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

65Interim consolidated financial statements Q3 2011 millions of € Q3 2010 millions of € Change % Q1 – Q3 2011 millions of € Q1 – Q3 2010 millions of € Change % FY 2010 millions of € Net revenue 3,680 4,140 (11.1) 10,954 12,135 (9.7) 16,075 Cost of sales (1,536) (2,296) 33.1 (5,105) (6,495) 21.4 (8,673) Gross profit (loss) 2,144 1,844 16.3 5,849 5,640 3.7 7,402 Selling expenses (1,089) (1,228) 11.3 (3,290) (3,595) 8.5 (4,747) General and administrative expenses (118) (141) 16.3 (435) (433) (0.5) (580) Other operating income 19 5 n. a. 28 37 (24.3) 54 Other operating expenses (2) (3) 33.3 (8) (30) 73.3 (39) Profit (loss) from operations 954 477 n. a. 2,144 1,619 32.4 2,090 Profit (loss) from financial activities 45 0 n. a. 35 0 n. a. (7) Profit (loss) before income taxes 999 477 n. a. 2,179 1,619 34.6 2,083 Income taxes (402) (168) n. a. (1,011) (606) (66.8) (746) Profit (loss) after taxes from discontinued operations 597 309 93.2 1,168 1,013 15.3 1,337 Income tax expense from discontinued operations increased year-on-year by EUR 0.4 billion, primarily due to the higher profit before income taxes in the current period. In addition, due to the classification of T-Mobile USA as a dis- continued operation, deferred tax liabilities amounting to EUR 0.1 billion were recognized on the temporary differences for the first time in connection with the carrying amount of the investment. Profit/loss from discontinued operations includes depreciation, amortization and impairment losses of EUR 0.5 billion (Q1 - Q3 2010: EUR 1.5 billion, FY 2010: EUR 2.1 billion) that are no longer included in the Group’s depre­ ciation, amortization and impairment losses. Profit/loss from discontinued operations includes personnel costs of EUR 1.6 billion (Q1 - Q3 2010: EUR 1.6 billion, FY 2010: EUR 2.1 billion) that are no longer included in the Group’s personnel costs. Income taxes. Q3 2011 millions of € Q3 2010 millions of € Change % Q1 – Q3 2011 millions of € Q1 – Q3 2010 millions of € Change % FY 2010 millions of € Income taxes (282) 67 n. a. (480) (503) 4.6 (189) Compared with the first three quarters of 2010, the decrease in income tax expense from continuing operations was relatively small in spite of a EUR 0.4 billion decline in profit before income taxes. This is mainly attributable to the lower tax rate in the prior-year period resulting from the first-time capitalization of deferred taxes of EUR 0.3 billion on temporary differences and tax loss carry- forwards in Europe. The loss resulting from the deconsolidation of T-Mobile UK, which had no tax effect, and a special tax imposed in Greece had an offsetting effect at the time but these effects were not as significant as that of the first-time capitalization of deferred taxes. Profit/loss after taxes from discontinued operations. The following table provides a breakdown of profit/loss from discontinued operations: