UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of March 2006

 

DEUTSCHE TELEKOM AG

(Translation of registrant’s name into English)

 

Friedrich-Ebert-Allee 140

53113 Bonn

Germany

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ý   Form 40-F o

 

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes o   No ý

 This report is deemed submitted and not filed pursuant to the rules and regulations of the Securities and Exchange Commission.

 

 


 

 

On March 2, 2005, Deutsche Telekom AG announced selected results of its mobile operations in North America, which was contained in a press release, a copy of which is filed as Exhibit 99.1 and incorporated herein.

 

 



Exhibit Index

99.1

Press Release dated March 3, 2005 relating to selected results of Deutsche Telekom AG mobile operations in North America.

 

 

 

 

3



 

T Mobile USA

 

Press Release

 

Bellevue, March 2, 2006

 

T-MOBILE USA REPORTS RECORD FOURTH QUARTER AND FULL YEAR

 

2005 RESULTS

 

1.4 million net new customers added in Q4 2005

 

4.4 million net new customers in 2005, compared to 4.2 million in 2004

 

$1.1 billion in Operating Income Before Depreciation and Amortization (OIBDA) in Q4 2005

 

$4.2 billion in OIBDA in 2005, up 67% from 2004

 

32% OIBDA margin achieved in 2005

 

Nearly 3,500 new cell sites added in 2005 to enhance existing coverage

 

Geographic coverage increased over 50% primarily through expansion of roaming coverage

 

In the fourth quarter of 2005, T-Mobile USA added 1.39 million net new customers, up from 1.06 million net customers added in the third quarter of 2005 and 1.02 million net added in the fourth quarter of 2004. Postpay customers made up 66% of the fourth quarter customer growth and comprised 85% of T-Mobile USA’s total customer base at the end of the year.

 

“A record breaking fourth quarter perfectly capped off another highly successful year for T-Mobile USA,” said T-Mobile USA President and CEO Robert Dotson. “During the year we smashed the key 20 million customer milestone, adding an all time high 4.4 million net new customers in 2005. We achieved this strong customer growth while maintaining our disciplined approach to delivering solid operating margins. 2005 also marked the second year in a row we captured top Overall Customer Satisfaction rankings from J.D. Power and Associates. So

 

 

 

T-Mobile USA

12920 SE 38th Street

Bellevue, Washington 98006

Phone 1-800-318-9270

Internet http://www.T-Mobile.com

 

 

4



 

however you look at it, 2005 was an outstanding year as record numbers of high quality new customers joined our ranks.”

 

René Obermann, CEO of T-Mobile International and member of the Board of Management of Deutsche Telekom (NYSE: DT), stated, “T-Mobile USA once again delivered outstanding results and continues to be a top driver of growth for the mobile segment and Deutsche Telekom as a whole. We look forward to further leveraging the global scale and skills of T-Mobile and Deutsche Telekom across both sides of the Atlantic.”

 

T-Mobile USA reported OIBDA of $1.11 billion in the fourth quarter of 2005 compared to $1.17 billion in the third quarter of 2005 and $515 million in the fourth quarter of 2004. T-Mobile USA’s net income for the fourth quarter of 2005 was $2.99 billion, up from $458 million in the third quarter of 2005 and a net loss of $329 million in the fourth quarter of 2004. Net income in 2005 included a $2.6 billion non-cash income tax benefit related to net operating loss carry forwards (“NOLs”). These NOLs represent an asset to the Company to the extent they can be utilized to reduce cash income tax payments expected in the future. In accordance with accounting guidelines requiring evidence supporting the Company’s ability to utilize the NOLs, the Company had not previously recognized the NOL-related assets by maintaining a valuation allowance against them. In the fourth quarter of 2005 T-Mobile USA determined that its financial performance trends supported a $2.6 billion reduction in the valuation allowance against its deferred tax assets.

 

T-Mobile USA service revenues, which consist of postpay, prepaid, roaming and other service revenues, were $3.26 billion in the fourth quarter of 2005, up from $3.15 billion in the third quarter of 2005 and $2.75 billion in the fourth quarter of 2004. Other revenues were $213 million in the fourth quarter of 2005, down

 

 

5



 

 

from $235 million in the third quarter of 2005 and up from $40 million in the fourth quarter of 2004. Other revenues include Wi-Fi revenues, co-location rental income, and revenues from the usage of our network in California, Nevada, and New York by customers of Cingular Wireless LLC (“Cingular”)(see note 1 to the Selected Data below). The sequential decrease in other revenues in the fourth quarter of 2005 reflects the continued migration of Cingular customers to Cingular’s own network. Total revenues, including service, equipment, and other revenues were $3.95 billion in the fourth quarter of 2005, up from $3.24 billion in the fourth quarter of 2004.

 

Average Revenue Per User (“ARPU, “as defined in note 1 to the Selected Data, below) was $52 in the fourth quarter of 2005, down from $53 in the third quarter of 2005 and $55 in the fourth quarter of 2004. The year on year decrease in ARPU was primarily caused by a decrease in prepaid ARPU and the increased percentage of prepaid customers in the customer base in 2005, along with a decline in postpay ARPU. Data services revenue from postpay and prepaid customers continued to grow, reaching a total of $279 million in the fourth quarter of 2005. Data revenues now represent 9.6% of postpay ARPU, or $5.21 per postpay customer, compared to 8.8% in the third quarter of 2005 and 6.6% in the fourth quarter of 2004. Central to the growth in data services revenue was a net increase in postpay converged device users of over 123,000 during the fourth quarter of 2005. In total, T-Mobile USA had 1.1 million converged device users at the end of 2005. Converged devices include both BlackBerry and T-Mobile Sidekick devices.

 

Postpay churn was 2.3% in the fourth quarter of 2005, down from 2.4% in the third quarter of 2005 and 2.6% in fourth quarter 2004. Prepaid churn was 6.6% in the fourth quarter of 2005, which was the same in the third quarter of 2005 and fourth quarter 2004. Blended churn, including both postpay and prepaid

 

 

 

6



 

customers, was 2.9% in the fourth quarter of 2005, the same as in the third quarter of 2005, and down from 3.1% in the fourth quarter of 2004.

 

The average cost of acquiring a customer, Cost Per Gross Add (“CPGA”, as defined in the note 4 to the Selected Data, below) was $264 in the fourth quarter of 2005, down from $271 in the third quarter of 2005 and $345 in the fourth quarter of 2004. The decrease in CPGA from the fourth quarter of 2004 is primarily due to changes in the postpay and prepaid sales mix and changes in the competitive environment.

 

The average cash cost of serving customers, Cash Cost Per User (“CCPU”, as defined in note 3 to the Selected Data, below), was $24.32 per customer per month in the fourth quarter of 2005, down from $24.65 in the third quarter of 2005 and $27.66 in the fourth quarter of 2004 (which included a cumulative noncash lease charge — see footnotes). CCPU in the fourth quarter of 2005 was slightly less than the fourth quarter of 2004, excluding the impact of the cumulative lease accounting charge, due to increased economies of scale associated with the larger customer base.

 

Capital expenditures were $807 million in the fourth quarter of 2005, compared with $585 million in the third quarter of 2005 and $422 million in the fourth quarter of 2004. (Capital expenditures in the fourth quarter of 2004 excluded $124 million of expenditures related to the network joint venture with Cingular, which was terminated at the beginning of 2005.) T-Mobile USA added more than 1,000 new cell sites in the fourth quarter of 2005, bringing the total number of cell sites to nearly 33,000. During 2005 T-Mobile USA added almost 3,500 new cell sites, reflecting the continued commitment to network coverage and quality. In 2005 T-Mobile USA also expanded its geographic coverage footprint

 

 

7



 

by over 50% primarily through expanded roaming coverage with new and existing domestic roaming partners.

 

This press release includes non-GAAP financial measures. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations from the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below following Selected Data and the financial statements.

 

T-Mobile USA, Inc. (“T-Mobile USA”) is the U.S. operation of T-Mobile International AG & Co. KG (“T-Mobile International”), the mobile communications subsidiary of Deutsche Telekom AG (“Deutsche Telekom”) (NYSE: DT). In order to provide comparability with the results of other U.S. wireless carriers all financial amounts are in US dollars and are based on accounting principles generally accepted in the United States (“GAAP”). T-Mobile USA results are included in the consolidated results of Deutsche Telekom, but differ from the information contained herein as Deutsche Telekom reports financial results in accordance with International Financial Reporting Standards (IFRS).

 

 

8



 

SELECTED DATA FOR T-MOBILE USA

 

(`000)

 

YE 05

 

Q4 05

 

Q3 05

 

Q2 05

 

Q1 05

 

YE 04

 

Q4 04

 

Covered population

 

233,000

 

233,000

 

232,000

 

232,000

 

229,000

 

229,000

 

229,000

 

Customers, end of period

 

21,690

 

21,690

 

20,302

 

19,243

 

18,271

 

17,314

 

17,314

 

Thereof postpay customers

 

18,424

 

18,424

 

17,512

 

16,796

 

16,115

 

15,340

 

15,340

 

Thereof prepaid customers

 

3,266

 

3,266

 

2,790

 

2,447

 

2,156

 

1,974

 

1,974

 

Net customer additions

 

4,376

 

1,388

 

1,059

 

972

 

957

 

4,186

 

1,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minutes of use/postpay customer/month

 

963

 

985

 

985

 

960

 

921

 

877

 

907

 

Postpay churn

 

2.3

%

2.3

%

2.4

%

2.3

%

2.3

%

2.6

%

2.6

%

Prepaid churn

 

6.6

%

6.6

%

6.6

%

6.4

%

6.4

%

6.3

%

6.6

%

Blended churn

 

2.9

%

2.9

%

2.9

%

2.8

%

2.8

%

3.0

%

3.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ / month)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARPU (blended) (1)

 

53

 

52

 

53

 

54

 

54

 

55

 

55

 

ARPU (postpay)

 

55

 

54

 

55

 

55

 

54

 

56

 

56

 

ARPU (prepaid)

 

25

 

24

 

24

 

27

 

28

 

28

 

29

 

Cost of serving

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(CCPU) (3)

 

25

 

24

 

25

 

26

 

26

 

25

 

28

 

Cost per gross add

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(CPGA) (4)

 

297

 

264

 

271

 

310

 

357

 

323

 

345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

14,806

 

3,953

 

3,802

 

3,614

 

3,437

 

11,679

 

3,238

 

Service revenues (1)

 

12,308

 

3,261

 

3,153

 

3,040

 

2,854

 

10,032

 

2,748

 

OIBDA (2), (5)

 

4,185

 

1,112

 

1,166

 

1,081

 

826

 

2,512

 

515

 

OIBDA margin (8)

 

32

%

32

%

34

%

33

%

27

%

25

%

19

%

Capital expenditures (6)

 

5,045

 

807

 

585

 

815

 

2,838

 

2,138

 

422

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cell sites on-air (7)

 

32,861

 

32,861

 

31,840

 

30,876

 

29,869

 

29,401

 

29,401

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Since all companies do not calculate these figures in the same manner, the information contained in this press release may not be comparable to similarly titled measures reported by other companies.

 


(1)                                  Average Revenue Per User (“ARPU”) represents the average monthly service revenue we earn from our customers. ARPU is calculated by dividing service revenues for the specified period by the average customers during the period, and further dividing by the number of months in the period. We believe ARPU provides management and investors with useful information to evaluate the recurring revenues generated from our customer base.

 

Service revenues include postpay, prepaid, and roaming and other service revenues, and do not include equipment sales and other revenues. Revenues from our Wi-Fi business, co-

 

 

9



 

location rental income, and revenues for network usage by Cingular customers who have not yet transitioned from the former joint venture networks in California, Nevada, and New York, are therefore not included in ARPU. The joint venture was terminated at the beginning of 2005.

 

(2)                                  As a result of financial statement restatements by numerous U.S. public companies and publication of a letter by the Chief Accountant of the SEC to the American Institute of Certified Public Accountants on February 7, 2005, clarifying the interpretation of existing US GAAP accounting literature applicable to certain operating leases and leasehold improvements, T-Mobile USA changed its accounting for operating leases and recorded a cumulative adjustment representing a net charge to net income of $143 million in the fourth quarter of 2004, of which $71 million related to the years 2001 through 2003. The net cumulative adjustment was comprised of a $200 million increase in rent expense based primarily on rent escalation clauses related to future renewal periods of cell site leases; an increase of $33 million in the equity loss from the network sharing venture with Cingular also related to cell site leases; a reduction of $53 million in depreciation expense to adjust the depreciable life of leasehold improvements; and a reduction of $36 million in the loss provision related to dissolution of the network sharing joint venture with Cingular. Financial results for 2004 and prior periods have not been restated.

 

The following table provides the impact of the cumulative adjustment as it relates to the quarterly results in 2004 as if restated.

 

($ million)

 

Total
2004

 

Q4 2004

 

Q3 2004

 

Q2 2004

 

Q1 2004

 

 

 

 

 

 

 

 

 

 

 

 

 

OIBDA (5)

 

(93.4

)

(24.2

)

(23.9

)

(23.2

)

(22.1

)

 

 

 

 

 

 

 

 

 

 

 

 

OIBDA margin (8)

 

(0.9

)%

(0.9

)%

(0.9

)%

(0.9

)%

(1.0

)%

Depreciation

 

(2.0

)

(.5

)

(.5

)

(.5

)

(.5

)

Equity (loss)

 

(13.6

)

(3.5

)

(3.4

)

(3.4

)

(3.3

)

Other income/(expense)

 

36.4

 

36.4

 

 

 

 

Net income/(loss)

 

(72.6

)

8.2

 

(27.8

)

(27.1

)

(25.9

)

($ / month)

 

 

 

 

 

 

 

 

 

 

 

CCPU (3)

 

1

 

1

 

1

 

1

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3)                                  The average cash cost of serving customers, or Cash Cost Per User (“CCPU”) is a non-GAAP financial measure and includes all network and general and administrative costs as well as the subsidy loss on equipment (handsets and accessories) sales unrelated to customer acquisition. This measure is calculated as a per month average by dividing the total costs for the specified period by the average total customers during the period and further dividing by the number of months in the period. We believe that CCPU, which is a measure of the costs of serving a customer, provides relevant and useful information to our investors and is used by our management to evaluate the operating performance of our business.

 

(4)                                  Cost Per Gross Add (“CPGA”) is a non-GAAP financial measure and is calculated by dividing the costs of acquiring a new customer, consisting of customer acquisition costs plus the subsidy loss on equipment (handsets and accessories) sales related to customer acquisition for the specified period, divided by gross customers added during the period. We believe that CPGA, which is a measure of the cost of acquiring a customer, provides

 

 

10



 

relevant and useful information to our investors and is used by our management to evaluate the operating performance of our business.

 

(5)                                  OIBDA is a non-GAAP financial measure, which we define as operating income before depreciation and amortization. In a capital-intensive industry such as wireless telecommunications, we believe OIBDA, as well as the associated percentage margin calculation, to be meaningful measures of our operating performance. OIBDA should not be construed as an alternative to operating income or net income as determined in accordance with GAAP, as an alternative to cash flows from operating activities as determined in accordance with GAAP or as a measure of liquidity. We use OIBDA as an integral part of our planning and internal financial reporting processes, to evaluate the performance of our senior management and to compare our performance with that of many of our competitors. We believe that operating income is the financial measure calculated and presented in accordance with GAAP that is the most directly comparable to OIBDA.

 

(6)                                  2004 amounts exclude our investment to fund capital expenditures in the network sharing joint venture with Cingular Wireless LLC (“Cingular”). 2005 amounts include capital expenditures in the coverage areas previously served by the venture.

 

(7)                                  2004 amounts include sites in New York, California and Nevada previously owned and operated by our network sharing joint venture.

 

(8)                                  OIBDA margin is a non-GAAP financial measure, which we define as OIBDA (as described in note 5 above) divided by total revenues less equipment sales.

 

 

11



 

T-MOBILE USA

Condensed Consolidated Balance Sheets

(dollars in millions)

(unaudited)

 

 

 

Dec. 31,

 

Dec. 31,

 

 

 

2005

 

2004

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

57

 

$

182

 

Accounts receivable, net of allowance for doubtful accounts of $151 and $158, respectively

 

2,116

 

1,657

 

Accounts receivable from affiliates

 

188

 

 

Inventory

 

409

 

444

 

Current portion of net deferred tax assets

 

275

 

 

Other current assets

 

437

 

2,818

 

 

 

3,482

 

5,101

 

Property and equipment, net of accumulated depreciation of $5,134 and $3,247, respectively

 

10,805

 

6,718

 

Goodwill

 

10,701

 

10,704

 

Spectrum licenses

 

11,510

 

11,087

 

Other intangible assets, net of accumulated amortization of $282 and $791, respectively

 

241

 

35

 

Investments in and advances to unconsolidated affiliates

 

5

 

1,203

 

Other assets and investments

 

248

 

212

 

 

 

36,992

 

$

35,060

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDER’S EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

941

 

$

615

 

Accrued liabilities

 

1,134

 

1,002

 

Loss provision on network transaction

 

 

792

 

Deferred revenue

 

373

 

335

 

Current portion of capital lease

 

1

 

1

 

Construction accounts payable

 

724

 

438

 

Current portion of long-term notes payable to affiliates

 

 

2,505

 

Total current liabilities

 

3,173

 

5,688

 

 

 

 

 

 

 

Long-term payables to affiliates

 

6,457

 

5,127

 

Deferred tax liabilities

 

906

 

3,096

 

Other long-term liabilities

 

1,697

 

395

 

Total long-term liabilities other than preferred stock

 

9,060

 

8,618

 

 

 

 

 

 

 

Voting preferred stock

 

5,000

 

5,000

 

Total long-term liabilities

 

14,060

 

$

13,618

 

 

 

 

 

 

 

Minority interest in equity of consolidated subsidiaries

 

65

 

18

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Shareholder’s equity:

 

 

 

 

 

Common stock

 

39,452

 

39,433

 

Deferred stock-based compensation

 

 

(3

)

Accumulated deficit

 

(19,758

)

(23,694

)

Total shareholder’s equity

 

19,694

 

15,736

 

 

 

$

36,992

 

$

35,060

 

 

 

12



 

T-MOBILE USA

Condensed Consolidated Statements of Operations

(dollars in millions)

(unaudited)

 

 

 

Quarter

 

Quarter

 

Year

 

Year

 

 

 

Ended

 

Ended

 

Ended

 

Ended

 

 

 

Dec. 31,

 

Dec. 31,

 

Dec. 31,

 

Dec. 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

Revenues:

 

 

 

 

 

 

 

 

 

Postpay

 

$

2,920

 

$

2,484

 

$

11,044

 

$

9,051

 

Prepaid

 

213

 

158

 

741

 

573

 

Roaming and other services

 

128

 

105

 

523

 

408

 

Equipment sales

 

479

 

452

 

1,529

 

1,519

 

Other

 

213

 

40

 

969

 

129

 

Total revenues

 

3,953

 

3,239

 

14,806

 

11,680

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Network

 

749

 

757

 

2,883

 

2,297

 

Cost of equipment sales

 

738

 

719

 

2,622

 

2,313

 

General and administrative

 

598

 

511

 

2,324

 

1,883

 

Customer acquisition

 

756

 

737

 

2,792

 

2,675

 

Depreciation and amortization

 

567

 

265

 

2,229

 

1,273

 

Total operating expenses

 

3,408

 

2,989

 

12,850

 

10,441

 

Operating income

 

545

 

250

 

1,956

 

1,239

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense

 

(97

)

(135

)

(453

)

(566

)

Equity in net losses of unconsolidated affiliates

 

1

 

(83

)

2

 

(202

)

Interest income and other, net

 

21

 

(784

)

27

 

(793

)

Total other income (expense)

 

(75

)

(1,002

)

(424

)

(1,561

)

Income (loss) before income taxes

 

470

 

(752

)

1,532

 

(322

)

Income tax benefit

 

2,518

 

423

 

2,404

 

329

 

Net income (loss)

 

$

2,988

 

$

(329

)

$

3,936

 

$

7

 

 

 

 

13



 

T-MOBILE USA

Condensed Consolidated Statements of Cash Flows

(dollars in millions)

(unaudited)

 

 

 

Year Ended

 

Year Ended

 

 

 

Dec. 31, 2005

 

Dec. 31, 2004

 

Operating activities:

 

 

 

 

 

Net income

 

$

3,936

 

$

7

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

Depreciation and amortization

 

2,229

 

1,273

 

Income tax benefit

 

(2,404

)

(329

)

Amortization of debt discount and premium, net

 

(43

)

(30

)

Equity in net (income) losses of unconsolidated affiliates

 

(2

)

202

 

Stock-based compensation

 

2

 

12

 

Allowance for bad debts

 

(7

)

7

 

Deferred rent

 

86

 

200

 

Loss provision on network transaction

 

32

 

792

 

Other, net

 

(51

)

(6

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(640

)

(395

)

Inventory

 

35

 

(153

)

Other current assets

 

2,512

 

(2,357

)

Accounts payable

 

106

 

20

 

Accrued liabilities

 

107

 

139

 

Net cash provided by (used in) operating activities

 

5,898

 

(618

)

Investing activities:

 

 

 

 

 

Purchases of property and equipment

 

(2,338

)

(2,139

)

Joint venture and network transaction with Cingular

 

(2,282

)

 

Acquisitions spectrum licenses and wireless properties

 

(425

)

(2

)

Proceeds on disposal of assets

 

22

 

 

Investments in and advances to unconsolidated affiliates, net

 

 

(648

)

Net cash used in investing activities

 

(5,023

)

(2,789

)

Financing activities:

 

 

 

 

 

Long-term debt repayments

 

 

(15

)

Long-term debt repayments to affiliates

 

(1,205

)

(1,514

)

Long-term debt borrowings from affiliates

 

100

 

900

 

Equity Increase

 

 

4,000

 

Change in minority interest

 

62

 

 

Book overdraft

 

43

 

70

 

Net cash (used in) provided by financing activities

 

(1,000

)

3,441

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

(125

)

34

 

Cash and cash equivalents, beginning of period

 

182

 

148

 

Cash and cash equivalents, end of period

 

$

57

 

$

182

 

 

 

 

14



T-MOBILE USA

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

(dollars in millions, except for CPGA and CCPU)

(unaudited)

 

OIBDA can be reconciled to our operating income as follows (refer to footnote 2 of the Selected Data Table for the quarterly impacts of the cumulative operating lease adjustment):

 

 

 

YE

 

Q4

 

Q3

 

Q2

 

Q1

 

YE

 

Q4

 

 

 

2005

 

2005

 

2005

 

2005

 

2005

 

2004

 

2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OIBDA

 

$

4,185

 

$

1,112

 

$

1,166

 

$

1,081

 

$

826

 

$

2,512

 

$

515

 

Depreciation and amortization

 

(2,229

)

(567

)

(558

)

(585

)

(519

)

(1,273

)

(265

)

Operating income

 

$

1,956

 

$

545

 

$

608

 

$

496

 

$

307

 

$

1,239

 

$

250

 

 

The following schedule reflects the CPGA calculation and provides a reconciliation of cost of acquiring customers used for the CPGA calculation to customer acquisition costs reported on our condensed consolidated statements of operations:

 

 

 

YE

 

Q4

 

Q3

 

Q2

 

Q1

 

YE

 

Q4

 

 

 

2005

 

2005

 

2005

 

2005

 

2005

 

2004

 

2004

 

Customer acquisition costs

 

$

2,792

 

$

756

 

$

657

 

$

668

 

$

711

 

$

2,675

 

$

737

 

Plus: Subsidy loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equipment sales

 

(1,529

)

(479

)

(414

)

(305

)

(331

)

(1,519

)

(452

)

Cost of equipment sales

 

2,622

 

738

 

648

 

575

 

661

 

2,313

 

719

 

Total subsidy loss

 

1,093

 

259

 

234

 

270

 

330

 

794

 

267

 

Less: Subsidy loss unrelated to customer acquisition

 

(629

)

(171

)

(133

)

(153

)

(172

)

(350

)

(122

)

Subsidy loss related to customer acquisition

 

464

 

88

 

101

 

117

 

158

 

444

 

145

 

Cost of acquiring customers

 

$

3,256

 

$

844

 

$

758

 

$

785

 

$

869

 

$

3,119

 

$

882

 

CPGA ($ / new customer added)

 

$

297

 

$

264

 

$

271

 

$

310

 

$

357

 

$

323

 

$

345

 

 

 

 

15



 

The following schedule reflects the CCPU calculation and provides a reconciliation of the cost of serving customers used for the CCPU calculation to total network costs plus general and administrative costs reported on our condensed consolidated statements of operations (refer to footnote 2 of the Selected Data Table for the quarterly impacts of the cumulative operating lease adjustment):

 

 

 

YE

 

Q4

 

Q3

 

Q2

 

Q1

 

YE

 

Q4

 

 

 

2005

 

2005

 

2005

 

2005

 

2005

 

2004

 

2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Network costs

 

$

2,883

 

$

749

 

$

735

 

$

718

 

$

681

 

$

2,297

 

$

757

 

General and administrative

 

2,324

 

598

 

596

 

572

 

558

 

1,883

 

511

 

Total network and general and administrative costs

 

5,207

 

1,347

 

1,331

 

1,290

 

1,239

 

4,180

 

1,268

 

Plus: Subsidy loss unrelated to customer acquisition

 

629

 

171

 

133

 

153

 

172

 

350

 

122

 

Total cost of serving customers

 

$

5,836

 

$

1,518

 

$

1,464

 

$

1,443

 

$

1,411

 

$

4,530

 

$

1,390

 

CCPU ($ / customer per month)

 

$

25

 

$

24

 

$

25

 

$

26

 

$

26

 

$

25

 

$

28

 

 

About T-Mobile USA:

Based in Bellevue, WA, T-Mobile USA, Inc. is a member of the T-Mobile International group, the mobile telecommunications subsidiary of Deutsche Telekom AG (NYSE: DT).

 

T-Mobile USA’s GSM/GPRS 1900 voice and data network in the United States reaches over 268 million people, including roaming and other agreements. In addition, T-Mobile USA operates the largest carrier-owned Wi-Fi (802.11b) wireless broadband (WLAN) network in the United States, available in more than 7,400 public access locations including Starbucks coffeehouses, Kinko’s copy shops, Borders Books and Music, Hyatt and Accor hotels, selected airports’ American Airlines Admirals Clubs, United Red Carpet Clubs, US Airways Clubs and Delta Air Lines Clubs. T-Mobile USA is committed to providing the best value in wireless service through its GET MORE promise to provide customers with more minutes, more features and more service. For more information, visit the company website at www.t-mobile.com.

 

 

 

16



 

About T-Mobile International:

T-Mobile International, one of Deutsche Telekom AG’s three main strategic business units, is one of the world’s leading international mobile communications providers. Deutsche Telekom’s majority-held mobile companies today serve 87 million mobile customers in Europe and the U.S. For more information about T-Mobile International, please visit http://www.t-mobile.net/. For further information on Deutsche Telekom, please visit http://www.telekom.de/investor-relations.

 

Press Contacts:

 

Investor Relations Contacts:

 

 

 

Philipp Schindera

 

Investor Relations Bonn

T-Mobile International

 

Deutsche Telekom

+49 228.936.1700

 

+49 228.181.88880

 

 

 

Andreas Leigers

 

Nils Paellmann/Bernie Scholtyseck

Deutsche Telekom

 

Investor Relations New York

+49 228.181.4949

 

Deutsche Telekom

 

 

+1 212.424.2951 or +1 212.424.2926

 

 

+1 877.DT SHARE (toll-free)

 

 

 

 

 

 

 

17



SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

DEUTSCHE TELEKOM AG

 

 

 

 

By:

/s/ ppa. Guido Kerkhoff

 

 

Name: Guido Kerkhoff

 

 

Title:

Senior Executive Vice President

 

 

 

Chief Accounting Officer

 

 

Date: March 2, 2006

 

 

 

18