The table below provides a reconciliation of the non-GAAP measure of operating income before impairment and
amortization of goodwill and exceptional loss to the Dutch GAAP measure of operating income:
Fiscal 2002 Fiscal 2001 Fiscal 2000
(in eur millions) (restated) (restated)
Operating income
239
1,911
1,635
Goodwill and intangible asset amortization
433
256
50
Intangible asset amortization
(180)
(104)
(45)
Goodwill amortization
253
152
5
Impairment of goodwill and other intangible assets
1,287
8
Other intangible assets impairment
(6)
(8)
Goodwill impairment
1,281
Exceptional loss on related party default guarantee
372
Operating income before impairment and amortization of goodwill and exceptional loss
2,145
2,063
1,640
Operating income before impairment and amortization of goodwill and exceptional loss increased in fiscal 2002 compared
to fiscal 2001 as a result of strong operating performances at Stop Shop, Giant-Landover and Giant-Carlisle.
- Fiscal 2001
Our operating income increased to EUR 1.9 billion in fiscal 2001 from EUR 1.6 billion in fiscal 2000, an increase of
16.9%. Our operating income, as a percentage of net sales, was 3.5% in fiscal 2001, compared to 4.0% in fiscal 2000.
Operating income increased in fiscal 2001 primarily as a result of acquisitions and an increase in net sales and the
EUR 122 million gain on disposal of real estate, offset in part by the restructuring charges incurred in fiscal 2001, in
particular relating to the restructuring of USF in connection with the acquisition of Alliant. The increase in operating
income in fiscal 2001 was also affected by favorable currency exchange rates.
Net financial expense
- Fiscal 2002
Our net financial expense, which comprises net interest expenses, gains and losses on currency exchange transactions and
other financial income and expense, was EUR 1.0 billion in fiscal 2002 compared to EUR 707 million in fiscal 2001. As
a result of currency devaluation, we had a loss on foreign exchange in fiscal 2002 of EUR 50 million compared to a gain
on foreign exchange of EUR 108 million in fiscal 2001. The increase in net financial expense in fiscal 2002 was largely
due to devaluation of the Argentine Peso and inflation adjustment losses related to Argentina and an increase in interest
expense. Interest expense increased from EUR 921 million in fiscal 2001 to EUR 1.0 billion in fiscal 2002. The increase
in interest expense was primarily caused by the new debt assumed or incurred in connection with acquisitions and an
increase in cash dividends, as a result of fewer shareholders electing to receive their dividends in the form of common
shares compared to fiscal 2001.
- Fiscal 2001
Our net financial expense was EUR 707 million in fiscal 2001 compared to EUR 568 million in fiscal 2000. We had a
gain on foreign exchange in fiscal 2001 of EUR 108 million compared to a gain of EUR 39 million in fiscal 2000. Interest
expenses increased by EUR 222 million in fiscal 2001. Excluding the gain on foreign exchange, the increase in net
financial expense was largely due to the debt of PYA/Monarch and Superdiplo assumed as part of those acquisitions,
as well as interest expenses on debt incurred to finance acquisitions.
Income taxes
- Fiscal 2002
Our effective tax rate, calculated as a percentage of income (loss) before income taxes, was negative 50.8% in fiscal 2002
primarily as a result of non-tax-deductible goodwill amortization of EUR 179 million, goodwill impairment of EUR 1.3
billion, the exceptional loss on related party default guarantee of EUR 372 million and foreign exchange loss primarily
relating to the devaluation of the Argentine Peso. Our effective income tax rate in fiscal 2001 was 22.5%. The statutory
corporate income tax rates in The Netherlands for fiscal 2002 and fiscal 2001 were 34.5% and 35%, respectively.
In addition, our effective income tax rate was affected by the consolidation of Disco beginning in the second quarter of
fiscal 2002, the consolidation of Santa Isabel beginning in the third quarter of fiscal 2002 and the consolidation of
G. Barbosa beginning in the first quarter of fiscal 2002, as well as the continued consolidation of Bompreqo in fiscal 2002.
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