Adidas 2002 Annual Report Download - page 129

11 /// OTHER INTANGIBLE ASSETS
Other intangible assets consist of the following:
The increase in other intangible assets primarily relates to the Group’s purchase of the Maxfli
trademark and related patents and technologies in December 2002 and new software implementa-
tions in 2002.
Intangible asset amortization expense was € 30 million and € 28 million for the years ending
December 31, 2002 and 2001 respectively.
12 /// OTHER NON-CURRENT ASSETS
Other non-current assets consist of the following:
Prepaid expenses mainly include pre-payments for long-term promotional contracts and
service contracts (see also notes 29 and 20).
Financial assets include a 10% participation in FC Bayern München AG of € 77 million which
was concluded in July 2002. This participation is recorded at cost including transaction costs,
as this equity security does not have a quoted market price in an active market and other methods
of reasonably estimating fair value as at December 31, 2002 are inappropriate or unworkable.
Additionally, financial assets comprise shares in unconsolidated affiliated companies of € 3 million
at December 31, 2002 and 2001.
Financial assets further include investments which are mainly related to a deferred compensa-
tion plan (see also note 16). It is mostly invested in insurance products and measured at fair value.
13 /// BORROWINGS AND CREDIT LINES
Despite the decrease of borrowings in 2002, it has been the policy of the Group to continue the high
level of financing agreements, with further improvement in the quality and maturity profile of these
arrangements. The Group has continued its diversification among different sources of financing
and succeeded in increasing its funding through private placements to € 560 million (2001: € 225
million), with maturities of up to 10 years. The global on-balance-sheet asset-backed security (ABS)
program, under which € 147 million were outstanding at the end of 2002 (2001: € 155 million),
was extended for another year to maintain a remaining life of five years.
Gross borrowings declined in 2002 by € 192 million while the longer-term credit facilities
were increased by € 441 million. As all borrowings with short-term maturities which are backed
by longer-term arrangements are reported as long-term borrowings, the Group no longer reports
short-term borrowings. Long-term borrowings include bank borrowings, commercial paper, financ-
ing under the ABS program and private placements.
Under the € 750 million German multi-currency commercial paper program and the
€ 300 million Belgian treasury notes program, the Group had a total nominal amount outstanding
of € 234 million at December 31, 2002 (2001: € 280 million).
Borrowings are denominated in a variety of currencies in which the Group does business. The
largest portions of effective net borrowings (before liquidity swaps for cash management purposes)
as at December 31, 2002 are denominated in euro (54.2%; 2001: 57.1%) and US dollars (29.7%;
2001: 31.0%).
Month-end weighted average interest rates on borrowings in all currencies ranged from 3.0 to
3.4% and from 3.3 to 5.3% for the years ending December 31, 2002 and 2001 respectively.
As at December 31, 2002 the Group had cash credit lines and other longer-term financing
arrangements totaling € 3.5 billion (2001: € 3.4 billion); thereof unused credit lines accounting
for € 1.9 billion (2001: € 1.7 billion). In addition, the Group had separate lines for the issuance of
letters of credit in an amount of approximately € 0.6 billion (2001: € 0.7 billion).
127
OTHER NON-CURRENT ASSETS € in thousands
Dec. 31 Dec. 31
2002 2001
Prepaid expenses 45,113 59,291
Financial assets, net 87,474 15,031
Interest rate options 2,250 3,804
Currency options 1,217 2,941
Security deposits 6,030 2,212
Cash deposits 02,066
Sundry 3,051 22,415
Other non-current assets 145,135 107,760
OTHER INTANGIBLE ASSETS € in thousands
Dec. 31 Dec. 31
2002 2001
Software, patents, trademarks and concessions, gross 223,658 173,082
Less: accumulated amortization 108,281 82,080
115,377 91,002
Advance payments, net 118 129
Other intangible assets, net 115,495 91,131