6 Goodwill
Goodwill, net of amortization, recorded in the balance sheet as of December 29, 2002 amounts to EUR 3,053. Of this
goodwill, net of amortization, EUR 485 relates to Ahold's retail trade segments and EUR 2,568 relates to Ahold's Food
service segments, which are discussed separately below.
The following table summarizes the changes in goodwill for Ahold's retail segments:
Retail trade
Stop Giant U.S. Albert Europe Latin Asia
Shop Landover Other Heijn Other America Pacific Total
As of January 2, 2000
Acquisitions
1
1,208
1,209
As of December 31, 2000
1
1,208
1,209
Acquisitions
198
6
51
126
381
Purchase accounting adjustments
75
75
Divestments
(4)
(4)
Amortization
(5)
(1)
(70)
(76)
Exchange rate differences
3
2
5
As of December 30, 2001
193
5
1,264
128
1,590
Acquisitions
6
14
237
2
259
Purchase accounting adjustments
15
46
25
29
115
Divestments
(1)
(1)
Amortization
(1)
(19)
(2)
(66)
(10)
(98)
Impairment charges
(128)
(882)
(269)
(2)
(1,281)
Exchange rate differences
(29)
(70)
(99)
As of December 29, 2002
14
69
17
340
45
485
In fiscal 2002, as a result of the general slow-down or negative economic growth in most regions in which Ahold operates
and the increasing competition in certain markets, Ahold's goodwill impairment tests resulted in the recognition of EUR
1,281 in impairment charges in the Company's retail trade reporting units. The Company recorded the following
impairment charges in 2002:
- Bruno's Supermarket's - acquired in December 2001, and part of the U.S. Other segment, recorded an impairment charge
of EUR 128. Bruno's Supermarkets operates in the Southeast U.S. During 2002, the economic environment changed as
one of Bruno's Supermarkets closest competitors introduced significant price cuts that were followed by other
competitors, creating one of the most competitive markets in this region. Competitive pricing strategies coupled with a
declining economic trend during the second half of 2002 resulted in deteriorating sales and profit margins. The effect of
these events indicated that Bruno's Supermarkets future operating performance would be severely affected. Accordingly,
the Company significantly revised its forecasts in the fourth quarter of 2002, which resulted in an impairment charge for
the full amount of goodwill that was recorded when the Company purchased Bruno's Supermarkets.
- AholdSupermercados Spain - part of the Europe Other segment, recorded an impairment charge of EUR 882. This
impairment was the result of lower than expected operating performance after the acquisition of Superdiplo, mainly
caused by a slow-down in the Spanish economy and lower than expected cost savings after the integration of Ahold's
businesses in Spain.
- DAIH - part of the Latin America segment, recorded an impairment charge, after Ahold acquired our partner's interest in
July and August 2002, of EUR 215. This impairment was recognized for Ahold's investment in its subsidiaries Disco
(which operates in Argentina) and Santa Isabel (which operates primarily in Chile, Paraguay and Peru), since the
economic crisis in Argentina and to a lesser extent Chile, resulted in a revised expectation of the future cash flows
of each reporting unit's operations.
- Bomprego and G. Barbosa (both operating in Brazil) - part of the Latin America segment, recorded an impairment charge of
EUR 54. This impairment was the result of lower than expected operating performance, which is mainly the result of the
devaluation of the Brazilian Real and a slow down in the Brazilian economy in 2002.
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