Currency Exposure
The adidas Group’s reporting and consolidation currency is the euro. 205 Since the Group produces and sells its products worldwide, the company is exposed to several currencies, especially US dollar, Japanese yen and British pound. In order to minimize the risk from increasing / declining exchange rates versus the euro, the adidas Group hedges itself against the major currencies.  see also Hedging

Currency-Neutral
Financial figures translated at prior-year exchange rates. This indicates increases or decreases to reported figures by eliminating variances arising from currency translation, thus reflecting the underlying business performance.

Currency Option
  see Option

Current Asset Intensity of Investments
Percentage of total assets tied up in current assets.
Current asset intensity of investments = current assets / total assets.

Customer Flow Management™
A widely used initiative of managing the flow of people and related information from entry to a retailer’s point-of-sale or specific service area. The aim is to optimize the consumer’s shopping experience and increase shop sales.

Days of Sales Outstanding (DSO)
Average time of receipt of outstanding payments from customers.

Demand-Driven Supply Chain
Management of up- and downstream relationships between suppliers and customers to deliver the best value to the customer at the least cost to the supply chain as a whole. A clear focus of the concept is this alignment of the supply chain to the customers’ needs, bridging the gap between optimal customer relationship management and the company’s supply chain management.  see also Supply Chain

Diluted Earnings per Share (Diluted EPS)
Performance indicator used to gauge a company’s earnings per share, assuming that all stock options, options and conversion rights related to a convertible bond are exercised, which would result in an increase of the number of shares outstanding.
Diluted EPS = (net income + interest expense on convertible bonds net of tax) / (weighted average number of shares outstanding during the year + weighted share options + shares from assumed conversion of convertible bonds).

Directional Accounts
High-profile boutiques and metropolitan retailers that target trendsetting sports lifestyle consumers.

D&O Liability Insurance
Directors and Officers (D&O) liability insurance. Protects directors and officers from liability and litigation from actions against them, claiming wrongdoing in connection to the company’s business.

Earnings per Share (EPS)
Performance indicator that expresses a company’s net income in relation to the number of ordinary shares issued.
Earnings per share = net income / weighted average number of shares outstanding during the year. 

EBITDA
Earnings before interest, taxes, depreciation and amortization.

Emerging Markets
Developing countries showing potential for growth in both size and importance in the future. For the adidas Group, emerging markets are the developing countries of Asia, Eastern Europe, Latin America and Africa.

Equity Ratio
Shows the role of shareholders’ equity within the overall financing structure of a company.
Equity ratio = shareholder’s equity / total assets.

Equity-To-Fixed-Asset Ratio
Defines the percentage of non-current assets financed by equity.
Equity-to-fixed-asset ratio = equity / non-current assets.

Fair Value
Amount at which assets are traded fairly between business partners. Fair value is often identical to market price.

Family Footwear Channel
Primarily North American retail distribution channel, catering for affordable footwear across all age groups.

Finance Lease
Method of acquiring an asset that involves a series of rental payments extending over the expected lifetime of the asset.

Financial Covenants
A promise in a debt instrument, or any other formal debt agreement, that certain activities will or will not be carried out.

Financial Leverage
Ratio reflects the role of borrowings within the financing structure of a company.
Financial leverage = net total borrowings / shareholders’ equity.

ForMotion™
Apparel and footwear technology that enhances the natural movement of sport for greater comfort, fit and control while athletes are in motion.

Forward Contract
Agreement to exchange amounts of one currency for another currency at an agreed fixed rate at a future date.

Franchising
Franchising is a form of business by which the owner (franchisor) of a product, service or method obtains distribution through affiliated dealers (franchisees). The franchisee offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration.

Free Cash
Flow Cash that is generated by a company’s operating activities after the deduction of capital expenditure and other cash expenses such as taxes and interest from the operating profit.
Free cash flow = operating profit + depreciation and amortization (incl. goodwill) +/– changes in operating working capital – capital expenditures +/- non-operating components.