Reebok 2006 Annual Report Download - page 165
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› Notes to the Consolidated Balance SheetNotes ›161
The adidas AG share first traded above 110% (€ 28.05) of the conversion price of € 25.50 on
more than 20 trading days within the last 30 trading days in the fourth quarter of 2004. Con-
sequently, bond holders have had the right to convert their convertible bonds into equity since
January 1, 2005. An early redemption or conversion of the convertible bond is currently not
expected.
Gross borrowings increased by € 1.543 billion in 2006 compared to a decline of € 85 mil-
lion in 2005.
Borrowings are denominated in a variety of currencies in which the Group conducts its
business. The largest portions of effective gross borrowings (before liquidity swaps for cash
management purposes) as at December 31, 2006 are denominated in euros (51%; 2005: 76%)
and US dollars (44%; 2005: 16%).
Month-end weighted average interest rates on borrowings in all currencies ranged from
4.2% to 5.3% in 2006 and from 3.7% to 4.2% in 2005.
As at December 31, 2006, the Group had cash credit lines and other long-term financing
arrangements totaling € 6.9 billion (2005: € 5.1 billion); thereof unused credit lines accounted
for € 4.4 billion (2005: € 4.1 billion). In addition, the Group had separate lines for the issuance
of letters of credit in an amount of approximately € 0.3 billion (2005: € 0.4 billion).
The Group’s outstanding financings are unsecured.
The private placement and convertible bond documentation each contains a negative-
pledge clause. Additionally, the private placement documentation contains minimum equity
covenants. As at December 31, 2006, actual shareholders’ equity was well above the amount
of the minimum equity covenant.
The amounts disclosed as borrowings represent outstanding borrowings under the following
arrangements with aggregated expiration dates as follows:
As all short-term borrowings are based upon long-term arrangements, the Group reports
them as long-term borrowings.
The borrowings related to our outstanding convertible bond changed in value, reflecting
the accruing interest on the debt component in accordance with IFRS requirements.
Gross Borrowings as at December 31, 2006 € in millions
Between Between
Up to 1 and 3 3 and 5 After
1 year years years 5 years Total
Bank borrowings
incl. commercial paper 144 0 275 0 419
Private placements 109 610 474 591 1,784
Convertible bond 0 0 375 0 375
Total 253 610 1,124 591 2,578
Gross Borrowings as at December 31, 2005 € in millions
Between Between
Up to 1 and 3 3 and 5 After
1 year years years 5 years Total
Bank borrowings 0 0 102 0 102
Private placements 31 294 65 177 567
Convertible bond 0 0 366 0 366
Total 31 294 533 177 1,035