The T-Share.

Deutsche Telekom at a glance.
Against the background of the positive development in the first nine months, we can confirm our guidance for the full year 2012. Revenue remained almost stable and adjusted EBITDA decreased only slightly. This was predominantly due to the expected increase in expenditure to improve our market position in Germany and the United States. While we recorded growth in the United States thanks to exchange rate effects and only saw a slight decrease in our home market in Germany, developments at our subsidiaries in Eastern Europe continued to be dominated by the tough economic environment, intense competition and massive regulatory intervention.
On October 3, 2012, we concluded an agreement with MetroPCS on the combination of our business activities in the United States. The agreement triggered an impairment test for T-Mobile USA. With no market value being available in the past, the fair value of T-Mobile USA had been determined using so-called discounted cash flow calculations. As a result of the agreed business combination and in accordance with the applicable International Financial Reporting Standards (IFRSs), the valuation of T-Mobile USA as of September 30, 2012 had to be based on the share price of the MetroPCS share prior to the announcement of the transaction. This resulted in a noncash impairment loss of around EUR 7.4 billion (after taxes) which significantly impacted the Group results in the reporting period. The Board of Management and the Supervisory Board of Deutsche Telekom approved this transaction because it generates value and makes sense from a business perspective.
Major changes at a glance.
Total return of the T-Share in the first three quarters of 2012. (%)
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T-Share performance.
  Q1 – Q3
2012
Q1 – Q3
2011
FY
2011
 
Xetra closing prices      
Share price on the last trading day € 9.57 8.83 8.87
Year high € 10.04 11.32 11.32
Year low € 7.71 7.95 7.95
Weighting of the T-Share in major stock indexes      
DAX 30 % 4.5 5.5 5.1
Dow Jones Euro STOXX 50© % 2.0 2.1 2.0
Dow Jones Europe STOXX 600 Telecommunications© % 11.4 10.2 10.2
       
Market capitalization billions of € 41.4 38.2 38.3
Number of shares issued millions 4,321 4,321 4,321
 
Historical performance of the T-Share as of September 30, 2012. (%)
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The stock markets remained highly volatile in the third quarter of 2012. Uncertainty persisted, primarily due to the still unresolved debt problems in European crisis countries, especially Greece and Spain. There were also increasing signs of recession for the entire eurozone economy in the third quarter.
The DAX nevertheless climbed 18.8 percent year-on-year in the first nine months. The main driver on the capital markets was the expansionary monetary policy of central banks around the world. A promise by ECB president Mario Draghi to save the euro at any cost caused the stock markets to rally in the third quarter of 2012. Most recently the European Central Bank announced a program allowing for unlimited purchases of bonds from states in crisis such as Spain and Italy, if necessary. This announcement gave a further boost to share prices.
Upwards movement in the European telecommunications sector was clearly more restrained. It continued to be dragged down by profit warnings and dividend cuts at a number of competitors. The Dow Jones Europe STOXX 600 Telecommunications© ended the first nine months of 2012 up 1.7 percent.
Meanwhile, Deutsche Telekom substantially increased its lead on the sector index in the third quarter of 2012. The T-Share rose by 13.4 percent in the first three quarters of 2012 on a total return basis (share price performance plus reinvested dividend). The strong performance of the T-Share was attributable to the continued sound financial figures from operations and Deutsche Telekom’s confirmed shareholder remuneration policy.