Financial Statements for the Year Ended December 31, 2009 and Management Report

adidas AG Herzogenaurach

09 Financial Statements for the Year Ended December 31, 2009 and Management Report

CONTENTS

3 Balance Sheet

4 Profit and Loss Statement

5 Notes

38 Statements of Changes in Fixed Assets

40 Supervisory Board and Executive Board

45 List of Shareholdings

53 Management Report

112 Auditors’ Report

114 Responsibility Statement

115 Supervisory Board Report

The Financial Statements and The Financial Statements and Management Report of adidas AG as well as the Management Report of adidas AG for List of Shareholdings of adidas AG are also available for download on the the financial year 2009 are filed with Internet at and published in the electronic Federal Gazette. > www.adidas-group.com/en/investorrelations/reports/annualreports.aspx

2 FINANCIAL STATEMENTS of adidas AG

BALANCE SHEET (euros in thousands)

Note 31.12.2009 31.12.2008 A S S E T S

FIXED ASSETS (1)

Intangible assets (2) 166,142 57,569

Tangible assets (2) 171,339 141,382

Financial assets (3) 3,305,605 3,299,090

3,643,086 3,498,041 CURRENT ASSETS

Inventories (4) 19,192 21,428

Receivables and other assets (5) 1,670,602 1,318,875

Securities (6) 3,825 3,675

Cash and cash equivalents (7) 232,078 1,593

1,925,697 1,345,571

PREPAID EXPENSES (8) 48,324 125,664

5,617,107 4,969,276

E Q U I T Y A N D L I A B I L I T I E S

EQUITY

Subscribed capital (9) 209,216 193,516 Contingent capital 1999 1.278 Contingent capital 2003 20.314 Contingent capital 2006 20.000

Capital reserves (9) 1,145,075 830,037

Revenue reserves 652,752 652,752

Retained earnings (10) 284,555 237,409

2,291,598 1,931,714

UNTAXED RESERVE (11) 6,007 6,329

ACCRUALS (12) 239,815 235,240

LIABILITIES (13) 3,079,687 2,813,972

DEFERRED INCOME 021

5,617,107 4,969,276

3 FINANCIAL STATEMENTS of adidas AG

STATEMENT OF INCOME (euros in thousands)

Note 2009 2008

Sales (15) 1,399,182 860,577 Change in inventory -205 -689

Total operating profit 1,398,977 859,888

Other operating income (16) 753,497 809,695 Cost of materials (17) -427,981 -441,078 Personnel expenses (18) -249,939 -241,090 Depreciation and amortization of tangible and intangible assets (19) -55,908 -36,169 Other operating expenses (20) -1,211,360 -899,611

INCOME FROM OPERATIONS 207,286 51,635

Income from investments in related companies (21) 72,151 105,748 Profit/ Loss received under a profit - positive transfer agreement (22) 0 133,340 - negative transfer agreement -7,918 0 Depreciation on financial assets (23) -3,958 0 Interest result (24) -67,515 -68,417

INCOME FROM ORDINARY ACTIVITIES 200,046 222,306

Taxes on income (25) -55,928 -14,054 Other taxes -214 -329

NET INCOME 143,904 207,923

Retained earnings brought forward 140,651 29,486 Earnings appropriated to earned surplus 0 409,387 Earnings appropriated to reduction of subscribed capital 0 10,182 Transfer to capital reserves 0 -10,182 Offset with Retirement of treasury shares 0 -409,387

RETAINED EARNINGS 284,555 237,409

Notes to the Financial Statements of adidas AG for the Year Ended December 31, 2009

In the interest of providing a clearer overall picture, certain items in the balance sheet and income statement have been combined as permitted in § 265 (7) German Commercial Code (Handelsgesetzbuch, "HGB"), and have been disclosed and explained separately under the numerical text reference indicated below.

The list of shareholdings in adidas AG as required by § 287 HGB is filed with the electronic Federal Gazette.

Accounting Policies

The annual financial statements have been prepared in accordance with the following accounting policies.

Acquired intangible fixed assets are recognized at cost and subject to periodic straight-line amortization.

Tangible fixed assets are recognized at cost. All recognizable direct and overhead costs are included in production costs. Items with a limited life are depreciated/amortized over their expected useful lives.

Buildings are subject to straight-line amortization at adidas AG. The estimated useful life of business premises is 50 years maximum and from two to ten years for technical equipment and machinery, other equipment, and operating and office equipment. The refurbishment costs of buildings comprising the World of Sports headquarters, owned by GEV Grundstücksgesellschaft Herzogenaurach mbH & Co. KG, a company within the adidas AG Group, are being written down over 20 years. The factory outlet building is being depreciated over 33 years. By virtue of a use agreement between the property owner GEV Grundstücksgesellschaft Herzogenaurach mbH & Co. KG and adidas AG, adidas AG is the beneficial owner of the office building under construction on the World of Sports premises. As with the other buildings, these buildings will be depreciated over 33 years upon completion.

Chattel assets are depreciated on a straight-line basis.

Minor-value assets worth less than € 150 are written off in full in the year of their acquisition and are shown as disposals in the statement of changes in fixed assets. Omnibus items are recognized for assets worth between € 150 and

€ 1,000. These are depreciated on a straight-line basis over five years. 20 % is written off in the year of acquisition.

Write-downs to the lower fair value are also recognized if an impairment is anticipated to be other than temporary.

Long-term financial assets are recognized at cost. To the extent necessary, write-downs are made to their lower fair value. If the reasons for the write- down no longer apply, a reversal is recognized.

Inventories are measured at the lower of cost or market. Manufacturing costs comprise direct costs that must be recognized and recognizable overhead costs. Allowances are taken for discernable fashion and technical risks, age structure, and marketability.

Receivables and other assets are generally recognized at nominal values. Individual adjustments and allowances for doubtful accounts are taken to cover discernible risks.

Securities classified as current assets are recognized at cost. If the market price or fair value is lower at the balance sheet date, this is recognized.

Derivative financial transactions entered into with banks by Group Treasury (primarily forward currency and currency option transactions) are generally related to underlying transactions with group companies. Hedge accounting is applied if there is a direct hedging relationship between these transactions. Unrealized losses are recognized in profit or loss if they are not covered by unrealized gains in the hedge accounting. Derivative transactions that are not recognized using hedge accounting are measured individually at fair value. Any resulting losses are recognized in profit or loss.

The fair value of interest rate swaps and cross currency swaps used for hedging purposes is calculated using generally accepted models. Hedge accounting is applied if interest rate swaps and cross currency swaps are entered into for the purpose of hedging currency and interest rate risk from existing liabilities and there is a direct hedging relationship between these transactions. Unrealized losses are recognized in profit or loss if they are not covered by unrealized gains in the hedge accounting.

Subscribed capital is recognized at the nominal amount.

The special tax-allowable reserve is recognized for the amounts allowed under tax law provided that tax law requires the establishment of this reserve on the balance sheet.

Provisions for pensions at adidas AG are recognized based on actuarial opinions using the present value under the German entry age normal method (Teilwertverfahren) pursuant to § 6a German Income Tax Act (Einkommensteuergesetz, "EStG") and applying a 6% discount rate (previous year: 6%). The 2005 G mortality tables published in July 2005 by Prof. Klaus Heubeck were used for this purpose.

Other provisions cover all discernible risks and uncertain obligations and have been recognized in the amount required based on prudent business judgment.

Liabilities are recognized at their nominal amount or their higher repayment amount.

Receivables and liabilities denominated in foreign currencies are translated using the end-of-month rate prevailing for the month prior to the transaction posting date. Exchange rate losses are recognized at the balance sheet date unless there is a closed position. The contingent liabilities from payment guarantees and warranties reported correspond to the borrowings and obligations of subsidiaries as of the balance sheet date.

Revenues are then recognized once the price risk has been transferred to the purchaser. This generally occurs upon delivery of the merchandise.

Licensing revenues are recognized in accordance with the underlying contractual agreements. Claims and revenues generally arise whenever the licensee generates sales revenue with adidas products.

1. Fixed assets

Please see Appendix 1 to the notes on the financial statements for the statement of changes in fixed assets pursuant to § 268 (2) HGB.

2. Intangible fixed assets and tangible fixed assets

In € thousands 12/31/2009 12/31/2008

Balance as of 01/01 198.951 153.538

Additions 197.068 83.045

Reebok, ASL residual carrying amount 1.097 0

Disposals 3.727 1.463

Depreciation, amortization and write-downs 55.908 36.169

Balance as of 12/31 337.481 198.951

The significant additions primarily concern acquired intangible fixed assets (€ 114,000 thousand) due to the transfer of the brand management function (such as trademarks, slogans, patents, design etc.) from adidas International Marketing B.V., Amsterdam, the Netherlands, to adidas AG and, under assets under construction, a new administration building on third-party land (€ 34,842 thousand), as well as licenses for standard software, fixtures and fittings for adidas shops and hardware. The merger of Reebok Deutschland GmbH and ASL-American Sports and Leisure Vertriebs GmbH with adidas AG resulted in € 3,187 thousand in additions from historical cost and € 2,090 thousand in cumulative depreciation/amortization.

3. Long-term financial assets Additions (€ 6,554 thousand) consisted of the transformation of one of the loans granted to adidas Industrial S.A. de C.V., Mexico City, Mexico, into a capital contribution (€ 5,351 thousand) and the increase in the Company's equity stake in adidas Hellas A.E., Thessaloniki, Greece (€ 1,203 thousand).

4. Inventories In € thousands 12/31/2009 12/31/2008

Raw materials, consumables and supplies 3.326 3.302

Work in progress 60 1.090

Finished goods and merchandise 15.806 17.036

19.192 21.428

Inventories relate to raw materials, consumables, and supplies for production purposes, work in progress in the production process, and merchandise at the Company's own adidas shops, the factory outlet, as well as merchandise of the Fashion Group, i.e., products from collections such as "Y3" and "Porsche Design".

5. Receivables and other assets In € thousands 12/31/2009 12/31/2008

Trade accounts receivable 41.144 48.945

of which with a residual maturity of more than one year 0 0

Receivables from affiliated companies 1.611.420 1.243.560

of which with a residual maturity of more than one year 71.017 53.377

Other assets 18.038 26.370

of which with a residual maturity of more than one year 2.450 1.519

1.670.602 1.318.875

The receivables from affiliated companies primarily concern receivables in connection with Group Treasury activities. Group Treasury uses a netting process to balance out any fund surpluses or deficits at subsidiaries through adidas AG and settle payments between subsidiaries. Receivables from affiliated companies include € 7,633 thousand in trade accounts receivable. € 1,853 thousand in other receivables from affiliated companies was written down.

Other assets include mainly VAT receivables from tax authorities, recognized option premiums, and accounts payable with debit balances.

6. Securities In € thousands 12/31/2009 12/31/2008

Other securities 3.825 3.675

All assets are earmarked for the purpose of serving as hedges against insolvency for partial and early retirement liabilities.

7. Cash and cash equivalents In € thousands 12/31/2009 12/31/2008

Cash-in-hand, bank balances and checks 232.078 1.593

8. Prepaid expenses In € thousands 12/31/2009 12/31/2008

Issue discount on convertible bond 0 75.964

Advertising and promotion agreements 16.678 21.057

Discount on promissory note loan 1.553 1.680

Other 30.093 26.963

48.324 125.664

€ 16,678 thousand of the prepaid expenses relates to accrued expenditures in connection with long-term advertising and promotion agreements with sports clubs and athletes. The discount on promissory note loans includes € 1,210 thousand as a discount and € 343 thousand as a capitalized commitment fee. Other prepaid expenses mainly comprise advance payments for advertising, insurance premiums and maintenance. Due to the early redemption and the associated conversion of the convertible bond, prepaid expenses for this item were no longer recognized as of the balance sheet date. The discount on the issue of the convertible bond was netted against the capital reserves at the time of the exercise of the conversion right (see note 9 "Subscribed capital/capital reserves").

9. Subscribed capital/capital reserves The share capital of adidas AG (“the company”) was € 193,515,512 as of 31 December 2008, allocated to 193,515,512 no-par value bearer shares ("shares") and was paid-in in full.

On October 5, 2009 the share capital was increased to a total of € 193,531,912, divided into 193,531,912 shares, as a result of the exercise of a total of 4,100 stock options in August 2009 and the issuance of 16,400 new shares as part of adidas AG's Management Share Option Plan (MSOP). The capital reserves increased by € 322,260 to € 830,358,985.

Additionally, on November 9, 2009, the share capital was increased to a total of € 209,216,186, divided into 209,216,186 shares, as a result of the exercise of all of the remaining 7,999 convertible bonds issued in 2003 by adidas International Finance B.V. (formerly adidas-Salomon International Finance B.V.) and guaranteed by adidas AG (formerly adidas-Salomon AG) and the issue of 15,684,274 new shares. The remaining € 69,549 thousand in prepaid expenses were reversed and netted against the capital reserves on the balance sheet. Taking into account the prepaid expenses netted against it, the capital reserve increased by € 314,716,075 to € 1,145,075,061.

As of the balance sheet date, the Company's share capital totaled € 209,216,186, divided into 209,216,186 shares. It is fully paid in.

The following table summarizes the changes in equity:

Changes in shareholders' equity

In € thousands

01/01/2009 Dividend MSOP Convertible Net profit 12/31/2009 bond for the year

Subscribed capital 193.516 16 15.684 209.216

Capital reserves 830.037 322 314.716 1.145.075

Revenue reserves 652.752 652.752

Net retained profits 237.409 -96.758 143.904 284.555

Equity 1.913.714 -96.758 338 330.400 143.904 2.291.598

The table below summarizes the increase in the capital reserves in connection with the exercise of conversion rights from 7,999 convertible bonds:

In € thousand

Volume 7,999 bonds at € 50,000 a piece 399.950

Prepaid expenses on the exercise date netted against capital reserves -69.549

Issue of new shares (thousands) -15.684

Cash compensation for fractional shares -1

Contribution to capital reserves 314.716

The change to the amount of the share capital resulting from the above transactions up through December 31, 2009 was entered into the commercial register on January 28, 2010.

No further changes were made to the share capital. On February 19, 2010, adidas AG's share capital thus amounted to € 209,216,186, divided into 209,216,186 shares.

Each share grants one vote and carries dividend rights from the year in which it is issued. Pursuant to § 71 b German Stock Corporation Act (Aktiengesetz, "AktG"), directly or indirectly held own shares do not carry dividend rights. As February 19, 2010, the Company held no treasury shares.

Authorized capital The Executive Board of adidas AG did not use the existing authorized capital totaling € 95,000,000 in the 2009 fiscal year or after the balance sheet date up to February 19, 2010. The following discussion of the existing authorized capital does not extend to include the revocation of Authorized Capital 2005/I and 2008 resolved by the Annual General Meeting on May 7, 2009, which also was not utilized up to May 7, 2009.

Pursuant to Article 4 paragraphs 2, 3, and 4 of the Articles of Association which, as of the balance sheet date governs the Company's authorized capital, the Executive Board is entitled, subject to Supervisory Board approval, to increase the share capital: until June 21, 2014 by issuing new shares against cash contributions, once or severally, by up to a maximum of € 50,000,000 and, subject to Supervisory Board approval, to exclude fractional shares from shareholders' subscription rights (Authorized Capital 2009/I); until June, 21 2012 by issuing new shares against contributions in kind, once or severally, up to a maximum of € 25,000,000 and, subject to Supervisory Board approval, to exclude shareholders' subscription rights (Authorized Capital 2009/II); until May 28, 2011 by issuing new shares against cash contributions, once or severally, by up to a maximum of € 20,000,000 and, subject to Supervisory Board approval, to exclude shareholders' subscription rights for fractional amounts and when issuing the new shares at an issue price that is not substantially below the market price of shares of the same class (Authorized Capital 2006). However, the authorization to exclude subscription rights pursuant to the previous sentence may only be used to the extent that the pro rata amount of the new shares in share capital, together with the pro rata amount of other shares in share capital issued by the Company since May 11, 2006, subject to the exclusion of subscription rights pursuant or analogous to § 186 (3) sentence 4 Stock Corporation Act (Aktiengesetz, "AktG") on the basis of authorized capital or following a repurchase, or for which conversion rights or warrants were granted since May 11, 2006 through the issuance of convertible bonds or bonds with warrants, with subscription rights excluded in correspondence with § 186 (3) sentence 4 AktG, does not exceed ten percent (10 %) of the share capital existing on the date this authorization was entered into the commercial register or as at the respective date on which the authorization is exercised if such amount is lower.

Contingent capital The following description of contingent capital relates to Article 4 (5), (6) and (7) of the Company's Articles of Association as well as the underlying resolution of the annual general meeting. There is no other contingent capital.

Contingent Capital 1999/I The Contingent Capital 1999/I was intended to fulfill stock options in connection with the Company's MSOP for members of adidas AG's Executive Board, members of executive bodies of affiliated companies, and other executives of adidas AG and of its affiliated companies.

Due to the issue of 16,400 shares as a result of the exercise of 4,100 stock options during the exercise periods ended in October 2009 for Tranche V (2003) of the Company's MSOP, the nominal amount of Contingent Capital 1999/I since October 5, 2009 and as of the balance sheet date was € 1,278,348 and was divided into 1,278,348 shares.

The corresponding adjustment to the amount of the Contingent Capital 1999/I was submitted for declaratory entry in the commercial register on January 28, 2010 and will be amended in the Articles of Association following the registration

All stock options under the Company's MSOP have either been exercised or have expired. No further Contingent Capital 1999/I has been utilized.

On February 19, 2010, the nominal amount of Contingent Capital 1999/I was therefore € 1,278,348, divided into 1,278,348 shares.

Contingent Capital 2003/II Contingent Capital 2003/II was intended to fulfill conversion rights arising from the convertible bonds issued in 2003 by adidas International Finance B.V. and guaranteed by adidas AG.

Following the issue of 15,684,274 new shares as a result of the exercise of the conversion rights on all 7,999 bonds remaining outstanding, Contingent Capital 2003/II amounted to € 20,313,766 as of the balance sheet date, divided into up to 20,313,766 shares (as of December 31, 2008: 35,998,040). There are no further subscription or conversion rights outstanding.

The corresponding adjustment to the amount of the Contingent Capital 2003/II resulting from the above transaction up to and including December 31, 2009 was submitted for declaratory entry in the commercial register on January 28, 2010 and will be amended in the Articles of Association following the registration.

No further Contingent Capital 2003/II had been utilized.

On February 19, 2010, the nominal amount of Contingent Capital 2003/II was therefore € 20,313,766, divided into 20,313,766 shares.

Contingent Capital 2006 As of the balance sheet date, the share capital is conditionally increased by up to an additional € 20,000,000, divided into up to 20,000,000 shares (Contingent Capital 2006). The contingent capital increase will be implemented only to the extent that the holders of options or conversion rights, or the persons obligated to exercise warrants or to convert due to bonds with warrants or convertible bonds, which are issued or guaranteed by the Company or a subordinate Group company pursuant to the authorization of the Executive Board by shareholder resolution dated May 11, 2006, exercise their warrants or conversion rights or, if they are obligated to exercise the warrant or conversion feature, such persons fulfill that obligation. The Executive Board is authorized, subject to Supervisory Board approval, to fully exclude the shareholders' subscription rights if the bonds with warrants and/or convertible bonds are issued at a price that is not significantly below the market value of such bonds. The limitation on subscription right exclusions of 10% of the share capital pursuant to § 186 (3) sentence 4 AktG in conjunction with § 221 (4) sentence 2 AktG must be observed.

The Executive Board of adidas AG has not issued any bonds with warrants, convertible bonds or shares from Contingent Capital 2006 in the 2009 fiscal year or after the balance sheet date up until February 19, 2010.

Acquisition of treasury shares At the Annual General Meeting on May 7, 2009, the shareholders of the Company revoked the May 8, 2008 authorization to acquire treasury shares which had been partially utilized in 2008 but not at all during the year under review. At the same time, the Annual General Meeting resolved a new Authorization for the Executive Board to acquire treasury shares of up to a total of 10% of the share capital by November 6, 2010. The authorization may be exercised by the Company, its Group companies or by a third party acting on their account.

The authorization was not exercised during the year under review or by February 19, 2010.

Convertible bond issue The 2.5% convertible bond issued on October 8, 2003 by adidas International Finance B.V. granting a right to convert to adidas AG shares and unconditionally and irrevocably guaranteed by adidas AG with a total principal amount of € 400,000,000 maturing on October 8, 2018, was called early on October 8, 2009, with effect from November 23, 2009. All conversion rights arising from the 7,999 remaining bonds outstanding were exercised by November 9, 2009. Upon completion of the conversion process, 15,684,274 new shares in the Company were issued on the basis of Contingent Capital 2003/II. Beginning in fiscal year 2009, the new shares carry dividend rights.

Notifications of voting rights Pursuant to § 160 (1) no. 8 AktG, existing shareholdings which have be notified to the Company in accordance with § 21 (1) or (1a) of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) need to be disclosed.

The Capital Research and Management Company, Los Angeles, USA, informed the Company by letter on January 5, 2009, pursuant to § 21 (1) sentence 1 WpHG, that on December 19, 2008, their voting interest in adidas AG had exceeded the threshold of 5% and amounted to 5.01% of the voting rights (9,695,127 shares) on this date. All of these voting rights are attributable to the Capital Research and Management Company in accordance with § 22 (1) sentence 1 no. 6 WpHG.

The Euro Pacific Growth Fund, Los Angeles, USA, informed the Company by letter on January 19, 2009, pursuant to § 21 (1) WpHG, that on January 13, 2009, their voting interest in adidas AG had exceeded the threshold of 3% and amounted to 3.11% of the voting rights (6,021,253 shares) on this date.

The Bank of New York Mellon Corporation, New York, USA, informed the Company by letter on February 3, 2009, pursuant to § 21 (1) sentence 1 WpHG, that on January 14, 2009, their voting interest in adidas AG had exceeded the threshold of 3% and amounted to 3.05% of the voting rights (5,901,424 shares) on this date. All of these voting rights are attributable to the Bank of New York Mellon Corporation in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The UBS AG, Zurich, Switzerland, informed the Company by letter on March 3, 2009, pursuant to § 21 (1) WpHG, that on February 25, 2009, their voting interest in adidas AG had exceeded the threshold of 3% and amounted to 3.37% of the voting rights (6,525,021 shares) on this date. 0.23% of these voting rights (442,894 shares) are attributable to UBS AG in accordance with § 22 (1) sentence 1 no. 1 WpHG.

The UBS AG, Zurich, Switzerland, informed the Company by letter on March 4, 2009, pursuant to § 21 (1) WpHG, that on February 26, 2009, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 1.04% of the voting rights (2,010,607 shares) on this date. 0.23% of these voting rights (442,832 shares) are attributable to UBS AG in accordance with § 22 (1) sentence 1 no. 1 WpHG.

The Fidelity International, Tadworth, Great Britain, informed the Company by letter on March 4, 2009 on and behalf of FMR LLC, Boston, USA, pursuant to § 21 (1) WpHG, that on February 26, 2009, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 2.95% of the voting rights (5,700,013 shares) on this date. All of these voting rights are attributable to the FMR LLC in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The Invesco Ltd, Hamilton, Bermudas, informed the Company by letter on March 27, 2009, pursuant to § 21 (1) WpHG, that on September 30, 2008, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 2.97% of the voting rights (5,894,813 shares) on this date. All of these voting rights are attributable to Invesco Ltd. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The Invesco Holdings Company Limited, London, Great Britain, informed the Company by letter on March 27, 2009, pursuant to § 21 (1) WpHG, that on September 30, 2008, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 2.97% of the voting rights (5,894,813 shares) on this date. All of these voting rights are attributable to Invesco Holdings Limited in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The IVZ Callco Inc., Halifax, Canada, informed the Company by letter on March 27, 2009, pursuant to § 21 (1) WpHG, that on September 30, 2008, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 2.97% of the voting rights (5,894,813 shares) on this date. All of these voting rights are attributable to IVZ Callco Inc. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The Invesco Inc., Toronto, Canada, informed the Company by letter on March 27, 2009, pursuant to § 21 (1) WpHG, that on September 30, 2008, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 2.97% of the voting rights (5,894,813 shares) on this date. All of these voting rights are attributable to Invesco Inc. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The Invesco Canada Holdings Inc. (formerly AIM Canada Holdings Inc.),Toronto, Canada, informed the Company by letter on March 27, 2009, pursuant to § 21 (1) WpHG, that on September 30, 2008, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 2.97% of the voting rights (5,894,813 shares) on this date. All of these voting rights are attributable to the Invesco Canada Holdings Inc. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The Invesco Trimark Ltd (formerly AIM Funds Management Inc.),Toronto, Canada, informed the Company by letter on March 27, 2009, pursuant to § 21 (1) WpHG, that on September 30, 2008, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 2.97% of the voting rights (5,894,813 shares) on this date. All of these voting rights are attributable to Invesco Trimark Inc. in accordance with § 22 (1) sentence 1 no. 6 WpHG.

The above-listed notifications of voting rights dated March 27, 2009 are the revisions of the notifications dated October 2, 2008, which had not been disclosed due to concerns of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) regarding formal requirements.

The UBS AG, Zurich, Switzerland, informed the Company by letter on April 21, 2009, pursuant to § 21 (1) WpHG, that on April 15, 2009, their voting interest in adidas AG had exceeded the threshold of 3% and amounted to 3.23% of the voting rights (6,248,659 shares) on this date. 0.39% of these voting rights (749,197 shares) are attributable to UBS AG in accordance with § 22 (1) sentence 1 no. 1 WpHG.

The UBS AG, Zurich, Switzerland, informed the Company by letter on April 23, 2009, pursuant to § 21 (1) WpHG, that on April 20, 2009, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 0.82% of the voting rights (1,580,086 shares) on this date. 0.39% of these voting rights (758,034 shares) are attributable to UBS AG in accordance with § 22 (1) sentence 1 no. 1 WpHG.

The Euro Pacific Growth Fund, Los Angeles, USA, informed the Company by letter on June 11, 2009, pursuant to § 21 (1) WpHG, that on June 8, 2009, their voting interest in adidas AG had exceeded the threshold of 5% and amounted to 5.01% of the voting rights (9,696,414 shares) on this date.

BlackRock Investment Management (UK) Limited, London, United Kingdom, informed the Company by letter on December 7, 2009 pursuant to § 21 (1) sentence 1 as well as § 24 WpHG that:

1) on December 1, 2009, the voting interest of BlackRock Financial Management, Inc., New York, USA, in adidas AG had exceeded the threshold of 3 % and amounted to 4.74 % of the voting rights (9,921,962 shares) on this date. All of these voting rights are attributable to BlackRock Financial Management, Inc. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

2) on December 1, 2009, the voting interest of BlackRock Holdco 2, Inc., New York, USA, in adidas AG had exceeded the threshold of 3 % and amounted to 4.74 % of the voting rights (9,921,962 shares) on this date. All of these voting rights are attributable to BlackRock Holdco 2, Inc. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

3) on December 1, 2009, the voting interest of BlackRock, Inc., New York, USA, in adidas AG had exceeded the threshold of 3 % and amounted to 4.93 % of the voting rights (10,308,916 shares) on this date. All of these voting rights are attributable to BlackRock, Inc. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

BlackRock Inc., New York, USA, informed the Company by letter on January 5, 2010 pursuant to § 21 (1) WpHG that on December 9, 2009, their voting interest in adidas AG had exceeded the threshold of 5% and amounted to 5.03 % of the voting rights (10,521,736 shares) on this date. All of these voting rights are attributable to BlackRock, Inc. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

BlackRock Inc., New York, USA, informed the Company by letter on January 28, 2010 pursuant to § 21 (1) WpHG that on January 25, 2010, their voting interest in adidas AG had fallen below the threshold of 5% and amounted to 4.99 % of the voting rights (10,458,560 shares) on this date. All of these voting rights are attributable to BlackRock, Inc. in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The Bank of New York Mellon Corporation, New York, USA, informed the Company by letter on February 5, 2010, pursuant to § 21 (1) sentence 1 WpHG, that on February 3, 2010, their voting interest in adidas AG had fallen below the threshold of 3% and amounted to 2.99 % of the voting rights (6,260,660 shares) on this date. All of these voting rights are attributable to The Bank of New York Mellon Corporation in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

The Bank of New York Mellon Corporation, New York, USA, informed the Company by letter on February 12, 2010, pursuant to § 21 (1) sentence 1 WpHG, that on February 9, 2010, their voting interest in adidas AG had exceeded the threshold of 3 % and amounted to 3.004 % of the voting rights (6,284,824 shares) on this date. All of these voting rights are attributable to The Bank of New York Mellon Corporation in accordance with § 22 (1) sentence 1 no. 6 in conjunction with § 22 (1) sentence 2 WpHG.

Equity participation plans All stock options under the Company's MSOP have either been exercised or have expired as of the balance sheet date. The Executive Board's authority to issue new shares from Contingent Capital 1999/I as part of the Company's MSOP has expired.

10. Net retained profits In € thousands

Net unappropriated profits as of 12/31/2008 237.409

Distribution of a dividend of € 0.50 per ordinary share with a nominal value of € 1 of the share capital for the 2008 fiscal year (198,117,937 ordinary shares) 96.758

Retained profits brought forward 140.651

Net income of adidas AG for the 2009 fiscal year 143.904

Net unappropriated profits as of 12/31/2009 284.555

11. Special tax-allowable reserves

The special reserve for adjustments of € 322 thousand established in 2003 in accordance with § 273 HGB and Section 35 Income Tax Regulations (Einkommensteuer-Richtlinien, "EStR") in connection with construction of the factory outlet was reversed as planned.

12. Provisions

In € thousands 12/31/2009 12/31/2008

Provisions for pensions and similar obligations 102.183 95.774

Provisions for taxes 22.452 8.265

Other provisions 115.180 131.201 239.815 235.240 adidas AG's pension provisions were determined using the present value under the German entry age normal method (Teilwertverfahren) pursuant to § 6a EStG based on actuarial calculations and applying a 6 % discount rate. The 2005 G mortality tables published in July 2005 by Prof. Klaus Heubeck were used for this purpose. There are no shortfalls.

After an appropriation to a pension fund in December 2006 for the entitlements of the current members of the Executive Board and two former members of the Executive Board, the pension provisions for pension commitments for the current board members are € 0. As a result of this adidas AG has an indirect obligation. Other payments recognized in profit or loss accrue to a pension trust fund to cover the pension entitlements of active members of the Executive Board. As of the balance sheet date, there are no shortfalls in the pension trust fund.

Pension provisions for pension commitments to former Executive Board members and their survivors total € 29.9 million (previous year: € 30.5 million). Former members of the Executive Board and their survivors received a total of € 2.2 million in retirement pay in fiscal year 2009.

The largest item in other provisions concerns provisions for personnel of € 52,330 thousand. This amount is primarily attributable to provisions for performance-based remuneration components. Further significant items in other provisions are provisions for outstanding invoices (€ 32,034 thousand) and provisions for marketing (€ 19,404 thousand).

The reduction in other provisions was due primarily to a reduction in provisions for unrealized losses on forward exchange transactions (by € 17,219 thousand).

13. Liabilities

In € thousands 12/31/2009 12/31/2008 Total Residual Residual Residual Prior term term term year up to 1 - 5 more than total 1 year years 5 years

Liabilities to banks 678.355 198.796 380.000 99.559 1.095.199 (previous year) (565.566) (378.130) (151.503)

Trade accounts payable 23.475 22.519 956 0 69.443 (previous year) (69.443)

Liabilities to affiliated companies 2.344.990 2.037.362 203.229 104.399 1.443.172 (previous year) (1.043.222) (399.950)

Other liabilities 32.867 31.027 1.074 766 206.158 (previous year) (204.067) (1.014) (1.077)

of which for taxes 3.347 4.715

of which relating to 1.022 1.616 social security

12/31/2009 3.079.687 2.289.704 585.259 204.724 2.813.972 12/31/2008 (1.882.298) (779.094) (152.580)

The liabilities are unsecured.

The liabilities to affiliated companies primarily concern liabilities from Group treasury activities. In 2009, adidas International Finance B.V. issued a five-year

Eurobond with a € 500,000 thousand face value, which it transferred to adidas AG. Trade payables to affiliated companies amounted to € 7,355 thousand. Other liabilities include leasing liabilities, tax and customs liabilities, liabilities relating to social security and similar obligations, accrued interest not yet payable, credit balances in accounts receivable, and wages, salaries and commissions payable.

14. Contingent liabilities and other financial commitments

Contingent liabilities In € thousands 12/31/2009 12/31/2008

Warranty obligations 1,945,886 2,235,799

of wich for affiliated companies - Bank (1,268,603) (1,470,888) loans - Letters of credit (108,550) (46,365) - Guarantee Agreement (568,733) (718,546)

The warranty obligations for bank loans of affiliated companies relate to the U.S. promissory note loans and a commercial paper program of adidas International B.V. Amsterdam, the Netherlands. adidas AG's letters of credit are mainly import letters of credit in connection with product purchases in the Far East. Most of the guarantee agreements are with adidas International Finance B.V., Amsterdam, the Netherlands, and secure a loan to an affiliated company.

Other financial commitments

Other financial commitments of € 616,306 thousand (previous year: € 534,697 thousand) for adidas AG include amounts for the entire foreseeable contractual period for promotion, advertising, rental and leasing agreements as of December 31, 2009. This includes commitments of € 30,317 thousand (previous year: € 29,434 thousand) to GEV Grundstücksgesellschaft Herzogenaurach mbH und Co. KG, a 90%-held subsidiary. Maturities In € thousands

In 2010 186.032 2011 - 2014 300.850 After 2014 129.424

616.306

The Group acquires approximately 80% of its products in Asia. Since a major portion of the product costs concerns raw materials that the suppliers have to acquire in USD, billings to the adidas Group are also made in USD. In contrast, sales by Group companies to customers are mainly in EUR, GBP, JPY, and in many other currencies. Currency hedging transactions are entered into in order to reduce currency risk. Most subsidiaries hedge their currency risks through adidas AG, except for those subsidiaries that are unable to hedge through adidas AG due to local currency conditions or where it is more sensible to hedge locally for economic reasons. Currency risks that are assumed by adidas AG from subsidiaries by entering into inter-Group currency transactions are strategically hedged with banks, normally for a period of between 12 and 24 months, using forward exchange transactions, currency swaps, currency options, or a combination of currency options, which provide protection and, at the same time, the opportunity to profit from future beneficial foreign exchange rate movements on financial markets. In some cases, longer-term transactions have been concluded in order to profit from the strong euro. In 2009, adidas AG purchased about USD 2.6 billion net to hedge its operating business.

Outstanding financial derivatives

In € millions 12/31/2009 12/31/2008

Nominal amount Currency hedging contracts 6.048 5.420 Interest hedging contracts 369 395 6.417 5.815

12/31/2009 12/31/2008 In € thousands Carrying Fair Carrying Fair amount value amount value Assets (Other assets)

Currency hedging contracts 5.755 49.016 4.818 114.413 Interest hedging contracts 0 2.902 0 7.505

Liabilities (Other liabilities) Currency hedging contracts -2.749 -38.323 -19.968 -104.990 Interest hedging contracts 0 -6.863 0 -6.886 3.006 6.732 -15.150 10.042

Notional amounts represent the gross total of all call and put contracts for derivative financial transactions. Fair values of forward exchange transactions are determined based on current ECB reference exchange rates, together with forward premiums or discounts. The fair values (gains and losses) of the currency hedging contracts are presented as net values.

Currency options are measured using market quotes or option pricing models (Garman-Kohlhagen model). The fair values of interest rate hedges are calculated using discounted expected future cash flows, using current market interest rates for the remaining terms of the financial instruments concerned.

The increase in the notional amounts for the currency hedging contracts is primarily a consequence of the longer-term hedging of future USD requirements. The notional amounts of outstanding financial derivatives in foreign currency are translated into euros at year-end closing rates. The fair value of the interest hedging contracts is reported using the clean price.

The carrying values are taken from the balance sheet.

15. Sales revenues adidas AG's business activities are primarily concentrated in one sector, specifically, the development, trading and marketing of sports and leisure articles.

In € thousands 2009 2008

Breakdown by product group

Shoes 283.997 304.620

Textiles 311.950 324.573

Sports equipment 42.620 48.445

638.567 677.638

Other sales revenues 25.806 27.590

Licensing and commission income 734.809 155.349

1.399.182 860.577

Of these revenues, € 573,053 thousand (previous year: € 584,393 thousand) were generated in Germany and € 826,147 thousand (previous year: € 276,184 thousand) outside Germany, mainly in Europe.

The increase in licensing revenues is attributable to the transfer of the brand management function from adidas International Marketing B.V., Amsterdam, the Netherlands, to adidas AG as of January 1, 2009 and the associated transfer of the global rights to adidas AG.

16. Other operating income

Other operating income mainly consists of foreign currency gains and cost transfers to affiliated companies. The € 56,198 thousand reduction was due primarily to the € 96,577 thousand reduction in cost transfers to affiliated companies and the € 31,114 thousand increase in exchange rate gains. The reduction in cost transfers is due primarily to the fact that following the transfer of the brand management function to adidas AG, expenses incurred in international marketing activities were no longer transferred to adidas International Marketing as in prior years.

Other operating income includes income relating to other periods of € 28,066 thousand, compared to € 17,367 thousand in the previous year. These consist primarily of income from insurance benefits (€ 12,794 thousand; previous year; € 375 thousand) and income from the reversal of provisions (€ 10,817 thousand; previous year; € 11,248 thousand).

17. Cost of materials

In € thousands 2009 2008

Cost of raw materials, consumables and supplies, and of purchased merchandise 427.981 441.078

18. Personnel expenses In € thousand 2009 2008

Wages and salaries 207.159 199.692

Social security, post-employment and other employee benefit costs 42.780 41.398 of which for old age pensions (12,524) (13,034)

249.939 241.090

The increase in personnel expenses was due to salary increases and higher numbers of personnel.

19. Amortization and write-downs of intangible fixed assets and depreciation and write-downs of tangible fixed assets

Amortization and write-downs of intangible assets amounted to € 33,285 thousand (previous year: € 15,487 thousand) related to brand rights transferred from adidas International Marketing B.V., Amsterdam, the Netherlands, and computer software and licenses. Depreciation and write-downs of tangible fixed assets of € 22,623 thousand (previous year: € 20,682 thousand) relates primarily to write-downs of € 9,000 thousand (previous year: € 7,893 thousand) on computer hardware and write-downs on buildings of € 6,023 thousand (previous year: € 5,468 thousand).

20. Other operating expenses

Other operating expenses essentially comprise cost transfers, currency exchange losses, advertising and promotional expenses, legal and consulting fees, services, travel expenses, rental and lease charges, postal and telephone expenses, and outgoing freight. The € 311,749 thousand increase in these expenses is due primarily to a € 338,350 thousand rise in cost transfers while expenses fell in nearly every other segment. The increase in costs transferred to adidas AG is due to the transfer of the international brand management function to adidas AG with effect from January 1, 2009. Since that date, affiliated companies have been providing services related to that function for adidas AG, invoicing the expenses incurred to adidas AG.

21. Income from long-term equity investments Income from long-term equity investments at adidas AG of € 72,151 thousand (previous year: € 105,748 thousand) essentially concerns dividend payments from subsidiaries in the Netherlands, Austria, Poland and Switzerland and thus consists entirely of equity income from affiliated companies.

22. Profits received/losses absorbed in accordance with a profit and loss transfer agreement.

A profit and loss transfer agreement exists with adidas Insurance & Risk Consultants GmbH, Herzogenaurach, as well as with adidas Beteiligungsgesellschaft mbH, Herzogenaurach.

23. Write-downs on long-term financial assets

In 2009, the Company took write-downs on € 3,958 thousand in loans to affiliated companies (previous year: € 0 thousand).

24. Net interest income (loss) In € thousands 2009 2008

Income from loans of long-term financial assets 1.040 2.550

of which from affiliated (1,040) (2,550) companies

Other interest and similar income 32.472 91.279

of which from affiliated companies (23,280) (72,903)

of which income from securities classified as current assets (78) (73)

Interest and similar expenses -101.027 -162.246

of which to affiliated companies (-30,246) (-58,883)

-67.515 -68.417

25. Taxes on income Taxes on income related primarily to withholding tax on licensing income, which rose considerably in connection with the transfer of the brand management function to adidas AG, as well as trade tax.

26. Other disclosures

2009 2008 No. of employees (annual average) Total Salaried Wage Total Salaried Wage

Europe Region 143 138 5 210 198 12

Headquarters Corporate 831 750 81 773 697 76 Services Marketing 768 768 0 617 617 0 Operations 531 505 26 481 456 25

Central Area 791 706 85 669 662 7

Uffenheim 198 48 150 199 46 153

Scheinfeld 219 69 150 218 65 153

3.481 3.167 (Closing date: December 31) 3.537 3.299

27. Remuneration of the Executive Board and the Supervisory Board

Remuneration of the Supervisory Board and the Executive Board of adidas AG

Executive Board Total remuneration of members of the Executive Board in the 2009 fiscal year was € 10,494 thousand (previous year: € 8,416 thousand). Please refer to the management report for disclosures pursuant to § 285 sentence 1 no. 9a sentence 5-9 HGB.

Pension commitments for former Executive Board members and their survivors totaled € 29,857 thousand.

Previous members of the Executive Board and their survivors received pension payments totaling € 2,188 thousand in the 2009 fiscal year.

Executive Board members did not receive any loans from the Company in fiscal 2009.

Supervisory Board The annual remuneration for members of the Supervisory Board in accordance with the Articles of Association was € 899 thousand.

No loans were granted to members of the Supervisory Board in fiscal 2009.

Recommendation on appropriation of the net unappropriated profits of adidas AG

The Executive Board of adidas AG recommends that the shareholders approve a dividend of € 0.35 per share for 2009.

It is therefore recommended that adidas AG's net unappropriated profits as of December 31, 2009 be appropriated as follows:

In € thousands

Net unappropriated profits as of 12/31/2009 284,555

Distribution of a dividend of € 0.35 per no-par value share on the nominal capital of € 209,216,186.00 entitled to dividends for the 2009 fiscal year (209,216,186 no-par value shares) 73,226

Amount carried forward 211,329

Declaration on the German Corporate Governance Code On February 11, 2010, the Executive Board and Supervisory Board of adidas AG issued an updated Declaration of Conformity in accordance with § 161 AktG and made it accessible to the shareholders on a permanent basis. The wording of the Declaration of Conformity may be found on the Company's website.

Disclosures pursuant to § 285 sentence 1 no. 10 HGB and § 285 no. 17 HGB

The disclosures pursuant to § 285 sentence 1 no. 10 HGB are contained in Appendix 2 to the notes to the financial statements.

In accordance with § 285 no. 17 HGB, the Company has opted not to include a disclosure of the total audit fee charged by the auditor in this report, since such disclosures are already contained in the consolidated financial statements of the adidas Group.

In its function as the ultimate parent, adidas AG, Herzogenaurach (Local Court of Fürth, HRB 3868), prepares consolidated financial statements, which are published on the electronic Federal Gazette.

Herzogenaurach, dated February 19, 2010 The Executive Board of adidas AG

37 adidas AG

Statement of changes in fixed assets

Cost

Balance on Reebok Balance on in € thousands (HGB) Jan. 1, 2009 ASL* Additions Reclassifications Disposals Dec. 31, 2009

Intangible assets

Industrial and similar rights and assets and licenses in such rights and assets 138.120 53 129.316 16.121 6.152 277.458

Prepayments and assets under construction 17.953 0 14.758 -16.121 0 16.590 156.073 53 144.074 0 6.152 294.048 Tangible assets Land, land rights and buildings including buildings on third-party land 117.583 0 7.360 12.980 2.154 135.769

Technical equipment and machinery 22.135 0 1.685 233 808 23.245

Other equipment, office and operating equipment 137.390 3.094 5.991 1.202 8.743 138.934

Prepayments and assets under construction 29.917 40 37.958 -14.415 27 53.473

307.025 3.134 52.994 0 11.732 351.421

Financial assets Shares in affiliated companies 3.322.788 0 6.554 0 0 3.329.342 Loans to affiliated companies 10.991 0 3.156 0 4 14.143 3.333.779 9.710 0 4 3.343.485

Total fixed assets 3.796.877 3.187 206.778 0 17.888 3.988.954

* Merger with Reebok Deutschland GmbH and ASL-American Sports and Leisure Vertriebs GmbH

38 Cumulative depreciation, amortization and write-downs

Carrying amount Depreciation, Reebok, ASL* Balance on Net book value Net book value amortization and Jan. 1, 2009 Dec. 31, 2009 Dec. 31, 2009 Dec. 31, 2008 write-downs for the year

35 127.906 149.552 39.616 33.285

0 0 16.590 17.953 0 35 127.906 166.142 57.569 33.285

0 52.202 83.567 70.668 6.023 0 13.701 9.544 9.090 1.463

2.055 114.179 24.755 31.707 15.137

0 0 53.473 29.917 0

2.055 180.082 171.339 141.382 22.623

0 27.955 3.301.387 3.294.834 0

0 9.925 4.218 4.256 3.958 0 37.880 3.305.605 3.299.090 3.958

2.090 345.868 3.643.086 3.498.041 59.866

Supervisory Board

Igor Landau, Paris, France Chairman1) Former CEO of Aventis S.A., Paris, France