108
24 Provisions
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Ahold
Annual Report 2011
Groupata glance
Performance
Governance
Investors
Notes to the consolidated financial statements continued
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 January 2, 2011
Current portion
78
10
13
23
24
4
152
Non-current portion
380
41
33
44
79
46
623
Carrying amount
458
51
46
67
103
50
775
Year ended January 1, 2012
Additions charged to income
107
17
113
11
11
8
267
Used during the year
(96)
(18)
(15)
(25)
(14)
(3)
(171)
Released to income
(2)
(6)
(3)
(5)
(1)
(17)
Interest accretion
5
2
1
4
6
1
19
Effect of changes in discount rates
13
1
1
3
18
Exchange rate differences
19
4
3
26
Closing carrying amount
506
51
144
54
107
55
917
As of January 1, 2012
Current portion 102 12 103 13 18 5 253
Non-current portion 404 39 41 41 89 50 664
Maturities of total provisions as of January 1, 2012, are as follows:
Self- Claims
insurance
Loyalty
and legal
Onerous
million
program
programs
disputes
Restructuring
contracts
Other
Total
Amount due within one year
102
12
103
13
18
5
253
Amount due between two and five years
243
39
20
21
54
14
391
Amount due after five years
161
21
20
35
36
273
Total
506
51
144
54
107
55
917
Self-insurance program
Ahold is self-insured for certain potential losses, mainly relating to general liability, 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 $8 million
(€6 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 claim
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 participating in the loyalty program are entitled.
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. The balance of the provision as of January 1, 2012, included €92 million related to an adverse judgment received
in Stop Shop's legal proceedings against Vornado. For more information, see Note 34.
