Adidas 2002 Annual Report Download - page 134

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In 2002, the Group contracted a sale and leaseback transaction which resulted in an operating
lease. In this context, a one-time profit of € 8 million was realized within selling, general and
administrative expenses.
Finance Leases
The Group also leases several premises for administration, warehousing, research and develop-
ment as well as production, which are classified as finance leases.
The net carrying amount of these assets of € 10 million and € 12 million is included in prop-
erty, plant and equipment as at December 31, 2002 and 2001 respectively. Interest expense was
€ 1 million (2001: € 1 million) and depreciation expense was € 3 million (2001: € 3 million) for the
year ending December 31, 2002.
The minimum lease payments under these contracts over their remaining terms which extend
up to 2011 and their net present value are as follows:
The non-current portion of the obligation under finance leases includes amounts with terms of
more than five years of € 1 million and € 3 million as at December 31, 2002 and 2001 respectively.
Distributable Profits and Dividends
Distributable profits to shareholders are determined by reference to the retained earnings of
adidas-Salomon AG and calculated under German Commercial Law.
The Executive Board of adidas-Salomon AG recommends a dividend of € 1.00 for 2002, subject
to approval of shareholders. The dividend for 2001 was € 0.92 per share.
It is proposed accordingly that retained earnings of adidas-Salomon AG as at December 31,
2002 be appropriated as follows:
20 /// LEASING AND SERVICE ARRANGEMENTS
Operating Leases
The Group leases offices, warehouses and equipment under leases with expiration dates of
between one and ten years. Rent expenses aggregated to € 128 million and € 108 million for the
years ending December 31, 2002 and 2001 respectively.
Future minimum lease payments under non-cancelable operating leases are as follows:
132 FINANCIAL ANALYSIS CONSOLIDATED FINANCIAL STATEMENTS (IFRS) /// NOTES TO THE CONSOLIDATED BALANCE SHEET
RETAINED EARNINGS OF adidas-Salomon AG € in thousands
Retained earnings of adidas-Salomon AG as at December 31, 2002 55,119
Less: dividend of € 1.00 per share 45,423
Retained earnings carried forward 9,696
MINIMUM LEASE PAYMENTS FOR OPERATING LEASES € in millions
Dec. 31 Dec. 31
2002 2001
Within 1 year 62 52
Between 1 and 5 years 130 97
After 5 years 63 23
Total 255 172
MINIMUM LEASE PAYMENTS FOR FINANCE LEASES € in thousands
Dec. 31 Dec. 31
2002 2001
Lease payments falling due:
Within 1 year 3,207 3,143
Between 1 and 5 years 9,094 9,424
After 5 years 1,166 2,732
Total lease payments 13,467 15,299
Less: estimated amount representing interest 2,047 3,304
Obligation under finance leases 11,420 11,995
Thereof:
Current 2,580 2,505
Non-current 8,840 9,490