37 Notes to the consolidated statement of cash flows

Net cash from operating activities

At EUR 40.6 billion, net cash from operating activities was EUR 0.8 billion higher than in the prior year. This is the result of the strong development of the operating business. Lower cash outflows in connection with the integration of Sprint in the United States also had a positive effect. By contrast, exchange rate effects and slight increases in net interest payments and tax payments had a reducing effect.

Deutsche Telekom defines operating working capital as the total of trade receivables, inventories, and trade and other payables. The negative effect on the change in assets carried as working capital is mainly attributable to an increase of new contracts with equipment installment plans and to higher inventories of terminal equipment, mainly as a result of the UScellular Acquisition and the larger customer base following the acquisition of customers from Metronet and Lumos. Other factors contributing to the development were higher capitalized contract costs and dealer commission, as well as higher receivables from terminal equipment manufacturers. The positive effect on the change in liabilities carried as operating working capital mainly resulted from higher liabilities in the United States operating segment, including as a result of the higher procurement volume.

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.”

At EUR 19.3 billion, cash outflows for investments in intangible assets and property, plant and equipment were EUR 0.1 billion higher than in the prior-year period. In the reporting period, payments of EUR 1.1 billion were made for mobile spectrum licenses, mainly in the United States and Europe operating segments. Furthermore, in the United States operating segment, investments in the acquisition of customer bases, mainly in connection with the acquisition of Metronet, resulted in total cash outflows of EUR 1.3 billion. In the prior-year period, this item had included cash outflows for mobile spectrum licenses of EUR 3.2 billion in the United States operating segment. Excluding investments in mobile spectrum licenses and acquisitions of customer bases, cash outflows for investments in intangible assets and property, plant and equipment were up EUR 0.9 billion year-on-year. Cash outflows in the United States operating segment increased by EUR 0.6 billion, in particular due to higher investments in the continued network build-out and additional capex as a result of the UScellular Acquisition. Cash outflows in the Europe and Germany operating segments increased by EUR 0.2 billion and EUR 0.1 billion, respectively.

The contractually promised government grants from publicly funded projects for the broadband build-out in Germany 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 7.7 billion (2024: EUR 8.1 billion; 2023: EUR 7.9 billion) were made in the 2025 financial year. Capitalized interest of EUR 0.1 billion (2024: EUR 0.1 billion; 2023: EUR 0.2 billion) was reported within cash capex in net cash used in/from investing activities, together with the associated assets.

Non-cash transactions in the consolidated statement of cash flows

In the reporting period, Deutsche Telekom leased assets with a carrying amount of EUR 4.6 billion, mainly network equipment, cell sites, and land and buildings. 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. The corresponding additions of right-of-use assets were up EUR 0.8 billion against the prior-year period, in part as a result of the inclusion of UScellular, as well as due to the continued build-out of the nationwide 5G networks in the United States operating segment.

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 0.4 billion were recognized in the reporting year for future consideration for acquired broadcasting rights (2024: EUR 0.4 billion). The payment of the consideration will be recognized in net cash used in/from financing activities.

In connection with the extension of use of the 800 MHz, 1,800 MHz, and 2,600 MHz frequency ranges in Germany granted by the Bundesnetzagentur, financial liabilities of EUR 0.2 billion were recognized for future consideration. Future payments will be recognized in net cash used in/from financing activities.

Financial liabilities associated with net cash used in/from financing activities

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:

Total carrying amount changes having an effect on cash flows of EUR 0.3 billion reported in net cash used in/from financing activities deviate from net cash used in/from financing activities, in particular due to the cash payments made for satisfying dividend entitlements of Deutsche Telekom AG’s shareholders, 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 as well as the share buy-back program of Deutsche Telekom AG. 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 0.4 billion for the acquisition of broadcasting rights.

In the 2025 financial year, Deutsche Telekom made total interest payments of EUR 7.7 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 2024: