Notes to the consolidated statement of cash flows

Net cash from operating activities

Net cash from operating activities decreased by EUR 2.5 billion year-on-year to EUR 9.1 billion. This decline relates in part to the repayment of a Deutsche Bundespost treasury note (zero-coupon bond) issued by Deutsche Telekom AG in 1990 with a nominal amount of EUR 0.2 billion, which fell due on December 31, 2019 and was repaid on that date by a bank using its own funds. The payment by Deutsche Telekom AG to this bank was made on the following bank working day of January 2, 2020. The interest portion amounted to EUR 1.2 billion. In addition, the repayment of EUR 0.4 billion in the first half of 2020 for another zero-coupon bond also had a negative impact. The interest portion amounted to EUR 0.4 billion. Net cash from operating activities was also negatively impacted in the amount of EUR 2.2 billion in the first half of 2020 as a result of the premature termination of forward-payer swaps for borrowings raised at T‑Mobile US. Higher (net) interest payments, which were up by EUR 0.8 billion in total, mainly as a result of the financial liabilities recognized in connection with the acquisition of Sprint and the restructuring begun in connection with this acquisition and related increase in financing, including the handling charges incurred for a briefly utilized bridge loan facility, had a negative effect. Income tax payments decreased by EUR 0.3 billion compared with the prior-year period. Factoring agreements of EUR 0.5 billion had a negative impact on net cash from operating activities in the first half of 2020, mainly as a result of the contractual termination of a revolving factoring agreement in the Germany operating segment. In the prior-year period, factoring agreements had had a positive effect of EUR 0.3 billion. The sustained strong performance of the operating segments, especially in the United States, had an increasing effect on net cash from operating activities.

Net cash used in investing activities

At EUR 8.1 billion, cash capex was EUR 0.1 billion higher than in the prior-year period. In the United States operating segment, FCC mobile licenses were acquired for a total of EUR 0.9 billion and in the Europe operating segment, mobile spectrum licenses were acquired for a total of EUR 0.2 billion in the reporting period. The prior-year figure included EUR 1.0 billion for the acquisition of mobile spectrum licenses, which primarily related to the United States operating segment. Adjusted for investments in mobile spectrum licenses, cash capex remained at the prior-year level. In the Germany operating segment, the decline is mainly a result of the changed accounting treatment of grants receivable from funding projects for the broadband build-out as of the start of the third quarter of 2019. Since then, the grants received and payments made for the build-out are no longer part of cash capex. In the United States operating segment, cash capex increased as a result of the inclusion of Sprint and the continued build-out of the 5G network.

Net cash from/used in financing activities

Non-cash transactions

In the first half of 2020, Deutsche Telekom chose financing options of EUR 0.1 billion under which the payments for trade payables from operating and investing activities primarily become due at a later point in time by involving banks in the process (H1 2019: EUR 0.3 billion). These payables will subsequently be recognized under financial liabilities in the statement of financial position. As soon as the payments have been made, they are disclosed under net cash from/used in financing activities.

In the first half of 2020, Deutsche Telekom leased assets of EUR 2.3 billion, mainly network equipment, and land and buildings (H1 2019: EUR 2.9 billion). These assets are now 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 from/used in financing activities.

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 0.1 billion were recognized in the first half of 2020 for future consideration for acquired broadcasting rights (H1 2019: EUR 0.1 billion). As soon as the payments have been made, they are disclosed under net cash from/used in financing activities.

In the United States operating segment, EUR 1.6 billion was recognized for mobile handsets under property, plant and equipment in the first half of 2019 (H1 2019: EUR 0.3 billion). These relate to the JUMP! On Demand business model at T‑Mobile US, under which customers do not purchase the devices but lease them. The payments are presented under net cash from operating activities.

The business combination of T‑Mobile US and Sprint in the United States operating segment as of April 1, 2020 was executed by means of a share exchange without a cash component (all-stock transaction).

For further information on the business combination of T‑Mobile US and Sprint, please refer to the section “Changes in the composition of the Group.”