Payout of EUR 3.4 billion

Deutsche Telekom’s shareholders can expect a dividend of 70 eurocents per share for 2010. That is what the Board of Management and the Supervisory Board will be proposing to the Annual General Meeting on May 12, 2011. If the shareholders agree, the payout and the already completed share buy-backs will amount to a total of EUR 3.4 billion. This is in line with the Company’s shareholder remuneration policy for the years through 2012 that was presented a year ago.

To look back: In February 2010, Telekom takes on a pioneering role. Deutsche Telekom is the first company listed in Germany's leading stock index, the DAX, to give a three-year outlook for the distribution of profits. The plan is to pay shareholders an attractive dividend in the years 2010 to 2012. Specifically, a dividend of at least 70 cents per share is to be paid for each of the three financial years.

Shares are also to be bought back from the market over the same period to support the positive development of the share price. Share buy-backs improve KPIs that have a major effect on share valuation, such as the earnings per share. After all, one criterion for shareholders when selecting shares to invest in is the so-called price-to-earnings ratio. This is a measure of the share price relative to the earnings per share. If the number of shares of a company falls, then that company's profit is divided between fewer shares and the price-to-earnings ratio will improve. Dividend payments and share buy-backs are intended to generate a total payment of EUR 3.4 billion per annum.

Precisely this amount is to be paid out for 2010. The figure of EUR 3.4 billion includes around EUR 400 million that the Group has already paid out for its share buy-back program which was completed in December 2010. Subject to approval of the dividend payment proposed by the Board of Management and the Supervisory Board by the shareholders’ meeting on May 12, 2011, the first part of the stated shareholder remuneration policy would be fulfilled. "What we say can be relied on. We stand for a sustainable financial strategy, solid balance sheet ratios, and a consistent dividend policy," explains Timotheus Höttges, CFO of Deutsche Telekom. "The dividend of EUR 0.70 per share - which is, incidentally, tax-free once again for German taxpayers – makes the Deutsche Telekom share an attractive capital investment."

Telekom’s three-year shareholder remuneration policy is designed to create consistency for shareholders and investors. "Shareholders, the owners of the company, are entitled to expect a sufficient yield from their shares. Our three-year outlook allows us to give them specific information that will enable them to plan more effectively than in the past", emphasizes René Obermann, the CEO of Deutsche Telekom.

This shareholder remuneration policy is subject to the requisite unappropriated net income being posted in the single-entity financial statements of Deutsche Telekom AG for the financial year in question and the ability to form the necessary reserves for the share buy-back and compliance with the requisite legal framework for a share buy-back. It is also contingent upon the executive bodies adopting resolutions to this effect, taking account of the Company's situation at the time.