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Report of the Report of the
Contents Overview Executive Board Supervisory Board
Financial
statements
Other information
Level 2
HEINEKEN determines level 2 fair values for over-the-counter securities based on broker quotes. The fair values of simple over-the-
counter derivative financial instruments are determined by using valuation techniques. These valuation techniques maximise the use
of observable market data where available.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield
curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the
internal valuation with the valuation received from the counterparty. Fair values reflect the credit risk of the instrument and include
adjustments to take into account the credit risk of HEINEKEN and counterparty when appropriate.
Level 3
Details of the determination of level 3 fair value measurements as at 31 December 2013 are set out below
In millions of EUR
2013
2012
Available-for-sale investments based on level 3
Balance as at 1 January
134
183
Fair value adjustments recognised in other comprehensive income
8
1
Disposals
(1)
(50)
Transfers
(96)
Balance as at 31 December
45
134
The fair values for the level 3 available-for-sale investments are based on the financial performance of the investments and the
market multiples of comparable equity securities.
33. Off-balance sheet commitments
In millions of EUR
Total 2013
Less than
1 year
1-5 years
More than
5 years
Total 2012
Lease operational lease commitments
701
191
330
180
618
Property, plant equipment ordered
160
124
36
136
Raw materials purchase contracts
4,526
1,731
2,119
676
3,806
Other off-balance sheet obligations
2,279
569
1,307
403
2,139
Off-balance sheet obligations
7,666
2,615
3,792
1,259
6,699
Undrawn committed bank facilities
2,397
49
2,348
1,832
HEINEKEN leases buildings, cars and equipment in the ordinary course of business.
Raw material contracts include long-term purchase contracts with suppliers in which prices are fixed or will be agreed based upon
predefined price formulas. These contracts mainly relate to malt, bottles and cans.
During the year ended 31 December 2013 EUR282 million (2012: EUR265 million) was recognised as an expense in profit or loss
in respect of operating leases and rent.
Other off-balance sheet obligations mainly include distribution, rental, service and sponsorship contracts.
Committed bank facilities are credit facilities on which a commitment fee is paid as compensation for the bank's requirement
to reserve capital. The bank is legally obliged to provide the facility under the terms and conditions of the agreement.
Heineken N.V. Annual Report 2013
123
