Notes to the consolidated financial statements
122
30 Financial risk management and financial instruments (continued)
Year ended December 29, 2013
Credit ratings
Capital risk management
Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2014
Contractual cash flows
millior
Net carrying
amount
Within
1 year
Between
1 and 5
years
After
5 years
Total
Non-derivative financial liabilities
Notes
(970)
(62)
(528)
(1,033)
(1,623)
Other loans
(3)
(2)
(2)
(4)
Financing obligations
(346)
(48)
(165)
(185)
(398)
Mortgages payable
(10)
(3)
(7)
(2)
(12)
Finance lease liabilities
(1,143)
(198)
(670)
(801)
(1,669)
Cumulative preferred financing shares1
(497)
(24)
(79)
(48)
(151)
Short-term borrowings
(52)
(52)
(52)
Reinsurance liabilities
(152)
(53)
(86)
(15)
(154)
Accounts payable
(2,387)
(2,387)
(2,387)
Other
(48)
(14)
(5)
(47)
(66)
Cross-currency swaps and foreign currency derivatives
(182)
(17)
(68)
(235)
(320)
1 Cumulative preferred financing shares have no maturity. For the purpose of the table above, the future dividend cash hows were calculated until t
he coupon reset date of each of the four share-series
(2016, 2018, 2020 and 2023). No
liability redemption was assumed.
S&P upgraded Ahold's corporate credit rating to BBB with a stable outlook in June 2009 and, since then, this rating has remained unchanged. In July 2013, Moody's affirmed Ahold's Baa3 issuer credit rating and changed
the outlook to positive from stable. Maintaining investment grade credit ratings is a cornerstone 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 in terms of managing capital is the optimization of its debt and equity balances in order to sustain the future development of the business, maintain an investment grade credit rating and
maximize shareholder value.
The capital structure of the Company consists of net lease adjusted debt, which includes borrowings, cash and cash equivalents, short-term deposits and similar instruments, equity, and the present value of the operating lease
commitments. Ahold may balance its overall capital structure in a number of ways, including through the payment of dividends, capital repayment, new share issues and share buybacks as well as the issuance of new debt or
the redemption of existing debt.
