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Deutsche Telekom AG - Interim Group report - January 1 to September 30, 2015

52 Interim consolidated financial statements Deutsche Telekom. Interim Group Report 9M 2015. Since the aforementioned termination and conversion rights embedded in bonds and Mandatory Convertible Preferred Stock issued by T-Mobile US are not subject to a credit risk, they constitute a separate class of financial instruments. Disclosures on credit risk. In line with the contractual provisions, in the event ofinsolvencyallderivativeswithapositiveornegativefairvaluethatexistwiththe respective counterparty are offset against each other, leaving a net receivable or liability. The net amounts are normally recalculated every bank working day and offset against each other. When the netting of the positive and negative fair values of all derivatives was positive from Deutsche Telekomʼs perspective, Deutsche Telekom received unrestricted cash collateral from counter- parties pursuant to collateral contracts in the amount of EUR 1,720 million (December 31, 2014: EUR 486 million). The credit risk was thus reduced by EUR 1,709 million because on the reporting date the collateral received is offset by corresponding net derivative positions in this amount. On the basis of these contracts, derivatives with a positive fair value and a total carrying amount of EUR 2,205 million as of the reporting date (December 31, 2014: EUR 1,160 million) had a maximum credit risk of EUR 64 million as of September 30, 2015 (December 31, 2014: EUR 52 million). There is no danger of default on embedded derivatives held. When the netting of the positive and negative fair values of all derivatives was negative from Deutsche Telekomʼs perspective, Deutsche Telekom provided cash collateral in the amount of EUR 68 million (December 31, 2014: EUR 527 million) to counterparties pursuant to collateral agreements. The net amounts are normally recalculated every bank working day and offset against each other. The cash collateral paid is offset by corresponding net derivative positions of EUR 68 million at the reporting date, which is why it was not exposed to any credit risks in this amount. The collateral paid is reported under originated loans and receivables within other financial assets. On account of its close connection to the corresponding derivatives, the collateral paid constitutes a separate class of financial assets. Likewise, the collateral received, which is reported under financial liabilities, constitutes a separate class of financial liabilities on account of its connection to the corresponding derivatives. No other significant agreements reducing the maximum exposure to the credit risks of financial assets existed. The maximum exposure to credit risk of the other financial assets thus corresponds to their carrying amounts.

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