Reebok 2008 Annual Report Download - page 185
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adidas Group Annual Report 2008 181
22 Leasing and service arrangements
Operating leases
The Group leases primarily retail stores as well as offi ces, warehouses and equipment. The
contracts regarding these leases with expiration dates of between one and sixteen years partly
include renewal options and escalation clauses. Rent expenses, which partly depend on net
sales, amounted to € 422 million and € 337 million for the years ending December 31, 2008 and
2007, respectively.
Future minimum lease payments for minimum lease durations are as follows:
Minimum lease payments for operating leases
€ in millions
Dec. 31, 2008 Dec. 31, 2007
Within 1 year 213 212
Between 1 and 5 years 516 432
After 5 years 340 192
Total 1,069 836
Finance leases
The Group also leases various premises for administration, warehousing, research and develop-
ment as well as production, which are classifi ed as fi nance leases.
The net carrying amount of these assets of € 5 million and € 6 million was included in property,
plant and equipment as at December 31, 2008 and 2007, respectively. Interest expenses were
€ 2 million (2007: € 2 million) and depreciation expenses were € 1 million (2007: € 2 million) for
the year ending December 31, 2008.
The minimum lease payments under these contracts over their remaining terms which extend
up to 2016 and their net present values are as follows:
Minimum lease payments for fi nance leases
€ in millions
Dec. 31, 2008 Dec. 31, 2007
Lease payments falling due:
Within 1 year 2 2
Between 1 and 5 years 2 3
After 5 years 1 1
Total lease payments 5 6
Less: estimated amount representing interest 0 1
Obligation under fi nance leases 5 5
Thereof falling due:
Within 1 year 2 2
Between 1 and 5 years 2 2
After 5 years 1 1
Service arrangements
The Group has outsourced certain logistics and information technology functions, for which it
has entered into long-term contracts. Financial commitments under these contracts mature as
follows:
Financial commitments for service arrangements
€ in millions
Dec. 31, 2008 Dec. 31, 2007
Within 1 year 49 48
Between 1 and 5 years 48 62
After 5 years — —
Total 97 110