Notes to the consolidated statement of cash flows

Net cash from operating activities

Net cash from operating activities increased by EUR 4.0 billion year-on-year to EUR 17.5 billion. In the prior-year period, the cash outflows in connection with operating leases reduced net cash from operating activities. Due to the first-time application of IFRS 16, the principal repayment portion of lease payments is presented in net cash used in financing activities. The strong performance of the operating segments, in particular the United States, significantly increased net cash from operating activities. Factoring agreements, especially in the Systems Solutions operating segment, resulted in positive effects of EUR 0.3 billion on net cash from operating activities in the reporting period. The effect from factoring agreements in the prior-year period totaled EUR 0.2 billion. In addition, in the prior-year period, dividends received in the amount of EUR 0.2 billion had had an increasing effect. Net cash from operating activities was reduced in the reporting period by a EUR 0.3 billion increase in net interest payments and a EUR 0.1 billion increase in tax payments.

Net cash used in investing activities

Cash capex increased by EUR 1.9 billion to EUR 11.2 billion. In the reporting period, mobile spectrum licenses were acquired for total cash of EUR 1.2 billion. EUR 1.0 billion of this relates to the FCC licenses acquired in the United States operating segment in two auctions for the 28 GHz and 24 GHz spectrum, and EUR 0.1 billion each to spectrum acquired in the Germany operating segment, where payment by annual installments through 2030 has been agreed for the 5G licenses worth EUR 2.2 billion acquired in 2019, and the Europe operating segment. The prior-year figure included EUR 0.2 billion for the acquisition of mobile spectrum licenses, predominantly for the United States operating segment. Adjusted for investments in mobile spectrum licenses, cash capex was up by EUR 0.9 billion. This amount relates almost entirely to the United States operating segment and was primarily attributable to the infrastructure build-out for the 600 MHz spectrum, which also lays the groundwork for 5G.

The contractual grants receivable from public funding projects for the broadband build-out in Germany are recognized in full as of the start of the third quarter of 2019. The grants received and payments made for the build-out continue to be recognized in net cash used in 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. For more information, please refer to the section “Accounting policies.”

Net cash used in financing activities

Non-cash transactions

In the first three quarters of 2019, Deutsche Telekom chose financing options totaling EUR 0.7 billion under which the payments for trade payables from operating and investing activities become due at a later point in time mainly by involving banks in the process. For the prior-year period, this figure was EUR 0.2 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 used in/from financing activities.

In the first three quarters of 2019, Deutsche Telekom leased assets totaling EUR 4.5 billion, mainly network equipment, and land and buildings. These assets are now recognized in the statement of financial position under right-of-use assets and the related liability under lease liabilities. Future repayments of the liabilities will be recognized in net cash used in/from financing activities. In the prior-year period, finance leases totaling EUR 0.6 billion had been concluded in accordance with the previous standard IAS 17.

Consideration for the acquisition of broadcasting rights will be 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 0.2 billion were recognized in the first three quarters of 2019 for future consideration for acquired broadcasting rights. This figure was also EUR 0.2 billion in the prior-year period. The payment will be recognized in net cash used in/from financing activities.

In the United States operating segment, mobile handsets amounting to EUR 0.6 billion were recognized under property, plant and equipment in the first three quarters of 2019. For the prior-year period, this figure was EUR 0.7 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.

As part of the acquisition of 100 percent of the shares in Tele2 Netherlands N.V., Deutsche Telekom transferred a 25 percent share in T‑Mobile Netherlands (prior to the business combination). For more information, please refer to the section “Changes in the composition of the Group.”

In the Germany operating segment, Deutsche Telekom acquired mobile spectrum licenses worth EUR 2.2 billion in the reporting period for the construction of a 5G network. Under the agreed installment plan, EUR 0.1 billion was paid in the reporting period and recognized in cash capex. Future payments will primarily be recognized in net cash used in/from financing activities.