Reebok 2007 Annual Report Download - page 210

APPENDIX - Glossary ANNUAL REPORT 2007 --- adidas Group
206 GERMAN CO-DETERMINATION ACT German Mitbestimmungsgesetz (MitbestG). This act gov-
erns the form of co-determination of employees in corporations employing more than 2,000
employees. It stipulates, among other things, that such a corporation’s Supervisory Board must
be composed of an equal number of employees and shareholder representatives.
GNC (GREG NORMAN COLLECTION) Golf brand, acquired as part of the Reebok acquisition on
January 31, 2006. The adidas Group announced the divestiture of the Greg Norman Collection
wholesale business on November 21, 2006. Prior to that, the business was consolidated in the
TaylorMade-adidas Golf segment.
GOODWILL Intangible asset that quantifi es the price that a buyer of a company has paid for the
reputation, know-how and market position of the acquired company. Goodwill is the excess of
the amount paid over the fair value of the net assets acquired at the purchase date.
GREEN GRASS RETAILERS Golf distribution channel. Small golf specialty shops typically located
at a golf course.
GROSS DOMESTIC PRODUCT (GDP) Market value of all fi nished goods and services produced
within a country in a given period of time.
GDP = consumption + investment + government spending + (exports − imports).
GROSS MARGIN Gross profi t as a percentage of net sales.
Gross margin = (gross profi t / net sales) x 100.
GROSS PROFIT Difference between net sales and the cost of sales.
Gross profi t = net sales - cost of sales.
HARDWARE / HARD GOODS Product category which comprises sports equipment that is used
rather than worn by the athlete, such as bags, balls, golf clubs and hockey sticks.
HEDGING A strategy used to minimize exposure to changes in prices, interest rates or exchange
rates by means of derivative fi nancial instruments (options, swaps, forward contracts, etc.).
 see also Natural Hedges
HIGH-END DEPARTMENT STORES Retail format which places emphasis on shopping experi-
ence, selling high- to mid-price products from several merchandise lines under the same roof.
IN-HOUSE BANK Internally and centrally managed cash liquidity within the adidas network
of subsidiaries. Organization and implementation through the adidas Group’s Treasury depart-
ment.
INITIAL PUBLIC OFFERING (IPO) First placement of a corporation’s common shares on an
organized market.
INSTITUTIONAL INVESTOR Investors such as investment companies, mutual funds, brokerages,
insurance companies, pension funds, investment banks and endowment funds. They are fi nan-
cially sophisticated, with a greater knowledge of investment vehicles and risks, and have the
means to make large investments.
INTEREST COVERAGE Indicates the ability of a company to cover net interest expenses with
income before net interest and taxes.
Interest coverage = income before interest and tax / interest.
INTEREST RATE CAP Option contract which places an upper limit on a fl oating interest rate. The
writer of the cap is required to pay the holder of the cap the difference between the fl oating rate
and the reference rate when that reference rate is exceeded. There is a premium to be paid by
the buyer of such a contract as the market price for the potential pay-out.
INTERNATIONAL ACCOUNTING STANDARDS BOARD (IASB) Independent, privately-funded coop-
eration of professional associations dealing with matters of fi nancial accounting and setting and
promoting the IFRS (formerly IAS).
INTERNATIONAL FINANCIAL REPORTING INTERPRETATIONS COMMITTEE (IFRIC) Accounting
body which rules on controversial accounting issues. Its interpretations are approved by the
International Accounting Standards Board (IASB) and, once adopted, are binding on all Inter-
national Financial Reporting Standards (IFRS) users.
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) Reporting standards (formerly
called IAS) which have been adopted by the International Accounting Standards Board (IASB).
The objective is to achieve uniformity and transparency in the accounting principles that are used
by businesses and other organizations for fi nancial reporting around the world.
INVESTMENTS  see Capital Expenditure
JOINT VENTURES Contractual agreement joining together two or more parties for the purpose
of executing a particular business undertaking.
KEY ACCOUNTS Wholesalers or retailers which are primary customers and account for a large
percentage of sales.
KINETICFIT Fit system that accommodates the changes in size and shape of an athlete’s foot as
it moves. From impact through toe-off, the foot can change up to half of a shoe size. KineticFit
construction makes use of a series of engineered stretch panels positioned in key areas of the
shoe.
LICENSED APPAREL Apparel products, which are produced and marketed under a license agree-
ment with a sports organization (e. g. FIFA, UEFA, IOC), sports league (e. g. NFL, NBA), profes-
sional team (e. g. Real Madrid, Liverpool) or university (e. g. UCLA, Notre Dame). If visible, the
supplier’s branding is secondary.
LIEN The right to take and hold or sell the asset of a debtor as security or payment for a debt.
LIQUIDITY RATIOS I-III Measures the extent to which a company can quickly liquidate assets to
cover short-term liabilities.
Liquidity I: ((sum of cash + short-term fi nancial assets) / current liabilities) x 100.
Liquidity II: ((sum of cash + short-term fi nancial assets + accounts receivable) / current liabilities)
x 100.
Liquidity III: ((sum of cash + short-term fi nancial assets + accounts receivable + inventories)
/ current liabilities) x 100.