Food Lion 2001 Annual Report Download - page 46

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expense, the interest coverage rate was 3.8
(4.7 in 2000).
In 2001, net exceptional results of EUR
96.4 million (EUR 70.6 million, net of taxes
and minority interests) were recorded
primarily due to one-time merger costs
related to the share exchange with Delhaize
America and to the acquisition of Hannaford
(EUR 16.6 million, net of taxes and minority
interests), the closing of the Atlanta-based,
60% joint venture Super Discount Markets
(EUR 34.5 million) and the closing of eight
Delvita stores and an asset impairment
charge for seven other Delvita stores (EUR
19.1 million).
Total income taxes increased by 31.6% to
EUR 191.8 million due to higher operating
profitability. The effective tax rate was
53.2% in 2001, compared to 36.3% in 2000
because of non-deductible goodwill
amortization related to the Hannaford
acquisition and the share exchange with
Delhaize America, and the non-deductible
exceptional charges for the closings of Super
Discount Markets and Delvita stores. The
effective tax rate before goodwill
amortization and exceptional expenses was
38% (35.8% in 2000).
Due to the share exchange with Delhaize
America, minority interests in the results
decreased from EUR 95.5 million in 2000 to
EUR 19.3 million in 2001. This amount
represents primarily the minority interest
portion of Delhaize America results prior to
the share exchange in April 2001.
In 2001, Delhaize Group earned EUR 339.0
million before goodwill amortization and
exceptional income, a 80.6% increase
compared to the EUR 187.7 million in 2000.
The U.S. operations contributed 87.4% to
Delhaize Group’s cash earnings, the
Belgian operations 25.1%, the other
European activities –2.0% and the Asian
operations –1.1%. Corporate had a negative
contribution of –9.4%. Cash earnings per
share rose by 18.2% to EUR 4.26 (EUR
3.61 in 2000). At identical exchange rates,
cash earnings per share rose 15.0%.
Delhaize Group’s increase in cash earnings
per share was due to continued sales growth
and significant margin improvements both in
the U.S. and Belgian operations.
In 2001, Delhaize Group’s net earnings
after goodwill amortization and exceptional
expenses were EUR 149.4 million, or EUR
1.88 per share based on the weighted
average number of shares during the year,
compared to a total of EUR 160.7 million or
EUR 3.09 per share in 2000. At identical
currency rates, net earnings decreased 9.8%
in 2001. The decline was related to higher
financial expenses, amortization of goodwill
and exceptional charges. Return on equity
decreased from 15.3% in 2000 to 13.3% in
2001 due to increased shareholders’equity
associated with the share exchange with
Delhaize America.
Balance Sheet (p. 50) |Delhaize
Group’s total assets increased by 16.2% to
EUR 12.1 billion as a result of investments
in existing activities and acquisitions. The
share exchange with Delhaize America
resulted in an increase of goodwill and
intangibles by EUR 1.2 billion to EUR 4.9
billion. Other major asset changes in 2001
included the acquisition of the Greek food
retail company Trofo, which was
consolidated beginning January 1, 2001, and
44 |Delhaize Group |Annual Report 2001
2.42
3.02
97 98 99 00 01
Cash Earnings per Share
(in EUR)
3.36 3.61
4.26
75%
51%
97 98 99 00 01
Net Debt to Equity
71%
160%
127%