Note 25
-
-
-
-
-
-
-
-
Financial statements - Notes to the consolidated financial statements
On the basis of the financial statements of the plans in which the Company participates in the United States, the total
unfunded liability of the plans with a deficit amounts to EUR 18,890 as of January 1, 2005 (the latest available year of reliable
information). During 2005, these plans received approximately EUR 2,616 in total contributions, of which approximately
EUR 59 was for current or former employees of Ahold. Based upon the relative amount of contributions for current active
Ahold employees entitled to benefits provided by these plans in relation to the total amount of contributions for all active
employees entitled to such benefits, the proportionate share of the total unfunded liability of these plans relevant to Ahold
would be EUR 614. The unfunded liabilities of these plans may result in increased future payments by the Company and the
other participating employers.
The Company contributed EUR 334, EUR 356 and EUR 345 to multi-employer union as well as other defined contribution
plans during 2006, 2005 and 2004, respectively, which are recognized as an expense in the consolidated statements of
operations. The 2005 and 2004 contributions reflect a correction to include certain multi-employer contributions that were
omitted in prior year's disclosure.
25 Provisions
The table below specifies the changes in total provisions (current and non-current):
Claims
Self
and legal
insurance
Loyalty
Onerous
disputes
program
programs Restructuring
contracts
Other
Total
Current portion
969
190
14
34
14
9
1,230
Non-current portion
12
364
46
23
38
53
536
Carrying amount as of January 1, 2006
981
554
60
57
52
62
1,766
Additions charged to income
23
295
23
75
15
26
457
Used during the year
(908)
(279)
(17)
(35)
(26)
(17)
(1,282)
Released to income
(12)
(2)
(10)
(9)
(8)
(4)
(45)
Interest accretion
10
24
2
1
37
Classified as held for sale
(2)
(2)
Exchange rate differences
(48)
(59)
(5)
(5)
(4)
(121)
Carrying amount as of December 31, 2006
46
533
58
83
29
61
810
Current portion
40
165
13
43
12
14
287
Non-current portion
6
368
45
40
17
47
523
Maturities of total provisions as of December 31, 2006 are as follows:
Claims
Self-
and legal
insurance
Loyalty
Onerous
disputes
program
programs Restructuring
contracts
Other
Total
Amount due within one year 40
Amount due between two and five years 4
Amount due after five years 2
Total 46
165 13 43 12 14 287
273 45 8 8 7 345
95 - 32 9 40 178
533 58 83 29 61 810
Claims and legal disputes
The Company is party to a number of legal proceedings
arising out of business operations. Such legal proceedings
are subject to inherent uncertainties. Management, where
appropriate supported by internal and external legal
counsels, determines whether it is more likely than not that
an outflow of resources will be required to settle an
obligation. If this is the case, the best estimate of the outflow
of resources is recognized.
The amount used during the year relates primarily to the
settlement of the Securities Class Action. For more
information, see Notes 30 and 34.
Self-insurance program
Ahold is self-insured for certain potential losses, mainly
relating to general liability, commercial vehicle liability and
workers' compensation relating to its U.S. subsidiaries.
The maximum self-insurance retention per occurrence,
including defense costs, is USD 2 (EUR 2) for general
liability, USD 5 (EUR 4) for commercial vehicle liability and
USD 5 (EUR 4) for workers' compensation.
Measurement of the provision for the self-insurance
program requires significant estimates. These estimates and
assumptions include an estimate of claims incurred but not
yet reported, historical loss experience, projected loss
development factors, estimated changes in claims reporting
patterns, claim settlement patterns, judicial decisions
and legislation.
98 Ahold Annual Report 2006
