimation technique. The fair value estimates presented
es between the transaction date and the balance sheet herein are not necessarily indicative of an amount that Telia
date that, in the assessment of Telia Company, would be Company could realize in a current transaction. Future
a material impact on the fair value, the carrying value is confirming events will also affect the estimates of fair
adjusted to reflect the changes. value. The effect of such events on the estimates of fair
In addition, the assessment of the fair value of material value could be material.
unlisted equity instruments is verified by applying other Unlisted equity instruments for which the fair value can-
valuation models in the form of valuation multiples from not be reliably measured are measured at cost less any
listed comparable companies (peers) on relevant financial impairment.
and operational metrics, such as revenue, gross profit and The table below presents the movement in Level 3 in-
other relevant KPIs for the specific company. Comparable struments for the twelve-month period ended December
listed companies are determined based on industry, size, 31, 2016.

Long- and Long- and
Equity in- Equity in- short-term Deriva Equity in- Equity in- short-term Deriva
struments struments bonds tives struments struments bonds tives
available- held-for- available held-for- available- held-for- available held-for-
SEK in millions for-sale trading for sale trading Total for-sale trading for sale trading Total
Level 3, opening balance 1,053 35 65 1,153 275 61 0 55 391

Changes in fair value -4 -4 10 -26 0 10 -6
of which recognized in
net income -15 -26 0 10 -31
of which recognized in
other comprehensive income -4 -4 25 25
Purchases/capital contributions 48 48 994 4 998
Exercise of warrants 65 -65
Transfers out of level 3
Disposals -10 -10
Exchange rate differences 16 -5 0 0 11
Reclassified to assets classified
as held for sale -242 -1 -243
Level 3, closing balance 1,162 26 1,188 1,053 35 65 1,153
The purchases in 2015 mainly related to the acquisition of specification in Note C9 Finance costs and other financial
a 1.4 percent stake in Spotify for USD 115 million, cor- items. Former segment region Eurasia is classified as held
responding to SEK 976 million at the transaction date for sale and discontinued operations since December 31,
on June 9, 2015. Changes in fair value recognized in net 2015. For further information, see Note C34 Discontinued
income are included in line item Other financial items, see operations and assets classified as held for sale.
152
C26 FINANCIAL RISK MANAGEMENT
Principles of financing and financial risk management Capital management

Telia Companys financing and financial risks are managed Telia Companys capital structure and dividend policy is
under the control and supervision of the Board of Direc- decided by the Board of Directors. The ambition is to dis-
tors of Telia Company AB. Financial management is cen- tribute at least 80 percent of free cash flow from continuing
tralized within the Group Treasury unit of Telia Company, operations excluding licenses.
which operates as Telia Companys internal bank and is Telia Company shall target a solid investment grade
responsible for the management of financing, manage- long-term credit rating of A- to BBB+ and a leverage cor-
ment of capital requirements and cash. Group Treasury is responding to Net debt/EBITDA of 2x plus/minus 0.5x to
also responsible for Telia Companys financial risk man- secure the companys strategically important financial
agement, related to implementation of group policies and flexibility for investments in future growth, both organically
instructions, identification and monitoring of financial risks and by acquisitions.
as well as implementation of hedging strategies thereof. In May 2016, Moodys Investors Service confirmed its P-2
The most noticeable risks under Group Treasurys respon- rating for short-term borrowings and announced a down-
sibility are credit risk, liquidity risk, currency risk, interest grade to Baa1 rating for long-term borrowings with a stable
rate risk and (re-)financing risk. Group Treasury also seeks outlook. In September 2016, Standard & Poors Ratings
to manage the cost of financial risk management. Services placed its rating of A- for long-term borrowings
Telia Company finances its operations mainly by borrow- on a credit watch negative and affirmed its A-2 rating for
ing under its uncommitted open-market financing pro- short-term borrowings. These ratings represent a solid
grams directly in Swedish and international money markets investment grade level and are thus expected to allow Telia
and capital markets. The communicated funding strategy Company continued good access to the financial markets.
themes have been to increase duration, to diversify funding Telia Company is not subject to any externally imposed
sources and to keep a prudent liquidity position. Capital capital requirements.
market funding is the primary source and bank funding Telia Company defines capital as equity.
is considered mainly as backup. This increases flexibility
and ensures access to markets with attractive pricing. The Credit risk management
open-market financing programs typically provide a cost- Credit risk is the risk of delay or loss of value or income as
effective and flexible alternative to bank financing. well as incurred costs due to counterparty default or failure
Former segment region Eurasia is since 2015 classified to meet its financial obligations. The carrying amount of
as held for sale and discontinued operations since Decem- Telia Companys instruments with credit risk exposure is as
ber 31, 2015, and therefore not included in the figures for follows.
2016. For further information, see Note C34 Discontinued
operations and assets classified as held for sale.
Other non-current assets C15 19,542 17,860

Trade and other receivables C17 13,670 14,639
Interest-bearing receivables C18 11,143 10,679
Cash and cash equivalents C18 14,510 14,647
Total 58,865 57,825
When entering into financial transactions such as interest The net aggregated exposure in derivatives as of Decem-
rate swaps, cross currency swaps and other derivative ber 2016, is distributed by the counterparty long-term
transactions, Telia Company accepts only creditworthy rating with Moodys in the table below. Received collateral,
counterparties with a solid investment grade rating. Telia regulated by the Credit Support Annex of the ISDA agree-
Company requires each counterparty to have an Inter- ments, is deducted from the exposure.
national Swaps and Derivatives Association, Inc. (ISDA)
agreement. The permitted exposure of each counterparty
when entering into a financial transaction depends on the
rating of that counterparty.
153
Counterparty rating Aa3 727 271

Counterparty rating Aa2 121 312
Counterparty rating A1 769 320
Counterparty rating A2 1,128
Counterparty rating A3 226 216
Counterparty rating Baa1
Counterparty rating Baa2 2
Counterparty rating Baa3 2
Total exposure of counterparties in derivatives 1,842 2,251
Surplus cash in Telia Company can be invested in bank de- Liquidity risk management
posits and securities issued by banks and corporates with Liquidity risk is the risk that Telia Company will encounter
at least a rating of A- (Standard & Poors) or A3 (Moodys). difficulty in meeting obligations associated with financial
In addition, cash can be invested in government bonds and liabilities that are settled by delivering cash or another
treasury bills issued by the Swedish, German, Finnish, Nor- financial asset.
wegian or Danish government, Swedish municipals, invest- Telia Company has internal control processes and con-
ment funds and securitized assets with AAA/Aaa rating. tingency plans for managing liquidity risk. The short-term
The credit risk with respect to Telia Companys trade and mid-term liquidity management takes into account the
receivables is diversified geographically and among a large maturities of financial assets and financial liabilities and
number of customers, private individuals as well as compa- estimates of cash flows from operations.
nies in various industries. Solvency information is required A centralized daily cash pooling process enables Telia
for credit sales to minimize the risk of bad debt losses and Company to manage liquidity surpluses and deficits ac-
is based on group-internal information on payment behav- cording to the actual needs on group and subsidiary level.
ior, if necessary supplemented by credit and business infor- Telia Companys policy is to have a prudent liquidity posi-
mation from external sources. Bad debt expense in relation tion in terms of available cash and/or unutilized committed
to consolidated net sales was approximately 0.5 percent in credit facilities. Telia Companys short term liquidity risk is
2016 and 0.6 percent in 2015. managed with the liquidity reserve described below.
Surplus liquidity
Cash equivalents 1 8,656 3,718
Cash and cash equivalents (see also Note C18) 14,510 14,647
Short-term investments2 (see also Note C18) 5,043 5,216
Total 19,553 19,862
Long-term investments 3 (see also Note C15) 10,185 8,841
Total surplus liquidity 29,738 28,703
Committed credit facilities
Revolving credit facilities (limit amount) 14,365 18,270
Bank overdraft and short-term credit facilities (limit amount) 3,817 2,063
Utilized credit facilities -2,196 -4,110
Total unutilized committed credit facilities 15,986 16,223
Liquidity position 45,724 44,926
1) Bank deposits and securities which matures within 3 months of the date of acquisition.
2) Securities with maturities between 3 and 12 months. Convertible to cash within 2 days, i.e. excluding securities that for regulatory reasons are not convertible to cash
within 2days.
3) Securities with maturities exceeding 12 months. Convertible to cash within 2 days.
154
Telia Companys committed bank credit facilities and overdraft facilities, intended for short-term financing and back-up
purposes, were as follows.

Group entity Type Characteristics Final maturity Currency Limit Limit
Telia Company AB Revolving credit facility Committed, syndicated December 2017 EUR 9,135
Telia Company AB Revolving credit facility Committed, syndicated June 2017 EUR 9,135
Telia Company AB Revolving credit facility Committed, syndicated September 2021 EUR 14,365
Telia Company AB
and subsidiaries Bank overdraft facility Committed, bilateral Extended yearly (various) 3,817 2,063
As of December 31, 2016, contractual undiscounted cash rate prevailing as of the end of the reporting period. Future
flows for the group represented the following expected interest payments, related to instruments with floating
maturites. The amounts regarding the groups interest- interest rates, have been estimated using forward rates.
bearing borrowings and derivatives include installments Where gross settlements are performed (cross currency
and estimated interest payments. Amounts in foreign cur- interest rate swaps, currency swaps and forward exchange
rency have been converted into SEK using the exchange contracts), all amounts are reported on a gross basis.
Expected maturity JanMar AprJun JulSep OctDec Later

SEK in millions Note 2017 2017 2017 2017 2018 2019 2020 2021 years Total
Utilized bank overdraft and short-

term credit facilities -185 -185
Open-market financing program
borrowings -9,164 -57 -351 -1,792 -4,453 -11,267 -10,513 -11,489 -59,088 -108,175
Other borrowings -291 -75 -75 -74 -296 -293 -290 -72 -1,466
Finance lease agreements -2 -2 -2 -2 -7 -6 -6 -7 -11 -45
Cross currency interest rate swaps
and interest rate swaps
Payables -6,770 -950 -57 -3,079 -6,755 -5,306 -7,685 -1,110 -26,392 -58,104
Receivables 8,269 1,077 68 3,000 7,146 5,696 8,002 1,133 26,451 60,842
Currency swaps and forward
exchange contracts
Payables -47,500 -2,157 -450 -50,107
Receivables 47,131 2,052 448 49,631
Goverment bonds and treasury bills C15 9 9
Loans and receivables C15 1,801 335 212 128 520 2,997
Financial guarantees C22
Other long term liabilities C23 -108 -54 -51 -48 -11 -271
Trade Payables and Other Current
Liabilities C24 -8,370 -69 -68 -273 -8,780
Credit and performance guarantees C29 -112 -112
Total -16,697 -366 -485 -2,222 -2,775 -10,895 -10,331 -11,465 -58,531 -113,766
Currency risk management into the future. Financial flows are usually hedged until
Currency risk is the risk that fluctuations in foreign maturity, even if that is longer than 12 months.
exchange rates will adversely affect the groups results, Regarding foreign currency transaction exposure, CFO
financial position and/or cash flows. Currency risk can be has a clearly defined deviation mandate which is capped
divided into operational transaction exposure and conver- at the equivalent of SEK 10 million calculated as one day
sion exposure. Value at Risk (VaR), expressed as the long/short SEK
Transaction exposure relates to net inflows or outflows counter-value amount that may be exposed to currency
of foreign currencies required by operations and financing. fluctuations. Since SEK is the functional currency of Telia
Telia Companys general policy is to hedge the majority of Company borrowings are normally denominated in, or
known operational transaction exposure up to 12 months swapped into SEK unless linked to international operations
or allocated as hedging of net investments abroad.
155
Financial transaction exposure risk and estimated interest payments. Amounts in foreign
As of December 31, 2016, contractual undiscounted finan- currency have been converted to SEK using the exchange
cial cash flows split by currency, for the groups interest- rate prevailing as of the end of the reporting period. Future
bearing borrowings, assets and derivatives represented interest payments, related to instruments with floating
the following expected maturities, including installments interest rates, have been estimated using forward rates.
JanMar AprJun JulSep OctDec Later

SEK in millions 2017 2017 2017 2017 2018 2019 2020 2021 years Total
DKK lnterest bearing asset
lnterest bearing debt
Derivatives -5,004 -5,004
Net -5,004 -5,004
EUR lnterest bearing asset 4,846 479 5,325
lnterest bearing debt -8,854 -942 -414 -754 -3,617 -7,155 -9,767 -10,872 -46,795 -89,171
Derivatives 18,029 1,019 25 -26 1,139 4,927 7,211 -76 -6,622 25,626
Net 14,021 556 -389 -780 -2,478 -2,228 -2,556 -10,948 -53,417 -58,220
GBP lnterest bearing asset
lnterest bearing debt -121 -121 -121 -121 -121 -5,306 -5,911
Derivatives -181 121 121 121 121 121 5,306 5,730
Net -181 -181
JPY lnterest bearing asset
lnterest bearing debt -8 -2 -8 -353 -794 -7 -7 -7 -1,408 -2,594
Derivatives 8 2 8 353 794 7 7 7 1,408 2,594
Net
NOK lnterest bearing asset
lnterest bearing debt -18 -70 -88 -88 -88 -457 -2,261 -3,070
Derivatives -702 -3,064 -18 -2,119 -4,774 39 34 399 -18 -10,223
Net -702 -3,082 -18 -2,189 -4,862 -49 -54 -58 -2,279 -13,293
USD lnterest bearing asset 19 19
lnterest bearing debt
Derivatives 5,982 -446 5,536
Net 6,001 -446 5,555
SEK lnterest bearing asset 7,214 817 351 164 429 3,973 3,837 1,840 18,625
lnterest bearing debt -594 -14 -3 -569 -129 -4,189 -820 -104 -3,318 -9,740
Derivatives -16,789 2,065 -4 2,040 3,111 -4,705 -7,056 -427 -16 -21,781
Net -10,169 2,868 344 1,635 3,411 -4,921 -4,039 1,309 -3,334 -12,896
Total, net 3,966 342 -63 -1,780 -3,929 -7,198 -6,649 -9,697 -59,030 -84,039
The cash flow pertains to foreign exchange rate hedging of receivables, payables and cash balances in foreign currencies.
Foreign exchange rate risks are also mitigated through the groups net investment in EUR and NOK, see section Conver-
sion exposure risk.
Operational transaction exposure sensitivity Hence, the operational need to net purchase foreign cur-
In most cases, Telia Company customers are billed in their rency is primarily due to a deficit from such settlements
respective local currency. Receivables from and payables and the limited import of equipment and supplies. Main
to other operators for international fixed-line traffic and sources of transaction exposures are derived from the Nor-
roaming are normally settled net through clearing-houses. dic operations involving SEK, EUR, NOK and DKK.
Impact on Net income if currency Impact on Net income if currency

Currency rate depreciates by 10 percent rate depreciates by 10 percent
SEK -510 -369
EUR 450 329
NOK -13 -36
DKK 14 -9
Other 9 13
The sensitivity analysis is based on the assumption that the operational transaction exposure is equivalent to that in 2016,
and provided that no hedging measures were taken.
156
Conversion exposure risk

Conversion exposure relates to net investments in foreign to a specific ratio limit. Telia Companys net investments in
operations. CEO has a mandate to implement hedging up foreign operations were distributed by currency as follows.
2016 2015
Hedged through Hedged through
Net borrowings or Net borrowings or
SEK in millions investments derivatives Net investments derivatives Net
DKK 3,240 3,240 608 608
EUR 72,461 -43,991 28,470 75,719 -50,231 25,488
GBP 98 98 137 137
NOK 16,255 -1,438 14,817 13,797 -1,304 12,493
RUB 4,957 4,957 4,459 4,459
TRY 16,099 16,099 16,693 16,693
USD 1,746 1,746 389 389
Other currencies 431 431 218 218
Total 115,287 -45,429 69,858 112,021 -51,536 60,485
Conversion exposure sensitivity Interest rate risk management

The positive impact on group equity would be approxi- Telia Companys sources of funds are primarily equity
mately SEK 7.0 billion if the Swedish krona weakened by attributable to owners of the parent, cash flows from
10 percentage points against all conversion exposure operating activities, and borrowings. The interest-bearing
currencies. The calculation is based on the exposure as of borrowing and financial investments expose the group to
December 31, 2016, including hedges but excluding any interest rate risk. Interest rate risk is the risk that a change
potential equity impact due to Telia Companys operational in interest rates will negatively affect the groups net inter-
need to net purchase foreign currency, or to currency est expense and/or cash flows.
translation of other net income related items.
Average interest rates, including relevant hedges, on Telia Company ABs outstanding long-term and short-term borrow-
ings as of the end of the reporting period was as follows.
Percent Dec 31, 2016 Dec 31, 2015

Long-term borrowings 2.07 2.15
Short-term borrowings 1.88 1.62
Debt key figures on debt portfolio as of the end of the reporting period was as follows. Amounts indicated represent
carrying values.
Dec 31, 2016 Dec 31, 2015

SEK in millions
Duration (years) 5.1 4.8
Average maturity (years) 7.8 8.4
Short-term borrowings 11,307 9,337
Long-term borrowings 83,161 91,646
Interest rate adjustment <1year 67,170 65,641
Interest rate adjustment >1year 31,737 35,342
Telia Companys financial policy provides the framework is that the duration of the debt portfolio should be between
for management of interest rates and the average maturity 3 to 7 years.
of borrowings and investments. The group aims at balanc- If the loan portfolio structure deviates from the desired
ing the estimated running cost of borrowing and the risk of one, various forms of derivative instruments are used to
significant negative impact on earnings, should there be a adapt the structure in terms of duration and/or currency,
sudden, major change in interest rates. The groups policy including interest rate swaps and cross currency interest
rate swaps.
157
As of December 31, 2016, Telia Companys rate reset periods of interest bearing assets, liabilities and derivatives repre-
sented the following interest types and expected maturities. Amounts indicated represent nominal values.
JanMar AprJun JulSep OctDec Later

Fixed
lnterest bearing asset 11,046 947 300 3,138 2,872 1,540 19,843
lnterest bearing debt -7,741 -185 -1,066 -6,215 -7,670 -10,903 -47,325 -81,106
Derivatives 7,183 161 -168 9,712 6,215 7,183 8,509 14,528 53,324
Net 10,487 923 300 -168 8,647 3,138 2,385 -854 -32,797 -7,939
Float
lnterest bearing asset 3,465 3,465
lnterest bearing debt -5,676 -350 -6,026
Derivatives -43,078 -9,922 -52,999
Net -45,289 -10,272 -55,560
Total, net -34,802 -9,349 300 -168 8,647 3,138 2,385 -854 -32,797 -63,500
Telia Company has designated certain interest rate swaps rates make a parallel shift of one percentage point, and
as cash flow hedges to hedge against changes in the assuming the same volume of loans and a similar duration
amount of future cash flows related to interest payments on those loans as per year-end 2016.
on existing liabilities also including certain long-term bor-
rowings hedging net investments, see Note C20 Long- Refinancing risk management
term and short-term borrowings. Hedge ineffectiveness In order to reduce refinancing risk, the group aims to
related to outstanding cash flow hedges was immaterial distribute loan maturity dates over a longer period. The
and recognized in net income. Net changes in fair value groups policy is that the average maturity of borrowings
recognized in other comprehensive income are offset in a should exceed 4 years and that a maximum of 25 percent
hedging reserve as a component of equity, see Note C11 of the funding is allowed to mature within 2 years. As of
Other comprehensive income. In 2016, no cash flow December 31, 2016 the average maturity of Telia Com-
hedges were discontinued due to the original forecasted panys borrowings was 7.8 years and 11 percent of the
transactions not having occurred in the originally specified borrowings due within 2 years.
time period.
Pension obligation risk and sensitivity
Interest rate risk sensitivity See Note C21 Provisions for pensions and employment
As of December 31, 2016, Telia Company had interest- contracts for details on the pension obligation risks and a
bearing debt of SEK 94.9 billion, carrying value, with dura- sensitivity analysis.
tion of interest of approximately 5.1 years, including deriva-
tives. The volume of loans exposed to changes in interest Management of insurable risks
rates over the next 12-month period was at the same date The insurance cover is governed by corporate guidelines
approximately SEK 67.2 billion, carrying value, assuming and includes a common package of different property and
that existing loans maturing during the year are refinanced liability insurance programs. The business units and other
and after accounting for derivatives. units being responsible for assessing the risks decide the
The exact effect of a change in interest rates on the extent of actual cover. Corporate Insurance at Telia Com-
financial net stemming from this debt portfolio depends on pany AB manages the common group insurance programs
the timing of maturity of the debt as well as reset dates for and uses a captive, Telia Frskring AB, as a strategic tool
floating rate debt, and that the volume of loans may vary in managing the insurance programs. The risks in the cap-
over time, thereby affecting the estimate. tive are in part reinsured in the international reinsurance
However, assuming that those loans were reset by Janu- market.
ary 1, 2017, at a one percentage point higher interest rate
than the prevailing rate as per December 31, 2016, and Master netting arrangements and similar
remained at that new level during 12 months, the post-tax agreements
interest expense would increase by approximately SEK Telia Company has entered into ISDA Master Agreements
524 million. At the same time the effect on equity would be for its OTC derivative business, i.e. interest rate and curren-
a decrease of SEK 178 million due to cash flow hedges. cy derivatives, with all of its core banks. These ISDA Mas-
Fair value of the loan portfolio would change by approxi- ter Agreements allow the parties to do close-out nettings.
mately SEK 5.0 billion, should the level in market interest For derivatives in the financial operations, CSAs (credit
158
support annex) may be entered into as an annex to the agreement. Funds transferred and interest accrued under a
respective master agreement, and are recognized as other CSA agreement is not considered collateral.
current receivables/liabilities. Under the CSA, the parties For information on discontinued operations, see Note
agree to provide each other with eligible support, which is C34 Discontinued operations and assets classified as
calculated based on a weekly exposure under the specific held for sale.
December 31, 2016

Gross Gross Net amounts of Related
amounts, amounts, financial assets financial
financial financial in the statement of liabilities that Net
SEK in millions Note assets liabilites financial position are not set off CSA amount
Interest and cross currency

interest rate swaps C15, C18 5,437 5,437 -2,517 -1,407 1,513
exchange contracts C15, C17 259 259 -255 4
Other assets 34 -19 15 15
Total 5,729 -19 5,711 -2,772 -1,407 1,532
December 31, 2016

amounts, amounts, financial liabilities financial
financial financial in the statement of assets that Net
SEK in millions Note liabilities assets financial position are not set off CSA amount

interest rate swaps C20 2,877 2,877 -2,517 360
Other liabilites 36 -19 17 17
Total 3,608 -19 3,589 -2,772 817
December 31, 2015

amounts, amounts, financial assets financial
financial financial in the statement of liabilities that Net
SEK in millions Note assets liabilites financial position are not set off CSA amount

interest rate swaps C15, C18 5,546 5,546 -2,192 -1,558 1,796
Other receivables 24 -8 16 16
Total 5,921 -8 5,913 -2,218 -1,558 2,137
December 31, 2015

amounts, amounts, financial liabilities financial
financial financial in the statement of assets that Net
SEK in millions Note liabilities assets financial position are not set off CSA amount

interest rate swaps C20 2,393 2,393 -2,192 201
Other liabilites 29 -8 20 20
Total 2,523 -8 2,514 -2,218 296
159

C27 LEASING AGREEMENTS
Telia Company as lessee, continuing operations
Finance leases
The groups finance leases concern computers and other IT equipment, production vehicles, company cars to employees,
and other vehicles. There is no subleasing.
The carrying value of the leased assets as of the end of the reporting period was as follows.
Cost 329 92
Less accumulated depreciation and impairment losses -85 -79
Net carrying value of finance lease agreements 244 13
In 2016 and 2015, depreciation and impairment losses totaled SEK 2 million and SEK 4 million, respectively. Leasing fees
paid in these years totaled SEK 10 million and SEK 9 million, respectively.
As of the end of the reporting period, the present value of future minimum leasing fees under non-cancelable finance
lease agreements were as follows.
Total future minimum leasing fees 259 68

Less interest charges -32 -19
Present value of future minimum leasing fees 228 49
As of December 31, 2016, future minimum leasing fees and their present values as per finance lease agreements that could
not be canceled in advance and were in excess of one year were as follows.

Future minimum leasing fees 4 4 4 4 17 15 15 15 180 259

Present value of future minimum
leasing fees 4 4 4 4 14 13 14 14 159 228
Operating leases
Telia Companys operating lease agreements primarily concern office space, technical sites, land, computers and other
equipment. Certain contracts include renewal options for various periods of time. Subleasing consists mainly of office
premises.
Future minimum leasing fees under operating lease agreements in effect as of December 31, 2016, that could not be
canceled in advance and were in excess of one year were as follows.

Future minimum leasing fees 386 410 410 411 1,110 529 459 402 1,522 5,640
Minimum sublease payments 6 6 6 6 3 1 28
In 2016 and 2015, total rent and leasing fees paid were SEK Telia Company as lessor, continuing operations
1,771 million and SEK 1,818 million, respectively. Finance leases
The decrease compared to reported expected maturity in The leasing portfolio of Telia Companys customer financ-
the annual report 2015 is mainly related to Yoigo in Spain ing operations in Sweden, Finland, Denmark and Norway,
which was divested in the fourth quarter of 2016. comprise financing related to Telia Companys product of-
In these years, revenues for subleased items totaled SEK ferings. The term of the contract stock is approximately 14
24 million and SEK 15 million, respectively. quarters. The term of new contracts signed in 2016 was 14
Apart from certain short-term leases, leasing terms range quarters. Of all contracts, 67 percent carry a fixed interest
between 3 months and 31 years with an average term of rate and 33 percent a floating interest rate. Most contracts
approximately 5 years. All leases have been entered into include renewal options. In Finland, Telia Company pro-
on conventional commercial terms. Certain contracts vides, under a finance lease agreement, electricity meters
include renewal options for various periods of time. with SIM cards for automated reading to a power company
as part of Telia Companys service package.
160
The term of the agreement was 15 years and it carries a fixed interest rate and agreement will end at year 2023.
As of the end of the reporting period, the present value of future minimum lease payment receivables under non-cancela-
ble finance lease agreements were as follows.
Minimum lease payments receivables 1,007 947

Unguaranteed residual values accruing to the benefit of the lessor
Gross investment in finance lease contracts 1,007 947
Unearned finance income -130 -77
Present value of future minimum lease payments receivables (net investment in finance lease contracts) 877 870
As of December 31, 2016, the gross investment and present value of receivables relating to future minimum lease pay-
ments under non-cancelable finance lease agreements were distributed as follows.

Gross investment 116 116 117 116 221 145 98 53 24 1,007

Present value of future minimum lease
payments receivables 40 42 42 41 251 187 146 105 23 877
As of December 31, 2016 and 2015, the accumulated periods with operators range between 10 and 25 years
allowance for uncollectible minimum lease payments re- with the average term being 20 years. For other contracts,
ceivables totaled SEK 0 million and SEK 0 million, respec- the contract periods range between 3 and 10 years with
tively. Credit losses on leasing receivables are reduced by the average term of approximately 5 years. Apart from this,
gains from the sale of equipment returned. Telia Company has operating lease agreements related
product offerings to end-customers in Sweden and Fin-
Operating leases land. Contract periods range between 3 and 5 years, with
The leasing portfolio refers mainly to the international an average term of approximately 3 years.
carrier business and includes agreements with other The carrying value of the leased assets as of the end of
international operators and other contracts. The contract the reporting period was as follows:
Cost 3,304 3,249

Less accumulated depreciation and impairment losses -1,880 -1,886
Gross carrying value 1,424 1,363
Less prepaid lease payments -466 -319
Net value of operating lease agreements 958 1,044
Depreciation and impairment losses totaled SEK 636 million in 2016 and SEK 651 million in 2015.
Future minimum lease payment receivables under operating lease agreements in effect as of December 31, 2016, that
could not be canceled in advance and were in excess of one year were as follows:

Future minimum lease payments

receivables 155 155 155 155 265 138 53 23 68 1,168
161
C28 RELATED PARTY TRANSACTIONS

The Swedish State Act. Notified operators are required to pay a fee to finance
At year-end, the Swedish State held 37.3 percent of the measures to prevent serious threats and disruptions to
outstanding shares in Telia Company AB. The remaining electronic communications during peacetime. The required
62.7 percent of the outstanding shares are widely held. fee from Telia Company was SEK 43 million in 2016 and
The Telia Company groups services and products are of- SEK 45 million in 2015. In addition, Telia Company, like
fered to the Swedish state, their agencies, and state-owned other operators, pays annual fees to the Swedish National
companies in competition with other operators and on Post and Telecom Agency (PTS) to fund the Agencys
conventional commercial terms. Certain state-owned com- activities under the Electronic Communications Act and the
panies run businesses that compete with Telia Company. Radio and Telecommunications Terminal Equipment Act.
Likewise, Telia Company buys services from state-owned Telia Company paid fees of SEK 47 million in 2016 and SEK
companies at market prices and on otherwise conventional 52 million in 2015.
commercial terms. Neither the Swedish State and their
agencies, nor state-owned companies represent a signifi- Associated companies and joint ventures
cant share of Telia Companys net sales or earnings. Telia Company sells and buys services and products to
The Swedish telecommunications market is governed and from associated companies. These transactions are
mainly by the Electronic Communications Act and ordi- based on commercial terms.
nances, regulations and decisions in accordance with the
Summarized information on transactions and balances with associated companies was as follows.
JanuaryDecember
or December 31,
Sales of goods and services

PAO MegaFon 76 96
Other 15 16
Total sales of goods and services 91 112
Total purchases of goods and services 96 83
Total trade and other receivables 17 7
Total trade and other payables 24 10
Pension and personnel funds Key management

As of December 31, 2016, Telia Companys Finnish pension See section Remuneration to corporate officers in Note
fund held 366,802 shares and its Finnish personnel fund C31 Human resources for further details.
673,749 shares in Telia Company AB, respectively, in total
representing 0.03 percent of the outstanding shares. For
information on transactions and balances, see Note C21
Provisions for pensions and employment contracts.
162
C29 CONTINGENCIES, OTHER CONTRACTUAL OBLIGATIONS

AND LITIGATION
Contingent assets and financial guarantees, continuing operations
As of the end of the reporting period, Telia Company had no contingent assets, while financial guarantees reported as
contingent liabilities were distributed as follows.
Credit and performance guarantees, etc. 112 15

Subtotal (see Liquidity risk Note C26) 112 15
Guarantees for pension obligations 287 283
Total financial guarantees 398 298
As of December 31, 2016, credit and performance guarantees represented the following expected maturities.

Credit and performance guarantees 96 16 112
Some loan covenants agreed limit the scope for divesting For all financial guarantees issued, stated amounts
or pledging certain assets. Some of Telia Company ABs equal the maximum potential future payments that Telia
more recent bond issuances include change-of-control Company could be required to make under the respective
provisions which under certain conditions allow the lenders guarantee.
to call back the bond before scheduled maturity. Condi-
tions stipulated include a new owner taking control of Telia Collateral pledged, continuing and discontinued
Company AB, as such also resulting in a lowering of Telia operations
Company ABs official credit rating to a non-investment As of the end of the reporting period, collateral pledged
grade level. was distributed as follows and are based on the total
Telia Company group including both continuing and
discontinued operations.
For cash: Investment bond pledge under repurchase agreements 559

For long-term borrowings: Real estate mortgages and chattel mortgages 137 226
For pension obligations: Real estate mortgages 2
For other provisions: Bonds and short-term investments 9 80
For operating leases: Blocked funds in bank accounts 47 45
Total collateral pledged 752 353
Other unrecognized contractual obligations, continuing operations

As of December 31, 2016, unrecognized contractual obligations regarding future acquisitions (or equivalent) of non-current
assets represented the following expected maturities.
Expected investment period JanMar AprJun JulSep OctDec Later

Intangible assets 171 31 5 3 211

Property, plant and equipment 1,146 398 99 195 842 1 1 2,681
Other holdings 1 1 1 1 1 5
Total (see Liquidity risk Note C26) 1,319 430 105 199 843 1 1 2,897
163
Most of the obligations with respect to property, plant and damages amounting to SEK 305 million plus interest in
equipment refer to contracted build-out of Telia Companys total. Telia Company has appealed and the law suits for
fixed networks in Sweden and a lease agreement relating damages are still ongoing.
to future data center i Finland. In 2005, Telia Company and ukurova signed an agree-
ment regarding Telia Companys purchase of shares
Legal and administrative proceedings in Turkcell Holding A.S. from ukurova. As ukurova
In its normal course of business, Telia Company is involved subsequently did not honor the agreement, Telia Company
in a number of legal proceedings. These proceedings pri- brought legal action. On September 1, 2011, an Internation-
marily involve claims arising out of commercial law issues al Chamber of Commerce (ICC) Arbitral Tribunal awarded
and matters relating to telecommunications regulations Telia Company USD 932 million in damages, plus interest
and competition law. Further, Telia Company is involved and costs, for ukurovas failure to deliver the Turkcell
in some proceedings related to interconnect fees, which Holding shares as required under the share purchase
could affect revenues. In addition, there are still ongoing agreement. Due to the refusal of ukurova to honor the
investigations in Sweden, the Netherlands and the USA ICC award, Telia Company conducts legal action to pursue
regarding Telia Companys operations in Uzbekistan and enforcement of the award. In parallel, ukurova pursues
suspected irregularities related to those and to the market legal actions against Telia Company with the aim to revert
entry into Uzbekistan. At this point in time, it is not possible the ICC award or to refute its enforceability. Telia Company
to assess how or when the investigations will be resolved. continues to vigorously pursue collection of the ICC award.
For more information see Risks and uncertainties section Telia Company has not recorded any award amount receiv-
Review of Eurasian transactions and not C34 Discontin- able in the financial statements. Following an agreement
ued operations and assets classified as held for sales. Ex- with Alfa Telecom (now LetterOne) signed in November
cept for the proceedings described below, Telia Company 2009, LetterOne is under certain circumstances entitled
or its subsidiaries are not involved in any legal, arbitration to receive part of the damages amount set out in the ICC
or regulatory proceedings which management believes award, if such funds will be successfully collected.
could have a material adverse effect on Telia Companys In 2012, Telia Company made an investment and ac-
business, financial condition or results of operations. quired a minority stake in Kaztranscom (through the hold-
During the second half of 2001, a number of operators ing company Rodnik), a company that operates a fibrenet-
filed complaints against Telia Company with the Swed- work and provides ITC services for the corporate segment
ish Competition Authority and the Authority initiated an in Kazakhstan. There is now a dispute with another
investigation regarding Telia Companys pricing of ADSL owner in Rodnik regarding, inter alia, the interpretation of
services. In December 2011, it was finally decided that agreements between the owners and of the management
Telia Company had abused its dominant position and responsibilities of the company. During 2016, the other
Telia Company has paid a fine of SEK 35 million. The two owner initiated arbitration proceedings in London against
operators Tele2 and Spray Network sued Telia Company Telia Company and requested damages for alleged breach
for damages they alleged had been caused by the abuse of contract and mismanagement. Telia Company will vigor-
in 2005 and 2006 respectively. The court of first instance ously defend itself in the proceedings that are expected to
ruled against Telia Company and awarded the plaintiffs continue during 2017.
164
C30 CASH FLOW INFORMATION
Non-cash transactions, continuing and Building-infrastructure exchange transactions

discontinued operations Telia Company provides and installs infrastructure in build-
Asset retirement obligations (AROs) ings and as compensation is granted an exclusive right to
In 2016 and 2015, obligations regarding future dismantling deliver services for 510 years through this infrastructure.
and restoration of technical sites entailed non-cash invest- These activities entailed non-cash exchanges of SEK 66
ments of SEK 258 million and SEK 295 million, respectively. million in 2016 and SEK 51 million in 2015.
Dividends, interest and income taxes, continuing and discontinued operations
SEK millions Jan-Dec 2016 Jan-Dec 2015

Dividends received 2,122 6,896
Interest received 785 1,381
Interest paid -2,448 -3,034
Income taxes paid -3,375 -3,166
Dividends to holders of non-controlling interests, continuing and discontinued operations
Subsidiaries
TeliaSonera Asia Holding B.V. -2,146
AO Kcell -142 -593
Latvijas Mobilais Telefons SIA -81 -93
TEO LT AB -7 -44
Other subsidiaries -52
Total dividends to holders of non-controlling interests -2,376 -781
Business combinations, other acquisitions and The total cash inflow from divestement of operations
disposals and other equity instruments in 2016 was SEK 12,084
The Telia Company group is continually restructured by million, which mainly related to the divestments of Ncell in
acquiring and divesting equity instruments or operations. Nepal of SEK 9.3 billion and Yoigo in Spain of SEK 2.6 bil-
The total net cash outflow from business combinations lion. For more information on these divestments, see Note
in 2016 was SEK 60 million. For information on business C34 Discountinued operations and assets classified as
combinations in 2016, see Note C33 Business combina- held for sale.
tions. No operations were divested in 2015. Cash inflow for
In 2015, the total net cash outflow from business combi- 2015 of SEK 4,724 million from other equity instruments
nations was SEK 5,213 million. The amount included SEK divested comprised the two last tranches received from
5,137 million relating to the acquisition of Tele2 Norway and AF Telecom Holding (AFT) relating to the sale of shares in
SEK 76 million relating to other minor business combina- MegaFon in 2012.
tions.
165
C31 HUMAN RESOURCES

Employees, salaries, and social security expenses discontinued operations decreased by 566 to 4,987 from
During 2016, the number of employees from continuing 5,553 at year-end 2015. The major part of the decrease
operations decreased by 312 to 21,030 at year-end from comes from divestment of Nepal and Spain.
21,342 at year-end 2015. The number of employees in
The average number of full-time employees by country was as follows.

Total of whom Total of whom
Country (number) men (%) (number) men (%)
Sweden 8,109 61.8 8,172 60.5

Finland 3,276 65.4 3,326 59.9
Norway 1,099 65.2 1,158 64.8
Denmark 1,161 69.7 1,132 70.3
Lithuania 2,885 50.1 2,978 50.9
Latvia 982 47.8 958 48.2
Estonia 1,888 58.8 1,931 54.5
Spain 78 64.2 103 64.1
Russian Federation 33 48.5 37 54.1
United Kingdom 49 71.4 49 63.3
Other countries 262 69.8 192 70.3
Total from continuing operations 19,822 60.5 20,036 58.7
Kazakhstan 1,877 43.0 1,801 41.6
Azerbaijan 716 61.7 820 54.5
Uzbekistan 1,032 63.7 953 62.1
Tajikistan 603 68.5 569 67.0
Georgia 375 46.3 357 45.4
Moldova 295 42.0 344 46.8
Nepal 130 74.2 522 73.9
Other countries 48 66.7 48 58.3
Total from discontinued operations 5,076 52.3 5,414 53.7
Total 24,898 58.8 25,450 57.7
In total, for 2016 and 2015 operations were conducted in 28 and 29 countries, respectively, of which continuing operations
were conducted in 21 countries.
The share of female and male senior executives was as follows. Boards of directors refer to board members in all consoli-
dated group companies. Other senior executives include presidents and other members of executive management teams
at the group level, region level and company level.
Dec 31, 2016 Dec 31, 2015

Boards of Other senior Boards of Other senior
Percent directors executives directors executives
Women 24.4 33.5 26.1 32.6

Men 75.6 66.5 73.9 67.4
Total continuing operations 100.0 100.0 100.0 100.0
Women 4.2 35.4 3.4 34.7
Men 95.8 64.6 96.6 65.3
Total discontinued operations 100.0 100.0 100.0 100.0
166
Total salaries and other remuneration, along with social security expenses and other personnel expenses, were as follows.
Salaries and other remuneration 9,534 9,408

Social security expenses
Employers social security contributions 2,056 1,992
Pension expenses 1,156 1,298
Total social security expenses 3,211 3,291
Capitalized work by employees -1,092 -969
Other personnel expenses 453 441
Total personnel expenses recognized by nature, continuing operations 12,105 12,171
Total personnel expenses, discontinued operations 1,096 1,495
Salaries and other remuneration were divided between senior executives and other employees as follows. Variable pay was
expensed in the respective year, but disbursed in the following year.

Senior executives Senior executives
(of which Other (of which Other
SEK in millions variable pay) employees variable pay) employees
Salaries and other remuneration, continuing operations 216 (16) 9,318 188 (11) 9,220
Salaries and other remuneration, discontinued operations 28 (3) 878 25 (1) 1,216
Pension expenses for all senior executives totaled SEK 27 Performance share program 2012 to 2014
million in 2016 and SEK 32 million in 2015. Financial targets are earnings per share (EPS) and total
In 2016 and 2015, employee profit-sharing costs in Telia shareholder return (TSR). The maximum number of perfor-
Companys Finnish subsidiaries amounted to SEK 70 mance shares a participant can receive corresponds to 30
million and SEK 38 million, respectively. In addition to this percent of the participants annual base salary. The final
employee profit-sharing system, all Telia Company regions allotments of performance shares will be based 50 percent
apply performance-based variable compensation for dif- on EPS development for each of the three years of the per-
ferent groups of employees. In Sweden, for example, all formance period in relation to EPS for the preceding year
permanent employees are included in variable compensa- and 50 percent on TSR during the full performance period
tion schemes, one type for the sales force and one for all of three years in relation to TSR of a group of comparable
other staff. telecom companies defined by the Board of Directors.
Participation in the program requires that the participant
Long-term incentive program (LTI) has invested in or allocated already held TeliaCompany
The 2010 to 2016 Annual General Meetings in Telia shares to the program corresponding to a value of 2 per-
Company AB resolved to implement performance share cent of the participants annual base salary. The maximum
programs (PSP), to be offered to a selected group of senior financial outcome for a participant, and the maximum num-
executives and key positions within the group. Members ber of performance shares that may finally be allotted in a
of the Group Executive Management team are excluded. program, shall be capped at such number of performance
If the pre-defined financial performance conditions are shares which aggregated market value corresponds to 37.5
met during the defined performance period, participants percent of each participants base salary.
in the programs shall receive a number of Telia Company PSP 2013 vested during the spring 2016 and 122,986
shares (performance shares) at a share price of SEK 0. shares were distributed to 71 participants remaining in the
The financial targets include a minimum level which must program. Final performance of PSP 2013 was 5.63 percent
be achieved in order for any allotment of performance (of maximum 30 percent). Telia Company AB acquired
shares to occur at all, as well as a maximum level over 118,398 own shares in April 2016, to an average price of
which no additional allottment of performance shares will SEK 38.6519 to cover the commitments under the PSP
occur. Each program shall in total comprise no more than 2013 program. Telia Company AB already held 4,588 own
1,360,000 (PSP 2013), 2,090,000 (PSP 2014), 3,793,200 shares.
(PSP 2015) and 2,370,400 (PSP 2016) TeliaCompany
shares, corresponding to approximately 0.03 percent of Performance share program 2015 to 2016
the total number of outstanding shares for PSP 2013, 0.05 Financial targets are earnings before interest, tax, depre-
percent for PSP 2014, 0.08 for PSP 2015 and 0.04 for PSP ciation and amortization (EBITDA) and total shareholder
2016, respectively. return (TSR). The maximum number of performance shares
Recalculation of final allotments of performance shares a participant can receive corresponds to 30 percent of the
shall take place in the event of an intervening bonus issue, participants annual base salary. The final allotments of
a split, a rights issue and/or other similar events. performance shares will be based 50 percent on accumu-
167
lated EBITDA and 50 percent on TSR during the full perfor- Participants are not required to invest in Telia Company
mance period of three years. TSR is measured in relation to shares. The final number of performance shares awarded
TSR of a group of comparable telecom companies defined shall be capped at such number where the aggregated
by the Board of Directors. market value corresponds to 60 percent of each partici-
pants base salary.
The summarized performance share program activity in 2016 was as follows.
Performance share program 2016/2019 2015/2018 2014/2017 2013/2016

Participants
Number of participants, December 31, 2015 191 136 75
New participants in 2016 202
Terminated employments in 2016 -7 -39 -25 -4
Vested employees in 2016 -71
Number of participants, December 31, 20161 195 152 111
Allotted shares
Preliminary allotments, December 31, 2015 777,530 105,545 129,210
Preliminary allotments in 2016 1,012,823 44,626
Forfeited shares 0 0 0
Cancelled shares -57,907 -182,598 -32,021 -6,224
Final allotments -122,986
Number of allotted shares, December 31, 2016 954,916 594,932 118,150
1) 25 participants, in total for all performance share programs, are part of discontinued operations.
The estimated fair values at the date of allotment and the assumptions used when estimating the achievements of the
performance conditions were as follows.
Performance share program 2016/2019 2015/2018 2014/2017 2013/2016
Fair value at the date of allotment (SEK in millions) 28 41 19 15

Assumptions used (percentages)
Achievement of EBITDA-based performance condition 50 50
Achievement of EPS-based performance condition 50 50
Achievement of TSR-based performance condition was based on
Estimated volatility, Telia Company 20 18 21 21
Estimated volatility, peer group companies 17-31 15-36 21-35 20-27
Average reciprocal correlation between Telia Company and the peer group compa-
nies 43 33 37 41
Risk-free interest rate -0.4 -0.3 0.9 1.0
The achievement of the TSR-based performance condition was estimated using a Monte Carlo simulation model.
The estimated fair value of each performance share program and related social security expenses are amortized to ex-
pense over the performance period. Total personnel expenses were as follows.
Salaries and other remuneration 28 23

Social security expenses 7 6
Total personnel expenses, performance share programs 35 29
Remuneration to corporate officers tee in the amount of SEK 200,000 (SEK 150,000) to the
Board of Directors Chair and SEK 150,000 (SEK 100,000) to each of the other
As resolved by the 2016 Annual General Meeting of members. Additional annual remuneration is also paid to
shareholders (AGM) in Telia Company AB, annual remu- the members of the Boards Remuneration Committee in
neration is paid to the members of the Board of Directors the amount of SEK 70,000 (SEK 65,000) to the Chair and
in the amount of SEK 1,600,000 (SEK 1,550,000) to the SEK 50,000 (SEK 45,000) to each of the other members.
Chair, SEK 775,000 (SEK 750,000) to the Vice-Chair and Remuneration to the Chair of the Sustainability and Ethics
SEK 545,000 (SEK 530,000) to each of the other direc- Committee is SEK 70,000 (SEK 150,000) and SEK 50,000
tors, elected by the AGM. In addition, annual remunera- (SEK 100,000) is paid to each of the other members.
tion is paid to the members of the Boards Audit Commit-
168
Remuneration to Board members
Sustainability
Audit Remuneration and Ethics Total
SEK in thousands Board1 Committee Committee Committee remuneration
Board of Directors, AGM 2016

Marie Ehrling, Chair 1,586 136 69 64 1,855
Olli-Pekka Kallasvuo, Vice-Chair 768 49 817
Susanna Campbell 392 36 428
Mikko Kosonen 541 92 633
Nina Linander 541 186 727
Martin Lorentzon 541 28 28 597
Anna Settman 392 36 428
Olaf Swantee 392 108 500
Board of Directors 2015-2016
Mats Jansson 150 13 163
Per-Arne Sandstrm 150 28 178
Kersti Strandqvist 150 28 178
Total 5,602 486 166 249 6,502
Sustainability
Audit Remuneration and Ethics Total
SEK in thousands Board Committee Committee Committee remuneration
Board of Directors, AGM 2015

Marie Ehrling, Chair 1,466 100 65 100 1,731
Olli-Pekka Kallasvuo, Vice-Chair 750 45 795
Mats Jansson 514 45 559
Mikko Kosonen 514 150 664
Nina Linander 514 150 664
Martin Lorentzon 514 100 100 714
Per-Arne Sandstrm 514 100 614
Kersti Strandqvist 514 100 614
Total 5,297 450 155 450 6,353
1) Board remuneration, remuneration for Audit Committee, remuneration for Remuneration Committee and remuneration for Sustainability and
EthicCommittee are presented in separate columns above. The remuneration is paid monthly. Marie Ehrling, Olli-Pekka Kallasvuo, Mikko Kosonen,
Nina Linander and Martin Lorentzon were re-elected at the AGM 2016. New Board members are Susanna Campbell, Anna Settman and Olaf Swan-
tee. Numbers may not add up due to rounding.
Group Executive Management The termination period may be up to six (6) months
The Chief Executive Officer (CEO) and the Other members (twelve (12) for the CEO) when given by the employee and
of the Group Executive Management referring to the two up to twelve (12) months when given by the Company. In
EVPs and the six SVPs directly reporting to the CEO, con- case the termination is given by the Company, the indi-
stituted the Telia Company Group Executive Management. vidual may be entitled to a severance payment up to twelve
The 2016 Annual General Meeting decided to approve (12) months.
the following guidelines for remuneration to the Group The severance payment is not included when calculating
Executive Management. vacation pay or pension benefits. The severance payment
Telia Companys objective is to offer remuneration levels will be reduced if the executive should receive income from
and other employment conditions required to attract, retain either a new employer or conducting his/her own business.
and motivate high calibre executives needed to maintain The executive may be entitled to a company car benefit,
the success of the business. Remuneration should be health care provisions, travel insurance etc. in accordance
built upon a total reward approach allowing for a market with local labor market practice. The Board of Directors are
relevant but not market leading and cost effective allowed to make minor deviations on an individual basis
executive remuneration based on the following compensa- from the principles stated above.
tion components: (1) base salary; (2) pension; and (3) other Acting Group Executive Management members keep
benefits. The base salary should reflect the competence their previous terms regarding Short term and Long term
required in the position and the responsibility, complexity variable pay, pension and benefits remain during the acting
and the business contribution of the executive. The base period. They also keep their existing notice periods.
salary should also reflect the performance of the executive Remuneration to the CEO and other permanent mem-
and consequently be individual and differentiated. Pen- bers of Group Executive Management consists of base
sion and other retirement benefits should be based on the salary, certain taxable benefits and pension benefits. As
defined contribution method. per December 31, 2016, Telia Company does not oper-
169
ate any share related incentive program in relation to the Board of Directors based on the recommendation of its
CEO, and other permanent members of Group Executive Remuneration Committee.
Management. Total remuneration packages to other members of
Applying the remuneration policy adopted at the AGM, Group Executive Management are approved by the
the CEOs total remuneration package is decided by the Remuneration Committee, based on the CEOs recom-
mendation.
Remuneration and other benefits during the year, capital value of pension commitments
Capital value
Other Other Pension Total of pension
SEK in thousands Base salary remuneration1 benefits2 expense3 remuneration commitment5
Group Executive Management, 2016
Johan Dennelind, CEO 15,794 1,358 75 6,204 23,431
Other members of Group Executive
Management (including 2 EVPs and 6 SVPs) 41,507 3,371 1,383 12,835 59,095 1,351
Total 57,301 4,729 1,457 19,039 82,526 1,351
Other former members of Group
Other former members of Group Executive
Management (1 individual)4 2,670 11 226 946 4,592
Other former CEOs and EVPs (8 individuals) 169,921
Total 2,670 11 226 946 4,592 169,921
Grand total 59,971 4,740 1,683 19,984 87,118 171,272
Capital value
Other Other Pension Total of pension
SEK in thousands Base salary remuneration benefits expense remuneration commitment
Group Executive Management, 2015
Johan Dennelind, CEO 14,490 147 74 5,685 20,396
Other members of Group Executive
Management (including 2 EVPs and 6 SVPs) 36,032 1,589 1,174 11,045 49,840 1,167
Total 50,522 1,736 1,249 16,730 70,236 1,167
Other former members of Group
Other former members of Group Executive
Management (5 individuals) 33,828 715 376 8,301 43,219 9,615
Other former CEOs and EVPs (8 individuals) 168,468
Total 33,828 715 376 8,301 43,219 178,083
Grand total 84,349 2,450 1,624 25,031 113,455 179,250
1) Other remuneration for the CEO is holiday allowance SEK 359,359 Pension benefits
(SEK 144,846), payment for unused vacation days SEK 998,808 and Telia Company offers permanent members of the Group
minor taxable expenses SEK 220 (SEK 2,060). Other remuneration for Executive Management defined contribution pension
Other Memebers of Group Executive management includes payment
schemes. A defined contribution scheme provides premi-
for unused vacation days.
um contributions to the pension scheme as a percentage
2) Other benefits refer to company cars and a number of other taxable
benefits. Other benefits for the CEO refer to car allowance SEK
of the pensionable salary. The level of pension benefits
60,000 (SEK 60,000) and health insurance SEK 14,630 (SEK 14,400). at retirement will be determined by the contributions paid
3) See further disclosures concerning the terms and conditions of pen- and the return on investments and the costs associated
sion benefits below. to the plan. The reasons behind the change in the capital
4) Other former members of Group Executive Management is one value of defined benefit pension commitments are due to
individual who has been a temporary member of the Group Executive changes in discount rate and retirement benefits paid to
Management. retirees.
5) Capital value of pension commitment includes defined benefit plans
for eight former CEOs and EVPs (left Telia Company before 2016).
CEO
Comments on the table related to 2015 can be found in the Annual and
The CEO is eligible to a defined contribution pension
Sustainability Report 2015. Numbers may not add up due to rounding.
scheme with contributions corresponding to 4.5 percent
170
of base salary up to 7.5 income base amounts and to 30 contributions to the pension schemes are vested immedi-
percent for such salary above 7.5 income base amounts. ately. The retirement age for members of Group Executive
In addition, contributions of 10 percent of base salary are Management is 65 or variable.
paid into the scheme. These contributions add up to a total
pension contribution per annum of SEK 6,204,229 (com- Other former members of Group Executive
pared to base salary for 2016 SEK 15,794,100 represent- Management
ing 39.3 percent). The contributions into the scheme are During the year there has been one member with a tempo-
vested immediately. The income base amount is deter- rary acting position within Group Executive Management.
mined annually by the Swedish Government and was This individual is participating in ITP plan section 1.
SEK 59,300 for 2016. Defined pension benefits earned by former CEOs and
The retirement age is variable. Contributions to the pen- EVPs until 2008 are pledged and calculated as capital
sion scheme will cease at retirement or earlier if leaving the values (debt) until all their lifelong pensions are fully paid
company for any other reason. out by Telia Company. Their pensions are paid out from the
age of 60. Within the total capital value for this category of
Other members of Group Executive Management SEK 169,920,843 (SEK 168,467,937), the capital value for
The EVPs and the SVPs are eligible to defined contribu- Marie Ehrling of SEK 8,075,343 (SEK 8,121,577) is included
tion pension schemes similar to the ITP plan section 1 relating to her period as president of Telia Company Swe-
providing contributions corresponding to 4.5 percent of den during 20022006. Pension is paid to Marie Ehrling
their base salary up to 7.5 income base amounts and 30 in the amount of SEK 705,180 (SEK 411,355). Since 2008,
percent of such salary above 7.5 income base amounts. TeliaCompany does not offer any defined benefit pension
Two members of Group Executive Mangement have an ad- schemes to CEOs and EVPs.
ditional contribution of 10 percent of their base salary. The
171
C32 REMUNERATION TO AUDIT FIRMS
The following remuneration from audit firms was ex- the group auditors. Auditors are elected by the Annual
pensed for audits and other reviews based on applicable General Meeting.
legislation and for advice and other assistance resulting Deloitte AB was re-elected at the Annual General Meet-
from observations in the reviews. Remuneration was also ing on April 12, 2016, as TeliaCompany ABs independent
expensed for independent advice, using group auditors or auditor (group auditor) for a one-year term. The audit of
other audit firms, in the fields of Tax/Law and Corporate the consolidated financial statements has been carried
Finance as well as other consulting services. Audit fees out throughout the year since the election. No separate
to other audit firms refer to subsidiaries not audited by renumeration has been expensed for the review of interim
financial statements.
Remuneration expensed, continuing and discontinued operations

Deloitte
Audits 40 46
Audit-related services 3 3
Tax services 1 1
All other services 22 17
Total Deloitte 65 67
EY
Audits 1 1
Audit-related services 0
Tax services 1 1
Total EY 13 6
KPMG
Audits 0 1
Tax services 6 8
Total KPMG 9 21
PwC
Audits 0 0
Audit-related services
Tax services 16 5
Total PwC 26 9
Other audit firms
Audits, audit-related services 0 0
Tax services and all other services
Total other audit firms 0 0
Total remuneration expensed 112 102
Total remuneration 112 102
Within the provisions of Swedish legislation, the Audit Committee of the Board of Directors of Telia Company AB is respon-
sible, among other matters, for the oversight of Telia Companys independent auditors. The Board of Directors has adopted
a policy regarding pre-approval of audit-related services and permissible non-audit services provided by audit firms.
172
C33 B USINESS COMBINATIONS
Minor business combinations during the period Business combinations after the reporting period
On March 1, 2016, Telia Company acquired all shares in the On February 1, 2017, Telia Company acquired all shares
Swedish company Telecom3 Fibernt i Sverige AB. The in Flt Communications AB (Fltcom), a company in the
cost and net cash outflow of the combination was SEK 26 Nordic connected public transportation market. The acqui-
million, all attributable to goodwill. On July 1, 2016, Telia sition will position Telia Company to become the leading
Company acquired a business, consisting of fibernetworks provider of Smart Public Transport services whilst laying a
from Comne Work AB. The cost of the acquisition foundation for further expansion in the Smart Transport &
was SEK 26 million. On December 30, 2016, Telia Com- Logistics and Smart City space. The preliminary cost of the
pany acquired a minor business from the Estonian combination, preliminary fair values of net assets acquired
company AK Ssteemid O, consisting of IT Hosting and and goodwill are presented in the table below.
Workplace management solutions. The cost of the acquisi-
tion was SEK 8 million.
SEK in millions Fltcom
Cost of combination 151

Whereof cash consideration 144
Fair value of net assets acquired

Property, plant and equipment and intangible assets 8
Other non-current assets 6
Current assets 32
Total assets acquired 47
Non-current liabilities 0
Current liabilities 12
Total liabilities assumed 13
Total fair value of net assets acquired 34
Goodwill 117
The net cash flow effect of the business combination On March 1, 2017, Telia Company acquired all of the
was SEK 138 million (cash consideration SEK 144 million shares in the Swedish company C-SAM AB, a company
less cash and cash equivalents in Fltcom SEK 6 million). that develops and maintains fiber and cable networks.
Transaction costs amounted to SEK 4 million. The total The cost of the acquisition was SEK 93 million. Since the
cost of combination and fair values have been determined acquisition was completed on March 1, 2017, fair values
provisionally, as they are based on preliminary apprais- for the net assets acquired have not yet been determined
als and subject to confirmation of certain facts. Thus, the and additional information is therefore not disclosed in this
purchase price accounting is subject to adjustment. annual report.
173
C34 DISCONTINUED OPERATIONS AND ASSETS CLASSIFIED

AS HELD FOR SALE
Classification services and debt purchase business) to Marginalen at an
Eurasia enterprise value of SEK 2.1 billion. In 2015, Sergels EBITDA
Former segment region Eurasia (including holding com- contribution, excluding non-recurring items, was SEK 206
panies) is classified as held for sale and discontinued million. The transaction is conditional on relevant regula-
operations since December 31, 2015. The holding com- tory approvals including the Swedish Financial Supervisory
panies will be divested or liquidated in connection with the Authority as well as Competition Authorities. The approvals
transactions. Telia Company is still committed to the plan are deemed highly probable and Sergel is therefore clas-
to divest the remaining parts of Eurasia and the delay dur- sified as held for sale since June 30, 2016. In the seg-
ing 2016 in the sales process was caused by events and ment reporting Sergel is part of Other operations. It is not
circumstances beyond Telia Companys control. A sales considered to represent a separate major line of business
agreement was signed in September 2016 for Tcell, but or geographical area of operations and is therefore not
regulatory approval has not yet been received for the trans- presented as discontinued operations.
action. For the other remaining parts of Eurasia different
circumstances arose during 2016 which led to that these Presentation
units were not sold by the end of the year. Telia Company Former segment region Eurasia (including holding com-
has taken actions necessary to respond the change in panies), which is classified as discontinued operations, is
circumstances and the units are being actively marketed at presented as a single amount in the consolidated state-
reasonable prices given the change in circumstances. The ments of comprehensive income. Comparative periods in
remaining Eurasian parts are available for immediate sale the consolidated statements of comprehensive income
and divestments of these units are deemed highly probable are restated to reflect the classification of region Eurasia
within one year. as discontinued operations. The consolidated cash flow
statement is presented including region Eurasia, but with
Yoigo additional information on cash flows from operating, invest-
Yoigo in Spain was classified as held for sale since June ing and financing activities and free cash flow for region
2016 when Telia Company signed an agreement to sell its Eurasia. Eurasia and Sergel are classified as held for sale
76.6 percent holding in the Spanish operator Yoigo. The and the related assets and liabilities are therefore present-
deal was closed on October 5, 2016, see Disposals. Yoigo ed separately in two line items in the consolidated state-
in Spain was a part of the reportable segment region Eu- ment of financial position. The amounts for discontinued
rope. It was not considered to represent a separate major operations and assets and liabilities held for sale (Eurasia
line of business or geographical area of operations and is and Sergel) in the consolidated financial statements are
therefore not presented as discontinued operations. presented after elimination of intragroup transactions and
intragroup balances.
Sergel
In June 2016, Telia Company signed an agreement to di-
vest its 100 percent holding in Sergel (credit management
Net income from discontinued operations (region Eurasia)

SEK in millions, except per share data Jan-Dec 2016 Jan-Dec 2015
Net sales 13,653 20,742
Expenses and other operating income, net 1 -20,701 -13,775
Operating income -7,048 6,967
Financial items, net -315 1,552
Income after financial items -7,364 8,519
Income taxes -1,208 -2,546
Net income before remeasurement and gain on disposal -8,572 5,973
Impairment loss on remeasurement to fair value less costs to sell 2 -2,400 -5,300
Gain on disposal of Ncell in Nepal (including cumulative Ncell exchange loss in
equity reclassified to net income of SEK 1,065 million)3 1,035
whereof loss attributable to parent shareholders -927
whereof gain attributable to non-controlling interests 1,962
Net income from discontinued operations 3 -9,937 673
EPS from discontinued operations (SEK) 3 -2.90 -0.19

EBITDA excl. non-recurring items 5,880 11,035
1) Operating expenses for 2016 include expenses relating to the provision for settlement amount proposed by the US and Dutch authorities. The provision is recognized as
a short-term provision relating to continuing operations in the consolidated statements of financial position, see Note C22.
2) Non-tax deductible.
3) Non-taxable gain.
174
Assets and liabilities classified as held for sale (region Eurasia and Sergel)
Eurasia Sergel, Total Eurasia
SEK in millions Dec 31, 20164 Dec 31, 2016 Dec 31, 2016 Dec 31, 2015
Goodwill and other intangible assets 7,562 38 7,601 10,821
Property, plant and equipment 7,551 6 7,557 10,379
Other non-current assets 448 251 699 586
Short-term interest-bearing receivables 1,889 1 1,890 1,382
Other current assets 4 2,329 568 2,898 1,957
Cash and cash equivalents 4 8,302 95 8,397 10,687
Assets classified as held for sale 28,082 960 29,042 35,812
Long-term borrowings 355 0 355 238
Long-term provisions 2,652 149 2,801 4,431
Other long-term liabilities 3,711 5 3,716 2,176
Short-term borrowings 1,612 1,612 1,230
Other current liabilities 4,932 211 5,144 3,524
Liabilities classified as held for sale 13,262 365 13,627 11,598
Net assets classified as held for sale 5 14,819 596 15,415 24,214
4) The major part of the minority owner Visors share of the sales price for Ncell and Visors share of the holding company Reynolds Holding has been distributed to Visor
during the third quarter of 2016 and SEK 0.3 billion remains within cash and cash equivalents of discontinued operations as of December 31, 2016. The provisions for
transaction warranties and the sales price for Telia Companys 60.4 percent ownership in Ncell and Telia Companys share in the holding company Reynolds Holding, as
well as sales price for Telia Companys economic interest in the 20 percent local shares in Ncell are included in continuing operations.
5) Represents 100 percent of external assets and liabilities, i.e. non-controlling interests share of net assets are included.
Measurement erations (Eurasia) would have been SEK 2.0 billion in 2016.
In accordance with IFRS 5, discontinued operations Depreciation and amortization in discontinued operations
(Eurasia) and assets held for sale (Sergel) are measured (Eurasia) for 2015 were SEK 3.6 billion.
at the lower of carrying value and estimated fair value less
costs to sell. The valuation is based on an assessment of Uzbekistan
the input from the sales process and the risks in the differ- Since December 31, 2015, the operations in Uzbekistan
ent countries. Fair value is the price that would be received (Ucell) is measured at estimated fair value less costs to sell
to sell the discontinued operations in an orderly transac- and is classified within Level 3 of the fair value hierarchy of
tion between market participants at the measurement date IFRS 13. For Ucell, valuations have been prepared based
under current market conditions. There are no directly ob- on the current business plan. Input from both internal and
servable (quoted) prices for Telia Companys discontinued external advisors have been considered in the valuations.
operations and fair values have therefore been estimated The following different valuation models have been used:
using other valuation techniques which require the use of Valuation multiples from comparable companies (peers)
judgment. on relevant financial metrics such as EBITDA and Oper-
Non-current assets included in discontinued operations ating free cash flow (OpFCF)
or disposal groups held for sale are not depreciated or am- Discounted cash flow (DCF) calculations, and
ortized. Depreciation and amortization in discontinued op- Brokers EBITDA multiple valuations of Ucell
The key assumptions used in the valuation models per December 31, 2016, and December 31, 2015, are presented in the
table below.
Terminal
Multiple range WACC % growth rate %
Enterprise value/EBITDA 3.00-3.50 (2.75-3.75)
Enterprise value/OpFCF 5.00-6.00 (4.75-5.75)
DCF 22.31-23.31 (20.78-21.78) 2.00-3.00 (2.00-3.00 )
Brokers EBITDA multiples 1.0-4.3 (2.5-4.0)
The combined results of the different valuation models lack of precedents and factual evidence, it is difficult to
provided an estimated range reflecting a normalized Enter- quantify the valuation impact of all such risks. Moreover,
prise value based on normal business risks. Apart from the any potential discount, will be highly subject to the specific
normal business risks, there are a number of specific risks views of an interested buyer. The normalized range for the
related to the valuation of Ucell such as cash repatriation estimated enterprise value was adjusted to reflect manage-
issues, the foreign exchange risks, the unstable regulatory ments best estimate of these specific risks.
environment, the historical compliance issues associated The remeasurement of the net assets in Ucell per De-
with Ucells previous minority shareholder and finding the cember 31, 2015, resulted in an impairment charge in the
right buyer from a sustainability point of view. Given the fourth quarter of 2015 of SEK 5.3 billion related to goodwill
175
and other fixed assets. Managements best estimate is been approved by all relevant authorities. Telia Company
that the risk adjusted debt free value of Ucell of SEK 3.3 has completed the sale at an enterprise value of USD
billion as of December 31, 2015, remains unchanged as of 1,030 million for its 60.4 percent ownership of Ncell and
December 31, 2016. Due to increased carrying values for Telia Companys share of the holding company Reynolds
Ucell, impairment charges of SEK 200 million, SEK 550 Holding. The transaction was subject to customary closing
million, SEK 600 million and SEK 600 million were recog- adjustments based on net debt and net working capital.
nized in the first, second, third and fourth quarters of 2016, Telia Company has been paid for Ncells cash position
respectively. In total Ucell was impaired by SEK 1,950 in proportion to its economic interest of 80.4 percent.
million in 2016. Furthermore, Telia Company has dissolved its economic
Changes in any of the estimated risk adjustments would interests in the 20 percent local ownership in Ncell and re-
have a material impact on the estimated fair value. The ceived approximately USD 48 million from Sunivera Capital
most significant impact on fair value will be the buyers Ventures, Singapore.
ability to operate in the country and convert local currency. The divestment, all transactions included, resulted in a
See also Risks and uncertainties, sections Emerging mar- total capital gain of SEK 1,258 million for the group in the
kets, and Review of Eurasian transactions. second quarter of 2016, whereof a loss of SEK -888 million
was attributable to owners of the parent and a gain of SEK
Tajikistan 2,146 million was attributable to non-controlling interests.
In September 2016, Telia Company signed an agreement The sale resulted in a loss for the parent shareholders
to sell its 60 percent holding in Central Asian Telecommu- mainly due to the carrying value of goodwill in Ncell (not
nications Development B.V., which controls CJSC Indigo attributable to minority) and provisions for parent share-
Tajikistan (Tcell), to the Aga Khan Fund for Economic holders transaction warranties. On signing in December
Development (AKFED). AKFED is currently the minority 2015, no material effect on net income (attributable to
owner in Central Asian Telecommunications Development parent shareholders) was expected, but final amounts were
B.V. with a 40 percent holding. The transaction is subject subject to deviations in foreign exchange rates and closing
to regulatory approvals in Tajikistan. The transaction price adjustments. Compared to the estimated net income effect
for Tcell is based on an enterprise value of USD 66 million, expected in December 2015, the capital loss relating to
of which Telia Companys 60 percent share corresponds parent shareholders of SEK -888 million recognized in the
to USD 39 million. Based on current FX-rates, the agreed second quarter of 2016 was effected by negative foreign
price implies an EV/EBITDA multiple of approximately 4.0x currency effects on the sales price, estimated closing
based on Tcells 2015 results. The transaction will have adjustments and estimated additional provisions for trans-
limited result and net debt impact. Based on the signed action warranties. In the fourth quarter of 2016 the total
agreement for Tcell and current information in the sales capital gain for the group was reduced to SEK 1,035 mil-
process of Roshan (financial asset relating to shares in lion, whereof a loss of SEK -927 million was attributable to
an operator in Afghanistan), managements best estimate owners of the parent and a gain of SEK 1,962 million was
is that the enterprise value for Tcell (100 percent) and the attributable to non-controlling interests. The change in the
value of the shares in Roshan (12.25 percent) combined as fourth quarter was mainly related to transaction warranties
of June 30, 2016, of SEK 600 million remains unchanged of the minority owners.
as of December 31, 2016. An impairment loss of SEK 450 The total price for all transactions was SEK 14.0 bil-
million was recognized in the second quarter of 2016 for lion, whereof SEK 12.6 billion has been received in cash
Tcell and Roshan. as of December 31, 2016. The price received in cash less
divested cash and cash equivalents in Ncell of SEK 3.3 bil-
Other parts of discontinued operations lion resulted in a net cash flow effect for the group of SEK
For the other remaining parts of discontinued opera- 9.3 billion for 2016. The net cash flow effect for the group
tions (excluding Ucell and Tcell), the estimated fair values was SEK 9.8 billion (relating to both parent shareholders
exceeds the carrying value and these parts have therefore and non-controlling-interests) in the second quarter of
not been remeasured at December 31, 2015 or December 2016 and changed to SEK 9.3 billion at the end of the third
31, 2016. The estimated fair values were based on a com- quarter 2016. The net cash flow change of SEK -0.5 billion
bination of indicative bids received, valuation discussions related to cash proceeds received in the third quarter of
with potential buyers and valuation models in the form of SEK 0.9 billion and SEK -1.4 billion which was part of the
multiples from comparable companies (peers) on relevant proceeds that were recognized as cash in the second
financial metrics such as EBITDA and discounted cash quarter that was reported as receivables in the third quar-
flow calculations. The specific risks of each country have ter of 2016. There were no cash flow changes during the
also been factored in to the fair value estimates. See Risks fourth quarter of 2016.
and uncertainties for more information on the risks. Provisions for transaction warranties are included in the
statement of financial position for continuing operations.
Disposals The sales price of SEK 12.9 billion for Telia Companys 60.4
Ncell in Nepal percent direct ownership and the minority owner Visors
On April 11, 2016, Telia Company completed the divest- 19.6 percent ownership in Ncell and their 100 percent
ment of its holdings in Ncell in Nepal to Axiata, one of ownership in the holding company Reynolds Holding, have
Asias largest telecommunication groups. The deal has been recognized in the legal entity TeliaSonera Norway
176
Nepal Holding. A liquidation process has been initiated Put options

for TeliaSonera Norway Nepal Holding, which is included Azertel Telekomnikasyon A.S. (Azertel), the parent
within discontinued operations. Telia Companys share of company of the mobile operator Azercell Telekom B.M.
the sales price of SEK 9.6 billion has been classified within (Azercell) in Azerbaijan, has a put option granted in 2008 in
continuing operations (whereof SEK 8.9 billion has been conjunction with the privatization of Azercell, now wholly-
included in cash and cash equivalents as of December 31, owned by Azertel. Should a deadlock regarding material
2016). The minority owner Visors share of the sales price decisions at the general assembly arise, the resolution
of SEK 3.3 billion was included within discontinued opera- supported by Fintur Holdings B.V. will apply. In such
tions and was classified as held for sale. The major part of circumstances, the put option gives the largest holder of
Visors sales price was distributed to Visor during the third non-controlling interests the right to sell its 42 percent
quarter and SEK 0.3 billion remains within cash and cash holding in Azertel to Fintur Holdings B.V. Telia Company
equivalents of discontinued operations as of December 31, consolidates 74.3 percent of Fintur. The exercise price is
2016. The sales price of SEK 1.0 billion for Telia Companys equal to the fair value at the time of exercise and is to be
economic interest in the 20 percent local shares has been determined by independent appraisal. The provision rep-
transferred to Telia Company AB and has been included resents the present value of managements best estimate
within cash and cash equivalents in continuing operations. of the amount required to settle the liability. The provision
The final amounts relating to the Ncell divestment are still may vary as a result of changes in Azertels estimated fair
subject to deviations in foreign exchange rates and trans- value and the timing of the option exercise.
action warranties. Ncell in Nepal was part of the former Uzbek Holding, the parent company of the mobile opera-
segment region Eurasia which is classified as discontinued tor OOO Coscom (Ucell) in Uzbekistan, had a put option
operations. granted that gave the non-controlling owner Takilant the
right to sell its 6 percent interest in Uzbek Holding to Telia
Yoigo in Spain Company. After the transfer during the fourth quarter
In June 2016, Telia Company signed an agreement to sell 2016 of the 6 percent non-controlling shares to the Dutch
its 76.6 percent holding in the Spanish operator Yoigo to authorities, the put option can no longer be exercised and
Masmovil, a Spanish telecommunications operator. The the provision for the put option has been derecognized.
deal has been approved by all relevant authorities and was See Subsidiaries in discontinued operations with material
completed On October 5, 2016, at a price of SEK 3.8 billion non-controlling interests.
for Telia Companys share. The divestment resulted in a Put options and financial receivables are offset in the
capital gain of SEK 4.5 billion, which is recognized as part statement of financial position when there is an enforce-
of Other operating income within continuing operations. able right to offset the recognized amounts and there is an
The transaction had a cash flow effect of SEK 2.6 billion intention to settle on a net basis, or to settle the put option
(price received in cash SEK 3.8 billion less divested cash and financial receivable simultaneously (Ncell before the
and cash equivalents in Yoigo SEK 1.2 billion) and has divestment and Rodnik).
reduced net debt for Telia Company by SEK 6.1 billion.
Financial risk management
Subsidiaries in discontinued operations with Telia Companys net investments in the Eurasia region is al-
material non-controlling interests though classified as discontinued operations, still exposed
AO Kcell and Azercell Telekom B.M. are held partly by in- to fluctuations in foreign exchange rates and managed
termediate holding companies where one is partly held by accordingly.
the associated company Turkcell. The NCI in Kcell is 38.1 Transaction risk on proceeds of the divestments is dealt
percent. Based on a put option granted, the NCI in Azercell with as a part of the groups established foreign exchange
is accounting-wise reduced to 30.5 percent. risk management procedures following the group policy
Based on put options granted on 6 percent of the share on financial management. The currency of the future sales
capital in TeliaSonera Uzbek Telecom Holding B.V. (Uzbek proceeds will probably not be the same as the local cur-
Holding), the subsidiary has previously accountingwise rency of the disposed operations.
been treated as a wholly-owned subsidiary of Telia Conversion risk in discontinued operations relates to the
Company. During the fourth quarter of 2016 the 6 percent net investments in foreign operations. The major curren-
shares owned by the non-controlling owner Takilant were cies contributing to the conversion risk are AZN, USD, UZS
transferred to the Dutch Authorities. As a result the put op- and KZT.
tion can no longer be exercised. The put option provision The surplus liquidity and liquidity position for the dis-
of SEK 686 million has therefore been derecognized with continued operations as of December 31, 2016, were SEK
a corresponding charge to other operating income within 8,397 million (SEK 10,687 million), which relate to cash and
discontinued operations. In addition a 6 percent non-con- cash equivalents. Based on the current liquidity position
trolling interest has been recognized in equity. and the expected disposal of the Eurasian operations
Before the divestment, Ncell Pvt. Ltd. was held by inter- within one year, Telia Companys liquidity risk relating to
mediate holding companies with an NCI of 39.6 percent, discontinued operations are considered limited.
but based on a put option granted the NCI was reduced to Credit risk is dealt with as part of the groups established
19.6 percent. credit risk management procedures following the group
177
policy, or where applicable, the subsidiarys policy on requirements, which states that the best estimate must be
financial management. recorded as a provision. As it is not possible for manage-
Interest rate risk is the risk that a change in interest rates ment to make another reliable estimate at this point in time,
will negatively affect the group net income or cash flows. this amount is the estimate of the expenditure required to
The interest-bearing borrowings in the discontinued opera- settle this matter at the balance sheet date. Disclosure of
tions refers mainly to fixed rate loans with short maturity further details regarding the assumptions and uncertain-
and considering the expected divestment of the operations ties of the provision is expected to prejudice seriously the
within one year the interest rate risk exposure for Telia position of Telia Company. Telia Company has therefore,
Company is therefore deemed limited. The interest rate risk in accordance with IAS 37.92, not presented any further
relating to cash and cash equivalents and receivables is information on the provision in this Annual report. From
deemed limited. end of December 2016, the provision is partly hedged for
changes in foreign currencies. The total net income effect
Provision for settlement amount proposed by the of the provision including foreign exchange effects and the
US and Dutch authorities hedge effect was SEK 13.5 billion for 2016.
The US and Dutch authorities have investigated historical The provision is recognized as a short-term provision
transactions related to Telia Companys entry into Uzbeki- in the consolidated statements of financial position. The
stan in 2007. As announced on September 15, 2016, Telia provision is classified as part of liabilities relating to con-
Company received a proposal from the authorities for reso- tinuing operations as the provision will not be part of the
lution of the pending investigations. The authorities have sale of the Eurasian net assets. The effect on net income
proposed a global resolution that includes a total financial is included in the line item Net income from discontinued
sanction of USD 1.45 billion. operations in the consolidated statements of comprehen-
Resolution of the various investigations is complex and sive income and disclosed as operating expenses in the
will require further discussion and negotiation with the table Net income from discontinued operations (Eura-
various government agencies involved in the investiga- sia) above. The net income effect is classified as part of
tions. Without certainty as to the timing and amount that discontinued operations based on that the expenses are
may be paid at the time of a final resolution, Telia Company related to the operations in Uzbekistan. The settlement
recorded a USD 1.45 billion (SEK 12.5 billion per Sep- amount is assumed to be non-tax deductible.
tember 30, 2016, which due to foreign currency changes
has increased to SEK 13.2 billion per December 31, 2016)
provision at the balance sheet date. This is in line with IFRS
178
Annual and Sustainability Report 2016 PARENT COMPANY FINANCIAL STATEMENTS
PARENT COMPANY INCOME STATEMENTS
Net sales P2 4 4
Cost of sales
Gross income 4 4
Selling and marketing expenses P3 -51 -53
Administrative expenses P3 -706 -1,140
Other operating income P4 9 19
Other operating expenses P4 -13,556 -91
Operating loss/income -14,300 -1,261
Finance income P5 22,684 11,234
Finance costs P5 -8,472 -3,470
Income after financial items -88 6,503
Appropriations P6 11,567 6,376
Income before taxes 11,479 12,879
Income taxes P6 -1,113 -1,194
Net income 10,367 11,685
179
PARENT COMPANY FINANCIAL STATEMENTS Annual and Sustainability Report 2016
PARENT COMPANY STATEMENTS

OF COMPREHENSIVE INCOME
Net income 10,367 11,685

Items that may be reclassified to net income
Cash flow hedges, net change in fair value 214 621
Cash flow hedges, transferred to finance costs in net income -343 -7
Available-for-sale financial instruments, net change in fair value 134 -2
Income taxes relating to other comprehensive income -1 -130
Total other comprehensive income P7 5 482
Total comprehensive income 10,372 12,167
180
PARENT COMPANY BALANCE SHEETS
Assets
Intangible assets P8 11 7
Property, plant and equipment P9 2 3
Deferred tax assets P6
Other financial assets P10 162,273 162,690
Total non-current assets 162,286 162,700
Trade and other receivables P11 35,043 41,740
Current tax receivables 581
Short-term investments P12 13,699 8,870
Cash and bank P12 3,576 9,903
Total current assets 52,898 60,513
Total assets 215,184 223,213
Shareholders equity and liabilities
Restricted equity
Share capital 13,856 13,856
Statutory reserve 1,855 1,855
Capitalized development expenses 1
Non-restricted equity
Other reserves 591 586
Retained earnings 53,615 54,919
Net income 10,367 11,685
Total shareholders equity 80,286 82,901
Untaxed reserves P6 8,786 12,666
Provisions for pensions and employment contracts P14 433 436
Deferred tax liabilities P6 36 10
Other provisions P15 49 58
Total provisions 519 504
Interest-bearing liabilities
Long-term borrowings P16 81,207 88,086
Short-term borrowings P16 29,642 37,537
Current tax payables 86
Non-interest-bearing liabilities
Long-term liabilities P17 9 8
Short-term provisions, trade payables and other current liabilities P15, P18 14,735 1,425
Total liabilities 125,594 127,142
Total shareholders equity and liabilities 215,184 223,213
181
PARENT COMPANY CASH FLOW

STATEMENTS
Net income 10,367 11,685

Adjustments for:
Amortization, depreciation and impairment losses 2,877 225
Capital gains/losses on sales/discards of non-current assets -118 48
Pensions and other provisions 12,942 8
Financial items 3,539 -1,382
Group contributions and appropriations -11,567 -6,376
Income taxes -641 989
Cash flow before change in working capital 17,399 5,197
Increase (-)/Decrease (+) in operating receivables -103 444
Increase (+)/Decrease (-) in operating liabilities -46 -801
Change in working capital -150 -358
Cash flow from operating activities 17,249 4,839
Intangible and tangible non-current assets acquired -7 0
Repayment of capital in subsidiary 501 380
Equity instruments acquired -1,495 -7,663
Equity instruments and operations divested 3,342 4,817
Loans granted and other similar investments -11,195 -11,775
Net change in interest-bearing current receivables 1,719 3,303
Repayment of long-term loans 2,716 711
Cash flow from investing activities -4,419 -10,227
Cash flow before financing activities 12,830 -5,388
Repurchased treasury shares including transaction costs -5 -14
Dividend to shareholders -12,990 -12,990
Group contributions net 7,394 7,980
Proceeds from long-term borrowings -337 8,050
Repayment of long-term borrowings -6,843 -8,173
Change in short-term borrowings -3,362 3,336
Settlement of derivative contracts for economic hedges and CSA 1,180 450
Cash received for repurchase agreements 6,975
Cash paid for repurchase agreements -6,416
Cash flow from financing activities -14,403 -1,361
Change in cash and cash equivalents -1,573 -6,748
Cash and cash equivalents, opening balance 13,558 20,379

Change in cash and cash equivalents -1,573 -6,748
Exchange rate differences in cash and cash equivalents 247 -73
Cash and cash equivalents, closing balance P12 12,232 13,558
Dividends received 21,796 7,917

Interest received 884 1,660
Interest paid -2,198 -2,866
Income taxes paid -1,754 -206
182
PARENT COMPANY STATEMENTS

OF CHANGES IN SHAREHOLDERS EQUITY
Reserve for
develop- Total share-
Share Statutory ment Fair value Retained holders
SEK in millions Note capital reserve expenses reserve earnings equity
Closing balance, December 31, 2014 13,856 1,855 104 67,917 83,732
Dividend P13 -12,990 -12,990
Share-based payments P25 7 7
Treasury shares -14 -14
Total comprehensive income 482 11,685 12,167
Closing balance, December 31, 2015 13,856 1,855 586 66,604 82,901
Dividend P13 -12,990 -12,990
Share-based payments P25 8 8
Treasury shares -5 -5
Capitalized development expenses P8 1 -1
Total comprehensive income 5 10,367 10,372
Closing balance, December 31, 2016 13,856 1,855 1 591 63,983 80,286
183
NOTES TO PARENT COMPANY

CONTENTS
Note Page
P1. Basis of preparation 185

P2. Net sales 185
P3. Expenses by nature 186
P4. Other operating income and expenses 186
P5. Financial income and finance costs 187
P6. Income taxes 188
P7. Other comprehensive income 189
P8. Intangible assets 190
P9. Property, plant and equipment 190
P10. Other financial assets 191
P11. Trade and other receivables 194
P12. Short-term investments, cash and cash equivalents 195
P13. Shareholders equity 195
P14. Provisions for pensions and employment contracts 196
P15. Other provisions 198
P16. Long-term and short-term borrowings 199
P17. Long-term liabilities 200
P18. Short-term provisions, trade payables and other current liabilities 200
P19. Financial assets and liabilities by category and level 201
P20. Financial risk management 202
P21. Operating lease agreements 203
P22. Related party transactions 203
P23. Contingencies, other contractual obligations and litigation 203
P24. Cash flow information 204
P25. Human resources 204
P26. Remuneration to audit firms 205
184
P1 BASIS OF PREPARATION
General with the Annual Reports Act in their separate financial
The parent company Telia Company ABs financial state- statements. RFR 2 states that as a main rule listed parent
ments have been prepared in accordance with the Swed- companies should apply IFRSs and specifies exceptions
ish Annual Reports Act, other Swedish legislation, and and additions, caused by legal provisions or by the con-
standard RFR 2 Accounting for Legal Entities and other nection between accounting and taxation in Sweden.
statements issued by the Swedish Financial Reporting
Board. The standard is applicable to Swedish legal entities Measurement bases and significant accounting
whose equities at the end of the reporting period are listed principles
on a Swedish stock exchange or authorized equity market With the few exceptions below, Telia Company AB applies
place. In their consolidated financial statements such com- the same measurement bases and accounting principles
panies have to comply with the EU regulation on interna- as described in Notes to consolidated financial statements
tional accounting standards, while they still have to comply (NoteC3).
Item Note Accounting treatment
Group contributions P6 Under certain conditions, it is possible to transfer profits through group contributions between Swedish
companies in a group. A group contribution is normally a deductible expense for the contributor and a
taxable income for the recipient. Group contributions are recognized as appropriations in the income
statement.
Borrowing costs P5, P8, P9 Borrowing costs directly attributable to the acquisition, construction or production of an asset are not
capitalized as part of the cost of that asset.
Investments in subsidiaries P5, P10 Shares in subsidiaries and associated companies are recognized at cost less any impairment. Dividends
and associated companies received are brought to income while a repayment of contributed capital reduces the carrying value.
Provisions for pensions and P5, P14 Pension obligations an pension expenses are recognized in accordance with the simplification rule for
employment contracts pensions in RFR 2 Accounting for legal entities.
Untaxed reserves and P6 Untaxed reserves and appropriations are reported gross excluding deferred tax liabilities related to the
appropriations temporary differences.
Capitalized development P8 The corresponding amount that has been capitalized as development expenses in the balance sheet as
expenses intangible assets have been recognized in the reserve for capitalized development expenses in equity.
Leasing agreements P21 All leasing agreements are accounted for as operating leases.
Amounts and dates Recently issued accounting standards

Unless otherwise specified, all amounts are in millions of For information relevant to Telia Company AB, see Notes
Swedish kronor (SEK million) or other currency specified to consolidated financial statements (corresponding sec-
and are based on the twelve-month period ended De- tion in Note C1).
cember 31 for income statement and cash flow statement
items, and as of December 31 for balance sheet items, Key sources of estimation uncertainty
respectively. For information relevant to Telia Company AB, see Notes to
consolidated financial statements (Note C2).
P2 NET SALES
Net sales amounted to SEK 4 million (SEK 4 million) and
were related to other services to internal and external
customers in Sweden.
185
P3 EXPENSES BY NATURE
Operating expenses are presented on the face of the income statement using a classification based on the functions Cost
of production, Selling and marketing expenses and Administrative expenses. Total expenses by function were distrib-
uted by nature as follows.
Other network expenses -5 -1

Personnel expenses (see also Note P25) -821 -717
Rent and leasing fees -34 -29
Consultants services -209 -275
IT expenses 29 -154
Invoiced and other expenses, net 287 -12
Amortization, depreciation and impairment losses -4 -4
Total -757 -1,193
Administrative and other parent company expenses which are not classified as shareholder costs are invoiced to the sub-
sidiaries and recognized as cost reductions. Amortization, depreciation and impairment losses were distributed by function
as follows.
Administrative expenses -4 -4
Total -4 -4
P4 OTHER OPERATING INCOME AND EXPENSES

Other operating income and expenses were distributed as follows.
Other operating income

Exchange rate gains 9 19
Total other operating income 9 19
Exchange rate losses -16 -30
Restructuring costs -57 -61
Other operating expenses -13,483
Total other operating expenses -13,556 -91
of which amortization, depreciation and impairment losses
Net effect on income -13,547 -72
of which net exchange rate gains/losses on derivative instruments held-for-trading
Other operating expenses 2016 include the income effect of the provision for settlement amount proposed by the US and
Dutch authorities. For more information, see Note C34.
186
P5 FINANCE INCOME AND FINANCE COSTS

Finance income and finance costs were distributed as follows.
Finance income
Dividends from subsidiaries 21,796 7,917
Capital gains from subsidiaries 152 1
Dividends from associated companies 0 0
Interest from subsidiaries 400 546
Other interest income 75 226
Changes in fair value of held for trading investments 10
Exchange rate gains 255 2,524
Interest to subsidiaries 10
Dividens from equity holdings 6
Total finance income 22,684 11,234
Finance costs
Impairment losses from subsidiaries -2,671 -207
Capital losses from subsidiaries -25 -
Capital losses from associated companies -15 -50
Impairment losses from other financial investments -202 -13
Other interest expenses -2,611 -3,043
Interest component of pension expenses -18 -16
Exchange rate losses -2,930 -23
Other financial expenses -118
Total finance costs -8,472 -3,470
Net effect on income 14,212 7,764

Details on other interest expenses, net exchange rate gains and losses and other interest income related to hedging activi-
ties, loan receivables, bonds and borrowings were as follows.
JanDec JanDec JanDec JanDec JanDec JanDec

2016 2015 2016 2015 2016 2015
Net exchange rate
SEK in millions Other interest expenses gains and losses Other interest income
Fair value hedge derivatives 387 -1,648 119 6

Cash flow hedge derivatives 10 -34 -457 96
Derivatives held-for-trading 695 1,117 125 -45
Loans and receivables 1,379 -1,129 14 179
Bonds available-for-sale 61 47
Borrowings in fair value hedge relationships -1,415 -1,450 -3,190 1,991
Borrowings and other financial liabilities at amortized cost -2,201 -965 -652 1,582
Other -87 -63 0
Total -2,611 -3,043 -2,675 2,501 75 226
Borrowings at amortized cost include items in cash flow hedge relationships as well as unhedged items.
187
P6 INCOME TAXES
Tax items recognized in comprehensive income
Tax items recognized in comprehensive income were distributed as follows.
Tax items recognized in net income

Current tax -1,057 -1,189
Adjustment of current tax related to prior years -1 -6
Deferred tax -54 1
Total tax expense recognized in net income -1,113 -1,194
Tax items recognized in other comprehensive income
Current tax -29 6
Deferred tax 28 -136
Total tax recognized in other comprehensive income -1 -130
Pre-tax income was SEK 11,479 million in 2016 and SEK 12,879 million in 2015. The difference between the nominal
Swedish income tax rate and the effective tax rate comprise the following components.
Percent JanDec 2016 JanDec 2015
Swedish income tax rate 22.0 22.0

Underprovided or overprovided current tax expense in prior years 0.0 0.1
Non-deductible expenses 29.8 0.8
Tax-exempt income -42.1 -13.6
Effective tax rate in net income 9.7 9.3
Non-deductible expenses consist mainly of the provision for settlement amount proposed by US and Dutch authorities. In
2016 and 2015, tax-exempt income consisted primarily of dividends from subsidiaries.
Deferred tax assets and liabilities

Deferred tax assets and liabilities changed as follows.
Deferred tax assets

Carrying value, opening balance 0 125
Reclassification from current tax 0
Offset tax liabilities/assets 54 -126
Carrying value, closing balance 0 0
Carrying value, opening balance 10
Offset tax assets/liabilities 54 -126
188
Temporary differences in deferred tax assets and liabilities were as follows.
Deferred tax assets

Delayed expenses for provisions 101 126
Offset deferred tax liabilities/assets -101 -126
Total deferred tax assets
Fair value adjustments, cash-flow hedges and assets available-for-sale 137 136
Offset deferred tax assets/liabilities -101 -126
Total deferred tax liabilities 36 10
Net deferred tax assets (+) / liabilities (-) -36 -10
In 2016 and 2015, there were no accumulated non-expiring tax loss carry-forwards or unrecognized deferred tax assets.
As of December 31, 2016 and 2015, the unrecognized deferred tax liability in untaxed reserves amounted to SEK 1,933 mil-
lion and SEK2,787 million, respectively.
Untaxed reserves and appropriations

As of December 31, 2016 and 2015, untaxed reserves in the balance sheet consisted of profit equalization reserves totaling
SEK8,786 million and SEK 12,666 million, respectively.
Change in profit equalization reserves 3,880 -1,190

Group contributions received 8,297 16,395
Group contributions paid -609 -8,829
Net effect on income 11,567 6,376
P7 OTHER COMPREHENSIVE INCOME

Other comprehensive income was distributed as follows.
SEK in millions Equity component JanDec 2016 JanDec 2015
Cash flow hedges

Net changes in fair value Fair value reserve 214 621
Transferred to finance costs in net income Fair value reserve -343 -7
Income tax effect Fair value reserve 28 -136
Total cash flow hedges -100 478
Available-for-sale financial instruments
Net changes in fair value Fair value reserve 134 -2
Transferred to finance costs in net income Fair value reserve 0 0
Tax effect Fair value reserve -29 6
Total available-for-sale financial instruments 105 4
Total other comprehensive income 5 482
of which total income tax effects (see also Note P6) -1 -130
189
P8 INTANGIBLE ASSETS
Accumulated cost 68 69
Accumulated amortization -57 -61
Carrying value 11 7
of which work in progress 7 1
Carrying value, opening balance 7 10
Investments 7 0
Disposals 0
Amortization for the year -3 -3
No general changes of useful lives were made during the function as well as in line item Other operating expenses.
year. For useful lives applied, see Notes to consolidated Accelerated amortization, to the extent allowed by Swedish
financial statements (corresponding section in Note C2). In tax legislation, is recorded as untaxed reserves and appro-
the income statement, amortization and impairment losses priations, see this section in Note P6 Income taxes.
are, if applicable, included in all expense line items by
The carrying value of intangible assets was distributed as follows.
Capitalized development expenses 4 6

Work in progress 7 1
Total carrying value 11 7
P9 PROPERTY, PLANT AND EQUIPMENT

Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31,
2016 2015 2016 2015 2016 2015
Equipment, tools
SEK in millions Plant and machinery and installations Total
Accumulated cost 6 6 17 19 24 25
Accumulated depreciation -4 -2 -17 -18 -22 -21
Carrying value 2 4 0 1 2 3
Carrying value, opening balance 3 4 0 1 3 5
Depreciation for the year -1 -1 0 -1 -1 -2
Carrying value, closing balance 2 3 0 0 2 3
No general changes of useful lives were made in 2016. as well as in line item Other operating expenses. Acceler-
For useful lives applied, see Notes to consolidated financial ated depreciation, to the extent allowed by Swedish tax
statements (corresponding section in Note C2). In the in- legislation, is recorded as untaxed reserves and appropria-
come statement, depreciation and impairment losses are, tions, see this section in Note P6 Income taxes.
if applicable, included in all expense line items by function
190
P10 OTHER FINANCIAL ASSETS

The total carrying value changed as follows.
Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31,
2016 2015 2016 2015 2016 2015 2016 2015
Investments in
Investments in subsidiaries and
associated companies Investments in other other non-current
SEK in millions and joint ventures equity instruments financial assets Total
Carrying value, opening balance 267 280 1,077 67 161,346 155,007 162,690 155,355
New share issues and shareholder
contributions 3 1,359 4,275 1,359 4,278
Repayment of capital -2 -501 -380 -503 -380
Repayment of borrowings and interest -3 -3
Additions 32 112 1,023 9,977 12,238 10,089 13,293
Disposals -15 -49 -9,309 -3,684 -9,324 -3,733
Impairment losses -197 -5 -13 -2,623 -207 -2,825 -220
Reclassifications to short-term investments 0 851 -5,911 851 -5,911
Changes in fair value 0 3 -65 9 -62 9
Carrying value, closing balance 54 267 1,186 1,077 161,031 161,346 162,273 162,690
For other financial assets, fair values equal carrying values. The total carrying values of other financial assets were
distributed as follows.
Carrying value
Investments in other equity instruments available-for-sale 1,160 1,052

Investments in other equity instruments held-for-trading 26 25
Bonds available-for-sale 10,185 8,841
Interest rate and cross currency interest rate swaps at fair value 4,453 4,742
of which designated as fair value hedges 1,039 1,193
of which held-for-trading 2,116 1,918
of which designated as cash flow hedges 1,298 1,631
Derivatives held-for-trading 65
Currency swaps and forward exchange contracts held-for-trading
Subtotal (see Fair value hierarchy levels Note P19) 15,823 14,725
Loans and receivables at amortized cost 54 51
Subtotal (see Categories Note P19 and Credit risk Note P20) 15,877 14,776
Investments in subsidiaries 139,239 144,226
Receivables from subsidiaries 7,103 3,421
Investments in associated companies 54 267
Total other financial assets 162,273 162,690
191
For Loans and receivables (including claims on associated in Note P20 Financial risk management, respectively.
companies), fair value is estimated at the present value of Conventional commercial terms apply for receivables from
future cash flows discounted by applying market interest subsidiaries.
rates at the end of the reporting period. Investments in subsidiaries are specified below, while
For more information on financial instruments by corresponding information on associated companies and
category/fair value hierarchy level and exposed to credit other equity instruments is presented in Notes to consoli-
risk, refer to Note P19 Financial assets and liabilities by dated financial statements (Notes C14 and C15).
category and level and section Credit risk management
Carrying value (SEK in millions)

Subsidiary, Participation Number of
Corp. reg. no., registered office (%) shares Dec 31, 2016 Dec 31, 2015
Swedish companies
Skanova AB, 556446-3734, Stockholm 100 21,255,000 25,616 27,819
TeliaSonera Sverige AB, 556430-0142, Stockholm 100 3,000,000 4,376 3,021
Telia Nttjnster Norden AB, 556459-3076, Stockholm 100 68,512 3,146 3,146
TeliaSonera Mobile Networks AB, 556025-7932, Stockholm 100 550,000 1,343 2,698
Cygate AB, 556549-8952, Solna 100 61,000 659 659
Telia Finance AB, 556404-6661, Solna 100 45,000 481 481
Telia Mobile Holding AB, 556855-9040, Stockholm 100 50,000 476 476
Telia Carrier AB, 556583-2226, Stockholm 100 1,000,000 453 453
Zitius Service Delivery AB, 556642-8339, Stockholm 100 2,079,000 353 353
Telia Frskring AB, 516401-8490, Stockholm 100 2,000,000 200 200
TeliaSonera Sverige Net Fastigheter AB, 556368-4801, Stockholm 100 5,000 169 169
Svenska Stadsnt AB, 556577-9195, Landskrona 100 100,000 70 70
Rtt Internet Kapacitet i Sverige AB, 556669-1704, Ume 100 8,500 31 31
Telia Asset Finance AB, 556599-4729, Solna 100 1,000 22 22
Quadracom Networks AB, 556606-6055, Gothenburg 100 10,000 9 71
Sergel Kredittjnster AB, 556264-8310, Stockholm 100 5,000 8 8
Svenska Stadsnt Transit AB, 556333-0934, Tby 100 1,000 8 23
TeliaSonera Network Sales AB, 556458-0040, Stockholm 100 10,000 7 7
Svenska Stadsnt Perspektiv AB, 559028-4153, Stockholm 100 500 4
We Care and Repair Nordic AB, 556989-3679, Stockholm 100 500 2 0
Vxj Support Center Frsljnings AB, 556663-4514, Vxj 100 1,000 1 5
Sergel Finans AB, 559067-6416, Stockholm 100 50,000 0
Other operating, dormant and divested companies 0 7
192
Carrying value (SEK in millions)

Subsidiary, Participation Number of
Corp. reg. no., registered office (%) shares Dec 31, 2016 Dec 31, 2015
TeliaSonera Finland Oyj, 1475607-9, Helsinki 100 1,417,360,515 74,863 74,863
Cygate Oy, 0752421-0, Helsinki 100 1,500,000 246 246
Sergel Oy, 1571416-1, Helsinki 100 267,966,000 149 277
Telia Carrier Finland Oy, 1649304-9, Helsinki 100 100 98 98
Bemecon Solutions Oy, 2442892-5, Esbo 100 10,000 6
Sergel Finans Oy, 2767856-7, Helsinki 100 250 0
Telia Norge AS, 981929055, Oslo 100 30,000 12,786 12,786
Sergel Norge AS, 984272170, Sandefjord 100 227,247 143 143
Telia Carrier Denmark A/S, 24210413, Copenhagen 100 1,000 172 172
TeliaSonera Danmark A/S, 18530740, Copenhagen 100 14,500 19 54
Sergel A/S, 35481036, Copenhagen 100 500,000 1 6
Argon A/S, 36462272, Copenhagen 100 500,000 1 1
TEO LT, AB, 121215434, Vilnius 88.2 513,593,681 4,144 3,310
UAB Sergel, 125026242, Vilnius 100 10,850 7 7
SIA Telia Latvija, 000305757, Riga 100 293,500 29 51
Telia Carrier Latvia SIA, 000325135, Riga 100 208,542 13 13
SIA Sergel, 010318318, Riga 100 3,507 4 4
Latvijas Mobilais Telefons SIA, 000305093, Riga 24.5 200,165 2 2
Telia Eesti AS, 10234957, Tallinn 100 137,954,528 5,686 5,686
Telia Carrier Estonia O, 12606073, Tallin 100 1 11 11
TeliaSonera Kazakhstan Holding B.V., 6547289, Rotterdam 100 10 1,355
Telia Carrier France S.A.S., B421204793, Paris 100 2,700,000 681 681
Telia Carrier UK Ltd, 02796345, London 100 1,010,000 268 268
Telia Carrier Germany GmbH, HRB50081, Frankfurt am Main 100 249 249
AO Telia Carrier Russia, 102780919327, Moscow 100 220,807,825 200 200
Telia Carrier U.S.Inc., 541837195, Herndon VA 100 3,000,100 136 136
Telia Carrier Czech Republic a.s., 26207842, Praque 100 20,000 126 126
Telia Carrier Austria GmbH, FN191783i, Vienna 100 118 118
Telia Carrier Netherlands B.V., 34128048, Amsterdam 100 910 59 59
Telia Carrier Switzerland AG, CHE-105.398.242, Zurich 100 1,000 54 54
Telia Frankfurt Property GmbH, HRB98956, Frankfurt am Main 100 49 49
Telia Carrier Poland Sp.z.o.o., KRS0000018616, Warsaw 100 22,500 37 37
Telia Carrier Hungary Kft, 01-09-688192, Budapest 100 19 19
Telia Carrier Italy S.p.A., 07893960018, Turin 100 530,211 17 17
Telia Carrier Bulgaria EOOD, 175215740, Sofia 100 29,210 14 14
TeliaSonera Telekomnikasyon Hizmetleri A.S., 381395, Istanbul 99.0 79,193 10 10
Telia Carrier Turkey Telekomnikasyon Ltd Sirketi, 609188, Istanbul 99.5 55,919 8 8
Telia Carrier Slovakia s.r.o., 36709913, Bratislava 100 7 7
Telia Carrier Ireland Ltd., 347074, Dublin 100 27 6 6
TOV Telia Carrier Ukraine, 34716440, Kyiv 100 6 6
Telia Carrier Romania S.R.L., 20974985, Bukarest 100 10,001 5 5
Telia Carrier Belgium S.A., 0469422293, Brussels 100 50,620 3 3
Telia Carrier Singapore Pte. Ltd., 200005728N, Singapore 100 1,200,002 1 1
Telia Carrier Canada, Inc., BC0968600, Vancouver, BC 100 100 1 1
TeliaSonera Assignments B.V., 24300363, Rotterdam 100 1,810,719,000 0 2
Telia Carrier Croatia d.o.o., 13282149307, Zagreb 100 1 0
Other operating, dormant and divested companies 1 4,702
Total 139,239 144,226
In 2016, the carrying value of Skanova AB was written of the intragroup disposal of all assets and liabilities been
down to reflect the operational performance and capital transferred to TeliaSonera Sverige AB. Telia Danmark is a
structure. Xfera Mviles S.A. was divested to Masmovil, branch of Telia Nttjnster Norden AB. Telia Companys
a Spanish telecommunications operator. The carrying stakes in the networksharing operations in Sweden and
value in UAB Omnitel has as part of the intragroup share Denmark are held through TeliaSonera Sverige AB and Tel-
disposal been transferred to TEO LT, AB and the carry- ia Mobile Holding AB, respectively. Another 24.5 percent of
ing value in TeliaSonera Mobile Networks AB has as part the shares in Latvijas Mobilais Telefons SIA are owned by a
193
subsidiary. Telia Company has a board majority on Latvijas ticipation in all companies. Other operating and dormant
Mobilais Telefons SIA. Telekomnikasyon Hizmetleri A.S. companies do not control group assets of significant value.
are owned by TeliaSonera Finland Oyj which also indirectly In addition to companies mentioned above, Telia Company
controls Fintur Holdings B.V. and TeliaSonera UTA Holding AB indirectly controls a number of operating and dormant
B.V. Equity participation corresponds to voting rights par- subsidaries of subsidiaries.
P11 TRADE AND OTHER RECEIVABLES

The carrying value of trade and other receivables were distributed as follows.
Interest rate and cross currency interest rate swaps designated as fair value hedges 301
Currency swaps and forward exchange contracts held for trading 942 1,154
Subtotal (see Fair value hierarchy levels Note P19) 1,243 1,154
Accounts receivable at amortized cost 2
Loans and receivables at amortized cost 0 2
Subtotal (see Categories Note P19 and Credit risk Note P20) 1,243 1,159
Receivables from subsidiaries 33,407 40,375
of which cash-pool balances and short-term deposits 25,234 32,325
of which trade and other receivables 8,173 8,050
Other current receivables 369 182
Deferred expenses 25 24
Total trade and other receivables 35,043 41,740
For Accounts receivable and Loans and receivables, the nies and joint ventures), at the end of the reporting period,
carrying values equal fair value as the impact of discount- concentration of credit risk by geographical area and by
ing is insignificant. For Accounts receivable and Loans and customer segment was as follows.
receivables (including receivables from associated compa-
Geographical area
Other countries 4
Total carrying value 4
Customer segment
Other customers 0 4
Total carrying value 0 4
For more information on financial instruments by category/ commercial terms apply for receivables from subsidiaries.
fair value hierarchy level and exposed to credit risk, refer to As of the end of the reporting period, allowance for
Note P19 Financial assets and liabilities by category and doubtful and ageing of Accounts receivable, respectively,
level and section Credit risk management in Note P20 were as follows.
Financial risk management, respectively. Conventional

Accounts receivable invoiced 2
Allowance for doubtful accounts receivable
Total accounts receivable 2
Accounts receivable not due 1
Accounts receivable past due but not impaired 1
of which 30180 days 0
of which more than 180 days 1
Total accounts receivable 2
194
As of the end of the reporting period, ageing of Loans and receivables (including receivables from associated companies)
were as follows.
Loans and receivables not due 2

Total loans and receivables 2
There were no bad debt expenses and no recovered accounts receivable in 2016 and in 2015.
P12 S HORT-TERM INVESTMENTS, CASH AND CASH EQUIVALENTS

Short-term investments, cash and cash equivalents were as follows.
Short term investments with maturities longer than 3 months 5,043 5,216
Short-term investments with maturities up to and including 3 months 8,656 3,655
of which bank deposits at amortized cost 4,846 2,421
Total short-term investments 13,699 8,870
Total (see Categories Note P19 and Credit risk Note P20) 17,275 18,773
of which cash and cash equivalents 12,232 13,558
Cash and cash equivalents are defined as the sum of ABs bank accounts. For more information on financial
Short-term investments with maturities up to and including instruments by category and exposed to credit risk, refer to
3 months and the balance sheet item Cash and bank. The Note P19 Financial assets and liabilities by category and
carrying values are assumed to approximate fair values as level and section Credit risk management in Note P20
the risk of changes in value is insignificant. As of December Financial risk management, respectively.
31, 2016, there were no blocked funds in Telia Company
P13 SHAREHOLDERS EQUITY

Share capital, treasury shares, earnings per The dividend should be split and distributed into two equal
share and dividends tranches of SEK 1.00 each, one in April 2017 and one in
See Notes to consolidated financial statements October 2017.
(corresponding sections in Note C19). The Board of Directors has, according to Chapter 18
Section 4 of the Swedish Companies Act, assessed
At the disposal of the Annual General Meeting: whether the proposed dividend is justified. The Board of
Directors assesses that:
SEK
The parent companys restricted equity and the groups
Retained earnings 54,206,643,071 total equity attributable to the shareholders of the parent
Net income 10,366,679,823 company, after the distribution of profits in accordance
Total 64,573,322,894 with the proposal, will be sufficient in relation to the scope
The Board proposes that this sum be appropriated of the parent companys and the groups business.
as follows: The proposed dividend does not jeopardize the parent
companys or the groups ability to make the investments
SEK
that are considered necessary. The proposal is consistent
SEK 2.00 per share ordinary dividend with the established cash flow forecast under which the
to the shareholders 8,660,169,562 parent company and the group are expected to manage
To be carried forward 55,913,153,332 unexpected events and temporary variations in cash flows
Total 64,573,322,894 to a reasonable extent.
The full statement by the Board of Directors on the same
will be included in the AGM documents.
195
P14 PROVISIONS FOR PENSIONS AND EMPLOYMENT CONTRACTS

Pension obligations and pension expenses Most pension obligations are secured by Telia Pension
The vast majority of employees in Telia Company AB are Fund. Certain commitments, such as certain supple-
covered by a defined benefit pension plan (the ITP-Tele mentary individual pension benefits and a right under the
plan and ITP 2 plan) which means that the individual is employment contracts for certain categories of personnel
guaranteed a pension equal to a certain percentage of his to retire at age 55, 60, or 63, are provided for by taxed
or her salary. The pension plan mainly includes retirement reserves in the balance sheet.
pension, disability pension and family pension. All employ- Pension obligations are calculated annually, as of the end
ees born in 1979 or later are covered by a defined contribu- of the reporting period, based on actuarial principles.
tion pension plan (the ITP1 plan).
Opening balance, pension obligations covered by plan assets 1,569 1,586

Opening balance, pension obligations not covered by plan assets 436 427
Opening balance, total pension obligations 2,005 2,013
Interest cost, paid-up policy indexation 125 105
Benefits paid -131 -127
Divested operations 0 0
Other changes in valuation of pension obligations -22 -15
Closing balance, pension obligations covered by plan assets 1,568 1,569
Closing balance, pension obligations not covered by plan assets 432 436
Closing balance, total pension obligations 2,001 2,005
of which PRI Pensionsgaranti pensions 1,343 1,357
The fair value of plan assets changed as follows.
SEK in millions, except percentages Dec 31, 2016 Dec 31, 2015
Opening balance, plan assets 2,421 2,358

Actual return 133 63
Closing balance, plan assets 2,555 2,421
Actual return on plan assets (%) 5.5 2.7
Provisions for pension obligations were recognized in the balance sheet as follows.
Present value of pension obligations 2,001 2,005

Fair value of plan assets -2,555 -2,421
Surplus capital in pension fund 987 852
Provisions for pension obligations 432 436
196
Total pension expenses (+)/income (-) were distributed as follows.

Interest cost, paid-up policy indexation 125 105
Less interest expenses recognized as financial expenses -18 -16
Actual return on plan assets -133 -63
Divested operations, pension obligations 0 0
Other changes in valuation of pension obligations -22 -15
Pension expenses (+)/income (-), defined benefit pension plans -25 41
Pension premiums, defined benefit/defined contribution pension plans and other pension costs 85 55
Pension-related social charges and taxes 52 51
Less termination benefits (incl. premiums and pension-related social charges) reported as restructuring cost -10 -6
Pension expenses (+)/income (-) 127 100
Decrease (-)/Increase (+) of surplus capital in pension fund 135 80
Recognized pension expenses (+)/income (-) 237 221
of which pension premiums paid to the ITP pension plan 6 5
Principal actuarial assumptions The principal calculation assumption is the discount rate
The actuarial calculation of pension obligations and pen- which, as a weighted average for the different pension
sion expenses is based on principles set by PRI Pension- plans and, as applicable, net of calculated yield tax, was
sgaranti and the Swedish Financial Supervisory Authority, 3,0 percent in 2016 and 3.2 percent in 2015. Obligations
respectively. were calculated based on the salary levels prevailing at
December 31, 2016 and 2015, respectively.
Plan-asset allocation
At the end of the reporting period, plan assets were allocated as follows.
Dec 31, 2016 Dec 31, 2015

Asset category SEK in millions Percent SEK in millions Percent
Fixed income instruments, liquidity 1,244 48.9 1,344 55.5

Shares and other investments 1,310 51.1 1,077 44.5
Total 2,555 100.0 2,421 100.0
of which shares in Telia Company AB
Future contributions and pension payments of the present value of pension obligations, Telia Company
As of December 31, 2016, the fair value of plan assets AB has no intention to make any contribution to the pen-
exceeded the present value of pension obligations. Unless sion fund.
the fair value of plan assets during 2017 should fall short
197
P15 OTHER PROVISIONS

Changes in other provisions were as follows.
December 31, 2016

Payroll taxes
on future pen- Restructuring Other Damages and Insurance
SEK in millions sion payments provisions provisions court cases provisions Total
Opening balance 20 50 240 23 333

of which financial liabilities at amortized cost
Provisions for the period 57 10 13,204 13,271
Utilized provisions -4 -64 -69
Reversals of provisions -240 -240
Reclassifications -1 -1
Closing balance 16 42 10 13,204 23 13,294
of which non-current portion 16 10 23 49
of which current portion 42 13,204 13,245
For financial liabilities, the carrying value equals fair value payments, damages and court cases, and insurance provi-
as provisions are discounted to present value. Refer to sions is expected in the period 2017-2029.
Note P19 Financial assets and liabilities by category and The provisions represent the present value of manage-
level for more information on financial instruments classi- ments best estimate of the amounts required to settle the
fied by category. liabilities. The estimates may vary mostly as a result of
Restructuring provisions mainly refer to staff redundancy changes in actual pension payments, changes in the actual
costs related to cost saving programs. The remaining pro- number of months an employee is staying in redeployment
vision as of December 31, is expected to be fully utilized in before leaving, changes in tax and other legislation and
2017-2018. Provisions for damages and court cases com- changes in the actual outcome of negotiations with les-
prises of the provision for settlement amount proposed sors, sub-contractors and other external counterparts as
by the US and Dutch authorities, for more information see well as the timing of such changes.
Note C34. Full utilization of payroll taxes on future pension
198
P16 LONG-TERM AND SHORT-TERM BORROWINGS

Open-market financing programs
For information on Telia Company ABs open-market financing programs, see Notes to consolidated financial statements
(corresponding section in Note C20).
Borrowings
Long-term and short-term borrowings were distributed as follows.
Dec 31, 2016 Dec 31, 2015

SEK in millions Carrying value Fair value Carrying value Fair value
Long-term borrowings
Open-market financing program borrowings in fair value hedge
relationships 37,189 46,135 37,672 41,021
Interest rate swaps at fair value 37 37 621 621
Cross currency interest rate swaps at fair value 2,648 2,648 1,694 1,694
Subtotal (see Fair value hierarchy levels Note P19) 39,873 48,819 39,988 43,337
Subtotal (see Categories Note P19) 81,207 94,028 87,896 96,914
Borrowings from subsidiaries 190
of which other borrowings 190
Total long-term borrowings 81,207 88,086
Short-term borrowings
Open-market financing program borrowings in fair value hedge
relationships 7,486 7,551
Interest rate swaps designated as hedging instruments 43 43
Interest rate swaps designated as held-for trading 3 3 7 7
Cross currency interest rate swaps as held-for trading 191 191
Subtotal (see Fair value hierarchy levels Note P19) 7,679 7,744 51 51
of which hedging net investments 1,584 1,589
of which at amortized cost 2,258 2,265 4,043 4,059
Other borrowings at amortized cost 559 559 3,354 3,354
Subtotal (see Categories Note P19) 10,496 10,567 9,031 9,052
Borrowings from subsidiaries 19,146 28,506
of which cash pool balances 9,229 26,603
of which other borrowings 9,917 1,903
Total short-term borrowings 29,642 37,537
As of December 31, 2016 and 2015, fully unutilized bank section Liquidity risk management in Note P20 Financial
overdraft facilities had a total limit of SEK 1,342 million and risk management. Refer to Notes to consolidated finan-
SEK 973 million, respectively. cial statements (corresponding section in Note C20) for
For additional information on financial instruments clas- further information on borrowings and the swap portfolio.
sified by category/fair value hierarchy level, refer to Note Conventional commercial terms apply for borrowings from
P19 Financial assets and liabilities by category and level, subsidiaries, which comprise cash-pool balances and other
and for information on maturities and liquidity risks, refer to borrowings.
199
P17 LONG-TERM LIABILITIES

The carrying value of long-term liabilities were distributed as follows.
Liabilities to subsidiaries 0 1
Other liabilities 9 7
Total long-term liabilities 9 8
For the years 2016 and 2015, no long-term liabilities fell due more than 5 years after the end of the reporting period.
P18 SHORT-TERM PROVISIONS, TRADE PAYABLES AND OTHER

CURRENT LIABILITIES
Short-term provisions, trade payables and other current liabilities were distributed as follows.
Subtotal (see Fair value hierarchy levels Note P19) 694 101
Accounts payable at amortized cost 86 132
Current liabilities at amortized cost 7 75
Subtotal (see Categories Note P19) 788 308
Liabilities to subsidiaries 497 551
Other current liabilities 13,450 567
Total short-term provisions, trade payables and other current liabilities 14,735 1,425
For Accounts payable and Current liabilities, the carrying by category/fair value hierarchy level and on liquidity risks,
value equals fair value as the impact of discounting is in- refer to Note P19 Financial assets and liabilities by cat-
significant. Other current liabilities mainly comprises of the egory and level and section Liquidity risk management
provision for settlement amount proposed by the US and in Note P20 Financial risk management. As of December
Dutch authorities, for more information see Note C34. For 31, 2016, contractual cash flows for liabilities at amortized
additional information on financial instruments classified cost represented the following expected maturities.
Expected maturity JanMar AprJun JulSep OctDec

SEK in millions 2017 2017 2017 2017 Total
Liabilities at amortized cost 94 0 0 0 94
Corresponding information for currency derivatives held-

for-trading is presented in section Liquidity risk manage-
ment to Note P20 Financial risk management.
Conventional commercial terms apply for trading with
subsidiaries.
200
P19 FINANCIAL ASSETS AND LIABILITIES BY CATEGORY AND LEVEL

Categories cluded are also investments in associated companies and
Carrying values of classes of financial assets and liabilities joint ventures as discussed in Note P10 Other financial
were distributed by category as follows. Financial assets assets and pension obligations as discussed in Note P14
and liabilities relating to subsidiaries are not included. Ex- Provisions for pensions and employment contracts.
Financial assets
Derivatives designated as hedging instruments P10, P11 2,637 2,824
Financial assets at fair value through profit and loss 3,084 3,162
Derivatives not designated as hedging instruments P10, P11 3,058 3,137
Held-for-trading investments P10 26 25
Long- and short-term bonds available-for-sale P10, P12 18,560 15,291
Loans and receivables P10, P11, P12 40,933 44,033
Available-for-sale financial assets P10, P12 1,160 1,052
Total financial assets by category 66,374 66,362
Financial liabilities
Derivatives designated as hedging instruments P16 2,346 2,139
Derivatives not designated as hedging instruments P16, P18 1,226 329
Financial liabilities measured at amortized cost P16, P18 108,562 124,015
Total financial liabilities by category 112,133 126,483
Fair value hierarchy levels

The carrying values of classes of financial assets and liabilities were distributed by fair value hierarchy level as follows.

of which of which
Fair Fair
SEK in millions Note value Level 1 Level 2 Level 3 value Level 1 Level 2 Level 3
Financial assets at fair value

Equity instruments available-for-sale P10 1,160 1,160 1,052 1,052
Investments in other equity instruments
held-for-trading P10 26 26 25 25
Long and short term bonds available-for-sale P10, P12 18,560 18,560 15,291 15,291
Derivatives designated as hedging instruments P10, P11 2,637 2,637 2,824 2,824
Derivatives held-for-trading P10, P11 3,058 3,058 3,137 3,072 65
Total financial assets at fair value by level 25,442 18,560 5,695 1,186 22,329 15,291 5,896 1,142
Financial liabilities at fair value
Derivatives designated as hedging instruments P16 2,346 2,346 2,139 2,139
Derivatives held-for-trading P16, P18 1,226 1,226 329 329
Total financial liabilities at fair value by level 3,572 3,572 2,468 2,486
There were no transfers between Level 1 and 2 in 2016 and 2015.
201
Level 3 financial assets changed as follows.

Equity Investments Equity Investments
instruments in other equity Derivatives instruments in other equity Derivatives
available- instruments held-for- available- instruments held-for-
SEK in millions for-sale held-for-trading trading Total for-sale held-for-trading trading Total
Level 3, opening balance 1,052 25 65 1,142 46 21 55 122

Changes in fair value -4 -4 12 0 10 22
of which recognized in net income -4 -4 -13 0 10 -3
of which recognized in other
comprehensive income 25 25
Purchases/capital contributions 48 1 49 994 4 998
Exercise of warrants 65 -65 0
Level 3, closing balance 1,162 26 0 1,186 1,052 25 65 1,142
Changes in fair value recognized in net income are included in line item Financial income and expenses, see specification
in Note P5 Financial income and expenses. For more information see Note C25.
P20 FINANCIAL RISK MANAGEMENT

Principles, capital management and management ments in equity instruments), with a maximum exposure
of financial risks equal to the carrying amount of these instruments (detailed
For information relevant to Telia Company AB, see Notes to in the respective Note and excluding receivables from sub-
consolidated financial statements (Note C26). sidiaries), as follows.
Credit risk management

Telia Companys exposure to credit risk arises from default
of counterparts (including price risks as regards invest-
Other financial assets P10 14,718 14,776

Trade and other receivables P11 1,244 1,159
Short-term investments, cash and cash equivalents P12 17,275 18,773
Total 33,237 34,708
For information on credit risk management relevant to Telia management relevant to Telia Company AB, see Notes to
Company AB, see Notes to consolidated financial state- consolidated financial statements (corresponding section
ments (corresponding section in Note C26). in Note C26).
As of December 31, 2016, contractual undiscounted
Liquidity risk management cash flows for interest-bearing borrowings and non-
Liquidity risk is the risk that Telia Company AB will en- interest-bearing currency derivatives (excluding intra-group
counter difficulty in meeting obligations associated with derivatives) represented the following expected maturities,
financial liabilities that are settled by delivering cash or including installments and estimated interest payments.
another financial asset. For information on liquidity risk The balances due within 12 months equal their carrying
values as the impact of discounting is insignificant.
202

Utilizied bank overdraft facilities 185 185

Open-market financing program borrowings 9,164 57 351 1,792 4,453 11,267 10,513 11,489 59,088 108,175
Cross currency interest rate swaps and
interest rate swaps
Payables 47,500 2,157 450 50,107
Receivables -47,131 -2,052 -448 -49,631
Currency swaps and forward exchange
contracts
Payables 6,770 950 57 3,079 6,755 5,306 7,685 1,110 26,392 58,104
Receivables -8,269 -1,077 -68 -3,000 -7,146 -5,696 -8,002 -1,133 -26,451 -60,842
Total, net 8,034 220 340 1,873 4,062 10,877 10,196 11,466 59,029 106,098
Expected maturities for and additional information on non-interest-bearing liabilities, guarantees and other contractual
obligations are presented in Notes P15 Other provisions, P18 Short-term provisions, trade payables and other current
liabilities and P23 Contingencies, other contractual obligations and litigation, respectively.
P21 OPERATING LEASE AGREEMENTS

Telia Company AB leases primarily office premises. Most of the leases are from outside parties. The leases are on com-
mercial terms with respect to prices and duration.
Future minimum leasing fees under operating lease agreements in effect as of December 31, 2016, that could not be
canceled in advance and were in excess of one year were as follows.

Future minimum leasing fees 8 8 8 8 33 32 32 47 0 177
In 2016 and 2015, total rent and leasing fees paid were SEK 43 million and SEK 29 million, respectively.
P22 RELATED PARTY TRANSACTIONS

General Commitments on behalf of related parties
Conventional commercial terms apply for the supply of Telia Company AB has made certain commitments on
goods and services to and from subsidiaries, associated behalf of group companies and joint ventures. See Note
companies and joint ventures. P23 Contingencies, other contractual obligations and
litigation for further details.
Subsidiaries
In 2016 and 2015, sales to subsidiaries totaled SEK 3 mil- Other transactions
lion and SEK 3 million, respectively, while purchases from For descriptions of certain other transactions with related
subsidiaries totaled SEK -343 million and SEK -166 million, parties, see Notes to consolidated financial statements
respectively. (Note C28).
P23 CONTINGENCIES, OTHER CONTRACTUAL OBLIGATIONS

AND LITIGATION
Contingent assets and financial guarantees
As of the end of the reporting period, Telia Company AB had no contingent assets, while financial guarantees reported as
contingent liabilities were distributed as follows.
Guarantees on behalf of subsidiaries 11,752 2,556

Guarantees for pension obligations 39 38
Total financial guarantees 11,791 2,595
203
Some loan covenants agreed limit the scope for divesting 2018. The guarantee was necessary for the companies
or pledging certain assets. For information on change-of- to distribute dividends within the Group. Guarantees on
control provisions included in some of Telia Company ABs behalf of subsidiaries also include SEK 532 million related
more recent bond issuances, see Notes to consolidated to Swedish pension obligations and SEK 684 million related
financial statements (corresponding section in Note C30). to vendor financing. In addition to financial guarantees
For all financial guarantees issued, stated amounts equal indicated above, guarantees for fulfillment of contractual
the maximum potential future payments that Telia Com- undertakings are granted by Telia Company AB on behalf
pany AB could be required to make under the respective of subsidiaries, as part of the Groups normal course of
guarantee. Guarantees on behalf of subsidiaries include business. At the end of the reporting period, there was no
SEK 9,106 million to TeliaSonera UTA Holding B.V. and indication that payment will be required in connection with
Sonera Holding B.V. to support the companies financially any such contractual guarantee.
if they can not meet their payment obligations until March
Collateral pledged
As of the end of the reporting period, collateral pledged was distributed as follows.
Investment bonds pledged under repurchase agreements 559

Total collateral pledged 559
Other unrecognized contractual obligations

As of December 31, 2016, unrecognized contractual obligations regarding future acquisitions (or equivalent) of non-current
assets represented the following expected maturities.
Oct
Expected maturity JanMar AprJun JulSep Dec Later
Other holdings 1 1 1 1 1 5
Total (see Liquidity risk Note P20) 1 1 1 1 1 5
Reported obligations refer to licenses for and adaption of business support systems.
Legal and administrative proceedings

For additional information relevant to Telia Company AB, see Notes to consolidated financial statements (corresponding
section in Note C29).
P24 CASH FLOW INFORMATION

Non-cash transactions
No non-cash transactions were performed during 2016 or 2015.
P25 HUMAN RESOURCES

The number of employees was 273 at December 31, 2016 (298 at year-end 2015). The average number of full-time
employees was as follows.

Total of whom Total of whom
Country (number) men (%) (number) men (%)
Sweden 286 51 288 48
Total 286 51 288 48
The share of female and male Corporate Officers was as follows. Corporate Officers include all members of the Board of
Directors, the President and the 10 other members (9 members in 2015) of Group Executive Management employed by
the parent company.
204
Dec 31, 2016 Dec 31, 2015

Other Other
Percent Board of Directors Corporate Officers Board of Directors Corporate Officers
Women 45.5 33.3 36.4 33.3

Men 54.5 66.7 63.6 66.7
Total 100.0 100.0 100.0 100.0
Total personnel expenses were distributed by nature as follows.
Salaries and other remuneration 418 343

of which performance share programs 8 7
Social security expenses
Employers social security contributions 131 109
of which performance share programs 3 2
Pension expenses 237 221
Total social security expenses 371 330
Other personnel expenses 32 44
Total personnel expenses recognized by nature 821 717
Salaries and other remuneration were divided between Corporate Officers and other employees as follows.

Corporate Officers Other Corporate Officers Other
SEK in millions (of which variable pay) employees (of which variable pay) employees
Salaries and other remuneration 67 () 351 91 () 252
Corporate Officers include members of the Board of Pension expenses and outstanding pension commit-
Directors and, as applicable, former Board members (but ments for Corporate Officers were as follows. There are no
exclude employee representatives); the President and, as pension benefit arrangements for external members of the
applicable, former Presidents and Executive Vice Presi- Board of Directors.
dents; and the 9 other members (9 members in 2015) of
Group Executive Management employed by the parent
company.
JanuaryDecember
or December 31,
Pension expenses 20 25
Outstanding pension commitments 171 183
For additional information, see sections Performance share programs and Remuneration to corporate officers in Notes
to consolidated financial statements (Note C31).
P26 REMUNERATION TO AUDIT FIRMS

Remuneration billed by audit firms was as follows. See additional information in Notes to consolidated financial statements
(NoteC32).
Remuneration expensed
Deloitte
Audit 9 11
Tax services 2
Total 15 30
205
GRI INDEX Annual and Sustainability Report 2016
GRI INDEX
GRI index and other sections of the Annual and Sustain- G4-5 Location of the organizations headquarters
ability Report have been prepared according to GRI G4 In
accordance Core. Additionally we use the Telecommuni- Stockholm, Sweden.
cations Sector Supplement. Deloitte has been engaged to
provide a limited level of assurance on these sections, see
Auditors Limited Assurance Report on the Sustainability
Report for more information. All disclosures in this GRI G4-6 Countries where the
index are covered by the limited assurance. organization operates
Some of the disclosures in this GRI index, while deemed
non-material, are nevertheless included as a response to See Our Company, section Where we operate.
specific stakeholder requests. In the case of a disclosure
not being fully reported, the omission is explained at the
end of the disclosure. G4-7 Nature of ownership and
The following exceptions to the reporting scope apply: legal form
Information from Yoigo in Spain and Ncell in Nepal are
excluded from 2016 reporting as they were divested dur- See Directors' report, section Telia Company share.
ing 2016, but are included in 2014 and 2015 information.
For 2016, information from Tcell in Tajikistan is included
only in reported energy, emissions (scope 1 and 2) and G4-8 Markets served
occupational health and safety figures.
See Our Company, section Where we operate.
STRATEGY AND ANALYSIS

G4-9 Scale of the organization
G4-1 CEO statement
See Our Company, section Telia Company and 2016 in
See Our Company, section Comments by the CEO. brief.
G4-2 Description of key impacts, risks, G4-10 Total workforce by employment type,
and opportunities employment contract, and region
See Our Company, sections How we create value and See Note C31 to the consolidated financial statements.
Trends and strategy and Sustainability Work, sections
Sustainability in Telia Company and Sustainability focus Omission: We do not report percentage of full-time and
area summary. part-time employees, or percentage of permanent and
temporary employees.
ORGANIZATIONAL PROFILE
G4-11 Percentage of employees covered by
G4-3 Name of the organization collective bargaining agreements
Telia Company AB (publ). 79 (79) percent of employees were covered by collective

bargaining agreements.
In the following countries the percentage is zero:
G4-4 Primary brands, products, and services Kazakhstan, Azerbaijan, Georgia, Czech Republic,
Germany, Hong Kong, Hungary, Netherlands, Poland,
See Our Company, section Where we operate. Singapore, United Kingdom, United States, Turkey, Italy
and Russia.
206
Annual and Sustainability Report 2016 GRI INDEX
Telia Company employees have the right to choose

G4-18 Process for defining report content and
whether or not to be represented by a trade union for the
aspect boundaries, and how the reporting
purpose of collective bargaining. No employee shall be
principles for defining report content have
discriminated against for exercising this right. All employ-
been implemented
ees should be aware of the basic terms and conditions of
their employment. Telia Company respectfully cooperates
Report content and aspect boundaries are defined through
with legitimate employee representatives and national
continuous or annual internal and external stakeholder
labor unions.
input, including discussions at Group Executive Manage-
ment and Board of Directors level on the strategic direction
of Telia Company's sustainability work, and as part of the
G4-12 Description of the supply chain process of producing the Annual and Sustainability Report.
See also Our Company, section Trends and strategy
See Sustainability Work, section Responsible and Sustainability Work, section Sustainability in Telia
procurement. Company.
G4-13 Significant changes during the reporting G4-19 Material aspects identified in the process
period regarding size, structure, ownership for defining report content
or supply chain
See Sustainability Work, section Sustainability in
See Our Company, section Telia Company and 2016 in Telia Company and Our Company, section Trends and
brief. strategy for an understanding of material topics that de-
fine our sustainability work and report content.
G4-14 How the precautionary principle is

approached G4-20 Aspect boundary within the organization
for each material aspect
For Telia Company the precautionary principle relates
mainly to product safety and electromagnetic fields. Our Material aspects are considered material for the entire
overall precautionary approach is addressed through the organization.
code of responsible business conduct, supplier code of
conduct, other policies, and the compliance framework.
G4-21 Aspect boundary outside the organization
for each material aspect
G4-15 Externally developed economic, environmen-
tal, and social charters, principles, or other ini- Material aspects are considered material for all external
tiatives to which the organization subscribes stakeholder groups.
or endorses
See Sustainability Work, section Sustainability in Telia

G4-22 Effect of any restatements of information
Company.
provided in previous reports, and the reasons
for such restatements
G4-16 Memberships of associations See Emissions.
See www.teliacompany.com/en/about-the-company/
public-policy/.
G4-23 Significant changes from previous reporting
periods in the scope and aspect boundaries
IDENTIFIED MATERIAL ASPECTS Operations in Nepal and Spain have been excluded from
AND BOUNDARIES parts of reporting as they were divested during the year.
G4-17 Entities included in the consolidated financial

statements, and whether any entity is not
covered by the report
See Our Company, section Where we operate and Note

C4 to the consolidated financial statements.
207
STAKEHOLDER ENGAGEMENT GOVERNANCE

G4- Stakeholder engagement G4-34-49 Governance of the organization with
24-27 regards to economic, social and environ-
mental impacts
See Our Company, section Strategy and trends and
Sustainability Work, section Sustainability in Telia Company. See Corporate Governance, sections Governing Bod-
ies, Shareholders, Board of Directors, Group-wide
governance framework and Sustainability Work, section
Sustainability in Telia Company.
REPORT PROFILE
G4-28 Reporting period
ETHICS AND INTEGRITY
Calendar year 2016.
G4-56 Values, principles, standards and norms
of behavior such as codes of conduct and
G4-29 Date of most recent previous report codes of ethics
March 2016. See Corporate Governance, section Group-wide govern-

ance framework and Sustainability Work, section Sus-
tainability in Telia Company.
G4-30 Reporting cycle
Annual. We regularly publish sustainability related infor- G4-58 Internal and external mechanisms for report-
mation on the Newsroom, and a bi-annual sustainabil- ing concerns about unethical or unlawful
ity update and law enforcement disclosure report. See behavior.
www.teliacompany.com/en/sustainability/reports/.
See Corporate Governance, section Enterprise risk man-
agement (ERM) framework.
G4-31 Contact point for questions regarding

the report or its contents
DISCLOSURE ON MANAGEMENT
Comments and feedback are important to help us develop APPROACH
our sustainability work and reporting. You are welcome to
For an understanding of how material aspects have been
contact us at sustainability-group (at) teliacompany.com.
identified, see Our Company, section Trends and strat-
egy and Sustainability Work, section Sustainability in
Telia Company. For more information about sustainability
G4-32 GRI content index governance, see Sustainability Work, section Sustainabil-
ity in Telia Company and the Governance section of each
GRI Index. respective focus area. The Code of Responsible Business
Conduct and other governing documents can be found at
www.teliacompany.com/en/about-us/public-policies.
G4-33 Policy and current practice with regard to Evaluation of management approach of material aspects
seeking external assurance to the report is the responsibility of the function responsible for the
specific material aspect, and is carried out mainly through
Deloitte has been engaged to provide a limited level of internal reporting and assessment, including to Group
assurance on sections of the Annual and Sustainability Executive Management and the Board of Directors. To
Report. Telia Company will continue this practice. understand how the management approach of material as-
pects connected to the Responsible business focus areas
was evaluated and revised during 2016, see the respec-
tive chapter. The management approach of other material
aspects was not significantly revised.
208
ECONOMIC G4-EC2 Financial implications and other risks and

opportunities due to climate change
Economic performance
G4-EC1 Direct economic value generated and See Directors' Report, section Risks and uncertainties.
distributed For additional information, see our Carbon Disclosure
Project Climate Change Response at www.cdp.net.
For detailed financial information, see the consolidated
financial statements.
Telia Company provides network access, telecommu- Indirect economic impacts
nications and other services to our customers, we buy G4-EC8 Significant indirect economic impacts
equipment to develop our networks and IT systems, and
we purchase mobile handsets and other consumer elec- See Our Company, section How we create value.
tronics from our suppliers. We pay salaries, dividends and
taxes that benefit our employees, local communities and Omission: we are unable to accurately quantify or report
national economies. These actions all generate monetary on our indirect economic impacts.
flows affecting TeliaSoneras stakeholders. For more infor-
mation, see Our Company, section How we create value.
Tax is an important sustainability issue, with high expec-
tations from stakeholders. Telia Company is a responsible ENVIRONMENT
tax payer, paying the amount of taxes legally due in any Energy
territory, in accordance with local legislation and interna-
See Emissions regarding reporting scope and changes
tional accepted principles. We promote the importance of
during the reporting period. All scope 1 energy except
transparency and fair, ethical tax practices.
solar energy is non-renewable. Part of scope 2 energy is
The table below lays out corporate income tax payments
renewable, see Sustainability Work, section Environmen-
by country.
tal responsibility for more information.
Income taxes paid

SEK in millions 2016 2015 2014 G4-EN3 Energy consumption within the organization
Sweden 1,773 220 906
Finland 0 0 -2 Direct energy consumption
by geographical area, GWh 2016 2015 2014
Norway 12 264 159
Denmark 0 0 0 Sweden 3 3 4
Lithuania 38 37 30 Europe 27 29 31
Latvia 27 23 28 Eurasia 104 161 178
Estonia 123 91 101 Direct energy consumption, total 134 193 213
Russia 90 82 100
Turkey 4 438 0 The figures include energy generated by solar powered
Other countries1 11 68 193 base stations in Tcell in Tajikistan and Ucell in Uzbekistan,
Total, continuing operations 2,078 1,223 1,515 2 GWh in total. Direct energy consumption consists mainly
Kazakhstan 268 685 649 of fuel for generators used to provide back-up power, and
Azerbaijan 416 410 359 for company cars. The large figure for Eurasia reflects the
Uzbekistan 0 6 12 need for back-up generators where or when access to grid
Tajikistan 73 136 123 electricity is limited or unavailable.
Georgia -10 0 24
Moldova 0 0 0 Indirect energy consumption
Nepal 453 661 492 by geographical area, GWh 2016 2015 2014
Other countries2 97 45 4 Sweden 439 434 444
Total, discontinued Europe 552 639 656
operations 1,297 1,943 1,663
Eurasia 403 421 398
Total 3,375 3,166 3,178
Other countries 47 41 29
1) Telia Carrier outside above countries. Indirect energy consumption, total 1,441 1,535 1,527
2) 4 countries.
1) Telia Carrier outside above areas.
Omission: we are unable to accurately report value gener-

ated and distributed for all stakeholder groups. As we gain The major share of indirect energy consumed (electricity,
a better understanding of the financial and social impact of district heating and district cooling) is used for running
our services we aim to improve this reporting. base stations and data centers. The figures also include
offices, stores and other locations such as warehouses.
Omission: we are unable to specify energy used for cool-

ing and heating of network equipment.
209
G4-EN5 Energy intensity G4-EN17 Other indirect greenhouse gas emissions

(scope 3)
See Sustainability Work, section Environmental
responsibility. Greenhouse gas emissions by
geographical area, ktons COe 2016 2015 2014
Sweden 3 4 4
G4-EN6 Energy saved due to conservation and Europe 3 3 2
efficiency improvements Eurasia 2 3 3
Other indirect emissions from
business travel, total 8 10 9
Energy savings initiatives, mainly related to replacing older
equipment at base stations and data centers, closing tech-
A significant share of the total emissions generated in our
nical sites and various office energy efficiency programs
value chain is generated at suppliers. Correctly calculating
accounted for reported savings of around 60 GWh.
these emissions is challenging across all markets as data
is often lacking or of low quality. Therefore we only report
business travel emissions from all countries.
Emissions
WRI, IEA, Defra and Nord Pool emission factors have been
used as a basis for calculating greenhouse gas (GHG)
G4-EN18 Greenhouse gas emissions intensity
emissions. Historical figures have been recalculated using
the most recent emission factors and are presented below
See Sustainability Work, section Environmental
as market-based emissions, with the following exceptions:
responsibility.
Eurasia, Other operations and operations in Spain
(which is reported as part of Europe) have been calcu-
lated using location-based emission factors, as well as
emissions from district heating and district cooling. G4-EN19 Reduction of greenhouse gas emissions
Operations in Spain and Nepal are excluded from 2016
figures as they were divested during the year, but are See Sustainability Work, section Environmental
included in 2014 and 2015 figures. responsibility.
Leased assets are generally considered as scope 1 and

scope 2. All major operations where Telia Company has Effluents and waste
financial control are included, unless otherwise noted. G4-EN23 Total weight of waste by type and disposal
Joint ventures are included based on ownership share. method
Emissions are reported as COe as we estimate that the
difference between CO and CO e is negligible.
Dismantled telephone poles,
ktons 2016 2015 2014
G4-EN15-16 Direct and indirect greenhouse gas Sweden 5 6 8
emissions (scope 1 and scope 2) Finland 1 4 6
Total 6 10 14
Greenhouse gas emissions
by geographical area, ktons COe 2016 2015 2014 Waste reporting covers only operations in Sweden and
Direct emissions (scope 1)
Finland, where we are confident in the data provided
Sweden 1 1 1
by waste handlers. To provide meaningful comparison
Europe 7 7 7 between scopes and years, we limit waste reporting to
Eurasia 25 40 44 include only dismantled telephone poles. These poles are
Direct emissions, total 33 48 52 mainly dismantled as part of the technology shift from
fixed to mobile networks.
Indirect emissions (scope 2) In addition, approximately 1,050 tons of electronic waste
Sweden 0 0 0
was reported. The accuracy of this figure is uncertain
Europe 58 105 112
as much of this waste, generated mainly from replac-
Eurasia 176 167 161
ing equipment at or decommissioning technical sites is
Other countries 20 17 12
handled by contractors. For more information, see Sus-
Indirect emissions, total 254 289 285
tainability Work, section Environmental responsibility.
Direct and indirect emissions, total 287 337 337
1) Telia Carrier outside above areas. Omission: we are continuously reviewing how we can
improve waste reporting.
Recalculating scope 2 emissions using a market-based
approach and excluding figures from Spain in 2016 pro-
duced a significant change to Europe.
210
Supplier environmental assessment Supplier assessment for labor practices

G4-EN32 Percentage of new suppliers screened G4-LA14 Percentage of new suppliers screened
using environmental criteria using labor practices criteria
See Sustainability Work, section Responsible See Sustainability Work, section Responsible
procurement. procurement.
Omission: we are unable to report separately on the Omission: we are unable to report separately on the
percentage of new suppliers. As we develop our supplier percentage of new suppliers. As we develop our supplier
assessment processes, this data might become available. assessment processes, this data might become available.
LABOR PRACTICES AND Labor practices grievance mechanisms

DECENT WORK G4-LA16 Number of grievances about labor
practices filed, addressed, and resolved
Occupational health and safety through formal grievance mechanisms
G4-LA6 Injuries, absenteeism, and work-related
fatalities See Corporate Governance, section Enterprise risk man-
agement (ERM) framework.
See also Sustainability Work, section Occupational health
and safety.
HUMAN RIGHTS
2016 2015
LTIF and SAR, by
geographical area LTIF1 SAR2 (%) LTIF SAR (%)
Investment
Sweden 0.32 3.0 0.44 2.5 G4-HR1 Significant investment agreements and
Europe 0.50 2.3 0.54 2.3 contracts that include human rights clauses
Eurasia 0.10 1.5 0.09 1.4 or that underwent human rights screening
Other countries 0.0 1.2 0.0 0.9
Total 0.36 2.4 0.41 2.2 See Sustainability Work, sections Human rights impact
assessments and Responsible procurement.
1) Total number of lost-time injuries per million possible working hours.
2) Total hours of sickness absence per possible working hours (full year
average).
3) Telia Carrier outside above areas. G4-HR2 Employee training on human rights poli-
cies or procedures concerning aspects of
Around 20 lost-time injuries were reported. Most injuries human rights that are relevant to operations
occurred in the course of normal work (e.g. in offices or
shops) or in traffic. A few cases were stress related. See Sustainability Work, sections New Code of Responsi-
There have been no fatal accidents involving Telia Com- ble Business Conduct and Freedom of expression.
pany employees reported during 2014-2016.
Non-discrimination
Omission: we do not consider reporting by gender rel-
evant, as there are no differences in work tasks. We are G4-HR3 Total number of incidents of discrimination
working on developing supplier reporting, see Sustainabil- and actions taken
ity Work, section Responsible procurement.
There were no substantiated cases, with cause for discipli-
nary action, of discrimination during the year.
Training and education
G4-LA11 Percentage of employees receiving
regular performance and career
development reviews
Since 2016, Telia Company has a new group-wide people

performance approach called YouFirst. See Corporate Gov-
ernance, section Group-wide governance framework.
YouFirst covers all employees in regions Sweden and
Europe. By year end, 71 percent had documented goals in
the YouFirst tool. Local companies in region Eurasia follow
the former performance management process which cov-
ers 86 percent of employees.
211
Freedom of association and collective ties were reported, many of which related to supporting
bargaining; Child labor; children and young people with healthcare or education.
Forced and compulsory labor Such activities support the local implementation of the All
in shared value creation strategy.
G4-HR4-6 Operations and suppliers identified with
significant risks regarding the right to Omission: we do not carry out local impact assessments.
exercise freedom of association and col- We aim to develop a more comprehensive approach
lective bargaining, child labor and forced to assessing the positive and negative impacts of our
and compulsory labor operations.
See Directors' Report, section Risks and uncertainties,

Sustainability Work, section Responsible procurement Anti-corruption
and UK Modern Slavery Act statement. We generally
consider these risks very small in Telia Companys own G4-SO3 Number and percentage of operations
operations, but bigger in parts of the supply chain. assessed for risks related to corruption
and the significant risks identified
Supplier human rights assessment See Sustainability Work, section Anti-bribery and
corruption and Directors' Report, section Risks and
G4-HR10 Percentage of new suppliers that were uncertainties.
screened using human rights criteria
See Sustainability Work, section Responsible

G4-SO4 Communication and training on anti-
procurement.
corruption policies and procedures
Omission: we are unable to report separately on the
See Sustainability Work, sections New Code of Responsi-
percentage of new suppliers. As we develop our supplier
ble Business Conduct, Anti-bribery and corruption and
assessment processes, this data might become available.
Responsible procurement.
Omission: We are unable to provide more accurate statis-

Human rights grievance mechanisms
tics than those provided in the above sections.
G4-HR12 Number of grievances about human rights
impacts filed, addressed, and resolved
through formal grievance mechanisms G4-SO5 Confirmed incidents of corruption
and actions taken
See Corporate Governance, section Enterprise risk man-
agement (ERM) framework. See Sustainability Work, section Anti-bribery and cor-
ruption, Corporate Governance, section Enterprise risk
management (ERM) framework and G4-SO8.
SOCIETY
Local communities Anti-competitive behavior
G4-SO1 Local community engagement G4-SO7 Total number of legal actions for anti-
competitive behavior, anti-trust, and
All local companies engage in a number of commercial monopoly practices and their outcomes
sponsorships, events, philanthropic donations and more
with the purpose of supporting local communities and to Azercell in Azerbaijan and Telia in Sweden were engaged in
build brand trust and awareness. It is up to the local com- ongoing legal cases with claims in excess of 10 MSEK.
pany to decide what is the most suitable engagement.
It is important that such sponsoring and donations are not
used to support unethical or corrupt business practices Compliance
or for purposes that are not in line with Telia Companys
values. To mitigate these risks, the group-wide instruc- G4-SO8 Monetary value of significant fines and total
tion for sponsorships and donations sets out a number number of non-monetary sanctions for non-
of principles regarding what to sponsor and support, and compliance with laws and regulations
the correct approval process. During 2016 we identified a
need to improve the level of understanding of and compli- Following a tax audit, Azercell in Azerbaijan was engaged
ance with the instruction. See Sustainability Work, section in a case related to payment of tax which resulted in a sig-
Anti-bribery and corruption. nificant amount being paid to the Azerbaijani tax authority
During the year a large number of non-commercial activi- by Azercell. Azercell has appealed the decision.
212
Local companies were engaged in a small number of TELECOMMUNICATIONS SECTOR

labor disputes, none of which resulted in significant fines.
Telia Company, some of its subsidiaries and former SUPPLEMENT
employees are involved in preliminary investigations in Health and safety
Sweden, the Netherlands and USA primarily relating to
investments in Uzbekistan. See Directors' Report, section IO4-6 Compliance with ICNIRP standards and
Risks and uncertainties for more information. guidelines related to radiofrequency
emissions and Standard Absorption Rate
of handsets and base stations
PRODUCT RESPONSIBILITY Our approach to electromagnetic fields (EMF) can be

Product and service labeling found in the group EMF policy at teliacompany.com/en/
about-the-company/public-policy/.
G4-PR5 Practices related to customer satisfaction,
including results of surveys measuring
customer satisfaction Access to telecommunication products
and services
We use NPS (Net Promoter Score) as the key measure to
track development towards reaching our vision of becom- PA1-2 Policies and practices to overcome barriers
ing loyalty leader on all our markets. NPS was introduced for access and use of telecommunications
as a group-level KPI in 2015 and is complemented by products and services
regular brand tracking in terms of brand consideration
and preference. Results are analyzed and action plans are See Sustainability Work, section All in - shared value
developed on both group and country level. creation.
Due to changes during 2016 in how NPS is measured
and calculated, we cannot present comparable, relevant
figures for 2015 and 2016. PA6 Programs to provide and maintain tele
communication products and services in
Omission: We aim to present comparable NPS figures in emergency situations and disaster relief
2017 reporting.
We are prepared to assist in rescue work and disaster relief
following major emergencies and disasters. Maintaining
Marketing communications telecommunications is vital to facilitate rescue work and
G4-PR7 Total number of incidents of non-compli- for helping affected people.
ance with regulations and voluntary codes In 2015, Nepal was hit by major earthquakes. Ncell in
concerning marketing communications Nepal collaborated with the Swedish non-profit organiza-
tion Flowminder to provide aid agencies with updated
No significant cases. people displacement data based on anonymized call detail
record (CDR) data. See 2015 annual and sustainability
report, Sustainability Work, section Sponsorships and
donations for more information.
Customer privacy
G4-PR8 Total number of substantiated complaints
regarding breaches of customer privacy Access to content
and losses of customer data
PA7 Policies and practices to manage human
rights issues relating to access and use of
Around 25 substantiated complaints involving local data
telecommunications products and services
protection authorities were reported. Most cases related to
system errors or failures which caused customer data to
See Sustainability Work, sections Freedom of expression
be visible for other customers or online, or customer data
and Human rights impact assessments.
being sent to the wrong customer. In all reported cases,
local companies cooperated with national supervisory
authorities to correct the errors.
Omission: There are likely additional similar cases that

have not been reported. We are working on improving
internal reporting practices, including common definitions
and logging of cases.
213
OTHER INFORMATION
BOARD OF DIRECTORS AND PRESIDENTS CERTIFICATION Annual and Sustainability Report 2016
BOARD OF DIRECTORS AND

PRESIDENTS CERTIFICATION
The Board of Directors and the President and CEO certify that the consolidated financial statements have been prepared
in accordance with IFRSs as adopted by the EU and give a true and fair view of the Groups financial position and results
of operations. The financial statements of the Parent Company have been prepared in accordance with generally accepted
accounting principles in Sweden and give a true and fair view of the Parent Companys financial position and results of
operations.
The Board of Directors' Report for the Group and the Parent Company provides a fair review of the development of the
Groups and the Parent Companys operations, financial position and results of operations and describes material risks
and uncertainties facing the Parent Company and the companies included in the Group.
Marie Ehrling Olli-Pekka Kallasvuo Agneta Ahlstrm

Chair of the Board Vice-Chair of the Board Board member,
employee representative
Susanna Campbell Stefan Calsson Mikko Kosonen

Board member Board member, Board member
Nina Linander Martin Lorentzon Anna Settman

Board member Board member Board member
Olaf Swantee Peter Wiklund

Board member Board member,
Johan Dennelind
President and CEO
Our auditors report was rendered on March 8, 2017
Deloitte AB
Jan Nilsson
Authorized Public Accountant
214
OTHER INFORMATION
Annual and Sustainability Report 2016 AUDITORS REPORT
AUDITORS REPORT
To the general meeting of the shareholders of Telia Company AB (publ)
corporate identity number 556103-4249
REPORT ON THE ANNUAL REVENUE RECOGNITION

ACCOUNTS AND CONSOLIDATED Risk description
ACCOUNTS In Telia Company, net sales amount to SEK 97.8 billion
Opinions including discontinued operations and comprise of several
We have audited the annual accounts and consolidated different revenue streams such as traffic charges including
accounts of Telia Company AB (publ) for the financial year interconnect and roaming, subscription fees, installation
2016-01-01 - 2016-12-31 except for the corporate govern- fees, services and equipment sales. Telia Company may
ance statement on pages 51-70. The annual accounts and bundle services and products into one customer offer-
consolidated accounts of the company are included on ing. Offerings may involve the delivery or performance of
pages 22-50, 100-205 and 214 in this document. multiple products, services, or rights to use assets (multiple
In our opinion, the annual accounts have been prepared deliverables).
in accordance with the Annual Accounts Act and present We focused on this area since there are a number of risks
fairly, in all material respects, the financial position of the mainly relating to the interpretation and application of ac-
parent company as of 31 December 2016 and its financial counting principles which include management estimates
performance and cash flow for the year then ended in as to when the revenue should be recognized, and as well
accordance with the Annual Accounts Act. The consoli- the completeness and valuation of revenue which mainly
dated accounts have been prepared in accordance with derives from the use of complex billing systems and data
the Annual Accounts Act and present fairly, in all material applications. In these systems and applications a vast
respects, the financial position of the group as of 31 De- amount of data are generated when customers use Telia
cember 2016 and their financial performance and cash flow Companys services and networks.
for the year then ended in accordance with International Fi-
nancial Reporting Standards (IFRS), as adopted by the EU, Audit procedures
and the Annual Accounts Act. Our opinions do not cover Our audit procedures included, but were not limited to:
the corporate governance statement on pages 51-70. The evaluating the design and testing operational effec-
statutory administration report is consistent with the other tiveness of key internal controls, including relevant IT
parts of the annual accounts and consolidated accounts. systems, used for billing and monitoring of revenue
We therefore recommend that the general meeting of recognition;
shareholders adopts the income statement and balance review of billing and revenue recognition policies with
sheet for the parent company and the group. respect to significant new services, products and tariff
plans during the year to determine appropriate revenue
Basis for Opinions recognition;
We conducted our audit in accordance with International analytical and detailed audit procedures for a selection
Standards on Auditing (ISA) and generally accepted audit- of recognized revenue and
ing standards in Sweden. Our responsibilities under those evaluating the adequacy of disclosures related to the
standards are further described in the Auditors Responsi- various revenue streams.
bilities section. We are independent of the parent company
and the group in accordance with professional ethics for ac- For further information, please refer to the Groups ac-
countants in Sweden and have otherwise fulfilled our ethical counting principles in note C3 on page 111-120, the key
responsibilities in accordance with these requirements. management judgements made in note C2 on pages
We believe that the audit evidence we have obtained is suf- 107-108 and the disclosures for Net Sales in note C6 on
ficient and appropriate to provide a basis for our opinions. page 124 and information of Net Sales in discontinued
operations in note C34 on page 174.
Key Audit Matters
Key audit matters of the audit are those matters that, in our
professional judgment, were of most significance in our CARRYING VALUE OF ASSETS
audit of the annual accounts and consolidated accounts of Risk description
the current period. These matters were addressed in the Telia Companys recorded values of intangible and other
context of our audit of, and in forming our opinion thereon, non-current tangible assets amount to SEK 129.1 billion
the annual accounts and consolidated accounts as a whole, excluding assets-held-for-sale and represent a significant
but we do not provide a separate opinion on these matters. part of Telia Companys total assets. Telia Company is
215
OTHER INFORMATION
AUDITORS REPORT Annual and Sustainability Report 2016
required to test such assets for impairment annually or on judgements and estimates. In addition the divestment
whenever events or changes in circumstances indicate requires a thorough governance structure to ensure com-
that the carrying value of an asset may not be recoverable. pliance with local and international legislation and internal
A number of significant assumptions and estimates are policies.
involved when testing assets for impairment, among other
determine fair value less costs of disposal, identification Audit procedures
of cash generating units, estimation of expected future Our audit procedures included, but were not limited to:
discounted cash flows and determine the weighted average review of Telia Companys actions in order to divest the
cost of capital (WACC). The process for preparing impair- operations and assets in Eurasia;
ment test also includes relevant management and board identification and analysis of facts and circumstances
approvals of business plans and valuations. to assess if former segment region Eurasia should be
We focused on the impairment test of intangible and classified as held for sale and reported as discontinued
other non-current tangible assets as the carrying value of operations as of 31 December, 2016, in accordance with
such assets is material and the tests are sensitive to chang- IFRS 5;
es in assumptions. review and evaluation of the Board of directors and
managements process to determine fair value less costs
Audit procedures to sell;
Together with our valuation specialists our audit proce- review of capital gain or loss calculations including
dures included, but were not limited to: presentation in the financial reporting and adequacy of
gained an understanding of managements process for disclosures;
identifying indicators of impairment; gained an understanding of the divestment processes
evaluating the assumptions and methodologies used by including assessment of compliance to relevant legisla-
management when testing assets for impairment includ- tion and internal policies as well as testing adequate
ing sensitivity analyses; approvals.
evaluating the adequacy of disclosures related to those
assumptions to which the outcome of the impairment For further information please refer to the Groups ac-
test is most sensitive. counting principles in note C3 on pages 111-121, the key
management judgements made for classification and
For further information, please refer to the Groups ac- valuation of assets held for sale in note C2 on page 110 and
counting principles in note C3 on pages 111-121, the key the information on assets held for sale and discontinuing
management judgements made for valuation in note C2 on operations in note C34 on page 174-178.
page 108-109 and the information on intangible and non-
current intangible assets in note C12 and C13 on pages REVIEW OF EURASIAN
132-136.
TRANSACTIONS
Risk description
DIVESTMENTS IN EURASIA As described on page 49 in the Annual accounts Telia
Risk description Company and subsidiaries in the Netherlands are subject
Telia Company announced in September 2015 their inten- to investigations in Sweden, the Netherlands and the US
tion to divest their operations and assets in Eurasia. The regarding Telia Companys operations in Uzbekistan and
operations to be divested are classified as held for sale suspected irregularities in 2007 related to those and to the
and discontinued operations as of 31 December, 2016. Ac- market entry into Uzbekistan. Telia Company has received
cording to IFRS 5, non-current assets and disposal groups a preliminary claim from the US and Dutch authorities
should be classified as held-for-sale if their carrying value amounting to USD 1.45 billion and a provision of the same
will be recovered principally through a sales transaction amount in SEK (SEK 13.2 billion, including subsequent
rather than through continuing use. One of the conditions foreign currency changes) was recorded in 2016.
that must be satisfied for classification as held-for-sale is We focused on this area since the amount has a signifi-
that the sale is highly probable within one year. In addition, cant impact on the financial position of Telia Company.
assets held for sale should be measured at the lower of
carrying value and estimated fair value less costs to sell. Audit procedures
For operations already fully divested the capital gain or loss Our audit procedures included, but were not limited to:
calculations can be complex and also include significant obtaining from management a description and evaluation
management judgements relating to for example provisions of the claim and managements assessments and judge-
for indemnities. ment related to the most likely outcome;
Since the operations are in countries with complex regu- inquiring of and discussions with in-house legal counsel
latory environment, compliance with local and international about circumstances and considerations to be made in
legislations as well as internal policies needs to be adhered order to assess the claim;
to by the Board of directors and management. inquiring of external legal counsel about circumstances
We focused on this area since the amounts are significant and considerations related to the claim and
and valuations and the accounting are complex and based evaluating the adequacy of relevant disclosures.
216
OTHER INFORMATION
For further information, please refer to the Risks and uncer- review the process for acquiring and accounting for
tainties section in the Board of Directors report on pages intangible and tangible assets;
49-50, the key management judgements made in note C2 detailed sample testing of the nature and amount of
on pages 109-110 and the information on provisions within capitalized items as well as amortization and deprecia-
discontinued operations in note C34 on page 178. tion rates applied by Telia Company.
IT-SYSTEMS FOR FINANCIAL For further information, please refer to the Groups ac-
counting principles in note C3 on pages 111-121, the prin-
REPORTING ciples for useful lives of assets in note C2 on page 108 and
Risk description the information on Capital Expenditure during 2016 in notes
In addition to revenues large amounts of data are gener- C12, C13 and C34 on pages 132-136 and 174-178.
ated and processed in Telia Companys IT environment
as part of their daily operations. The IT environment is Other information than the annual accounts and
complex and includes multiple applications throughout consolidated accounts
the Group. In addition data warehouse solutions are being This document also contains other information than the
used to capture and aggregate information as needed. The annual accounts and consolidated accounts and is found
complex IT infrastructure requires processes for maintain- on pages 2-21, 71-99, 206-213 and 220-230. The Board of
ing key IT systems and controls that enhance efficiency, Directors and the Managing Director are responsible for
consistency and control within business processes. this other information.
We focused on this area since there are risks that all Our opinion on the annual accounts and consolidated ac-
transactions and data used for financial reporting are not counts does not cover this other information and we do not
captured timely and/or not complete. express any form of assurance conclusion regarding this
other information.
Audit procedures In connection with our audit of the annual accounts and
In collaboration with our IT-audit specialists our audit pro- consolidated accounts, our responsibility is to read the in-
cedures included, but were not limited to: formation identified above and consider whether the infor-
evaluation of Telia Companys governance model regard- mation is materially inconsistent with the annual accounts
ing IT and IT controls; and consolidated accounts. In this procedure we also take
identification, evaluation and testing of general computer into account our knowledge otherwise obtained in the audit
controls for systems material to financial reporting; and assess whether the information otherwise appears to
identification, evaluation and testing of automated be materially misstated.
controls within IT applications as well as data analytic If we, based on the work performed concerning this
procedures in order to review cut-off and completeness information, conclude that there is a material misstatement
of information for systems material to financial reporting of this other information, we are required to report that fact.
identification, evaluation and testing of controls over criti- We have nothing to report in this regard.
cal data for financial reporting.
Responsibilities of the Board of Directors and
the Managing Director
CAPITAL EXPENDITURE The Board of Directors and the Managing Director are
Risk description responsible for the preparation of the annual accounts and
Telia Company is investing significant amounts in their consolidated accounts and that they give a fair presentation
operations and capital expenditure amounts to SEK 21.4 in accordance with the Annual Accounts Act and, concern-
billion for 2016 including discontinued operations. These ing the consolidated accounts, in accordance with IFRS as
investments have significant impact of the reporting of the adopted by the EU. The Board of Directors and the Manag-
financial position for Telia Company. The significant investing Director are also responsible for such internal control
ments made by Telia Company require robust processes as they determine is necessary to enable the preparation of
for acquiring and monitoring of intangible and tangible annual accounts and consolidated accounts that are free
assets. from material misstatement, whether due to fraud or error.
We focused on this area since there is significant man- In preparing the annual accounts and consolidated ac-
agement judgment required to determine the economic counts, The Board of Directors and the Managing Director
life of assets and assess appropriate amortization and are responsible for the assessment of the companys and
depreciation rates as well as management assessment and the groups ability to continue as a going concern. They
application of accounting principles for costs to be capital- disclose, as applicable, matters related to going concern
ized. and using the going concern basis of accounting. The go-
ing concern basis of accounting is however not applied if
Audit procedures the Board of Directors and the Managing Director intends
Our audit procedures included, but were not limited to: to liquidate the company, to cease operations, or has no
review of Telia Companys capital expenditure programs realistic alternative but to do so.
to understand strategy and its impacts on the financial The Audit Committee shall, without prejudice to the
statements; Board of Directors responsibilities and tasks in general,
217
OTHER INFORMATION
AUDITORS REPORT Annual and Sustainability Report 2016
among other things oversee the companys financial re- counts and consolidated accounts represent the under-
porting process. lying transactions and events in a manner that achieves
fair presentation.
Auditors responsibility Obtain sufficient and appropriate audit evidence regard-
Our objectives are to obtain reasonable assurance about ing the financial information of the entities or business
whether the annual accounts and consolidated accounts activities within the group to express an opinion on the
as a whole are free from material misstatement, whether consolidated accounts. We are responsible for the direc-
due to fraud or error, and to issue an auditors report that tion, supervision and performance of the group audit. We
includes our opinions. Reasonable assurance is a high level remain solely responsible for our opinions.
of assurance, but is not a guarantee that an audit con-
ducted in accordance with ISAs and generally accepted We must inform the Board of Directors of, among other
auditing standards in Sweden will always detect a material matters, the planned scope and timing of the audit. We
misstatement when it exists. Misstatements can arise from must also inform of significant audit findings during our au-
fraud or error and are considered material if, individually or dit, including any significant deficiencies in internal control
in the aggregate, they could reasonably be expected to in- that we identified.
fluence the economic decisions of users taken on the basis We must also provide the Board of Directors with a state-
of these annual accounts and consolidated accounts. ment that we have complied with relevant ethical require-
As part of an audit in accordance with ISAs, we exercise ments regarding independence, and to communicate with
professional judgment and maintain professional scepti- them all relationships and other matters that may reason-
cism throughout the audit. We also: ably be thought to bear on our independence, and where
Identify and assess the risks of material misstatement applicable, related safeguards.
of the annual accounts and consolidated accounts, From the matters communicated with the Board of
whether due to fraud or error, design and perform audit Directors, we determine those matters that were of most
procedures responsive to those risks, and obtain audit significance in the audit of the annual accounts and con-
evidence that is sufficient and appropriate to provide a solidated accounts, including the most important assessed
basis for our opinions. The risk of not detecting a mate- risks for material misstatement, and are therefore the key
rial misstatement resulting from fraud is higher than for audit matters. We describe these matters in the auditors
one resulting from error, as fraud may involve collusion, report unless law or regulation precludes disclosure about
forgery, intentional omissions, misrepresentations, or the the matter or when, in extremely rare circumstances, we
override of internal control. determine that a matter should not be communicated in
Obtain an understanding of the companys internal con- the auditors report because the adverse consequences of
trol relevant to our audit in order to design audit proce- doing so would reasonably be expected to outweigh the
dures that are appropriate in the circumstances, but not public interest benefits of such communication.
for the purpose of expressing an opinion on the effective-
ness of the companys internal control.
Evaluate the appropriateness of accounting policies used REPORT ON OTHER LEGAL AND
and the reasonableness of accounting estimates and
related disclosures made by the Board of Directors and REGULATORY REQUIREMENTS
the Managing Director. Opinions
Conclude on the appropriateness of the Board of In addition to our audit of the annual accounts and consoli-
Directors and the Managing Directors use of the going dated accounts, we have also audited the administration
concern basis of accounting in preparing the annual of the Board of Directors and the Managing Director of
accounts and consolidated accounts. We also draw a Telia Company AB (publ) for the financial year 2016-01-
conclusion, based on the audit evidence obtained, as 01 - 2016-12-31 and the proposed appropriations of the
to whether any material uncertainty exists related to companys profit or loss.
events or conditions that may cast significant doubt on We recommend to the general meeting of shareholders
the companys and the groups ability to continue as a that the profit to be appropriated in accordance with the
going concern. If we conclude that a material uncertainty proposal in the statutory administration report and that
exists, we are required to draw attention in our auditors the members of the Board of Directors and the Managing
report to the related disclosures in the annual accounts Director be discharged from liability for the financial year.
and consolidated accounts or, if such disclosures are
inadequate, to modify our opinion about the annual ac- Basis for Opinions
counts and consolidated accounts. Our conclusions are We conducted the audit in accordance with generally
based on the audit evidence obtained up to the date of accepted auditing standards in Sweden. Our responsibili-
our auditors report. However, future events or conditions ties under those standards are further described in the
may cause a company and a group to cease to continue Auditors Responsibilities section. We are independent
as a going concern. of the parent company and the group in accordance with
Evaluate the overall presentation, structure and content professional ethics for accountants in Sweden and have
of the annual accounts and consolidated accounts, otherwise fulfilled our ethical responsibilities in accordance
including the disclosures, and whether the annual ac- with these requirements.
218
OTHER INFORMATION
We believe that the audit evidence we have obtained is suf- always detect actions or omissions that can give rise to li-
ficient and appropriate to provide a basis for our opinions. ability to the company, or that the proposed appropriations
of the companys profit or loss are not in accordance with
Responsibilities of the Board of Directors and the Companies Act.
the Managing Director As part of an audit in accordance with generally accepted
The Board of Directors is responsible for the proposal for auditing standards in Sweden, we exercise professional
appropriations of the companys profit or loss. At the pro- judgment and maintain professional scepticism throughout
posal of a dividend, this includes an assessment of whether the audit. The examination of the administration and the
the dividend is justifiable considering the requirements proposed appropriations of the companys profit or loss
which the companys and the groups type of operations, is based primarily on the audit of the accounts. Additional
size and risks place on the size of the parent companys audit procedures performed are based on our professional
and the groups equity, consolidation requirements, liquid- judgment with starting point in risk and materiality. This
ity and position in general. means that we focus the examination on such actions,
The Board of Directors is responsible for the companys areas and relationships that are material for the operations
organization and the administration of the companys af- and where deviations and violations would have particular
fairs. This includes among other things continuous assess- importance for the companys situation. We examine and
ment of the companys and the groups financial situation test decisions undertaken, support for decisions, actions
and ensuring that the companys organization is designed taken and other circumstances that are relevant to our
so that the accounting, management of assets and the opinion concerning discharge from liability. As a basis for
companys financial affairs otherwise are controlled in a re- our opinion on the Board of Directors proposed appro-
assuring manner. The Managing Director shall manage the priations of the companys profit or loss we examined the
ongoing administration according to the Board of Directors Board of Directors reasoned statement and a selection of
guidelines and instructions and among other matters take supporting evidence in order to be able to assess whether
measures that are necessary to fulfill the companys ac- the proposal is in accordance with the Companies Act.
counting in accordance with law and handle the manage-
ment of assets in a reassuring manner. Auditors examination of the corporate
governance report
Auditors responsibility The Board of Directors is responsible for that the corporate
Our objective concerning the audit of the administration, governance statement on pages 51-70 has been prepared
and thereby our opinion about discharge from liability, is to in accordance with the Annual Accounts Act.
obtain audit evidence to assess with a reasonable degree Our examination of the corporate governance statement
of assurance whether any member of the Board of Direc- is conducted in accordance with FARs auditing standard
tors or the Managing Director in any material respect: RevU 16 The auditors examination of the corporate gov-
has undertaken any action or been guilty of any omission ernance statement. This means that our examination of the
which can give rise to liability to the company, or corporate governance statement is different and substan-
in any other way has acted in contravention of the Com- tially less in scope than an audit conducted in accordance
panies Act, the Annual Accounts Act or the Articles of with International Standards on Auditing and generally
Association. accepted auditing standards in Sweden. We believe that
the examination has provided us with sufficient basis for
Our objective concerning the audit of the proposed appro- our opinions.
priations of the companys profit or loss, and thereby our A corporate governance statement has been prepared.
opinion about this, is to assess with reasonable degree of Disclosures in accordance with chapter 6 section 6 the
assurance whether the proposal is in accordance with the second paragraph points 2-6 of the Annual Accounts Act
Companies Act. and chapter 7 section 31 the second paragraph the same
Reasonable assurance is a high level of assurance, but law are consistent with the other parts of the annual ac-
is not a guarantee that an audit conducted in accordance counts and consolidated accounts and are in accordance
with generally accepted auditing standards in Sweden will with the Annual Accounts Act.
Deloitte AB
Signature on Swedish original
Jan Nilsson
Authorized Public Accountant
219
OTHER INFORMATION
AUDITORS LIMITED ASSURANCE REPORT Annual and Sustainability Report 2016
AUDITORS LIMITED ASSURANCE

REPORT ON THE SUSTAINABILITY
REPORT
This is the translation of the auditors report in Swedish. We conducted our limited assurance engagement in ac-
cordance with RevR 6 Assurance of Sustainability Reports
To Telia Company AB (publ), corporate identity number issued by FAR. A limited assurance engagement consists
556103-4249. of making inquiries, primarily of persons responsible for
the preparation of the Sustainability Report, and applying
analytical and other limited assurance procedures. The
INTRODUCTION procedures performed in a limited assurance engage-
We have been engaged by the Management of the Telia ment vary in nature from, and are less in extent than for, a
Company AB (publ) to undertake a limited assurance reasonable assurance engagement conducted in ac-
engagement of the Telia Company Sustainability Report for cordance with IAASBs Standards on Auditing and other
the year 2016. The Company has defined the scope of the generally accepted auditing standards in Sweden. The firm
Sustainability Report on page 2 in the printed version of applies ISQC 1 (International Standard on Quality Control)
this document. and accordingly maintains a comprehensive system of
quality control including documented policies and pro-
RESPONSIBILITIES OF THE BOARD cedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory
OF DIRECTORS AND THE requirements. The procedures performed consequently do
EXECUTIVE MANAGEMENT FOR not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in a
THE SUSTAINABILITY REPORT reasonable assurance engagement. Accordingly, we do not
The Board of Directors and the Executive Management are express a reasonable assurance conclusion.
responsible for the preparation of the Sustainability Report Our procedures are based on the criteria defined by
in accordance with the applicable criteria, as explained on the Board of Directors and the Executive Management as
page 206 in the Sustainability Report, and are the parts of described above. We consider these criteria suitable for the
the Sustainability Reporting Guidelines (published by The preparation of the Sustainability Report.
Global Reporting Initiative (GRI)) which are applicable to the We believe that the evidence we have obtained is suf-
Sustainability Report, as well as the accounting and cal- ficient and appropriate to provide a basis for our conclusion
culation principles that the Company has developed. This below.
responsibility also includes the internal control relevant to
the preparation of a Sustainability Report that is free from
material misstatements, whether due to fraud or error. CONCLUSION
Based on the limited assurance procedures we have per-
formed, nothing has come to our attention that causes us
RESPONSIBILITIES OF THE AUDITOR to believe that the Sustainability Report, is not prepared, in
Our responsibility is to express a conclusion on the Sus- all material respects, in accordance with the criteria defined
tainability Report based on the limited assurance proce- by the Board of Directors and Executive Management.
dures we have performed.
Deloitte AB
Signatures on Swedish original
Jan Nilsson Didrik Roos

Authorized Public Accountant Authorized Public Accountant
220
OTHER INFORMATION
Annual and Sustainability Report 2016 UNITED NATIONS GLOBAL COMPACT PRINCIPLES
UNITED NATIONS GLOBAL

COMPACT PRINCIPLES
Telia Company is a signatory to the United Nations Global Compact since 2013.
This Annual and Sustainability Report represents our Communication On Progress.
Telia Companys implementation of the UN Global Compact principles is outlined in the table below. Our statement of
continuing support for the Global Compact is found in Comments by the Chair. Four subsidiaries Omnitel and TEO
in Lithuania, Moldcell in Moldova and Kcell in Kazakhstan are themselves also signatories to the Global Compact. This
Annual and Sustainability Report represents the Communication On Progress also for these companies.
Principle Human Rights Approach and outcomes
1 Support and respect the protection of internationally See Sustainability Work, sections Sustainability in
proclaimed human rights Telia Company, Human rights impact assessments
and Freedom of expression
2 Make sure that we are not complicit in See Sustainability Work, sections Human rights impact
human rights abuses assessments and Freedom of expression
Labor
3 Uphold the freedom of association and the effective See Sustainability Work, sections Occupational health
recognition of the right to collective bargaining and safety and Responsible procurement, and GRI
Index, G4-11 and G4-HR4-6
4 Uphold the elimination of all forms of forced and See Sustainability Work, section Responsible procure-
compulsory labor ment and GRI Index, G4-HR4-6
5 Uphold the effective abolition of child labor See Sustainability Work, section Responsible procure-
ment and GRI Index, G4-HR4-6
6 Uphold the elimination of discrimination in See Sustainability Work, section Occupational health
respect of employment and occupation and safety
Environment
7 Support a precautionary approach to environmental See Sustainability Work, section Environmental

challenges responsibility and GRI Index, G4-14
8 Undertake initiatives to promote greater See Sustainability Work, section Environmental

environmental responsibility responsibility
9 Encourage the development and diffusion of See Sustainability Work, section Environmental
environmentally friendly technologies responsibility
Anti-corruption
10 Work against corruption in all its forms, See Sustainability Work, section Anti-bribery and
including extortion and bribery corruption
221
OTHER INFORMATION
UK MODERN SLAVERY ACT STATEMENT Annual and Sustainability Report 2016
UK MODERN SLAVERY ACT

STATEMENT

TELIA COMPANY STATEMENT
This statement has not been subject to limited
assurance. Telia Company is commit-
As per the UK Modern Slavery Act (the Act), compa-
ted to preventing any kind
nies with operations in the UK are called upon to report of human trafficking, forced
on their practices regarding understanding and pre-
venting any kind of human trafficking, forced or slave
or slave labor in its own
labor in their own operations and their supply chain. operations and in its supply
Telia Company has operations in the UK through its
chain.
subsidiary Telia Carrier UK Limited. Additionally, Kcell
in Kazakhstan in which Telia Company is a majority
owner is listed on the London Stock Exchange. Kcell
has no significant business in the UK.
Telia Company is committed to the United Nations
Universal Declaration of Human Rights and the core
conventions of the ILO, and seek to respect human
rights as set out in the UN Guiding Principles on Busi-
ness and Human Rights. We follow local legislation on
human and labor rights wherever we operate. These
and other commitments form the foundation of the
Code of Responsible Business Conduct, which applies
to all employees and subsidiaries. The commitments
are extended to our supply chain through the Supplier
Code of Conduct, which states the expectations and
requirements on all our suppliers and sub-suppliers.
Telia Company considers the issues and related
risks covered by the Act well understood and man-
aged, and that they should be virtually non-existent
within its own operations. We know that the risks are
considerably higher in the supply chain, and through
our Responsible procurement work we have processes
in place to carry out third party due diligence, including
risk assessments and audits, to identify and together
with suppliers mitigate the presence and related risks
of, inter alia, the issues covered by the Act. These
processes are regularly revised, and key employees
are continuously trained, to make sure that we work
according to our commitments. If an employee or third
party identifies potential or actual violation of these
commitments or requirements, they can file an anony-
mous report to the Speak-Up Line.
222
OTHER INFORMATION
Annual and Sustainability Report 2016 FIVE-YEAR SUMMARY
FIVE-YEAR SUMMARY
Telia Company Group
Financial data 2016 2015 2014 2013 7 20127
Income (SEK in millions) 1
Net sales 84,178 86,569 81,131 101,870 104,898
Operating income 21,090 14,606 17,743 24,462 28,400
EBITDA excluding non-recurring items 25,836 25,281 24,364 35,584 36,171
EBITDA 29,813 23,992 23,453 33,656 35,074
Net income from continuing operations 16,433 9,532 12,219
Net income from discontinued operations -9,937 673 3,379
Net income 6,496 10,205 15,599 16,767 21,168
Financial position (SEK in millions) 2
Goodwill and other intangible assets 70,947 67,933 86,161 81,522 83,278
Property, plant and equipment 58,107 55,093 69,669 64,792 62,657
Other non-current assets 50,421 50,824 54,592 46,681 49,738
Current assets 73,955 80,167 61,645 59,833 57,373
Total assets 253,430 254,017 272,066 252,828 253,046
Total equity 94,869 102,202 116,364 112,934 109,106
of which attributable to owners of the parent 89,833 97,884 111,383 108,324 105,150
Non-current liabilities 101,734 109,175 118,163 103,226 108,409
Current liabilities 56,826 42,641 37,539 36,668 35,531
Total equity and liabilities 253,430 254,017 272,066 252,828 253,046
Capital employed, continuing and discontinued operations 184,900 193,486 208,365 192,134 193,056
Operating capital, continuing and discontinued operations 136,041 144,609 155,683 143,154 144,020
Net debt, continuing and discontinued operations 50,756 55,717 59,320 55,774 59,444
Cash flows (SEK in millions) 3
Cash flow from operating activities 25,970 35,249 29,252 31,036 38,879
Cash flow from investing activities -7,428 -28,985 -21,979 -14,644 -6,359
Cash flow from financing activities -22,491 -9,628 -10,269 -15,013 -15,231
Cash flow for the year -3,949 -3,363 -2,997 1,379 17,289
Free cash flow 7,267 16,550 13,046 16,310 23,740
of which from discontinued operations 116 4,030 4,905
Investments (SEK in millions) 4

CAPEX 15,625 14,595 11,955 16,332 15,685
Acquisitions and other investments 483 5,818 1,210 1,461 1,905
Total investments 16,108 20,413 13,165 17,793 17,590
Key ratios5
Return on equity (%) 4.5 9.3 15.0 15.9 20.5
Return on capital employed (%) 7.7 8.9 12.2 13.5 14.9
Equity/assets ratio (%) 34.0 35.1 38.0 39.5 38.2
Net debt/equity ratio (%) 58.9 62.5 57.4 55.8 61.4
Net debt/EBITDA rate excl. non-recurring items 1.69 1.53 1.68 1.57 1.64
Net debt/assets ratio 20.0 21.9 21.8 22.1 23.5
Owners equity per share (SEK) 20.75 22.61 25.72 25.02 24.28
Share data
Number of outstanding shares (millions)
at the end of the period 4,330.1 4,330.1 4,330.1 4,330.1 4,330.1
average, basic 4,330.1 4,330.1 4,330.1 4,330.1 4,330.1
average, diluted 4,330.1 4,330.1 4,330.1 4,330.1 4,330.1
Basic and diluted total earnings per share (SEK) 0.86 1.97 3.35 3.46 4.59
Cash dividend per share (SEK)6 2.00 3.00 3.00 3.00 2.85
Total cash dividend (SEK in millions)6 8,660 12,990 12,990 12,990 12,341
Pay-out ratio (%) 8 121 152 90 87 62
1) Former segment region Eurasia is classified as held for sale and discontinued operations since December 31, 2015, and is therefore presented on one line in the income
statement 2016, 2015 and 2014. The above presented income statement line items for 2016, 2015 and 2014 refer to continuing operations if not otherwise stated.
2) Assets and liabilities in former segment region Eurasia are presented separately on two line items in the consolidated statement of financial position as of December 31,
2016 and Decemer 31, 2015. The Sergel companies (Sergel) are classified as assets held for sale since June 30, 2016. In the above presented balance sheet line items
assets classified as held for sale and liabilities directly associated with assets classified as held for sale are included in current assets and current liabilities.
3) Cash flow information is presented including discountinued operations.
4) 2016, 2015 and 2014 including continuing operations only.
5) Key ratios are based on the total Telia Company group including both continuing and discontinued operations for 2014, 2015 and 2016. The definition for the key ratio
Return on capital employed was changed during 2014 (see Definitions), only 2013, 2014, 2015 and 2016 have been calculated with the current definition.
6) For 2016 as proposed by the Board of Directors.
7) 2012-2013 are not restated to reflect classification of former segment region Eurasia as discontinued operations.
8) For 2016, the Board of Directors proposes to the Annual General Meeting an ordinary dividend of 2.00 SEK, or 121 percent of free cash flow attributable to continuing
operations, due to this the definition of paid-out ratio has been changed. 2012-2015 has not been recalculated.
223
OTHER INFORMATION
FIVE-YEAR SUMMARY Annual and Sustainability Report 2016
Telia Company Group

Operational data 2016 2015 2014 2013 2012
Mobile services
Total subscriptions (thousands) 1) 16,695 20,033 19,179 19,337 20,537
of which Sweden
Mobile telephony, total subscriptions (thousands) 2) 6,207 6,119 6,186 6,171 6,587
Mobile telephony, blended churn (%) 17 19 19 19 15
Mobile telephony, ARPU (SEK) 209 206 200 198 190
of which Finland
Mobile telephony, subscriptions (thousands) 3,253 3,306 3,281 3,245 3,249
Mobile telephony, blended churn (%) 23 21 21 21 26
Mobile telephony, ARPU (EUR) 17 16 17 18 19
of which Norway 3)
Mobile telephony, subscriptions (thousands) 2,211 2,311 1,344 1,532 1,641
Mobile telephony, ARPU (NOK) 252 259 283 258 248
of which other countries
Mobile telephony, subscriptions, Denmark (thousands) 1,606 1,644 1,581 1,522 1,462
Mobile telephony, subscriptions, Lithuania (thousands) 1,318 1,327 1,378 1,546 1,953
Mobile telephony, subscriptions, Latvia (thousands) 1,200 1,119 1,097 1,066 1,070
Mobile telephony, subscriptions, Estonia (thousands) 901 863 841 821 868
Mobile telephony, subscriptions, Spain (thousands) 3,344 3,471 3,434 3,707
Fixed services
Broadband, total subscriptions (thousands) 2,559 2,589 2,543 2,416 2,545
of which
Broadband, subscriptions, Sweden (thousands) 1,299 1,306 1,275 1,208 1,175
Broadband, subscriptions, Finland (thousands) 497 527 561 532 501
Broadband, subscriptions, Norway (thousands) 184
Broadband, subscriptions, Denmark (thousands) 128 135 114 99 87
Broadband, subscriptions, Lithuania (thousands) 4) 402 390 369 355 385
Broadband, subscriptions, Estonia (thousands) 233 231 224 222 213
Fixed telephony, total subscriptions (thousands) 5) 2,565 2,838 3,034 3,247 3,452
of which
Fixed telephony, subscriptions, Sweden (thousands) 1,675 1,896 2,054 2,209 2,347
Fixed telephony, subscriptions, Finland (thousands) 65 80 99 108 125
Fixed telephony, subscriptions, Denmark (thousands) 101 114 122 121 125
Fixed telephony, subscriptions, Lithuania (thousands) 417 447 468 504 540
Fixed telephony, subscriptions, Estonia (thousands) 307 301 291 305 315
Human Resources 6)
Number of employees as of December 31 26,017 26,895 26,166 26,013 27,838
Average number of full-time employees during the year 24,898 25,450 24,973 25,319 26,793
of whom, in Sweden 8,109 8,172 7,977 8,122 8,486
of whom, in Finland 3,276 3,326 3,577 3,745 4,231
of whom, in other countries 13,513 13,953 13,419 13,452 14,076
of whom, women 10,227 10,777 10,579 10,958 11,465
of whom, men 14,670 14,673 14,394 14,361 15,328
Salaries and remuneration (SEK in millions) 9,534 9,408 9,746 9,400 9,863
Employers social security contributions (SEK in millions) 2,056 1,992 1,893 1,900 1,835
Salaries and employers social security contributions
as a percentage of operating costs 13.2 12.6 14.4 14.0 14.2
Net sales per employee (SEK in thousands) 3,929 4,220 4,047 4,023 3,915
Operating income per employee (SEK in thousands) 518 639 908 966 1,056
Net income per employee (SEK in thousands) 261 401 625 662 790
1) The definition of number of mobile prepaid subscriptions was changed in 2015. 2013 and 2014 were restated for comparability in 2015. Prepaid subscriptions are
counted if the subscriber has been active during the last three months.
2) As a result of a review of certain types of mobile subscriptions in Sweden the operational data for number of subscriptions has for 2015 been restated for comparability.
3) As a result of a review of certain types of mobile subscriptions in Norway the operational data for number of subscriptions has for 2014 been restated for comparability.
2014 and 2015 have also been restated to reflect the discovery of certain classification errors between net sales and cost of sales referring to insurance sales in Norway.
4) The definition for number of broadband subscriptions in Lithuania was changed in 2015. 2013 and 2014 were restated for comparability in 2015.
5) Fixed telephony subscriptions include PSTN and VoIP.
6) HR data is based on the total Telia Company group including both continuing and discontinued operations.
224
OTHER INFORMATION
Annual and Sustainability Report 2016 ALTERNATIVE PERFORMANCE MEASUREMENTS
ALTERNATIVE PERFORMANCE
MEASUREMENTS
Alternative performance measurements These terms may be defined differently by other companies
In addition to financial performance measures prepared in and are therefore not always comparable to similar meas-
accordance with IFRS, Telia Company presents non-IFRS ures used by other companies.
financial performance measures, for example EBITDA,
EBITDA excluding non-recurring items, CAPEX, Cash EBITDA and EBITDA excluding non-recurring items
CAPEX, Free cash flow, Operational free cash flow and Telia Company considers EBITDA as a relevant measure for
Net debt. These alternative measures are considered to be investors to be able to understand profit generation before
important performance indicators for investors and other investments in fixed assets. To assist the understand-
users of the Annual report. The alternative performance ing of Telia Companys underlying financial performance
measures should be considered as a complement to, but we believe it is also useful to analyze EBITDA excluding
not a substitute for, the information prepared in accordance non-recurring items. Non-recurring items within EBITDA
with IFRS. Telia Companys definitions of these non-IFRS are specified in Board of Directors Report, Non-recurring
measures are described in this Note and in the Definitions. items.
Operating income 21,090 14,606
Income from associated companies and joint ventures -2,810 -3,394
Total depreciation/amortization/write-down 11,534 12,780
EBITDA 29,814 23,992
Non-recurring within EBITDA -3,977 1,289
EBITDA excluding non-recurring items 25,836 25,281
Operating income -7,048 6,967
Income from associated companies and joint ventures -7 -31
Total depreciation/amortization/write-down -52 3,625
Capital gain on disposal 1,035 -
EBITDA -6,072 10,560
Non-recurring within EBITDA 11,952 474
EBITDA excluding non-recurring items 5,880 11,035
225
OTHER INFORMATION
ALTERNATIVE PERFORMANCE MEASUREMENTS Annual and Sustainability Report 2016
CAPEX
Telia Company considers CAPEX and Cash CAPEX as relevant measures for investors to understand the groups invest-
ments in intangible and tangible non-current assets (excluding goodwill, assets acquired in business combinations and
asset retirement obligations).
Intangible assets 2,787 2,251
Property, plant and equipment 12,838 12,344
CAPEX 15,625 14,595
Intangible assets 3,657 994
Property, plant and equipment 2,156 3,201
CAPEX 5,813 4,195
of which unpaid investments1 -2,735 -91
Cash CAPEX, continuing and discontinued operations 18,703 18,699
1) For 2016 mainly attributable to a prolonged unpaid license in Uzbekistan.
Free cash flow

Telia Company considers free cash flow as a relevant measure for investors to be able to understand the groups cash flow
from operating activities and after CAPEX.

Cash flow from operating activities 25,970 35,249
Cash CAPEX (paid Intangible and tangible assets) -18,703 -18,699
Free cash flow, continuing and discontinued operations 7,267 16,550
Operational free cash flow

Telia Company considers Operational free cash flow as a relevant measure for investors to be able to understand the
cash flows that Telia Company are in control of. From the reported free cash flow from continuing operations dividends
from associated companies are deducted as these are dependent on the approval of board of the associated companies.
Licenses and spectrum payments are excluded as they generally refer to a longer period than just one year.
Cash flow from operating activities from continuing operations 22,510 27,128
Deduction: Cash CAPEX from continuing operations -15,358 -14,608
Free cash flow continuing operations 7,152 12,520
Add back: Cash CAPEX for licenses from continuing operations 376 383
Deduction: Dividends from associates from continuing operations -2,122 -6,896
Add back: Taxes paid on dividends from associates from continuing operations 91 517
Operational free cash flow 5,497 6,524
Net debt
Telia Company considers Net debt to be an important measure for investors and rating agencies to be able to understand
the groups indebtedness. Net debt presented below is based on the total Telia Company group for both continuing and
discontinued operations.
Long-term borrowings 83,516 91,884

Short-term borrowings 12,919 10,567
Less derivatives recognized as financial assets and hedging long-term and short-term borrowings and related credit
support annex (CSA) -5,455 -5,580
Less long-term bonds available for sale -10,185 -8,841
Less short-term investments -7,132 -6,979
Less cash and cash equivalents1 -22,907 -25,334
Net debt, continuing and discontinued operations 50,756 55,717
1) SEK 0.3 billion of the minority owner Visors share of the sales price for Ncell and the holding company Reynolds Holding remain within cash and cash
equivalents of discontinued operations as of December 31, 2016. For more information, see Note 34.
226
OTHER INFORMATION
Annual and Sustainability Report 2016 DEFINITIONS
DEFINITIONS
CONCEPTS AND KEY RATIOS EBITDA margin

EBITDA excluding non-recurring items expressed as a
Acquisitions and other investments percentage of net sales.
Investments in goodwill and fair-value adjustments, shares
and participations, and asset retirement obligations. Equity/assets ratio
Adjusted equity and equity attributable to non-controlling
Adjusted equity interests expressed as a percentage of total assets.
Reported equity attributable to owners of the parent less
the (proposed) dividend. For the parent company also Free cash flow
including untaxed reserves net of tax. Cash flow from operating activities less cash CAPEX.
ARPU Interest coverage ratio

Average monthly revenue per user. Operating income plus financial revenues divided by finan-
cial expenses.
Blended churn
The number of lost subscriptions (postpaid and prepaid) Mobile billed revenues
expressed as a percentage of the average number of sub- Voice, messaging, data and content.
scriptions (postpaid and prepaid).
Net debt
CAPEX Interest-bearing liabilities less derivatives recognized as
An abbreviation of Capital Expenditure. Investments in financial assets (and hedging long-term and short-term
intangible and tangible non-current assets but exclud- borrowings) and related credit support annex (CSA), less
ing goodwill, fair-value adjustments and asset retirement short term investments, long-term bonds available for sale
obligations. and cash/cash equivalents.
Capital employed Net debt/assets ratio

Total assets less non-interest-bearing liabilities and non- Net debt expressed as a percentage of total assets.
interest-bearing provisions, and the (proposed) dividend.
Net debt/EBITDA ratio (multiple)
Change local organic (%) Net debt divided by EBITDA excluding non-recurring items
The change in Net sales/External service revenues/EBITDA rolling 12 months and excluding divested operations.
excluding non-recurring items, excluding effects from
changes in currency rates compared to the groups report- Net debt/equity ratio
ing currency (SEK) and acquisitions/divestitures, compared Net debt expressed as a percentage of adjusted equity and
to the same period previous year. equity attributable to non-controlling interests.
Earnings and equity per share Net interest-bearing liability

Earnings per share are based on the weighted average Interest-bearing liabilities and provisions less interest-
number of shares before and after dilution with potential bearing assets but including investments in associated
ordinary shares, while equity per share is based on the companies and joint ventures.
number of shares at the end of the period. Earnings equal
net income attributable to owners of the parent and equity Non-recurring items
is equity attributable to owners of the parent. Non-recurring items comprise capital gains and losses, im-
pairment losses, restructuring programs (costs for phasing
EBITDA out operations and personnel redundancy costs) or other
An abbreviation of Earnings Before Interest, Tax, Depre- costs with the character of not being part of normal daily
ciation and Amortization. Equals operating income before operations.
amortization, depreciation and impairment losses, and be-
fore income from associated companies and joint ventures.
227
OTHER INFORMATION
DEFINITIONS Annual and Sustainability Report 2016
Operating capital Return on equity

Non-interest-bearing assets less non-interest-bearing Net income attributable to owners of the parent expressed
liabilities, including the (proposed) dividend, and non-inter- as a percentage of average adjusted equity.
est-bearing provisions.
Return on sales
Operational free cash flow Net income expressed as a percentage of net sales.
Free cash flow from continuing operations excluding cash
CAPEX for licenses and dividends from associates net of Segment assets and liabilities
taxes. (Segment operating capital)
As Operating capital, but assets and liabilities exclude
Operating margin items related to foreign currency derivatives and accrued
Operating income expressed as a percentage of net sales. interest as well as to deferred and current tax, respectively,
and liabilities exclude the (proposed) dividend.
Pay-out ratio
For 2012-2015 dividend per share divided by basic total Self-financing rate
earnings per share. For 2016 proposed dividend divided by Cash flow from operating activities divided by gross invest-
free cashflow excluding licenses. ments.
Return on assets Service revenues (external)

Operating income plus financial revenues expressed as a External net sales excluding equipment sales.
percentage of average total assets.
Total asset turnover
Return on capital employed Net sales divided by average total assets.
Operating income, including impairments and gains/losses
on disposals, plus financial revenues excluding FX gains Turnover of capital employed
expressed as a percentage of average capital employed. Net sales divided by the average capital employed.
NOTATION CONVENTIONS
In conformity with international standards, this report applies the following currency notations:
SEK Swedish krona HKD Hong Kong dollar NPR Nepalese rupee
AZN Azerbaijan manat JPY Japanese yen RUB Russian ruble
CZK Czech koruna KZT Kazakhstan tenge TJS Tajikistan somoni
DKK Danish krone LTL Lithuanian litas TRY Turkish lira
EUR European euro LVL Latvian lats USD US dollar
GBP Pound sterling NOK Norwegian krone UZS Uzbekistan som
GEL Georgian lari MDL Moldovan leu
228
OTHER INFORMATION
Annual and Sustainability Report 2016 ANNUAL GENERAL MEETING 2017
ANNUAL GENERAL MEETING 2017
Telia Companys Annual General Meeting will be held on

Wednesday, April 5, 2017, at 14.00 CET at Skandiascenen,
NOMINEE
Cirkus, Stockholm. The complete notification was published Shareholders who are represented by proxy shall issue
on Telia Companys website, www.teliacompany.com at the a power of attorney for the representative. Forms for
beginning of March. The meeting will be interpreted into power of attorneys are available at the Companys website
English. www.teliacompany.com. To a power of attorney issued by
a legal entity a copy of the certificate of registration (and
should such certificate not exist, a corresponding docu-
RIGHT TO ATTEND ment of authority) of the legal entity shall be attached. The
Shareholders who wish to attend the Annual General documents must not be older than one year. In order to
Meeting shall be entered into the transcription of the share facilitate the registration at the meeting, powers of attorney
register as of Thursday, March 30, 2017, kept by Swedish in original, certificates of registration and other documents
central securities depository Euroclear Sweden AB and of authority should be sent to the Company at the address
give notice of attendance to the Company no later than above at the latest by Thursday, March 30, 2017.
Thursday, March 30, 2017.
DECISIONS TO BE MADE BY
NOTICE TO THE COMPANY THE ANNUAL GENERAL MEETING
Notice of attendance can be made The Annual General Meeting determines, among other
in writing to Telia Company AB, Box 7842, matters, the appropriation of the Companys profits and
SE-103 98 Stockholm, Sweden, whether to discharge the Board of Directors and President
by telephone +46 (0)8 402 90 50 on weekdays between from liability. The Annual General Meeting also appoints
09.00 CET and 16.00 CET, or the Board of Directors and makes decisions regarding re-
via the companys website www.teliacompany.com muneration to the Board. The Board of Directors proposes
(only private individuals). that a dividend of SEK 2.00 per share be distributed to
the shareholders in two tranches of SEK 1.00 each. April
When giving notice of attendance, please state name/ 7, 2017, and October 24, 2017, respectively, be set as the
company name, social security number/corporate registra- record dates for the dividend. If the Annual General Meet-
tion number, address, telephone number (office hours) and ing adopts this proposal, it is estimated that disbursements
number of accompanying persons. from Euroclear Sweden AB will take place on April 12, 2017,
and on October 27, 2017, respectively.
SHAREHOLDING IN THE
NAME OF A NOMINEE
Shareholders, whose shares are registered in the name of
a nominee, must request to be temporarily entered into the
share register kept by Euroclear Sweden AB as of March
30, 2017, in order to be entitled to participate in the meet-
ing. Such shareholder is requested to inform the nominee
to that effect well before that day. As Finnish shareholders
within the Finnish book-entry system at Euroclear Finland
Oy are nominee registered at Euroclear Sweden AB, these
Finnish shareholders have to contact Euroclear Finland Oy,
by email: thy@euroclear.eu or by phone: +358 (0)20 770
6609, for re-registration well in advance of March 30, 2017,
to be able to participate in the meeting.
229
OTHER INFORMATION
CONTACT TELIA COMPANY Annual and Sustainability Report 2016
CONTACT TELIA COMPANY
Mailing address:
Telia Company AB
SE169 94 Solna
Sweden
Visiting address:
Stjrntorget 1, Solna
Telephone: +46 (0)8 504 550 00
www.teliacompany.com
Production: Telia Company AB Investor Relations in cooperation with Narva

Photo of the Board of Directors and Group Executive Management: Jeanette Hgglund,
Petter Karlberg and Telia Company
Telia Company provides communication services helping millions of people to be connected and
communicate, do business and be entertained. By doing that we fulfil our purpose to bring the
world closer on the customers terms.
230
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LEADING

The audited annual The corporate gov- The sustain-

CONTENTS and consolidated

OUR COMPANY FINANCIAL STATEMENTS

SUSTAINABILITY WORK OTHER INFORMATION

THIS IS US! CURIOUS ON HOW WE

Telia Company provides communication services helping millions of people to be

OUR BUSINESS PURPOSE

16.7 Million mobile

2.6 Million fixed voice

2.6 Million fixed broadband

159 SEK billion

EBITDA CAPEX DIVIDEND

84,178 25,836 30.7

CONTINUING AND DISCONTINUED OPERATIONS

0.86 2.00 7.7 1.69

NET SALES SPLIT

per region per service per segment

n Region Sweden, 44% n Mobile, 46% n B2B, 31%

On-site supplier audits

billion by the US and Dutch authorities related to the entry into

470,000 JOBS 20%

Lithuania Latvia Estonia Moldova

Georgia Azerbaijan Kazakhstan

HOW WE CREATE VALUE

RESOURCES AND ASSETS WHAT WE PROVIDE

SERVICES AND SUPPORT

INFRASTRUCTURE ASSETS CONNECTIVITY

WHAT WE CREATE CREATED STAKEHOLDER VALUE

Total shareholder SEK billion dividend

CO2 287,000 -6% 13.0

SUPPLIERS AND PARTNERS

countries in which Telia Carrier

COMMENTS BY THE CHAIR

Our network is our backbone and we want our customers

COMMENTS BY THE CEO

Our customers will be the pioneer users of the new

Stockholm, March 8, 2017

TRENDS AND STRATEGY

Our society is changing

KEY TRENDS AFFECTING TELIA COMPANY

not. This requires services and service providers to adapt

On our customers On Telia Company

CONSUMERS BUSINESS CUSTOMERS EMPLOYEES

How we engage How we engage How we engage

INVESTORS SUPPLIERS SOCIETY

How we engage How we engage How we engage

ENHANCE THE CORE

Value through superior Customer loyalty Competitive operations

Develop the core

EXPLORE OPPORTUNITIES CLOSE TO THE CORE

IoT eHealth Security Media

In Denmark we launched two new value adding

During the year we were awarded the best

TELIA APP MARKET

OSLO In Norway we launched Smart Farming - a ground

BOARD OF DIRECTORS REPORT

GROUP DEVELOPMENT IN 2016

Change (%), of which

Operating expenses Change