Reebok 2014 Annual Report Download - page 218

adidas Group
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2014 Annual Report
Consolidated Financial Statements
214
2014
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04.8
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Notes
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Notes to the Consolidated Statement of Financial Position
The amounts disclosed as gross borrowings represent outstanding borrowings under the following arrangements
with aggregated expiration dates as follows:
Gross borrowings as at December 31, 2014
(€ in millions) Up to
1 year
Between
1 and 3 years
Between
3 and 5 years
More than
5 years
Total
Bank borrowings incl.
commercial paper 194 – – – 194
Private placements 95 123 – – 218
Eurobond – – – 990 990
Convertible bond – 471 – – 471
Total 288 594 – 990 1,873
The above table includes two Eurobonds amounting to € 1 billion in total issued on October 1, 2014. The seven-year
Eurobond of € 600 million matures on October 8, 2021 and has a coupon of 1.25%. The twelve-year Eurobond of
€ 400 million matures on October 8, 2026 and has a coupon of 2.25%. The Eurobonds have denominations of
€ 1,000 each and were priced with a spread of 68 basis points and 100 basis points, respectively, above the
corresponding euro mid-swap rate. The issue price was fixed at 99.145% and 99.357%, respectively.
In addition, gross borrowings include a convertible bond for an aggregate nominal amount of € 500 million
divided into denominations of € 200,000 which was issued on March 21, 2012. The bond has a maximum maturity
(including prolongation options) until June 14, 2019. The coupon of the bond amounts to 0.25% and is payable
annually, commencing on June 14, 2013. The bond is, at the option of the respective holder, convertible at any time
from and including May 21, 2012, up to and including June 5, 2019, into up to 6.06 million new or existing adidas AG
shares. The convertible bond has a conversion premium of 40% above the reference price of € 59.61, which
resulted in an initial conversion price of € 83.46 per share. As a consequence of contractual provisions relating to
dividend protection, the conversion price was adjusted from € 83.10 to € 82.56 per share. This adjustment became
effective on May 9, 2014. On June 14, 2017, the bondholders have the right to call the bond at nominal value plus
interest accrued on the nominal amount. adidas AG is entitled to redeem the remaining bonds in whole if, at any
time, the aggregate principal amount of bonds outstanding falls below 15% of the aggregate principal amount of
the bonds that were initially issued. Furthermore, as of July 14, 2017, adidas AG is entitled to redeem the bonds in
whole if, on 20 of 30 consecutive trading days, the share price of adidas AG exceeds the current conversion price
of € 82.56 by at least 30%.
According to IAS 32 ‘Financial Instruments: Presentation’, the conversion right represented in the convertible
bond constitutes a financial instrument which is covered in the capital reserve in an amount of € 55 million after
deduction of the issuance cost. The initial liability component amounted to € 441 million after deduction of the
issuance cost and is shown within long-term borrowings. The initial difference of € 59 million compared to the
nominal amount of € 500 million is accrued as interest expense of the financial liability over the expected maturity
of the convertible bond using the ‘effective interest method’. As at December 31, 2013, the financial liability
amounted to € 471 million.
Gross borrowings as at December 31, 2013
(€ in millions) Up to
1 year
Between
1 and 3 years
Between
3 and 5 years
More than
5 years
Total
Bank borrowings incl.
commercial paper 126 – – – 126
Private placements 55 193 – – 248
Eurobond 500 – – – 500
Convertible bond – – 460 – 460
Total 681 193 460 – 1,334
The above table includes a Eurobond issued on July 6, 2009 in a nominal amount of € 500 million and with an initial
maturity of five years. The Eurobond with an annual coupon of 4.75% was repaid on July 14, 2014.
Furthermore, on June 4, 2014, a private placement amounting to € 56 million was repaid.
For further details on future cash outflows
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SEE RISK AND OPPORTUNITY REPORT, P. 154.