o www.ahold.com/reports2009
Notes to the consolidated financial statements
24 Provisions
-
-
-
-
Financials
The table below specifies the changes in total provisions (current and
non-current):
million
Self-
insurance
program
Loyalty
programs
Claims
and legal
disputes
Restructuring
Onerous
contracts
Other
Total
As of December 28, 2008
Current portion
126
12
9
16
4
3
170
Non-current portion
292
40
11
32
33
34
442
Carrying amount
418
52
20
48
37
37
612
Year ended January 3, 2010
Additions charged to income
116
20
25
25
126
11
323
Used during the year
(87)
(15)
(8)
(15)
(13)
(7)
(145)
Released to income
(32)
(13)
(3)
(8)
(4)
(3)
(63)
Interest accretion
8
3
2
9
1
23
Exchange rate differences
(8)
3
(1)
(8)
(14)
Closing carrying amount
415
47
37
51
147
39
736
As of January 3, 2010
Current portion
91
9
24
15
9
4
152
Non-current portion
324
38
13
36
138
35
584
Maturities of total provisions as of January 3, 2010 are as follows:
million
Self-
insurance
program
Loyalty
programs
Claims
and legal
disputes
Restructuring
Onerous
contracts
Other
Total
Amount due within one year
91
9
24
15
9
4
152
Amount due between two and five years
205
35
13
15
98
5
371
Amount due after five years
119
3
21
40
30
213
Total
415
47
37
51
147
39
736
Self-insurance program
Ahold is self-insured for certain potential losses, mainly relating to general liability, commercial vehicle liability, workers' compensation and
property losses relating to its subsidiaries. The maximum self-insurance retention per occurrence, including defense costs, is $2 million
(€1 million) for general liability, $5 million (€4 million) for commercial vehicle liability, $5 million (€4 million) for workers' compensation
and $5 million (€4 million) for property losses.
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.
Loyalty programs
This provision relates to a third-party customer loyalty program in the Netherlands and reflects the estimated cost of benefits to which
customers are entitled when they participate in the loyalty program.
Claims and legal disputes
The Company is a party to a number of legal proceedings arising out of its business operations. Such legal proceedings are subject
to inherent uncertainties. Management, supported by internal and external legal counsel, where appropriate, 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.
Restructuring
In 2009, Ahold recognized restructuring provisions of €25 million, mainly related to Ahold's Czech operations. The provisions are based
on formal and approved plans using the best information available at the time. The amounts that are ultimately incurred may change as
the plans are executed.
Ahold Annual Report 2009 93
