O
Notes to the consolidated financial statements
13 Intangible assets continued
Etos 4 3
14 Investments in joint ventures
-
Financial statements
AHOLD ANNUAL REPORT 2008 70
Goodwill recognized upon acquisitions in 2008 and 2007 relates mainly to acquisitions of individual stores at Giant-Carlisle,
Albert Heijn and Schuitema.
Goodwill acquired in business combinations is allocated, at acquisition, to the cash generating units ("CGUs") or groups of CGUs
expected to benefit from that business combination. The carrying amounts of goodwill allocated to CGUs within Ahold's segments
are as follows:
December 28, December 30,
million 2008 2007
Segment CGU
Stop Shop/Giant-Landover Peapod 18 18
Giant-Carlisle Giant-Carlisle 57 51
Albert Heijn Albert Heijn 146 142
Gall Gall 1
Albert/Hypernova Czech Republic 25 25
Schuitema Schuitema - 13
Ahold Group 251 252
CGUs to which goodwill has been allocated are tested for impairment annually or more frequently if there are indications that a
particular CGU might be impaired. The recoverable amount of each CGU is determined based on value-in-use or fair value less costs
to sell calculations. Value-in-use calculations use cash flow projections generally covering a maximum period of five years that are
based on three-year financial budgets approved by Company management. Cash flows beyond this three-year period are extrapolated
using estimated growth rates that do not exceed the long-term average growth rate for the retail trade business in which the CGU
operates and are consistent with forecasts included in industry reports. The rates used to discount the projected cash flows reflect
specific risks relating to relevant CGUs and are 7.6 percent for the United States, 7.3 percent for the Netherlands, and 8.7 percent
for the Czech Republic.
Lease-related intangible assets consist primarily of favorable operating lease contracts acquired in business acquisitions. Customer
relationships consist primarily of pharmacy scripts. Intangible assets under development relates mainly to software development.
"Other" mainly includes intangible assets related to location development rights, deed restrictions and similar assets.
Ahold owns 60 percent of the outstanding common shares of ICA, a food retailer operating in Sweden, Norway and the Baltic
states. The 60 percent shareholding does not entitle Ahold to unilateral decision-making authority over ICA due to the shareholders
agreement with the joint venture partner, which provides that strategic, financial and operational decisions will be made only on
the basis of mutual consent. On the basis of this shareholders agreement, the Company concluded that it has no control over ICA
and, consequently, does not consolidate ICA's financial statements. For condensed financial information on ICA, see Note 6.
Ahold also has a 49 percent stake in JMR, which is classified as held for sale and discontinued operation (see Note 5),
and is a partner in various smaller joint ventures. Changes in investments in joint ventures are as follows:
million
2008
2007
Beginning of the year
869
799
Investments and increases in existing shareholdings
6
1
Share in income of joint ventures
109
138
Dividend
(70)
(66)
Classified as held for sale or sold
(4)
(2)
Exchange rate differences
(109)
(1)
Other changes
1
End of the year
802
869
Effective January 1, 2009, the tax legislation in Sweden concerning intercompany loans has been changed. ICA estimates that
this will result in approximately SEK 300 million (EUR 27 million) higher income tax charges annually for the ICA Group.
www.ahold.com/reports2008
