31
Ahold Annual Report 2003
Financial Statements
175
In 2003, under Dutch GAAP, the Company recognized goodwill impairment losses of EUR 45 and impairment
losses on other intangible assets of EUR 27. The Company recognized additional impairment losses under US GAAP
related to goodwill and other intangible assets of EUR 57 and EUR 9, respectively, in connection with the annual
impairment test required by SFAS No. 142. The additional impairment losses on goodwill related to impairment
charges at Deli XL of EUR 71 for which no goodwill was capitalized under Dutch GAAP, offset by a lower impairment
charge of EUR 14 under US GAAP as compared to Dutch GAAP related to South America. The Deli XL impairment
resulted primarily from downward revisions of expected future cash flows. The goodwill of G. Barbosa is fully written
off under US GAAP. Additional impairment losses on other intangibles relate to an impairment of the customer lists
of U.S. Foodservice of EUR 9.
In 2002, under Dutch GAAP, the Company recognized goodwill impairment losses of EUR 1,281, and
impairment losses on other intangible assets of EUR 6. Under US GAAP, additional goodwill impairment losses were
recognized of EUR 3,228, including a transitional impairment loss of EUR 2,499, net of income tax benefit of EUR
257 as explained below. Additional impairment losses for other intangible assets of EUR 22, including a transitional
impairment loss of EUR 6 for brand names and EUR 16 relating to impairment losses on other intangible assets
were recognized.
The Company recognized under US GAAP a transitional goodwill impairment loss of EUR 2,499, net of income
tax benefit of EUR 257, upon adoption of SFAS No. 142, related to certain consolidated subsidiaries as a cumulative
effect of a change in accounting principle. The transitional goodwill impairment loss relates to goodwill that was not
capitalized under Dutch GAAP and was comprised of the following:
Impairment losses amounting to EUR 136 related to one of its reporting units within the "Retail - Europe
Other" reportable segment. The impairment loss relates principally to operations in Spain.
Impairment losses amounting to EUR 331 related to one of its reporting units within the "Retail - South
America" reportable segment. The impairment loss relates principally to operations in Brazil.
Impairment losses amounting to EUR 180 related to several of its reporting units within the "Retail - Asia
Pacific" reportable segment. The impairment loss relates principally to operations in Malaysia of EUR 29 and
Thailand of EUR 150.
Impairment losses amounting to EUR 1,846, net of income tax benefit of EUR 257, related to USF, mainly as a
result of accounting irregularities which had caused significant reduction in estimated future profitability in 2002.
The Company recognized a transitional impairment loss of EUR 6 related to Peapod Inc.'s brand name, which is
included within the "Retail - U.S. Other" reportable segment.
In addition to transitional impairment losses and impairment losses recorded under Dutch GAAP, the Company
recognized additional impairment losses under US GAAP related to goodwill and other intangible assets amounting
to EUR 735 and EUR 16, respectively, during 2002 in connection with the annual impairment test required by SFAS
No. 142, primarily consisting of the following:
Impairment losses amounting to EUR 529 related to USF. This goodwill impairment relates to goodwill that was
not capitalized under Dutch GAAP. The impairment resulted from a reassessment of the previously performed
impairment test, taking into account the accounting irregularities discussed above and the resulting revisions to
the estimated future profitability of USF.
Impairment losses amounting to EUR 50 related to several of its reporting units within the "Retail - U.S. Other"
reportable segment. The impairment loss related to Peapod Inc. and Bruno's Supermarkets, in an amount of
EUR 43 and EUR 7, respectively. Peapod Inc. is an on-line grocer, and during 2002 the impairment was
recognized as a result of revised expectations of the future cash flows of Peapod's operations, due to lower
expected growth of the Company's internet grocery sales. The impairment related to goodwill that was not
capitalized under Dutch GAAP. The additional impairment charge recognized for Bruno's under US GAAP is
the result of the higher carrying value of the goodwill under US GAAP as compared to Dutch GAAP.
Additional goodwill impairment losses amounting to EUR 115 related to part of the "Retail - Europe Other"
reportable segment were the result of a higher carrying value of goodwill under US GAAP as compared to
Dutch GAAP. As described in Note 12, the impairment was recorded as a result of lower than expected
operating performance after the acquisition of Superdiplo in December 2000, which is mainly the result of a
slow-down of the Spanish economy since the acquisition and lower than expected cost savings from the
integration of Ahold's businesses in Spain.
Impairment losses amounting to EUR 41 related to several of its reporting units within the "Retail - South
America" reportable segment was the result of an impairment of goodwill that was not capitalized under Dutch
GAAP relating to Bompreqo and a difference in the carrying value of goodwill in Ahold's operations in Argentina
and Chile. As discussed in Note 12, the total impairment losses resulted principally from downward revisions to
expected future cash flows resulting from an economic downturn in Argentina, Brazil and Chile.
The Company recognized additional impairment losses under US GAAP amounting to EUR 16 related to
impairment of other intangible assets, relating to its "Retail - Other Europe" reportable segment.
As a result of the aforementioned Dutch GAAP and additional US GAAP impairments, total goodwill impairment
