(NLG 149 million) and the exercise of stock options (NLG 29 mil
lion). Conversely, goodwill paid on acquisitions (NLG 320 million),
together with exchange differences (NLG 114 million), were charged
to stockholders' equity.
Capital accounts totaled NLG 2.7 billion (1994:
NLG 2.7 billion), equivalent to 29.4% of the balance sheet total
(1994: 31.1%). Interest-bearing debt increased from NLG 2,851
million in 1994 to NLG 2,968 million.
The ratio of interest-bearing debt, net of cash, to stock
holders' equity (net gearing), increased from 102% to 106%.
The ratio of current assets to current liabilities (current ratio) was
0.82 (1994: 0.94). Of the NLG 524 million total cash balance,
NLG 300 million is considered as committed to daily operations.
Acquisitions made in 1995 were all financed from available funds
on hand, and through new credit facilities established specifically
for this purpose.
At the time of the Mayfair acquisition, a public offering was
made for all of the $75 million worth ofMayfair's 11.75% bonds
maturing 1993/2003 then outstanding. The offer was accepted by
99.7% of the bond holders.
Ahold Real Estate-US refinanced a portion of its short-
term debt through private placements with American institutional
investors. These private loans totaled $58.0 million, with an average
term of eleven years. The effective interest rate was 7.9%
Short-term guilder interest rates fluctuated considerably in
the course of the year. The downward trend in short-term rates had
a mildly positive effect on interest expense calculated in guilders.
Through interest rate options, Ahold hedged a portion of its
exposure against guilder interest rate hikes. Interest on Ahold's
US dollar loan portfolio was by and large stable.
Exchange rate fluctuations, particularly between the dollar and
the guilder, are reflected in Ahold's consolidated statements. In
determining earnings, a quarterly average rate of exchange is used.
For the entire year, the average dollar rate was NLG 1.61, as op
posed to NLG 1.82 in 1994. This differential decreased reported
consolidated net earnings by approximately NLG 23 million.
The balance sheet reflects the exchange rate prevailing as of
the balance sheet date. At year end, this was NLG 1.60 (NLG 1.74
in 1994). This exchange-rate differential resulted in an amount of j 1
NLG 114 million being charged to stockholders' equity. A schedule
of exchange rates used in 1995 and 1994 is given on page 42.
A better insight, free of the distortions of exchange rate
differences, comes from separate analysis of the activities conducted j j
in guilders and those conducted in dollars.
Stockholders' equity denominated in guilders decreased
from NLG 897 million in 1994 to NLG 864 million. Net earnings
from activities conducted in guilders totaled NLG 222 million, m
against NLG 205 million in 1994.
Stockholders' equity denominated in dollars amounted to
$885 million at year end 1995, against $817 million in 1994. Net
earnings from activities conducted in dollars rose from $96 million
to $119 million.
Stockholders' equity as a
of assets
Hill
1991 1992 1993 1994 1995
■i Group equity
■i Capital accounts
Financing
Net gearing
1991 1992 1993 1994 1995
■i Incl. capital leases
hi Excl. capital leoses
f
'Theater' is the key theme for product presentation of the newjamin format.
Impact of currency fluctuations
Annual Report 1995 Royal Ahold 25
