39 Related-party disclosures
Federal Republic of Germany and other related parties. The Federal Republic of Germany is both a direct and an indirect shareholder (via KfW Bankengruppe) and holds approximately 31.9 percent (December 31, 2016: 32.0 percent) of the share capital of Deutsche Telekom AG. In the last few years, this has resulted in the Federal Republic of Germany representing a solid majority at the shareholders’ meetings of Deutsche Telekom AG due to its level of attendance, giving it control over Deutsche Telekom. Therefore, the Federal Republic and the companies controlled by the Federal Republic, or companies over which the Federal Republic can exercise a significant influence, are classified as related parties of Deutsche Telekom. In the course of business, Deutsche Telekom deals directly with the individual companies, authorities, and other government agencies as mutually independent parties. Deutsche Telekom participates in the spectrum auctions of the Federal Network Agency. The acquisition of mobile communications spectrum through licenses may result in build-out requirements stipulated by the Agency.
The Federal Posts and Telecommunications Agency (Federal Agency) has been assigned certain tasks by law that affect cross-company issues at Deutsche Telekom AG, Deutsche Post AG, and Deutsche Postbank AG. The Federal Agency’s responsibilities include the continuation of the Civil Service Health Insurance Fund (Postbeamtenkrankenkasse), the Recreation Service (Erholungswerk), the Deutsche Bundespost Institution for Supplementary Retirement Pensions for Salaried Employees and Wage Earners (Versorgungsanstalt der Deutschen Bundespost), and the Welfare Service (Betreuungswerk) for Deutsche Telekom AG, Deutsche Post AG, and Deutsche Postbank AG. The coordination and administrative tasks are performed on the basis of agency agreements. Up to and including the 2012 reporting year, Deutsche Telekom maintained a joint pension fund, Bundes-Pensions-Service für Post und Telekommunikation e.V., Bonn (Federal Pension Service for Post and Telecommunications – BPS-PT), together with Deutsche Post AG and Deutsche Postbank AG for civil-servant pension plans. The German Act on the Reorganization of the Civil Service Pension Fund (Gesetz zur Neuordnung der Postbeamtenversorgungskasse – PVKNeuG) transferred the functions of BPS-PT relating to civil-servant pensions (organized within the Civil Service Pension Fund) to the existing Federal Agency effective January 1, 2013. The civil-servant pension functions are therefore performed by the Civil Service Pension Fund as an integral part of the Federal Agency. This joint Civil Service Pension Fund works for the funds of all three companies and also handles the financial administration of the pension plan for the Federal Republic on a trust basis. For the 2017 financial year, Deutsche Telekom made payments in the amount of EUR 94 million (2016: EUR 84 million; 2015: EUR 85 million). Furthermore, payments are made to the Civil Service Pension Fund in accordance with the provisions of the Act on the Reorganization of the Civil Service Pension Fund (please also refer to Note 12 “Provisions for pensions and other employee benefits”).
The Federal Republic and the companies controlled by the Federal Republic, or companies over which the Federal Republic can exercise a significant influence are customers or suppliers of Deutsche Telekom and as such have mutual contractual relationships with Deutsche Telekom.
The Federal Republic of Germany and KfW Bankengruppe requested their dividend entitlements for the 2016 financial year relating to shares held in Deutsche Telekom AG be paid out partly in cash and partly in shares from authorized capital. In this connection, 12,630 thousand shares were transferred to the Federal Republic and 10,186 thousand shares to KfW Bankengruppe in June 2017. As of December 31, 2017, the Federal Republic held a share of 14.5 percent and KfW Bankengruppe a share of 17.4 percent in Deutsche Telekom AG. Otherwise, Deutsche Telekom did not execute any individually material transactions in the 2017 financial year at off-market terms and conditions or, as described, outside of its normal business activities.
Joint ventures. Revenue generated with Toll Collect totaled EUR 57 million (2016: EUR 52 million; 2015: EUR 83 million), in particular from data processing and telecommunications services as well as consulting services. As of December 31, 2017, there were also receivables in the amount of EUR 15 million (December 31, 2016: EUR 15 million), liabilities of EUR 1 million (December 31, 2016: EUR 0 million), an equity maintenance undertaking, and loan guarantees granted to banks. For further details, please refer to Note 32 “Contingencies.”
Associates. The remaining direct stake of 9.26 percent in Scout24 AG was sold with effect from June 23, 2017, generating income of EUR 226 million (Dec. 31, 2016: EUR 96 million; Dec. 31, 2015: EUR 298 million).
There are otherwise no material revenues, receivables or liabilities in relation to joint ventures or associates.
Related individuals. In the reporting period, expenses for short-term benefits payable to members of the Board of Management and the Supervisory Board amounted to EUR 17.1 million (2016: EUR 15.9 million) and expenses for other long-term benefits amounted to EUR 5.3 million (2016: EUR 4.8 million). Service cost of EUR 3.6 million (2016: EUR 3.1 million) was recorded for Board of Management benefits. In addition, expenses for share-based payment for Board of Management members were incurred in the amount of EUR 1.3 million (2016: EUR 1.2 million). EUR 4.3 million (2016: EUR 0.0 million) was paid for termination benefits and recognized as an expense.
As of December 31, 2017, Deutsche Telekom recognized provisions for Board of Management compensation from short-term benefits of EUR 7.2 million (2016: EUR 6.5 million) and from other long-term benefits of EUR 12.4 million (2016: EUR 9.4 million). Furthermore, the present value of the defined benefit obligation (DBO) from the Board of Management pension amounts to EUR 29.1 million (2016: EUR 25.6 million).
The compensation of the Board of Management and the Supervisory Board totaled EUR 32.7 million in the reporting year (2016: EUR 25.0 million).
For further information, please refer to the “Compensation report” in the combined management report, and Note 40 “Compensation of the Board of Management and the Supervisory Board.”
Employees elected to the Supervisory Board of Deutsche Telekom continue to be entitled to a regular salary as part of their employment contract. The amount of the salary is the adequate compensation for their job or activity within the Company. Besides this, no major transactions took place with related individuals.
The members of the Board of Management and Supervisory Board of Deutsche Telekom AG are members of supervisory boards or management boards of other companies or are shareholders of other companies with which Deutsche Telekom AG maintains relations in the ordinary course of business. All related party transactions are performed on an arm’s length basis.