Reebok 2006 Annual Report Download - page 198

194 ANNUAL REPORT 2006 › adidas Group ›
Glossary
adidas_1
Innovative, customizable adidas footwear concept featuring a built-in microprocessor that
automatically and continuously adjusts the cushioning level to the needs of athletes and
changing surface conditions (first intelligent footwear).
American Depositary Receipt (ADR)
A US-traded negotiable certificate of a foreign-based company held by a US bank that entitles
the holder to all dividends and rights of the underlying stock. ADRs are traded similarly to
stocks on US exchanges and provide a way for Americans to invest in foreign-based companies
by buying their shares in the USA instead of through an overseas exchange.
Asset-Backed Securities (ABS)
Securities (bonds or notes) backed by loan receivables, accounts receivable or other quantifi-
able assets.
Asset Coverage I & II
The extent to which a company’s non-current assets cover its debt obligations. They are
expressed as a percentage and calculated as follows:
Asset coverage I (%) = (equity + non-current liabilities) / non-current assets.
Asset coverage II (%) = (equity + non-current liabilities) / (non-current assets + inventories).
Athletic Specialty
A largely mall-based retail distribution channel in North America that focuses primarily on
performance-oriented consumers.
Backlogs
Also called order backlogs. The value of orders received for future delivery. At adidas and
Reebok, most orders are received six to nine months in advance, depending on the season.
This information is used as an indicator of future sales performance.
Beta Factor
Indicates a stock’s relative risk. A beta coefficient of more than one indicates that the stock
has a higher risk than the overall market. Consequently, a beta coefficient of less than one
indicates a lower risk.
BOUNCE™
Three-dimensional energy management system, consisting of several pieces that can be
placed under the forefoot and/or heel. The pieces are tuned to a particular need such as cush-
ion and guidance for optimal performance.
Capital Expenditure
Total cash expenditure, net of any recoverable taxes (e.g. Value Added Tax – VAT) for the pur-
chase, lease or construction of assets.
Classics
Retro products that continue to be in demand because of their authentic unique heritage
style.
Clearance Sales
Revenues generated outside the course of normal business terms, arising from commercial
decisions by management to clear excess stock usually through specific channels and at a
significant discount.
Clima
adidas apparel system encompassing the ClimaCool®, ClimaLite®, ClimaWarm® and
ClimaProof® technologies. ClimaCool® is an integrated system of technologies that work to-
gether to regulate the athlete’s body temperature. ClimaCool® is also utilized as a cooling
system in footwear. ClimaLite® fabric pulls sweat away from the skin to the outer fabric face
for quick evaporation, enhancing the body’s natural temperature regulation. ClimaWarm® is
lightweight, breathable insulation that keeps the athlete dry and comfortable in cold weather
conditions. ClimaProof® is breathable weather protection that keeps wind, rain and snow out
while allowing heat and sweat to escape through evaporation.
Commercial Paper
Tradeable unsecured promissory notes issued for the purpose of short-term financing. A com-
mercial paper is issued on an ongoing, revolving basis with maturities typically between seven
days and 12 months or more.
Continuing Operations
Ongoing operations of a business contributing to the future economic development of a com-
pany. They include acquisitions and exclude divestitures. For the adidas Group this roughly
equals the Group’s brands adidas and TaylorMade-adidas Golf which are the segments that
were not divested in October 2005. See also Net Income from Continuing and Discontinued
Operations.
Convertible Bond
A corporate bond that can be exchanged for a specific number of shares of a company’s com-
mon stock. Convertible bonds tend to have lower interest rates than non-convertibles because
they also accrue value as the price of the underlying stock rises. In this way, convertible bonds
reflect a combination of the benefits of stocks and those of bonds.
Corporate Governance
The distribution of rights and responsibilities among different participants in a company, in
particular shareholders, the Executive Board and the Supervisory Board.
Cost of Sales
The costs of sourcing and manufacturing products. This figure includes costs for raw materials
plus costs of production, customs and delivery to the adidas Group’s sales organizations.
Glossary ›