Financial position of Deutsche Telekom AG

Balance sheet of Deutsche Telekom AG under German GAAP
millions of €
  Dec. 31, 2017 Dec. 31, 2017 % Dec. 31, 2016 Change Dec. 31, 2015
Assets          
Intangible assets 195 0.2 249 (54) 261
Property, plant and equipment 2,698 2.2 2,993 (295) 3,295
Financial assets 93,807 77.3 81,240 12,567 84,469
Noncurrent assets 96,700 79.7 84,482 12,218 88,025
Inventories 1 0.0 1 0 1
Receivables 22,073 18.2 16,308 5,765 15,795
Other assets 1,659 1.4 1,629 30 1,338
Cash and cash equivalents 157 0.1 208 (51) 221
Current assets 23,890 19.7 18,146 5,744 17,355
Prepaid expenses and deferred charges 676 0.6 516 160 418
Difference between plan assets and corresponding liabilities 51 0.0 36 15 16
Total assets 121,317 100.0 103,180 18,137 105,814
Shareholders’ equity and liabilities          
Capital stock and reserves 53,011 43.7 51,651 1,360 50,615
Unappropriated net income 5,928 4.9 3,795 2,133 4,299
Shareholders’ equity 58,939 48.6 55,446 3,493 54,914
Pensions and similar obligations a 3,164 2.6 3,247 (83) 3,512
Tax accruals 238 0.2 238 0 255
Other accruals a 2,321 1.9 1,642 679 1,493
Accruals 5,723 4.7 5,127 596 5,260
Debt 6,398 5.3 5,021 1,377 9,428
Other liabilities 50,101 41.3 37,413 12,688 36,019
Liabilities 56,499 46.6 42,434 14,065 45,447
Deferred income 156 0.1 173 (17) 193
Total shareholders’ equity and liabilities 121,317 100.0 103,180 18,137 105,814
 
a Pursuant to the provisions of IDW RS HFA 30, as amended, which was adopted in December 2016, the accruals from the collateral promise for pensions are recognized under pension accruals; in 2015, they had been included under other accruals. Figures for 2015 have been adjusted accordingly.

In addition to shareholders’ equity, our financial position is mainly determined by noncurrent assets, and receivables from and payables to Group companies. Loans recognized under financial assets as well as receivables from and payables to subsidiaries primarily resulted from Deutsche Telekom AG’s financing function for its subsidiaries, whereby financing on the external capital market is generally handled by Deutsche Telekom AG International Finance B.V., Maastricht, and passed on to Deutsche Telekom AG.

The balance sheet total increased by EUR 18.1 billion year-on-year to EUR 121.3 billion.

The development of total assets was attributable in particular to the increase of EUR 12.2 billion in noncurrent assets and the increase of EUR 5.8 billion in receivables.

The growth in financial assets of EUR 12.6 billion year-on-year was mainly due to the increase in loans to T-Mobile USA, Inc., Bellevue, of EUR 8.7 billion (net). Financial assets also increased by EUR 5.4 billion as a result of the capital increase at CTA Holding GmbH, Bonn. In particular, the write-down of the carrying amount of the investment in T-Systems International GmbH, Frankfurt/Main, in the amount of EUR 1.0 billion had an offsetting effect.

The decrease of EUR 0.3 billion in property, plant and equipment was primarily due to the depreciation of real estate.

The increase of EUR 5.8 billion in receivables from subsidiaries resulted from a EUR 5.4 billion increase in receivables from cash management. The increase in receivables from cash management is attributable to higher income related to subsidiaries, associated and related companies recorded in the reporting year.

The development of total shareholders’ equity and liabilities was mainly influenced by the increase of EUR 12.7 billion in other liabilities, of EUR 3.5 billion in shareholders’ equity, and of EUR 1.4 billion in financial liabilities. Other accruals also increased by EUR 0.7 billion.

The increase of EUR 12.7 billion in other liabilities was in particular the result of net loans of EUR 6.0 billion taken out from Deutsche Telekom International Finance B.V., Maastricht, as well as loans of EUR 5.4 billion taken out from CTA Holding GmbH, Bonn.

The increase in shareholders’ equity was mainly due to income after taxes for the financial year of EUR 4.9 billion and its effect on unappropriated net income as well as to the deposits of EUR 1.4 billion reported in capital stock and reserves by shareholders who chose to exchange their dividend entitlement for the 2016 financial year for shares as part of the fulfillment of dividend entitlements. The EUR 2.8 billion dividend payment for the previous year had an offsetting effect.

The increase in financial liabilities was mainly due to new loans taken out for a net amount of EUR 0.7 billion and the issue of commercial paper for a net amount of EUR 0.5 billion.

The increase in other accruals is mostly attributable to the addition in the amount of EUR 0.5 billion to accruals arising from the new arrangement for early retirement for civil servants.

Statement of cash flows of Deutsche Telekom AG under German GAAP
millions of €
  2017 2016 Change 2015
Income after taxes 4,927 2,020 2,907 1,889
Net cash provided by (used for) operating activities 2,988 (1,531) 4,519 (134)
Net cash (used for) provided by investing activities (12,890) 4,156 (17,046) 1,470
Net cash provided by (used for) financing activities 9,851 (2,638) 12,489 (1,502)
Net change in cash and cash equivalents (51) (13) (38) (166)
Cash and cash equivalents, at the beginning of the year 208 221 (13) 387
Cash and cash equivalents, at the end of the year 157 208 (51) 221

Net cash provided by/used for operating activities increased year-on-year by EUR 4.5 billion, resulting in net cash provided by operating activities of EUR 3.0 billion. This increase was due mainly to the positive change in income after taxes after elimination of the non-cash write-downs, which were EUR 1.0 billion higher than in the previous year, but also to the EUR 1.2 billion lower net increase in receivables from cash management compared with the previous year. In particular, the decrease in liabilities from the early retirement program for civil servants compared with an increase in the previous year had an offsetting effect.

Net cash used for investing activities in the reporting year was largely attributable to medium- and long-term investments at subsidiaries of EUR 10.8 billion, mainly due to the increase in loans to T-Mobile USA, Inc., Bellevue, and to a capital increase at CTA Holding GmbH, Bonn. Primarily repayments of medium- and long-term investments by subsidiaries in the amount of EUR 3.0 billion, mainly by T-Mobile USA, Inc., Bellevue, had an offsetting effect. Net cash used for investing activities also included interest received of EUR 0.8 billion. In the previous year, net cash provided by investing activities of EUR 4.2 billion had included in particular an equity repayment by Deutsche Telekom IT GmbH (formerly T-Mobile Worldwide Holding GmbH), Bonn, in the amount of EUR 2.0 billion, repayments of medium- and long-term investments by subsidiaries of EUR 2.1 billion, interest received of EUR 0.6 billion, and cash inflows from the disposal of property, plant and equipment of EUR 0.2 billion and from the sale of further shares in Scout24 AG, Munich, of EUR 0.1 billion. Medium- and long-term investments of EUR 0.9 billion at subsidiaries had an offsetting effect.

Net cash provided by financing activities increased by EUR 12.5 billion year-on-year to EUR 9.9 billion and primarily comprised the net issuance of medium- and long-term liabilities of EUR 9.7 billion and the net issuance of current financial liabilities in the amount of EUR 2.8 billion in the reporting year. Interest paid of EUR 1.2 billion and the payment of the cash dividend for the 2016 financial year of EUR 1.4 billion had an offsetting effect. In the prior year, net cash used for financing activities of EUR 2.6 billion had primarily comprised net repayments of current financial liabilities of EUR 8.7 billion, the payment of the cash dividend for the 2015 financial year of EUR 1.5 billion, and interest paid of EUR 1.3 billion. The issuance of medium- and long-term liabilities of EUR 8.3 billion and cash inflows from the close-out of interest rate and currency derivatives of EUR 0.6 billion had an offsetting effect.

Combined, this resulted in a decrease in cash and cash equivalents of EUR 51 million in the reporting year.