111
29 Earnings per share
30 Financial risk management and financial instruments
Ahold
Annual Report 2011
Groupata glance
Performance
Governance
Investors
Notes to the consolidated financial statements continued
The calculation of basic and diluted net income per share attributable to common shareholders is based on the following data:
2011 2010
Earnings million)
Net income attributable to common shareholders for the purposes of basic earnings per share 1,017 853
Effect of dilutive potential common shares - reversal of preferred dividends from earnings 25 30
Net income attributable to common shareholders for the purposes of diluted earnings per share 1,042 883
Number of shares (in millions)
Weighted average number of common shares for the purposes of basic earnings per share 1,111 1,169
Effect of dilutive potential common shares:
Share options and conditional shares 11 13
Cumulative preferred financing shares 49 48
Weighted average number of common shares for the purposes of diluted earnings per share 1,171 1,230
The calculation of the basic and diluted income per share from continuing operations attributable to common shareholders is based on the
same number of shares as detailed above and the following earnings data:
million 2011 2010
Income from continuing operations, attributable to common shareholders for the purposes of basic earnings
per share 1,032 863
Effect of dilutive potential common shares - reversal of preferred dividends from earnings 25 30
Income from continuing operations, attributable to common shareholders for the purposes of diluted
earnings per share 1,057 893
Basic and diluted income per share from discontinued operations attributable to common shareholders amounted to negative €0.01 and
negative €0.01respectively (2010: negative €0.01 basic and negative €0.01 diluted). They are based on the income from discontinued
operations attributable to common shareholders of negative €15 million (2010: negative €10 million) and the denominators detailed above.
Financial risk management
The Treasury function provides a centralized service to the Company for funding, foreign exchange, interest rate, liquidity, and
counterparty risk management. T reasury operates in a centralized function within a framework of policies and procedures that is reviewed
regularly. The T reasury function is not operated as a profit center. T reasury's function is to manage the financial risks that arise in relation
to underlying business needs. Ahold's Corporate Executive Board has overall responsibility for the establishment and oversight of the
Treasury risk management framework. Ahold's management reviews material changes to Treasury policies and receives information
related to T reasury activities.
In accordance with its Treasury policies, Ahold uses derivative instruments solely for the purpose of hedging exposures. These exposures
are mainly connected with the interest rate and currency risks arising from the Company's operations and its sources of finance.
Ahold does not enter into derivative financial instruments for speculative purposes. The transaction of derivative instruments is restricted
to Treasury personnel only and Ahold's Internal Control and Internal Audit departments review the Treasury internal control environment
regularly. Relationships with the credit rating agencies and monitoring of key credit ratios are also managed by the T reasury department.
Ahold's primary market risk exposures relate to foreign currency exchange rates and interest rates. In order to manage the risks arising
from these exposures, various financial instruments may be utilized.
