Food Lion 2005 Annual Report Download - page 77

37. Net Foreign Exchange (Gains) Losses
The exchange differences (charged) credited to the income statement are as
follows:
(in m illions of EUR) 2005 2004 2003
Cost of sales 0.1 - (0.1)
Selling, general and administrative
expenses 0.2 (1.0) 0.7
Finance costs 3.3 (3.9) (6.1)
Income from investments 4.1 4.2 (1.5)
Result from discontinued operations (0.1) (0.1) -
Total 7.6 (0.8) (7.0)
38. Supplemental Cash Flow Information
(in m illions of EUR) 2005 2004 2003
Non-cash investing and financing
activities:
Capitalized lease obligations incurred
for store properties and equipment 53.5 76.2 39.9
Capitalized lease obligations
terminated for store properties and
equipment 4.0 10.5 18.9
39. Hyperinflation
Until December 31, 2003, Romania was considered as a country with an hyper-
inflationary economy. Therefore, the 2003 financial statements of our Romanian
subsidiaries were restated for the changes in the general purchasing power of the
functional currency. The financial statements of the Romanian companies were
based on an historical approach.
40. Related Party Transactions
In June 2004, Delhaize Group sold its interest of 70.0% in Super Dolphin, a non-
operating company of the Mega Image Group to the former executives of Super
Dolphin. In the same period, Delhaize Group also acquired most of the remaining
interests of the other companies related to its Romanian activities from the same
former executives (30.0% of Mega Image, 18.6% of M ega Dolphin, 13.2% of
Mega Doi, 30.0% of ATTM Consulting and Commercial and 30.0% of NP Lion
Leasing and Consulting). Delhaize Group paid an aggregate price of EUR 0.3 mil-
lion for all those transactions.
Several of the Group’s subsidiaries provide for post-employment benefit plans
for the benefit of employees of the Group. Payments made to these plans and
receivables from and payables to these plans are disclosed in Note 24.
41. Commitments
Capital expenditures contracted for at the balance sheet date but not yet incurred
as of December 31, 2005 amounted to EUR 28.5 million for property, plant and
equipment.
Commitments related to lease obligations are disclosed in Note 19.
42. Contingencies
Delhaize Group is from time to time involved in legal actions in the ordinary
course of its business. Delhaize Group is not aware of any pending or threatened
litigation, arbitration or administrative proceedings the likely outcome of which
(individually or in the aggregate) it believes is likely to have a material adverse
effect on its business or financial statements. Any litigation, however, involves
risk and potentially significant litigation costs, and therefore Delhaize Group
cannot give any assurance that any litigation now existing or which may arise
in the future will not have a material adverse effect on its business or financial
statements.
We continue to experience tax audits in jurisdictions in which we do business,
which we consider to be part of our ongoing business activity. In particular, we
have experienced an increase in audit and assessment activity during both finan-
cial years 2004 and 2005 in the United States and Greece. Although some audits
have been settled in both the United States and Greece during 2005, Delhaize
Group expects continued audit activity in both of these juridictions in 2006. While
the ultimate outcome of these audits is not certain, we have considered the mer-
its of our filing positions in our overall evaluation of potential tax liabilities and
believe we have adequate liabilities recorded in our consolidated financial state-
ments for exposures on these matters. Based on our evaluation of the potential
tax liabilities and the merits of our filing positions, we also believe it is unlikely
that potential tax exposures over and above the amounts currently recorded as
liabilities in our consolidated financial statements will be material to our financial
condition or future results of operation.
43. Subsequent Events
In February 2006, Delhaize Group reimbursed a 5.5% bonds in the amount of
EUR 150 million, using a combination of available cash, the proceeds from the
issuance of EUR 50 million medium-term notes in November 2005 (see Note 17)
and amounts borrowed under the existing credit facilities.
DELHAIZE GROUP / ANNUAL REPORT 200 5 75