2 Factors affecting results of operations in fiscal 2002 and fiscal 2001
00 Ahold ANNUAL REPORT 2002 33
BOARD GOVERNANCE HIGHLIGHTS OPERATING REVIEW FINANCIAL INVESTOR REL AT IONS
Our results of operations for fiscal 2002 and fiscal 2001 were significantly affected by the acquisitions we made and new
joint ventures we formed in fiscal 2000 through fiscal 2002. In addition to our acquisitions and joint ventures, a number
of other factors affected our results of operations in fiscal 2002 and fiscal 2001, including economic and political factors,
as well as currency exchange rate fluctuations.
Acquisitions in fiscal 2002, fiscal 2001 and fiscal 2000
In fiscal 2002, fiscal 2001 and fiscal 2000, we completed several acquisitions and joint venture investments. Through
these acquisitions and joint ventures, we entered a number of new markets and expanded in existing markets. These
acquisitions and joint ventures significantly affected our results of operations. However, beginning in late fiscal 2002, we
have changed our focus from acquisitions to divestments of certain operations in an effort to focus on our core operations
in selected markets that fit within our new strategy.
In the second quarter of fiscal 2002, we began consolidating Disco in our financial statements as a result of directly
acquiring shares of Disco in consideration for capitalizing intercompany loans we had directly made to Disco.
During fiscal 2002, as a result of Velox Retail Holding's ("VRH's") default on certain indebtedness, on which we were
contingently liable, we were required in July 2002 to purchase substantially all of VRH's shares in DAIH and to take over
certain of VRH's indebtedness. For additional information about our acquisition of the DAIH shares, please see the
paragraph "Exceptional Loss on Related Party Default Guarantee" below and in Note 5 to our financial statements. In
addition, we completed the following individually insignificant acquisitions and joint venture investments that are material
in the aggregate for a total cost of EUR 380 million, which was paid primarily in cash and assumed debt: in the food retail
area, Jumbo Hypermarkets in Poland, PSP Group in Indonesia (in which we obtained the remaining 30% interest),
G. Barbosa and certain stores from Lusitana (acquired by Bompreqo) in Brazil, Santa Isabel in Chile (in which
we increased our direct and indirect ownership to 97%) and Disco in Argentina (in which we increased our ownership
to 99.6%) and, in the food service area, Allen Foods and certain assets of Lady Baltimore in the United States.
In fiscal 2001, we acquired Alliant, a food service company in the United States, and Bruno's, a food retail company in
the United States. In consideration for the Alliant acquisition, we paid a total of USD 1.5 billion (EUR 1.6 billion) in cash
and assumed USD 436 million (EUR 487 million) of debt. In consideration for the Bruno's acquisition, we paid a total of
USD 578 million (EUR 644 million), including assumed debt. We also acquired the following individually insignificant
entities, or an interest in them, that are material in the aggregate for a total cost of EUR 655 million, which was paid
primarily in cash and assumed debt: in the food retail area, DAIH (in which we increased our ownership to 55.9%),
Bompreqo in Brazil (in which we obtained the remaining preferred shares), Cemetro in Spain, certain Grand Union stores
in the United States and Peapod in the United States (in which we increased our interest to 100%) and, in the food
service area, Mutual and Parkway, both in the United States.
In fiscal 2000, we acquired USF and PYA/Monarch, both of which are food service companies in the United States,
Superdiplo, a food retail company in Spain, and obtained our interest in ICA, a food retail company headquartered in
Sweden. In consideration for the acquisitions of USF and PYA/Monarch, we paid a total of approximately USD 3.6 billion
and approximately USD 1.6 billion, respectively, which was paid primarily in cash and assumed debt. In the Superdiplo
acquisition, we exchanged approximately 37 million of our newly issued common shares for shares of Superdiplo,
representing 97.64% of the outstanding share capital of Superdiplo. In consideration for the joint venture investment in
ICA, we paid a total of approximately EUR 1.8 billion in cash. In fiscal 2000, we also acquired the following individually
insignificant entities, or an interest in them, that are material in the aggregate for a total of EUR 1.0 billion, which was
paid primarily in cash, assumed debt and our common shares: in the food retail area, Kampio in Spain, Ekono in Argentina,
Bompreqo in Brazil (in which we obtained the remaining voting shares), A&P in The Netherlands and Peapod and certain
assets of Streamline.com ("Streamline") in the United States and, in the food service area, MEA in Belgium. For a more
detailed discussion of our acquisitions in fiscal 2002, fiscal 2001 and fiscal 2000, please see Note 4 to our financial
statements.
Acquisitions in which we obtained 50% or greater voting interest have been accounted for by the purchase method of
accounting. The purchase price for the acquisitions has been allocated based on the estimated fair values of the assets
acquired and the liabilities assumed. As discussed in Note 2 to our financial statements, under Dutch GAAP, until
November 2000, any resulting goodwill was immediately charged to shareholders' equity in the year of acquisition. As of
December 1, 2000, goodwill is capitalized and amortized on a straight-line basis over a maximum period of 20 years. For
treatment of goodwill under US GAAP, please see Note 31 to our financial statements. Goodwill is, in general, only tax
