During 2004, advertising and marketing expenses increased approximately 11% as the reebok outlet Company continues to invest in brand building initiatives that it believes are important to the long-term success of its brands. The Company also continues to invest in infrastructure improvements to its supply chain and its information systems. Net interest expense was $13.4 million for the year ended December 31, 2004, a decrease of $4.0 million as compared to 2003. Interest expense increased $0.5 million and interest income increased $4.5 million.
The increase in interest income resulted from interest earned on the favorable settlement of some outstanding income tax matters and interest earned due to higher cash balances and to higher interest rates. On May 17, 2004, the reebok outlet company redeemed the $250.0 million outstanding principal amount of its 4.25% convertible debentures due 2021. The redemption price included a call premium of $5.3 million. The call premium and the write-off of the remaining unamortized original debt issuance costs of $4.9 million resulted in a loss due to the early extinguishment of debt of $10.2 million.
For the year ended December 31, 2004, other expenses, net, were $4.9 million compared to $0.8 million in 2003. Included in other expenses, net, are certain currency losses, reebok outletthe amortization of finite-lived intangibles and other non-operating expenses. The increase in other expenses, net, in 2004 was primarily due to an increase in foreign exchange losses of $2.6 million as compared to 2003 and the write-off of certain unamortized costs related to the termination of the reebok outlet Company’s securitization program in Italy
