Notes to the
consolidated
financial statements
continued
9 Net financial expenses
Overview
Business review
Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
(541)
(265)
Net financial expenses
Interest income primarily relates to interest earned on cash and cash equivalents and short-term cash deposits and similar instruments.
Net interest expense on defined benefit pension plans is caused by the Company’s pensions plans being in a liability position over 2016 and 2015.
For more information on financial instruments, see Note 30.
Foreign exchange results arising from the purchase of goods for sale or goods and services consumed in Ahold Delhaize’s operations are included
in cost of sales or in the appropriate element of operating expenses, respectively. In 2016, the Company recorded a net exchange gain (including
the impact of foreign exchange hedging instruments) of €1 million in operating income (2015: loss of €1 million).
Interest expense primarily relates to financial liabilities measured at amortized cost (which include notes, finance lease liabilities, financing
obligations and cumulative preferred financing shares), interest accretions to provisions, and amortization of the fair value allocation of the debt
brought in through acquisitions (refer to Note 4).
Gains (losses) on foreign exchange on financial assets and liabilities are presented as part of net financial expenses. The gains on foreign exchange
in 2016 mainly resulted from the remaining GBP 250 million of the original GBP 500 million notes. The gains (losses) on foreign exchange are offset
by fair value losses on financial instruments from derivatives, primarily related to the remaining GBP 250 million notes (an interest rate and a U.S.
dollar cross-currency swap), which do not qualify for hedge accounting treatment.
In 2016, the line item Other consists mainly of the one-off finance cost of €243 million relating to the buying back the JPY 33,000 million notes, see
Note 21.
Gains (losses) on foreign exchange
Fair value gains (losses) on financial instruments
Other
Other financial expenses
67
(86)
(246)
(265)
(14)
(2)
(5)
(21)
2016
15
(273)
(18)
2015
5
(235)
(14)
million
Interest income
Interest expense
Net interest expense on defined benefit pension plans
