Reebok 2006 Annual Report Download - page 202

198 ANNUAL REPORT 2006 › adidas Group ›
Option
Financial instrument which ensures the right to purchase (call option) or to sell (put option) a
particular asset (e.g. shares or foreign exchange) at a predetermined price (strike price) on or
before a specific date.
Order Backlogs
See Backlogs.
Organized Market
A securities market, which is governed and monitored by state-approved bodies, occurs regu-
larly and is open to public.
Other Operating Expenses (and Income)
Operating expenses (and income) for sales, marketing, research and development, as well as
for logistics and central finance and administration. Also includes amortization of goodwill and
trademarks.
Over-The-Counter Market (OTC Market)
When a traded stock is not listed on a stock exchange. In such cases, brokers negotiate directly
with one another over computer networks and by phone.
Own-Retail Activities
Sales directly generated through a store operated by a brand segment within the adidas
Group. Own retail includes adidas concept stores (Sport Performance and Sport Heritage) and
concession corners as well as factory outlets and e-commerce for both the adidas and Reebok
brands.
Price-Earnings Ratio (P/E Ratio)
A company’s share price divided by its current or future diluted earnings per share. The
P/E ratio is used by investors as a fundamental measure of the attractiveness of a particu-
lar security versus other securities or the overall market. It is usually more useful to com-
pare P/E ratios of one company to other companies in a similar industry. In general, a high
P/E ratio suggests that investors are expecting higher earnings growth in the future compared
to companies with a lower P/E.
Private Placement
Placement of securities directly to institutional investors, such as banks, mutual funds, insur-
ance companies, pension funds, and foundations.
Product Licensees
Companies that are authorized to use the name of a brand or company to manufacture and dis-
tribute products. For adidas, these products include sports watches, sports eyewear, toiletries
and perfume, for Reebok fitness equipment and for TaylorMade-adidas Golf bags and gloves.
Promotion Partnerships
Partnerships with events, associations, leagues, clubs and individual athletes. In exchange for
the services of promoting the adidas Group, the party is provided with cash and/or promotional
material.
Promotional Expenditure
Expenses related to promotion partnerships.
Purchase Price Allocation (PPA)
Stipulated by IFRS regulations. Allocation of the purchase price paid for an acquisition accord-
ing to the fair values assigned to acquired assets and liabilities.
Record Date
Date by which a shareholder must own a company’s shares in order to be able to register for
participation in the Annual General Meeting of such company. According to German law, the
record date is twenty-one days before the Annual General Meeting.
Retail Investor
An individual who purchases securities for him-/herself, as opposed to an institutional investor.
Return on Capital Employed (ROCE)
A measure of the returns that a company is realizing from its capital.
ROCE = (income before taxes + financial result + extraordinary income) / (average of share-
holders’ equity + minority interests + total net borrowings).
Return on Equity (ROE)
An indicator of company profitability related to the shareholders’ financing.
ROE = net income / shareholders’ equity.
Risk-Free Rate
The rate of return to be expected on a risk-less investment, e.g. federal bonds.
Second Tier Supplier
Also tier 2 suppliers. Suppliers who provide the adidas Group with materials and components
to be used in the production of finished products, but do not manufacture products.
Segment
Also Business Segment. Units within a company that have profit & loss responsibility. The
adidas Group is currently divided into four major business segments: adidas, Reebok,
TaylorMade-adidas Golf and HQ/Consolidation.
Segmental Reporting
Information regarding the financial position and results of operations in individual brands
(segments) and regions. This gives an indication of developments in the individual segments
and their contribution to the Group’s results.
Glossary ›