Adidas 2003 Annual Report Download - page 137

Download and view the complete annual report

Please find page 137 of the 2003 Adidas annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 170

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170

4 /// ACQUISITIONS OF SUBSIDIARIES
In 2003, adidas-Salomon acquired no subsidiaries. Major acquisitions in 2002 were as follows:
Effective January 1, 2002 the Group assumed full ownership of its former, already fully consoli-
dated joint venture company adidas Italia S.r.l., Monza (Italy), by acquiring the remaining 50% of
outstanding shares for an amount of € 70 million.
On January 1, 2002 adidas-Salomon assumed control over its distribution partner and licensee
for Salomon products in Denmark, SC IMPORT ApS (renamed to Salomon Danmark ApS), by acquir-
ing 100% of the shares for an amount of € 2 million.
Effective January 15, 2002 adidas-Salomon purchased 100% of the shares of the Canadian
outdoor specialist Arc’Teryx Equipment Inc. for an amount of € 18 million. The Vancouver-based
Arc’Teryx specializes in technical outerwear, performance backpacks and climbing equipment.
NOTES TO THE CONSOLIDATED BALANCE SHEET
5 /// CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash at banks and in hand as well as short-term bank
deposits.
The increase in cash and cash equivalents is mainly attributable to increased short-term bank
deposits.
Compared to the prior year presentation, marketable securities are reported under short-term
financial assets (see note 6). Prior year figures have been adjusted by approximately € 9 million to
conform with this year’s presentation.
6 /// SHORT-TERM FINANCIAL ASSETS
Short-term financial assets are classified as available-for-sale investments with fair value changes
recognized in the income statement as incurred. They mainly comprise investment funds as well as
marketable equity securities.
Subsequent to the issuance of the Group’s convertible bond and the sharp decline of net
borrowings, the Group invested in various mutual funds with a conservative investment orientation
in amounts totaling € 80 million.
The majority of marketable securities relates to commercial paper and certificates of deposit
in Eastern European currencies.
7 /// ACCOUNTS RECEIVABLE
Accounts receivable are as follows:
ACCOUNTS RECEIVABLE € in thousands
Dec. 31 Dec. 31
2003 2002
Accounts receivable, gross 1,167,721 1,363,866
Less: allowance for doubtful accounts 92,629 71,199
Accounts receivable, net 1,075,092 1,292,667
8 /// INVENTORIES
Inventories by major classification are as follows:
INVENTORIES € in thousands
Dec. 31 Dec. 31
2003 2002
Finished goods and merchandise on hand 846,589 816,266
Goods in transit and advance payments 311,475 360,142
Raw materials 66,914 63,159
Work in progress 10,172 14,272
Inventories, gross 1,235,150 1,253,839
Less: allowance for obsolescence 71,632 63,906
Inventories, net 1,163,518 1,189,933
Goods in transit mainly relate to shipments from suppliers in the Far East to subsidiaries in
Europe, Asia and the Americas.
The allowance for obsolescence mainly relates to inventories on hand.
133
NOTES TO THE CONSOLIDATED BALANCE SHEET