General and administrative expenses
Net income (loss) after preferred dividends per common share
Consolidated statement of cash flows
Recently issued Dutch GAAP accounting pronouncements
Selling expenses
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Slotting and stocking allowances that are paid by vendors in return for introducing their new products in a store, up-front
payments by vendors and rebates received relating to volume allowances are recognized on a systematic basis as a
reduction of the purchase price of the related products as they are purchased or sold. If these volume allowances are
contingent on achieving certain minimum volume targets, the allowances are recognized only to the extent it is probable
that the minimum volume targets will be achieved and the amount of the allowance can be reasonably estimated.
Payments from vendors for promotional allowances are initially deferred and subsequently recognized when the advertising
or other marketing activities specified in the contract are performed by the Company for the vendor. If no specific
performance criteria are defined in the contract, the allowance is deferred over the term of the contract.
Scan billback promotional programs involve amounts billed back to vendors based on scan data in some cases adjusted to
compensate for scanning errors and/or administrative costs.
Other vendor allowances mainly relate to display allowances paid by vendors in return for displaying their products in a
specific manner or location and other lump sum payments. These payments are generally recognized as an offset to the
cost of products sold over the term of the agreement if a specific commitment term is indicated or upon completing the
criteria indicated in the contract.
General and administrative expenses consist of salaries and wages of Ahold’s operating companies’ main offices and
Ahold’s corporate offices, rent and depreciation of those facilities, restructuring costs and other general and administrative
expenses.
Net income (loss) after preferred dividends per common share - basic is computed using the weighted average number of
common shares outstanding during the period. Net income (loss) after preferred dividends per common share - diluted
incorporates the dilutive effect of incremental shares issuable upon the assumed exercise of stock options and upon
assumed conversion of the Company’s convertible subordinated notes as if conversion to common shares had occurred at
the beginning of the fiscal year. Net income (loss) after preferred dividends also has been adjusted for interest expense on
the convertible subordinated notes in calculating net income (loss) after preferred dividends per common share - diluted.
The weighted average number of common shares outstanding is retroactively adjusted for stock dividends. In 2002 the
adjustment factor to calculate the weighted average number of shares has not been changed, because the factor was
slightly higher than 1.
The consolidated statements of cash flows is presented using the indirect method, in a form that is consistent with that
required by International Accounting Standard No. 7 “Cash flow statements". The changes in assets and liabilities of
subsidiaries and equity investees with functional currencies different than the Euro, are translated per quarter using an
average exchange rate. The cash flows are adjusted for changes in assets or liabilities that are acquired in business
acquisitions. The net balance of the acquired assets and liabilities is presented, including the goodwill paid, on the line
“Acquisition of consolidated subsidiaries". Cash flows resulting from exceptional items are accounted for by their nature as
cash flows from operating, investing or financing activities.
In 2002, the CAR amended Guideline 270 “Profit and loss account" (“RJ 270"). RJ 270 changed the definitions of an
“exceptional item" and an “extraordinary item" in the statements of operations. Exceptional items relate to events or
transactions resulting from ordinary operations that must be separately presented because of their nature, volume or
infrequency. Examples of exceptional items include restructuring expenses, profits or losses related to the termination or
divestment of business activities, and the cumulative effect of changes in accounting principles. Extraordinary items relate
to events or transactions that are unrelated to normal business activities. Examples of extraordinary items include losses
resulting from expropriation and losses resulting from natural disasters such as earthquakes and floods. RJ 270 is effective
for fiscal years beginning on or after January 1, 2003.
Selling expenses consist of wages and salaries of retail and food service personnel, store expenses, rent of stores and food
service facilities, depreciation of Company owned locations, advertising costs and other selling expenses.
