Notes to the
consolidated
financial statements
22 Other non-current financial liabilities continued
continued
Overview
Business review
Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
Current portion finance lease liabilities (see Note 26)
Non-current portion finance lease liabilities
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 1, 2017, the finance lease liabilities are recorded at their present value at a
weighted average interest rate of 7.1% (January 3, 2016: 7.7%).
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 Delhaize’s leases impose restrictions on Ahold Delhaize’s ability to pay
dividends, incur additional debt or enter into additional leasing arrangements.
During 2016, interest expense on finance lease liabilities was €111 million (2015: €100 million). Total future minimum sublease income expected
to be received under non-cancellable subleases as of January 1, 2017, is €111 million (January 3, 2016: €89 million, adjusted by €22 million from
last year’s disclosure of €111 million). The total contingent rent expense recognized during the year on finance leases was €1 million expense
(2015: €1 million expense).
Finance lease liabilities
Finance lease liabilities relating to continuing operations are payable as follows:
199
1,761
110
1,290
million
Within one year
Between one and five years
After five years
Total
Future
minimum
lease
payments
209
790
1,110
2,109
January 3, 2016
Present
value of
minimum
lease
payments
110
484
806
1,400
Future
minimum
lease
payments
318
1,083
1,370
2,771
Interest
portion
119
352
340
811
January 1, 2017
Present
value of
minimum
lease
payments
199
731
1,030
1,960
Interest
portion
99
306
304
709
