Key performance indicators for financial position

Key performance indicator	Definition
Net debt	Net debt is calculated as financial liabilities (primarily bonds and bank loans) less cash and cash equivalents and short-term financial assets. Lease liabilities are part of the financial liabilities.
EBITDA	Operating income before depreciation and amortisation. Lease expense is not included in EBITDA.

A strong balance sheet – as measured by relative indebtedness and credit rating – is a pillar of Swisscom’s financial strategy. Relative indebtedness corresponds to the ratio of net debt to operating income before depreciation and amortisation (EBITDA). For calculation purposes, lease liabilities are included in net debt, and lease expenses are not deducted from operating income before depreciation and amortisation. While this treatment differs from the key indicator for financial performance (EBITDAaL), it corresponds to the method used by rating agencies – and by the Swiss Federal Council in its goals for Swisscom – to calculate relative indebtedness (with additional adjustments).