Treasury
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 intercompany cash
flows. Responsibilities are arranged in a three-tiered approach:
» The Treasury Committee, consisting of members of the Executive Board and other senior executives, decides upon the Group’s treasury policy and provides 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.
Total Credit Facilities € in millions
Remaining Time to Maturity of Available Facilities € in millions
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 the 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 (see Note 24).
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.
Number and Volume of Financing Instruments Increased
The acquisition of Reebok International Ltd. (USA) strongly increased
the Group’s financing requirements. As a result, we increased the
number and volume of certain financing instruments. By issuing private
placements in the USA, in Europe and in Asia in a total amount of
around € 1.3 billion in 2006, we continued to diversify the Group’s
financing structure. This further reduced our dependency on single
credit institutions and country-specific factors. In addition,
long-term financial flexibility is ensured by a currently unutilized €
2.0 billion syndicated loan as well as additional unutilized bilateral
credit lines at different banks in an amount of € 2.4 billion (see Note 16).
The Group’s currency split of gross borrowings was also further
diversified in 2006. We significantly increased our US
dollar-denominated financing to reflect the acquisition of US
dollar-based assets related to Reebok. We monitor the ongoing need for
available credit lines based on the current level of debt as well as
future financing requirements.
