94
13 Intangible assets continued
14 Investments in joint ventures
Ahold is also a partner in various smaller joint ventures. Changes in investments in joint ventures are as follows:
Ahold
Annual Report 2011
Groupata glance
Performance
Governance
Investors
Notes to the consolidated financial statements continued
The carrying amounts of goodwill allocated to CGUs within Ahold's reportable segments are as follows:
million
January 1
2012
January 2,
2011
Reportable segment
Cash generating unit
Ahold USA
Stop Shop New England
12
7
Stop Shop New York Metro
23
5
Giant Carlisle
164
158
Peapod
20
19
The Netherlands
Albert Heijn
152
151
Etos
6
6
Gall Gall
1
1
Other Europe
Czech Republic
26
26
Ahold Group
404
373
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 was determined based on value-in-use calculations. Value-in-use was
determined using discounted cash flow projections that generally cover a period of five or ten years and are based on the financial plans
approved by the Company's management. The key assumptions for the value-in-use calculations are those regarding discount rates,
growth rates, and operating margins. The post-tax rates used to discount the projected cash flows reflect specific risks relating to relevant
CGUs and are 5.4 percent for Ahold USA, 5.7 percent for the Netherlands, and 7.8 percent for the Czech Republic. The growth rates and
operating margins used to estimate future performance are based on past performance and experience of growth rates and operating
margins achievable in Ahold's main markets. Growth rates used to extrapolate cash flows beyond the explicit forecast period are set such
that the return on invested capital never exceeds the weighted average cost of capital of the CGUs.
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 relate mainly to software development. "Other"1
mainly includes intangible assets related to location development rights, deed restrictions, and similar assets. Included in "Other" is an
intangible asset allocated to Stop Shop New England with an indefinite useful life and a carrying value of €26 million (2010: €26 million).
The useful life of this asset is assessed to be indefinite since it relates to the land portion of an owned location.
The additions to intangibles under development include capitalized borrowing costs of €3 million (2010: €3 million). The capitalization rate
used was the same as for property, plant and equipment (see Note 11).
Ahold owns 60 percent of the outstanding common shares of ICA AB (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.
Ahold has a 49 percent stake in JMR - Gestao de Empresas de Retalho, SGPS. S.A. (JMR). JMR operates food retail stores in Portugal
under the brand name Pingo Doce.
For condensed financial information on ICA and JMR, see Note 6.
million 2011 2010
Beginning of the year
1,072
1,066
Share in income of joint ventures
141
57
Dividend
(130)
(111)
Share of other comprehensive income (loss)
(3)
(60)
Other changes in equity of joint ventures
2
1
Exchange rate differences
5
119
End of the year
1,087
1,072
