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13 Financial liabilities and lease liabilities

The following table shows the composition and maturity structure of financial liabilities as of December 31, 2021:

millions of €

 

 

 

 

 

 

 

 

 

Dec. 31, 2021

Dec. 31, 2020

 

 

 

 

 

 

 

 

 

 

Total

Due within 1 year

Due > 1 year ≤ 5 years

Due > 5 years

Total

Due within 1 year

Due > 1 year ≤ 5 years

Due > 5 years

Bonds and other securitized liabilities

93,857

5,941

24,673

63,242

87,702

5,282

25,681

56,739

Liabilities to banks

4,003

1,540

1,646

817

5,257

2,152

1,666

1,439

Of which: promissory notes

655

28

312

315

737

58

287

392

Of which: loans from the European Investment Bank

2,141

524

1,192

425

3,240

1,073

1,276

891

Of which: other loans

1,207

988

142

77

1,280

1,021

103

156

 

97,860

7,481

26,319

64,060

92,959

7,435

27,347

58,178

Liabilities to non-banks from promissory note bonds

483

53

150

280

490

0

53

437

Liabilities with the right of creditors to priority repayment in the event of default

3,248

463

2,288

496

3,886

859

2,257

769

Other interest-bearing liabilities

7,343

2,700

2,165

2,478

7,206

2,711

1,958

2,537

Other non-interest-bearing liabilities

1,829

1,499

145

185

1,703

1,563

134

6

Derivative financial liabilities

703

47

625

31

864

85

252

527

 

13,607

4,762

5,374

3,471

14,149

5,217

4,655

4,277

Financial liabilities

111,466

12,243

31,693

67,531

107,108

12,652

32,002

62,455

Lease liabilities

33,133

5,040

13,517

14,577

32,715

5,108

12,610

14,997

The carrying amount of current and non-current financial liabilities increased by EUR 4.4 billion compared with year-end 2020 to EUR 111.5 billion, primarily due to the factors described below. Exchange rate effects, in particular from the translation of U.S. dollars into euros, raised the carrying amount by EUR 5.0 billion.

The carrying amount of bonds and other securitized liabilities increased by EUR 6.2 billion. The main factors in this increase were senior notes issued in the reporting period by T‑Mobile US with a total volume of USD 14.8 billion (EUR 12.5 billion) with terms ending between 2026 and 2060 and bearing interest of between 2.25 and 3.6 %. The carrying amount was also increased by AUD bonds with a volume of AUD 0.1 billion (EUR 0.1 billion) issued by Deutsche Telekom AG and euro bonds with a volume of EUR 0.1 billion. The early repayment by T‑Mobile US in the reporting period of bonds with a volume of USD 5.8 billion (EUR 4.8 billion) with terms originally ending between 2023 and 2026 and bearing interest of between 4.5 and 6.5 %, and scheduled repayments by T‑Mobile US of bonds with a volume of USD 3.3 billion (EUR 2.8 billion) and repayments in the Group of euro bonds with a volume of EUR 2.3 billion and U.S. dollar bonds with a volume of USD 0.6 billion (EUR 0.5 billion) had a contrasting effect. The carrying amount of bonds and other securitized liabilities increased by EUR 4.4 billion due to exchange rate effects, especially from the translation of U.S. dollars into euros.

The carrying amount of liabilities to banks decreased by EUR 1.3 billion compared with December 31, 2020 to EUR 4.0 billion, mainly due to scheduled repayments of EUR 1.2 billion made in the reporting period and a decline of EUR 0.2 billion in connection with factoring in the United States operating segment. Exchange rate effects, mainly from the translation of U.S. dollars into euros, raised the carrying amount by EUR 0.1 billion.

The liabilities with the right of creditors to priority repayment in the event of default of EUR 3.2 billion (December 31, 2020: EUR 3.9 billion) relate primarily to bonds issued by Sprint. Collateral was provided for these bonds, hence they constitute a separate class of financial instruments. Repayments in the reporting period in the amount of EUR 0.9 billion when translated into euros reduced the carrying amount. Exchange rate effects, in particular from the translation of U.S. dollars into euros, raised the carrying amount by EUR 0.3 billion. At the reporting date, cash and cash equivalents with a carrying amount of EUR 76 million (December 31, 2020: EUR 63 million) when translated into euros were pledged as collateral for these bonds.

The carrying amount of other interest-bearing liabilities increased by EUR 0.1 billion compared with December 31, 2020 to EUR 7.3 billion. The carrying amount of other interest-bearing liabilities increased by a total of EUR 0.1 billion in connection with collateral received for derivative financial instruments.

For further information on cash collateral, please refer to Note 40 “Financial instruments and risk management.”

The carrying amount of derivative financial liabilities decreased by EUR 0.2 billion to EUR 0.7 billion, mainly in connection with positive measurement effects in the reporting period.

For further information on derivative financial liabilities, please refer to Note 40 “Financial instruments and risk management.”

Deutsche Telekom has established ongoing liquidity management. To ensure the Group’s and Deutsche Telekom AG’s solvency and financial flexibility at all times, Deutsche Telekom maintains a liquidity reserve in the form of credit lines and cash. This liquidity reserve is to cover the capital market maturities of the next 24 months at any time. Since the successful business combination between T‑Mobile US and Sprint, T‑Mobile US has pursued its own separate financing and liquidity strategy.

At December 31, 2021, Deutsche Telekom (excluding T‑Mobile US) had standardized bilateral credit agreements with 21 banks for a total of EUR 12.6 billion. As of December 31, 2021, EUR 0.1 billion of these credit lines had been utilized. Pursuant to the credit agreements, the terms and conditions depend on Deutsche Telekom’s rating. The bilateral credit agreements have an original maturity of 36 months and can, after each period of 12 months, be extended by a further 12 months to renew the maturity of 36 months. From today’s perspective, access to the international debt capital markets is not jeopardized.

Furthermore, bilateral credit lines with an aggregate total volume of USD 5.5 billion (EUR 4.9 billion) plus a cash balance of USD 6.6 billion (EUR 5.9 billion) were available to T‑Mobile US as of December 31, 2021. None of these credit lines had been utilized as of December 31, 2021.

The carrying amount of current and non-current lease liabilities increased by EUR 0.4 billion to EUR 33.1 billion compared with December 31, 2020. Exchange rate effects, in particular from the translation of U.S. dollars into euros, raised the carrying amount by EUR 2.2 billion. Effects of changes in the composition of the Group, mainly from the first-time inclusion of Shentel, acquired by T‑Mobile US, also increased the carrying amount by EUR 0.3 billion. This was offset in particular by an advance payment for the lease of cell sites of EUR 0.9 billion made by T‑Mobile US to a U.S. cell tower company in September 2021 in connection with a change to the existing lease agreed in the reporting period. The carrying amount was further reduced by EUR 0.6 billion, in part in connection with the decommissioning of former Sprint cell sites and the closure of some former Sprint shops in the United States operating segment. The reclassification of T‑Mobile Netherlands’s liabilities to liabilities directly associated with non-current assets and disposal groups held for sale, decreases of EUR 0.2 billion in the Group Headquarters & Group Services segment and of EUR 0.1 billion in the Europe operating segment also reduced the carrying amount.

For further information on lessee relationships, please refer to Note 8 “Right of use assets – lessee relationships.”

For further information on the agreed sale of T‑Mobile Netherlands, please refer to the section “Changes in the composition of the Group and other transactions” under “Summary of accounting policies.”

In the reporting year and in the 2020 financial year, there were no significant expenses for variable lease payments that were not included in the measurement of lease liabilities.

As of December 31, 2021, future payment obligations for leases that have not yet begun and which are not taken into account in the measurement of lease liabilities amounted to EUR 0.1 billion (December 31, 2020: EUR 0.2 billion).

The following tables show the contractually agreed (undiscounted) interest payments and repayments of the non-derivative financial liabilities, the lease liabilities, and the derivatives with positive and negative fair values:

millions of €

 

 

 

 

 

 

 

 

Carrying amount

Cash flows in 2022

Cash flows in 2023

 

Dec. 31, 2021

Fixed interest rate

Variable interest rate

Repay­ment

Fixed interest rate

Variable interest rate

Repay­ment

Non-derivative financial liabilities (excluding lease liabilities)

 

 

 

 

 

 

 

Bonds, other securitized liabilities, liabilities to banks and liabilities to non-banks from promissory notes and similar liabilities

(98,343)

(2,747)

0

(6,529)

(3,411)

0

(7,108)

Liabilities with the right of creditors to priority repayment in the event of default

(3,248)

(63)

0

(463)

(122)

0

(707)

Other interest-bearing liabilities

(7,343)

(23)

(2)

(2,700)

(23)

(1)

(796)

Other non-interest-bearing liabilities

(1,829)

0

0

(1,499)

0

0

(120)

Lease liabilities

(33,133)

(563)

0

(5,044)

(902)

0

(4,432)

Derivative financial liabilities and assets

 

 

 

 

 

 

 

Derivative financial liabilities:

 

 

 

 

 

 

 

Currency derivatives without a hedging relationship

(15)

 

 

(13)

 

 

0

Currency derivatives in connection with cash flow hedges

(1)

 

 

(3)

 

 

0

Embedded derivatives without a hedging relationship

(7)

0

0

(8)

 

 

(1)

Other derivatives without a hedging relationship

(455)

0

(22)

0

0

(22)

0

Interest rate derivatives without a hedging relationship

(109)

(27)

6

(6)

(3)

(7)

(7)

Interest rate derivatives in connection with fair value hedges

(11)

22

(5)

0

22

(5)

(4)

Interest rate derivatives in connection with cash flow hedges

(105)

(122)

61

0

(122)

61

0

Derivative financial assetsa:

 

 

 

 

 

 

 

Currency derivatives without a hedging relationship

44

 

 

42

 

 

 

Currency derivatives in connection with cash flow hedges

17

 

 

14

 

 

 

Embedded derivatives without a hedging relationship

191

0

0

26

0

0

20

Other derivatives without a hedging relationship

3

 

 

2

 

 

1

Interest rate derivatives without a hedging relationship

235

16

2

49

7

9

0

Interest rate derivatives in connection with fair value hedges

1,195

559

(188)

0

554

(190)

4

Interest rate derivatives in connection with cash flow hedges

348

61

(11)

63

53

(6)

0

millions of €

 

 

 

 

 

 

 

 

 

 

Cash flows in 2024-2026

Cash flows in 2027-2031

Cash flows in 2032 and thereafter

 

Fixed interest rate

Variable interest rate

Repay­ment

Fixed interest rate

Variable interest rate

Repay­ment

Fixed interest rate

Variable interest rate

Repay­ment

Non-derivative financial liabilities (excluding lease liabilities)

 

 

 

 

 

 

 

 

 

Bonds, other securitized liabilities, liabilities to banks and liabilities to non-banks from promissory notes and similar liabilities

(8,291)

0

(18,714)

(8,683)

0

(39,301)

(10,612)

0

(23,238)

Liabilities with the right of creditors to priority repayment in the event of default

(165)

0

(1,553)

(16)

0

(406)

0

0

0

Other interest-bearing liabilities

(51)

0

(1,370)

(54)

0

(2,444)

(30)

0

(34)

Other non-interest-bearing liabilities

0

0

(26)

0

0

(178)

0

0

(7)

Lease liabilities

(2,091)

0

(9,198)

(2,683)

0

(14,052)

(76)

0

(427)

Derivative financial liabilities and assets

 

 

 

 

 

 

 

 

 

Derivative financial liabilities:

 

 

 

 

 

 

 

 

 

Currency derivatives without a hedging relationship

0

0

0

0

0

0

0

0

0

Currency derivatives in connection with cash flow hedges

0

0

0

0

0

0

0

0

0

Embedded derivatives without a hedging relationship

0

0

(3)

0

0

(20)

0

0

(8)

Other derivatives without a hedging relationship

0

(13)

(409)

0

0

0

0

0

0

Interest rate derivatives without a hedging relationship

2

15

(35)

0

12

(9)

0

5

69

Interest rate derivatives in connection with fair value hedges

62

(15)

0

75

(25)

(16)

213

(84)

4

Interest rate derivatives in connection with cash flow hedges

(246)

114

0

0

0

0

0

0

0

Derivative financial assetsa:

 

 

 

 

 

 

 

 

 

Currency derivatives without a hedging relationship

 

 

 

 

 

 

 

 

 

Currency derivatives in connection with cash flow hedges

 

 

 

 

 

 

 

 

 

Embedded derivatives without a hedging relationship

0

0

38

0

0

68

0

0

62

Other derivatives without a hedging relationship

 

 

1

 

 

 

 

 

 

Interest rate derivatives without a hedging relationship

16

25

63

42

22

11

8

95

62

Interest rate derivatives in connection with fair value hedges

1,500

(567)

18

1,562

(666)

(9)

1,624

(709)

30

Interest rate derivatives in connection with cash flow hedges

139

(3)

0

110

0

244

(10)

0

65

a

This does not include payments that Deutsche Telekom would have to make or would receive in the event of exercising options to buy or sell company shares. It is unclear whether, when, and to what extent such options will be exercised. This mainly relates to the stock options to buy shares in T-Mobile US received from SoftBank. If Deutsche Telekom were to exercise the maximum number of these stock options, it would have to make a payment of EUR 5,509 million when translated into euros, based on the share price at the reporting date. For further information on these stock options, please refer to Note 40 “Financial instruments and risk management” in the disclosures on financial liabilities assigned to Level 3. Deutsche Telekom also holds other immaterial options to buy or sell company shares.

millions of €

 

 

 

 

 

 

 

Carrying amount

Cash flows in

 

Dec. 31, 2020

2021

2022

2023-2025

2026-2030

2031 and thereafter

Non-derivative financial liabilities (excluding lease liabilities)

 

 

 

 

 

 

Bonds, other securitized liabilities, liabilities to banks and liabilities to non-banks from promissory notes and similar liabilities

(93,449)

(8,954)

(9,871)

(27,948)

(42,226)

(30,107)

Liabilities with the right of creditors to priority repayment in the event of default

(3,886)

(1,019)

(563)

(2,022)

(642)

0

Other interest-bearing liabilities

(7,206)

(2,734)

(800)

(1,232)

(1,861)

(748)

Other non-interest-bearing liabilities

(1,703)

(1,563)

(106)

(28)

(5)

(1)

Lease liabilities

(32,715)

(6,218)

(5,285)

(10,466)

(17,153)

(648)

Derivative financial liabilities and assets

 

 

 

 

 

 

Derivative financial liabilities:

 

 

 

 

 

 

Currency derivatives without a hedging relationship

(41)

(32)

(6)

0

0

0

Currency derivatives in connection with cash flow hedges

(28)

(26)

0

0

0

0

Embedded derivatives without a hedging relationship

(129)

(18)

(7)

(28)

(65)

(37)

Other derivatives without a hedging relationship

(13)

(2)

(10)

(2)

0

0

Interest rate derivatives without a hedging relationship

(295)

(18)

(17)

(40)

(52)

33

Interest rate derivatives in connection with fair value hedges

(52)

37

37

101

13

(1)

Interest rate derivatives in connection with cash flow hedges

(307)

(44)

(41)

(94)

146

24

Derivative financial assetsa:

 

 

 

 

 

 

Currency derivatives without a hedging relationship

15

16

0

0

0

0

Currency derivatives in connection with cash flow hedges

8

4

0

0

0

0

Embedded derivatives without a hedging relationship

77

0

(1)

19

40

25

Other derivatives without a hedging relationship

0

0

0

0

0

0

Interest rate derivatives without a hedging relationship

191

9

118

31

36

76

Interest rate derivatives in connection with fair value hedges

2,025

317

309

828

813

1,043

Interest rate derivatives in connection with cash flow hedges

12

6

12

5

0

0

a

This does not include payments that Deutsche Telekom would have to make or would receive in the event of exercising options to buy or sell company shares. It is unclear whether, when, and to what extent such options will be exercised. This mainly relates to the stock options to buy shares in T-Mobile US received from SoftBank. If Deutsche Telekom were to exercise the maximum number of these stock options, it would have to make a payment of EUR 5,509 million when translated into euros, based on the share price at the reporting date. For further information on these stock options, please refer to Note 40 “Financial instruments and risk management” in the disclosures on financial liabilities assigned to Level 3. Deutsche Telekom also holds other immaterial options to buy or sell company shares.

All instruments held at December 31, 2021 and for which payments were already contractually agreed were included. Planning data for future, new liabilities were not included. Amounts in foreign currency were each translated at the closing rate at the reporting date. The variable interest payments arising from the financial instruments were calculated using the last interest rates fixed before December 31, 2021. Financial liabilities that can be repaid at any time are always assigned to the earliest possible time period. In accordance with § 2 (4) of the German Act on the Transformation of the Deutsche Bundespost Enterprises into the Legal Structure of Stock Corporation (Stock Corporation Transformation Act – Postumwandlungsgesetz), the Federal Republic is guarantor of all Deutsche Telekom AG’s liabilities that were already outstanding as at January 1, 1995. At December 31, 2021, this figure was a nominal EUR 0.1 billion (December 31, 2020: EUR 0.1 billion).