Food Lion 2012 Annual Report Download - page 116

114 // DELHAIZE GROUP FINANCIAL STATEMENTS’12
Delhaize America, LLC did not repurchase any Delhaize Group ADRs from third parties in 2012 and transferred 139 813 ADRs to
satisfy the exercise of stock options granted to U.S. management pursuant to the Delhaize America 2000 Stock Incentive Plan
and the Delhaize America 2002 Restricted Stock Unit Plan.
Since the authorization of the Board of August 3, 2011, Delhaize Group SA acquired 285 000 Delhaize Group shares for an
aggregate amount of €13 million. As a consequence, at the end of 2012, the management of Delhaize Group SA had a
remaining authorization for the purchase of its own shares or ADRs for an amount up to €87 million subject to and within the
limits of an outstanding authorization granted to the Board of Directors by the shareholders.
At the end of 2012, Delhaize Group owned 1 044 135 treasury shares (including ADRs), all of which were acquired prior to 2012,
representing approximately 1.02% of the Delhaize Group share capital.
Delhaize Group SA provided a Belgian financial institution with a discretionary mandate to purchase up to 1 100 000 Delhaize
Group ordinary shares on NYSE Euronext Brussels until December 31, 2013 to satisfy exercises of stock options held by
management of its non-U.S. operating companies. This credit institution makes its decisions to purchase Delhaize Group
ordinary shares pursuant to the guidelines set forth in the discretionary mandate, independent of further instructions from
Delhaize Group SA, and without its influence with regard to the timing of the purchases. The financial institution is able to
purchase shares only when the number of Delhaize Group ordinary shares held by a custodian bank falls below a certain
minimum threshold contained in the discretionary mandate.
Retained Earnings
Retained earnings decreased in 2012 by €82 million, representing (i) the profit attributable to owners of the parent (€105 million),
(ii) the purchase of non-controlling interests in Maxi for €10 million (see Note 4.2) and (iii) the dividend declared and paid in 2012
(€177 million).
According to Belgian law, 5% of the statutory net income of the parent company must be transferred each year to a legal reserve
until the legal reserve reaches 10% of the capital. At December 31, 2012, 2011 and 2010, Delhaize Group’s legal reserve
amounted to €5 million and was recorded in retained earnings. Generally, this reserve cannot be distributed to the shareholders
other than upon liquidation.
The Board of Directors may propose a dividend distribution to shareholders up to the amount of the distributable reserves of
Delhaize Group SA, including the profit of the last fiscal year, subject to the debt covenants (see Note 18.2). The shareholders at
Delhaize Group’s Ordinary General Meeting must approve such dividends.
Other Reserves
(in millions of €)
December 31,
2012
2011
2010
Deferred gain (loss) on discontinued cash flow hedges:
Gross
(15)
(15)
(15)
Tax effect
6
6
6
Cash flow hedge:
Gross
—
(6)
(1)
Tax effect
—
2
—
Unrealized gain (loss) on securities available-for-sale:
Gross
—
7
5
Tax effect
—
(1)
(1)
Actuarial gain (loss) on defined benefit plans:
Gross
(79)
(64)
(44)
Tax effect
28
24
16
Total other reserves
(60)
(47)
(34)
 Deferred gain (loss) on discontinued cash flow hedge: This represents a deferred loss on the settlement of a hedge
agreement in 2001 related to securing financing for the Hannaford acquisition by Delhaize America, and a deferred gain
related to the 2007 debt refinancing (see Note 19). Both the deferred loss and gain are amortized over the life of the
underlying debt instruments.
 Cash flow hedge: This reserve contains the effective portion of the cumulative net change in the fair value of cash flow
hedge instruments related to hedged transactions that have not yet occurred (see Note 19). During 2012, Delhaize Group
refinanced the $300 million bond issued in 2009 (see Note 18.1) that was included in a cash flow hedge relationship. As a
result, the cumulative loss on the hedging instrument recognized in other comprehensive income was reclassified to profit or
loss as a reclassification adjustment and was not included in the initial cost or other carrying amount of a non-financial asset
or liability.