Reebok 2011 Annual Report Download - page 232

adidas Group
2011 Annual Report
ADDITIONAL INFORMATION
228
2011
05.2 Glossary
Glossary
05.2
A
AFIRM (Apparel and Footwear
International Restricted Substances
List Management Working Group)
A centre of excellence comprising experts whose
aim is to reduce the use and impact of harmful
substances in the apparel and footwear supply
chains :
WWW.AFIRM-GROUP.ORG .
American Depositary Receipt (ADR)
US-traded negotiable certificate of a foreign-based
company held by a US bank that entitles the holder
to all dividends and rights of the underlying stock.
ADRs provide a way for US-based investors to in-
vest in foreign-based companies by buying their
shares in the USA instead of through an overseas
exchange.
B
Backlogs
Also called order backlogs. The value of orders re-
ceived for future delivery. Most retailers’ orders are
received six to nine months in advance.
Basic Earnings Per Share (Basic EPS)
Performance indicator used to gauge a company’s
earnings per share, based on the number of shares
outstanding.
Basic EPS = net income attributable to
shareholders / weighted average number of shares
outstanding during the year
SEE ALSO DILUTED EARN-
INGS PER SHARE
.
Beta factor
Indicates a stock’s relative risk. A beta factor of
more than one indicates that the stock has a higher
risk than the overall market. Conversely, a beta
factor of less than one indicates a lower risk.
Better Cotton Initiative (BCI)
The Better Cotton Initiative was created through
a collaboration between the World Wildlife Fund
(WWF) and a wide range of stakeholders involved
in the cotton supply chain. BCI aims to promote
measurable improvements in the key environ-
mental and social impacts of cotton cultiva-
tion worldwide to make it more economically,
environmentally and socially sustainable
: WWW.BETTERCOTTON.ORG .
C
CAD design
Computer-aided design (CAD) is the use of
computer technology for the process of design
and design documentation.
Capital charge
Capital charge is a payment for capital employed by
a given business unit. Capital charge is comprised
of asset base and weighted average cost of capital.
The asset base includes operating working capi-
tal as well as other assets needed by a market or
operating unit in its day-to-day activities.
Capital charge = asset base x weighted average
cost of capital (WACC).
Capital expenditure
Total cash expenditure used for the purchase of
tangible and intangible assets, excluding acquisi-
tions and finance leases.
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 twelve
months or more.
Comparable store sales
Comparable (comp) store sales are sales gener-
ated in stores which have been open for the entire
prior financial year and are currently operating. Re-
modelled stores are included if the store format or
store size has remained unchanged.
Concession corners
Retail space that is fully operated by one brand of
the adidas Group and is part of a larger sales area
operated by a retail partner.
Consumer price index (CPI)
Measure of the average price of consumer goods
and services purchased by households. Deter-
mined by measuring the price of a standard group
of goods meant to represent the typical market
basket of a typical urban consumer. The percentage
change in the CPI is a measure of inflation.
Controlled space
Controlled space includes own-retail business,
mono-branded franchise stores, shop-in-shops,
joint ventures with retail partners and co-branded
stores. Controlled space offers a high level of brand
control and ensures optimal product offering and
presentation according to brand requirements.
Corporate governance
Distribution of rights and responsibilities among
the primary stakeholders in a company, in par-
ticular shareholders, the Executive Board and the
Supervisory Board.
Cost of sales
The amount the Group pays to third parties for ex-
penses associated with producing and delivering
our products. Own-production expenses are also
included in the Group’s cost of sales.
Credit default swap (CDS)
A credit default swap is a derivative in which the
buyer of the CDS makes a payment to the seller
and, in exchange, receives a payoff if a credit in-
strument (typically a bond or loan) undergoes a
defined “Credit Event”, often described as a default
(failure to pay).
Credit spread
Risk premium which represents the yield difference
between risk-free government bonds and corporate
bonds with the same duration. A potential investor
demands an additional yield (risk premium = credit
spread) for the higher risk of default with corporate
bonds versus government bonds.
Currency-neutral
This figure eliminates variances arising from cur-
rency translation and thus reflects the underlying
business performance.
CRM (Customer Relationship
Management)
Capabilities and methodologies used by a company
with its customers to systematically design and
build customer relationships and processes.