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Deutsche Telekom AG - Interim Group report - January 1 to September 30, 2011

22 Free cash flow. Free cash flow of the Group (before dividend payments, spectrum investment and PTC transaction) decreased by EUR 0.3 billion in the reporting period compared with the first nine months of 2010. Whereas net cash from operating activities decreased slightly, cash capex increased marginally. The year-on-year decrease in net cash from operating activities in the first three quarters of 2011 (before PTC transaction) was not significant. In addition to a decline from operations, the decrease was attributable to cash inflows of EUR 0.3 billion from canceling interest rate swaps in the first nine months of 2010 for which there was no corresponding item in the current year, a year- on-year reduction in the levels of receivables sold (factoring) accounting for EUR 0.2 billion, as well as lower interest received and higher interest paid totaling EUR 0.2 billion. These effects were largely offset by dividends received from the Everything Everywhere joint venture in the first three quarters of 2011 amounting to EUR 0.5 billion and lower income tax payments of EUR 0.1 billion. The remaining changes in net cash from operating activities consisted of vari- ous partially offsetting effects. The marginal increase in cash capex (before spectrum investment and PTC transaction) in the first nine months of 2011 compared with the first nine months of the prior year was attributable to offsetting effects. While cash capex in the Germany operating segment increased, it decreased in the Europe and Systems Solutions operating segments. Free cash flow (before dividend payments, spectrum investment and PTC transaction). Q1 2011 millions of € Q2 2011 millions of € Q3 2011 millionsof€ Q3 2010 millions of € Change % Q1 – Q3 2011 millionsof€ Q1 – Q3 2010 millions of € Change % FY 2010 millions of € Cash generated from operations (before PTC transaction) 3,901 4,310 4,476 4,517 (0.9) 12,687 12,667 0.2 17,069 Interest received (paid) (832) (716) (732) (674) (8.6) (2,280) (2,111) (8.0) (2,338) Net cash from operating activities (before PTC transaction) 3,069 3,594 3,744 3,843 (2.6) 10,407 10,556 (1.4) 14,731 Cash outflow for investments in intangible assets (excluding goodwill and before spectrum investment) and property, plant and equipment (cash capex) (2,120) (1,879) (2,114) (2,036) (3.8) (6,113) (6,011) (1.7) (8,532) Proceeds from disposal of intangible assets (excluding goodwill) and property, plant and equipment 112 52 76 75 1.3 240 265 (9.4) 344 Free cash flow (before dividend payments, spectrum investment and PTC transaction) 1,061 1,767 1,706 1,882 (9.4) 4,534 4,810 (5.7) 6,543 Of which: from discontinued operations (United States) 427 477 472 481 (1.9) 1,376 1,672 (17.7) 2,037