Reebok 2009 Annual Report Download - page 182

178 CONSOLIDATED FINANCIAL STATEMENTS Notes
The acquired subsidiary contributed net losses of € 0 million to the Group’s net income for the
period from January to December 2009.
Effective January 23, 2009, adidas AG acquired the remaining 5% of the shares of its
subsidiary in Greece, adidas Hellas A.E., Thessaloniki, for a purchase price in the amount of
€ 1 million.
On February 16, 2009, adidas International, Inc. acquired assets of Bones in Motion, Inc. as
part of an asset deal for a purchase price in the amount of USD 5 million. Based in Austin/Texas
(USA), Bones in Motion, Inc. is engaged in developing, manufacturing and selling sports- and
fitness-specific location-aware software applications and web-based services.
The acquisition had the following effect on the Group’s assets and liabilities:
N °-
04
BONES IN MOTION, INC.’S NET ASSETS AT THE ACQUISITION DATE
€ IN MILLIONS
Pre-acquisition
carrying
amounts Fair value adjustments
Recognised
values on
acquisition
Accounts receivable 0 — 0
Trademarks and other intangible assets, net — 3 3
Net assets — 3 3
Goodwill arising on acquisition 1
Purchase price settled in cash 4
Cash and cash equivalents acquired —
Cash outflow on acquisition 4
Pre-acquisition carrying amounts were based on applicable IFRS standards.
The following valuation methods for the acquired assets were applied:
Trademarks and other intangible assets: The “multi-period-excess-earnings method” was
used for the valuation of patents. The respective future excess cash flows were identified and
adjusted in order to eliminate all elements not associated with these assets. Future cash flows
were measured on the basis of the expected sales by deducting variable and sales-related imputed
costs for the use of contributory assets. Subsequently, the outcome was discounted using the
appropriate discount rate and adding a tax amortisation benefit.
The excess of the acquisition cost paid versus the net of the amounts of the fair values
assigned to all assets acquired and liabilities assumed was recognised as goodwill. Any acquired
asset that did not meet the identification and recognition criteria for an asset was included in the
amount recognised as goodwill.
The goodwill arising on this acquisition was allocated to the cash-generating unit adidas at
the time of the acquisition. As part of the Group’s reorganisation in the second half of 2009, it has
been reallocated and is denominated in the local functional currency see also Note 2.
If this acquisition had occurred on January 1, 2009, total Group net sales would have been € 10.4
billion and net income would have been € 245 million for the year ending December 31, 2009.
Effective January 3, 2008, adidas Canada acquired 100% of the shares of Saxon Athletic
Manufacturing, Inc. for a purchase price in the amount of CAD 4.6 million. Based in Brantford/
Ontario (Canada), Saxon Athletic is a design, development, marketing and manufacturing company
for team uniforms worn by professional and amateur teams throughout North America.
The acquisition had the following effect on the Group’s assets and liabilities:
N °-
04
SAXON ATHLETIC MANUFACTURING, INC.’S NET ASSETS AT THE ACQUISITION DATE
€ IN MILLIONS
Pre-acquisition
carrying
amounts Fair value adjustments
Recognised
values on
acquisition
Accounts receivable 1 — 1
Inventories 1 — 1
Borrowings (1) — (1)
Other current financial liabilities (1) — (1)
Net assets 0 — 0
Goodwill arising on acquisition 2
Purchase price settled in cash 2
Cash and cash equivalents acquired —
Cash outflow on acquisition 2
Pre-acquisition carrying amounts were based on applicable IFRS standards.
The acquired subsidiary contributed € 0 million to the Group’s net income for the period from
February to December 2008.
Effective January 10, 2008, adidas AG acquired an additional 22.5% of the shares of its sub-
sidiary for the adidas brand in Greece, adidas Hellas A.E., Thessaloniki (Greece), for a purchase
price in the amount of € 6 million, thus taking its controlling stake to over 95%.
Effective April 1, 2008, adidas International B.V. acquired 99.99% of the shares of Reebok
Productos Esportivos Brasil Ltda. (formerly Comercial Vulcabras Ltda.) for a purchase price in
the amount of BRL 6 million. Based in Jundiai (Brazil), Reebok Productos Esportivos Brasil Ltda.
( formerly Comercial Vulcabras Ltda.) is a marketing company for Reebok products in Brazil.
The acquisition had the following effect on the Group’s assets and liabilities: