11 Other financial assets

The carrying amount of current and non-current other financial assets decreased by EUR 0.8 billion compared with December 31, 2020 to EUR 8.9 billion. The carrying amount of derivatives with a hedging relationship decreased by EUR 0.5 billion to EUR 1.6 billion, mainly due to the decrease in positive fair values from interest rate swaps in fair value hedges, which is primarily the result of a rise in the interest rate level. The carrying amount of derivatives without a hedging relationship decreased by a net effect of EUR 0.8 billion to EUR 1.2 billion. Taking into account the partial exercising of the stock options received from SoftBank in June 2020 to purchase shares in T‑Mobile US, as well as measurement effects, the carrying amount of these stock options decreased by EUR 0.6 billion compared with December 31, 2020 to EUR 0.2 billion for the following reasons. Due to the negative development of the T‑Mobile US share price, a remeasurement loss of EUR 0.3 billion was recorded in other financial income/expense in 2021. Furthermore, the amortization from the initial measurement of the stock options at fair value resulted in current income of EUR 0.2 billion and, in connection with the exercise of the options, in one-time income of EUR 0.4 billion in other financial income/expense. At the time of exercising the stock options, they had a fair value of EUR 0.8 billion. This amount was recognized directly in equity as part of the consideration (within the meaning of the IFRSs) paid to SoftBank, as a result of the derecognition of the exercised options. The carrying amount of other financial assets decreased as a result. In addition, the carrying amount of the derivatives without a hedging relationship decreased by EUR 0.4 billion due to negative measurement effects from embedded derivatives of T‑Mobile US, including from the premature repayment of bonds. By contrast, the carrying amount was increased by positive measurement effects of EUR 0.1 billion from energy forward agreements embedded in contracts.

Subsidiaries of Deutsche Telekom deposited cash collateral of EUR 90 million as of December 31, 2021 (December 31, 2020: EUR 446 million) in connection with auctions for the planned acquisition of spectrum licenses. At the reporting date, cash and cash equivalents of EUR 76 million when translated into euros (December 31, 2020: EUR 63 million) were pledged as collateral for liabilities with right of creditors to priority repayment in the event of default. Collateral agreements as surety for potential credit risks arising from derivative transactions in connection with forward-payer swaps gave rise to receivables of EUR 423 million as of the reporting date (December 31, 2020: EUR 34 million).

For further information on allowances and the credit ratings of originated loans and receivables, please refer to Note 40 “Financial instruments and risk management.”