Reebok 2008 Annual Report Download - page 191
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adidas Group Annual Report 2008 187
25 Other operating expenses
Operating expenses include expenses for sales, marketing, research and development, as well
as for logistics and central fi nance and administration. In addition, they include depreciation on
tangible assets and amortisation on intangible assets, with the exception of goodwill amortisa-
tion and other depreciation and amortisation which is included in the cost of sales.
Marketing working budget is the largest component of operating expenses. The marketing
working budget consists of promotion and communication spending such as promotion con-
tracts, advertising, retail support, events and other communication activities. However, it does
not include marketing overhead expenses. In 2008, marketing working budget accounted for
approximately 33% (2007: 33%) of the total operating expenses.
Total depreciation and amortisation expense for tangible and intangible assets ( excluding
goodwill) was € 234 million and € 211 million for the years ending December 31, 2008 and
2007, respectively. Thereof, € 6 million and € 7 million were recorded within the cost of sales
as they are directly attributable to the production costs of goods sold.
Other operating expenses
€ in millions
Year ending
Dec. 31, 2008
Year ending
Dec. 31, 2007
Marketing working budget 1,429 1,378
Marketing overhead 1) 376 327
Sales force 1) 1,179 1,045
Logistics 1) 565 535
Research and development 1) 81 84
Central expenses for fi nance and administration divisions 1) 748 746
Total 4,378 4,115
Thereof:
Depreciation and amortisation 228 204
1) Including personnel and administration expenses.
26 Cost by nature
Expenses are presented by function in the income statement. Supplementary information on the
expenses by nature is detailed below.
Cost of materials
The total cost of materials was € 5,486 million and € 5,317 million for the years ending Decem-
ber 31, 2008 and 2007, respectively.
Personnel expenses
Personnel expenses were as follows:
Personnel expenses
€ in millions
Year ending
Dec. 31, 2008
Year ending
Dec. 31, 2007
Wages and salaries 1,123 1,040
Social security contributions 110 92
Pension expense 50 54
Personnel expenses 1,283 1,186
Personnel expenses which are directly attributable to the production costs of goods are included
within the cost of sales.