Adidas 2003 Annual Report Download - page 160

ABS (ASSET-BACKED Securities (bonds or notes) backed by loan receivables, accounts
SECURITIES) /// receivable or other quantifiable assets.
ADR (AMERICAN A negotiable certificate of a foreign-based company held by a US bank
DEPOSITARY RECEIPT) /// that entitles the holder to all dividends and rights of the underlying
stock. ADRs are traded similarly to stocks on US exchanges and provide
a way for Americans to invest in foreign-based companies by buying
their shares in the USA instead of through an overseas exchange.
Unsponsored ADRs are issued by a broker or depositary bank without
the involvement of the company whose stock underlies the ADR.
ASSET COVERAGE I & II /// The extent to which a company’s non-current assets cover its debt
obligations. Expressed as a percentage. They are calculated as follows:
Asset coverage I (%): The sum of equity and non-current liabilities
divided by non-current assets.
Asset coverage II (%): The sum of equity and non-current liabilities
divided by non-current assets and inventories.
ATHLETIC SPECIALTY A major distribution channel for adidas products in terms of sales.
RETAILERS /// These stores specialize in merchandising athletic footwear and apparel
products to the 12–24 year-old urban consumer group. Key buying
motivators of these consumers are design and technology underpinned
with strong marketing activities.
BACKLOGS (ALSO CALLED The value of orders received for future delivery. At brand adidas, orders
ORDER BACKLOGS) /// are received approximately six months in advance, depending on the
season. This information is used by the market as an indicator of future
sales performance.
CLEARANCE SALES /// Clearance sales are all those sales made outside the course of normal
business terms, arising from commercial decisions
by management to
clear excess stock usually through specific channels
and at a significant
discount.
COMMERCIAL PAPER /// Tradable unsecured promissory notes issued for the purpose of short-
term financing. Commercial paper is issued on an ongoing, revolving
basis with maturities typically between seven days and 12 months or
more.
CONVERTIBLE BOND /// A corporate bond that can be exchanged for a specific number of
shares of the company’s common stock. Convertible bonds tend to have
lower interest rates than non-convertibles because they also accrue
value as the price of the underlying stock rises. In this way, convertible
bonds reflect a combination of the benefits of stocks and those of bonds.
CORPORATE The distribution of rights and responsibilities among different partici-
GOVERNANCE /// pants in a company, in particular shareholders, the Executive Board,
the Supervisory Board.
CORRIDOR APPROACH /// A range of plus or minus 10% around a company’s best estimate of
post-employment benefit obligations (IAS 19). Outside that range, it is
not reasonable to assume that actuarial gains or losses will be offset
in future years.
COST OF SALES /// The costs of obtaining and manufacturing products. This figure
includes costs for raw materials plus the costs of production, customs
and delivery to our sales organizations.
CURRENCY-NEUTRAL /// Financial figures translated at prior-year exchange rates. This indi-
cates increases or decreases to reported figures by eliminating vari-
ances arising from currency translation and is the best indicator of
underlying business performance.
CURRENT ASSET INTEN- The ratio defines the percentage of total assets tied up in current assets.
SITY OF INVESTMENTS /// It is calculated by dividing current assets by total assets.
156 FINANCIAL ANALYSIS SUPPLEMENTARY INFORMATION GLOSSARY