BsimEiHHta
32
Group financial review (continued)
Financial position
-
billion
Ahold at a glance I Business review I Governance I Financials I Investors
Ahold's consolidated balance sheets as of December 28, 2014, and December 29, 2013, are summarized
as follows:
million
December 28,
2014
of total
December 29,
2013
of total
Property, plant and equipment
6,150
43.5%
5,712
37.7%
Intangible assets
1,763
12.5%
1,563
10.3%
Pension assets
5
5
Other non-current assets
1,772
12.5%
1,594
10.5%
Cash, cash equivalents and short-term deposits and
similar instruments
1,886
13.3%
3,963
26.2%
Inventories
1,589
11.2%
1,450
9.6%
Other current assets
973
7.0%
855
5.7%
Total assets
14,138
100.0%
15,142
100.0%
Equity
4,844
34.3%
6,520
43.1%
Non-current portion of long-term debt
3,032
21.4%
2,873
19.0%
Pensions and other post-employment benefits
290
2.1%
348
2.3%
Other non-current liabilities
1,506
10.6%
1,259
8.3%
Short-term borrowings and current portion of
long-term debt
165
1.2%
148
1.0%
Payables
2,655
18.8%
2,387
15.7%
Other current liabilities
1,646
11.6%
1,607
10.6%
Total equity and liabilities
14,138
100.0%
15,142
100.0%
Ahold
Annual Report 2014
Property, plant and equipment increased by
€438 million, primarily due to the strengthening
of the U.S. dollar against the euro, while capital
expenditures were more than offset by depreciation
and impairments.
Our defined benefit plans showed a net deficit
of €285 million at year-end 2014 compared to
a net deficit of €343 million at year-end 2013.
This improvement was primarily due to positive
investment results on the plan assets and a decrease
of 0.7% in the indexation assumption for the Dutch
plan, mostly offset by decreases of 1.3% and 0.7%
in the discount rate assumption for the Dutch and
U.S. plans, respectively. A significant number of
union employees in the United States are covered
by multi-employer plans. With the help of external
actuaries, we have updated the most recent available
information that these plans have provided (generally
as of January 1, 2014) for market trends and
conditions through the end of 2014. We estimate
our proportionate share of the total net deficit to be
$658 million (€540 million) at year-end 2014 (2013:
$662 million or €481 million). These amounts are
not recognized on our balance sheet. While this
is our best estimate based on the information
available to us, it is imprecise and not necessarily
reliable. For more information see Note 23 to the
consolidated financial statements.
Equity decreased by €1,676 million, primarily
reflecting returns to shareholders which, in 2014,
included €1,232 million share buyback on the
€2 billion program, €1 billion capital repayment and
reverse stock split, and the dividend payment related
to 2013 of €414 million. These were partially offset
by the current year's net income.
In 2014, gross debt increased by €176 million to
€3.2 billion, primarily due to the strengthening of the
U.S. dollar against the euro, partly offset by regular
payments on finance lease liabilities. Ahold's net debt
was €1,311 million as of December 28, 2014, up
€2,253 million compared to last year, refecting the
significant reduction in cash balances primarily as a
result of returns to shareholders.
Gross and net debt
2010 2011 2012 2013 2014
Gross debt Net debt
0 Cash, short-term deposits and similar instruments
Net debt does not include our commitments under
operating lease contracts, which, on an undiscounted
basis, amounted to €5.8 billion at year-end 2014.
These off-balance sheet commitments impact
our capital structure. The present value of these
commitments is added to net debt to measure our
leverage against EBITDAR (i.e. underlying operating
income before depreciation, amortization and gross
rent expense). The ratio of net lease-adjusted debt
to EBITDAR stood at 1.9 times at year-end 2014, up
from 0.9 times last year, distorted by a temporary
increase in cash balance. Under normal conditions
we expect to operate at around 2 times, which is
consistent with our commitment to maintaining an
investment grade credit rating.
Our ambition for return on capital employed is to
deliver in the top quartile of the food retail sector.
