Selected notes to the consolidated income statement

Net revenue

Net revenue breaks down into the following revenue categories:

millions of €

 

 

 

Q1 2019

Q1 2018b

a

Revenue from the sale of goods and merchandise includes interest income of EUR 0.1 billion in the reporting period, calculated using the effective interest method (Q1 2018: EUR 0.1 billion). This income is primarily attributable to accrued interest on receivables in connection with handsets sold under installment plans in the United States operating segment.

b

Prior-year figures were adjusted on account of a change in the allocation between revenue categories. This change relates to revenue from the use of entity assets by others of EUR 72 million in the Group Development operating segment that had been reported under revenue from the rendering of services in the consolidated financial statements for January 1 to March 31, 2018.

Revenue from the rendering of services

15,849

14,769

Germany

4,328

4,372

United States

7,495

6,484

Europe

2,408

2,364

Systems Solutions

1,241

1,300

Group Development

361

235

Group Headquarters & Group Services

16

15

Revenue from the sale of goods and merchandisea

3,136

2,769

Germany

503

498

United States

2,161

1,827

Europe

345

353

Systems Solutions

32

22

Group Development

95

69

Group Headquarters & Group Services

0

0

Revenue from the use of entity assets by others

503

386

Germany

205

117

United States

140

145

Europe

55

10

Systems Solutions

6

10

Group Development

65

72

Group Headquarters & Group Services

32

33

NET REVENUE

19,488

17,924

For details of changes in net revenue, please refer to the section “Development of business in the Group” in the interim Group management report.

Other operating income

millions of €

 

 

 

Q1 2019

Q1 2018

Income from the reversal of impairment losses on non-current assets

0

2

Of which: IFRS 5

0

0

Income from the disposal of non-current assets

20

106

Income from reimbursements

39

41

Income from insurance compensation

27

91

Income from ancillary services

4

6

Miscellaneous other operating income

114

126

Of which: income from divestitures and from the sale of stakes accounted for using the equity method

1

0

 

204

373

Miscellaneous other operating income includes a large number of individual items accounting for marginal amounts.

Other operating expenses

millions of €

 

 

 

Q1 2019

Q1 2018

Impairment losses on financial assets

(78)

(106)

Gains (losses) from the write-off of financial assets measured at amortized cost

(18)

(10)

Other

(613)

(697)

Legal and audit fees

(55)

(76)

Losses from asset disposals

(46)

(42)

Income (losses) from the measurement of factoring receivables

(32)

(30)

Other taxes

(137)

(156)

Cash and guarantee transaction costs

(85)

(84)

Insurance expenses

(25)

(20)

Miscellaneous other operating expenses

(233)

(289)

 

(709)

(813)

Miscellaneous other operating expenses include a large number of individual items accounting for marginal amounts.

Depreciation, amortization and impairment losses

At EUR 4.2 billion, depreciation, amortization and impairment losses on intangible assets, property, plant and equipment, and right-of-use assets were EUR 1.1 billion higher than in the prior-year period. Of this figure, EUR 0.9 billion was attributable to the depreciation charge for right-of-use assets required to be recognized for the first time in accordance with IFRS 16. In the prior-year period, by contrast, expenses had been recognized under goods and services purchased in connection with operating leases as well as depreciation of finance lease assets recognized as property, plant and equipment. Depreciation of property, plant and equipment and amortization of intangible assets were EUR 0.2 billion higher than in the prior year, mainly due to the consistently high investment volume in past years.

Profit/loss from financial activities

The loss from financial activities remained stable against the first quarter of 2018 at EUR 0.4 billion. Finance costs increased by EUR 0.2 billion to EUR 0.6 billion. These result in particular from the subsequent measurement of lease liabilities recognized since the application of IFRS 16. By contrast, other financial income/expense improved by EUR 0.2 billion, mainly due to positive measurement effects from embedded derivatives at T Mobile US. In the prior-year period, these had a negative effect of EUR 0.1 billion on other financial income/expense. For more information, please refer to the disclosures on financial instruments.

Income taxes

A tax expense of EUR 0.5 billion was recognized in the first quarter of 2019. The effective tax rate of 28 percent essentially reflects the shares of the different countries in the profit before income taxes and their respective national tax rates. In the prior-year period, tax expense in approximately the same amount arose with a profit before income taxes that was just marginally lower.