2 www.ahold.com/reports2008
Notes to the parent company financial statements
13 Derivatives
Non-current hedging derivatives - assets
-
-
-
-
-
-
-
-
-
-
Non-current hedging derivatives -
liabilities
End of year 116 158 - 101 375 478
Financial statements
AHOLD ANNUAL REPORT 2008 113
The Company regularly enters into derivative contracts with banks to hedge foreign currency and interest exposures of the Company
or its subsidiaries. Derivative contracts that are entered into to hedge exposures of subsidiaries are generally mirrored with
intercompany derivative contracts with the subsidiaries that are exposed to the hedged risks on substantially identical terms as the
external derivative contracts. In these parent company financial statements the external derivative contracts and the intercompany
derivative contracts are presented separately in the balance sheet. In situations where the external derivative contract qualifies for
hedge accounting treatment in the consolidated financial statements, the external derivative contract and the intercompany
derivative contract are presented as "Hedging derivatives external" and "Hedging derivatives intercompany", respectively. In
situations where the external derivative contract does not qualify for hedge accounting treatment in the consolidated financial
statements, the external derivative contract and the intercompany derivative contract are presented as "Other derivatives external"
and "Other derivatives intercompany", respectively.
Fair value movements of external derivative contracts that were entered into to hedge the exposures of subsidiaries are recorded
directly in income, where they effectively offset the fair value movements of the mirroring intercompany derivatives that are also
recorded directly in income. The Company has one cash flow hedge to hedge the interest rate and currency exposure on the
JPY 33,000 million notes. In relation to the cash flow hedge on the JPY 33,000 million notes, the Company recorded a fair value
gain of EUR 22 million in the cash flow hedge reserve in 2008 (2007: EUR 19 million) and recognized a gain of EUR 58 million
(2007: a loss of EUR 11 million) in the income statement from the cash flow hedge reserve release. Details of these derivative
contracts and the Company's risk management strategies are included in Note 29 to the consolidated financial statements and
in the tables presented below.
million
Hedging derivatives
external
Hedging derivatives
intercompany
Other derivatives
external
Other derivatives
intercompany
2008
Total
2007
Total
Beginning of year
169
6
156
7
338
340
Reclassification
(5)
(7)
(12)
(4)
Contracts matured or terminated
(1)
(1)
Fair value changes
(11)
(55)
(66)
2
End of year
158
101
259
338
million
Hedging derivatives
external
Hedging derivatives
intercompany
Other derivatives
external
Other derivatives
intercompany
2008
Total
2007
Total
Beginning of year 145 169 8 156 478 471
Reclassification (5) - - - (5) -
Contracts matured or terminated (1) - - - (1)
Fair value changes (23) (11) (8) (55) (97) 7
Fair value changes include exchange rate differences and installments paid on a cross-currency swap that was entered into on behalf
of one of the Company's subsidiaries.
