Adidas 1998 Annual Report Download - page 49

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Notes to Consolidated Financial Statements 47
Thereafter, a “going private” offer was launched followed by a mandatory repurchase of
all remaining outstanding shares. Consequently, the Salomon shares were delisted from
the Stock Exchange in Paris.
The aggregate acquisition cost for the Salomon group was DM 2,364 million. The
excess over the proportionate share of the acquired net assets was allocated as follows:
(in DM 000)
Tangible assets 5,065
Identifiable intangible assets 79,489
Acquired in-process research and development 722,600
Goodwill 1,136,002
Deferred tax assets 51,595
Accrued liabilities and provisions (205,000)
1,789,751
The goodwill is amortized over a period of twenty years.
The accrued liabilities and provisions include primarily provisions for restructuring.
In connection with the acquisition of the Salomon group the Company has implemented
a restructuring plan, which focuses on the integration of the Salomon group into the adidas
structure. The plan, which includes further key integration activities in 1999, will be sub-
stantially completed by the year 2001.
Effective April 1, 1998 the Company acquired a 90% interest in GEV Grundstücks-
gesellschaft mbH & Co. KG, a property investment company, which owns the property of
the new headquarters of the Company in Herzogenaurach.
adidas Japan K.K., a wholly-owned subsidiary, was founded on February 19, 1998.
In the first quarter of 1999 this company will take over the distribution of adidas branded
products from the former independent distributor and licensee.
adidas International Trading B.V., Netherlands, a wholly-owned subsidiary, was founded
on September 7, 1998. This company becomes operative effective January 1, 1999 and
will be responsible for European inventory management and global sourcing activities
through its subsidiary adidas Asia/Pacific Ltd., Hong Kong.
adidas Turkey A.S., a joint venture with the former distributor and licensee in Turkey,
was founded on November 3, 1998. Beginning January 1, 1999, this joint venture will
start its operations.
4. ACCOUNTS RECEIVABLE December 31,
1998 1998 1997
adidas- adidas adidas
(in DM 000) Salomon (comparable) (restated)
Accounts receivable, gross 1,709,617 1,089,941 960,349
less: allowance for doubtful accounts 141,734 113,050 72,093
Accounts receivable, net
1,567,883 976,891 888,256