Food Lion 2007 Annual Report Download - page 105

(in millions of EUR) 2007 2006 2005
CEO Other Members CEO Other Members CEO Other Members
of Executive of Executive of Executive
Management Management Management
Number of persons 1 9 1 8 1 9
Base pay 0.9 3.3 0.9 3.3 0.9 3.3
Annual bonus
(1)
0.7 1.8 0.5 1.3 0.7 1.9
Other short-term
benefits
(2)
0.04 0.2 0.02 0.2 0.02 0.2
Short-term benefits 1.7 5.3 1.4 4.8 1.6 5.4
Retirement and post-
employment benefits
(3)
0.4 1.0 0.4 1.1 0.3 1.4
Other long-term
benefits
(4)
0.5 1.6 0.3 0.8 0.3 0.8
Total compensation
paid 2.6 7.9 2.1 6.7 2.2 7.6
(in millions of EUR) 2007 2006 2005
Short-term benefits
(1)
7.3 7.0 6.4
Retirement and post-employment
benefits
(3)
1.1 1.2 1.1
Other long-term benefits
(4)
4.1 2.8 1.8
Share-based compensation 3.1 3.4 3.3
Employer social security contributions 1.6 1.2 1.0
Total compensation expense
recognized in the income statement 17.2 15.6 13.6
(1) Amounts in the first table represent the Annual Bonus paid during the respective years, related to the perform-
ance achieved in the previous year. Short-term benefits amounts indicated in the second table include the
Annual Bonus payable during the subsequent year for performance achieved during the respective years.
(2) Other short-term benefits include the use of transportation means, employee and dependent life insurance,
welfare benefits and financial planning for U.S. members of Executive Management.
(3) The members of Executive Management benefit from corporate pension plans, which vary regionally, including
a defined benefit group insurance plan for European members, that is contributory and based on the individual’s
career length with the Company. U.S. members of Executive Management participate in profit sharing plans and
defined benefit plans. Amounts in the first table represent the employer contributions to the plans. Amounts
in the second table represent the employer contributions to the plans for defined contribution plans and the
employer service cost for defined benefit plans.
(4) Other long-term benefits include the performance cash component of the Long-Term Incentive Plan that was
established in 2003. The grants of the performance cash component provide for cash payments to the grant
recipients at the end of a three-year performance period based upon achievement of clearly defined targets,
with a transition period ending in 2006. Amounts in the first table represent amounts effectively paid during the
respective years. Amounts in the second table represent the amount recognized as expense by the Company
during the respective years, as estimated based on realized and projected performance. Estimates are adjusted
every year and when payment occurs.
39. Commitments
Purchase obligations amounted to EUR 156.6 million as of December 31, 2007,
of which EUR 70.7 million relate to the acquisition of property, plant and equip-
ment and intangible assets. Purchase obligations include agreements to purchase
goods or services that are enforceable and legally binding on the Company and
that specify all significant terms, including: fixed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the approximate
timing of the transaction.
Commitments related to lease obligations are disclosed in Note 19.
40. 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 consolidated 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 our busi-
ness or consolidated financial statements.
We continue to experience tax audits in jurisdictions where we conduct business,
which we consider to be part of our ongoing business activity. In particular, we
have experienced an increase in tax audit and assessment activity during finan-
cial years 2007, 2006 and 2005 in the United States, during financial years 2006
and 2005 in Greece, and during financial years 2007 and 2006 in Belgium. While
the ultimate outcome of tax audits is not certain, we have considered the merits
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 operations.
In April 2007, representatives of the Belgian competition authority visited our pro-
curement offices in Zellik, Belgium, and requested us to provide them with speci-
fied documents. This visit was part of what appears to be a local investigation
affecting several companies in Belgium in the retail sector and relating, to what
we understand, prices of perfume, beauty products and other household goods.
41. Subsequent Events
On January 4, 2008, Delhaize Group has entered into an agreement to acquire
the Greek retailer Plus Hellas through our subsidiary Alfa-Beta. The acquisition
consists of 33 stores and a distribution center, including real estate ownership
associated with 14 stores and the distribution center. The purchase price is EUR
69.5 million, subject to contractual adjustments. The acquisition of Plus Hellas is
subject to customary conditions, including approval by the Greek antitrust authori-
ties. The transaction is expected to be closed in the second quarter of 2008.
Beginning in 2008, certain costs previously included in Corporate (Unallocated)
costs will be allocated to the segment “Belgium”. Please refer to the segment
information in note 6 for more information.
DELHAIZE GROUP / ANNUAL REPORT 2007 103