Amadeus IT Holding, S.A. and Subsidiaries - Investor relations at ...

AMADEUS IT HOLDING, S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED
DECEMBER 31, 2011, AND 2010
(EXPRESSED IN THOUSANDS OF EUROS - KEUR)
i) For the purposes of the Impairment Test exercise, specific forecasts are
developed for each cash-generating unit, which imply performing a cost
allocation exercise for some cost items. These forecasts are developed from
the available financial budgets and financial projections approved by the
Group management. The forecast developed for each cash-generating unit
takes into account the market environment, market growth forecasts as well
as the Group’s market position.
ii) Based on the specific forecast developed, after tax cash-flow forecasts for
each cash-generating unit are calculated. The discount rates calculated are
also after tax.
iii) The present value is obtained, using specific discount rates that take into
account the appropriate risk adjustment factors.
Regarding the 2011 Impairment Test exercise, the forecasts considered have been
based on the Group’s 2011-2014 Long Term Plan (LTP). Unallocated costs have
been allocated between the two cash-generating units and additional forecasts have
been developed for 2015 and 2016. For both cash-generating units, the forecasted
gross revenues CAGR used for the 2011-2016 period are between 3.38% and
10.27%. In year 2010 Impairment Test exercise, the forecast gross revenue CAGR
used for the 2010-2015 period was between 3% and 10%.
Management believes that any reasonable deterioration of the key assumptions
considered, which are the basis to calculate the value in use, would not result in the
recoverable amount being lower than the aggregate carrying amount of goodwill.
For Distribution cash-generating unit the value in use exceeds the carrying amount of
Goodwill and assets allocated to the cash-generating unit in all the scenarios of the
sensitivity analysis performed, considering a growth rate to perpetuity in the range
between -1.0% and 2.5% (between -1.0% and 2.5% in year 2010), and with a
discount rate of 8.1% (8.5% in 2010) with different scenarios that go from 7.0% to
11.0%, in line with market consensus, and not resulting in any case of impairment.
For IT solutions cash-generating unit the value in use exceeds the carrying amount of
Goodwill and assets allocated to the cash-generating unit in all the scenarios of the
sensitivity analysis performed, considering a growth rate to perpetuity in the range
between 0% and 3.5% (between 0% and 3.5% in year 2010), and with a discount
rate of 8.1% (8.5% in 2010) with different scenarios that go from 7.5% to 10.5%, in
line with market consensus and not resulting in any case of impairment.
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