00 Ahold ANNUAL REPORT 2002 43
BOARD GOVERNANCE HIGHLIGHTS OPERATING REVIEW FINANCIAL INVESTOR REL AT IONS
These entities had substantial losses before tax in fiscal 2002 for which no loss carry forward was recorded because it was
not deemed probable that these entities would generate sufficient income in the future against which such a loss carry
forward could be applied. As a result, such losses reduced the total amount of income before income tax, but not the
amount of income taxes. Our effective income tax rate in fiscal 2002 was reduced in part due to intercompany finance
activities, but this impact in fiscal 2002 was smaller than in fiscal 2001 because of unfavorable currency exchange rate
changes between the Euro and the US dollar during fiscal 2002.
- Fiscal 2001
Our effective income tax rate was 22.5% in fiscal 2001 and 21.9% in fiscal 2000. The statutory corporate income tax
rate in The Netherlands for fiscal 2001 and fiscal 2000 was 35% in both years. Our effective tax rate in fiscal 2001 was
lower than the statutory rate primarily because of our intercompany finance activities. In addition, our effective income tax
rate in fiscal 2001 was further reduced by the release of tax provisions.
Share in income (loss) of joint ventures and equity investees
The following table sets forth our share in income (loss) of joint ventures and equity investees:
Fiscal 2002
Fiscal 2001
Fiscal 2000
(Euro millions, except percentages)
(restated)
(restated)
ICA, Scandinavia
61
64
48
JMR, Portugal
35
30
20
Paiz Ahold, Latin America
10
13
13
DAIH, Latin America
(126)
(296)
(5)
Others
(18)
(3)
2
Total share in income (loss) of joint ventures and equity investees
(38)
(192)
78
- Fiscal 2002
Our loss from unconsolidated joint ventures and equity investees was EUR 38 million in fiscal 2002 compared to EUR 192
million in fiscal 2001. These losses were caused by losses at DAIH in fiscal 2002 and fiscal 2001 reflecting the losses
incurred at Disco and Santa Isabel and, to a lesser extent, losses at Luis Paez included under "Others" in the table above.
These losses were partly offset by income from ICA, JMR and Paiz Ahold in such years. The negative impact of DAIH in
fiscal 2002 was less than in fiscal 2001 because DAIH was consolidated beginning in the third quarter of fiscal 2002
and, after that time, DAIH's loss is no longer included in our loss from our unconsolidated joint ventures and equity
investees. In addition, Disco's loss in fiscal 2002 was offset in part by a change in Argentine law that redenominated
certain debts of Argentine companies from US dollar-denominated debt to Argentine Peso-denominated debt.
- Fiscal 2001
Our loss from unconsolidated joint ventures and equity investees was EUR 192 million in fiscal 2001 compared to income
of EUR 78 million in fiscal 2000. The loss in fiscal 2001 was caused by a loss at DAIH, which was partly offset by income
from ICA, JMR and Paiz Ahold. The loss at DAIH in fiscal 2001 was caused by a loss at Disco, which was largely a result
of the devaluation of the Argentine Peso.
Net income (loss)
- Fiscal 2002
Our net loss in fiscal 2002 was EUR 1.2 billion, compared to net income of EUR 750 million in fiscal 2001. The
significant decrease in net income in fiscal 2002 was primarily due to impairment charges of EUR 1.4 billion relating to
goodwill and other intangible assets and to other long-lived assets primarily in Spain, the United States and Latin America,
along with an exceptional loss of EUR 372 million relating to the default by VRH on debt that we had guaranteed. Higher
financial expenses also contributed to our net loss in fiscal 2002, as well as the weakening of the US dollar compared to
the Euro.
- Fiscal 2001
Our net income in fiscal 2001 was EUR 750 million, compared to net income of EUR 920 million in fiscal 2000, a
decrease of EUR 170 million, or 18.5%. The decrease in net income was largely attributable to the EUR 192 million
loss from unconsolidated joint ventures and equity investees in fiscal 2001, compared to EUR 78 million of income from
unconsolidated joint ventures and equity investees in fiscal 2000 offset by an increase in operating income. As noted
above, the fiscal 2001 loss of the unconsolidated joint ventures and equity investees was due principally to a loss at DAIH
