Reebok 2010 Annual Report Download - page 218

214 Consolidated Financial Statements Notes Notes to the Consolidated Statement of Financial Position / Notes to the Consolidated Income Statement
Financial instruments for the hedging of interest rate riskFinancial instruments for the hedging of interest rate risk
Interest rate hedges which were outstanding as at December 31, 2010 and 2009, respectively
expire as detailed below:
Expiration dates of interest rate hedges
€ in millions
Dec. 31, 2010 Dec. 31, 2009
Within 1 year 60 139
Between 1 and 3 years 105 150
Between 3 and 5 years 75 —
After 5 years — 81
Total 240 370
The above summary for 2010 includes an interest rate swap in the amount of € 75 million (2009:
€ 79 million) which is classified as a fair value hedge pursuant to IAS 39. The aim of this US dollar
interest rate swap was to obtain variable financing for a private placement in US dollars. The total
positive fair value of € 8 million (2009: € 4 million) was offset by a total negative fair value change
in the hedged private placements in the amount of € 8 million (2009: negative € 4 million).
The above summary further includes interest rate swaps in the nominal amount of € 150 million
(2009: € 279 million), which are classified as cash flow hedges pursuant to IAS 39. The goal of
these hedges is to protect future cash flows arising from private placements with variable interest
rates by generating synthetic fixed interest rate financing. These interest rate swaps classified
as cash flow hedges had a positive fair value in the amount of € 0 million (2009: € 0 million) and
a negative fair value of € 6 million (2009: negative € 10 million). The negative fair value change
of € 2 million (2009: negative € 7 million) for interest rate swaps which were classified as cash
flow hedges was booked in hedging reserves. The amount that was reclassified from equity to the
income statement for the period was negative € 4 million (2009: negative € 4 million). Interest
rate swaps classified as cash flow hedges in a nominal amount of € 45 million and € 105 million
secure variable interest payments arising from private placements with maturities in 2011 and
2012, respectively.
Notes to the Consolidated Income StatementNotes to the Consolidated Income Statement
Other operating income 29
Other operating income consists of the following:
Other operating income
€ in millions
Year ending
Dec. 31, 2010 Year ending Dec. 31, 2009
Income from accounts receivable previously written off 2 2
Income from release of accrued liabilities and other provisions 19 31
Gains from disposal of fixed assets 16 3
Sundry income 66 64
Reversals of impairment losses for intangible and tangible assets 7 0
Other operating income 110 100
In 2010, gains from disposal of fixed assets include income from the divestiture of a trademark. In
2010, sundry income partly relates to the positive settlement of a lawsuit.
Other operating expenses 30
Operating expenses include expenses for sales, marketing, research and development, as well
as for logistics and central administration. In addition, they include impairment losses as well
as depreciation on tangible assets and amortisation on intangible assets, with the exception of
depreciation and amortisation which is included in the cost of sales.
Marketing working budget is the largest component of other operating expenses. The
marketing working budget consists of promotion and communication spending such as promotion
contracts, advertising, events and other communication activities. However, it does not include
marketing overhead expenses, which are presented in marketing overheads. In 2010, marketing
working budget accounted for approximately 26% (2009: 23%) of the total other operating
expenses.
Expenses for central administration include the functions IT, Finance, Legal, Human
Resources, Facilities & Services as well as General Management.
Depreciation and amortisation expense for tangible and intangible assets (excluding goodwill)
and impairment losses were € 263 million and € 299 million for the years ending December 31,
2010 and 2009, respectively. Thereof, € 3 million and € 5 million were recorded within the cost of
sales as they are directly attributable to the production costs of goods sold.