Deutsche Telekom at a glance Net revenue Net revenue increased by 6.8 percent to EUR 59.2 billion. On a like-for-like basis, i.e., excluding exchange rate effects and effects of changes in the composition of the Group, net revenue increased by EUR 1.5 billion or 2.7 percent. Our United States operating segment posted an increase in revenue of 11.8 percent; also in U.S. dollars, the continuing success of our U.S. operations was evident in revenue growth of 5.2 percent. Our Europe operating segment recorded an increase in revenue of 2.2 percent and revenue in our Germany operating segment also edged up by 0.8 percent. The inclusion of Tele2 Netherlands made a substantial contribution to the increase in revenue in our Group Development operating segment. Net revenue billions of € Adjusted EBITDA ALa Adjusted EBITDA AL rose by 6.9 percent to EUR 18.7 billion, with contributions from all operating segments. Adjusted for exchange rate effects and the slightly positive effects of changes in the composition of the Group, adjusted EBITDA AL rose by EUR 0.6 billion or 3.5 percent. Adjusted EBITDA AL for our United States operating segment increased by 11.6 percent. In U.S. dollars, this constituted growth of 5.0 percent in our U.S. operations. Our Europe operating segment recorded an increase in adjusted EBITDA AL of 5.0 percent and our Germany operating segment an increase of 2.4 percent. Substantial increases in adjusted EBITDA AL were likewise recorded by the Systems Solutions and Group Development operating segments – the latter also due to earnings contributed by the acquiree Tele2 Netherlands. At 31.6 percent, the Group’s adjusted EBITDA AL margin remained at the prior-year level. The adjusted EBITDA AL margin was 40.2 percent in Germany, 33.8 percent in Europe, and 28.4 percent in the United States. Adjusted EBITDA ALa billions of € EBIT EBIT increased by EUR 0.6 billion to EUR 7.7 billion. Special factors in connection with staff-related measures decreased slightly against the prior-year level to EUR 0.7 billion, while additional special factors of EUR 0.4 billion, in particular in connection with the approval process for the business combination with Sprint, had a negative effect in the reporting period. At EUR 12.8 billion, depreciation, amortization and impairment losses were EUR 3.2 billion higher than in the prior-year period. This substantial increase is primarily attributable to the depreciation charge for right-of-use assets required to be recognized as a result of the application of IFRS 16. Depreciation of property, plant and equipment and amortization of intangible assets were EUR 0.5 billion higher than in the prior-year period, which had contained depreciation, amortization and impairment losses on finance lease assets. EBIT billions of € Net profit Net profit increased from EUR 2.6 billion to EUR 3.2 billion. Our loss from financial activities decreased from EUR 2.1 billion in the prior-year period to EUR 1.5 billion. Finance costs that were higher due to the application of IFRS 16 were compensated by positive measurement effects from embedded derivatives at T‑Mobile US. The prior year had also contained a negative effect of EUR 0.6 billion in connection with a settlement agreed in the Toll Collect arbitration proceedings. At EUR 1.7 billion, the tax expense was up from EUR 1.4 billion in the prior-year period. Profit attributable to non-controlling interests increased year-on-year by EUR 0.4 billion to EUR 1.3 billion. Adjusted earnings per share increased to EUR 0.83 from EUR 0.79 in the prior-year period. Net profit billions of € a The new IFRS 16 “Leases” accounting standard has been applied since January 1, 2019. This led to a change in the definition of some of our financial performance indicators. Prior-year figures have not been adjusted; however, for the redefined key performance indicators we show prior-year comparatives calculated on a pro-forma basis. Equity ratio The decrease in the equity ratio from 29.9 percent at year-end 2018 to 25.9 percent mainly results from the increase of 19.9 percent in total assets/total liabilities and shareholders’ equity. A key driver of this increase was the application of IFRS 16 and the resulting capitalization of right-of-use assets and recognition of lease liabilities. Shareholders’ equity increased from EUR 43.4 billion as of December 31, 2018 to EUR 45.1 billion. In particular, the profit of EUR 4.5 billion, the acquisition of Tele2 Netherlands totaling EUR 0.7 billion, and income taxes relating to components of other comprehensive income of EUR 0.6 billion had an increasing effect. In addition, currency translation effects recognized directly in equity increased shareholders’ equity by EUR 1.2 billion. Factors in this decrease included dividend payments (including to other shareholders of subsidiaries) of EUR 3.6 billion, the remeasurement of defined benefit pension plans accounting for EUR 1.5 billion, and effects from hedging instruments in the amount of EUR 1.0 billion. Equity ratio % Cash capex Cash capex (including spectrum investment) increased from EUR 9.4 billion to EUR 11.2 billion. In the reporting period, payments were made for mobile spectrum licenses in the amount of EUR 1.2 billion, especially in the United States operating segment. Annual installments through 2030 were agreed for the spectrum licenses worth EUR 2.2 billion acquired in Germany in 2019; EUR 0.1 billion was paid in the reporting period. In the comparative period, payments were made for mobile spectrum licenses in the amount of EUR 0.2 billion, again primarily in the United States. Excluding the effects from the acquisition of spectrum, the increase in cash capex of EUR 0.9 billion is attributable in particular to the United States operating segment, and mainly relates to the accelerated infrastructure build-out for the 600 MHz spectrum, which also lays the groundwork for 5G. In the other operating segments, investments in building out and upgrading our networks remained at a sustained high level. Cash capex billions of € Free cash flow ALa(before dividend payments and spectrum investment) Free cash flow AL was up from EUR 4.6 billion to EUR 5.3 billion. The increase was attributable to the positive development of net cash from operating activities, which benefited in particular from the strong performance of our operating segments, especially in the United States. The year-on-year increase of EUR 0.9 billion in cash capex (excluding spectrum investment) had a negative impact on free cash flow. Free cash flow ALa (before dividend payments and spectrum investment) billions of € Net debt Net debt increased by EUR 23.4 billion to EUR 78.8 billion compared with the end of 2018. The recognition of lease liabilities in connection with the application of IFRS 16 raised net debt by EUR 15.6 billion. Further factors in this increase included in particular the dividend payments – including to other shareholders of subsidiaries – (EUR 3.6 billion), additions to liabilities in connection with leases (EUR 4.5 billion), the acquisition of spectrum (EUR 3.2 billion), exchange rate effects (EUR 1.7 billion), and the acquisition of Tele2 Netherlands (EUR 0.4 billion). The main factor reducing net debt was free cash flow of EUR 7.6 billion. Net debt billions of € For a more detailed explanation, please refer to the section “Development of business in the Group.” a The new IFRS 16 “Leases” accounting standard has been applied since January 1, 2019. This led to a change in the definition of some of our financial performance indicators. Prior-year figures have not been adjusted; however, for the redefined key performance indicators we show prior-year comparatives calculated on a pro-forma basis. schließen 5G New communications standard, which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things – rollout starting 2020.