Reebok 2006 Annual Report Download - page 162

Consolidated Financial Statements ›
158 ANNUAL REPORT 2006 › adidas Group ›
9 » Inventories
Inventories by major classification are as follows:
Goods in transit mainly relate to shipments from suppliers in the Far East to subsidiaries in
Europe, Asia and the Americas. The allowance for obsolescence mainly relates to invento-
ries on hand amounting to € 349 million and € 250 million as at December 31, 2006 and 2005,
respectively (see also Note 2).
10 » Other Current Assets
Other current assets consist of the following:
Prepaid expenses relate mainly to promotion agreements and service contracts.
Information in relation to forward contracts as well as currency and interest options is
also included in these Notes (see Note 24).
Land held-for-sale relates to parts of land of the former “Herzo Base” in Herzogen-
aurach. This land, owned by the GEV Grundstücksgesellschaft Herzogenaurach mbH & Co. KG,
was bought (through acquisition of 90% of the shares) in 1998 (see Note 4).
As at December 31, 2005, the position “Sundry” includes the remaining payment of
€ 65 million related to the Salomon divestiture.
11 » Property, Plant and Equipment
Property, plant and equipment consist of the following:
Depreciation expenses (continuing operations) were € 129 million and € 80 million for the
years ending December 31, 2006 and 2005, respectively (see also Note 25). Impairment losses
which are included within depreciation and amortization (shown in the line item operating
income and expenses (see also Note 25) were € 11 million and € 0 million for the years ending
December 31, 2006 and 2005, respectively. These are related to assets within other equipment,
furniture and fittings for which contrary to expectations there will be an insufficient flow of
future economic benefits.
In connection with the planned sale of the GEV Grundstücksgesellschaft Herzogenaurach
mbH & Co. KG (see Note 4) assets amounting to € 17 million were transferred in 2006 from
other current assets to “Land and buildings” within property, plant and equipment.
For details see Statement of Movements of Tangible and Intangible Assets and Financial
Assets (Attachment I to these Notes).
Inventories € in millions
Dec. 31, 2006 Dec. 31, 2005
Allowance Allowance
for for
Gross obsoles- Net Gross obsoles- Net
value cence value value cence value
Finished goods and
merchandise on hand 1,208 86 1,122 870 50 820
Goods in transit 428 — 428 365 — 365
Raw materials 46 2 44 35 1 34
Work in progress 13 — 13 11 — 11
Inventories, net 1,695 88 1,607 1,281 51 1,230
Other Current Assets € in millions
Dec. 31 Dec. 31
2006 2005
Prepaid expenses 213 178
Tax receivables other than income tax 74 62
Interest rate options 0 2
Currency options 6 69
Forward contracts 7 23
Security deposits 28 20
Land held-for-sale 0 40
Sundry 85 145
Other current assets, gross 413 539
Less: allowance 0 2
Other current assets, net 413 537
Property, Plant and Equipment € in millions
Dec. 31 Dec. 31
2006 2005
Land and buildings 484 298
Technical equipment and machinery 118 83
Other equipment, furniture and fittings 567 443
1,169 824
Less: accumulated depreciation 498 440
671 384
Construction in progress, net 18 40
Property, plant and equipment, net 689 424