Food Lion 2006 Annual Report Download - page 76

At December 31, 2006, 2005 and 2004, EUR 34.4 million, EUR 49.8 million and
EUR 53.5 million in securities held-to-maturity are held in escrow related to
defeasance provisions of outstanding Hannaford debt and were not available for
general corporate purposes.
The fair value of investment in securities at December 31, 2006, 2005 and 2004
was EUR 152.1 million, EUR 152.2 million, EUR 139.5 million, respectively. Fair
value is determined by reference to market prices.
12. Other Financial Assets
Other financial assets, non-current and current, include notes receivable, guaran-
tee deposits, restricted cash in escrow and term deposits greater than 12 months
to maturity. Other financial assets are carried at amortized cost, less any impair-
ment. The fair value of other financial assets approximates the carrying amount.
The decrease in other financial assets in 2005 compared to 2004 is primarily due
to a refund in the United States of workers’ compensation cash collateral in the
amount of EUR 34.6 million, as the Group replaced its collateralized letters of
credit with uncollateralized letters of credit under the new credit facility issued
on April 22, 2005 (see Note 17).
13. Inventories
No inventory has been written down at December 31, 2006, 2005 or 2004, and no
previous write-downs were reversed in 2006, 2005 or 2004.
14. Dividends
On May 24, 2006, the shareholders approved the payment of a gross dividend
of EUR 1.20 per share (EUR 0.90 per share after deduction of the 25% Belgian
withholding tax) or a total gross dividend of EUR 114.5 million. On May 26, 2005,
the shareholders approved the payment of a gross dividend of EUR 1.12 per share
(EUR 0.84 per share after deduction of the 25% Belgian withholding tax) or a total
gross dividend of EUR 105.5 million. On May 27, 2004, the shareholders approved
the payment of a gross dividend of EUR 1.00 per share (EUR 0.75 per share
after deduction of the 25% Belgian withholding tax) or a total gross dividend of
EUR 92.8 million.
With respect to the current year, the Directors propose a gross dividend of
EUR 1.32 per share to be paid to shareholders on May 31, 2007. This dividend is
subject to approval by shareholders at the Ordinary General Meeting of May 24,
2007 and has not been included as a liability in Delhaize Group’s consolidated
financial statements prepared under IFRS. The dividend is included in the statu-
tory financial statements prepared under Belgian GAAP (“the annual accounts”).
The total estimated dividend, based on the number of shares outstanding at
March 14, 2007 is EUR 127.8 million.
As a result of the exercise of warrants issued under the Delhaize Group 2002
Stock Incentive Plan, the Company may have to issue new ordinary shares, to
which payment of the 2006 dividend is entitled, between the date of adoption
of the annual accounts by the Board of Directors and the date of their approval
by the Ordinary General Meeting of May 24, 2007. The Board of Directors will
communicate at the Ordinary General Meeting of May 24, 2007 the aggregate
number of shares entitled to the 2006 dividend and will submit at this meeting
the aggregate final amount of the dividend for approval. The annual accounts of
2006 will be modified accordingly. The maximum number of shares which could
be issued between March 14, 2007, and May 24, 2007, assuming that all vested
warrants were to be exercised, is 1,792,292. This would result in an increase in
the total amount to be distributed as dividend to a total of EUR 130.1 million.
The carrying amount of securities is as follows:
(in millions of EUR) December 31,
2006 2005 2004
Available Held to Total Available Held to Total Available Held to Total
for Sale Maturity for Sale Maturity for Sale Maturity
Non-current 53.4 67.6 121.0 31.1 93.9 125.0 20.1 95.8 115.9
Current 22.8 9.6 32.4 18.2 10.9 29.1 15.0 9.6 24.6
Total 76.2 77.2 153.4 49.3 104.8 154.1 35.1 105.4 140.5
The fair value of investment property was EUR 37.0 million, EUR 31.5 million and
EUR 24.6 million at December 31, 2006, 2005 and 2004, respectively. Fair value
has been determined using a combination of the present value of future cash
flows and market values of comparable properties.
Rental income from investment property recorded in other operating income was
EUR 2.8 million, EUR 2.3 million and EUR 1.7 million for 2006, 2005 and 2004,
respectively. Operating expenses arising from investment property generating
rental income, included in selling, general and administrative expenses, was
EUR 1.8 million, EUR 1.4 million and EUR 1.5 million for 2006, 2005 and 2004,
respectively.
11. Investment in Securities
Investment in securities includes debt and equity securities available-for-sale
that are carried at fair value with adjustments to fair value, other than foreign
exchange gains and losses relating to debt securities and impairment losses,
charged directly to equity. Investment in securities also includes debt securities
held-to-maturity, securities that the Group has the positive intention and ability
to hold to maturity. Securities held-to-maturity are carried at amortized cost less
any impairment. Securities are included in non-current assets, except for securi-
ties with maturities less than 12 months from the balance sheet date, which are
classified as current assets.
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