Management's discussion and analysis
In 2005, the Company's share in income of joint ventures
and associates increased 13.5 percent to EUR 118 million
primarily due to the sale of Ahold's share in a real estate
joint venture.
Income from discontinued operations
In 2006, income from discontinued operations, which
consisted of operational results from discontinued
operations and results on divestments, decreased
EUR 132 million to EUR 79 million. The decrease was
attributable to lower results on divestments. In 2005 net
gains on divestments were EUR 172 million compared
to a net loss of EUR 10 million in 2006.
In 2005, income from discontinued operations decreased
to EUR 211 million compared to EUR 222 million in 2004,
primarily as a result lower gains on divestments. In 2004 net
gains on divestments were EUR 238 million compared to
net gains of EUR 172 million in 2005.
For more information on discontinued operations, see
Note 12 to the consolidated financial statements included
in this Annual Report.
Net income attributable to common shareholders of Ahold
In 2006, net income attributable to common shareholders
of Ahold was EUR 899 million compared to EUR 120 million
in 2005. The improvement was primarily attributable to
the impact in 2005 of the settlement of the Securities
Class Action.
Net income attributable to common shareholders of Ahold
in 2005 was EUR 120 million compared to EUR 870 million
in 2004. The decrease was primarily attributable to the
settlement of the Securities Class Action and the positive
impact of a EUR 379 million net gain related to a ICA put
option transaction in 2004.
Adjustments to conform to US GAAP
The consolidated financial statements have been prepared
in accordance with IFRS, which differs in certain significant
respects from US GAAP. For 2006, 2005 and 2004, net
income under IFRS was EUR 915 million, EUR 146 million
and EUR 883 million, respectively, compared to net income
(loss) under US GAAP of EUR 973 million, EUR (20) million
and EUR 75 million, respectively. Under US GAAP, net
income (loss) per common share - basic was EUR 0.60,
EUR (0.04) and EUR 0.02 in 2006, 2005 and 2004,
respectively.
The most significant items in reconciling net income under
IFRS to net income (loss) under US GAAP in 2006, 2005
and 2004 are set forth below:
EUR in millions
2006
2005
2004
Items increasing (decreasing)
net income in accordance with IFRS:
Goodwill
2
17
(158)
Non-current assets held for sale
and discontinued operations
24
(194)
(442)
Investments in joint ventures and
associates, net of tax
(19)
(24)
(261)
Derivative instruments and loans
58
67
19
Pensions and other
post-employment benefits
(36)
(42)
(50)
The most significant items in reconciling shareholders'
equity under IFRS to shareholders' equity under US GAAP
in 2006 and 2005 are set forth below:
EUR in millions 2006 20C
Items increasing (decreasing) shareholders' equity
in accordance with IFRS:
Goodwill
Investments in joint ventures
and associates, net of tax
Other intangible assets
3,305
1,370
435
3,623
1,370
503
For more information about the significant items in
reconciling IFRS and US GAAP, see Note 35 to the
consolidated financial statements included in this
Annual Report.
Business segment results
The following is a discussion of the results of operations,
including net sales and operating income, for the Company's
business segments.
Stop Shop/Giant-Landover Arena
The following table sets forth net sales information and
operating income for the Stop Shop/Giant-Landover Arena
in 2006, 2005 and 2004:
2006
2005
2004
In millions, except percentages
(52 weeks)
(52 weeks)
(53 weeks)
Net sales in EUR
13,089
13,161
12,949
Net sales in USD
16,438
16,346
16,105
Change in identical sales:
Stop Shop
(1.3%)
0.2%
Giant-Landover
(1.6%)
(3.0%)
Change in comparable sales:
Stop Shop
(0.8%)
0.7%
Giant-Landover
(1.2%)
(2.4%)
Operating income in EUR
670
686
665
Operating income in USD
839
854
828
Operating income as
a percentage of net sales
5.1%
5.2%
5.1%
46 Ahold Annual Report 2006
