2 www.ahold.com/reports2008
Notes to the consolidated financial statements
29 Financial risk management and financial instruments continued
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-
-
-
-
Capital risk management
Financial instruments
Categories of financial instruments
Financial statements
AHOLD ANNUAL REPORT 2008 89
Contractual cash flows
million
Net
carrying amount
Within 1 year
Between
1 and 5 years
After 5 years
Total
Year ended December 30, 2007
Non-derivative financial liabilities
Notes
(3,125)
(1,155)
(1,656)
(1,671)
(4,482)
Other loans
(202)
(121)
(100)
(221)
Financing obligations
(394)
(61)
(218)
(356)
(635)
Mortgages payable
(15)
(4)
(10)
(6)
(20)
Finance lease liabilities
(1,080)
(141)
(528)
(1,316)
(1,985)
Cumulative preferred financing shares1
(497)
(31)
(92)
(27)
(150)
Short-term borrowings
(66)
(66)
(66)
Other
(5)
(5)
(5)
Derivative financial assets and liabilities
Cross-currency derivatives and interest flows
164
(33)
86
(8)
45
Interest derivatives and interest flows
18
16
(2)
7
21
1 Cumulative preferred financing shares have no maturity. For the purposes of the tables above and determining future dividend cash flows, it is assumed that the dividend
is calculated until the coupon reset date of each of the four-share series being 2010, 2013, 2016 and 2018, but with no liability redemption.
All instruments held at the reporting date and for which payments are already contractually agreed have been included. Amounts in
foreign currency have been translated using the reporting date closing rate. Cash flows arising from financial instruments carrying
variable interest payments have been calculated using the forward curves interest rates as of December 28, 2008 and December 30,
2007, respectively.
Credit ratings
As of December 28, 2008, Moody's Long Term Issuer rating was Baa3 (with a stable outlook) and Standard Poor's Corporate
Credit Rating was BBB- (with a stable outlook), both unchanged during 2008. Standard Poor's revised its outlook to positive on
January 14, 2009.
Maintaining investment grade credit ratings is an important part of the Company's strategy as they serve to lower the cost of funds
and to facilitate access to a variety of lenders and markets.
The Company's primary objective when managing capital is optimization of its debt and equity balance in order to sustain the future
development of the business, support an investment grade credit rating and to maximize shareholder value.
The capital structure of the Company consists of net debt (which includes borrowings and cash and cash equivalents as disclosed in
Notes 18, 20, 21 and 25) and equity (as disclosed in Note 19). Ahold may balance its overall capital structure in a number of ways,
including through the payment of dividends, capital reduction, new share issues and share buybacks as well as the issuance of new
debt or the redemption of existing debt.
The following table presents the carrying amounts for each of the categories of financial instruments:
December 28,
December 30,
million
2008
2007
Cash and cash equivalents
2,863
3,263
Available for sale
3
LO
l—i
Loans and receivables
864
969
Derivative instruments at fair value
267
348
Total financial assets
3,997
4,595
At amortized cost
(6,657)
(7,761)
Derivative instruments at fair value
(130)
(167)
Total financial liabilities
(6,787)
(7,928)
