Note 21
Financial statements - Notes to the consolidated financial statements
21 RECEIVABLES
2005 1
-
Accounts receivable securitization program
January 1,
2006
January 2,
2005
Trade receivables
1,411
1,267
Vendor allowance receivables
525
429
Other receivables
454
514
2,390
2,210
Provision for impairment
(86)
(121)
Total receivables
2,304
2,089
Included in other receivables are EUR 4 of receivables from joint ventures and associates (January 2, 2005: EUR 7).
The changes in the provision for impairment are as follows:
2004
Beginning of the year
(121)
(146)
Additions
(85)
(78)
Classified as held for sale
10
Used
81
51
Change in estimates
46
38
Exchange rate differences
(7)
4
End of the year
(86)
(121)
At the outset of 2005, U.S. Foodservice and certain of its subsidiaries participated in two separate accounts receivable sale
and related agreements ("Receivables Agreements"). On May 6, 2005 U.S. Foodservice merged its two accounts receivable
securitization programs into one. Under the Receivables Agreement, U.S. Foodservice and certain of its subsidiaries sell, on
a revolving basis, their receivables to a wholly-owned, special purpose, bankruptcy remote subsidiary of U.S. Foodservice
("Receivables Company") which in turn transfers, assigns and conveys all of its present and future rights, titles and interests
in the eligible receivables as defined by the Receivables Agreements to a special purpose entity (the "Master Trust").
Ahold consolidates the special purpose entity and consequently the transfer of the receivables is a transaction internal to the
Ahold group and the receivables have not been derecognized from the consolidated balance sheets. The Master Trust issues
certificates, representing fractional, undivided interests in the accounts receivable held in the Master Trust, which are financed
by third-party investors in exchange for cash or are retained by the Receivables Company as subordinate interests to those held
by the third party. These third-party investors are generally either commercial paper conduits, banks or other financial
institutions. In return for the receivables transferred, the Receivables Company receives cash and the remaining certificates.
The cash is included in Ahold's consolidated balance sheets in cash and cash equivalents and amounts corresponding to
the certificates financed are recognized under short-term borrowings. Included in Ahold's receivable balance is USD 1,092
(EUR 922), which is effectively pledged collateral in support of that financing. The maximum purchaser group limit under
the Receivables Agreement is USD 1,020 (EUR 861).
The aggregate amount of outstanding balances under the accounts receivable securitization program was USD 620 (EUR 524)
and USD 702 (EUR 518), as of January 1, 2006 and January 2, 2005, respectively. The costs associated with the sale of
interests in the receivables ranged between 2.4% and 4.2% during 2005, plus fees and expenses. Ahold received proceeds
from the collection under the Receivables Agreements of USD 18,005 (EUR 14,496) and USD 17,968 (EUR 14,465) in
2005 and 2004, respectively. Under the terms of the Receivables Agreements, these proceeds are legally restricted to the
Master Trust. As of January 1, 2006 and January 2, 2005, such restricted receivables collection proceeds held by Ahold
amounted to USD 122 (EUR 103) and USD 93 (EUR 79), which are included in cash and cash equivalents in the balance
sheets. The funds received from the Master Trust on a revolving basis have been used to redeem the short-term borrowings
140
