We expect Deutsche Telekom's (DT's) leverage to remain high in 2013 as a result of lower EBITDA generation and only break-even discretionary cash flow due to higher network and spectrum investments. We see those investments as supportive for DT's business risk profile, however, and expect the group's free cash flow generation to be supported by lower shareholder payouts and higher EBITDA generation in the medium term. We are affirming our 'BBB+/A-2' long-term and short-term corporate credit ratings on DT. The stable outlook primarily reflects our expectations of resilient medium-term group operating results and reduction of the Standard&Poor's-adjusted debt-to-EBITDA ratio to about 3.2x in 2014, following a modest increase in 2013, from about 3.3x at year-end 2012. FRANKFURT (Standard
