Vodafone 2015 Annual Report Download - page 122

Notes to the consolidated nancial statements (continued)
4. Impairment losses (continued)
Sensitivity analysis
Other than as disclosed below, management believes that no reasonably possible change in any of the above key assumptions would cause the
carrying value of any cash-generating unit to materially exceed its recoverable amount.
The estimated recoverable amounts of the Group’s operations in Germany, Italy and Spain exceed their carrying values by £2.2 billion, £1.3 billion
and £0.3 billion respectively.
Change required for carrying value to equal the recoverable amount
Germany Italy Spain
pps pps pps
Pre-tax risk adjusted discount rate 0.8 1.6 0.3
Long-term growth rate (0.9) (1.8) (0.3)
Budgeted EBITDA1(7.3) (7.5) (2.6)
Budgeted capital expenditure22.1 2.9 0.7
Notes:
1 Budgeted EBITDA is expressed as the compound annual growth rates in the initial ve years for all cash-generating units of the plans used for impairment testing.
2 Budgeted capital expenditure, which excludes licences and spectrum, is expressed as a percentage of revenue in the initial ve years for all cash-generating units of the plans used for
impairment testing.
Year ended 31 March 2014
During the year ended 31 March 2014 impairment charges of £4,900 million, £800 million, £500 million, £200 million and £200 million were
recorded in respect of the Group’s investments in Germany, Spain, Portugal, Czech Republic and Romania respectively. The impairment charges
relate solely to goodwill. The recoverable amounts of Germany, Spain, Portugal, Czech Republic and Romania were £23.0 billion, £3.3 billion,
£1.3 billion, £0.6 billion and £1.2 billion respectively.
The impairment charges were driven by lower projected cash ows within the business plans resulting in our reassessment of expected future
business performance in the light of current trading and economic conditions.
The table below shows key assumptions used in the value in use calculations.
Assumptions used in value in use calculation
Germany Italy Spain Portugal Czech Republic Romania Greece
% % % % % % %
Pre-tax risk adjusted discount rate 7.7 10.5 9.9 11.1 8.0 11.0 24.3
Long-term growth rate 0.5 1.0 1.9 1.5 0.8 1.0 1.0
Budgeted EBITDA12.8 (2.2) (0.7) (0.8) (0.6) 1.7 4.7
Budgeted capital expenditure212.5–21.7 11.1–25.5 9.0–23.5 11.0 –28. 3 15.9–21.2 10.5–17.3 7.6 –12.2
Notes:
1 Budgeted EBITDA is expressed as the compound annual growth rates in the initial ve years for all cash-generating units of the plans used for impairment testing.
2 Budgeted capital expenditure, which excludes licences and spectrum, is expressed as the range of capital expenditure as a percentage of revenue in the initial ve years for all cash-generating
units of the plans used for impairment testing.
Vodafone Group Plc
Annual Report 2015
120