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35 Notes to the consolidated statement of cash flows

Net cash from operating activities

Net cash from operating activities increased by EUR 8.4 billion year-on-year to EUR 32.2 billion. The strong performance both in the United States and outside of the United States had a positive effect here. In addition, the increase is attributable to the business combination of T‑Mobile US and Sprint effective April 1, 2020. Net cash from operating activities had been negatively affected in the prior year by interest payments totaling EUR 1.6 billion for zero-coupon bonds. Net cash from operating activities had also been negatively impacted in the amount of EUR 2.2 billion in the prior year as a result of the premature termination of forward-payer swaps for borrowings raised at T‑Mobile US as well as by a net increase of EUR 0.7 billion in interest payments, mainly as a result of the financial liabilities assumed and the restructuring carried out in connection with the acquisition of Sprint, and the related increase in financing. Income tax payments increased by EUR 0.2 billion compared with the prior year. Factoring agreements of EUR 0.1 billion had a negative impact on net cash from operating activities in the 2021 financial year. In the prior year, factoring agreements had had negative effects of EUR 0.8 billion, mainly as a result of the contractual termination of a revolving factoring agreement in the Germany operating segment.

Deutsche Telekom’s working capital measures are focused on improvements in the area of liabilities as well as in the management of receivables and inventories. However, they are not used for active liquidity management. The positive effect on the change in assets carried as working capital is mainly attributable to lower cash outflows for mobile terminal equipment in the United States operating segment, due in part to the planned withdrawal from the terminal equipment lease model. By contrast, factors including higher receivables under the Equipment Installment Plan in the United States operating segment and in Europe had a negative impact on the change in assets carried as working capital. The development of liabilities carried as working capital in the financial year was neutral. The prior year had been negatively impacted by high cash outflows to terminal equipment manufacturers and to other telecommunications companies in the United States operating segment due to seasonal effects.

For further information on individual assets carried as working capital, please refer to Note 2 “Trade receivables” and Note 4 “Inventories.”

For further information, please refer to Note 14 “Trade and other payables.”

Net cash used in/from investing activities

millions of €

 

 

 

 

2021

2020

2019

Cash capex

 

 

 

Germany

(4,116)

(4,191)

(4,447)

United States

(18,594)

(10,394)

(6,369)

Europe

(1,905)

(2,216)

(1,816)

Systems Solutions

(237)

(235)

(324)

Group Development

(572)

(699)

(452)

Group Headquarters & Group Services

(1,007)

(990)

(1,010)

Reconciliation

65

32

61

 

(26,366)

(18,694)

(14,357)

Payments for publicly funded investments in the broadband build-outa

(436)

(507)

(401)

Proceeds from public funds for investments in the broadband build-outa

420

431

341

Net cash flows for collateral deposited and hedging transactions

89

268

365

Changes in cash and cash equivalents in connection with the consummated business combination of T‑Mobile US and Sprint

0

(4,767)

0

Of which: cash and cash equivalents acquired from Sprintb

0

1,997

0

Of which: repayment of Sprint loans pursuant to change-in-control clause

0

(6,764)

0

Changes in cash and cash equivalents in connection with the acquisition of Shentel at T‑Mobile US

(1,588)

0

0

Cash outflows for the acquisition of shares in Simpelc

0

(255)

0

Cash outflows for the acquisition of shares in Tele2 Netherlandsd

0

0

(195)

Other changes in cash and cash equivalents in connection with the acquisition of control of subsidiaries and associates

(29)

0

0

Changes in cash and cash equivalents in connection with the contribution of the stake in T‑Mobile Infra into Cellnex Netherlandse

135

0

0

Changes in cash and cash equivalents in connection with the sale of the stake in Telekom Romania Communicationsf

202

0

0

Changes in cash and cash equivalents in connection with the sale of Sprint’s prepaid business to DISHg

0

1,072

0

Changes in cash and cash equivalents in connection with the loss of control of subsidiaries and associates

37

22

62

Payment in relation to settlement reached in Toll Collect arbitration proceedings

0

0

(200)

Proceeds from the disposal of property, plant and equipment, and intangible assets

116

236

176

Other

16

(456)

(21)

 

(27,403)

(22,649)

(14,230)

a

For further information on the change in estimates made in 2019, please refer to the section “Changes in accounting policies, changes in estimates” in the notes to the consolidated financial statements in the 2019 Annual Report.

b

Also includes a payment of EUR 93 million received in relation to a cost allocation from SoftBank in connection with CPUC.

c

Includes, in addition to the purchase price of EUR 259 million, inflows of cash and cash equivalents in the amount of EUR 4 million.

d

Includes, in addition to the purchase price of EUR 199 million, inflows of cash and cash equivalents in the amount of EUR 4 million.

e

Includes, in addition to the cash inflow for the sale of the business operation of EUR 113 million (cash inflow of EUR 118 million less outflows of cash and cash equivalents of EUR 5 million), the cash inflow from the sale-and-leaseback transaction of EUR 23 million.

f

Includes, in addition to the cash inflow for the sale of the business operation of EUR 292 million, outflows of cash and cash equivalents in the amount of EUR 89 million.

g

Of the overall purchase price payment of EUR 1,208 million, EUR 136 million are recognized under net cash used in/ from financing activities. This relates to receivables from customers in connection with the Equipment Installment Plan in Sprint’s sold prepaid business.

At EUR 26.4 billion, cash capex was EUR 7.7 billion higher than in the prior year. In the United States operating segment, FCC mobile licenses were acquired mainly as part of the concluded C-band auction for a total of EUR 8.3 billion and, in the Europe operating segment, mobile spectrum licenses were acquired for a total of EUR 0.1 billion in the 2021 financial year. The figure for the prior year included EUR 1.7 billion for the acquisition of mobile spectrum licenses, EUR 1.1 billion of which related to the United States operating segment, EUR 0.4 to the Europe operating segment, and EUR 0.2 billion to the Group Development operating segment. Excluding investments in mobile spectrum licenses, cash capex was up EUR 1.0 billion year-on-year. This change was primarily attributable to an increase in the United States operating segment on account of the inclusion of Sprint and as a result of the further build-out of the 5G network.

The contractually promised government grants from publicly funded projects for the broadband build-out in Germany were recognized in full as receivables as of the start of the second half of 2019. They reduce the cost of the relevant property, plant and equipment. The grants received and payments made for the build-out continue to be recognized in net cash used in/from investing activities, however, they are not part of cash capex, because the payments made do not result in additions to property, plant and equipment. Since the payments are not made at the same point in time as the proceeds are received, the net amounts can be positive or negative in the individual periods.

Interest payments (including capitalized interest) of EUR 6.4 billion (2020: EUR 7.6 billion, 2019: EUR 4.3 billion) were made in the 2021 financial year. Capitalized interest of EUR 0.2 billion (2020: EUR 0.3 billion, 2019: EUR 0.3 billion) was reported within cash capex in net cash used in/from investing activities, together with the associated assets.

Net cash used in/from financing activities

millions of €

 

 

 

 

2021

2020

2019

Repayment of bonds

(11,318)

(8,958)

(2,718)

Dividend payments (including to other shareholders of subsidiaries)

(3,145)

(3,067)

(3,561)

Repayment of financial liabilities from financed capex and opex

(108)

(358)

(699)

Repayment of EIB loans

(1,093)

(193)

(660)

Net cash flows for collateral deposited and hedging transactions

0

(4)

112

Principal portion of repayment of lease liabilities

(6,458)

(5,371)

(3,835)

Repayment of financial liabilities for media broadcasting rights

(338)

(375)

(407)

Cash flows from continuing involvement factoring, net

(72)

(77)

(21)

Loans taken out with the EIB

0

425

500

Promissory notes, net

(58)

(202)

144

Issuance of bonds

12,678

9,202

5,479

Commercial paper, net

0

0

(467)

Overnight borrowings from banks

0

0

(626)

Repayment of liabilities from 5G spectrum acquired in Germany

(195)

(110)

0

Repayment of liabilities from 5G spectrum acquired in the Netherlands

(204)

0

0

Changes in cash and cash equivalents in connection with the sale and leaseback of the passive mobile infrastructure of T‑Mobile Infra

242

0

0

Issue of senior secured notes in connection with the acquisition of Sprint

0

20,942

0

Raising of secured term loan in connection with the acquisition of Sprint

0

3,562

0

Repayment of secured term loan in connection with the acquisition of Sprint

0

(3,389)

0

Raising of bridge loan facility in connection with the acquisition of Sprint

0

17,405

0

Repayment of bridge loan facility in connection with the acquisition of Sprint

0

(17,493)

0

Repayment of Sprint loans (raised prior to acquisition by T‑Mobile US)

0

(3,572)

0

Cash inflows from transactions with non-controlling entities

 

 

 

T‑Mobile US stock options

9

42

2

Cellnex Netherlands capital contributions

4

0

0

Toll4Europe capital contributions

0

11

10

Other

1

0

1

 

14

53

13

Cash outflows from transactions with non-controlling entities

 

 

 

T‑Mobile US share buy-backs

(261)

(391)

(139)

OTE share buy-back program

(190)

(142)

(110)

Other

(54)

(32)

(12)

 

(506)

(565)

(261)

Other

(218)

(293)

(134)

 

(10,779)

7,561

(7,141)

Non-cash transactions in the consolidated statement of cash flows

In the deal signed between Deutsche Telekom and SoftBank on September 6, 2021, Deutsche Telekom acquired a total of around 45.4 million T‑Mobile US shares from SoftBank on September 28, 2021. SoftBank received in return 225 million new shares in Deutsche Telekom AG by way of a capital increase against a non-cash contribution.

For further information on the increase of the stake in T‑Mobile US by way of the agreement concluded with SoftBank, please refer to the section “Other transactions that had no effect on the composition of the Group.”

In the 2021 financial year, Deutsche Telekom did not make use of financing options under which the payments for trade payables from operating and investing activities mainly become due at a later point in time by involving banks in the process (2020: EUR 0.2 billion). These are shown under financial liabilities in the statement of financial position. As soon as the payments have been made, they are disclosed under net cash used in/from financing activities.

In the 2021 financial year, Deutsche Telekom leased assets totaling EUR 5.7 billion, mainly network equipment, cell sites, and land and buildings. As a result, these assets are recognized in the statement of financial position under right-of-use assets and the related liabilities under lease liabilities. Future repayments of the liabilities will be recognized in net cash used in/from financing activities. In the prior year, this figure stood at EUR 14.3 billion, EUR 9.4 billion of which related to a modified agreement with American Tower for the lease of around 20,729 cell towers, resulting in an increase in the same amount in the carrying amount of the right-of-use assets and the lease liabilities. Excluding this effect, there was a year-on-year increase of EUR 0.8 billion, which was mainly attributable to the further build-out of the 5G network and the inclusion of Sprint in the United States operating segment, and to the sale-and-leaseback agreements in connection with the combination of the cell tower business in the Netherlands.

Consideration for the acquisition of broadcasting rights is paid by Deutsche Telekom in accordance with the terms of the contract on the date of its conclusion or spread over the term of the contract. Financial liabilities of EUR 0.5 billion were recognized in the 2021 financial year for future consideration for acquired broadcasting rights (2020: EUR 0.4 billion). The payment of the consideration will be recognized in net cash used in/from financing activities.

In the United States operating segment, EUR 1.0 billion was recognized for mobile terminal equipment under property, plant and equipment in the 2021 financial year (2020: EUR 2.5 billion). This relates to the terminal equipment lease model at T‑Mobile US, under which customers do not purchase the devices but lease them. The cash outflows are presented under net cash from operating activities. The decline was primarily due to the withdrawal from the terminal equipment lease model.

The combination of the cell tower business in the Netherlands and the set-up of an infrastructure fund in the Group Development operating segment resulted in the following non-cash transactions: First, the stake in T‑Mobile Infra was contributed into Cellnex Netherlands in exchange for the granting of a stake of 37.65 % in the “new” company, Cellnex Netherlands. Second, in order to ensure T‑Mobile Netherlands’ continued access to the contributed passive mobile infrastructure, a long-term agreement, primarily on the lease of corresponding infrastructure components, was concluded in the form of a sale-and-leaseback transaction.

For further information on the combination of the cell tower business in the Netherlands and the set-up of an infrastructure fund, please refer to the section “Changes in the composition of the Group and other transactions” under “Summary of accounting policies.”

The carrying amounts of the financial liabilities associated with net cash used in/from financing activities, divided into carrying amount changes having and not having an effect on cash flows, developed as follows in the reporting year:

millions of €

 

 

 

 

 

 

 

 

 

 

As of Jan. 1, 2021

Of which: payments to be disclosed in net cash used in/from financing activitiesa

Total carrying amount changes having an effect on cash flows

Changes in the composition of the Group

Bonds and other securitized liabilities

87,702

87,702

2,091

(4)

Liabilities to banks

5,257

4,581

(888)

(21)

 

92,959

92,283

1,203

(25)

Liabilities to non-banks from promissory note bonds

490

490

0

0

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

3,886

3,886

(811)

0

Other interest-bearing liabilities

7,206

6,036

(1,389)

(3)

Other non-interest-bearing liabilities

1,703

3

48

136

Derivative financial liabilities

864

827

(6)

0

 

14,149

11,242

(2,158)

133

Financial liabilities

107,108

103,525

(955)

108

Lease liabilities

32,715

32,715

(6,458)

285

Derivative financial assets

4,038

(142)

(1)

0

a

Deutsche Telekom exercised the option pursuant to IAS 7.33 and presented interest paid and interest received under net cash from operating activities.

millions of €

 

 

 

 

 

 

 

 

Carrying amount changes not having an effect on cash flows

 

 

 

 

 

 

 

 

 

 

 

Currency translation

Fair value

Carrying amount changes according to the effective interest method

Other

Total carrying amount changes not having an effect on cash flows

Carrying amount on Dec. 31, 2021 of the payments to be disclosed in net cash used in/from financing activitiesa

As of Dec. 31, 2021

Bonds and other securitized liabilities

5,325

(1,000)

(235)

(23)

4,063

93,857

93,857

Liabilities to banks

0

(51)

29

(11)

(54)

3,640

4,003

 

5,325

(1,051)

(206)

(34)

4,009

97,497

97,860

Liabilities to non-banks from promissory note bonds

(7)

0

0

0

(7)

483

483

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

283

0

(32)

(77)

174

3,248

3,248

Other interest-bearing liabilities

206

0

174

1,060

1,437

6,084

7,343

Other non-interest-bearing liabilities

1

0

0

0

137

187

1,829

Derivative financial liabilities

0

(642)

0

0

(642)

179

703

 

483

(642)

142

983

1,099

10,181

13,606

Financial liabilities

5,808

(1,693)

(64)

949

5,108

107,678

111,466

Lease liabilities

2,225

0

0

4,366

6,876

33,133

33,133

Derivative financial assets

0

(181)

0

0

(181)

(324)

2,762

a

Deutsche Telekom exercised the option pursuant to IAS 7.33 and presented interest paid and interest received under net cash from operating activities.

millions of €

 

 

 

 

 

 

 

 

 

Carrying amount changes not having an effect on cash flows

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation

Fair value

Carrying amount changes according to the effective interest method

Other

Total carrying amount changes not having an effect on cash flows

Carrying amount on Dec. 31, 2021 of the payments to be disclosed in net cash used in/from financing activitiesa

As of Dec. 31, 2021

 

Bonds and other securitized liabilities

5,325

(1,000)

(235)

(23)

4,063

93,857

93,857

 

Liabilities to banks

0

(51)

29

(11)

(54)

3,640

4,003

 

 

5,325

(1,051)

(206)

(34)

4,009

97,497

97,860

 

Liabilities to non-banks from promissory note bonds

(7)

0

0

0

(7)

483

483

 

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

283

0

(32)

(77)

174

3,248

3,248

 

Other interest-bearing liabilities

206

0

174

1,060

1,437

6,084

7,343

 

Other non-interest-bearing liabilities

1

0

0

0

137

187

1,829

 

Derivative financial liabilities

0

(642)

0

0

(642)

179

703

 

 

483

(642)

142

983

1,099

10,181

13,606

 

Financial liabilities

5,808

(1,693)

(64)

949

5,108

107,678

111,466

 

Lease liabilities

2,225

0

0

4,366

6,876

33,133

33,133

 

Derivative financial assets

0

(181)

0

0

(181)

(324)

2,762

 

a

Deutsche Telekom exercised the option pursuant to IAS 7.33 and presented interest paid and interest received under net cash from operating activities.

Total carrying amount changes having an effect on cash flows of EUR ‑7.4 billion reported in net cash used in/from financing activities deviate from net cash used in/from financing activities due in particular to the dividend entitlements of Deutsche Telekom AG’s shareholders having an effect on cash flows, the interest paid in connection with financial liabilities reported in cash generated from operations, and the changes in non-controlling interests having an effect on cash flows. The other carrying amount changes in lease liabilities not having an effect on cash flows are mainly attributable to additions in connection with the recognition of right-of-use assets. The other carrying amount changes in financial liabilities not having an effect on cash flows include additions of EUR 0.5 billion for the acquisition of broadcasting rights.

In the 2021 financial year, Deutsche Telekom made total interest payments of EUR 6.4 billion to service interest obligations. This figure includes interest payments for derivative and non-derivative financial liabilities, interest payments for lease liabilities, and interest payments recognized under intangible assets and property, plant and equipment. The above reconciliation only shows the carrying amounts of the financial liabilities, lease liabilities, and derivative financial assets allocated to net cash used in/from financing activities.

For further information, please refer to the previous section “Non-cash transactions in the consolidated statement of cash flows.”

The carrying amounts of the financial liabilities disclosed in net cash used in/from financing activities, divided into carrying amount changes having and not having an effect on cash flows, developed as follows in 2020:

millions of €

 

 

 

 

 

 

 

 

 

 

As of Jan. 1, 2020

Of which: payments to be disclosed in net cash used in/from financing activitiesa

Total carrying amount changes having an effect on cash flows

Changes in the composition of the Group

Bonds and other securitized liabilities

51,644

51,295

16,754

24,631

Liabilities to banks

6,516

4,393

(1,265)

0

 

58,160

55,688

15,489

24,631

Liabilities to non-banks from promissory note bonds

699

699

(200)

0

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

0

0

(148)

4,832

Other interest-bearing liabilities

4,369

3,264

(477)

9,177

Other non-interest-bearing liabilities

1,476

10

(8)

0

Derivative financial liabilities

1,645

232

(2)

0

 

8,189

4,205

(835)

14,009

Financial liabilities

66,349

59,893

14,654

38,640

Lease liabilities

19,835

20,165

(5,371)

6,819

Derivative financial assets

2,333

(306)

(19)

0

millions of €

 

 

 

 

 

 

 

 

Carrying amount changes not having an effect on cash flows

 

 

 

 

 

 

 

 

 

 

 

Currency translation

Fair valueb

Carrying amount changes according to the effective interest methodb

Otherb

Total carrying amount changes not having an effect on cash flowsb

Carrying amount on Dec. 31, 2020 of the payments to be disclosed in net cash used in/from financing activitiesa, b

As of Dec. 31, 2020

Bonds and other securitized liabilities

(6,600)

977

234

411

19,653

87,702

87,702

Liabilities to banks

0

25

32

1,396

1,453

4,581

5,257

 

(6,600)

1,002

266

1,807

21,106

92,283

92,959

Liabilities to non-banks from promissory note bonds

(9)

0

0

0

(9)

490

490

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

(885)

0

(21)

108

4,034

3,886

3,886

Other interest-bearing liabilities

(222)

0

145

(5,852)

3,248

6,036

7,206

Other non-interest-bearing liabilities

1

0

0

0

1

3

1,703

Derivative financial liabilities

0

597

0

0

597

827

864

 

(1,115)

597

124

(5,744)

7,871

11,242

14,149

Financial liabilities

(7,715)

1,559

390

(3,937)

28,977

103,525

107,108

Lease liabilities

(2,295)

0

0

13,397

17,921

32,715

32,715

Derivative financial assets

0

183

0

0

183

(142)

4,038

a

Deutsche Telekom exercised the option pursuant to IAS 7.33 and presented interest paid and interest received under net cash from operating activities.

b

The disclosures hereunder are presented in net terms from the reporting year. The comparatives were retrospectively adjusted accordingly.

5G
New communications standard (launched from 2020), which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things.
Glossary