Adidas 2003 Annual Report Download - page 142
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The actuarial valuations of defined benefit plans are made at the end of each reporting period.
Similar obligations include mainly long-term liabilities under a deferred compensation plan. The
funds withheld are invested by the Group on behalf of the employees in certain securities, which
are presented under long-term financial assets (see note 13).
Pension expenses are as follows:
PENSION EXPENSES € in thousands
Year ending December 31
2003 2002
Defined benefit plans 10,696 10,434
Thereof:
adidas-Salomon AG 8,371 7,087
Defined contribution plans 13,440 16,593
Pension expenses 24,136 27,027
Defined Benefit Plans
The provision for pensions evolved as follows:
PROVISION FOR DEFINED BENEFIT PLANS € in thousands
Provision for pensions as at December 31, 2002 89,391
Currency translation differences (1,284)
Pension expense 10,696
Pensions paid (4,056)
Provision for pensions as at December 31, 2003 94,747
Most pension provisions are for employees in Germany where the actuarial assumptions for
the defined benefit plans are as follows:
ACTUARIAL ASSUMPTIONS
Dec. 31 Dec. 31
2003 2002
Discount rate 5.50% 5.75%
Salary increases 1.7–3.0% 1.7–3.0%
Pension increases 1.7–2.0% 1.7–2.0%
Actuarial assumptions for employee turnover and mortality are based on empirical data, the
latter on the 1998 version of the mortality tables of Dr. Heubeck as in the prior year. The actuarial
assumptions for other countries are not materially different.
The pension obligation consists of the following:
PROVISION FOR DEFINED BENEFIT PLANS € in thousands
Dec. 31 Dec. 31
2003 2002
Present value of the defined benefit obligation 100,100 92,655
Unrecognized actuarial losses (5,353) (3,264)
Provision for pensions 94,747 89,391
On the basis of the actuarial valuations as at December 31, 2003 and 2002 it was not necessary
to recognize actuarial gains or losses pursuant to the corridor approach of IAS 19.92 (revised 2000).
Pension expense attributable to the defined benefit plans comprises:
PENSION EXPENSE FOR DEFINED BENEFIT PLANS € in thousands
Year ending December 31
2003 2002
Current service cost 6,348 6,323
Interest cost 4,348 4,111
Pension expense 10,696 10,434
19 /// OTHER NON-CURRENT LIABILITIES
Other non-current liabilities consist mainly of obligations under finance leases of € 16 million and
€ 8 million (see note 22) and negative fair values of long-term interest rate options of € 17 million
and € 10 million as at December 31, 2003 and 2002 respectively.
Liabilities falling due after more than five years totaled € 11 million and € 1 million as at
December 31, 2003 and 2002 respectively.
138 FINANCIAL ANALYSIS CONSOLIDATED FINANCIAL STATEMENTS (IFRS) /// NOTES TO THE CONSOLIDATED BALANCE SHEET