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Selected notes to the consolidated income statement

Net revenue

Net revenue breaks down into the following revenue categories:

millions of €

 

 

 

H1 2022

H1 2021

Revenue from the rendering of services

45,184

41,401

Germany

10,306

10,131

United States

28,343

24,247

Europe

4,510

4,638

Systems Solutions

1,566

1,550

Group Development

418

795

Group Headquarters & Group Services

42

40

Revenue from the sale of goods and merchandise

9,608

9,250

Germany

1,193

1,065

United States

7,535

7,230

Europe

740

709

Systems Solutions

23

31

Group Development

117

215

Group Headquarters & Group Services

0

0

Revenue from the use of entity assets by others

1,399

2,331

Germany

302

356

United States

792

1,648

Europe

100

105

Systems Solutions

8

16

Group Development

144

144

Group Headquarters & Group Services

55

63

Net revenue

56,191

52,983

For further information on 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 €

 

 

 

H1 2022

H1 2021

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

2

1

Income from the disposal of non-current assets

38

82

Income from reimbursements

62

64

Income from insurance compensation

132

47

Income from ancillary services

12

11

Miscellaneous other operating income

3,208

636

Of which: gains resulting from deconsolidations and from the sale of stakes accounted for using the equity method

2,619

201

 

3,452

841

Income from insurance compensation mainly resulted from payments on account from insurance companies in connection with damage sustained in the catastrophic flooding in North Rhine-Westphalia and Rhineland-Palatinate in July 2021. Gains resulting from deconsolidations and from the sale of stakes accounted for using the equity method of EUR 1.7 billion were attributable to the loss of control over the GlasfaserPlus entities. The sale of T‑Mobile Netherlands resulted in a gain on deconsolidation of EUR 0.9 billion, which was determined taking the repayment of internal shareholder loans and the net assets on the date of deconsolidation into account. Other operating income also includes a payment of EUR 0.2 billion in connection with the settlement of a series of patent disputes between T‑Mobile US and a competitor as well as a large number of individual items at marginal amounts.

For further information on these corporate transactions, please refer to the section “Changes in the composition of the Group and other transactions.”

Other operating expenses

millions of €

 

 

 

H1 2022

H1 2021

Impairment losses on financial assets

(602)

(269)

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

(18)

(53)

Other

(2,110)

(1,533)

Legal and audit fees

(576)

(272)

Losses from asset disposals

(94)

(80)

Income (losses) from the measurement of factoring receivables

(2)

(2)

Other taxes

(320)

(270)

Cash and guarantee transaction costs

(294)

(256)

Insurance expenses

(81)

(67)

Miscellaneous other operating expenses

(743)

(586)

 

(2,730)

(1,855)

The year-on-year increase in impairment losses on financial assets was mainly attributable to allowances of customer receivables primarily in the United States operating segment. These resulted from higher receivables and potential future macroeconomic effects. Expenses for legal and audit fees included EUR 0.4 billion for the settlement reached and the further proceedings pending in consequence of the cyberattack on T‑Mobile US. Miscellaneous other operating expenses include expenses of EUR 0.2 billion in the United States operating segment for data storage in data centers, in cloud applications, or other IT services. This position also includes a large number of individual items accounting for marginal amounts.

Depreciation, amortization and impairment losses

At EUR 14.3 billion, depreciation, amortization and impairment losses on intangible assets, property, plant and equipment, and right-of-use assets were EUR 0.7 billion higher overall in the first half of 2022 than in the prior-year period, with depreciation and amortization increasing by EUR 0.3 billion. In the United States operating segment, a reduction in the useful life of leased network technology for cell sites following the business combination of T‑Mobile US and Sprint increased depreciation of the corresponding right-of-use assets by EUR 1.1 billion. By contrast, depreciation on property, plant and equipment in the United States operating segment declined due to the ongoing strategic withdrawal from the terminal equipment lease business. In the Group Development operating segment, depreciation, amortization and impairment losses were down on the prior-year level in connection with the fact that T‑Mobile Netherlands had been held for sale until it was sold and accordingly the related depreciation and amortization had been suspended, and in connection with the subsequent sale of T‑Mobile Netherlands. Impairment losses increased year-on-year by EUR 0.4 billion to EUR 0.5 billion. The impairment losses recorded in the reporting period mainly related to the former Sprint’s fiber-optic-based wireline assets.

For further information on impairment losses, please refer to the section “Property, plant and equipment.”

Profit/loss from financial activities

The loss from financial activities decreased from EUR 2.2 billion in the first half of 2021 to EUR 1.5 billion, with other financial income improving from EUR 0.2 billion to EUR 1.0 billion. This positive trend was attributable in particular to positive measurement effects from a forward transaction to hedge the price of acquiring T‑Mobile US shares in the future and to less pronounced negative measurement effects from derivatives of T‑Mobile US embedded in bonds compared with the prior-year period. Positive measurement effects from the amortization and subsequent measurement of the stock options to buy shares in T‑Mobile US received from SoftBank in June 2020 were slightly up on the prior-year level. The interest component from the measurement of provisions and liabilities increased by EUR 0.4 billion. This increase was mainly attributable to the subsequent measurement using actuarial principles of the present value of the provision recognized for the Civil Service Health Insurance Fund. By contrast, finance costs increased from EUR 2.3 billion to EUR 2.5 billion. Overall, the share of profit/loss of associates and joint ventures accounted for using the equity method was on a par with the prior-year period.

For further information on embedded derivatives at T‑Mobile US, please refer to the section “Disclosures on financial instruments.”

Income taxes

A tax expense of EUR 1.4 billion was recorded in the first half of 2022. The tax amount essentially reflects the shares of the different countries in profit before income taxes and their respective national tax rates. However, the effective tax rate was significantly reduced by the realization of tax-free income from the sale of T‑Mobile Netherlands and the shares in GlasfaserPlus. In the prior-year period, a tax expense of EUR 1.3 billion had been recorded despite lower profit/loss before income taxes.