1) Calculated and rounded off on the basis of millions for the sake of greater precision. EBITDA excluding special influences increased considerably in fourth quarter With EBITDA excluding special influences amounting to EUR 4.35 billion in the fourth quarter of 2002, Deutsche Telekom improved once again on the previous quarter (EUR 4.2 billion). Group EBITDA excluding special influences amounted to EUR 16.3 billion for the full 2002 financial year, almost EUR 1.2 billion or 7.8 percent higher than in the previous year. EBITDA including special influences amounted to EUR 16.1 billion. The difference of around EUR 0.2 billion consists of EUR 0.5 billion relating to proceeds from the sale of shares (Satelindo and T-Online) and EUR 0.7 billion for restructuring expenses at T-Com and T-Systems and an additional accrual for pensions. Group EBITDA
For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". 2) Calculated and rounded off on the basis of millions for the sake of greater precision. Net loss for the full year at the same level as after nine months The Group's net loss for the full 2002 financial year amounted to EUR 24.6 billion, only slightly higher than the net loss of EUR 24.5 billion recorded for the first nine months of the year. The increase in the net loss compared with the previous year is mainly attributable to the non-scheduled write-downs of EUR 21.4 billion resulting from the strategic review. Net loss
1) For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". 2) Calculated and rounded off on the basis of millions for the sake of greater precision. Net debt In comparison with the third quarter of 2002, Deutsche Telekom succeeded in reducing its net debt to EUR 61.1 billion. This significant progress in reducing the company's debt is attributable in part to asset sales already made (including the sale of various real estate holdings, 120 million T-Online shares, T-Systems ABS transaction) and the improvement of free cash flow. "Over the past 18 months, we have succeeded in reducing our net debt by almost EUR 10 billion. Excluding the one-time payments of EUR 8.3 billion, we would have been able to reduce our net debt by around EUR 18 billion in 18 months", Dr. Karl-Gerhard Eick, Chief Financial Officer, emphasized. "The average monthly level of debt repayment achieved over this period of EUR 1 billion should reassure everybody that we will succeed in reducing our net debt to three times our 2003 EBITDA forecast by the end of this year, based on net debt of EUR 61.1 billion at 31 December 2002." A further aspect in the reduction of net debt is the continued positive development of the dollar exchange rate.
1) Calculated on the basis of millions for the sake of greater precision. 2) The prior-year figures shown have been adjusted in line with this definition to allow proper comparisons. 3) For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". T-Com - EBITDA increased in the fourth quarter T-Com's total revenue increased by almost three percent, or EUR 0.8 billion, compared with the previous year to EUR 30.2 billion. The main contributing factors to this development were the Eastern European affiliates with an increase in revenue from EUR 2.8 billion to EUR 3.9 billion. Revenue from business within Germany decreased by EUR 0.3 billion. A particularly pleasing development was the increase in call revenues in the last two quarters of 2002 which, combined with the growth of around twelve percent in access revenues in the course of the year, mostly stabilized the negative development of revenue. The decrease in revenue, EUR 0.8 billion after the first nine months of 2002, was considerably reduced and, in a comparison of the fourth quarters of 2001 and 2002, actually reflects revenue growth. When considering T-Com's total revenue, it must be remembered that Hrvatski Telekomunikacije (HT) was only consolidated for the fourth quarter of 2001, but for the entire 2002 financial year. HT's contribution to total revenue increased from around EUR 0.2 billion in 2001 to around EUR 1 billion in 2002. Furthermore, the Baden-Württemberg cable business was still included in the figures for T-Com's business within Germany in full for the first half of 2001. The deconsolidation of the Baden-Württemberg cable TV business decreased T-Com's revenue by around EUR 0.1 billion. T-Com's EBITDA excluding special influences increased slightly by 0.4 percent from EUR 10.1 billion to EUR 10.2 billion. EBITDA including special influences decreased by 8.9 percent from EUR 10.9 billion to EUR 9.9 billion. Income before taxes (including special influences) amounted to EUR 3.5 billion compared with EUR 4.6 billion in the previous year. T-Com recorded adjusted EBITDA of EUR 2.6 billion in the fourth quarter of 2002, an increase over the corresponding figure of EUR 2.5 billion for the third quarter. The main special influence affecting EBITDA in the fourth quarter of 2002 was the additional minimum liability of EUR 0.2 billion relating to the company pension plan. Unadjusted income before taxes amounted to EUR 3.5 billion. The trend towards broadband access in the fixed network continues unabated, resulting in increased demand for T-DSL and T-ISDN. The number of T-DSL contracts marketed increased by almost 44 percent, or around one million, in the course of the year to more than 3.1 million at the end of 2002. As a result, Germany extended its leading position among western industrialized countries. Despite the very high level already achieved, demand for T-ISDN continued to develop positively. The number of channels in operation in Germany increased from around 20.4 million to 22.4 million. T-Com
1) For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". 2) Average number of employees. 3) Calculated and rounded off on the basis of millions for the sake of greater precision. Disproportionately high EBITDA growth at T-Mobile The T-Mobile division recorded strong growth of total revenue over the full 2002 financial year of almost 35 percent or EUR 5.1 billion to EUR 19.7 billion and thus clearly underlined its position as the growth driver in the Deutsche Telekom Group. Even excluding RadioMobil and T-Mobile USA, consolidated for the full year for the first time in 2002, and Ben, newly consolidated in the fourth quarter of 2002, revenue increased by 16.8 percent. EBITDA increased by 61 percent or EUR 1.9 billion to EUR 5.0 billion. T-Mobile USA recorded the strongest EBITDA growth, turning negative EBITDA of EUR 0.3 billion into EBITDA plus EUR 0.5 billion. The loss before taxes increased by EUR 17.3 billion from EUR 6.4 billion in 2001 to EUR 23.7 billion in 2002. The number of subscribers served by T-Mobile majority shareholdings increased from 46.7 million to 53.9 million in 2002. T-Mobile USA made a considerable contribution to this marked growth in subscriber numbers, recording an increase over the course of the year of 42 percent, more than 2.9 million net additions, to 9.9 million subscribers. This made T-Mobile USA the leader among U.S. mobile communications operators over the full 2002 financial year in terms of net subscriber additions. In the fourth quarter of 2002 alone, net growth in the number of subscribers served by T-Mobile USA was more than 1 million. The number of contract subscribers increased by an even greater amount, 1.1 million. At the end of 2002, contract subscribers accounted for 86 percent of all T-Mobile USA subscribers, compared with 74 percent one year before. T-Mobile USA achieved this strong subscriber growth at the same time as improving the structure of its subscriber base. The proportion of bad debt losses relating to direct customer business decreased by almost half compared with the previous year. The number of T-Mobile subscribers in Europe also increased considerably. In Germany, T-Mobile extended its market leadership in comparison with the previous year with almost 24.6 million subscribers. Subscriber growth over the full year amounted to 1.5 million, of which over 56 percent were contract subscribers. The number of T-Mobile UK subscribers increased by around 2 million over the course of the year to more than 12.4 million. At T-Mobile UK, too, the customer acquisition strategy was clearly focused on improving the existing subscriber structure. With around 141,000 new contract subscribers in the fourth quarter of 2002, T-Mobile UK once more recorded a considerable improvement compared with the previous quarter. The number of subscribers at RadioMobil increased by more than 0.6 million in the past financial year to 3.5 million, and T-Mobile Austria succeeded in keeping its number of subscribers almost constant at more than 2.0 million, despite comprehensive streamlining of its subscriber base. Ben in the Netherlands has been fully consolidated since the fourth quarter of 2002. Ben had 1.4 million subscribers at the end of the year. The total number of subscribers served by consolidated companies and minority shareholdings of the Deutsche Telekom Group – including mobile communications shareholdings not held by T-Mobile – increased to 81.7 million, which corresponds to a growth of more than 22 percent. T-Mobile
1) For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". 2) Average number of employees. 3) Calculated and rounded off on the basis of millions for the sake of greater precision. T-Systems increased its adjusted EBITDA despite negative economic influences T-Systems was not able to set itself apart from the generally weak economic environment. Total revenue decreased by EUR 0.6 billion, or five percent, compared with the previous year to EUR 11.3 billion. Net revenue decreased by around six percent, or EUR 0.5 billion, to EUR 7.8 billion. Despite this decrease in revenue, T-Systems recorded a growth in EBITDA excluding special influences of around 30 percent, or EUR 0.3 billion, to EUR 1.15 billion. EBITDA including special influences decreased in the period under review from EUR 0.9 billion to EUR 0.8 billion. The special influences of EUR 0.4 billion affecting EBITDA in 2002 related mainly to restructuring expenses. The loss before taxes increased from EUR 0.4 billion in 2001 to EUR 2 billion in 2002. T-Systems
1) For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". 2) Average number of employees. 3) Calculated and rounded off on the basis of millions for the sake of greater precision. T-Online continued its profitable growth trend The T-Online division (including DeTeMedien) increased its total revenue by 26 percent, or almost EUR 0.4 billion, compared with the previous year to EUR 1.8 billion. EBITDA improved over the same period, from negative EBITDA of EUR 0.1 billion into positive EBITDA of EUR 0.2 billion and thus demonstrates clearly the division's successful orientation towards increasing its profitability. T-Online developed very pleasingly with customer growth of 1.5 million compared with the previous year and around 12.2 million customers at the end of the year. Foreign subsidiaries accounted for around 2.2 million of the total number of customers. T-Online
1) For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". 2) Average number of employees. 3) Calculated and rounded off on the basis of millions for the sake of greater precision. Other: PSA up and running Total revenue generated by the area "Other" amounted to EUR 4.4 billion compared with EUR 5.1 billion in the previous year. The decrease in revenue of around EUR 0.7 billion was a result of the deconsolidation of DeTeSat (around EUR 0.1 billion) at 31 December 2001 and, in particular, the lower level of services provided within the Group for other divisions. EBITDA adjusted to exclude special influences decreased by EUR 1.1 billion compared with the previous year to around EUR 30 million. The main reasons for this are the decrease in revenue (EUR 0.7 billion), the costs of T-Mobile rebranding amounting to around EUR 0.2 billion and expenses of approximately EUR 0.2 billion related to the sale of receivables. The Personnel Service Agency (PSA) is now in operation and had around 1,700 employees (calculated as full-time equivalents) assigned to it at 31 December 2002. The PSA serves as a key instrument for the placement of staff inside and outside the Group while avoiding compulsory redundancies. Other
1) For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". 2) Average number of employees. 3) Calculated and rounded off on the basis of millions for the sake of greater precision. Free cash flow more than quadrupled Despite the seasonal increase in investments, Deutsche Telekom generated positive free cash flow of EUR 0.2 billion in the fourth quarter of the year. Over the full financial year, free cash flow thus increased to EUR 4.8 billion. Cash generated from operations in the full financial year increased by 2.4 percent to EUR 16.7 billion, while net cash provided by operating activities, i.e. after net interest payments, improved by 4.4 percent to EUR 12.5 billion. At the same time, cash outflows for investments in property, plant and equipment and intangible assets decreased by EUR 3.3 billion to EUR 7.6 billion. Free cash flow thus more than quadrupled to the figure of EUR 4.8 billion already mentioned.
1) Calculated and rounded off on the basis of millions for the sake of greater precision. 2) For a detailed explanation and calculation of these figures, please refer to the information in the appendix to this press release "Reconciliation to pro forma figures". Depreciation and amortization Depreciation and amortization during the year under review increased by EUR 15.2 billion to a total of EUR 36.9 billion. While depreciation of property, plant and equipment of EUR 9.5 billion remained at almost the same level as in the previous year, amortization of intangible assets and mobile communications licenses (including write-downs) increased from EUR 5.7 billion to EUR 27.4 billion, mainly as a result of the strategic review in the second half of the year. Depreciation and amortization
1) Calculated and rounded off on the basis of millions for the sake of greater precision This press release contains or may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. It is important to note that the company's actual results could differ materially from the results anticipated or projected in any such forward-looking statements, based on a number of important factors. Deutsche Telekom's filing with the U.S. SEC (particularly its report on Form 20-F) contain cautionary statements identifying important factors affecting such forward-looking statements, including certain risks and uncertainties, that could cause actual results to differ materially from projections contained in any forward-looking statements made by the company. The detailed explanations and calculations of the so-called pro forma figures are included as an appendix "Reconciliation to pro forma figures" to the published press release on the Internet and can be viewed at www.deutschetelekom.com/reconciliation/2002 |