Results of operations of the Group Net revenue In the first three quarters of 2019, we generated net revenue of EUR 59.2 billion, which was up 6.8 percent or EUR 3.8 billion year-on-year. Even adjusted for positive net exchange rate effects of EUR 1.6 billion – mainly from the translation of U.S. dollars into euros – as well as positive effects of changes in the composition of the Group in the net amount of EUR 0.6 billion resulting primarily from the acquisitions of UPC Austria and Tele2 Netherlands, revenue increased by EUR 1.5 billion or 2.7 percent. Our United States operating segment contributed to the positive revenue trend with an increase of 11.8 percent – or, adjusted for exchange rate effects, of 5.2 percent. This increase was due primarily to higher service revenues from the rise in the average branded customer base, triggered in particular by the continued growth in existing and greenfield markets, and the growing success in new customer segments, along with low customer churn. Revenue in our home market of Germany increased slightly on the prior-year level by 0.8 percent, due in particular to the strong performance in mobile business, which benefited from higher service and terminal equipment revenues, and higher IT and broadband revenues from fixed-network business. In our Europe operating segment, revenue was up by 2.2 percent year-on-year; adjusted for exchange rate effects and for the inclusion of UPC Austria and the sale of Telekom Albania, it increased marginally by 0.5 percent. Factors in this increase were growth in revenue from our broadband, TV, and wholesale business. Mobile revenue remained at a consistently high level. Total revenue in our Systems Solutions operating segment was down 2.6 percent year-on-year. The upward revenue trend in our growth areas public cloud and health was not sufficient to offset the declines in traditional IT operations and in telecommunications business. Revenue in our Group Development operating segment increased significantly year-on-year on the back of a positive development in operations in the Netherlands and in the GD Towers unit, due in particular to the revenue contributions from Tele2 Netherlands taken into account since the beginning of 2019. For detailed information on revenue development in our segments, please refer to the section “Development of business in the operating segments.” (XLS:) Download Contribution of the segments to net revenue millions of € Q12019 Q22019 Q32019 Q32018 Change% Q1-Q32019 Q1-Q32018 Change% FY2018 NET REVENUE 19,488 19,664 20,017 19,104 4.8 59,169 55,395 6.8 75,656 Germany 5,357 5,388 5,472 5,441 0.6 16,217 16,088 0.8 21,700 United States 9,796 9,826 10,006 9,227 8.4 29,629 26,504 11.8 36,522 Europe 2,891 2,978 3,074 3,045 1.0 8,943 8,752 2.2 11,885 Systems Solutions 1,630 1,673 1,657 1,754 (5.5) 4,961 5,094 (2.6) 6,936 Group Development 682 683 704 544 29.4 2,068 1,607 28.7 2,185 Group Headquarters & Group Services 651 678 633 677 (6.5) 1,961 2,096 (6.4) 2,735 Intersegment revenue (1,520) (1,561) (1,529) (1,585) 3.5 (4,610) (4,746) 2.9 (6,307) Contribution of the segments to net revenuea % a For more information on net revenue, please refer to the disclosures under segment reporting in the interim consolidated financial statements. a For more information on net revenue, please refer to the disclosures under segment reporting in the interim consolidated financial statements. Breakdown of revenue by region % At 50.1 percent, our United States operating segment again provided the largest contribution to net revenue of the Group and was up 2.3 percentage points above the level in the prior-year period. The proportion of net revenue generated internationally increased from 67.5 percent to 69.3 percent. EBITDA AL, adjusted EBITDA AL Excluding special factors, adjusted EBITDA AL increased by EUR 1.2 billion or 6.9 percent year-on-year to EUR 18.7 billion in the first three quarters of 2019. Positive net exchange rate effects of EUR 0.5 billion and positive net effects of changes in the composition of the Group of EUR 0.1 billion contributed to this trend. Excluding these effects, adjusted EBITDA AL increased by EUR 0.6 billion or 3.5 percent. All operating segments made a positive contribution to this development: Adjusted EBITDA AL of our United States operating segment had a noticeably positive effect on the back of the higher service revenue. Our Germany operating segment contributed to this result thanks to a positive revenue trend, lower personnel costs, and the successful implementation of further efficiency enhancement and digitalization measures with 2.4 percent higher adjusted EBITDA AL. Adjusted EBITDA AL in our Europe operating segment increased by 5.0 percent. Even adjusted for the inclusion of UPC Austria and the sale of Telekom Albania, and assuming constant exchange rates, it grew by 2.3 percent. Successfully implemented efficiency enhancement measures are taking effect in our Systems Solutions operating segment in the form of higher adjusted EBITDA AL. The increase in adjusted EBITDA AL in our Group Development operating segment was driven by revenue growth and efficient management of costs as well as by the earnings contributed by Tele2 Netherlands, acquired in early 2019. EBITDA AL increased by EUR 1.0 billion or 6.1 percent year-on-year to EUR 17.5 billion, with special factors changing from EUR -1.0 billion to EUR -1.2 billion. Net expenses incurred in connection with staff-related measures and non-staff-related restructuring expenses decreased by EUR 0.1 billion compared with the prior-year period to EUR -0.8 billion. In addition, expenses of EUR 0.4 billion incurred in connection with the approval process for the business combination of T‑Mobile US and Sprint were recorded as special factors. The transfer as of August 14, 2019 of our stake of around 11 percent in Ströer SE & Co. KGaA to Deutsche Telekom Trust e.V. as plan assets resulted in income from divestitures classified as special factors of EUR 0.1 billion. For detailed information on the development of EBITDA AL/adjusted EBITDA AL in our segments, please refer to the section “Development of business in the operating segments.” (XLS:) Download Contribution of the segments to adjusted Group EBITDA AL millions of € Q12019 Q22019 Q32019 Q32018 Change% Q1-Q32019 Q1-Q32018 Change% FY2018 a Prior-year comparatives were calculated on a pro forma basis for the redefined key performance indicators resulting from the introduction of the IFRS 16 accounting standard. EBITDA AL (ADJUSTED FOR SPECIAL FACTORS) IN THE GROUPa 5,940 6,283 6,478 6,148 5.4 18,701 17,501 6.9 23,074 Germany 2,108 2,153 2,254 2,200 2.5 6,515 6,361 2.4 8,516 United States 2,679 2,872 2,874 2,664 7.9 8,424 7,547 11.6 10,084 Europe 945 991 1,086 1,044 4.0 3,022 2,878 5.0 3,813 Systems Solutions 92 127 144 143 0.7 363 327 11.0 442 Group Development 255 250 269 222 21.2 774 674 14.8 892 Group Headquarters & Group Services (137) (82) (143) (132) (8.3) (362) (201) (80.1) (601) Reconciliation (2) (29) (4) 7 n.a. (35) (87) 59.8 (72) EBIT Group EBIT stood at EUR 7.7 billion, up EUR 0.6 billion or 8.7 percent against the prior-year period. This increase is partly due to the effects described under EBITDA AL. At EUR 12.8 billion, depreciation, amortization and impairment losses were EUR 3.2 billion higher than in the prior-year period, due in particular 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, expenses had been recognized in EBITDA in connection with operating leases. Depreciation of property, plant and equipment and amortization of intangible assets were EUR 0.5 billion higher than in the prior year, mainly due to the consistently high investment volume in past years – the prior-year period had included depreciation, amortization and impairment losses on finance lease assets. Profit before income taxes At EUR 6.2 billion, profit before income taxes was EUR 1.2 billion higher than in the prior-year period, with loss from financial activities decreasing from EUR 2.1 billion to EUR 1.5 billion. Finance costs increased by EUR 0.4 billion, because the subsequent measurement of recognized lease liabilities since the application of IFRS 16 added EUR 0.7 billion to finance costs. Favorable refinancing terms had a reducing effect on finance costs compared with the prior-year period. Other financial income/expense improved by EUR 0.4 billion, mainly due to positive measurement effects from embedded derivatives at T‑Mobile US. The share of profit/loss of associates and joint ventures accounted for using the equity method also improved – by EUR 0.6 billion. This item had been negatively impacted by an effect of EUR 0.6 billion in the first half of 2018 due to the settlement agreed in connection with ending the Toll Collect arbitration proceedings. Net profit, adjusted net profit Net profit increased year-on-year from EUR 2.6 billion to EUR 3.2 billion. Tax expense came to EUR 1.7 billion in the first three quarters of 2019 compared with EUR 1.4 billion for the prior-year period. For further information, please refer to the section “Income taxes” in the interim consolidated financial statements. Profit attributable to non-controlling interests increased from EUR 0.9 billion to EUR 1.3 billion, mainly in our United States operating segment. Excluding special factors, which had an effect of EUR 0.7 billion on net profit, adjusted net profit in the first three quarters of 2019 amounted to EUR 3.9 billion, i.e., EUR 0.2 billion higher than in the prior-year period. (XLS:) Download millions of € Q12019 Q22019 Q32019 Q32018 Change% Q1-Q32019 Q1-Q32018 Change% FY2018 NET PROFIT (LOSS) 900 944 1,368 1,110 23.2 3,213 2,597 23.7 2,166 Special factors affecting EBITDA (440) (562) (176) (333) 47.1 (1,178) (985) (19.6) (1,497) Staff-related measures (290) (304) (132) (225) 41.3 (726) (855) 15.1 (1,159) Non-staff-related restructuring (19) (30) (11) (20) 45.0 (59) (74) 20.3 (109) Effects of deconsolidations, disposals and acquisitions (111) (174) (30) (61) 50.8 (315) (70) n.a. (223) Other (20) (54) (3) (28) 89.3 (77) 14 n.a. (6) Special factors affecting net profit 158 178 124 123 0.8 459 (166) n.a. (882) Impairment losses 0 (50) 0 (3) n.a. (50) (3) n.a. (707) Profit (loss) from financial activities 0 (1) 0 0 0.0 (1) (704) 99.9 (757) Income taxes 122 173 79 104 (24.0) 374 470 (20.4) 401 Non-controlling interests 36 56 45 22 n.a. 136 71 91.5 181 TOTAL SPECIAL FACTORS (282) (385) (52) (210) 75.2 (719) (1,152) 37.6 (2,379) ADJUSTED NET PROFIT (LOSS) 1,183 1,329 1,420 1,321 7.5 3,932 3,749 4.9 4,545 Adjusted earnings per share, unadjusted earnings per share Adjusted earnings per share is calculated as net profit adjusted for special factors divided by the adjusted weighted average number of ordinary shares outstanding which totaled 4,743 million as of September 30, 2019. With adjusted net profit in the amount of EUR 3.9 billion, this gives adjusted earnings per share of EUR 0.83. Adjusted earnings per share in the prior-year period had amounted to EUR 0.79. Unadjusted net profit amounted to EUR 3.2 billion as of September 30, 2019, giving unadjusted earnings per share of EUR 0.68. Unadjusted earnings per share in the prior-year period had amounted to EUR 0.55. Employees (XLS:) Download Headcount development Sept. 30, 2019 Dec. 31, 2018 Change % NUMBER OF FTEs IN THE GROUP 211,884 215,675 (1.8) Of which: civil servants (in Germany, with an active service relationship) 12,281 13,507 (9.1) Germany 61,181 62,621 (2.3) United States 47,496 46,871 1.3 Europe 45,240 48,133 (6.0) Systems Solutions 37,718 37,467 0.7 Group Development 2,615 1,976 32.3 Group Headquarters & Group Services 17,635 18,606 (5.2) The Group’s headcount decreased by 1.8 percent compared with the end of 2018. In our Germany operating segment, the total number of employees decreased by 2.3 percent compared with the end of 2018 as a result of efficiency enhancement measures and the take-up of socially responsible instruments in connection with the staff restructuring. The total number of employees in our United States operating segment increased by 1.3 percent as of September 30, 2019 compared to December 31, 2018, primarily due to the anticipation of the proposed Sprint transaction. In our Europe operating segment, the headcount was down 6.0 percent compared with the end of the prior year. This was due in part to the sale of Telekom Albania. The headcount also decreased in Romania and Hungary in particular. The number of employees in our Systems Solutions operating segment increased by 0.7 percent compared with the end of 2018, mainly due to the first-time inclusion and expansion of a service unit in India. The remaining headcount in this segment decreased by 2.1 percent on account of restructuring measures. In the Group Development operating segment, the 32.3 percent increase in the number of employees can be attributed to the inclusion of Tele2 Netherlands in the Netherlands. The headcount in the Group Headquarters & Group Services segment was down 5.2 percent compared with the end of 2018, mainly due to the ongoing staff restructuring at Vivento and the lower headcount in the Technology and Innovation unit. schließen Service revenues Revenues generated with mobile customers from services (i.e., revenues from voice services – incoming and outgoing calls – and data services), plus roaming revenues, monthly charges, and visitor revenues. schließen Service revenues Revenues generated with mobile customers from services (i.e., revenues from voice services – incoming and outgoing calls – and data services), plus roaming revenues, monthly charges, and visitor revenues.