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

62 Income taxes. Q1 2011 millions of € Q1 2010 millions of € Change millions of € Change % FY 2010 millions of € Income taxes (119) (240) 121 50.4 (189) Income tax expense from continuing operations decreased year-on-year by EUR 0.1 billion, mainly as a result of the lower profit before income taxes. Addi- tionally, the tax rate decreased year-on-year as the composition of profit before income taxes in terms of country-specific contributions changed. Profit/loss after taxes from discontinued operations. The following table provides a breakdown of profit/loss from discontinued operation: Q1 2011 millions of € Q1 2010 millions of € Change millions of € Change % FY 2010 millions of € Net revenue 3,767 3,810 (43) (1.1) 16,075 Cost of sales (2,065) (1,990) (75) (3.8) (8,673) Gross profit 1,702 1,820 (118) (6.5) 7,402 Selling expenses (1,139) (1,122) (17) (1.5) (4,747) General and administrative expenses (163) (138) (25) (18.1) (580) Other operating income 4 3 1 33.3 54 Other operating expenses (3) (19) 16 84.2 (39) Profit from operations 401 544 (143) (26.3) 2,090 Profit (loss) from financial activities (5) 0 (5) n.a. (7) Profit (loss) before income taxes 396 544 (148) (27.2) 2,083 Income taxes (287) (209) (78) (37.3) (746) Profit (loss) after taxes from discontinued operations 109 335 (226) (67.5) 1,337 Income tax expense from discontinued operations increased despite the lower profit before income taxes compared with the first quarter of 2010, mainly as a result of the classification of T-Mobile USA as a discontinued operation. This resulted in the first-time recognition of deferred tax liabilities of EUR 0.1 billion on temporary differences in connection with the carrying amount of the invest- ment. Profit/loss from discontinued operations includes depreciation, amortization and impairment losses of EUR 0.5 billion (Q1 2010: EUR 0.5 billion, FY 2010: EUR 2.1 billion) that are no longer included in the Group’s depreciation, amorti- zation and impairment losses. Profit/loss from discontinued operations includes personnel costs of EUR 0.5 billion (Q1 2010: EUR 0.5 billion, FY 2010: EUR 2.1 billion) that are no longer included in the Group’s personnel costs.