Unilever 2008 Annual Report Download - page 112

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Notes to the consolidated accounts Unilever Group
Unilever Annual Report and Accounts 2008 109
Financial statements
17 Financial instruments and treasury risk management (continued)
Liquidity risk
A material and sustained shortfall in our cash flow could undermine our credit rating and overall investor confidence and could restrict the Group’s
ability to raise funds.
Operational cash flow provides the funds to service the financing of financial liabilities and enhance shareholder return. Unilever manages the
liquidity requirements by the use of short-term and long-term cash flow forecasts. Unilever maintains access to global debt markets through an
infrastructure of short-term and long-term debt programmes. In addition to this, Unilever has committed credit facilities in place to support its
commercial paper programmes and for general corporate purposes. During 2008 we made no use of the committed facilities.
Unilever had US $6 205 million of undrawn committed facilities on 31 December 2008 as follows;
• revolving 364-day bilateral credit facilities of in aggregate US $4 230 million (2007: US $3 630 million) out of which US $3 675 million (2007:
US $3 630 million) with a 364-day term out;
• revolving 364-day notes commitments of US $200 million (2007: US $200 million) with the ability to issue notes with a maturity up to
364 days; and
• 364-day bilateral money market commitments of in aggregate US $1 775 million (2007: US $1 720 million), under which the
underwriting banks agree, subject to certain conditions, to subscribe for notes with maturities of up to three years.
As from 1 January 2009 the amount of undrawn committed facilities will be US $5 950 million.
As part of the regular annual process these facilities will be renewed in October 2009.
The financial market turbulence and associated illiquidity in credit markets during the second half of 2007 and throughout 2008 did not impact
Unilever’s ability to meet its financing requirements.
The following table shows Unilever’s contractually agreed (undiscounted) cash flows payable under financial liabilities and derivative assets and
liabilities as at the balance sheet date:
€ million € million € million € million € million € million € million € million
Net
carrying
Due Due Due Due amount as
Due between between between between Due shown in
within 1 and 2 and 3 and 4 and after balance
Undiscounted cash flows 1 year 2 years 3 years 4 years 5 years 5 years Total sheet
2008
Non-derivative financial liabilities:
Financial liabilities excluding related derivatives (4 653) (1 532) (577) (940) (750) (2 387) (10 839) (10 779)
and finance lease creditors
Interest on financial liabilities (343) (313) (210) (197) (157) (1 608) (2 828)
Finance lease creditors including related finance cost (37) (36) (26) (21) (19) (242) (381) (207)
Trade payables and other liabilities (7 483) (175) – – – – (7 658) (7 658)
excluding social security and sundry taxes(a)
(12 516) (2 056) (813) (1 158) (926) (4 237) (21 706)
Derivative financial liabilities:
Interest rate derivatives:
Derivative contracts - receipts –4––––4
Derivative contracts - payments – (4) – – – – (4)
Foreign exchange derivatives:
Derivative contracts - receipts 3 510 – – – – – 3 510
Derivative contracts - payments (3 772) – – – – – (3 772)
(262) – – – – – (262) (262)(b)
31 December (12 778) (2 056) (813) (1 158) (926) (4 237) (21 968)
(a) See note 18 on page 114.
(b) Includes financial liability-related derivatives amounting to €(219) million (2007: €(95) million).