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

70 Additional information. Reconciliation of pro forma figures. Pro forma figures include EBITDA and EBITDA adjusted for special factors, EBITDA margin, EBITDA margin adjusted for special factors, as well as free cash flow, and gross and net debt. Pro forma figures are not governed by International Financial Reporting Stand- ards (IFRS). As other companies may not compute the pro forma figures pre­ sented by Deutsche Telekom by the same method, Deutsche Telekom’s pro forma figures may or may not be comparable with disclosures by other com­ panies using similar designations. The pro forma figures in this Interim Report should not be viewed in isolation as an alternative to profit/loss from operations, net profit/loss, net cash from op- erating activities or the debt reported in the consolidated statement of financial position, or other Deutsche Telekom key performance indicators presented in accordance with IFRS. EBITDA and EBITDA adjusted for special factors. EBITDA. EBITDA for the operating segments and for the Group as a whole is derived from profit/loss from operations (EBIT). This measure of earnings is adjusted for depreciation, amortization and impairment losses to calculate EBITDA. It should be noted that Deutsche Telekom’s definition of EBITDA may differ from that used by other companies. In this definition, profit/loss from financial activities includes finance costs, the share of the profit/loss of associates and joint ventures accounted for using the equity method, and other financial income/expense. As it is based on profit/loss from operations, this method of computation allows EBITDA to be derived in a uniform manner on the basis of a measure of earnings in accordance with IFRS published for the segments and the Group as a whole. EBITDA is an important indicator used by Deutsche Telekom’s senior operating decision-makers to manage Deutsche Telekom’s operating activities and to measure the performance of the individual segments. Adjusted EBITDA. Deutsche Telekom defines EBITDA adjusted for special factors as profit/loss from operations (EBIT) before depreciation, amortization and impairment losses and before the effects of any special factors. Deutsche Telekom uses EBITDA adjusted for special factors as an internal performance indicator for the management of its operational business activi- ties, and to allow it to better evaluate and compare developments over several reporting periods. For further details concerning the effects of special factors on Group EBITDA and the EBITDA of the operating segments, please refer to the section on “Special factors.” EBITDA margin/adjusted EBITDA margin. To compare the earnings performance of profit-oriented units of different sizes, the EBITDA margin and the EBITDA margin adjusted for special factors (EBITDA to revenue) are presented in addition to EBITDA and EBITDA adjusted for special factors. The unadjusted EBITDA margin and the EBITDA margin adjusted for special factors are calculated as the ratio of EBITDA to revenue (EBITDA divided by net revenue or EBITDA adjusted for special factors divided by revenue ad- justed for special factors, respectively). Special factors. Deutsche Telekom’s net profit/loss and EBITDA of the Group and of the operat- ing segments were affected by a range of special factors in both the reporting period and the prior-year periods. The underlying aim is to eliminate special factors that affect operating activities and that make it more difficult to compare EBITDA, net profit/loss and other fi- nancial measures of the Group and the operating segments with corresponding figures for prior periods. In addition, statements about the future development of EBITDA and net profit are only possible to a limited extent due to such special factors. On the basis of the unadjusted financial measures, the adjusted values are calculated by adding (expenses) or deducting (income) the special factors. Adjustments are made irrespective of whether the relevant income and expens- es are reported in profit/loss from operations, profit/loss from financial activities, or in tax expense. Income and expenses directly relating to the adjusted items are adjusted. The following table presents a reconciliation of EBIT/EBITDA and net profit/loss to the respective figures adjusted for special factors. Reconciliations are pre- sented for both the reporting period, the prior-year period and the full 2010 financial year.