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Deutsche Telekom AG - Interim Group report - January 1 to March 31, 2012

34 Selected notes to the consolidated income statement. Other operating income. Q1  2012  millions of € Q1 2011 millions of € Income from reimbursements 105 90 Income from the reversal of impairment losses on non-current financial assets in accordance with IFRS 5 3 – Income from disposal of non-current assets 14 50 Income from insurance compensation 11 8 Miscellaneous other operating income 201 161 334 309 In addition to a large number of smaller individual items, miscellaneous other operating income includes income of around EUR 0.1 billion resulting from litigation with Kreditanstalt für Wiederaufbau concluded in the reporting period. Other operating expenses. Q1  2012  millions of € Q1 2011 millions of € Losses on disposal of non-current assets (42) (23) Miscellaneous other operating expenses (88) (133) (130) (156) Miscellaneous other operating expenses include a large number of individual items accounting for marginal amounts. Profit/loss from financial activities. The year-on-year improvement in the loss from financial activities by EUR 0.1 billion in the first quarter of 2012 related in part to the sale of shares in Telekom Srbija effective January 25, 2012. The conclusion of the transaction and the subsequently necessary reclassification of the amounts recognized directly in equity in total other comprehensive income as of December 31, 2011 resulted in income of EUR 0.2 billion, which was recognized under other finan- cial income/expense. Income taxes. Income tax expense decreased by EUR 0.4 billion year-on-year to EUR 0.2 billion, mainly as a result of the lower profit before income taxes. Furthermore, in the prior-year period, T-Mobile USA was classified as a discontinued operation. This resulted in the recognition of deferred tax liabilities of EUR 0.1 billion on temporary differences in connection with the carrying amount of the investment. Other disclosures. Employees. Personnel costs increased by EUR 0.4 billion to EUR 4.0 billion compared with the prior-year period. This was primarily due to an increase in expenses of EUR 0.5 billion for civil servant early retirement arrangements as well as other staff-related measures in Germany and abroad. Notes to the consolidated statement of cash flows. Deutsche Telekom paid EUR 1.4 billion to Elektrim and Vivendi in the first quarter of the prior year. This gave Deutsche Telekom full, undisputed owner- ship of PTC (PTC transaction). In accordance with the standards governing statements of cash flows, this total consisted of the following: EUR 0.4 billion net cash from operating activities, EUR 0.8 billion net cash used in investing activities and EUR 0.2 billion net cash used in financing activities. Net cash from operating activities. Net cash from operating activities in the first quarter of 2012 increased by EUR 0.3 billion compared with the prior-year period to EUR 3.0 billion. This was mainly attributable to the following cash flows: lower income tax paid (EUR 0.1 billion), lower net interest payments (EUR 0.1 billion) and cash inflows from the canceling of interest rate swaps (EUR 0.1 billion). Whereas in the first quarter of 2011 cash outflows of EUR 0.4 billion were recorded for the PTC transaction, the first quarter of 2012 saw cash outflows of EUR 0.2 billion in connection with the AT&T transaction relating to the termination of the agreement for the sale of T-Mobile USA as well as EUR 0.1 billion in connection with investigations by the U.S. authorities into contracts signed in the F.Y.R.O. Macedonia and Montenegro. In addition, cash outflows for voluntary redundancy and sever- ance payments, and compensation payments decreased year-on-year in the first quarter of 2012. This effect was partially offset by EUR 0.1 billion lower dividend payments from the Everything Everywhere joint venture in the first quarter of 2012. Net cash used in investing activities. Q1  2012  millions of € Q1 2011 millions of € Cash capex Germany operating segment (823) (820) Europe operating segment (505) (512) United States operating segment (571) (546) Systems Solutions operating segment (131) (123) Group Headquarters & Shared Services (155) (111) Reconciliation 16 (8) Acquisition of government bonds (420) – Net cash flows for collateral deposited for hedging transactions (215) 89 PTC transaction – (820) Sale of Telekom Srbija 380 – Repayment of a bond issued by the Everything Everywhere joint venture 218 – Other 105 91 (2,101) (2,760)