Notes to the consolidated statement of cash flows

Net cash from operating activities

Net cash from operating activities decreased by EUR 1.1 billion year-on-year to EUR 16.4 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 reporting period 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 reporting period as a result of the premature termination of forward-payer swaps for borrowings raised at T‑Mobile US. Excluding these effects, higher (net) interest payments, which were up by EUR 1.5 billion, had a negative impact on net cash from operating activities, mainly due to the financial liabilities recognized and the restructuring begun in connection with the acquisition of Sprint and the related increase in financing, including the handling charges incurred for a briefly utilized bridge loan facility. Income tax payments decreased by EUR 0.1 billion compared with the prior-year period. Factoring agreements of EUR 0.6 billion had a negative impact on net cash from operating activities in the reporting period, 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, and the inclusion of Sprint had an increasing effect on net cash from operating activities.

Net cash used in investing activities

At EUR 12.9 billion, cash capex was EUR 1.7 billion higher than in the prior-year period. In the United States segment, FCC mobile licenses were acquired in the reporting period for a total of EUR 1.0 billion; the Europe and Group Development segments each acquired mobile spectrum licenses in the amount of EUR 0.2 billion, respectively, in the same period. The prior-year figure included EUR 1.2 billion for the acquisition of mobile spectrum licenses, which primarily related to the United States operating segment. Excluding investments in mobile spectrum licenses, cash capex was up EUR 1.5 billion year-on-year. This change was primarily attributable to an increase of EUR 1.8 billion in the United States operating segment on account of the inclusion of Sprint and as a result of the further expansion of the 5G network, as well a contrasting decline of EUR 0.4 billion in the Germany operating segment.

Net cash from/used in financing activities

Non-cash transactions

In the reporting period, Deutsche Telekom chose financing options of EUR 0.2 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 (prior-year period: EUR 0.7 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 three quarters of 2020, Deutsche Telekom leased assets of EUR 12.8 billion, mainly network equipment, and land and buildings (prior-year period: EUR 4.5 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. The year-on-year increase is mainly attributable to the United States operating segment and relates to the inclusion of Sprint as well as to a modified agreement with American Tower concerning the lease of approximately 20,729 cell towers, which increased the carrying amounts of the right-of-use assets and the lease liabilities by EUR 9.4 billion each.

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 0.2 billion were recognized in the first three quarters of 2020 for future consideration for acquired broadcasting rights (prior-year period: EUR 0.2 billion). The payment of the consideration will be recognized in net cash from/used in financing activities.

In the United States operating segment, mobile handsets amounting to EUR 2.1 billion were recognized under property, plant and equipment in the first three quarters of 2020 (prior-year period: EUR 0.6 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 increase in terminal equipment leases is mainly due to the inclusion of Sprint, whose business model had a strong focus on terminal equipment leases.

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.”