Notes: 30
160
Ahold Annual Report 2003
Financial Statements
As shown above, the investment commitments mainly relate to land and buildings of EUR 231 and EUR 323
at December 28, 2003 and December 29, 2002, respectively. The dominant regions with regard to investment
commitments are the U.S. with EUR 203 of outstanding capital investment commitments, and the European region
with EUR 134 of outstanding capital investment commitments.
Payments resulting from these commitments are expected as follows:
Region
2004
2005
2006
2007
2008
after 2008
Total
U.S.
197
2
2
2
203
Europe
80
16
10
2
26
134
Ahold Consolidated
277
18
12
4
26
337
Purchase commitments
Ahold enters into purchase commitments with vendors in the ordinary course of business. The Company has
long-term purchase contracts with some vendors for varying terms that requires the Company to buy services
and predetermined volumes of goods and goods not-for-resale at fixed prices. As of year end 2003, the
Company had approximately EUR 10,000 purchase commitments, which are not recorded on the balance sheet.
Not included in the above purchase commitments are those purchase contracts for which Ahold has received
advance vendor allowances, such as up-front signing payments in consideration of its purchase commitments.
These contracts generally may be terminated without satisfying the purchase commitments upon repayment
of the unearned portions of the advance vendor allowances. The unearned portion of these advance vendor
allowances are recorded as a liability on the balance sheet.
Leases
The Company is contingently liable for leases that have been assigned to various third parties in connection with
facility closings and asset dispositions. The Company could be required to assume these leases if any of the
assignees are unable to fulfill their lease obligation. Due to the wide distribution of the assignments among third
parties and various remedies available to the Company, management believes the likelihood that it will be required to
assume a material amount of these obligations remote.
Guarantees
Guarantees to third parties, other than lease and bond guarantees, have been issued by Ahold totaling EUR 2,438
and EUR 3,347 as of year-end 2003 and 2002, respectively. These guarantees primarily relate to Ahold's guarantees
that cover liabilities and commitments of its subsidiaries, which are recorded as a liability in the consolidated
balance sheet or disclosed as a commitment above.
At December 28, 2003 and at December 29, 2002, Ahold had outstanding guarantees relating to credit
facilities of EUR 1,842 and EUR 2,430, respectively. Of the guarantees outstanding at December 28, 2003, EUR
1,467 related to Ahold's December 2003 Credit Facility, under which no borrowings and USD 363 in letters of credit
were outstanding at such date. Of the guarantees outstanding at December 29, 2002, EUR 2,000 related to Ahold's
2002 Credit Facility, under which EUR 220 in borrowings were outstanding at such date. The carrying amount of
the liabilities related to these guarantees is recorded within loans payable in the consolidated balance sheet and
was approximately EUR 0 and EUR 220 as of December 28, 2003 and December 29, 2002.
At December 28, 2003, Ahold had granted EUR 329 of loan guarantees relating to the principal amounts of
certain loans payable by Ahold's subsidiaries. At December 29, 2002, the loan guarantees amounted to EUR 391.
The guarantees have been issued by Ahold to facilitate loan agreements between consolidated Ahold subsidiaries
and third-party financiers and the term of each guarantee is equal to the term of the related loan. Ahold's maximum
liability under the guarantees equals the total amount of the related loans recorded on the consolidated balance sheet.
As discussed in Note 24, Ahold also had provided guarantees of certain bonds issued by subsidiaries for
a total amount of EUR 2,358, USD 1,700 and GBP 500 as of December 28, 2003 (EUR 2,463, USD 1,789 and
GBP 500 as of December 29, 2002). The nature of these guarantees requires that Ahold assume the obligations
under the bonds in the event of default by the subsidiary. The guarantees extend through the dates of the related
debt instruments.
Ahold had corporate guarantees of EUR 128 and EUR 296 at December 28, 2003 and December 29, 2002,
respectively. These guarantees have been provided to suppliers as assurance that the Ahold subsidiary's financial
obligation, as detailed in the underlying contract, will be met. Ahold would be required to perform under the
guarantee if the subsidiary (or group of subsidiaries) fails to meet the financial obligations under the contract,
as described in the guarantee.
Ahold issued letters of assurance, comfort letters, real estate guarantees and buy-back guarantees, totaling
EUR 139 and EUR 230 at December 28, 2003 and December 29, 2002, respectively. Ahold granted letters of
assurance and comfort letters to suppliers and banks to acknowledge the Company's awareness and support of
the transactions and relationships entered into by its subsidiaries and franchisees. The real estate guarantees
