BsimEiHHta
Group financial review (continued)
Adjustments to underlying
operating income
-
Net financial expense
ncome taxes
Share in income of joint ventures
Income (loss) from discontinued operations
Ahold at a glance
Business review
Governance
Impairment of assets
Ahold recorded the following impairments and
reversals of impairments of assets (primarily related to
stores) in 2014 and 2013:
million
2014
2013
Ahold USA
(10)
(75)
The Netherlands
(21)
(9)
Czech Republic
1
Total
(31)
(83)
The impairment of assets in 2013 at Ahold USA
included charges related to the exit from
New Hampshire.
Gains and losses on the sale of assets
Ahold recorded the following gains on the sale of
non-current assets in 2014 and 2013:
million 2014 2013
Ahold USA
6 25
The Netherlands
14 2
Czech Republic -
Corporate Center
- 1
Total
20 28
Restructuring and related charges
Restructuring and related charges
2014 and 2013 were as follows:
and other items
and other items in
million 2014 2013
Ahold USA
(7) (88)
The Netherlands
17
Czech Republic
(6)
Corporate Center
(10) 3
Total
Oi
*00
On
In 2014, restructuring and related charges and
other items included gains from the Dutch pension
plan amendments totaling €59 million (of which
€50 million was in The Netherlands and €9 million
at Corporate Center). These were partly offset by
the €40 million restructuring charge related to the
European reorganization (of which €24 million was
in The Netherlands and €16 million at Corporate
Center). In addition, Czech Republic recognized
€6 million in restructuring and related charges
primarily related to the acquisition of SPAR.
In 2013, restructuring and related charges at Ahold
USA included €63 million of costs related to reducing
our exposure to our U.S. multi-employer pension plans
through negotiations with the New England Teamsters
and Trucking Industry Pension Fund as well as a
€23 million restructuring provision related to our exit
from New Hampshire.
Net financial expense, at €235 million, decreased
by €56 million compared to 2013. Excluding interest
income and expense on defined benefit pension
plans, net interest expense of €206 million was
€12 million lower than in 2013, and it fell at the
lower end of our guidance of €200-€220 million.
Net interest expense on defined benefit pension
plans decreased by €8 million in 2014.
Other financial expense of €13 million was lower by
€36 million compared to 2013 and primarily related
to a €22 million lower valuation adjustments related
to notes and derivatives and an €11 million one-time
adjustment to a financial liability in 2013.
At current exchange rates, we expect net interest
expense for 2015 to be in the range of €215 million
to €235 million, excluding net interest on defined
benefit pension plans.
In 2014, income tax expense was €248 million,
up €95 million compared to last year. In 2013,
income tax expense was positively impacted by
one-time transactions and by movements in income
tax contingency reserves. The effective tax rate,
calculated as a percentage of income before income
taxes, was 24.4% (2013: 16.1%), in line with our
guidance. Similar to 2014, we anticipate the effective
tax rate to be in the mid-twenties in 2015.
Ahold's share in income of joint ventures, which
relates primarily to our 49% shareholding in JMR, was
€24 million in 2014, up by €14 million compared to
last year. For further information about joint ventures,
see Note 14 to the consolidated financial statements.
The main contributor to the €197 million loss from
discontinued operations in 2014 was a charge
representing the net of tax settlement amount and
associated legal fees for the Waterbury litigation of
€194 million. Income from discontinued operations
in 2013 included a gain on the sale of our 60%
stakeholding in ICA of €1,751 million.
In April, we completed the sale of our Slovakian
business to Condorum, an agreement we had
announced in November 2013. An exit from this
country enables management to focus on the
continued successful improvement of our business
in the Czech Republic. Ahold recorded a net
loss of €1 million in 2014 on this divestment, with
negative cash proceeds amounting to €34 million.
Ahold Slovakia operated 24 stores, with net sales
of €139 million in 2013.
Ahold
Annual Report 2014
In addition, 2014 and 2013 results from discontinued
operations were impacted by various adjustments
to the results of prior years' divestments as a
consequence of warranties and indemnifications
provided in the relevant sales agreements.
For further information about discontinued operations,
see Note 5 to the consolidated financial statements.
