2 www.ahold.com/reports2008
Notes to the consolidated financial statements
21 Other non-current financial liabilities continued
Cumulative preferred financing shares
Financial statements
AHOLD ANNUAL REPORT 2008 77
Certain store leases provide for contingent additional rentals based on a percentage of sales. Substantially all of the store leases
have renewal options for additional terms. None of Ahold's leases impose restrictions on the ability of Ahold to pay dividends,
incur additional debt, or enter into additional leasing arrangements.
During 2008, interest expense on finance lease liabilities was EUR 94 million (2007: EUR 111 million), of which EUR 6 million
related to discontinued operations (2007: EUR 16 million). Total future minimum sublease income expected to be received under
non-cancelable subleases as of December 28, 2008 is EUR 175 million (December 30, 2007: EUR 144 million, which was
increased by EUR 78 million to correct the amount disclosed in Ahold's 2007 Annual Report). There were no contingent rentals
recognized as expense during the period.
Number
of shares
(x 1,000)
Share
capital
million
Issued cumulative preferred financing shares
268,415
81
Authorized cumulative preferred financing shares (EUR 0.30 par value each)
477,581
143
million
Other non-current
financial liabilities
Paid-in capital issued shares
81
Additional paid-in capital
416
Balance as of December 28, 2008
497
The preferred financing shares were issued in four tranches. Dividends are paid on each preferred financing share at a percentage
(the "Financing Dividend Percentage") that differs per tranche. For the shares issued in October 2000, this percentage is based on
the average effective yield on Dutch state loans with a remaining life of 9 to 10 years and determined at the time that the shares
were issued. When a period of 10 years has elapsed after the issue date of a tranche, and every 10 years thereafter (the "Reset
date"), the Financing Dividend Percentage is reset. For the shares issued in June 1996, August 1998 and December 2003, the
percentage is based on the 10-year euro swap rate. The current Financing Dividend Percentage is 5.93 percent per year for the
shares issued in June 1996, 6.08 percent per year for the shares issued in August 1998, 6.27 percent per year for the shares
issued in October 2000 and 7.33 percent per year for the shares issued in December 2003. The nominal value plus additional
paid-in capital per tranche are EUR 71 million (June 1996 tranche), EUR 46 million (August 1998 tranche), EUR 320 million
(October 2000 tranche) and EUR 60 million (December 2003 tranche), in aggregate EUR 497 million.
The total number of votes that can be exercised by the preferred financing shares is approximately 75 million, representing
approximately 6 percent of the total vote (expressed as the sum of the outstanding preferred financing shares and the outstanding
common shares).
The preferred financing shares are convertible into common shares. The conversion conditions have been set so as to avoid any
transfer of value from the common shares to the preferred financing shares. The maximum number of common shares to be received
upon conversion of all outstanding preferred financing shares is approximately 90 million. The conversion features are similar for
all tranches. Conversion is allowed for all shares in one tranche held by one investor but not for fractions of tranches held by one
investor. Upon conversion, the holders of (depositary receipts of) preferred financing shares will receive a number of common shares
that is calculated by dividing the value of the preferred financing shares on the day before the conversion date by the average share
price of Ahold common shares on the five trading days preceding the notification date, the notification date and the four trading
days following the notification date. The value of the preferred financing shares will for this purpose be considered to equal the lower
of the nominal value plus the additional paid-in capital of the preferred financing shares (the "Par Value") or the present value of the
remaining preferred dividends until the first Reset date plus the present value of the Par Value at the first Reset date.
Subject to the approval of the General Meeting of Shareholders, the Company can redeem the preferred financing shares of a certain
tranche, but not fractions of a tranche. Redemption of a tranche is subject to the approval of the holders of depositary receipts of
that tranche, unless all (remaining) preferred financing shares are redeemed. Redemption takes place at the higher of the Par Value
or the present value of the remaining preferred dividends plus the present value of the Par Value at the Reset date.
