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Cash flows


In CHF million
  1.1.–30.9.
2019
  1.1.–30.9.
2018
 
Change
Operating income before depreciation and amortisation (EBITDA)   3,360   3,231   129
Capital expenditure in property, plant and equipment and intangible assets   (1,833)   (1,621)   (212)
Lease expense (IFRS 16)   (206)     (206)
Operating free cash flow proxy   1,321   1,610   (289)
Change in net working capital   (52)   (348)   296
Change in defined benefit obligations   42   47   (5)
Net interest payments on financial assets and liabilities   (54)   (70)   16
Interest payments on finance lease liabilities     (18)   18
Income taxes paid   (347)   (313)   (34)
Other operating cash flow   (12)   7   (19)
Free cash flow   898   915   (17)
Net expenditures for company acquisitions and disposals   (397)   (51)   (346)
Other cash flows from investing activities, net   13   19   (6)
Repayment of financial lease liabilities according to IAS 17     (21)   21
Issuance and repayment of financial liabilities, net   461   141   320
Dividends paid to equity holders of Swisscom Ltd   (1,140)   (1,140)  
Other cash flows from financing activities   (15)   (7)   (8)
Net decrease in cash and cash equivalents   (180)   (144)   (36)

Operating free cash flow proxy declined by CHF 289 million to CHF 1,321 million, owing largely to higher capital expenditure, which increased year-on-year by CHF 212 million or 13.1% to CHF 1,833 million. This was driven by expenses of CHF 196 million for the mobile radio frequencies purchased by Swisscom Switzerland at auction in the first half of 2019.

Free cash flow declined year-on-year by CHF 17 million to CHF 898 million. Excluding Swisscom’s purchase of mobile radio frequencies, free cash flow rose by CHF 179 million or 19.6%. This increase is attributable to the improvement in net working capital. Net working capital grew by CHF 52 million compared to the end of 2018 (prior year: increase of CHF 348 million).

In the first quarter of 2019, Swisscom issued a debenture bond for CHF 200 million. It has a coupon of 0.5% and matures in 2029. In the second quarter of 2019, Swisscom increased a debenture bond that was issued in 2017 by CHF 80 million. It has a coupon of 0.75% and matures in 2033. In addition, in August 2019 Swisscom issued a debenture bond for CHF 125 million. It has a coupon of 0% and matures in 2044. Net expenditure for company acquisitions and disposals includes the purchase price of CHF 240 million paid to Tamedia for the acquisition of the outstanding share of 31% in Swisscom Directories Ltd.