Development of business in the Group.
Results of operations of the Group.

Net revenue.
In the first nine months of the 2012 financial year, we generated net revenue of EUR 43.5 billion, which was slightly down compared with the same period in the prior year. Intense competition, price changes imposed by regulatory authorities and the strained economic situation in most countries of our Europe operating segment had a negative effect. Net exchange rate effects of around EUR 0.9 billion on the proportion of net revenue generated internationally, especially from the translation of U.S. dollars into euros, had a positive impact on net revenue.
Our United States operating segment increased its revenue on a euro basis, whereas all others recorded decreases. For details on the revenue trends in our Germany, Europe, United States and Systems Solutions operating segments as well as at Group Headquarters & Shared Services, please refer to the section “Development of business in the operating segments”.
Contribution of the operating segments to net revenue.
                   
  Q1
2012
millions
of €
Q2
2012
millions
of €
Q3
2012
millions
of €
Q3
2011
millions
of €
Change


%
Q1 – Q3
2012
millions
of €
Q1 – Q3
2011
millions
of €
Change


%
FY
2011
millions
of €
 
Net revenue 14,432 14,379 14,651 14,670 (0.1) 43,462 43,742 (0.6) 58,653
Germany 5,659 5,610 5,736 5,810 (1.3) 17,005 17,396 (2.2) 23,206
Europe 3,575 3,584 3,654 3,873 (5.7) 10,813 11,352 (4.7) 15,124
United States 3,847 3,816 3,915 3,683 6.3 11,578 10,963 5.6 14,811
Systems Solutions 2,456 2,486 2,245 2,513 (10.7) 7,187 7,259 (1.0) 9,953
Group Headquarters & Shared Services 717 732 727 743 (2.2) 2,176 2,219 (1.9) 2,977
Intersegment revenue (1,822) (1,849) (1,626) (1,952) 16.7 (5,297) (5,447) 2.8 (7,418)
 
Breakdown of revenue by region. (%)
Breakdown of revenue by regions (%)
Contribution of the operating segments to net revenue. (%)
Contribution of the operating segments to net revenue. (%)
At 36.8 percent, just 0.6 percentage points down against the prior-year period, our Germany operating segment again provided the largest contribution to the net revenue of the Group. The increase in revenue in the United States operating segment in conjunction with the downward or stagnating trend in revenue in the other segments resulted in an increase of 1.6 percentage points in the proportion of net revenue contributed by the United States operating segment. This is also reflected in the proportion of net revenue generated internationally, which increased year-on-year from 54.9 percent to 55.9 percent.
EBITDA, adjusted EBITDA.
In spite of the aforementioned decline in revenue, our EBITDA increased by EUR 0.4 billion year-on-year to EUR 13.2 billion. The decrease in special factors, which were down by EUR 0.5 billion, in particular had a positive effect on the development of EBITDA. Special factors mainly comprised expenses incurred in connection with staff-related measures and non-staff-related restructuring expenses. Income attributable to a transaction carried out in September 2012 between T-Mobile USA and Verizon to swap AWS spectrum licenses also had a positive effect of around EUR 0.1 billion. A further positive effect of around EUR 0.1 billion resulted from the conclusion of litigation with Kreditanstalt für Wiederaufbau in the first quarter of 2012.
Excluding special factors of EUR 0.8 billion, which had a negative impact, adjusted EBITDA decreased slightly in the first nine months of 2012 compared with the same period in the prior year, to EUR 14.0 billion. Net exchange rate effects of EUR 0.2 billion, especially from the translation of U.S. dollars into euros, had a positive effect on the development of adjusted EBITDA. For detailed information on the development of EBITDA/adjusted EBITDA in our segments can be found in the section “Development of business in the operating segments”.
Contribution of the operating segments to adjusted Group EBITDA.
  Q1
2012
millions
of €
Q2
2012
millions
of €
Q3
2012
millions
of €
Q3
2011
millions
of €
Change


%
Q1 – Q3
2012
millions
of €
Q1 – Q3
2011
millions
of €
Change


%
FY
2011
millions
of €
 
EBITDA (adjusted for special factors) in the Group 4,477 4,697 4,777 4,907 (2.6) 13,951 14,074 (0.9) 18,685
Germany 2,343 2,348 2,401 2,463 (2.5) 7,092 7,259 (2.3) 9,553
Europe 1,173 1,200 1,328 1,388 (4.3) 3,701 3,930 (5.8) 5,241
United States 983 1,058 994 1,025 (3.0) 3,035 2,788 8.9 3,831
Systems Solutions 141 181 185 155 19.4 507 452 12.2 672
Group Headquarters & Shared Services (149) (86) (142) (112) (26.8) (377) (351) (7.4) (617)
Reconciliation (14) (4) 11 (12) n.a. (7) (4) (75.0) 5
 
EBIT.
Group EBIT decreased by EUR 11.4 billion to minus EUR 5.8 billion compared with the first nine months of 2011, primarily as a consequence of an impairment test which resulted in a one-time, non-cash impairment loss of around EUR 10.6 billion (before taxes) recognized on goodwill, other intangible assets and property, plant and equipment of T-Mobile USA. The impairment test was carried out following the announcement of the agreed business combination of T-Mobile USA and MetroPCS. In addition, the depreciation expense increased by EUR 1.1 billion in the reporting period due to the classification of our United States operating segment as a discontinued operation in the prior-year period. As a result of this classification, no depreciation, amortization or impairment losses had been recorded for this segment for part of the prior year. The classification as a discontinued operation was reversed as of the end of the 2011 financial year, and depreciation and amortization discontinued in the course of the year was retrospectively recognized in the fourth quarter of 2011.
Profit/loss before income taxes.
Profit before income taxes decreased by EUR 11.2 billion to a loss of EUR 7.5 billion year-on-year in the first quarter of 2012 as a result of the aforementioned effects. Loss from financial activities decreased by EUR 0.1 billion year-on-year to EUR 1.8 billion, due in part to the sale of the shares in Telekom Srbija.
Net profit/loss.
Primarily due to the recognition of an impairment loss in connection with the agreed business combination of T-Mobile USA and MetroPCS, we recorded a net loss of around EUR 6.0 billion. Tax income in the first three quarters of the year amounted to EUR 2.0 billion. For further information, please refer to the interim consolidated financial statements.
Profit attributable to non-controlling interests increased to EUR 0.5 billion, primarily as a result of the sale of shares in Telekom Srbija.
Average number of employees.
  Q1 – Q3
2012
Q1 – Q3
2011
 
Germany 68,996 70,715
Europe 58,083 60,701
United States 30,367 35,121
Systems Solutions 52,659 52,250
Group Headquarters & Shared Services 22,821 23,058
Number of employees in the Group 232,926 241,845
Of which: civil servants
(in Germany, with an active service relationship)
23,154 25,100
 
Average headcount decreased by 3.7 percent compared with the prior-year reporting period. This trend is largely attributable to a lower international headcount, which was down by 5.7 percent. In our Europe operating segment, downsizing programs carried out as a result of programs to enhance efficiency contributed to this lower figure. In the United States operating segment, fewer staff were employed in customer support, sales and administration compared with the prior-year period.
Average headcount in Germany decreased by 1.7 percent, mainly due to socially responsible staff restructuring and reduction in the Germany operating segment and a reduction in Vivento’s headcount at Group Headquarters & Shared Services. The overall decrease was partially offset by increased staff levels in the Systems Solutions operating segment, attributable in part to employees taken on in connection with big deals.