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Non-GAAP measures
Net debt
Performance
This Annual Report includes the following non-GAAP financial measures:
Net sales at constant exchange rates
Net sales at constant exchange rates exclude the impact of using different currency
exchange rates to translate the financial information of Ahold subsidiaries or joint ventures
to euros. Ahold's management believes this measure provides a better insight into the
operating performance of Ahold's foreign subsidiaries or joint ventures.
Identical sales, excluding gasoline net sales
Because gasoline prices have experienced greater volatility than food prices, Ahold's
management believes that by excluding gasoline net sales, this measure provides a better
insight into the growth of its identical store sales.
Underlying retail operating income
Total retail operating income, adjusted for impairment of non-current assets, gains and
losses on the sale of assets and restructuring and related charges. Ahold's management
believes this measure provides better insight into underlying operating performance of
Ahold's retail operations.
Core Corporate Center costs
Core Corporate Center costs relate to the core responsibilities of the Corporate Center,
including Corporate Finance, Corporate Strategy, Internal Audit, Legal, Human Resources,
Information Technology, Communications, Corporate Responsibility and the Corporate
Executive Board. Total corporate costs also include results from other activities coordinated
centrally but not allocated to any operating company. Management believes that this
measure provides a better insight into the Company's operating performance.
Net debt is the difference between (i) the sum of long-term debt and short-term debt
(i.e., gross debt) and (ii) cash, cash equivalents and short-term deposits. In management's
view, because cash, cash equivalents and short-term deposits can be used, among other
things, to repay indebtedness, netting this against gross debt is a useful measure for
investors to judge Ahold's leverage. Net debt may include certain cash items that are
not readily available for repaying debt.
Cash flow before financing activities
Cash flow before financing activities is the sum of net cash from operating activities and
net cash from investing activities. Ahold's management believes that because this measure
excludes net cash from financing activities, this measure is useful where such financing
activities are discretionary, as in the case of voluntary debt prepayments.
Management believes that these non-GAAP financial measures allow for a better
understanding of Ahold's operating and financial performance. These non-GAAP financial
measures should be considered in addition to, but not as substitutes for, the most directly
comparable IFRS measures.
