Adidas 1998 Annual Report Download - page 53

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Notes to Consolidated Financial Statements 51
13. OTHER CURRENT LIABILITIES Other current liabilities consist of the following:
December 31,
1998 1998 1997
adidas- adidas adidas
(in DM 000) Salomon (comparable) (restated)
Liabilities due to personnel 30,243 15,298 15,824
Sundry tax liabilities 38,690 18,355 37,966
Liabilities due to social security 16,191 14,377 13,547
Interest liabilities 9,820 3,479 2,220
Deferred income 2,587 180 233
Sundry 95,310 55,724 52,226
Other current liabilities
192,841 107,413 122,016
14. PENSIONS AND SIMILAR The Company sponsors and/or contributes to various pension plans, primarily in Ger-
OBLIGATIONS many. The Company’s plans include both defined contribution plans and defined benefit
plans as described below.
The plans of adidas-Salomon AG cover substantially all German employees.
The aggregate amounts vested in Germany under defined contribution plans were
DM 38 million and DM 33 million as of December 31, 1998 and 1997, respectively.
The Company sponsors and contributes to a defined benefit plan in Germany. The
employee benefits of this plan are based on years of service. Pension costs are funded
currently, subject to German regulatory funding limitations. The pension accruals of
adidas-Salomon AG were calculated actuarially using the projected unit credit method
in accordance with International Accounting Standards. Measurement of the projected
benefit obligation was based on a discount rate of 6.25% in 1998 and 7% in 1997, respec-
tively, and an expected compensation growth rate between 2% and 3%. Additionally,
the Company sponsors and contributes to a defined benefit plan in Germany for certain
employees. The Company’s contributions to the plan are determined annually and are
allocated to an employee based on years of service and the employee’s compensation.
Additionally, the Company borrowed approximately DM 21 million and DM 17 million
as of December 31, 1998 and 1997, respectively, from its pension trust fund in Germany,
which are also included in pensions and similar obligations.
The actuarial valuations of the plans described above are made at the end of each
reporting period. The actuarial valuations of the plans are dated December 9, 1998,
December 22, 1998 and January 11, 1999.
Salomon S.A. sponsors and contributes to a defined benefit plan, which covers all
employees. Besides the French mandatory pension plan an additional retirement plan
is funded. The additional retirement plan was revised retrospectively with effect from
January 1, 1998. As a result of this curtailment the provision was released by DM 19 million.
Measure
ment of the projected benefit obligation was based on a discount rate of 5.5% in
1998 and an expected compensation growth rate between 2.5% and 3.5%. The actuarial
valuation of the plans is dated October 6, 1998.
Pension expense totaled DM 26 million (adidas-Salomon group), DM 25 million
(adidas comparable), and DM 28 million for the years ended December 31, 1998 and
1997, respectively.