9 Net financial expense
10 Income taxes
Ahold
Annual Report 2010
Group at a glance
Performance
Governance
Financials
Notes to the consolidated financial statements continued
Investors
million
2010
2009
Interest income
18
27
Interest expense
(288)
(316)
Gains (losses) on foreign exchange
3
(25)
Fair value gains (losses) on financial instruments
10
41
Other financial expense
(2)
(10)
Net financial expense
(259)
(283)
Interest income is mainly attributable to the interest on cash and cash equivalents and short-term cash deposits. Interest expense primarily
relates to financial liabilities measured at amortized cost (mainly loans, finance lease liabilities, and cumulative preferred financing shares)
and interest accretions to provisions.
The gains (losses) on foreign exchange in both 2010 and 2009 mainly result from the foreign exchange translation of the GBP 250 million
notes. Foreign exchange results on financial assets and liabilities, including amounts released from the cash flow hedging reserve, are
presented as part of net financial expense, within gains (losses) on foreign exchange. Foreign exchange results arising from the purchase
of goods for sale or goods and services consumed in Ahold's operations are included in cost of sales or in the appropriate element of
operating expenses, respectively. In 2010, the Company included net exchange losses of €1 million in operating income (2009: losses of
€9 million).
Fair value gains (losses) on financial instruments mainly include fair value changes in swaps related to the GBP 250 million notes.
These swaps do not qualify for hedge accounting treatment. For more information on financial instruments, see Note 30.
Other financial expense in 2009 primarily included a loss of €7 million incurred on the buyback of certain notes. For more information, see
Note 21.
Income taxes on continuing operations
The following table specifies the current and deferred tax components of income taxes on continuing operations in the income statement:
million 2010 2009
Current income taxes
Domestic taxes (the Netherlands)
(169)
(68)
Foreign taxes
United States
(48)
(38)
Europe - Other
(4)
(11)
Total current tax expense
(221)
(117)
Deferred income taxes
Domestic taxes (the Netherlands)
(10)
(52)
Foreign taxes
United States
(33)
(4)
Europe - Other
(7)
25
Total deferred tax expense
(50)
(31)
Total income taxes on continuing operations
(271)
(148)
