Results Fourth Quarter

1
Results Fourth Quarter

• 2002

2
Safe Harbor

• Certain statements contained in this presentation
  constitute forward-looking statements. These
  statements may include, without limitation,
  statements concerning future results of
  operations, the impact of regulatory initiatives
  on KPNs operations, KPNs and its joint ventures
  share of new and existing markets, general
  industry and macro-economic trends and KPNs
  performance relative thereto, and statements
  preceded by, followed by or including the words
  believes, expects, anticipates or similar
  expressions. These forward-looking statements
  rely on a number of assumptions concerning future
  events and are subject to uncertainties, and
  other factors, many of which are outside KPNs
  control, that could cause actual results to
  differ materially from such statements. A number
  of these factors are described (not exhaustively)
  in KPNs Annual Report on Form 20-F for the year
  ended December 31, 2001.

3
CEO

• Ad Scheepbouwer

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4
The Year 2002Large net loss despite strong
operational performance

• Net loss of 9.5bn mainly due to 9.7bn
  impairment and related charges
• Core revenues1 growth of 4.0
• EBITDA margin1 improvement from 29 to 36
• Free Cash flow1 improvement from - 0.4 to
  2.8bn
• Net debt reduction from 15.7bn to 12.4bn

1excluding exceptional items
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5
Continuous Improvement Margin and Cash Flow Net
debt further reduced to 12.4bn
EBITDA Margin 1
Free Cash Flow
(in mn)
Capex
Net debt
(in bn)
(in mn)
1 Excluding exceptional items
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6
Management focusMoving from short term cash to
longer term value focus
Past
Future
Present
Mid-termfocus
Long-termfocus
Short-termfocus
Repair balance sheet
Optimal leverage
Positive free cash flow
Rationalisation restructuring
Customer satisfaction
Maximize bottom line growth
Best in class benchmarking
Profitable top-line growth
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7
Fixed Ambition best in class
Be best in class
Secured high Free Cash Flows
8
Fixed Development of major new services
Consumer Market
Business Market

• ADSL
• 310,000 installed ( 100,000) in Q4
• Pop coverage from 67 to 85
• Market share of total broadband market from 24
  to 29, target of 50 by 2005
• Introduction of discount packages
• Pilot started in Q1 2003
• Target nationwide introduction in Q3 2003 1
• Introduction of SMS
• Pilot started in Groningen2 in Q1 2003

• Increase IP-VPN networking
• services
• Introduction of complete DSL
• portfolio for business customers
• KPN EuroRings
• Fully operational as of January 1st 2003
• Already several contracts signed (Dutch and
  international customers)

WLAN in the Netherlands Extending to public hot
spots in combination with Mobile and ISPs
1 Anticipating a positive outcome of negotiations
with OPTA 2 Large Dutch city
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9
MobileMarket approach

• One company, active in 3 markets
• Synergies through innovation, purchasing and
  policy making
• Local branding and execution
• Priorities differ per country
• KPN Mobile NL retain number 1 position and
  maximize cash flow
• E-Plus strengthen number 3 position and maintain
  focus on margin
• BASE increase market share and become cash flow
  positive during 2004

10
Mobile Development of major new data services
Consumer Market
Business Market

• MMS
• Integrated with i-mode in all countries (Summer
  2003)
• Next generation i-mode to
• be launched at CeBIT
• (March 2003)

• Business partnership with top
• system integrators
• Mobile engineers solution already implemented
  within KPN
• Mobile sales solutions offered
• Successful launch of Personal
• Information Management
• for SME (Lucio)

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11
Mobile Development of major new services i-mode

• i-mode in 2002
• 236,000 subscribers as at end 2002
• E-Plus (Germany) 123,000
• KPN Mobile (The Netherlands) 111,000
• BASE (Belgium) 2,000 ¹
• Additional ARPU² 6 to 8 per month in Germany
  and the Netherlands
• i-mode in 2003
• New more straightforward pricing model
• Introduction of i-mode on pre-paid
• Broad range of handsets, including camera phones,
  to be introduced in course of 2003

¹ Introduced in December 2002 ² Outside the
promotion period
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12
Mobile UMTS

• Fulfilment of license obligations in all three
  countries
• Further roll-out of 3G network infrastructure
  depends on speed market demand for 3G services
• Pilot in The Netherlands in 2003
• Roll-out of network in Germany in 2003
• Progressive commercial launch in Germany early
  2004
• Capex up to and including 2005 1.4bn

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13
Cost Reduction Program More progress to be made
Total number of personnel (FTE)

• Collective labor agreement personnel
• Apart from 5,280 FTE reduction program, natural
  attrition is substantial
• resulting in reduction during 2002 of 5,662 FTE
  (excl. deconsolidation effects)
• ongoing reduction expectedduring 2003

47,888
44,080
39,561
37,251
16,837
35,837
15,840
15,761
1,674
15,209
975
14,457
729
29,377
685
847
27,265
23,071
21,357
20,533
- 8,8441
YE '01
Q1 '02
Q2 '02
Q3 '02
Q4 '02
Consolidation International
Temporary personnel
Coll. Labor Agr. (NL)
1 Including deconsolidation effect of
3,182(Network Construction, End-User Services and
Software House) and natural attrition
14
Other relevant developments

• Shareholding Dutch State
• Special share under scrutiny of EU
• State has always acted as a rational shareholder
• Reduction in mobile termination tariffs
• No forced reduction as of yet
• Annualized impact on EBITDA of OPTAs proposed
  tariff decrease - 105mn
• Outcome of O2 court case expected around end of
  March
• Expected to be full test for legitimacy of OPTAs
  MTA regulation
• New Telecommunications Act
• Based on EU directives
• NMa¹ investigation into dealer commissions
• Disproportionate fine of 31mn imposed
• KPN has lodged an appeal

¹ Dutch competition authority
15
Dividend Policy

• Conditions to resume dividend payments
• Structural¹ positive free cash flow
• Credit Rating of at least²
• Baa2 at Moodys
• BBB at SP
• Structural¹ net profit
• Net debt of around 10 billion

• Most likely a proposal for dividend policy will
  be made at the AGM in 2004

1 Structural realised for a full year and
expected to be sustainable ² Related to KPNs
1.75bn Credit Facility (undrawn)
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16
Outlook 2003Excluding impact Mobile termination
reduction
gt more than minimum lt less than
maximum
1 Based on reported figures, excluding
exceptional items 2 Net cash flow from operating
activities after capex, interest, tax and
restructuring expenses.
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17
CFO

• Maarten Henderson

18
Financial highlights in Q4(Reported, in
millions)
Revenues (-4)
EBITDA (91)
3,511
3,363
665
1,273
2001
2002
2001
2002
Net result
EBIT
-14,315
514
-6,226
7
2001
2002
2001
2002
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19
Major exceptionals in Q4
1 Stamp duty
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20
Results in Q4(Excluding exceptional items)
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21
Revenue development1 in Q4 Strong growth in core
divisions
millions
5.9 revenue growth in core divisions
164
-5
-171
3,114
34
3,136
FixedNetworks
Mobile
Business Solutions2
Other3
Q4 2002
Q4 2001
1 Excluding exceptional items 2 Previously known
as Data/IP 3 Including 9mn due to decrease
Intercompany sales
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22
Pension Charges Additional charge for 2002
amounts to 52mn

• Funding first two years 52¹mn per annum
• Total funding shortfall is 385¹mn
• Remaining 281¹mn to be funded in the 5 years
  following

Coverage ratio
Desired
385mn
281mn
Minimum reserve
Current 106
104mn
100
1 Amount final in April
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23
EBITDA margins¹ Despite additional pension
charge in Q4, increase continues
Business Solutions²
KPN Group
Mobile
Fixed Networks²
1 Excluding exceptionals ² 2001 numbers restated
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24
Tax1 in Q4

• Major differences with Q3 02 charge of -190mn
  relate to
• Fiscal re-consolidation Entercom
• Waived shareholder loans BASE and KPN Belgium

1 Excluding exceptional items 2 Divisions
Fixed/Business Solutions/Other
25
Free Cash Flow in Q4
1 Excluding exceptional items 2 A.o. decreased
accounts receivable (e.g. first effects of
advanced billing subscription fee) 3 Operational
cash flow after capex, interest, tax and
restructuring expenses
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26
Working CapitalStrong improvement in 2002
Working capital project 765mn
millions
332
Positive cash flow 1,097mn
1231
1131
1651
3641
Increase Accounts Payable
Other changes
Strong decrease Trade Receivables
Faster billing of offered services
Decrease Inventory
1 Change in balance position (includes non-cash
effects)
27
Credit profileMore balanced redemption schedule

• Debt redemption schedule strongly improved during
  Q4
• Public tender offers on the Global Bond maturing
  in 2005 ( 737mn)
• Early redemption and cancellation of E-Plus
  project financing ( 1,881mn)
• Open market repurchases ( 128mn)
• Repayment BellSouth Facility ( 516mn)
• Undrawn 1.75bn credit facility currently
  renegotiated

Costs involved in early repayments in Q4
107mn
1

• 
  Excluding money market, other
  short-term funding and other consolidated debt
• 1 Including Convertible Notes of 1.5bn

28
Financial Restructuring of KPN MobileQ4 summary

• Objective
• To enable Mobile to strengthen and grow its
  mobile activities, especially in Germany
• Transparent and healthy financial structure for
  KPN Mobile and E-Plus
• Tax cash benefits
• Developments
• KPN converted 14bn of its shareholder loans
  into 7bn newly issued ordinary KPN Mobile shares
• NTT DoCoMos share in KPN Mobile diluted to 2.16
  
• KPN Mobiles balance sheet improved significantly
  to a structure with 4.8bn equity and 5.6bn
  shareholder loans
• Capital injection in E-Plus of 1.9bn to repay
  its project financing
• Continuing discussions with the tax authorities,
  but no cash-taxes in 2003 and 2004 expected

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29
Fixed Networks in Q4 Strong EBITDA growth
(Excluding exceptional items, in millions)
Fixed Telephony
Carrier Services
Other
Interdivision
EBITDA (15) 447 514
EBIT (60) 190 303
Revenues (2) 1,644 1,678
Q4 01
Q4 02
Q4 01
Q4 02
Q4 01
Q4 02

• FT Lower revenues resulting from lower internet
  and domestic traffic
• CS Slightly lower revenues due to lower traffic
  prices offsetting other increases
• Other Increased revenues from internet-access
  originating and ADSL
• Decline in interdivisional charges mainly due to
  lower costs at network operator

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30
Revenue Development Fixed Networks Increase of
2.1
millions
1,678
15
26
1,644
-33
25
7
-17
11
Q401
Q402
Internet Minutes Fixed Telephony
Internet Originating Minutes ISPs
ADSL Subscription
Other Traffic Fixed Telephony
ISP and Telephony Subscription
Other2
Local1 Voice Fixed Telephony
1 Including -12mn local CPS effect 2 Including
9mn local CPS effect at Carrier Services
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31
Mobile in Q4Strong increase in revenues and
EBITDA
(Excluding exceptional items, in millions)
KPN Mobile (NL)
E-Plus
BASE
Other¹
EBITDA (24) 347 431
EBIT -132 160
Revenues (15) 1,087 1,251
BASE 0
other
other
Q4 01
Q4 02
Q4 01
Q4 02
Q4 01
Q4 02

• Overall increase in customer base and improved
  post/prepaid mix
• KPN Mobile (NL) continued strong margin
  performance 44 revenue growth 12
• E-Plus2 significant growth customer base while
  margin remains stable
• BASE continued YoY improvement of EBITDA and
  EBITDA margin

¹ Q4 01 including Pannon (deconsolidated per Feb
4, 2002) ² Q4 01 including 77.49 E-Plus Q4 02
full consolidation
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32
E-Plus in Q4Continued Improvement Customer Mix
mn customers
Stable ARPU
7.5
7.5
7.5
7.3
7.3
7.3
7.1
7.0
43
43
43
42
40
40
39
36
47
46
45
43
42
41
25
25
41
40
24
22
22
22
21
21
10
9
9
9
9
9
9
8
Q1 '01
Q2 '01
Q3 '01
Q4 '01
Q1 '02
Q2 '02
Q3 '02
Q4 '02
Q1 '01
Q2 '01
Q3 '01
Q4 '01
Q1 '02
Q2 '02
Q3 '02
Q4 '02
post paid
blended
post-paid
pre-paid
Stable margin
30.2
30.1
29.5
29.7
28.4
27.9
19.9
-2.1
Q1 '01
Q2 '01
Q3 '01
Q4 '01
Q1 '02
Q2 '02
Q3 '02
Q4 '02
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33
Business Solutions1 in Q4Large EBITDA growth
(Excluding exceptional items, in millions)
EBITDA (27) 166 210
EBIT -7 9
Revenues (-1) 545 540
Q4 01
Q4 02
Q4 01
Q4 02
Q4 01
Q4 02

• Third party sales increased related to ADSL and
  integrated solutions, partially offset by lower
  international bandwidth services and KPNQwest
  related matters
• On balance revenues declined due to lower
  internal transmission proceeds
• EBITDA margin increased to 38.9 (from 30.5)
  driven by cost reduction programs

¹ Formerly Data/IP
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34
Other in Q4EBITDA positive
(Excluding exceptional items, in millions)
EBITDA -16 45
EBIT -194 -31
Revenues (38) 480 300
Q4 01
Q4 02
Q4 01
Q4 02
Q4 01
Q4 02

• Revenue decline due to deconsolidation/ sale non-
  core assets(mainly KPNQwest) and lower own work
  capitalized
• EBITDA increase due to cost reduction program
• EBIT related to EBITDA increase and lower
  depreciation charges (lower asset base)

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35
Q A
36
Annex

• For more information please contact
• KPN Investor Relations
• Tel [phone]
• mailto ir_at_kpn.com

37
Corporate Governance Compliance with
Sarbanes-Oxley Act and Dutch/EU regulation

• Principles
• KPN endorses Dutch and European (Winter Committee
  2002) principles
• Rules of Sarbanes - Oxley apply to us as well
• Structure
• Current Supervisory Board members all independent
  non-execs
• Audit committee in place, with qualified
  financial expert nominated
• Internal control system strengthened during 2002
  (letters of representation, code of practice for
  financial managers)
• More comprehensive risk management system to be
  introduced in 2003
• Disclosure committee started
• As of 2003, Audit Committee decides all new
  assignments to auditor¹

1 Previous treshold was assignments above 1mn
38
Mid-Term Outlook as presented at Q3 20022003 -
2004

• Outlook excludes impact of Mobile Termination
  Reduction

1 Excluding exceptionals items and
deconsolidations 2 Including positive OPTA
effects (retail cap of CPI 0 before July 2002
CPI 5.3) 3 Including negative OPTA effects
(introduction interconnecting leased lines per
August 2002) 4 Excluding potential additional
funding effect pension fund
39
Results in Q4 and FY(Reported)
40
Exceptional Items (part I) Total impact on
EBITDA
41
Exceptional Items (part II) Total impact on
EBIT
42
Exceptional Items (part III) Total impact on
profit after taxes
43
Quam MobilCom 2.5G roaming contractsCash
accounting consequences

• Contracts closed April 2001
• Termination negotiated Q4 2002

44
Revenue development FY Strong growth in core
revenues
(Excluding exceptional items, in millions)
4 revenue growth in core divisions
410
-21
-713
132
12,362
12,170
FixedNetworks
Mobile
Business Solutions
Other1
FY 2002
FY 2001
1 Including 59 mn due to decrease Intercompany
sales
45
Operating ExpensesStrong decrease
(Excluding exceptional items, in millions)
46
Analysis Operating Expenses I
Salaries

• Lower number of personnel due to
• Social plan
• Recruitment freeze
• Deconsolidation and sale of non core activities
• Increase mainly related to higher number of
  mobile handsets sold

-7
Cost of materials
13
282
249
Q4 '01
Q4 '02
47
Analysis Operating Expenses II
Work contracted out

• Lower number of temporary personnel
• Lower purchasing costs of transit and
  international traffic
• Deconsolidation and sale ofnon-core activities
• Lower due to deconsolidation and sale of non-core
  activities

-10
Other
-54
48
Addition to 2001 restructuring provisionof 77
million on balance
1 Part of Other activities
49
Pension Charges2002 additional PL charge is
estimated at 52mn
Coverage ratio
Desired
385mn
281mn
Minimum reserve
Current 106
104mn
100

• Given December 31 2002 status1 total of 385mn
  needs to be funded
• Change2 in timing of payments3, not in total
  volume
• Preliminary agreement4
• 104mn spread over 2 years, starting Q4 2002
• 281mn spread over 5 years, starting Q4 2004
• ? 52mn PL charge Q4 2002 cash out Q2 2003

1 A possible shortfall is measured every
year-end. 2 Relates to change in minimum reserve
level caused by decrease in long term interest
rate 3 Compared to 388mn (status per October
31) of which 84mn to be funded in 2 years and
304mn in 5 years 4 Subject to final approval of
all parties involved in the discussions
50
Additional 52mn pension chargeSplit per
division
51
Depreciation and AmortizationStrong decrease
(Excluding exceptional items, in millions)
52
Tax FY(Including exceptional items, in
millions)
1 Divisions Fixed Networks/Business
Solutions/Other 2 Losses of German mobile
activities can be deducted from the Dutch mobile
profitsThis results in a postponed payment for
Dutch mobile activities (excluding the effects
from re-financing KPN Mobile) 3 Including
valuation allowance on deferred tax assets (
-275mn for E-Plus and -331mn for BASE) as part
of impairment on mobile assets in Q2
53
Net result affiliates(Excluding exceptional
items)
Income from Participating Interests
Minority Interests
1 Release of former Unisource provision set up in
1999.
54
Free Cash Flow FYStrong improvement
1 Excluding exceptional items 2 A.o. decreased
accounts receivable (e.g. first effects of
advanced billing subscription fee) 3 Operational
cash flow after capex, interest, tax and
restructuring expenses
55
Cash Flow in Q4 and FY
56
Capex in Q4 and FYFurther optimized
1 Excluding exceptionals
57
Balance Sheet
Assets ( bn)
Liabilities equity ( bn)
41.1
25.2
41.1
25.2
Goodwill
Group equity
12.2
Licenses
Exchange right
0.7
1.4
4.5
4.8
Fixed assets
Provisions
1.6
4.4
16.9
Current assets
Long term liabilities
12.7
11.0
Cash
Short term liabilities
9.9
2.6
6.1
2.7
YE 01
YE 02
YE 01
YE 02

• Main changes relate to
• Impairment charges on Mobile activities 9.0bn
• Acquisition of 22.51 of E-Plus per half March
  2002
• Redemptions of 8.3bn of debt
• Consolidation Vision Networks

58
Stable Financial PositionDriving down gross and
net debt
59
Vision NetworksReconsolidation in Q4 led to
decline net debt KPN by 632 mn

• 1998 cable activities deconsolidated as Vision
  Networks (VN)
• 1998-2002 cash within VN lent to KPN (as
  external debt)
• Oct 8, 2002 consolidation VN
• Effect on KPNs consolidated balance sheet
• Sale of last cable assets
• Dec 18, 2002 closing sale Polish assets
• Jan 20, 2003 closing sale Czech assets

Assets
Liabilities
Positive effect on equity was increased by
48mn to 745mn through adjustments taxes
Others assets 67mn Incl. affiliated
comp. equity 697mn debt -
632mn provisions 2mn other 67mn
67mn
Approx 65mn
60
Debt Summary
1 YE 01 and Q3 02 including Vision Networks
61
Early Redemptions
1 Originally repurchased amount is US 465mn
62
Debt PortfolioTotal debt Q4 15.0bn1
2
2
1 Including money market, other short term
funding 2 Foreign currency amounts hedged into
Euro
63
Financial RatiosStrong improvement
All figures calculated on a 12m rolling basis,
excluding excluding items
64
Mobile structure as at Q3
Royal KPN
18.9bn
2.2bn
NTT DoCoMo
KPN Mobile Total gross debt1 22.2bn
15
85
10.0bn
22.5
77.5
E-Plus Total gross debt 14.3bn
Project financing Financial leases
2.1bn
1 Including 77.5 of E-Plus financing outside KPN
Mobile Group (project financing financial
leases)
65
Financial Restructuring of KPN Mobile Steps
taken

• Royal KPN sold receivable on E-Plus of 2.2bn to
  KPN Mobile for 0.6bn
• Royal KPN indirectly increased the capital of
  E-Plus with 1.9bn
• E-Plus cancelled its project financing and early
  redeemed the amount outstanding ( 1.9bn)
• KPN converted 14bn of its shareholder loans to
  KPN Mobile into 7bn newly issued ordinary KPN
  Mobile shares
• KPNs stake in KPN Mobile increases to 97.84
  (8bn shares)
• Increase KPN Mobiles equity to 4.8bn

66
Mobile structure as at YE
Royal KPN
4.7bn
5.6bn
100
KPN Mobile Holding¹ Total gross debt² 10.4bn
NTT DoCoMo
1.9bn
KPN Mobile Total gross debt3 5.7bn
97.84
2.16
12.5bn
22.5
77.5
E-Plus4 Total gross debt 14.6bn
Financial leases
0.2bn
1 KPN Mobile Holding includes GMI (which is
financed via shareholder loans from Royal KPN of
2.8bn and owns 22.5 of E-Plus
Holding) 2 Including nearly 100 of E-Plus
financing ³ Including 77.5 of E-Plus financing
outside KPN Mobile Group (financial
leases) E-Plus includes E-Plus Holding (gross
debt 2.0bn) and E-Plus (gross debt 12.6bn)
4
67
KPIs Fixed Networks
1 Number of calls per channel per day 2 Average
duration per call in seconds
68
Development Minutes Fixed Networks Increase by
0.6
billion minutes
1.6
22.0
-2.1
21.8
-0.8
1.7
-0.2
Q401
Q402
Internet Minutes Fixed Telephony
Local1 Voice Fixed Telephony
Other Traffic Fixed Telephony
Other1
Internet Minutes ISPs
1 Local CPS -0.5 bn minutes
69
KPIs Internet Subscribers
70
KPIs KPN Mobile (NL)
71
KPIs E-Plus
1 Q3 02 figure restated to reflect official data
on marketshares 2 2001 figures restated to
include visitor roaming
72
KPIs BASE
73
Traffic and subscription revenues increase
(Excluding exceptional items, in millions)
BASE 162 YoY3
KPN Mobile (NL) 13 YoY
E-Plus¹(Excluding consolidation effects) 8 YoY²
¹ Figures represent 77.49 ² 39 incl.
consolidation effects
3 Q4 01 traffic and subscription revenue were
impacted by a 29 adjustment
Other (incl. handset sales)
Traffic and subscription
74
Regulation MobileEC Issues

• International Roaming
• Pending investigation of excessive pricing by all
  UK and German operators
• Power to the national regulators from mid 2003 to
  regulate wholesale international roaming prices
• Mobile termination
• Pending investigation on possible abuse of
  dominance by KPN next steps uncertain
• New ONP rules Power to the national regulators
  from mid 2003 to regulate fixed to mobile call
  termination rates in 2003 of all operators

75
Regulation MobileNetherlands

• Mobile Terminating
• OPTA
• KPN charges lower MTA tariffs since H2000 than
  those of other operators
• KPN filed interconnection disputes with OPTA and
  in meantime brought its tariffs more in line with
  those of other operators
• OPTA has ruled in more than 40 cases that tariffs
  of all mobile operators should go down on
  December 1, 2002
• Court has suspended OPTA decisions until outcome
  court case O2
• Court ruling in precedent setting O2 case
  expected end of March
• NMa¹
• Published report on relevant market and leaves
  further initiative to OPTA
• Dealer payments
• NMa¹ fined mobile operators for in total 88mn
• KPN considers the fine of 31.3mn
  disproportionate
• KPN is contemplating filing an appeal total
  procedure may take several years

¹ Dutch Competition Authority
76
Annualized impact of MTA¹-reductionTotal EBITDA
effect - 105mn per annum

• Possible impact of tariffs as proposed by OPTA

• No forced reduction as of yet
• Court ruling in O2 case expected end of March

1 Under the assumtion that MTA tariffs decrease
from KPNs current level of 0,189 to 0,1296
77
KPIs Business Solutions