Reebok 2012 Annual Report Download - page 246

adidas Group
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2012 Annual Report
Consolidated Financial Statements
224
2012
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04.8
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Notes
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Notes to the Consolidated Statement of Financial Position
Finance leases
The Group also leases various premises for administration and
warehousing which are classified as finance leases.
The net carrying amount of these assets of € 19 million and € 9 million
was included in property, plant and equipment as at December 31, 2012
and 2011, respectively. For the year ending December 31, 2012, interest
expenses were € 0 million (2011: € 0 million) and depreciation expenses
were € 3 million (2011: € 2 million).
The minimum lease payments under these contracts over their
remaining terms up to 2018 and their net present values are as follows:
Minimum lease payments for finance leases (€ in millions)
Dec. 31, 2012 Dec. 31, 2011
Lease payments falling due:
Within 1 year 5 3
Between 1 and 5 years 13 4
After 5 years 0 –
Total minimum lease payments 18 7
Less: estimated amount representing interest 0 0
Present value of minimum lease payments 18 7
Thereof falling due:
Within 1 year 5 3
Between 1 and 5 years 13 4
After 5 years 0 –
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, 2012 Dec. 31, 2011
Within 1 year 81 39
Between 1 and 5 years 115 44
After 5 years – 26
Total 196 109
29 Financial instruments
Additional disclosures on financial instruments
Due to the short-term maturities of cash and cash equivalents,
short-term financial assets, accounts receivable and payable as well as
other current financial receivables and payables, their respective fair
values approximate their carrying amount.
The fair values of non-current financial assets and liabilities are
estimated by discounting expected future cash flows using current
interest rates for debt of similar terms and remaining maturities, and
adjusted by an adidas Group specific credit risk premium.
Fair values of long-term financial assets classified as available-
for-sale are based on quoted market prices in an active market or are
calculated as present values of expected future cash flows.
The fair values of forward contracts and currency options are
determined on the basis of market conditions at the balance sheet
date. The fair value of a currency option is determined using generally
accepted models to calculate option prices, such as the “Garman-
Kohlhagen-model”. The fair market value of an option is influenced not
only by the remaining term of the option, but also by other determining
factors such as the actual foreign exchange rate and the volatility of the
underlying foreign currency base.