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

20 Reconciliation of gross debt. Mar. 31, 2011 millions of € Dec. 31, 2010 millions of € Change millions of € Change % Mar. 31, 2010 millions of € Financial liabilities (current) 9,766 11,689 (1,923) (16.5) 9,960 Financial liabilities (non-current) 38,040 38,857 (817) (2.1) 40,980 Financial liabilities 47,806 50,546 (2,740) (5.4) 50,940 Accrued interest (1,034) (1,195) 161 13.5 (1,161) Liabilities from corporate transactions (444) (1,566) 1,122 71.6 (1,391) Other (486) (467) (19) (4.1) (514) Gross debt 45,842 47,318 (1,476) (3.1) 47,874 The reclassification of the U.S. operations described on the previous page resulted in a substantial shift in the Group’s assets from non-current assets (reduced by 32.3 percent) to current assets (more than tripled). At the same time, non-current liabilities decreased by 16.1 percent, whereas current liabili- ties increased by 19.4 percent. In total, assets decreased by EUR 4.6 billion and liabilities by EUR 4.2 billion. The following analysis does not present the reclassification of U.S. operations in detail. For further information, please refer to the interim consolidated finan- cial statements. Cash and cash equivalents decreased by EUR 1.1 billion compared with December 31, 2010. For detailed information on this change, please refer to the consolidated statement of cash flows and selected notes to the consoli- dated statement of cash flows in the interim consolidated financial statements. Trade and other receivables decreased by EUR 0.4 billion. In addition to the decline in operations, this reduction is also attributable to increased re- ceivables as of year-end. Other current assets increased by EUR 0.3 billion. While inventories, re­ coverable income taxes and financial assets changed only marginally, other assets increased by EUR 0.4 billion. This increase is primarily due to the Group’s ongoing advance VAT payments. The EUR 1.6 billion decrease in intangible assets is mainly due to exchange rate effects. The reclassification of the U.S. operations was carried out using values as of March 20, 2011, hence the exchange rate effects from the transla- tion of U.S. dollars into euros had a negative impact of EUR 1.8 billion on this change. The EUR 1.2 billion decrease in property, plant and equipment is also signi­f- icantly impacted by exchange rate effects of EUR 0.4 billion. Additions of EUR 1.2 billion as well as depreciation and impairment losses of EUR 1.8 billion also contributed substantially to this development. Investments accounted for using the equity method declined by EUR 0.4 bil- lion, due to negative exchange rate effects of EUR 0.2 billion as well as dividend payments of EUR 0.3 billion. Current and non-current financial liabilities decreased by EUR 2.6 billion compared with the end of 2010. For more information, please refer to the following table and the accompanying explanations. Shareholders’ equity decreased by EUR 0.4 billion to EUR 42.6 billion, due to the development in total other comprehensive income of EUR 0.9 billion (mainly from currency translations from foreign operations). This was con­ trasted by the positive effect of actuarial gains and losses from pension obligations (EUR 0.3 billion) and profit (EUR 0.6 billion).