Deutsche Telekom AG - The 2009 financial year

Development of operations. 2009 millions of € 2008 millions of € Change millions of € Change % 2007 millions of € Total revenue 15,471 14,957 514 3.4 14,075 EBIT (profit from operations) 2,233 2,299 (66) (2.9) 2,017 EBIT margin (%) 14.4 15.4 14.3 Depreciation, amortization and impairment losses (2,028) (1,884) (144) (7.6) (1,892) EBITDAa 4,261 4,183 78 1.9 3,909 Special factors affecting EBITDA a – (57) n.a. n.a. – Adjusted EBITDAa 4,261 4,240 21 0.5 3,909 Adjusted EBITDA margina (%) 27.5 28.3 27.8 Cash capex (2,666) (2,540) (126) (5.0) (1,958) Number of employeesb 38,231 36,076 2,155 6.0 31,655 a Deutsche Telekom defines EBITDA as profit/loss from operations before depreciation, amortization and impairment losses. For a detailed explanation of the special factors affecting EBITDA, adjusted EBITDA, and the adjusted EBITDA margin, please refer to the section on “Development of business in the Group.” b Average of all employees. Total revenue. Total revenue in the United States operating segment grew by 3.4 percent. However, revenue declined slightly when measured in local currency (–1.6 percent), due primarily to the decrease in T-Mobile USA branded customers. Additionally, variable voice revenues decreased due to lower roaming revenues and an increase in the proportion of customers on unlimited rate plans. These decreases were partially offset by strong growth in data revenue, as customers adopt 3G converged devices and utilize Web access plans. EBIT, adjusted EBITDA. Adjusted EBITDA rose by EUR 21 million year-on-year driven by changes in the currency exchange rates. In U.S. dollars, adjusted EBITDA decreased year-on-year primarily due to lower revenues. In addition, higher cost of sales related to the 3G network were more than offset by lower commis- sions costs resulting from fewer T-Mobile USA retail customer gross addi- tions and various cost saving initiatives. EBIT declined by EUR 66 million year-on-year driven by the factors described above including changes in the currency exchange rate, and higher network-related depreciation expense. Cash capex. Cash capex increased year-on-year to EUR 2.7 billion from EUR 2.5 billion. In U.S. dollars, cash capex decreased slightly year-on-year driven by decreases in information technology and spectrum purchases. Network- related capex remained consistent year-on-year due to the continued focus on the improvement of network quality and coverage as well as the roll-out of the 3G (UMTS/HSPA) network. By the end of 2009, T-Mobile USA’s 3G network covered over 205 million people, almost doubling 3G cover- age in 2009. Personnel. The average number of employees rose year-on-year, related to retail distribution growth. By the end of 2009, T-Mobile USA had over 2,000 branded retail locations. 85Group management report Development of business in the operating segments