Merck 2014 Annual Report Download - page 248

243CONSOLIDATED FINANCIAL STATEMENTS → Notes to the Group accounts
(58) CAPITAL MANAGEMENT
The objective of capital management is to secure the financial
flexibility in order to maintain long-term business operations and
to realize strategic options. Maintaining a stable investment grade
rating, ensuring liquidity, limiting financial risks as well as opti-
mizing the costs of capital are the objectives of our financial policy
and set important framework conditions for capital management.
Traditionally, the capital market represents a major source of
financing for the Group for instance via bond issues. In addition,
the Group has both a commercial
paper program for short-term
financing on the capital market as well as a multi-currency working
capital credit facility of €2 billion with a term running until 2019
and one extension option for one year.
The responsible committees decide on the capital structure of
the balance sheet, the appropriation of net retained profit and the
dividend level. In this context, net financial debt is one of the
leading capital management indicators. It was as follows:
€ million Dec. 31, 2014 Dec. 31, 2013 Change
Financial liabilities 5,637.0 3,697.9 1,939.1
less:
Cash and cash equivalents 2,878.5 980.8 1,897.7
Current financial assets 2,199.4 2,410.5 – 211.1
Net financial debt 559.1 306.6 252.5
(59) CONTINGENT LIABILITIES
€ million Dec. 31, 2014 thereof affiliates Dec. 31, 2013 thereof affiliates
Guarantees 17.1 – 2.5 –
Warranties 0.5 – 0.9 –
Other contingent liabilities 54.3 – 32.9 –
Other contingent liabilities included, among other things, potentia l
obligations from legal disputes, for which the probability of an out-
flow of resources did not suffice to recognize a provision as of the
balance sheet date.