Notes to the consolidated financial statements
117
24 Provisions
Self-insurance program
Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2015
The table below specifies the changes in total provisions (current and non-current):
millior
Self-
insurance
program
Loyalty
programs
Claims
and legal
disputes
Severance
and termination
benefits1
Onerous
contracts1
Other1
Total
As of December 28, 2014
Current portion
151
14
1
21
48
5
240
Non-current portion
452
28
3
6
124
50
663
Carrying amount
603
42
4
27
172
55
903
Year ended January 3, 2016
Additions charged to income
149
17
8
48
8
3
233
Acquisitions through business combinations
61
61
Used during the year
(150)
(20)
(1)
(44)
(46)
(3)
(264)
Released to income
(9)
(2)
(2)
(13)
(11)
(37)
Interest accretion
9
1
3
1
14
Effect of changes in discount rates
(4)
(4)
Other movements
(5)
(5)
Exchange rate differences
74
13
3
90
Closing carrying amount
672
38
11
29
193
48
991
As of January 3, 2016
Current portion
172
14
9
26
35
4
260
Non-current portion
500
24
2
3
158
44
731
1 Balances for the prior year have been adjusted to align with the current year classification.
Maturities of total provisions as of January 3, 2016, are as follows:
million
Self-
insurance
program
Loyalty
programs
Claims
and legal
disputes
Severance
and termination
benefts
Onerous
contracts
Other
Total
Amount due within one year
172
14
9
26
35
4
260
Amount due between one and five years
338
24
1
2
89
11
465
Amount due after five years
162
1
1
69
33
266
Total 672 38 11 29 193 48 991
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 (€2 million) for general liability, $5 million (€5 million) for commercial vehicle liability, $5 million (€5 million) for workers' compensation, and $175 million (€16 million) for property losses.
Ahold purchased a stop-loss coverage of $50 million (€46 million) for property losses to limit the aggregate exposure for named windstorms through June 1, 2016. A portion of this risk is reinsured to third parties, see Note 15.
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.
