This Annual Report includes the following non-GAAP financial measures:
Net sales at constant exchange rates
In certain instances, net sales are presented at constant exchange rates or in local currencies. We believe these measures provide a better insight into the operating performance of our foreign subsidiaries or joint ventures.
Identical sales, excluding gasoline net sales
Because gasoline prices have experienced greater volatility than food prices, we believe that by excluding gasoline net sales, this measure provides a better insight into the growth of identical stores 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. We believe that excluding these elements provides a better insight into our underlying operating performance.
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 and the Corporate Executive Board. Total corporate costs also include results from other activities coordinated centrally but not allocated to any operating company. We believe that this measure provides a better insight into the Company’s operating performance.
Net debt
Net debt is the difference between (i) the sum of long-term debt and short-term debt (i.e., gross debt) and (ii) cash and cash equivalents. We believe that because cash and cash equivalents can be used, among other things, to repay indebtedness, netting this against gross debt is a useful measure of 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. We believe 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.