Notes to the consolidated financial statements
124
30 Financial risk management and financial instruments (continued)
Year ended December 28, 2014
Credit ratings
Capital risk management
Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2015
Contractual cash flows
millior
Net carrying
amount
Within
1 year
Between
1 and 5
years
After
5 years
Total
Non-derivative financial liabilities
Notes
(1,040)
(68)
(545)
(1,051)
(1,664)
Other loans
(3)
(2)
(1)
(3)
Financing obligations
(387)
(48)
(181)
(239)
(468)
Mortgages payable
(10)
(4)
(6)
(2)
(12)
Finance lease liabilities
(1,213)
(179)
(681)
(1,003)
(1,863)
Cumulative preferred financing shares1
(497)
(21)
(74)
(32)
(127)
Short-term borrowings
(47)
(47)
(47)
Reinsurance liabilities
(191)
(67)
(110)
(20)
(197)
Accounts payable
(2,655)
(2,655)
(2,655)
Other
(43)
(1)
(6)
(52)
(59)
Derivative financial liabilities
Cross-currency swaps and foreign currency derivatives
(251)
(18)
(70)
(246)
(334)
1 Cumulative preferred financing shares have no maturity. For the purpose of the table above, the future dividend cash flows were calculated until the coupon reset date of each of the four share-series (2016, 2018, 2020 and 2023). No liability redemption was assumed.
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. In August 2015, Moody's upgraded
Ahold's corporate credit rating to Baa2 with a stable outlook. In June 2009, Standard Poor's upgraded Ahold's corporate credit rating to BBB with a stable outlook; since then, this rating has remained unchanged.
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 Company's leverage is measured on the basis 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.
