Reebok 2010 Annual Report Download - page 150

146 Group Management Report – Financial Review Group Business Performance Treasury
Total credit facilities
€ in millions
2010 2009
Total 5,544 5,902
Remaining time to maturity of available facilities
€ in millions
2010 2009
Total 5,544 5,902
43
44
Short-term lines ..................2,169
< 1 year ..........................2,442
Medium-term committed lines ......1,860
1 to 3 years .......................2,279
Private placements ................1,017
3 to 5 years ........................ 711
Eurobond ......................... 498
> 5 years .......................... 112
2,238
2,436
2,000
2,458
1,166
822
498
186
Treasury
Group financing policy
The major goal of our financing policy
is to minimise the Group’s financial
expenses while ensuring sufficient
liquidity reserves at all times to meet
the Group’s payment commitments.
The operating activities of our Group
segments and the resulting cash inflows
represent the Group’s main source
of liquidity. Liquidity is planned on a
rolling monthly basis under a multi-
year financial and liquidity plan. This
comprises all consolidated Group
companies. Our in-house bank concept
takes advantage of the surplus funds of
individual Group companies to cover the
financial requirements of others, thus
reducing external financing needs and
optimising our net interest expenses.
By settling intercompany transactions
via intercompany financial accounts, we
are able to reduce external bank account
transactions and thus bank charges.
Effective management of our currency
exposure and interest rate risks are
additional goals of our Group Treasury
department.
Treasury system and responsibilities
Our Group’s Treasury Policy governs
all treasury-related issues, including
banking policy and approval of
bank relationships, global financing
arrangements and liquidity/asset
management, currency and interest
risk management as well as the
management of intercompany cash flows.
Responsibilities are arranged in a three-
tiered approach:
– The Treasury Committee consists of
members of the Executive Board and
other senior executives who decide on
the Group’s Treasury Policy and provide
strategic guidance for managing
treasury-related topics. The Treasury
Committee approves all major changes
to our Treasury Policy.
– The Group Treasury department is
responsible for specific centralised
treasury transactions and for the global
implementation of our Group’s Treasury
Policy.
– On a subsidiary level, local managing
directors and financial controllers are
responsible for managing treasury
matters in the respective subsidiaries.
Controlling functions on a Group
level ensure that the transactions of
the individual business units are in
compliance with the Group’s Treasury
Policy.
Centralised treasury function
In accordance with our Group’s Treasury
Policy, all worldwide credit lines are
directly or indirectly managed by the
Group Treasury department. Portions of
those lines are allocated to the Group’s
subsidiaries and backed by parental
guarantees. As a result of this centralised
liquidity management, the Group is
well positioned to allocate resources
efficiently throughout the organisation.
The Group’s debt is generally unsecured
and may include standard financial
covenants, which are reviewed on a
quarterly basis. We maintain good
relations with numerous partner banks,
thereby avoiding a high dependency on
any single institution. Banking partners
of the Group and our subsidiaries
are required to have at least a BBB+
long-term investment grade rating by
Standard & Poor’s or an equivalent rating
by another leading rating agency. Only in
exceptional cases are Group companies
authorised to work with banks with a
lower rating see Risk and Opportunity
Report, p. 158. To ensure optimal allocation
of the Group’s liquid financial resources,
subsidiaries transfer excess cash to the
Group’s headquarters in all instances
where it is legally and economically
feasible.