Adidas 2002 Annual Report Download - page 128

8 /// OTHER CURRENT ASSETS
Other current assets consist of the following:
Prepaid expenses relate mainly to promotion agreements and service contracts.
Investment property held for sale relates to parts of the land of the former “Herzo Base” in
Herzogenaurach. This land was bought in 1998 and is owned by the GEV Grundstücksgesellschaft
Herzogenaurach mbH &Co. KG. The part to be sold is not needed in the future by adidas-Salomon,
the remaining portion is being used for the adidas-Salomon international headquarters “World of
Sports”, which is included under property, plant and equipment. The area to be sold is currently
lying idle and has a size of 77 hectares. According to the “Urban Design Contract”, signed with the
town Herzogenaurach in December 2001, the land is to be split in a housing area (31 hectares), an
industrial area (19 hectares), a public area (24 hectares) and other areas (3 hectares). The fair value
of this investment property cannot be determined reliably at the current time as the land is not yet
developed, and a binding land-use plan and building permits do not yet exist. However, the Group
estimates that the range of the fair value for the undeveloped land could be up to € 50 million.
To secure an appropriate market value, the Group decided in 2002 to pursue development and
commercialization under the control of GEV Grundstücksgesellschaft mbH & Co. KG based on the
results of the economic evaluations during the concept phase.
Information regarding forward contracts as well as currency and interest options is also
included in these notes (see note 21).
126 FINANCIAL ANALYSIS CONSOLIDATED FINANCIAL STATEMENTS (IFRS) /// NOTES TO THE CONSOLIDATED BALANCE SHEET
OTHER CURRENT ASSETS € in thousands
Dec. 31 Dec. 31
2002 2001
Prepaid expenses 80,791 73,482
Taxes receivable 76,374 75,939
Interest rate options 4,487 1,954
Currency options 6,847 6,089
Forward contracts 25,035 39,869
Security deposits 10,250 15,412
Receivables from affiliated companies 326 885
Investment property held for sale 17,188 16,923
Sundry 52,306 42,156
Other current assets, gross 273,604 272,709
Less: allowance 6,169 5,780
Other current assets, net 267,435 266,929
9 /// PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
Depreciation expense was € 84 million and € 80 million for the years ending December 31,
2002 and 2001 respectively.
10 /// GOODWILL
Goodwill primarily relates to the Group’s acquisitions of the Salomon group and subsidiaries in the
United States, Australia/New Zealand, Netherlands/Belgium and Italy.
The increase in goodwill primarily relates to the Group’s purchase of the remaining shares of
adidas Italia S.r.l. and Arc’Teryx Equipment Inc.
Goodwill amortization expense was € 45 million and € 40 million for the years ending Decem-
ber 31, 2002 and 2001; thereof € 30 million and € 29 million for the years ending December 31,
2002 and 2001 relate to the acquisition of the Salomon group.
The change in the goodwill for the Salomon group relates to subsequent acquisition costs for
the acquisition of Salomon S.A. (see also note 30).
PROPERTY, PLANT AND EQUIPMENT € in thousands
Dec. 31 Dec. 31
2002 2001
Land and buildings 290,239 230,746
Technical equipment and machinery 129,499 130,086
Other equipment, furniture and fittings 300,666 285,537
720,404 646,369
Less: accumulated depreciation 369,836 353,771
350,568 292,598
Advance payments and construction in progress, net 15,188 85,267
Property, plant and equipment, net 365,756 377,865
GOODWILL € in thousands
Dec. 31 Dec. 31
2002 2001
Goodwill, gross 868,005 766,252
Thereof relating to the acquisition of the Salomon group 584,882 582,938
Less: accumulated amortization 229,263 186,183
Goodwill, net 638,742 580,069