Financial position of Deutsche Telekom AG

Balance sheet of Deutsche Telekom AG under German GAAP          
millions of €
  Dec. 31, 2016 Dec. 31, 2016 % Dec. 31, 2015 Change Dec. 31, 2014
Assets          
Intangible assets 249 0.3 261 (12) 310
Property, plant and equipment 2,993 2.9 3,295 (302) 3,594
Financial assets 81,240 78.7 84,469 (3,229) 85,705
Noncurrent assets 84,482 81.9 88,025 (3,543) 89,609
Inventories 1 0.0 1 5
Receivables 16,308 15.8 15,795 513 12,655
Other assets 1,629 1.6 1,338 291 1,135
Cash and cash equivalents 208 0.2 221 (13) 387
Current assets 18,146 17.6 17,355 791 14,182
Prepaid expenses and deferred charges 516 0.5 418 98 581
Difference between plan assets and corresponding liabilities 36 0.0 16 20 6
Total assets 103,180 100.0 105,814 (2,634) 104,378
Shareholders' equity and liabilities          
Capital stock and reserves 51,651 50.0 50,615 1,036 49,497
Unappropriated net income 3,795 3.7 4,299 (504) 4,667
Shareholders' equity 55,446 53.7 54,914 532 54,164
Pensions and similar obligations a 3,247 3.2 3,512 (265) 3,279
Tax accruals 238 0.2 255 (17) 194
Other accruals a 1,642 1.6 1,493 149 1,513
Accruals 5,127 5.0 5,260 (133) 4,986
Debt 5,021 4.9 9,428 (4,407) 5,977
Other liabilities 37,413 36.2 36,019 1,394 39,037
Liabilities 42,434 41.1 45,447 (3,013) 45,014
Deferred income 173 0.2 193 (20) 214
Total shareholders' equity and liabilities 103,180 100.0 105,814 (2,634) 104,378
 
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 must be recognized under pension accruals; in previous years, they had been included under other accruals. Prior-year figures 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 decreased by EUR 2.6 billion year-on-year to EUR 103.2 billion.

The development of total assets was attributable in particular to the decrease of EUR 3.5 billion in noncurrent assets, and the increase of EUR 0.5 billion in receivables, and of EUR 0.3 billion in other assets.

The year-on-year decrease in financial assets of EUR 3.2 billion was mainly due to a capital repayment by Deutsche Telekom IT GmbH (formerly T-Mobile Worldwide Holding GmbH), Bonn, of EUR 2.0 billion. A EUR 1.1 billion decline in loans to subsidiaries compared with the prior year, in particular in loans to Telekom Deutschland GmbH, Bonn, also contributed to the decrease.

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 0.5 billion in receivables from subsidiaries resulted from a EUR 0.6 billion increase in receivables from cash management, mostly from Telekom Deutschland GmbH, Bonn, offset by a EUR 0.1 billion decrease in financial receivables from subsidiaries.

The development of total shareholders’ equity and liabilities was mainly influenced by the decrease of EUR 4.4 billion in financial liabilities, and of EUR 0.3 billion in accruals for pensions and similar obligations, offset by the increase of EUR 1.4 billion in other liabilities, and of EUR 0.5 billion in shareholders’ equity.

The decrease in financial liabilities was primarily due to a net effect of EUR 3.7 billion from the repayment of commercial paper which exceeded the new issues and to the repayment of loans of EUR 0.7 billion and promissory notes of EUR 0.2 billion. The main offsetting effect was from the new issue of a new long-term loan of EUR 0.5 billion.

The decrease of EUR 0.3 billion in accruals for pensions and similar obligations is primarily attributable to an increase of EUR 0.2 billion in plan assets offset. In addition, the present value of direct pension obligations decreased by EUR 0.1 billion.

The increase of EUR 1.4 billion in other liabilities was in particular the result of net loans of EUR 5.6 billion, mainly from Deutsche Telekom International Finance B. V., Maastricht. It was also attributable to EUR 0.4 billion higher liabilities from early retirement arrangements for civil servants. The decrease in liabilities from cash management of EUR 3.8 billion and in liabilities from collateral of EUR 0.9 billion had an offsetting effect.

The increase in shareholders’ equity was mainly due to income after taxes for the financial year of EUR 2.0 billion and its effect on unappropriated net income as well as to the deposits of EUR 1.0 billion reported in capital stock and reserves by shareholders who chose to exchange their dividend entitlement for the 2015 financial year for shares as part of the fulfillment of dividend entitlements. The EUR 2.5 billion dividend payment for the previous year had an offsetting effect.

Statement of cash flows of Deutsche Telekom AG under German GAAP
millions of €
  2016 2015 Change 2014
Income after taxes 2,020 1,889 131 4,005
Net cash (used for) provided by operating activities (1,531) (134) (1,397) 1,424
Net cash provided by investing activities 4,156 1,470 2,686 2,905
Net cash used for financing activities (2,638) (1,502) (1,136) (5,064)
Net change in cash and cash equivalents (13) (166) 153 (735)
Cash and cash equivalents, at the beginning of the year 221 387 (166) 1,122
Cash and cash equivalents, at the end of the year 208 221 (13) 387

Net cash used for operating activities increased year-on-year by EUR 1.4 billion, resulting in net cash used for operating activities of EUR 1.5 billion. After elimination of the non-cash write-downs in the amount of EUR 0.4 billion and the net interest expense of EUR 0.7 billion in income after taxes, this trend results in particular from the net increase of EUR 4.5 billion in receivables from cash management, which was largely attributable to higher profit transfers from subsidiaries as well as the related issue of short-term loans in connection with cash management at the Group. After elimination of the non-cash write-downs in the amount of EUR 1.4 billion and the net interest expense of EUR 1.3 billion with income after taxes of EUR 1.9 billion, the prior-year net cash used for operating activities of EUR 0.1 billion had primarily been affected by the net increase of EUR 4.4 billion in receivables from cash management.

Net cash provided by investing activities in the reporting year 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, and repayments of medium- and long-term investments of subsidiaries of EUR 2.1 billion. Net cash provided by investing activities also included 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. In the prior year, net cash provided by investing activities of EUR 1.5 billion mainly comprised interest received of EUR 0.9 billion, the sale of around half of the investment in Scout24 AG, Munich, for EUR 0.4 billion, the repayment of company funds of Scout24 AG, Munich, of EUR 0.1 billion, cash inflows for cash collateral furnished to hedge derivatives of EUR 0.4 billion, offset by net medium- and long-term investments at subsidiaries of EUR 0.3 billion.

Net cash used for financing activities increased by EUR 1.1 billion year-on-year to EUR 2.6 billion and in the reporting year 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. In the prior year, net cash used for financing activities of EUR 1.5 billion mainly comprised interest paid of EUR 1.6 billion and the payment of the cash dividend for the 2014 financial year of EUR 1.2 billion, offset by the net issuance of medium- and long-term liabilities of EUR 1.0 billion and the net issuance of current liabilities of EUR 0.3 billion.

Combined, this resulted in cash and cash equivalents of approximately EUR 0.2 billion in the reporting year, which was almost unchanged against the prior year.