Management's discussion analysis
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
subsidiaries' financial results into euro or are presented
in local currencies. We believe these measures provide a
better insight into the operating performance of foreign
subsidiaries.
Net sales excluding the impact of divestitures. We believe
that by excluding divestitures, this measure provides a
better insight into the operating performance and results
from the continuing operations of the subsidiary.
identical sales, excluding net sales of gasoline. Because
gasoline prices have recently experienced a higher rate of
inflation than food prices, we believe that by excluding
net sales of gasoline, this measure provides a better
insight into the recent positive effect of net sales of
gasoline on our identical sales.
Net sales excluding week 53 of 2004. We believe that by
excluding net sales during week 53 of 2004, this measure
allows for better comparisons between periods.
Net sales excluding the impact of a deconsolidated joint
venture and a divestment. We believe that by excluding
the impact of a deconsolidated joint venture and a
divestment, this measure provides a better insight into
the operating performance of the entity.
Net debt, which is the difference between (i) the sum of
long-term debt and short-term debt ("gross debt") and (ii)
cash and cash equivalents less cash on hand ("other cash
and cash investments"). We believe that net debt is a
useful measure for investors. In our view, because other
cash and cash investments can be used, among other
things, to repay indebtedness, netting this against total
debt is a useful measure of our leverage. Readers are
cautioned that net debt might imply that there is less
debt than the comparable measures under IFRS indicate
and net debt may include certain cash items that are not
readily available for repayment.
Operating income, excluding the impact of the Securities
Class Action settlement including insurance proceeds.
We believe that by excluding the impact of the Securities
Class Action settlement including insurance proceeds,
this measure allows for better comparisons to prior
periods and provides a better insight into our operating
performance.
Net income, excluding the impact of the Securities Class
Action settlement including insurance proceeds.
We believe that by excluding the impact of the Securities
Class Action settlement including insurance proceeds,
this measure allows for better comparisons to prior
periods and provides a better insight into our operating
performance.
Operating income, excluding restructuring charge.
We believe that by excluding the impact of restructuring
charges, this measure allows for better comparisons to
prior periods and provides a better insight into our
operating performance.
Operating expenses as a percentage of net sales,
excluding impairment loss. We believe that by excluding
the impact of impairment losses, this measure allows for
better comparisons to prior periods and provides a better
insight into our operating performance.
Net sales, excluding divestments and acquisitions.
We believe that by excluding the impact of certain
divestments and acquisitions, this measure allows for
better comparisons to prior periods and provides a better
insight into our operating performance.
Operating income, excluding gain on sale of real estate.
We believe that by excluding the impact of certain gains
on the sale of real estate, this measure allows for better
comparisons to prior periods and provides a better insight
into our operating performance.
Operating income, excluding integration cost and
impairment charge. We believe that by excluding the
impact of certain integration costs and impairment
charges, this measure allows for better comparisons
to prior periods and provides a better insight into our
operating performance.
Operating expenses as a percentage of net sales,
excluding gain from divestment and pension curtailment
gain. We believe that by excluding the impact of certain
gains on divestments and certain pension curtailment
gains, this measure allows for better comparisons to prior
periods and provides a better insight into our operating
performance.
We rely on cash provided by operating activities as our
primary source of liquidity in addition to debt and equity
issuances in the capital markets, letters of credit under our
credit facilities, our U.S. Foodservice accounts receivable
securitization program and available cash, including net
cash from divestments. Our strategy to restore our financial
health, a key part of our Road to Recovery strategy, has
included reducing our gross debt level, improving our
working capital management, being selective with our
capital expenditures, raising funds through our divestment
of non-core businesses and under-performing assets and
raising equity through the rights offering of common shares
and restricted ADSs which we completed in December 2003
(the "2003 Rights Offering"). For additional information
regarding our strategy and the progress we have made by
implementing our strategy, see "Road to Recovery 2003
2005."
Our improved liquidity position and stronger balance sheet
enabled us on February 15, 2005 to terminate our
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