21
Group performance continued
million
-
-
-
Ahold
Annual Report 2011
Groupata glance
Performance
Governance
Financials
Investors
Restructuring and related charges
Restructuring and related charges were as follows in 2011 and 2010:
Net interest expense
2011 2010
million million
Ahold USA
(15)
(20)
The Netherlands
Other Europe
(4)
Ahold Europe
(4)
Total
(15)
(24)
At Ahold USA, in 2011, restructuring and related charges were primarily related to the transition of
certain logistics activities, while in 2010 they resulted from organizational changes.
Net financial expense
Net financial expense increased by €57 million compared to 2010, as a result of a financial
guarantee provision of €92 million, which is the estimated impact of a judgment rendered in
the Stop Shop Bradlees lease litigation with Vornado (as further described in Note 9 to the
consolidated financial statements).
Interest expense, at €245 million, was down €43 million mainly following debt reductions in
2010 of €0.4 billion, and a weaker U.S. dollar against the euro in 2011. Net interest expense
at €225 million was just below our guidance of €230-250 million.
Income taxes
In 2011, income tax expense was €140 million, down by €131 million compared to last year.
This was mainly due to a €109 million tax benefit resulting from the release of an income tax
contingency reserve related to financing transactions that occurred prior to 2004 (as further
described in Note 10 to the consolidated financial statements). The effective tax rate, calculated
as a percentage of income before income taxes, was 13.6 percent or 24.2 percent when
excluding the above mentioned release (25.2 percent in 2010).
Share in income of joint ventures
Ahold's share in income of joint ventures, which primarily relates to our 60 percent shareholding
in ICA and our 49 percent shareholding in JMR, was €141 million in 2011, up by €84 million
compared to last year. In 2010, ICA's results were negatively impacted by a tax provision
recognized by ICA following an adverse court ruling (Ahold's share was €47 million), and a
provision against deferred tax assets at ICA Norway (Ahold's share was €42 million). You can
read more about ICA's and JMR's results in Performance by segment.
Loss from discontinued operations
In 2011 and 2010, results from discontinued operations were impacted by various adjustments to
the results of prior years' divestments (primarily U.S. Foodservice and Tops), as a consequence
of warranties and indemnifications provided in the relevant sales agreements.
For further information about discontinued operations, see Note 5to the consolidated financial
statements.
