Note 35
(6)
redemption is not solely within the control of the Company,
the cumulative preferred financing shares are classified
outside of permanent shareholders' equity under US GAAP
and are presented as a separate class of equity.
On November 30, 2006, Ahold received a conversion
notification for 100,802,061 preferred financing shares with
par value of EUR 169. On January 2, 2007, these preferred
financing shares have been converted into 22,419,051
common shares, which conversion was effected by
(i) conversion of 22,419,051 cumulative preferred financing
shares into 22,419,051 common shares; and
(ii) the acquisition for no consideration of 78,383,010
cumulative preferred financing shares by Ahold. From the
date Ahold received irrevocable notification of the
conversion to common shares, these cumulative preferred
financing shares have been classified as a component of
permanent shareholders' equity because upon receipt of
notification, the Company was no longer required to offer
redemption of these shares to holders in the event of a
change in control of the Company.
12. Change in accounting principles
Rent during construction periods
The change in accounting policy for rent during construction
is applied prospectively from the earliest date practicable for
both IFRS and US GAAP and led to a decrease of net
income of EUR 11 and EUR 14 for 2005 and 2004,
respectively, and a decrease of equity attributable to
common shareholders of EUR 24 as of December 28, 2003.
Financial guarantee contracts
Ahold applied the change in accounting principles for
financial guarantees under IFRS in 2006 retrospectively,
with a negligible impact on net income and equity
attributable to common shareholders. The reconciling
difference on financial guarantees accounted for under
FIN 45 for US GAAP in 2004 and 2005, which had been
reflected in "other differences" in the reconciliations of
net income and shareholders' equity, has been adjusted
accordingly for the change in accounting principles
under IFRS.
New accounting standards
As of the end of 2006 Ahold applies SFAS No. 158
"Employers' Accounting for Defined Benefit Pension and
Other Post-retirement plans" and as of the beginning
of 2006, Ahold applies SFAS No. 123(R) "Share-Based
Payment". For more information, refer to the separate
sections on pensions and share-based compensation in
this note.
b. Condensed consolidated statements of operations under US GAAP
The following presents the Company's condensed consolidated statements of operations in accordance with US GAAP:
2006
2005
2004
Net sales
Cost of sales
44,447
(35,233)
42,980
(34,139)
42,659
(33,900)
Gross profit
9,214
8,841
8,759
Operating expenses
(7,811)
(8,531)
(7,911)
Operating income
1,403
310
848
Net financial expense
(490)
(569)
(402)
Income (loss) before income taxes
913
(259)
446
Income taxes
(76)
170
(200)
Income (loss) after income taxes
837
(89)
246
Share in income of joint ventures and associates
Minority interests
160
(18)
131
(16)
157
(8)
Income (loss) from continuing operations
979
26
395
Loss from discontinued operations after income taxes
(46)
(312)
Cumulative effect of changes in accounting principles FIN 46(R) net of income tax benefit of EUR 3
-
-
(8)
Net income (loss) in accordance with US GAAP
973
(20)
75
Ahold Annual Report 2006 123
