Food Lion 2004 Annual Report Download - page 49

DELHAIZE GROUP  ANNUAL REPORT 2004 47
Leases
Delhaize Group’s stores operate principally in leased premises. Lease terms
generally range from 3 to 27 years w ith renewal options ranging from 3 to
27 years. The average remaining lease term for closed stores is 6.4 years.
The follow ing table details, at December 31, 2004, the future minimum
lease payments under capital and operating leases:
(in thousands of EUR) Capital Leases Operating Leases
Open Stores Closed Stores
2005 97,339 181,118 28,534
2006 96,196 178,844 27,229
2007 95,229 170,989 26,187
2008 94,463 160,225 25,100
2009 92,141 148,596 22,568
Thereafter 676,172 1,259,235 114,423
Total minimum payments 1,151,540 2,099,007 244,041
Less estimated executory costs 20,724
Net minimum lease payments 1,130,816
Less amount representing interest 570,465
Present value of net minimum
lease payments 560,351
M inimum payments have not been reduced by minimum sublease income
of approximately EUR 45.4 million due over the term of non-cancelable
subleases.
Rent expenses, including scheduled rent increases, are recognized on a
straight-line basis over the minimum lease term.
Total Rent Expense under
Operating Leases for Open and Closed Stores (in millions of EUR)
2004 245
2003 260
2002 291
2001 298
2000 257
In addition, Delhaize Group has signed lease agreements for additional
store facilities, the construction of which was not complete at December
31, 2004. The leases expire on various dates extending to 2031 with
renewal options generally ranging from 3 to 27 years. Total future minimum
rents under these agreements are approximately EUR 187 million.
Provisions of approximately EUR 101 million and EUR 100 million at December
31, 2004 and 2003, respectively, for remaining lease liabilities on closed stores
are included in provisions for liabilities and charges. Delhaize Group uses a
discount rate based on the current treasury note rates to calculate the present
value of the remaining rent payments on closed stores.
6. Financial Fixed Assets
(in thousands of EUR) Equity Investments Other Companies
1. Investments
At the end of the previous year 238 1,603
M ovements during the current year:
• Acquisitions - 261
• Sales and disposals (238) (128)
• Translation difference - (107)
Net book value at the end
of the financial year - 1,629
2. Receivables and guarantee deposits
At the end of the previous year 103,702
M ovements during the current year:
• Additions 29,875
• Repayments (31,786)
• Transfer 527
• Change in scope of consolidation 2,630
• Translation difference (7,470)
Net book value at the end of the financial year 97,478
This caption includes EUR 53.5 million treasury instruments placed in a
trust by Hannaford to satisfy the remaining principal and interest payments
due on a portion of its long-term debt.
7. Capital and Share Premium Account
During 2004, several capital increases occurred, following the exercise
of 1,044,004 warrants by optionees under the Delhaize Group 2002 Stock
Incentive Plan primarily targeted to U.S. management associates (“the
Optionees” ). Capital was increased by EUR 0.5 million (EUR 0.50 per new
share issued); the share premium account increased by EUR 47.8 million. In
accordance w ith the Delhaize Group 2002 Stock Incentive Plan, the subs-
cription price of the new shares was partially funded by Delhaize Group in
the name and for the account of the Optionees.
8. Revaluation Reserves
(in millions of EUR) 2004 2003
Revaluation reserves 18.7 14.8
Revaluation reserves represent unrealized gains recorded on Delhaize
Belgium property in 1981, as w ell as a revaluation required by Greek law
recorded on Alfa-Beta property in 2004.
9. Group Reserves
(in millions of EUR) 2004 2003
Parent company reserves :
Legal reserve 4.7 4.6
Reserves not available for distribution 0.4 0.4
Untaxed reserves 44.2 43.9
Distributable reserves 16.8 16.5
Profit carried forward 49.3 63.1
Subtotal 115.4 128.5
Consolidated reserves 1,326.8 1,224.1
Total 1,442.2 1,352.6
Group Reserves (in thousands of EUR)
As of December 31, 2003 1,352,618
• Group share in consolidated results 211,454
• Dividends (105,289)
• Transfer from taxed revaluation surplus 369
• Dividends received on own shares 195
• Spread on Delhaize Group warrant exercises (17,113)
As of December 31, 2004 1,442,234