Cumulative Translation Adjustment
Non-controlling Interests
Capital Management
17. Dividends
FINANCIAL STATEMENTS
Discontinued cash flow hedge reserve: 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 reserve: 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). The cumulative gain or loss
will be reclassified to profit or loss when the hedged transaction affects profit or loss or is included as a basis adjustment to a
non-financial hedged item. Currently, the Group has no cash flow hedge relationships in place.
Available for sale reserve: The Group recognizes in this reserve unrealized fair value changes on financial assets classified
as available for sale.
Remeasurement of defined benefit liability reserve: Remeasurements comprise (i) actuarial gains and losses, (ii) the return
on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset) and (iii) any change in
the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset). They are
recognized immediately in OCI in the period in which they occur (see Note 21.1) and never reclassified into profit or loss.
The reserve includes an insignificant amount in relation to the Group's equity accounted joint venture.
The cumulative translation adjustment relates to changes in the balance of assets and liabilities due to changes in the functional
currency of the Group's subsidiaries relative to the Group's reporting currency. The balance in cumulative translation adjustment
is mainly impacted by the appreciation or depreciation of the U.S. dollar and the Serbian dinar to the euro. Exchange differences
previously accumulated are reclassified to profit or loss on the disposal of the foreign operation.
Non-controlling interests represent third party interests in the equity of fully consolidated companies that are not wholly owned by
Delhaize Group. These non-controlling interests are held by the Southeastern Europe segment and amounted to €6 million at the
end of 2014 (2013: €5 million; 2012: €2 million).
Delhaize Group's objectives for managing capital are to safeguard the Group's ability to continue as a going concern and to
maximize shareholder value, while maintaining investment grade credit rating, keeping sufficient flexibility to execute strategic
projects and reduce the cost of capital.
In order to maintain or adjust the capital structure and optimize the cost of capital, the Group may, among other things, return
capital to shareholders, issue new shares and or debt or refinance exchange existing debt. Further, Delhaize Group's new
dividend policy, as adopted by the Board of Directors in March 2014, is to pay out approximately 35% of the group share in
underlying net profit from continued operations.
Consistent with the objectives noted, the Group monitors its capital structure, by using (i) the equity vs liability classifications as
applied in its consolidated financial statements, (ii) debt capacity, (iii) its net debt and (iv) "Net debt to equity" ratio (see Note
18.4).
On May 22, 2014, the shareholders approved the payment of a gross dividend of €1.56 per share (€1.17 per share after
deduction of the 25% Belgian withholding tax) or a total gross dividend of €160 million (including the dividend on treasury
shares). On May 24, 2013, the shareholders approved the payment of a gross dividend of €1.40 per share (€1.05 per share after
deduction of the 25% Belgian withholding tax) or a total gross dividend of €143 million.
With respect to the financial year 2014, the Board of Directors proposes a gross dividend of €1.60 per share to be paid to owners
of ordinary shares against coupon no. 53 on June 4, 2015. This dividend is subject to approval by shareholders at the Ordinary
Shareholders' Meeting of May 28, 2015 and, therefore, has not been included as a liability in Delhaize Group's consolidated
financial statements prepared under IFRS. The financial year 2014 dividend, based on the number of shares issued at March 4,
2015, is €165 million. The payment of this dividend will not have income tax consequences for the Group.
As a result of the potential exercise of warrants issued under the Delhaize Group 2002 and 2012 Stock Incentive Plans, the
Group may have to issue new ordinary shares, to which payment in 2015 of the 2014 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 Shareholders' Meeting
of May 28, 2015. The Board of Directors will communicate at this Ordinary Shareholders' Meeting the aggregate number of
shares entitled to the 2014 dividend and will submit at this meeting the aggregate final amount of the dividend for approval. The
annual statutory accounts of Delhaize Group SA for 2014 will be modified accordingly.
The maximum number of shares which could be issued between March 4, 2015, and May 28, 2015, assuming that all vested
warrants were to be exercised, is 1 935 730. This would result in an increase in the total amount to be distributed as dividends to
a total of €3 million. Total outstanding non-vested warrants at March 4, 2015 amounted to 198 746, representing a maximum
additional dividend to be distributed of less than €1 million.
