Adidas 2003 Annual Report Download - page 152

Net sales to third parties are shown in the geographic market in which the revenues are
realized. Intersegment sales represent sales to operational units not belonging to the same region.
The global sourcing function is included in the Headquarter/Consolidation column. There are no
sales between the brands.
Transactions between the segments are based on the dealing-at-arm’s-length principle.
Segment assets include all operating assets and comprise mainly accounts receivable, inven-
tory as well as property, plant and equipment and intangible assets. Segment liabilities comprise
operating liabilities and consist principally of trade and other payables and accrued liabilities and
provisions. Non-allocable items include goodwill, financial assets, assets and liabilities relating to
income taxes and borrowings, which are included in the Headquarter/Consolidation column.
Capital expenditure, amortization and depreciation relate to segment assets; the acquisition of
goodwill do not affect capital expenditure.
30 /// ADDITIONAL CASH FLOW INFORMATION
Compared to the 2002 presentation, the consolidated statement of cash flows has been adjusted to
reflect the amended balance sheet structure. Cash and cash equivalents have been adjusted by
approximately € 9 million to reflect this year’s balance sheet presentation. This position is now
reported as a decrease in short-term financial assets under investing activities. Accordingly, the
effect of exchange rates on cash has also been adjusted.
The Group acquired all outstanding shares of Arc’Teryx Equipment Inc. and Salomon Danmark
ApS in 2002 (see also note 4).
The fair value of the net assets approximated the book value of the net assets acquired.
The assets acquired and liabilities assumed were as follows at the date of the acquisition:
CASH FLOW OF ACQUIRED SUBSIDIARIES € in thousands
2002
Cash 8
Inventories 7,175
Receivables and other current assets 4,246
Property, plant and equipment 1,413
Goodwill and other intangible assets 15,153
Accounts payable and other liabilities (4,235)
Long-term borrowings (4,129)
Total acquisition cost 19,631
Less: cash acquired (8)
Cash flow on acquisition net of cash acquired 19,623
31 /// COMMITMENTS AND CONTINGENCIES
Other Financial Commitments
The Group has other financial commitments for promotion and advertising contracts, which mature
as follows:
FINANCIAL COMMITMENTS FOR PROMOTION AND ADVERTISING € in millions
Dec. 31 Dec. 31
2003 2002
Within 1 year 187 195
Between 1 and 5 years 528 417
After 5 years 197 121
Total 912 733
Commitments with respect to advertising and promotion maturing after five years have
remaining terms of up to twelve years from December 31, 2003.
Information regarding commitments under lease and service contracts is also included in
these notes (see note 22).
Litigation
The Group is currently engaged in various lawsuits resulting from the normal course of business,
mainly in connection with license and distribution agreements. The risks regarding these lawsuits
are covered by accrued liabilities and provisions if a reliable estimate of the amount of the obliga-
tion can be made (see note 16). In the opinion of Management, the ultimate liabilities resulting from
such claims will not materially affect the consolidated financial position of the Group.
148 FINANCIAL ANALYSIS CONSOLIDATED FINANCIAL STATEMENTS (IFRS) /// ADDITIONAL INFORMATION