125
10 Current liabilities
-
-
11 Derivatives
Notes to the parent company financial statements continued
Ahold
Annual Report 2010
Group at a glance
Performance
Governance
Financials
Investors
January 2,
January 3,
million
2011
2010
Short-term borrowings from subsidiaries
3,613
3,004
Income taxes payable
75
Dividend cumulative preferred financing shares
30
32
Payables to subsidiaries
18
Payables to joint ventures
2
2
Interest payable
1
1
Hedging derivatives intercompany
1
1
Other derivatives external
4
1
Other current liabilities
26
24
Total current liabilities
3,770
3,065
The current liabilities are liabilities that mature within one year.
The Parent company regularly enters into derivative contracts with banks to hedge foreign currency and interest exposures of the Parent
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 on 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 Parent 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 Parent company recorded a fair value gain of €55 million in
the cash flow hedge reserve in 2010 (2009: a fair value loss of €7 million) and recognized a loss of €56 million (2009: a loss of €11 million)
in the income statement from the cash flow hedge reserve release. Details of these derivative contracts and the Parent company's risk
management strategies are included in Note 30 to the consolidated financial statements and in the tables presented below.
Non-current hedging derivatives - assets
million
Hedging
derivatives
external
Other
derivatives
external
2010
Total
2009
Total
Beginning of year
173
162
335
259
Fair value changes
(22)
34
12
76
End of year
151
196
347
335
Non-current hedging derivatives - liabilities
million
Hedging Hedging
derivatives derivatives
external intercompany
Other
derivatives
intercompany
2010
Total
2009
Total
Beginning of year
124 173
162
459
375
Fair value changes
(55) (22)
34
(43)
84
End of year
69 151
196
416
459
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 Parent company's subsidiaries.
