24 Provisions (continued)
25 Other non-current liabilities
Ahold Annual Report 2012 118
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Notes to the consolidated
financial statements
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 December 30, 2012, included €94 million (January 1, 2012: €92 million) related to an adverse judgment
received in Stop Shop's legal proceedings against Vornado. For more information, see Note 34.
Restructuring
In 2012, Ahold recognized restructuring provisions of €1 million, mainly related to Ahold's U.S. 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. The balance of the provision as of December 30, 2012, consisted of €30 million related
to rent and closing costs for Ahold's former Tops stores and €14 million and €2 million for restructurings within Ahold's Czech and U.S. operations, respectively.
Onerous contracts
Onerous contract provisions mainly relate to unfavorable lease contracts and include the excess of the unavoidable costs of meeting the obligations under the contracts over the benefits
expected to be received under such contracts.
Other
Other provisions include asset retirement obligations, provisions for environmental risks and supplemental and severance payments, other than those resulting from restructurings.
December 30,
January 1,
million
2012
2012
Step rent accruals
211
187
Deferred income
26
29
Other
14
14
Total other non-current liabilities
251
230
Step rent accruals relate to the equalization of rent payments from lease contracts with scheduled fixed rent increases throughout the life of the contract.
Deferred income predominantly represents the non-current portions of deferred income on vendor allowances and deferred gains on sale and leaseback transactions.
