Reebok 2007 Annual Report Download - page 208

APPENDIX - Glossary ANNUAL REPORT 2007 --- adidas Group
204 GLOSSARY
AMERICAN DEPOSITARY RECEIPT (ADR) US-traded negotiable certifi cate of a foreign-based
company held by a US bank that entitles the holder to all dividends and rights of the underlying
stock. ADRs 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 concept in North America that
focuses primarily on selling sports and sports lifestyle products to 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.
BASIC EARNINGS PER SHARE (BASIC EPS) Performance indicator used to gauge a company’s
earnings per share, based on the number of shares outstanding (excluding stock options, as well
as options and conversion rights related to a convertible bond).
Basic EPS = net income / weighted average number of shares outstanding during the year.
 see also Diluted Earnings Per Share
BETA FACTOR Indicates a stock’s relative risk. A beta coeffi cient of more than one indicates that
the stock has a higher risk than the overall market. Conversely, a beta coeffi cient of less than
one indicates a lower risk.
BODY MAPPING Aligning Clima fabric and construction technologies with an athlete’s physio-
logical zones of heat and sweat production, to optimize dryness and thermal comfort during
sport.
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
cushion and guidance for optimal performance.
BRANDED APPAREL Apparel products which visibly display specifi c symbols, trademarks or
other references to the supplier of the product.
CAPITAL EXPENDITURE Total cash expenditure (excluding acquisitions and fi nance leases), net
of any recoverable taxes (e. g. Value Added Tax – VAT) for the purchase, lease or construction of
assets.
CLASSICS Products designed in an authentic heritage style, targeting sports lifestyle consumers
who seek trendsetting streetwear with authentic origins.
CLEARANCE SALES Revenues generated outside the course of normal business terms, arising
from commercial decisions by management to clear excess stock usually through specifi c
channels and at a signifi cant discount.
CLIMA adidas apparel system encompassing the ClimaCool®, ClimaLite®, ClimaWarm® and
ClimaProof® technologies. ClimaCool® is an integrated system of technologies that work
together 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 light-
weight, breathable insulation that keeps the athlete dry and comfortable in cold weather condi-
tions. ClimaProof® is breathable weather protection that keeps wind, rain and snow out while
allowing heat and sweat to escape through evaporation.
CO-BRANDED STORES adidas or Reebok stores that are co-branded together with a partner, for
example a sports league such as the NHL or NBA (e. g. NBA Concept Shop in Istanbul, Turkey).
COMMERCIAL PAPER Tradable unsecured promissory notes issued for the purpose of short-
term fi nancing. A commercial paper is issued on an ongoing, revolving basis with maturities
typically between seven days and 12 months or more.
CONCESSION CORNERS Retail space that is fully operated by one brand within the adidas Group.
This distribution channel mainly exists in Asian markets, where no other established channels of
distribution exist.
CONVERTIBLE BOND Corporate bond that can be exchanged for a specifi c number of shares
of a company’s common 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 refl ect a combination of the benefi ts of stocks and those of bonds.
CORPORATE GOVERNANCE Distribution of rights and responsibilities among the primary stake-
holders in a company, in particular shareholders, the Executive Board and the Supervisory
Board.
COST OF SALES Costs of sourcing and manufacturing products. This fi gure includes costs for
raw materials plus costs of production, freight, customs and delivery to the adidas Group’s sales
organizations.
CREDIT SPREAD Risk premium which represents the yield difference between risk-free govern-
ment bonds and corporate bonds with the same duration. A potential investor demands an addi-
tional yield (risk premium = credit spread) for the higher risk of default with corporate bonds
versus government bonds.