Risk factors
The following discussion of risks relating to Ahold should be read carefully when
evaluating our business, our prospects and the forward-looking statements contained
in this annual report.
RISKS RELATING TO PENDING INVESTIGATIONS
AND LEGAL PROCEEDINGS
Any of the following risks could have a material adverse
effect on our financial position, results of operations,
liquidity and the actual outcome of matters that the forward-
looking statements contained in this annual report refer to.
The risks described below are not the only ones we are
facing. There may be additional risks we are currently
unaware of, and these may be common to most companies.
There may also be risks that we now believe are immaterial,
but which may ultimately have a material adverse effect on
our financial position, results of operations, liquidity and the
actual outcome of matters that the forward-looking
statements contained in this annual report refer to. For
additional information regarding forward-looking statements,
see "Forward-looking statements notice" included in this
annual report.
Results of pending investigations and legal proceedings
could have a material adverse effect on our financial
position, results of operations, liquidity and the prices
of our common shares and ADSs.
Due to the events announced on February 24, 2003, our
2002 annual report included a restatement of our financial
position and results for 2001 and 2000 in part because of
accounting irregularities at one of our operating subsidiaries,
U.S. Foodservice, and because certain of our joint ventures
had been improperly consolidated. These events led to a
number of investigations and legal proceedings. For a
further discussion of these investigations and legal
proceedings, see Note 35 to our consolidated financial
statements included in this annual report.
In November 2005 we entered into an agreement to settle
the securities class action entitled "In re Royal Ahold N.V.
Securities ERISA Litigation," which arose out of the
events announced on February 24, 2003. Under the terms
of the settlement agreement, the lead plaintiffs agree to
settle all claims against Ahold for the sum of USD 1.1 billon
(EUR 937 million, including EUR 8 million as compensation
to the Dutch Shareholders' Association Vereniging van
Effectenbezitters (the "VEB") for facilitating the global
settlement). The settlement covers Ahold, our subsidiaries
and affiliates, the individual defendants and the
underwriters. The settlement agreement has been
preliminarily approved and is subject to final court approval.
If the court will not give its final approval of the settlement
and if we are not able to defend ourselves successfully in
any subsequent legal proceedings, it is possible that we will
be required to pay a settlement amount or other payment
which is higher than anticipated by the settlement
agreement described above. Such events could have a
material adverse effect on our financial position, results of
operations, liquidity and the prices of our common shares
and ADSs.
In November 2005 we also entered into an agreement to
settle litigation with the VEB. Under the terms of this
settlement agreement, the VEB has terminated certain legal
proceedings relating to our annual accounts and has agreed
not to pursue any further legal action in the inquiry
proceedings before the Enterprise Chamber of the
Amsterdam Court of Appeals.
For a further discussion of these settlements, see Note 35
to our consolidated financial statements included in this
annual report.
We cannot predict when the remaining investigations or
legal proceedings will be completed. It is possible that they
could lead to criminal charges, civil enforcement
proceedings, additional civil lawsuits, settlements,
judgments and/or consent decrees either against us, our
subsidiaries or both, and that, as a result, we will be
required to pay substantial fines or damages, or to make
other payments, consent to injunctions on future conduct,
lose the ability to conduct business with government entities
and with customers in the casino and gaming industries or
suffer other penalties, each of which could have a material
adverse effect on our financial position, results of
operations, liquidity and the prices of our common shares
and ADSs.
We are also involved in legal proceedings as a result of our
divestments in 2003, 2004 and 2005 that, if decided
unfavorably, in the aggregate could have a material adverse
effect on our financial position, results of operations and
AHOLD ANNUAL REPORT 2005 39
