Notes to the consolidated financial statements
108
22 Other non-current financial liabilities
Finance lease liabilities
Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2015
millior
January 3,
2016
December 28,
2014
Finance lease liabilities
1,290
1,125
Cumulative preferred financing shares
497
497
Derivative financial instruments
210
250
Reinsurance liabilities
145
126
Other
45
41
Total other non-current financial liabilities
2,187
2,039
For more information on derivative financial instruments and fair values (see Note 30).
The Company recognizes reinsurance liabilities on its balance sheet in connection with a pooling arrangement between unrelated companies (see Note 15).
Other mainly consists of a pre-tax liability for the discounted amount of the remaining settlement liability of $36 million (€33 million) relating to a 2013 agreement with the New England Teamsters and Trucking Industry Pension
Fund (NETTI) to settle Stop Shop's pension liabilities in the fund.
Finance lease liabilities relating to continuing operations are payable as follows:
January 3, 2016
December 28, 2014
million
Future
minimum
ease
payments
Interest
portion
Present
value of
minimum
lease
payments
Future
minimum
lease
payments
Interest
portion
Present
value of
minimum
lease
payments
Within one year
209
99
110
179
91
88
Between one and five years
790
306
484
681
284
397
After five years
1,110
304
806
1,003
275
728
Total
2,109
709
1,400
1,863
650
1,213
Current portion finance lease liabilities (see Note 26)
110
88
Non-current portion finance lease liabilities
1,290
1,125
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 leases, that they will be exercised. At the time of
entering into a finance lease agreement, the commitment is recorded at its 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 January 3, 2016, the finance lease liabilities are recorded at their present value at a weighted average interest rate of 77% (December 28, 2014: 77%).
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 2015, interest expense on finance lease liabilities was €100 million (2014: €90 million). Total future minimum sublease income expected to be received under non-cancelable subleases as of January 3, 2016,
is €111 million (December 28, 2014: €107 million). The total contingent rent expense recognized during the year on finance leases was €1 million expense (2014: €2 million income).
