Retained Earnings
Other Reserves
Delhaize Group Annual Report 2014 119
price of €1.00 and a maximum share price not higher than 20% above the highest closing price of the Delhaize Group share on
NYSE Euronext Brussels during the 20 trading days preceding the acquisition. The authorization is granted for five years. Such
authorization also relates to the acquisition of shares of Delhaize Group by one or several direct subsidiaries of the Group, as
defined by legal provisions on acquisition of shares of the Group by subsidiaries.
In 2004, the Board of Directors approved the repurchase of up to €200 million of the Group's shares or ADRs from time to time in
the open market, in compliance with applicable law and subject to and within the limits of an outstanding authorization granted to
the Board by the shareholders, to satisfy exercises under the share-based compensation plans that Delhaize Group offers to its
employees. No time limit has been set for these repurchases. In 2011, the Board of Directors approved the increase of the
amount remaining for repurchases under the 2004 repurchases approval to €100 million to satisfy exercises under the stock
option plans that Delhaize Group and/or its subsidiaries offer to employees and to hedge certain stock option plan exposures.
During 2011, Delhaize Group acquired call options on its own shares, which qualified as equity instruments, in order to hedge the
exposure arising from the possible future exercise of stock options granted to employees of its non-U.S. operating companies. A
first tranche expired in 2013 and the second and third tranche will expire in May 2015 and 2016. These options are automatically
exercised under certain conditions by a credit institution on behalf of Delhaize Group. As a result of such automatic exercise,
Delhaize Group SA acquired 190 139 Delhaize Group shares during 2014, for an aggregate amount of €10 million, representing
approximately 0.18% of Delhaize Group's shares. Delhaize Group also transferred 225 643 shares to satisfy the exercise of
stock options granted to employees of non-U.S. operating companies (see Note 21.3).
Delhaize America, LLC repurchased no Delhaize Group ADRs in 2014 and transferred 50 345 shares 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 in 2011, Delhaize Group SA and its affiliates acquired 804 063 Delhaize Group shares for an
aggregate amount €37 million. As a consequence, at the end of 2014, the management of Delhaize Group SA had a remaining
authorization for the purchase of its own shares or ADRs for an amount up €63 million subject to and within the limits of an
outstanding authorization granted to the Board of Directors by the shareholders.
At the end of 2014, Delhaize Group owned 1 115 094 treasury shares (including ADRs), of which 924 955 were acquired prior to
2014, representing approximately 1.08% of the Delhaize Group shares.
Delhaize Group SA provided a Belgian financial institution with a discretionary mandate to purchase up to 800 000 Delhaize
Group ordinary shares on NYSE Euronext Brussels between December 31, 2013 and December 31, 2016, up to a maximum
aggregate consideration of €60 million 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.
In 2014, retained earnings decreased by €69 million, representing (i) the profit attributable to owners of the parent (€89 million),
and (ii) the dividend declared and paid in 2014 (€158 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, 2014, 2013 and 2012, Delhaize Group's legal reserve
amounted to €5 million and was recorded in retained earnings. Generally, this reserve cannot be distributed to the shareholde rs
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 Shareholders Meeting must approve such dividends.
December 31,
(in millions of
2014
2013
2012
Discontinued cash flow hedge reserve:
Gross
(15)
(13)
(15)
Tax effect
6
5
6
Available for sale reserve:
Gross
(3)
(6)
Tax effect
1
Remeasurement of defined benefit liability reserve:
Gross
(86)
(65)
(78)
Tax effect
30
23
28
Total other reserves (68) (55) (59)
