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Deutsche Telekom AG - Interim Group report - January 1 to March 31, 2011

14 Development of business in the Group. Discontinued operations (United States operating segment). On March 20, 2011, Deutsche Telekom AG and AT&T entered into an agreement on the sale of T-Mobile USA to AT&T that has not yet been completed. T-Mobile USA is reported as the United States operating segment in Deutsche Telekom’s consolidated financial statements. The consolidated income statement was consequently adjusted with retro­ active effect. This adjustment was necessary, as the United States operating segment must be recognized in the consolidated financial statements as a discontinued operation in the first quarter of 2011 as a result of the aforemen- tioned agreement. Thus the contributions of the United States operating segment are no longer included in the individual items of the consolidated income statement. Instead, profit/loss after taxes is included in aggregate form in the item “Profit/loss after taxes from discontinued operations.” Assets and the directly associated liabilities of the United States operating segment are shown as held for sale in the consolidated statement of financial position. For further information, please refer to the interim consolidated financial statements. In the following analyses of key financial figures that can be derived from the consolidated income statement, corresponding subtotals and reconciliations are presented in such a way that they can be reconciled with figures presented in the consolidated income statement as well as compared with figures pub- lished in prior periods. Effects of changes in the composition of the Group. Everything Everywhere joint venture. On April 1, 2010, Deutsche Telekom AG and France Télécom S.A. merged T-Mobile UK and Orange UK to create a joint venture called Everything Everywhere in which the two companies hold equal shares of 50 percent. Since then, the assets and liabilities of T-Mobile UK have no longer been shown in the consolidated statement of financial position. Equally, T-Mobile UK’s income statement has no longer been included in the consolidated income statement since the same date. Instead, the joint venture is included in the consolidated statement of financial position under invest- ments accounted for using the equity method. The share of the joint venture’s profit/loss is reported in the consolidated income statement under profit/loss from financial activities. The new joint venture is presented in the Europe oper- ating segment. In the first three months of the prior year, T-Mobile UK was still fully consoli- dated and, as such, its income statement was still included in the consolidated income statement. In order to provide comparability with the prior-year period, we have adjusted the consolidated figures in the table below accordingly and eliminated T-Mobile UK from the first quarter of 2010. Excluding T-Mobile UK Including T-Mobile UK Q1 2011 millions of € Q1 2010 millions of € Change % Q1 2011 millions of € Q1 2010 millions of € Change % Revenue from continuing and discontinued operations 14,597 15,054 (3.0) 14,597 15,812 (7.7) Revenue from continuing operations 10,830 11,244 (3.7) 10,830 12,002 (9.8)   EBITDA (adjusted for special factors) from continuing and discontinued operations 4,480 4,717 (5.0) 4,480 4,890 (8.4) EBITDA (adjusted for special factors) from continuing operations 3,609 3,709 (2.7) 3,609 3,882 (7.0)   Net profit (loss) 480 847 (43.3) 480 767 (37.4) Net profit (loss) (adjusted for special factors) 701 966 (27.4) 701 891 (21.3)   Free cash flow (before dividend payments, spectrum investment and PTC transaction) 1,061 1,432 (25.9) 1,061 1,439 (26.3) Cash capex (2,120) (1,873) (13.2) (2,120) (1,934) (9.6)