Goodwill 12

Goodwill primarily relates to the Group’s acquisitions of the Reebok and TaylorMade businesses as well as acquisitions of subsidiaries, primarily in the United States, Australia/New Zealand, Netherlands, Denmark and Italy.

The majority of goodwill which primarily relates to the acquisition of the Reebok business in 2006 is denominated in US dollars. A positive currency translation effect of € 61 million and negative € 27 million was recorded for the years ending December 31, 2010 and 2009, respectively.

The Group determines whether goodwill impairment is necessary at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. There was no impairment expense for the years ending December 31, 2010 and 2009.

Future changes in expected cash flows and discount rates may lead to impairments of the accounted goodwill in the future. For details see Statement of Movements of Intangible and Tangible Assets see Attachment I to these Notes.

The reconciliation of goodwill is as follows: