TREASURY
GROUP FINANCING POLICY
The major goal of our financing
policy is to minimize the Group’s financial expenses while
ensuring sufficient liquidity reserves at all times to meet the
Group’s payment commitments. The operating activities of our
Group segments and the resulting cash inflows represent the
Group’s main source of liquidity. Liquidity is planned on a
multi-year financial and liquidity plan on a rolling monthly
basis. This comprises all consolidated Group companies. Our
in-house bank concept takes advantage of the surplus funds
of individual Group companies to cover the financial requirements
of others, reducing external financing requirements
and optimizing our net interest expenses. By settling inter-company
transactions via inter-company financial accounts,
we are able to reduce external bank account transactions and
thus bank charges. Currency management as well as ongoing
interest rate optimization are additional goals of our Group
Treasury department.
TREASURY SYSTEM AND RESPONSIBILITIES
Our Group’s
Treasury Policy governs all treasury-related issues, including
banking policy and approval of bank relationships, global
financing arrangements and liquidity / asset management,
currency and interest risk management as well as the management
of inter-company cash flows. Responsibilities are
arranged in a three-tiered approach:
The Treasury Committee consists of members of the
Executive Board and other senior executives who decide
on the Group’s Treasury Policy and provide strategic guidance
for managing treasury-related topics. The Treasury Committee
approves all major changes to our Treasury Policy.
The Group Treasury department is responsible for specific
centralized treasury transactions and for global implementation
of our Group’s Treasury Policy.
On a subsidiary level, local managing directors and financial
controllers are responsible for managing treasury matters in
the respective subsidiaries. Brand and regional controlling
ensures that the transactions of the individual business units
are in compliance with the Group’s Treasury Policy.
CENTRALIZED TREASURY FUNCTION
In accordance with our
Group’s Treasury Policy, more than 90 % of our worldwide
credit lines are managed by the Group Treasury department.
Portions of those lines are allocated to the Group’s subsidiaries
and backed by parental guarantees. As a result of this
centralized liquidity management, the Group is well positioned
to allocate resources efficiently throughout the organization.
The Group’s debt is generally unsecured and includes standard
financial covenants, which are reviewed on a quarterly basis.
We maintain good relations with numerous partner banks,
thereby avoiding a strong dependency on any single institution.
Banking partners of the Group and our subsidiaries are
required to have at least a BBB+ long-term investment grade
rating by Standard & Poor’s or an equivalent rating by another
leading rating agency. Only in exceptional cases are Group companies
and subsidiaries authorized to work with banks with a
lower rating. 
see Risk and Opportunity Report To optimize the
Group’s cash position and ensure optimal allocation of liquid
financial
resources, subsidiaries are required to transfer
excess
cash to the Group’s headquarters.
LONG-TERM FINANCIAL FLEXIBILITY ENSURED
The adidas
Group’s long-term flexibility is ensured by unutilized financial
instruments in an amount of € 4.1 billion at the end of 2007 (2006: € 4.4 billion). These instruments include a € 2.0 billion
multi-year syndicated loan (2006: € 2.0 billion) as well as bilateral
credit lines at different banks in an amount of € 2.1 billion
(2006: € 2.4 billion). The reduction of unutilized credit lines
in 2007 reflects the decreased need for financial flexibility
as a result of the Group’s strong progress in gross borrowings
reduction in 2007. We monitor the ongoing need for available
credit lines based on the current level of debt as well as future
financing requirements.
|
TOTAL CREDIT FACILITIES € in millions |
|
 |
|
REMAINING TIME TO MATURITY OF AVAILABLE FACILITIES € in millions |
|
 |
