Reebok 2013 Annual Report Download - page 230
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adidas Group
/
2013 Annual Report
Consolidated Financial Statements
226
2013
/
04.8
/
Notes
/
Notes to the Consolidated Statement of Financial Position
Financial instruments for the hedging of foreign exchange risk
The adidas Group uses natural hedges and arranges forward contracts, currency options and currency swaps to
protect against foreign exchange risk. As at December 31, 2013, the Group had outstanding currency options with
premiums paid totalling an amount of € 2 million (2012: € 4 million). The effective part of the currency hedges is
directly recognised in hedging reserves and as part of the acquisition costs of inventories, respectively, and posted
into the income statement at the same time as the underlying secured transaction is recorded. An amount of
€ 2 million after taxes (2012: € 4 million) for currency options and an amount of negative € 34 million after taxes
(2012: negative € 7 million) for forward contracts were recorded in hedging reserves. Currency option premiums
impacted net income in the amount of € 4 million in 2013 (2012: € 4 million).
The total time value of the currency options not being part of a hedge in an amount of negative € 4 million
(2012: negative € 3 million) was recorded in the income statement in 2013. In 2012, due to a change in the exposure,
some of the currency hedges were terminated and consequently an amount of € 1 million was reclassified from
hedging reserves to the income statement.
In the years ending December 31, 2013 and 2012, hedging instruments related to product sourcing were
bought to hedge a total net amount of US $ 5.2 billion and US $ 5.1 billion, respectively.
The notional amounts of all outstanding currency hedging instruments, which are mainly related to cash flow
hedges, are summarised in the following table:
Notional amounts of all outstanding currency hedging instruments
(€ in millions) Dec. 31, 2013 Dec. 31, 2012
Forward contracts 4,430 3,943
Currency options 472 265
Total 4,902 4,208
The comparatively high amount of forward contracts is primarily due to currency swaps for liquidity management
purposes and hedging transactions.
Of the total amount of outstanding hedges, the following contracts related to the US dollar (i.e. the biggest
single exposure of product sourcing):
Notional amounts of outstanding US dollar hedging instruments
(€ in millions) Dec. 31, 2013 Dec. 31, 2012
Forward contracts 2,605 2,130
Currency options 425 225
Total 3,030 2,355
The fair value of all outstanding currency hedging instruments is as follows:
Fair values
(€ in millions) Dec. 31, 2013 Dec. 31, 2012
Positive
fair value
Negative
fair value
Positive
fair value
Negative
fair value
Forward contracts 47 (79) 53 (54)
Currency options 11 (13) 7 (5)
Total 58 (92) 60 (59)