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Deutsche Telekom AG - Interim Group report - January 1 to September 30, 2015

14 Interim Group management report Deutsche Telekom. Interim Group Report 9M 2015. Trade and other receivables decreased by EUR 0.2 billion to EUR 10.3 billion. Factoring agreements concluded in the reporting period concerning monthly revolving sales of current trade receivables resulted in a EUR 0.8 billion reduction in receivables. The new business model JUMP! On Demand introduced at T-Mobile US also reduced receivables: Under this model, trade receivables no longer include the receivable from the sale of the device when a contract is concluded with a customer, but rather only the monthly lease installment for the device. Exchange rate effects from the translation of U.S. dollars into euros in particular had an offsetting effect. Other assets as of September 30, 2015 included the following significant effects: The EUR 1.3 billion increase in the carrying amounts of non-current assetsanddisposalgroupsheldforsaleresultedmainlyfromtwotransactions agreed in the third quarter of 2015 for the exchange of mobile licenses with AT&T and Verizon Communications to improve T-Mobile USʼ mobile network coverage.ThesetransactionsincreasedthecarryingamountsbyEUR 0.6 billion and EUR 0.2 billion respectively. Currency effects of EUR 0.3 billion from the translation of pounds sterling into euros related to the reclassification in December 2014 of our stake in the EE joint venture also had an increasing effect on the carrying amount. Inventories increased by EUR 0.3 billion, mainly due to increased stock levels of terminal equipment (in particular higher-priced smartphones) at T-Mobile US and exchange rate effects from the translation of U.S. dollars into euros. The carrying amount of investments accounted for using the equity method decreased by EUR 0.2 billion compared with December 31, 2014, mainly in connection with the shares held in Scout24 AG: A dividend payment received in the second quarter of 2015 reduced the carrying amount of the investment by EUR 0.1 billion. Our current and non-current financial liabilities increased by EUR 1.9 billion compared with the end of 2014 to EUR 57.1 billion in total. For the main effects on financial liabilities, please refer to net cash used in financing activities on pages 45 and 46 of the interim consolidated financial statements. The EUR 0.2 billion decrease in provisions for pensions and other employee benefits to EUR 8.3 billion was mainly due to interest rate adjustments which resulted in an actuarial gain to be recognized of EUR 0.2 billion. Deferred tax liabilities increased by EUR 1.1 billion to EUR 8.8 billion, especially due to exchange rate effects from the translation of U.S. dollars into euros. Trade and other payables increased by EUR 0.2 billion compared with the end of 2014 to EUR 9.8 billion. The increase is mainly attributable to exchange rate effects from the translation of U.S. dollars into euros. The seasonal reduction in procurement volumes reduced trade and other payables in almost all countries of our Europe operating segment. Shareholdersʼ equity increased by EUR 2.4 billion compared with December31,2014toEUR36.5billion,duetoprofitaftertaxesofEUR 2.4 billion, currency translation effects recognized directly in equity of EUR 1.5 billion, the recognition of actuarial gains (after taxes) of EUR 0.1 billion, and the measure- ment of hedging instruments directly in equity of EUR 0.4 billion. In addition, in connection with the option granted to our shareholders to have their dividend entitlements converted into shares, a capital increase of EUR 1.1 billion was carried out involving the contribution of the dividend entitlements. Dividend payments for the 2014 financial year to Deutsche Telekom AG shareholders of EUR 2.3 billion and to non-controlling interests of EUR 0.1 billion had an offsetting effect. Furthermore, shareholdersʼ equity was also reduced by the acquisition of the remaining shares in Slovak Telekom for EUR 0.9 billion. Changes in net debt millions of € Net debt at Jan. 1, 2015 Other effectsExchange rate effects Acquisition of the remaining shares in Slovak Telekom Net debt at Sept. 30, 2015 47,868 42,500 225 1,255 900 1,330 1,437 Free cash flow (before dividend payments and spectrum investment) (3,548) Spectrum acquisition Future payments for spectrum (Germany) Dividends (including to non-controlling interests) 3,769

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