Reebok 2013 Annual Report Download - page 218

adidas Group
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2013 Annual Report
Consolidated Financial Statements
214
2013
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04.8
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Notes
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Notes to the Consolidated Statement of Financial Position
In Japan, employees are entitled to benefits from a defined benefit plan that is not funded by plan assets. The
benefits in case of retirement are dependent on final salary and service, and are paid out as a lump sum. The
pension plan is subject to Japanese labour law.
Breakdown of the present value of the obligation arising from defined benefit pension plans
in the major countries
(€ in millions) Dec. 31, 2013 Dec. 31, 2012
Germany UK Japan Germany UK Japan
Active members 123 — 14 112 — 15
Former employees with vested
rights 31 37 — 30 35 —
Pensioners 70 4 — 77 3 —
Total 224 41 14 219 38 15
The Group’s pension plans are subject to risks from changes in actuarial assumptions, such as the discount rate,
salary and pension increase rates, and risks from changes in longevity. A lower discount rate results in a higher
defined benefit obligation and/or in higher contributions to the pension funds. Lower than expected performance
of the plan assets could lead to an increase in required contributions or to a decline of the funded status.
The following tables analyse the defined benefit plans, plan assets, present values of the defined benefit
pension plans, expenses recognised in the consolidated income statement, actuarial assumptions and other
information.
Amounts for defined benefit pension plans recognised in the consolidated statement
of financial position
(€ in millions) Dec. 31, 2013 Dec. 31, 2012
Present value of funded obligation from defined benefit pension plans 95 89
Fair value of plan assets (83) (76)
Funded status 12 13
Present value of unfunded obligation from defined benefit pension plans 230 228
Asset ceiling effect 1 0
Net defined benefit liability 243 241
Thereof: liability 243 241
Thereof: adidas AG 199 196
Thereof: asset (0) (0)
Thereof: adidas AG — —
The determination of assets and liabilities for defined benefit plans is based upon statistical and actuarial
valuations. In particular, the present value of the defined benefit obligation is driven by financial variables (such
as the discount rates or future increases in salaries) and demographic variables (such as mortality and employee
turnover). The actuarial assumptions may differ significantly from the actual circumstances and could lead to
different cash flows.
Actuarial assumptions
(in %) Dec. 31, 2013 Dec. 31, 2012
Discount rate 3.7 3.5
Expected rate of salary increases 3.2 3.2
Expected pension increases 2.2 2.1
The actuarial assumptions as at the balance sheet date are used to determine the defined benefit liability at that
date and the pension expense for the upcoming financial year.