Unilever 2011 Annual Report Download - page 27

24
FINANCIAL REVIEW 2011 continued
Balance sheet
€ million
2011
€ million
2010
Goodwill and intangible assets 21,913 18,233
Other non-current assets 11,308 10,405
Current assets 14,291 12,534
Total assets 47,512 41,172
Current liabilities 17,929 13,608
Non-current liabilities 14,662 12,486
Total liabilities 32,591 26,094
Shareholders’ equity 14,293 14,485
Non-controlling interest 628 593
Total equity 14,921 15,078
Total liabilities and equity 47,512 41,172
Goodwill and intangibles at 31 December 2011 were €3.7 billion
higher than in 2010, mainly as a result of acquisitions, including
Alberto Culver and Concern Kalina, after disposals. The increase
in other non-current assets is mainly due to an increase in
property, plant and equipment to €8.8 billion compared to
€7.9billion in 2010.
Inventories were higher by €0.3 billion and trade and other
receivables were higher by €0.4 billion. Cash and cash
equivalents were €1.1 billion higher at €3.5 billion.
Current liabilities were €4.3 billion higher at €17.9 billion mainly
due to an increase in short term and maturing financial liabilities
and currency movements. Provisions remained at €0.4 billion.
The overall net liability for all pension arrangements was
€3.2billion at the end of 2011, up from €2.1 billion at the end of
2010. Funded schemes showed an aggregate deficit of €1.3 billion
and unfunded arrangements a liability of €1.9 billion. The increase
in the overall balance sheet liability was mainly due to the
decrease in discount rates over the year. Cash expenditure on
pensions was €553 million.
Shareholders’ equity fell by €0.2 billion in the year. Net profit
added €4.3 billion, with currency and other movements negatively
impacting by €2.0 billion. Dividends paid in the year totalled
€2.5billion.
Contractual obligations at 31 December 2011
€ million
Total
€ million
Due
within
1 year
€ million
Due in
1-3 years
€ million
Due in
3-5 years
€ million
Due in
over
5 years
Long-term debt 9,193 1,526 2,452 2,446 2,769
Interest on
financial
liabilities 3,007 387 602 594 1,424
Operating lease
obligations 1,628 381 499 337 411
Purchase
obligations(a) 515 459 32 8 16
Finance leases 346 28 52 46 220
Other long-term
commitments 1,749 628 781 257 83
Total 16,438 3,409 4,418 3,688 4,923
(a) For raw and packaging material and finished goods.
Unilever Annual Report and Accounts 2011
Report of the Directors About Unilever
Contractual obligations
Unilever’s contractual obligations at the end of 2011 included
capital expenditure commitments, borrowings, lease
commitments and other commitments. A summary of certain
contractual obligations at 31 December 2011 is provided in the
preceding table. Further details are set out in the following notes
to the consolidated financial statements: note 10 on pages 86 to
87, note 15 on pages 90 to 92, and note 20 on pages 102 to 103.
Off-balance sheet arrangements
SIC interpretation 12 ‘Consolidation – Special Purpose Entities’
(SIC 12) requires that entities which we do not control are
considered for consolidation in the financial statements based on
risks and rewards. We have reviewed our contractual
arrangements and concluded that there are no significant
relationships not already appropriately reflected in the
consolidated financial statements. Information concerning
guarantees given by the Group is stated in note 16B on page 96.
Finance and liquidity
The Group’s financial strategy provides the financial flexibility to
meet strategic and day-to-day needs. Our current long-term
credit rating is A+/A1 and our current short-term credit rating is
A1/P1. We aim to maintain a competitive balance sheet which we
consider to be the equivalent of a credit rating of A+/A1 in the long
term. This provides us with:
• appropriate access to equity and debt markets;
• sufficient flexibility for acquisitions;
• sufficient resilience against economic and financial uncertainty
ensuring ample liquidity; and
• optimal weighted average cost of capital, given the
constraintsabove.
Unilever aims to concentrate cash in the parent and central
finance companies in order to ensure maximum flexibility in
meeting changing business needs. Operating subsidiaries are
financed through the mixture of retained earnings, third-party
borrowings and loans from parent and central finance companies.
Unilever maintains access to global debt markets through an
infrastructure of short-term debt programmes (principally US
domestic and euro commercial paper programmes) and long-
term debt programmes (principally a US Shelf Registration
programme and a European markets Debt Issuance Programme).
Debt in the international markets is, in general, issued in the
name of NV, PLC, Unilever Finance International BV or Unilever
Capital Corporation. NV, PLC and Unilever United States Inc. will
normallyguarantee such debt where they are not the issuer.
In this uncertain environment, we have continued to closely
monitor all our exposures and counterparty limits. We were
comfortable with a higher cash balance in 2011.
Unilever has committed credit facilities in place for general
corporate purposes. The undrawn committed credit facilities
inplace on 31 December 2011 were US $6,150 million. Bilateral
committed credit facilities totalled US $5,950 million. Bilateral
money market commitments totalled US $200 million.
Furtherdetails are given in note 16B on page 95.