109
22 Other non-current financial liabilities
Other
Ahold Annual Report 2012
Notes to the consolidated
financial statements
Ahold at a glance
Our strategy
Our performance
Governan
Financials
Investors
December 30,
January 1
million
2012
2012
Finance lease liabilities
1,179
1,158
Cumulative preferred financing shares
497
497
Derivative financial instruments
175
89
Reinsurance liabilities
76
67
3
2
Total other non-current financial liabilities
1,930
1,813
For more information on derivative financial instruments and fair val
ues, see Note 30.
The Company recognizes reinsurance liabilities on its balance sheet
in connection with a
pooling arrangement between unrelated companies. For more
information, see Note 15.
Finance lease liabilities
Finance lease liabilities are payable as follows:
million
December 30, 2012
January 1, 2012
Present
Present
Future
value of
Future
value of
minimum
minimum
minimum
minimum
lease
Interest lease
lease
Interest
lease
payments
portion payments
payments
portion
payments
Within one year
172
97 75
165
98
67
Between one and five years
665
317 348
643
331
312
After five years
1,145
314 831
1,195
349
846
Total
1,982
728 1,254
2,003
778
1,225
Current portion finance lease liabilities (see Note 26) 75 67
Non-current portion finance lease liabilities 1,179 1,158
Finance lease liabilities are principally for buildings. Terms range primarily from 10 to 25 years and include renewal options if it is reasonably certain, at the inception of the lease, that they will
be exercised. At the time of entering into finance lease agreements, the commitments are recorded at their present value using the interest rate implicit in the lease, if this is practicable to
determine; if not, the operating company-specific interest rate applicable for long-term borrowings is used. As of December 30, 2012, the finance lease liabilities are recorded at their present
value at an average interest rate of 8.0% (January 1, 2012: 8.4%).
Certain store leases provide for contingent additional rentals based on a percentage of sales and consumer price indices. Substantially all of the store leases have renewal options for additional
terms. None of Ahold's leases impose restrictions on Ahold's ability to pay dividends, incur additional debt or enter into additional leasing arrangements.
During 2012, interest expense on finance lease liabilities was €102 million (2011€94 million), of which €2 million related to discontinued operations (2011€3 million). Total future
minimum sublease income expected to be received under non-cancelable subleases as of December 30, 2012, is €140 million (January 1, 2012: €156 million). The total contingent rent
expense recognized during the year on finance leases was €1 million (201 1€1 million).
