Selected notes to the consolidated statement of financial position

Trade receivables

At EUR 14.3 billion, trade receivables decreased by EUR 1.8 billion against the 2023 year-end level. This was on account of lower receivables in the United States operating segment due to a lower number of new contracts with equipment installment plans, as well as lower receivables from the termination of government assistance programs and from wholesale partners. Furthermore, receivables declined in the Germany operating segment. Exchange rate effects, mainly from the translation of U.S. dollars into euros, also decreased the carrying amount.

Contract assets

The carrying amount of contract assets at the reporting date totaled EUR 2.6 billion compared with EUR 2.4 billion as of December 31, 2023. Contract assets relate to receivables that have not yet legally come into existence, which arise from the earlier – as compared to billing – recognition of revenue, in particular from the sale of goods and merchandise. Furthermore, receivables from long-term construction contracts are recognized under contract assets.

Inventories

The carrying amount of inventories increased by EUR 0.1 billion against the 2023 year-end level to EUR 2.5 billion. It was increased by stockpiling for the market launch of high-value mobile terminal equipment in the United States and Germany operating segments. The reduction of stocks of less expensive terminal equipment due to the termination of government assistance programs in the United States operating segment had an offsetting effect.

Intangible assets

The carrying amount of intangible assets decreased by EUR 0.3 billion compared to December 31, 2023 to EUR 135.7 billion. Depreciation, amortization and impairment losses of EUR 5.0 billion and exchange rate effects of EUR 1.7 billion, primarily from the translation of U.S. dollars into euros, decreased the carrying amount. The reclassifications of intangible assets to non-current assets and disposal groups held for sale also reduced the carrying amount by EUR 1.0 billion and arose primarily in connection with agreed transactions concerning the exchange of spectrum licenses in the United States operating segment. Additions increased the carrying amount by EUR 6.0 billion, EUR 2.6 billion of which related to the acquisition of mobile spectrum in the United States operating segment, in particular for the acquisition of the first tranche of spectrum licenses in the 600 MHz band in connection with the agreements described below between T‑Mobile US and Channel 51. Effects of changes in the composition of the Group resulting from the acquisition of Ka’ena in the United States operating segment increased the carrying amount by EUR 1.4 billion, EUR 0.7 billion of which related to the goodwill acquired in this connection.

For further information on the acquisition of Ka’ena, please refer to the section “Changes in the composition of the Group and other transactions.”

On October 15, 2024 (after the reporting period), T‑Mobile US closed on an agreement with a third party for the exchange of certain of its 39 GHz spectrum licenses. The fair value of the spectrum licenses received is expected to amount to USD 1.0 billion (EUR 0.9 billion). The exchange transaction is expected to result in other operating income of USD 0.1 billion (EUR 0.1 billion).

The following transactions will have an impact on the presentation of Deutsche Telekom’s results of operations and financial position in the future:

On August 8, 2022, T‑Mobile US entered into agreements with Channel 51 License Co LLC and LB License Co, LLC (Sellers) for the acquisition of spectrum licenses in the 600 MHz band in exchange for a total cash consideration of USD 3.5 billion (EUR 3.1 billion). The licenses are to be acquired without any associated network assets. T‑Mobile US currently utilizes these licenses under an existing arrangement with the Sellers covering fixed-term spectrum leases. On March 30, 2023, the contractual parties further agreed that the transaction be divided into two separate tranches. The transfer of the licenses in accordance with the agreements is subject to regulatory approvals and certain other customary closing conditions. The Federal Communications Commission (FCC) approved the first tranche of the license transfer on December 29, 2023. It was concluded on June 24, 2024, with the corresponding purchase price payment of USD 2.4 billion (EUR 2.1 billion) being made on August 5, 2024. On October 22, 2024 (after the reporting period), the FCC approved the transfer of the Dallas licenses included in the second tranche. The closing of the transfer of these licenses and the associated payment of USD 0.5 billion (EUR 0.5 billion) is expected to occur in December 2024. The transfer transaction for the remaining licenses from the second tranche is expected to be closed in 2025.

On September 12, 2023, T‑Mobile US agreed with U.S. cable network operator Comcast to acquire spectrum in the 600 MHz band in exchange for total cash consideration of between USD 1.2 billion and USD 3.3 billion (EUR 1.1 billion and EUR 2.9 billion). The transaction is subject to approval by the FCC. At the same time, T‑Mobile US and Comcast have agreed exclusive leasing arrangements for these spectrum licenses. The transaction is expected to close in the first half of 2028, pending approval from the FCC.

On July 1, 2020, T‑Mobile US and DISH Network Corporation (DISH) reached an agreement on the sale of spectrum licenses, under which DISH agreed to purchase certain 800 MHz spectrum licenses from T‑Mobile US for USD 3.6 billion (EUR 3.2 billion). On October 15, 2023, T‑Mobile US and DISH modified the agreement to include, among other changes, a non-refundable extension fee of USD 0.1 billion (EUR 0.1 billion), which DISH paid to T‑Mobile US on October 25, 2023, as well as the requirement that the purchase of the spectrum licenses must be finalized by April 1, 2024. As of April 1, 2024, DISH had not exercised the purchase option. The already paid extension fee was retained in accordance with the agreement and recognized in profit or loss as other operating income in the second quarter of 2024. T‑Mobile US was contractually obligated to offer the licenses for sale at auction. The associated auction process ended on October 1, 2024. Since bidding did not reach the defined minimum purchase price of USD 3.6 billion by the end of the auction, T‑Mobile US was relieved of its obligation to sell the licenses. T‑Mobile US is currently exploring alternatives to sell or utilize the licenses.

On September 10, 2024, T‑Mobile US and N77 License Co LLC (N77) concluded a license purchase agreement, pursuant to which N77 has the option to purchase all or a portion of T‑Mobile US’ remaining 3.45 GHz spectrum licenses for a purchase price in the form of a range of cash consideration. The number of licenses sold will be determined based upon the amount of committed financing raised by the buyer. The carrying amount of the licenses subject to the license purchase agreement amounted to USD 2.7 billion (EUR 2.4 billion) as of September 30, 2024. In addition, it was agreed that N77 will notify T‑Mobile US in writing of the amount of the committed financing by December 9, 2024. T‑Mobile US reserves the right to terminate the license purchase agreement no later than February 7, 2025, if the buyer’s committed financing is less than a certain target level of the cash consideration. The transaction is subject to approval by the FCC.

Property, plant and equipment

The carrying amount of property, plant and equipment decreased from EUR 65.0 billion as of December 31, 2023 to EUR 63.4 billion. Depreciation, amortization and impairment losses of EUR 8.9 billion, exchange rate effects of EUR 0.4 billion, primarily from the translation of U.S. dollars into euros, and disposals of EUR 0.2 billion decreased the carrying amount. Additions, primarily for the upgrade and build-out of the network (broadband, fiber-optic, and mobile infrastructure) increased the carrying amount by EUR 7.5 billion. Reclassifications of lease assets upon expiry of the contractual lease term to property, plant and equipment, primarily for network technology in the United States operating segment, increased the carrying amount by EUR 0.3 billion.

Right-of-use assets

The carrying amount of the right-of-use assets decreased by EUR 1.9 billion compared to December 31, 2023 to EUR 30.9 billion. Depreciation and impairment losses reduced the carrying amount by EUR 4.0 billion. The aforementioned reclassifications of lease assets to property, plant and equipment, and exchange rate effects, primarily from the translation of U.S. dollars into euros, also both reduced the carrying amount by EUR 0.3 billion. The carrying amount was increased by additions of EUR 2.8 billion.

Capitalized contract costs

As of September 30, 2024, the carrying amount of capitalized contract costs remained at the level as of December 31, 2023 of EUR 3.5 billion. The capitalized contract costs primarily relate to the United States and Germany operating segments.

Investments accounted for using the equity method

The carrying amount of investments accounted for using the equity method increased by EUR 1.5 billion compared to December 31, 2023, to EUR 6.1 billion. This was primarily attributable to reversals of impairment losses recognized in the reporting period of EUR 1.0 billion and EUR 0.3 billion, respectively, on the carrying amounts of the investments in the GD tower companies and in GlasfaserPlus. These reversals of impairment losses were, at the GD tower companies entirely, and at GlasfaserPlus almost entirely, due to lower discount rates as a result of macroeconomic developments in the reporting period and changes within the peer group. Capital increases in the investments in GlasfaserPlus and Glasfaser NordWest also increased the respective carrying amount by EUR 0.1 billion.

Other financial assets

The carrying amount of current and non-current other financial assets decreased by EUR 1.7 billion compared to December 31, 2023 to EUR 7.9 billion. The net total of originated loans and receivables decreased by EUR 0.8 billion to EUR 5.8 billion, mainly due to lower collateral paid for derivatives due to normal fluctuations in fair value (EUR 0.4 billion), unscheduled repayments of shareholder loans to the GD tower companies (EUR 0.2 billion), and lower receivables from publicly funded projects (EUR 0.2 billion). In the course of renegotiations and contract adjustments with IFM Global Infrastructure Fund on the continuation of the joint fiber-optic rollout at GlasfaserPlus, Deutsche Telekom agreed to forgo the contingent consideration receivable. As a result, the carrying amount of debt instruments decreased by EUR 0.4 billion to EUR 0.3 billion. The carrying amount of the derivatives without a hedging relationship decreased by EUR 0.6 billion, in particular in connection with the options to acquire additional T‑Mobile US shares exercised by Deutsche Telekom on June 7, 2024 (EUR 0.4 billion) and the decrease in the carrying amounts of termination rights embedded in bonds issued by T‑Mobile US (EUR 0.1 billion).

For information on cash collateral deposited and on derivatives, please refer to the section “Disclosures on financial instruments.”

Other assets

The carrying amount of current and non-current other assets increased by EUR 0.3 billion to EUR 3.9 billion. As of September 30, 2024, this included various advance payments, totaling EUR 3.1 billion (December 31, 2023: EUR 2.9 billion), mainly including advance payments for maintenance, repairs, and in connection with agreements on services for certain mobile communications and fixed-network equipment that do not fall under the scope of IFRS 16. Receivables from other taxes also increased by EUR 0.1 billion. By contrast, exchange rate effects, mainly from the translation from U.S. dollars into euros, decreased the carrying amount.

Non-current assets and disposal groups held for sale

The carrying amount of non-current assets and disposal groups held for sale as of September 30, 2024 was EUR 1.0 billion, up EUR 0.8 billion on the level of December 31, 2023. This increase is primarily attributable to the transactions agreed between T‑Mobile US and other telecommunications companies for the exchange of spectrum licenses in order to improve mobile network coverage.

Financial liabilities and lease liabilities

The following table shows the composition and maturity structure of financial liabilities as of September 30, 2024:

The carrying amount of current and non-current financial liabilities increased by EUR 3.4 billion compared with year-end 2023 to EUR 107.9 billion, primarily due to the factors described below. Exchange rate effects, in particular from the translation of U.S. dollars into euros, reduced the carrying amount by EUR 1.1 billion in total.

The carrying amount of bonds and other securitized liabilities increased by EUR 4.4 billion to EUR 92.1 billion. The carrying amount was increased by USD bonds issued by T‑Mobile US in the reporting period with a volume of USD 5.5 billion (EUR 4.9 billion) with terms ending between 2029 and 2055 and bearing interest of between 4.2 and 5.50 %, EUR bonds with a volume of EUR 2.0 billion with terms ending between 2029 and 2036 and bearing interest of between 3.55 and 3.85 %, and by asset-backed securities (ABS notes) with a volume of USD 0.5 billion (EUR 0.5 billion) with terms ending in 2029 and bearing interest of 5.05 %. The carrying amount was also increased by the issue of EUR bonds of EUR 0.9 billion by Deutsche Telekom AG, with terms ending in 2036 and 2044 and bearing interest of 3.25 % to 3.56 %. The carrying amount was reduced by the scheduled repayment of a EUR bond in the amount of EUR 0.8 billion and of a USD bond in the amount of USD 2.5 billion (EUR 2.3 billion). In addition, the carrying amount increased by EUR 0.3 billion in connection with measurement effects from derivatives with a hedging relationship, for which the offsetting entry is posted under bonds and other securitized liabilities. Exchange rate effects decreased the carrying amount of bonds and other securitized liabilities by EUR 1.0 billion.

As of September 30, 2024, the carrying amount of liabilities to banks decreased by EUR 0.3 billion against the level of December 31, 2023 to EUR 3.2 billion, mainly due to the repayment of an EIB loan by Deutsche Telekom AG in the amount of EUR 0.4 billion.

The liabilities with the right of creditors to priority repayment in the event of default of EUR 1.4 billion (December 31, 2023: EUR 2.1 billion) relate primarily to bonds issued by Sprint. Collateral was provided for these bonds, hence they constitute a separate class of financial instruments. The main factor reducing the carrying amount was repayments made in the reporting period in the amount of EUR 0.6 billion when translated into euros. At the reporting date, cash and cash equivalents with a carrying amount of EUR 71 million (December 31, 2023: EUR 64 million) when translated into euros were pledged as collateral for these bonds.

The carrying amount of other interest-bearing liabilities decreased by EUR 0.5 billion compared with December 31, 2023 to EUR 6.2 billion. Scheduled repayments by T‑Mobile US reduced the carrying amount by EUR 0.2 billion, the majority of which related to payments made in connection with the existing agreement on IP transit services, concluded with Cogent as part of the sale of the Wireline Business. Likewise, scheduled repayments of loans for the acquisition of 5G licenses in the Germany operating segment reduced the carrying amount by EUR 0.2 billion. By contrast, the recognition of a liability for the contingent and other consideration paid for the acquisition of Ka’ena increased the carrying amount by EUR 0.2 billion. Exchange rate effects decreased the carrying amount of other interest-bearing liabilities by EUR 0.1 billion.

For further information on the acquisition of Ka’ena, please refer to the section “Changes in the composition of the Group and other transactions.”

The carrying amount of other non-interest-bearing liabilities increased by EUR 0.5 billion to EUR 1.4 billion, mainly due to the stake of the cash dividend of USD 0.88 per share – declared by the Board of Directors of T‑Mobile US on September 18, 2024 – attributable to non-controlling interests in T‑Mobile US.

For further information on the shareholder return program at T‑Mobile US, please refer to the section “Other transactions that had no effect on the composition of the Group.”

The carrying amount of derivative financial liabilities decreased by EUR 0.2 billion compared with December 31, 2023 to EUR 2.4 billion. It was reduced by measurement effects from interest rate swaps in fair value hedges of EUR 0.3 billion. By contrast, gains on derivatives in cash flow hedges increased the carrying amount by EUR 0.1 billion.

For further information on derivative financial liabilities, please refer to the section “Disclosures on financial instruments.”

The carrying amount of current and non-current lease liabilities decreased by EUR 2.4 billion to EUR 38.4 billion compared with December 31, 2023. Lease liabilities in the United States operating segment decreased by EUR 1.7 billion, mainly due to the decommissioning of the former Sprint’s wireless network and a decline in network and build-out investments, primarily on account of higher capital efficiency resulting from the accelerated build-out of the nationwide 5G network in the prior year. Lease liabilities in the Germany operating segment decreased by EUR 0.2 billion and in the Group Headquarters & Group Services segment by EUR 0.1 billion. Exchange rate effects, in particular from the translation of U.S. dollars into euros, reduced the carrying amount by EUR 0.4 billion.

Trade and other payables

The carrying amount of trade and other payables decreased by EUR 3.2 billion to EUR 7.7 billion. This was due to lower liabilities in the United States, Europe, and Germany operating segments. Exchange rate effects, in particular from the translation from U.S. dollars into euros, also decreased the carrying amount.

Provisions for pensions and other employee benefits

The carrying amount of provisions for pensions and other employee benefits decreased by EUR 0.8 billion compared with December 31, 2023 to EUR 3.3 billion. Overall, the remeasurement of defined benefit plans resulted in an actuarial gain of EUR 0.7 billion to be recognized directly in equity, mainly due to the increase in the fair values of plan assets compared with December 31, 2023. The decline in the discount rate compared with December 31, 2023 had a slight offsetting effect. Benefits paid directly by the employer in the reporting period also contributed to the reduction in the carrying amount.

Current and non-current other provisions

The carrying amount of current and non-current other provisions decreased by EUR 0.8 billion compared with the end of 2023 to EUR 7.3 billion. Other provisions for personnel costs decreased by EUR 0.2 billion overall, mainly due to an interest-rate based decline in the carrying amount of the provision recognized for the Civil Health Insurance Fund (Postbeamtenkrankenkasse – PBeaKK). Provisions for termination benefits also decreased by EUR 0.2 billion, partly as a result of the program implemented to reduce the workforce in the United States operating segment, and the provisions for restoration obligations by EUR 0.2 billion. Furthermore, provisions for procurement and sales support decreased by EUR 0.1 billion and provisions for process risks by EUR 0.1 billion.

Other liabilities

The carrying amount of current and non-current other liabilities increased by EUR 0.1 billion to EUR 5.4 billion, mainly due to an increase in liabilities from other taxes by EUR 0.3 billion. By contrast, liabilities in connection with publicly funded projects decreased by EUR 0.2 billion.

Current and non-current contract liabilities

The carrying amount of current and non-current contract liabilities increased by EUR 0.5 billion compared with December 31, 2023 to EUR 3.2 billion. These substantially include deferred revenues. In the United States operating segment, contract liabilities increased by EUR 0.2 billion, mainly due to the current contract liabilities assumed in connection with the acquisition of Ka’ena. Furthermore, contract liabilities in the Germany operating segment increased by EUR 0.2 billion.

For further information on the acquisition of Ka’ena, please refer to the section “Changes in the composition of the Group and other transactions.”

Shareholders’ equity

The carrying amount of shareholders’ equity increased by EUR 1.2 billion as of December 31, 2023 to EUR 92.4 billion, with profit of EUR 11.1 billion and capital increases from share-based payments of EUR 0.5 billion having an increasing effect. Shareholders’ equity was reduced in connection with dividend payments for the 2023 financial year to Deutsche Telekom AG shareholders in the amount of EUR 3.8 billion and to other shareholders of subsidiaries in the amount of EUR 1.7 billion. The latter figure includes cash dividends of EUR 1.5 billion paid by T‑Mobile US to non-controlling interests, as declared in the reporting period. Transactions with owners reduced the carrying amount of shareholders’ equity by EUR 3.2 billion, due in particular to the T‑Mobile US share buy-back program from September 2023. Furthermore, the carrying amount was reduced by Deutsche Telekom AG’s share buy-back program that started in January 2024 with share buy-backs of EUR 1.5 billion. Other comprehensive income decreased the carrying amount by EUR 0.2 billion, mainly due to currency translation effects recognized directly in equity of EUR -0.9 billion and income taxes relating to components of other comprehensive income of EUR -0.1 billion. The remeasurement of defined benefit plans of EUR 0.7 billion and gains from the remeasurement of debt instruments of EUR 0.1 billion had an increasing effect.

For further information on Deutsche Telekom AG’s share buy-back program and the share buy-back/shareholder return programs at T‑Mobile US, please refer to the section “Other transactions that had no effect on the composition of the Group.”

The following table shows the changes in the composition of the Group and the development of transactions with owners: