Cash flows

In CHF million
Operating income before depreciation and amortisation (EBITDA)   3,356   3,360   (4)
Lease expense   (226)   (206)   (20)
EBITDA after lease expense (EBITDA AL)   3,130   3,154   (24)
Capital expenditure   (1,632)   (1,833)   201
Operating free cash flow proxy   1,498   1,321   177
Change in net working capital   (62)   (52)   (10)
Change in defined benefit obligations   46   42   4
Net interest payments on financial assets and liabilities   (59)   (54)   (5)
Interest payments on finance lease liabilities   (34)   (24)   (10)
Income taxes paid   (174)   (347)   173
Other operating cash flow   52   12   40
Free cash flow   1,267   898   369
Net expenditures for company acquisitions and disposals   (45)   (397)   352
Other cash flows from investing activities, net   (103)   13   (116)
Issuance of financial liabilities   781   529   252
Repayment of financial liabilities   (832)   (68)   (764)
Dividends paid to equity holders of Swisscom Ltd   (1,140)   (1,140)  
Other cash flows from financing activities   (9)   (15)   6
Net decrease in cash and cash equivalents   (81)   (180)   99

Operating free cash flow proxy increased by CHF 177 million to CHF 1,498 million, mainly due to lower capital expenditure. In the previous year, capital expenditure included CHF 196 million for mobile radio frequencies in Switzerland. Excluding the expenditure for mobile radio frequencies, the operating free cash flow proxy decreased by CHF 19 million or 1.3%.

Free cash flow increased year on year by CHF 369 million to CHF 1,267 million. Adjusted for expenditure for mobile radio frequencies, free cash flow rose by CHF 173 million. The increase is mainly due to deferred income tax payments related to measures taken by the government to combat Covid-19. In the first nine months of 2020, income tax payments amounted to CHF 174 million (previous year: CHF 347 million).

Net expenditure for company acquisitions and disposals in the previous year includes the purchase price of CHF 240 million paid to Tamedia for the acquisition of the outstanding share of 31% in Swisscom Directories Ltd.

In the second quarter of 2020, Swisscom became the first listed company in Switzerland to issue a Green Bond in EUR. The debenture bond issued amounts to EUR 500 million. The coupon is 0.375% and the term 8.5 years. The funds will be used within the Green Bond Framework. The selection of projects is closely aligned with Swisscom’s sustainability strategy and at the same time takes into account the UN’s Sustainable Development Agenda 2030 and its objectives (Sustainable Development Goals, SDGs). A particular focus is on increased energy efficiency, renewable energies, climate protection (SDGs 7 and 13) and the provision of a state-of-the-art and resilient grid infrastructure (SDG 9). Furthermore, in the third quarter of 2020, Swisscom issued a CHF 100 million debenture bond with a term of 11 years and a coupon of 0.125% and repaid a EUR 500 million debenture bond.