Food Lion 2001 Annual Report Download - page 74

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72 |Delhaize Group |Annual Report 2001
Stock Based Compensation
Under Belgian GAAP, compensation expense related to stock options is
not recorded. Under US GAAP, Delhaize Group has elected to follow the
accounting provisions of Accounting Principles Board Opinion (APBO)
No. 25, Accounting for Stock Issued to Employees, for grant of shares,
stock options and other equity instruments. This resulted in the recording
of compensation expense relating to Delhaize America’s restricted stock
plans and Delhaize Group’s stock option plans. The share exchange with
Delhaize America resulted in a new measurement date for the Delhaize
America’s stock option and restricted stock plans. A result, a one-time,
non-cash compensation expense of EUR 13.1 million pre-tax was record-
ed under US GAAP.
Treasury Shares
Under Belgian GAAP, treasury shares are classified in the balance sheet
caption “Short-term investments” and are subject to a valuation
allowance when the share price at the reporting date is lower than the
acquisition price. Under US GAAP, treasury shares are deducted from
shareholders’equity in the captions “Capital” and “Additional Paid in
Capital” and are maintained at cost.
Other Items
Other items include adjustments to record differences between Belgian
GAAP and US GAAP for interest cost capitalization, software develop-
ment cost capitalization, accounting for derivative transactions and
accounting for a highly inflationary country (Romania). An adjustment is
also recorded to reflect the difference in the basis for Belgian GAAP and
US GAAP on the gain recorded on the disposition of an investment in
2000.
Approximate reconciliation to US GAAP of net income and shareholders' equity would be as follows*:
(in thousands of EUR) 2001 2000 1999
Net income in accordance with Belgian GAAP 149,420 160,687 169,886
Items having the effect of increasing (decreasing)
reported net income:
Goodwill 10,673 (2,070) (2,357)
Fixed asset accounting (6,339) (5,893) 807
Lease accounting 3,029 5,002 3,761
Pensions (1,569) (2,293) (1,307)
Foreign currency transactions 2,504 (8,353) (5,575)
Income taxes 6,168 452 345
Directors remuneration (1,106) (949) (926)
Treasury shares 1,517 - -
Stock based compensation (19,514) - -
Other items (786) 845 480
Total US GAAP adjustments before tax effects (5,423) (13,259) (4,772)
Tax effects of US GAAP adjustments 4,049 3,247 740
Net income in accordance with US GAAP 148,046 150,675 165,854
(*) Certain prior year amounts have been reclassified to conform to the current year presentation.