BsimEiHHta
Group financial review (continued)
Financial position
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billion
Ahold at a glance I Business review I Governance I Financials I Investors
Ahold's consolidated balance sheets as of January 3, 2016, and December 28, 2014,
are summarized as follows:
million
January 3,
2016
of total
December 28,
2014
of total
Property, plant and equipment
6,677
42.1%
6,150
43.5%
Intangible assets
1,968
12.4%
1,763
12.5%
Pension assets
5
Other non-current assets
1,975
12.4%
1,772
12.5%
Cash, cash equivalents and short-term deposits
and similar instruments
2,354
14.8%
1,886
13.3%
Inventories
1,676
10.6%
1,589
11.2%
Other current assets
1,230
7.7%
973
7.0%
Total assets
15,880
100.0%
14,138
100.0%
Group equity
5,621
35.4%
4,844
34.3%
Non-current portion of long-term debt
3,309
20.8%
3,032
21.4%
Pensions and other post-employment benefits
389
2.5%
290
2.1%
Other non-current liabilities
1,559
9.8%
1,506
10.6%
Short-term borrowings and current portion
of long-term debt
193
1.2%
165
1.2%
Payables
2,800
17.6%
2,655
18.8%
Other current liabilities
2,009
12.7%
1,646
11.6%
Total equity and liabilities
15,880
100.0%
14,138
100.0%
Ahold OA
Annual Report 2015 36
Gross and net debt
Property, plant and equipment increased by
€527 million, primarily due to the strengthening
of the U.S. dollar against the euro, while capital
expenditures were offset by depreciation
and impairments.
Our defined benefit plans showed a net deficit
of €389 million at year-end 2015 compared to
a net deficit of €285 million at year-end 2014.
This increase was primarily due to negative investment
results on the plan assets and the accrual of benefit
costs exceeding the contributions made to the plan.
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, 2015)
for market trends and conditions through the end
of 2015. We estimate our proportionate share of the
total net deficit to be $873 million (€804 million) at
year-end 2015 (2014: $658 million or €540 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.
Group equity increased by €777 million.
This increase was mainly driven by the current year's
net income and a positive currency translation impact.
This was partially offset by returns to shareholders.
In 2015, returns to shareholders included, in addition
to the 2014 dividend of €396 million, €161 million
relating to the €500 million share buyback program.
The €500 million share buyback program was
announced in February 2015 and suspended at the
end of June 2015 in connection with the intended
merger of Ahold and Delhaize.
In 2015, gross debt increased by €305 million
to €3.5 billion, primarily due to the strengthening
of the U.S. dollar against the euro and an increase
in finance lease liabilities driven by a €108 million
addition resulting from acquisitions. This was partially
offset by regular payments on finance lease and
financing transaction liabilities.
2011 2012 2013 2014 2015
Gross debt Net debt
9 Cash, short-term deposits and similar instruments
Ahold's net debt was €1,148 million as of
January 3, 2016, a decrease of €163 million
from December 28, 2014. Finance leases increased
our gross debt, driven by acquisitions (€108 million).
This was more than offset by the net of our strong
cash generation (free cash flow of €1,184 million),
dividend payment (€396 million), share buyback
program (€161 million), and the acquisition of
businesses (€150 million). The strengthening of the
U.S. dollar against the euro increased net debt by
a further €128 million. Net debt does not include our
commitments under operating lease contracts, which,
on an undiscounted basis, amounted to €6.1 billion
at year-end 2015 (2014: €5.8 billion).
The off-balance sheet operating lease 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 1.7 times at year-end 2015, down
from 1.9 times last year. Under normal conditions
we expect to operate at around 2 times, which is
consistent with our commitment to maintaining an
investment grade credit rating.
