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 2007
Commission File Number 001-14540
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 x Form 40-F ¨
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 ¨ No x
This report is deemed submitted and not filed pursuant to the rules and regulations of the Securities and Exchange Commission.
Bellevue, March 1st, 2007
T-MOBILE USA EXCEEDS 25 MILLION CUSTOMER MILESTONE AND
REPORTS FOURTH QUARTER AND 2006 RESULTS
| • | 901,000 total net new customers added in the fourth quarter of 2006, exceeding 25 million total customers milestone |
| • | Strong postpay ARPU of $56 in the fourth quarter of 2006, up from $54 in the fourth quarter of 2005 |
| • | Data ARPU was 12.5% of blended ARPU in the fourth quarter of 2006, up from 9.1% in the fourth quarter of 2005 |
| • | $3.81 billion in service revenues in the fourth quarter of 2006, up 16.9% from the fourth quarter of 2005 |
| • | $1.17 billion in Operating Income Before Depreciation and Amortization (OIBDA) in the fourth quarter of 2006, up 5.4% from the fourth quarter of 2005 |
| • | $4.71 billion OIBDA in 2006, up 12.6% over 2005 |
| • | T-Mobile USA secures rights from the FCC for the Advanced Wireless Services (AWS) spectrum in the fourth quarter of 2006 |
| • | T-Mobile achieved the highest ranking in the J.D. Power and Associates Wireless Customer Care Performance Study for the fifth consecutive time |
In the fourth quarter of 2006 T-Mobile USA, Inc (T-Mobile USA) added 901,000 net new customers, up from 802,000 net new customers added in the third quarter of 2006 and down from 1.39 million in the fourth quarter of 2005. Postpay customer net additions made up 87% of fourth quarter customer growth, up from 66% in the fourth quarter of 2005. Postpay customers comprised
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
85% of T-Mobile USA’s total customer base at December 31, 2006. The introduction of two-year contracts earlier in 2006 continued to prove popular with customers, with over three quarters of new postpay customers opting for two-year contract terms in the fourth quarter.
Postpay churn declined to 2.1% in the fourth quarter of 2006 from 2.3% in the third quarter of 2006 and the fourth quarter of 2005. Blended churn, including both postpay and prepaid customers, was 2.9% in the fourth quarter of 2006, level with the fourth quarter of 2005, and slightly down from 3.0% in the third quarter of 2006.
“myFavessm is attracting a new class of customers to our company. These customers see T-Mobile as truly standing apart by offering unique and simple ways for people to effortlessly communicate,” said Robert Dotson, Chief Executive Officer and President of T-Mobile USA, Inc. “With offerings like myFaves, we continue to add high quality customers to our ranks. In the fourth quarter, we added more than 900,000 new customers – of which 783,000 were postpay customers – helping us surpass the 25 million customer mark. Recently, we also captured our fifth consecutive J.D. Power and Associates award for customer care performance. This type of honor underscores how service at T-Mobile is foundational to the kinds of breakthrough communications capabilities we make possible for our customers.”
“T-Mobile USA is playing an increasingly vital role in bringing a service leadership culture to all of DT,” said René Obermann, Chief Executive Officer, Deutsche Telekom. “At more than 25 million customers and growing, the U.S. business continues to assert its position as the leading growth driver for Deutsche Telekom.”
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
T-Mobile USA reported OIBDA of $1.17 billion in the fourth quarter of 2006, slightly down from $1.23 billion in the third quarter of 2006 and up from $1.11 billion in the fourth quarter of 2005. The sequential fall in OIBDA occurred due to higher total customer acquisition costs related to the strong postpay customer growth and the expected continued decrease in Cingular Wireless LLC (“Cingular”) wholesale revenues (see below). 2006 OIBDA was $4.71 billion – an increase of 12.6% over 2005.
T-Mobile USA’s net income for the fourth quarter of 2006 was $179 million, down from $1.79 billion in the third quarter of 2006 and $2.99 billion in the fourth quarter of 2005. The lower net income compared to the third quarter of 2006 and the fourth quarter of 2005 is primarily due to the recognition of non-cash income tax benefits in both of these prior quarters.
T-Mobile USA service revenues, consisting of postpay, prepaid, roaming and other service revenues rose to $3.81 billion in the fourth quarter of 2006, up from $3.72 billion in the third quarter of 2006 and $3.26 billion in the fourth quarter of 2005. The increases are primarily due to growth in the number of customers, supported by strong postpay ARPU (“Average Revenue Per User” as defined in note 1 to the Selected Data, below). Other revenues were $122 million in the fourth quarter of 2006, down from $147 million in the third quarter of 2006 and $213 million in the fourth quarter of 2005. The main reason for the sequential and year on year decrease in other revenues is the ongoing migration of Cingular’s customers to its own network following the dissolution of our network sharing
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
venture in early 2005. Total revenues, including service, equipment, and other revenues were $4.52 billion in the fourth quarter of 2006, up from $4.37 billion in the third quarter of 2006 and $3.95 billion in the fourth quarter of 2005.
Blended ARPU was $52 in the fourth quarter of 2006, the same as the third quarter of 2006 and the fourth quarter of 2005. Postpay ARPU was $56 in the fourth quarter of 2006, the same as in the third quarter of 2006 and up from $54 in the fourth quarter of 2005. The year on year increase in postpay ARPU primarily relates to continued data revenue growth.
Data services revenue (see note 1 below) continued to grow, reaching a total of $475 million in the fourth quarter of 2006. Data services revenue was 12.5% of blended ARPU, or approximately $6.50 per customer, in the fourth quarter of 2006, compared to 11.3%, or approximately $5.90, in the third quarter of 2006 and 9.1%, or almost $4.80, in the fourth quarter of 2005. 2006 saw a significant expansion of T-Mobile USA’s data device offering with the successful launch of T-Mobile MDA and SDA in February, the Sidekick 3 in July, BlackBerry Pearl in September, and T-Mobile Dash in October. The number of postpay converged device users (which is defined as including BlackBerry and Sidekick device users only) increased to almost 1.6 million by the end of the year, a net increase of over 200,000 users in the quarter. Strong growth in messaging continued to contribute to the increase in data ARPU. The total number of SMS and MMS messages increased to almost 13 billion in the fourth quarter of 2006, compared to 9.9 billion in the third quarter of 2006 and 5.4 billion in the fourth quarter of 2005.
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
The average cost of acquiring a customer, Cost Per Gross Add (“CPGA”, as defined in note 3 to the Selected Data, below) was $300 in the fourth quarter of 2006, level with $299 in the third quarter of 2006 and up from $264 in the fourth quarter of 2005. The higher CPGA compared to the fourth quarter of 2005 is primarily due to higher marketing costs, due in part to the launch of myFavessm in the fourth quarter of 2006.
The average cash cost of serving customers, Cash Cost Per User (“CCPU”, as defined in note 2 to the Selected Data, below), was $25.14 per customer per month in the fourth quarter of 2006, slightly higher than $24.83 in the third quarter of 2006 and $24.32 in the fourth quarter of 2005. The sequential increase in CCPU in the fourth quarter was primarily due to higher customer retention costs.
Ongoing operational capital expenditures (purchases of property and equipment) were $675 million in the fourth quarter of 2006, compared with $569 million in the third quarter of 2006 and $807 million in the fourth quarter of 2005. Operational capital expenditures increased to $2.6 billion in 2006 from $2.3 billion in 2005. As part of its ongoing commitment to network coverage and quality, T-Mobile USA added approximately 800 new cell sites in the fourth quarter of 2006, and 3,200 for 2006 as a whole, bringing the total number of cell sites to more than 36,000. In addition, T-Mobile USA has started rolling out its UMTS network and has already deployed 3G equipment on over 1,200 cell sites in the New York metropolitan area.
During the fourth quarter, T-Mobile USA was granted the AWS spectrum for which it was the high bidder in the Federal Communications Commission’s (FCC) Auction 66, more than doubling its average spectrum position in the top 100 markets. The
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
total cost of these licenses of $4.18 billion was paid during the third and fourth quarters of 2006. Of the total $4.18 billion, $837 million was paid to the FCC directly by T-Mobile USA and $3.35 billion was paid on T-Mobile USA’s behalf by Deutsche Telekom.
In 2006 T-Mobile USA continued its trend in taking highest honors in a number of key industry surveys. For the fourth consecutive reporting period T-Mobile USA was the only wireless carrier to rank highest in overall customer satisfaction among wireless telephone users in all of the six regions surveyed by J.D. Power and Associates, and T-Mobile also received the highest ranking in the J.D. Power and Associates Wireless Retail Sales Satisfaction Performance Study, again for the fourth consecutive reporting period. This successful run of awards continued into 2007, with J.D. Power and Associates announcing that T-Mobile ranked highest in Wireless Customer Care for the fifth reporting period in a row. Also in early January, T-Mobile led the VocaLabs Satisfaction Study among the four largest national wireless phone companies.
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 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
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
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).
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
SELECTED DATA FOR T-MOBILE USA
| (`000) |
YE 06 | Q4 06 | Q3 06 | Q2 06 | Q1 06 | YE 05 | Q4 05 | ||||||||||||||
| Covered population |
239,000 | 239,000 | 239,000 | 238,000 | 234,000 | 233,000 | 233,000 | ||||||||||||||
| Customers, end of period |
25,041 | 25,041 | 24,139 | 23,338 | 22,725 | 21,690 | 21,690 | ||||||||||||||
| Thereof postpay customers |
21,211 | 21,211 | 20,428 | 19,656 | 19,149 | 18,424 | 18,424 | ||||||||||||||
| Thereof prepaid customers |
3,829 | 3,829 | 3,711 | 3,682 | 3,576 | 3,266 | 3,266 | ||||||||||||||
| Net customer additions |
3,351 | 901 | 802 | 613 | 1,035 | 4,375 | 1,387 | ||||||||||||||
| Minutes of use/post pay customer/month |
1,031 | 1,022 | 1,049 | 1,041 | 1,013 | 963 | 985 | ||||||||||||||
| Postpay churn |
2.2 | % | 2.1 | % | 2.3 | % | 2.2 | % | 2.1 | % | 2.3 | % | 2.3 | % | |||||||
| Blended churn |
2.9 | % | 2.9 | % | 3.0 | % | 2.9 | % | 2.7 | % | 2.9 | % | 2.9 | % | |||||||
| ($ / month) |
|||||||||||||||||||||
| ARPU (blended) 1 |
52 | 52 | 52 | 52 | 51 | 53 | 52 | ||||||||||||||
| ARPU (postpay) |
55 | 56 | 56 | 55 | 54 | 55 | 54 | ||||||||||||||
| ARPU (prepaid) |
22 | 21 | 22 | 22 | 22 | 25 | 24 | ||||||||||||||
| Cost of serving (CCPU)2 |
25.14 | 25.14 | 24.83 | 24.96 | 25.66 | 25.23 | 24.32 | ||||||||||||||
| Cost per gross add (CPGA)3 |
299 | 300 | 299 | 322 | 275 | 297 | 264 | ||||||||||||||
| ($ million) |
|||||||||||||||||||||
| Total revenues |
17,138 | 4,523 | 4,367 | 4,209 | 4,039 | 14,806 | 3,953 | ||||||||||||||
| Service revenues1 |
14,511 | 3,813 | 3,723 | 3,586 | 3,389 | 12,308 | 3,261 | ||||||||||||||
| OIBDA4 |
4,712 | 1,172 | 1,227 | 1,210 | 1,103 | 4,185 | 1,112 | ||||||||||||||
| OIBDA margin 5 |
31 | % | 30 | % | 32 | % | 32 | % | 31 | % | 32 | % | 32 | % | |||||||
| Capital expenditures6 |
3,444 | 1,512 | 569 | 593 | 770 | 5,045 | 807 | ||||||||||||||
| Cell sites on-air |
36,100 | 36,100 | 35,300 | 34,500 | 33,600 | 32,900 | 32,900 | ||||||||||||||
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 with useful information to evaluate the recurring revenues generated from our customer base. |
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
Service revenues include postpay, prepaid, and roaming and other service revenues, and do not include equipment sales and other revenues. Data services revenue is a component of service revenues. Per the consolidated financial statements below, other revenues include Wi-Fi revenues, co-location rental income, and wholesale revenues from the usage of our network in California, Nevada, and New York by Cingular customers, and are therefore not included in ARPU.
| 2 | 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 unrelated to customer acquisition. Subsidy loss unrelated to customer acquisition includes upgrade handset costs offset by upgrade equipment revenues and other related direct costs. 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 and is used by our management to evaluate the operating performance of our business. |
| 3 | 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 related to customer acquisition for the specified period, by gross customers added during the period. Subsidy loss related to customer acquisition consists primarily of the excess of handset and accessory costs over related revenues incurred to acquire new customers. We believe that CPGA, which is a measure of the cost of acquiring a customer, provides relevant and useful information and is used by our management to evaluate the operating performance of our business. |
| 4 | 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. |
| 5 | OIBDA margin is a non-GAAP financial measure, which we define as OIBDA (as described in note 4 above) divided by total revenues less equipment sales. |
| 6 | In accordance with US GAAP, capital expenditures include amounts paid by T-Mobile USA, but exclude amounts paid by affiliate or parent companies on T-Mobile USA’s behalf. |
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
T-MOBILE USA
Condensed Consolidated Balance Sheets
(dollars in millions)
(unaudited)
| December 31, 2006 |
December 31, 2005 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 78 | $ | 57 | ||||
| Accounts receivable, net of allowances of $203 and $198, respectively |
2,448 | 2,116 | ||||||
| Accounts receivable from affiliates |
136 | 188 | ||||||
| Inventory |
612 | 409 | ||||||
| Current portion of net deferred tax assets |
598 | 275 | ||||||
| License held for exchange |
1,145 | — | ||||||
| Other current assets |
446 | 437 | ||||||
| Total current assets |
5,463 | 3,482 | ||||||
| Property and equipment, net of accumulated depreciation of $7,058 and $5,134, respectively |
10,932 | 10,805 | ||||||
| Goodwill |
10,701 | 10,701 | ||||||
| Spectrum licenses |
14,516 | 11,510 | ||||||
| Other intangible assets, net of accumulated amortization of $421 and $282, respectively |
102 | 241 | ||||||
| Other assets |
181 | 253 | ||||||
| $ | 41,895 | $ | 36,992 | |||||
| LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 1,702 | $ | 1,665 | ||||
| Current payables to affiliates |
1,183 | 53 | ||||||
| Accrued liabilities |
1,253 | 1,082 | ||||||
| Liability for license exchange |
1,145 | — | ||||||
| Deferred revenue |
365 | 373 | ||||||
| Total current liabilities |
5,648 | 3,173 | ||||||
| Long-term payables to affiliates |
7,773 | 6,457 | ||||||
| Deferred tax liabilities |
491 | 906 | ||||||
| Other long-term liabilities |
756 | 1,697 | ||||||
| Total long-term liabilities |
9,020 | 9,060 | ||||||
| Voting preferred stock held by parent company |
— | 5,000 | ||||||
| Minority interest in equity of consolidated subsidiaries |
84 | 65 | ||||||
| Commitments and contingencies |
||||||||
| Stockholder’s equity: |
||||||||
| Common stock |
44,462 | 39,452 | ||||||
| Accumulated deficit |
(17,319 | ) | (19,758 | ) | ||||
| Total stockholder’s equity |
27,143 | 19,694 | ||||||
| $ | 41,895 | $ | 36,992 | |||||
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
T-MOBILE USA
Condensed Consolidated Statements of Operations
(dollars in millions)
(unaudited)
| Quarter Ended |
Quarter December |
Year December |
Year December |
|||||||||||||
| Revenues: |
||||||||||||||||
| Postpay |
$ | 3,470 | $ | 2,920 | $ | 13,078 | $ | 11,044 | ||||||||
| Prepaid |
235 | 213 | 945 | 741 | ||||||||||||
| Roaming and other services |
108 | 128 | 488 | 523 | ||||||||||||
| Equipment Sales |
588 | 479 | 1,983 | 1,529 | ||||||||||||
| Other1 |
122 | 213 | 644 | 969 | ||||||||||||
| Total revenues |
4,523 | 3,953 | 17,138 | 14,806 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Network |
954 | 749 | 3,621 | 2,883 | ||||||||||||
| Cost of equipment sales |
881 | 738 | 3,078 | 2,622 | ||||||||||||
| General and administrative |
697 | 598 | 2,707 | 2,324 | ||||||||||||
| Customer acquisition |
819 | 756 | 3,020 | 2,792 | ||||||||||||
| Depreciation and amortization |
623 | 567 | 2,522 | 2,229 | ||||||||||||
| Total operating expenses |
3,974 | 3,408 | 14,948 | 12,850 | ||||||||||||
| Operating income |
549 | 545 | 2,190 | 1,956 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
(136 | ) | (97 | ) | (486 | ) | (453 | ) | ||||||||
| Interest income and other, net |
(6 | ) | 22 | 89 | 29 | |||||||||||
| Total other income (expense), net |
(142 | ) | (75 | ) | (397 | ) | (424 | ) | ||||||||
| Income before income taxes |
407 | 470 | 1,793 | 1,532 | ||||||||||||
| Income tax (expense)/benefit |
(228 | ) | 2,518 | 646 | 2,404 | |||||||||||
| Net income |
$ | 179 | $ | 2,988 | $ | 2,439 | $ | 3,936 | ||||||||
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
T-MOBILE USA
Condensed Consolidated Statements of Cash Flows
(dollars in millions)
(unaudited)
| Year Ended December 31, 2006 |
Year Ended December 31, |
|||||||
| Operating activities: |
||||||||
| Net income |
$ | 2,439 | $ | 3,936 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
2,522 | 2,229 | ||||||
| Income tax benefit |
(646 | ) | (2,404 | ) | ||||
| Other, net |
203 | 17 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(284 | ) | (640 | ) | ||||
| Inventory |
(202 | ) | 35 | |||||
| Other current assets |
35 | 2,512 | ||||||
| Accounts payable |
83 | 149 | ||||||
| Accrued liabilities |
187 | 107 | ||||||
| Net cash provided by operating activities |
4,337 | 5,941 | ||||||
| Investing activities: |
||||||||
| Purchases of property and equipment |
(2,608 | ) | (2,338 | ) | ||||
| Joint venture and network transaction with Cingular |
— | (2,282 | ) | |||||
| Acquisitions of spectrum licenses and wireless properties |
(837 | ) | (425 | ) | ||||
| Proceeds on disposal of assets |
22 | 22 | ||||||
| Investments in and advances to unconsolidated affiliates, net |
1 | — | ||||||
| Short-term loan receivable from affiliate |
(750 | ) | — | |||||
| Net cash used in investing activities |
(4,172 | ) | (5,023 | ) | ||||
| Financing activities: |
||||||||
| Long-term debt repayments to affiliates |
(150 | ) | (1,205 | ) | ||||
| Long-term debt borrowing from affiliates |
— | 100 | ||||||
| Other, net |
6 | 62 | ||||||
| Net cash used in financing activities |
(144 | ) | (1,043 | ) | ||||
| Change in cash and cash equivalents |
21 | (125 | ) | |||||
| Cash and cash equivalents, beginning of period |
57 | 182 | ||||||
| Cash and cash equivalents, end of period |
$ | 78 | $ | 57 | ||||
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
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:
| YE 2006 |
Q4 2006 |
Q3 2006 |
Q2 2006 |
Q1 2006 |
YE 2005 |
Q4 2005 |
||||||||||||||||||||||
| OIBDA |
$ | 4,712 | $ | 1,172 | $ | 1,227 | $ | 1,210 | $ | 1,103 | $ | 4,185 | $ | 1,112 | ||||||||||||||
| Depreciation and amortization |
(2,522 | ) | (623 | ) | (654 | ) | (651 | ) | (594 | ) | (2,229 | ) | (567 | ) | ||||||||||||||
| Operating income |
$ | 2,190 | $ | 549 | $ | 573 | $ | 559 | $ | 509 | $ | 1,956 | $ | 545 | ||||||||||||||
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 2006 |
Q4 2006 |
Q3 2006 |
Q2 2006 |
Q1 2006 |
YE 2005 |
Q4 2005 |
||||||||||||||||||||||
| Customer acquisition costs |
$ | 3,020 | $ | 819 | $ | 775 | $ | 737 | $ | 689 | $ | 2,792 | $ | 756 | ||||||||||||||
| Plus: Subsidy loss Equipment sales |
(1,983 | ) | (588 | ) | (497 | ) | (446 | ) | (452 | ) | (1,529 | ) | (479 | ) | ||||||||||||||
| Cost of equipment sales |
3,078 | 881 | 758 | 702 | 737 | 2,622 | 738 | |||||||||||||||||||||
| Total subsidy loss |
1,095 | 293 | 261 | 256 | 285 | 1,093 | 259 | |||||||||||||||||||||
| Less: Subsidy loss unrelated to customer acquisition |
(715 | ) | (193 | ) | (160 | ) | (162 | ) | (200 | ) | (629 | ) | (171 | ) | ||||||||||||||
| Subsidy loss related to customer acquisition |
380 | 100 | 101 | 94 | 85 | 464 | 88 | |||||||||||||||||||||
| Cost of acquiring customers |
$ | 3,400 | $ | 919 | $ | 876 | $ | 831 | $ | 774 | $ | 3,256 | $ | 844 | ||||||||||||||
| CPGA ($ / new customer added) |
$ | 299 | $ | 300 | $ | 299 | $ | 322 | $ | 275 | $ | 297 | $ | 264 | ||||||||||||||
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
T-MOBILE USA
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
(dollars in millions, except for CPGA and CCPU)
(unaudited)
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:
| YE 2006 |
Q4 2006 |
Q3 2006 |
Q2 2006 |
Q1 2006 |
YE 2005 |
Q4 2005 | |||||||||||||||
| Network costs |
$ | 3,621 | $ | 954 | $ | 940 | $ | 878 | $ | 849 | $ | 2,883 | $ | 749 | |||||||
| General and administrative |
2,707 | 697 | 667 | 682 | 661 | 2,324 | 598 | ||||||||||||||
| Total network and general and administrative costs |
6,328 | 1,651 | 1,607 | 1,560 | 1,510 | 5,207 | 1,347 | ||||||||||||||
| Plus: Subsidy loss unrelated to customer acquisition |
715 | 193 | 160 | 162 | 200 | 629 | 171 | ||||||||||||||
| Total cost of serving customers |
$ | 7,043 | $ | 1,844 | $ | 1,767 | $ | 1,722 | $ | 1,710 | $ | 5,836 | $ | 1,518 | |||||||
| CCPU ($ / customer per month) |
$ | 25.14 | $ | 25.14 | $ | 24.83 | $ | 24.96 | $ | 25.66 | $ | 25.23 | $ | 24.32 | |||||||
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 innovative wireless products and services help empower people to connect effortlessly to those who matter most. T-Mobile USA’s GSM/GPRS 1900 voice and data network, when combined with roaming and other agreements, reaches almost 277 million people in the U.S. In addition, T-Mobile USA operates the largest carrier-owned Wi-Fi (802.11b) wireless broadband (WLAN) network in the country, available in more than 8,200 convenient public access locations nationwide. Multiple independent research studies continue to rank T-Mobile USA highest in wireless customer satisfaction, wireless call quality and wireless customer care in numerous regions throughout the U.S. For more information, visit the company website at www.t-mobile.com.
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
About T-Mobile International:
T-Mobile International is one of the world’s leading companies in mobile communications. As one of Deutsche Telekom AG’s (NYSE: DT) three strategic business units, T-Mobile International concentrates on the key markets in Europe and the United States.
By the end of the fourth quarter of 2006, more than 106 million mobile customers were served by the mobile segment of the Deutsche Telekom group, all over a common technology platform based on GSM, the world’s most widely used digital wireless standard.
For more information about T-Mobile International, please visit www.t-mobile.net. For further information on Deutsche Telekom, please visit www.telekom.de/investor-relations.
| Press Contacts: | Investor Relations Contacts: | |
| Stefan Zuber | Investor Relations Bonn | |
| T-Mobile International | Deutsche Telekom | |
| +49 228.936.15502 | +49 228.181.88880 | |
| Andreas Leigers | Nils Paellmann | |
| Deutsche Telekom | Investor Relations New York | |
| +49 228.181.4949 | Deutsche Telekom | |
| +1 212.424.2951 | ||
| +1 877.DT SHARE (toll-free) | ||
| T-Mobile USA |
| 12920 SE 38th Street |
| Bellevue, Washington 98006 |
| Phone 1-800-318-9270 |
| Internet http://www.T-Mobile.com |
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.
| Date: March 01, 2007 | DEUTSCHE TELEKOM AG | |||||
| By: | /s/ ppa. Guido Kerkhoff | |||||
| Name: | Guido Kerkhoff | |||||
| Title: | Senior Executive Vice President Chief Accounting Officer | |||||