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

42 Interim consolidated financial statements Deutsche Telekom. Interim Group Report 9M 2015. millions of € Total Q1–Q3 2015 Q1–Q3 2014 Organic change Q1–Q3 2015 Total Germany United States Europe Systems Solutions Group Headquarters & Group Services Reconcili- ation Pro-forma a Net revenue 51,369 45,656 127 (27) 45,756 5,613 Cost of sales (31,096) (27,741) (63) 4 (27,800) (3,296) GROSS PROFIT (LOSS) 20,273 17,915 0 0 64 0 (23) 0 17,956 2,317 Selling expenses (11,772) (10,008) (2) 12 (9,998) (1,774) General and administrative expenses (3,827) (3,464) (23) 3 (3,484) (343) Other operating income 967 2,888 1 (1,709) 1,180 (213) Other operating expenses (584) (1,055) (40) (1) (1,096) 512 PROFIT (LOSS) FROM OPERATIONS 5,057 6,276 0 0 0 0 (1,718) 0 4,558 499 Finance costs (1,756) (1,784) (9) (1) (1,794) 38 Share of profit (loss) of associates and joint ventures accounted for using the equity method (7) (32) 0 0 (32) 25 Other financial income (expense) (101) (250) 0 0 (250) 149 PROFIT (LOSS) FROM FINANCIAL ACTIVITIES (1,864) (2,066) 0 0 (9) 0 (1) 0 (2,076) 212 PROFIT (LOSS) BEFORE INCOME TAXES 3,193 4,210 0 0 (9) 0 (1,719) 0 2,482 711 Income taxes (777) (924) (1) (40) (965) 188 PROFIT (LOSS) 2,416 3,286 0 0 (10) 0 (1,759) 0 1,517 899 a Based on the composition of the Group in the current reporting period. SALE OF T-ONLINE.DE AND INTERACTIVEMEDIA On August 12/13, 2015, Deutsche Telekom concluded an agreement with Ströer for the sale of the online platform t-online.de and the digital marketing company InteractiveMedia. The transaction took the form of a capital increase of Ströer in return for the non-cash contribution of the two companies. In return, Deutsche Telekom received newly issued shares in Ströer worth some EUR 0.3 billion, corresponding to a stake of 11.6 percent. The transaction was completed on November 2, 2015 following approval by the Federal Cartel Office and the fulfillment of additional closing conditions. The investment in Ströer will be included in Deutsche Telekomʼs consolidated financial state- ments using the equity method. ACQUISITION OF THE REMAINING SHARES IN SLOVAK TELEKOM On June 18, 2015, Deutsche Telekom acquired the 49-percent stake in Slovak Telekom that it did not previously hold for a purchase price of EUR 0.9 billion. The acquisition of these remaining shares make it possible to simplify the financial and governance structure at Slovak Telekom. In addition, the trans- action results in reduced dividend payments to non-controlling interests. For the effects on shareholdersʼ equity, please refer to the section “Shareholdersʼ equity,” page 44. SELECTED NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION INVENTORIES Inventories increased by EUR 0.3 billion compared to December 31, 2014 to EUR 1.8 billion. This was due in particular to increased stock levels of terminal equipment (above all higher-priced smartphones) at T-Mobile US and exchange rate effects from the translation of U.S. dollars into euros. NON-CURRENT ASSETS AND DISPOSAL GROUPS HELD FOR SALE The increase of EUR 1.3 billion in the carrying amounts of non-current assets and disposal groups held for sale to EUR 7.2 billion resulted in part from the following effects: two transactions 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 increased the carrying amount by EUR 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 the stake in the EE joint venture also had an increasing effect on the carrying amount. The shares sold in connection with the IPO of Scout24 AG in October 2015 and the sale of the onlineplatformt-online.deandthedigitalmarketingcompanyInteractiveMedia consummated in November 2015 increased the carrying amount by EUR 0.1 billion overall as of September 30, 2015. In addition, as part of the intended sale of the remaining T-Mobile US portfolio of cell towers, assets of EUR 0.1 billion were reclassified from property, plant and equipment to non-current assets and disposal groups held for sale as of June 30, 2015. Net revenue 51,36945,656127 (27) 45,7565,613 GROSS PROFIT (LOSS) 20,27317,91500640 (23) 017,9562,317 Other operating income 9672,8881 (1,709) 1,180 (213) PROFIT (LOSS) FROM OPERATIONS 5,0576,2760000 (1,718) 04,558499 equity method (7) (32) 00 (32) 25 Other financial income (expense) (101) (250) 00 (250) 149 ACTIVITIES (1,864) (2,066) 00 (9) 0 (1) 0 (2,076) 212 TAXES 3,1934,21000 (9) 0 (1,719) 02,482711 PROFIT (LOSS) 2,4163,28600 (10) 0 (1,759) 01,517899

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