Financial position of Deutsche Telekom AG

In addition to shareholders’ equity, our financial position is mainly determined by financial assets as well as by receivables from and payables to Group companies. Loans recognized under financial assets as well as receivables from and payables to affiliated companies primarily resulted from financing relationships between Deutsche Telekom AG and its subsidiaries.

The balance sheet total decreased by EUR 7.3 billion year-on-year to EUR 116.8 billion.

The development of total assets was attributable in particular to the decrease of EUR 9.6 billion in financial assets and the decrease of EUR 0.3 billion in other assets. By contrast, receivables increased by EUR 1.5 billion and cash and cash equivalents by EUR 1.1 billion.

The decline in financial assets of EUR 9.6 billion year-on-year resulted in particular from repayments of loans to affiliated companies, mainly by T‑Mobile USA, Inc., Bellevue, in the amount of EUR 8.5 billion, T‑Mobile Polska S.A., Warsaw, in the amount of EUR 0.7 billion, and Telekom Deutschland GmbH, Bonn, in the amount of EUR 0.4 billion. Shares in affiliated companies, which rose by a total of EUR 0.2 billion, had an offsetting effect. This was due in particular to the increase in the carrying amount of the investment in Telekom Deutschland GmbH, Bonn, in connection with the spin-off of the DTGC business area at the fair value of the new shareholding of EUR 1.1 billion. In addition, write-ups led to an increase in the shares in Hellenic Telecommunications Organization S.A. (OTE), Athens, in the amount of EUR 0.9 billion and in Deutsche Telekom Asset Management GmbH & Co. KG, Monheim, in the amount of EUR 0.1 billion. The shares in affiliated companies were reduced by the write-down of EUR 1.4 billion on CTA Holding GmbH, Bonn, and the capital repayment of EUR 0.6 billion by T‑Mobile Global Zwischenholding GmbH, Bonn.

The year-on-year increase in receivables of EUR 1.5 billion resulted in particular from a EUR 1.0 billion increase in financial receivables from affiliated companies, mainly from loans granted to Deutsche Telekom Europe B.V., Maastricht, in the amount of EUR 1.0 billion, and a EUR 0.7 billion increase in receivables from cash management.

The decrease in other assets of EUR 0.3 billion is attributable in particular to a EUR 0.2 billion decline in income tax receivables and a EUR 0.1 billion decline in receivables from cost reimbursements.

The development of total shareholders’ equity and liabilities was mainly influenced by the decrease of EUR 7.2 billion in remaining liabilities and of EUR 0.3 billion in shareholders’ equity. By contrast, accruals increased by EUR 0.2 billion.

The EUR 0.3 billion decline in shareholders’ equity was primarily attributable to the dividend payment of EUR 2.8 billion for the previous year. Income after taxes for the 2020 financial year of EUR 2.5 billion had an offsetting effect on shareholders’ equity.

The increase in accruals is largely attributable to a EUR 0.2 billion increase in pension obligations, in particular in connection with changes in discount rates.

Debt remained unchanged year-on-year at EUR 11.0 billion. In the reporting year, new bonds were issued in the amount of EUR 1.6 billion and repayments of treasury bills were made in the amount of EUR 0.4 billion. Liabilities to banks decreased by EUR 1.2 billion, mainly due to repayments of principal in the amount of EUR 1.6 billion. These were offset by loans of EUR 0.4 billion.

Remaining liabilities decreased by a total of EUR 7.2 billion year-on-year, due mainly to the decrease in financial liabilities to affiliated companies, particularly as a result of loan repayments of EUR 5.4 billion to Deutsche Telekom International Finance B.V., Maastricht. The borrowing of EUR 1.2 billion from T‑Mobile Austria Holding GmbH, Vienna, had an offsetting effect. In addition, liabilities from cash management decreased due in particular to the capital repayment by T‑Mobile Global Zwischenholding GmbH, Bonn, in the amount of EUR 2.1 billion, as well as to other liabilities by a total of EUR 0.7 billion.

Net cash used for/provided by operating activities changed year-on-year by EUR 19.6 billion, resulting in net cash used for operating activities of EUR 1.8 billion. The change resulted mainly from the intragroup restructuring of receivables from cash management to noncurrent loans, which had led to a high level of net cash provided by operating activities in the previous year. In the reporting year, the decrease in liabilities from cash management, which was due in particular to a capital repayment by T‑Mobile Global Zwischenholding GmbH, Bonn, had a negative effect on net cash used for/provided by operating activities.

Net cash provided by investing activities in the reporting year was primarily attributable to repayments of medium- and long-term investments by subsidiaries of EUR 9.6 billion, mainly by T‑Mobile USA, Inc., Bellevue, as well as a capital repayment by T‑Mobile Global Zwischenholding GmbH, Bonn, in the amount of EUR 2.1 billion. Cash outflows for short-term loans amounting to EUR 1.0 billion and cash outflows to acquire properties in the amount of EUR 0.3 billion had an offsetting effect. Net cash provided by investing activities also included interest received of EUR 1.2 billion. In the previous year, net cash used for investing activities had been mainly impacted by cash outflows of EUR 17.9 billion to subsidiaries for medium- and long-term investments. In particular, repayments of medium- and long-term investments by subsidiaries in the amount of EUR 1.8 billion and interest received in the amount of EUR 1.5 billion had an offsetting effect.

Net cash used for financing activities changed by EUR 6.8 billion year-on-year to EUR 8.7 billion. Net cash used for financing activities in the reporting year resulted primarily from net repayments of current financial liabilities of EUR 2.9 billion, especially to Deutsche Telekom International Finance B.V., Maastricht, the payment of the dividend for the 2019 financial year of EUR 2.8 billion, and interest paid of EUR 3.0 billion. The year-on-year change mainly related to EUR 5.8 billion lower net borrowings of noncurrent financial liabilities and bullet payments of interest of EUR 1.6 billion in connection with the redemption of long-term zero-coupon bonds in the reporting year.

In all, this resulted in an increase in cash and cash equivalents of EUR 1.1 billion in the reporting year.