29 Finance costs
millions of € |
|
|
|
||
|---|---|---|---|---|---|
|
2022 |
2021 |
2020 |
||
Interest income |
387 |
611 |
589 |
||
Interest expense |
(5,679) |
(5,027) |
(4,617) |
||
|
(5,292) |
(4,416) |
(4,029) |
||
Of which: from leases |
(1,515) |
(1,130) |
(974) |
||
Of which: from financial instruments relating to measurement categories in accordance with IFRS 9 |
|
|
|
||
Debt instruments measured at amortized cost |
42 |
176 |
190 |
||
Debt instruments measured at fair value through other comprehensive income |
0 |
0 |
0 |
||
Debt instruments measured at fair value through profit or loss |
61 |
11 |
16 |
||
Financial liabilities measured at amortized costa |
(3,839) |
(3,453) |
(3,235) |
||
|
|||||
Finance costs increased from EUR 4.4 billion to EUR 5.3 billion, primarily due to the modification of the arrangements between T‑Mobile US and Crown Castle, which resulted in an increase in the carrying amounts of lease liabilities. Furthermore, the interest capitalized as part of acquisition costs decreased, especially in the United States operating segment. In the Group Headquarters & Group Services segment, the interest expense for variable-interest financial liabilities increased as a result of the rise in interest rates in the reporting year. In connection with the premature termination of forward-payer swaps by T‑Mobile US at the start of April 2020 and the associated losses recorded directly in equity, reclassifications to profit or loss of EUR 0.2 billion were made (2021: EUR 0.2 billion).
Interest of EUR 125 million (2021: EUR 211 million, 2020: EUR 334 million) was capitalized as part of acquisition costs in the reporting year. The amount was calculated on the basis of an interest rate in the average range between 3.4 % at the start of the year and 3.4 % at the end of the year (2021: between 3.6 and 3.4 %, 2020: between 3.2 and 3.6 %) applied across the Group.
Interest payments (including capitalized interest) of EUR 6.9 billion (2021: EUR 6.4 billion, 2020: EUR 7.6 billion) were made in the reporting year.
Accrued interest payments from derivatives (interest rate swaps) that were designated as hedging instruments in a fair value hedge in accordance with IFRS 9 are netted per swap contract and recognized as interest income or interest expense depending on the net amount. Finance costs are assigned to the measurement categories on the basis of the hedged item. Only financial liabilities were hedged in the reporting period.