Delhaize 20F 2012 Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

¨	Registration statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

x	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2012

¨	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

¨	Shell company report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of event requiring this shell company report

Commission file number: 333-13302

ETABLISSEMENTS

DELHAIZE FRÈRES ET CIE

“LE LION”

(GROUPE DELHAIZE)

(Exact name of Registrant as specified in its charter)*

Delhaize Brothers and Co. “The Lion” (Delhaize Group)

(Translation of Registrant’s name into English)*

Belgium

(Jurisdiction of incorporation or organization)

Square Marie Curie 40

1070 Brussels, Belgium

(Address of principal executive offices)

Pierre Bouchut

Tel: +32 2 412 22 11

Fax: +32 2 412 22 22

Square Marie Curie 40

1070 Brussels, Belgium

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered
Ordinary Shares, without nominal value		New York Stock Exchange**

American Depository Shares (as evidenced by American Depository Receipts), each representing one Ordinary Share		New York State Exchange

*	The Registrant’s charter (articles of association) specifies the Registrant’s name in French, Dutch and English.

**	Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Ordinary Shares, without nominal value 101,921,498 (as of December 31, 2012)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨

International Financial Reporting Standards as issued

by the International Accounting Standards Board x

Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ¨ Item 18 ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

TABLE OF CONTENTS


GENERAL INFORMATION		ii
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS		iii
PART I		1
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
ITEM 4.	INFORMATION ON THE COMPANY	19
ITEM 4A.	UNRESOLVED STAFF COMMENTS	29
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	29
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	53
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	65
ITEM 8.	FINANCIAL INFORMATION	66
ITEM 9.	THE OFFER AND LISTING	67
ITEM 10.	ADDITIONAL INFORMATION	70
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	91
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	93
PART II		93
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	93
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	93
ITEM 15.	CONTROLS AND PROCEDURES	93
ITEM 16.	[RESERVED]	94
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	94
ITEM 16B.	CODE OF ETHICS	94
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	94
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	95
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	95
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	96
ITEM 16G.	CORPORATE GOVERNANCE	96
ITEM 16H.	MINE SAFETY DISCLOSURE	96
PART III		96
ITEM 17.	FINANCIAL STATEMENTS	96
ITEM 18.	FINANCIAL STATEMENTS	97
ITEM 19.	EXHIBITS	98

GENERAL INFORMATION

References to “Delhaize Group” and to “our company,” “Group,” “we,” “us” and “our” in this Annual Report are to Etablissements Delhaize Frères et Cie “Le Lion” (Groupe Delhaize) and its consolidated and associated companies, unless the context otherwise requires.

We are a Belgian international food retailer present in ten countries on three continents. We were founded in Belgium in 1867. Our principal activity is the operation of food supermarkets. As of December 31, 2012, we had a sales network (which includes company-operated, affiliated and franchised stores) of 3,451 stores and employed approximately 158,000 people. We conduct our retail operations primarily through our businesses in (i) the United States, which we refer to as Delhaize America, (ii) Belgium and the Grand Duchy of Luxembourg, which we refer to collectively as Delhaize Belgium, and (iii) Greece, Romania, Serbia, Bosnia and Herzegovina, Montenegro, Albania, (divested in February 2013) Bulgaria and Indonesia, which we refer to collectively as Southeastern Europe and Asia. Our ordinary shares are listed under the symbol “DELB” on the regulated market NYSE Euronext, Brussels. Our American Depositary Shares (“ADSs”), evidenced by American Depositary Receipts (“ADRs”), each representing one ordinary share, are listed on the New York Stock Exchange under the symbol “DEG.” Our website can be found atwww.delhaizegroup.com.

The results of operations of our company and those of our subsidiaries outside the United States are presented on a calendar-year basis. The fiscal year for our U.S. operations ends on the Saturday nearest December 31. The consolidated results of Delhaize Group for 2012, 2011, and 2010 include the results of operations of its U.S. subsidiaries for the 52 weeks ended December 29, 2012, 52 weeks ended December 31, 2011 and 52 weeks ended January 1, 2011, respectively. Our financial information includes all of the assets, liabilities, sales and expenses of all consolidated subsidiaries, i.e. over which we can exercise control.

Our consolidated financial statements appear in Item 18 “Financial Statements” of this Annual Report on Form 20-F. Our consolidated financial statements presented herein were prepared using accounting policies in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, and as adopted by the European Union, or EU. Currently, the only difference between the effective IFRS as issued by the IASB and adopted by the EU relates to certain paragraphs of IAS 39 Financial Instruments: Recognition and Measurement, which are not required to be applied in the EU (so-called “carve-out”). We are not affected by the carve-out, and for us there is therefore no difference between the effective IFRS as issued by the IASB and the pronouncements adopted by the EU, as of December 31, 2012.

On March 6, 2013, our Board of Directors proposed a gross dividend of €1.40 per share to be paid to owners of ordinary shares against coupon nr. 51 on May 31, 2013. After deduction of 25% withholding tax pursuant to Belgian domestic law, this will result in a net dividend of €1.05 per share. This dividend is still subject to approval by the shareholders at the Ordinary General Meeting of May 23, 2013 and, therefore, has not been included as a liability our consolidated financial statements prepared under IFRS. The estimated dividend liability, based on the number of shares issued at March 6, 2013, is €143 million.

The euro is our presentation currency. The translations of euro (“EUR” or “€”) amounts into U.S. dollar (“USD” or “$”) amounts are included solely for the convenience of readers and have been made, unless otherwise noted, at the rate of exchange of EUR 1.00 = USD 1.3194, the reference rate of the European Central Bank on December 31, 2012. Such translations should not be construed as representations that euro amounts could be converted into U.S. dollars at that or any other rate. For more information on foreign currency translation and presentation in this report, see Note 2.3 to the consolidated financial statements included in this document.

Our address, telephone number and Internet address:

Etablissements Delhaize Frères et Cie “Le Lion” (Groupe Delhaize)

Square Marie Curie 40

1070 Brussels, Belgium

+32-2-412-2211

www.delhaizegroup.com

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Statements included in, or incorporated by reference into, this Annual Report, other than statements of historical fact, which address activities, events or developments that we expect or anticipate will or may occur in the future, including, without limitation, statements regarding the expansion and growth of our business, anticipated store openings and renovations, future capital expenditures, projected revenue growth or synergies resulting from acquisitions, cost savings from internal reorganizations, and business strategy, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, Section 21E of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995 about us that are subject to risks and uncertainties. These forward-looking statements generally can be identified as statements that include phrases such as “believe,” “project,” “estimate,” “strategy,” “may,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “should” or other similar words or phrases. Although we believe that these statements are based upon reasonable assumptions, we can give no assurance that our goals will be achieved. Given these uncertainties, prospective investors are cautioned not to place undue reliance on these forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included under “Risk Factors” of Item 3 “Key Information” within this Annual Report. Other important factors that could cause actual results to differ materially from our expectations are described under “Factors Affecting Financial Condition and Results of Operation” of Item 5 “Operating and Financial Review and Prospects” and elsewhere below. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

iii

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.

KEY INFORMATION

SELECTED FINANCIAL DATA

The following selected financial data is derived from our audited consolidated financial statements, included in Item 18 “Financial Statements” of this Annual Report, which have been prepared using accounting policies in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, and as adopted by the European Union, or EU. Currently, the only difference between the effective IFRS as issued by the IASB and as adopted by the EU relates to certain paragraphs of IAS 39 Financial Instruments: Recognition and Measurement, which are not required to be applied in the EU (so-called “carve-out”). We are not affected by the carve-out and for us there is therefore no difference between the effective IFRS as issued by the IASB and the pronouncements adopted by the EU.

The selected financial data presented below should be read in conjunction with our consolidated financial statements, related notes thereto and other financial information included in this Annual Report.

Our presentation currency is the euro. U.S. dollar amounts contained in the income statement data, balance sheet data and other data tables below are provided solely for the convenience of the reader and have been calculated using the exchange rate of EUR 1.00 = USD 1.3194, the reference rate of the European Central Bank on December 31, 2012. Such translations should not be construed as representations that euro amounts could be converted into U.S. dollars at that or any other rate.


	Year Ended December 31,
	2012 USD		2012 EUR		2011⁽³⁾ EUR		2010 EUR		2009 EUR		2008 EUR
	(in millions, except per share amounts)
INCOME STATEMENT DATA
Revenues		29,999		22,737		21,110		20,850		19,938		19,024
Operating profit		515		390		813		1,024		942		904
Profit before taxes and discontinued operations		197		149		633		821		740		702
Net profit from continuing operations		165		125		477		576		512		485
Net profit		136		103		475		575		520		479
Net profit attributable to equity holders of the Group		139		105		475		574		514		467
Cash dividends paid⁽¹⁾		237		180		173		161		148		143
Basic earnings per share⁽²⁾		1.39		1.05		4.71		5.73		5.16		4.70
Diluted earnings per share⁽²⁾		1.37		1.04		4.68		5.68		5.08		4.59


	December 31,
	2012 USD			2012 EUR			2011⁽⁴⁾ EUR			2010 EUR			2009 EUR			2008 EUR
	(in millions)
BALANCE SHEET DATA
Current assets		4,247			3,219			3,134			2,988			2,419			2,403
Total assets		15,748			11,936			12,292			10,902			9,748			9,700
Short-term borrowings		—			—			60			16			63			152
Long-term debt		3,052			2,313			2,325			1,966			1,904			1,766
Long-term obligations under finance lease		807			612			689			684			643			643
Share capital		67			51			51			51			50			50
Non-controlling interests		3			2			5			1			17			52
Shareholders’ equity		6,849			5,191			5,414			5,068			4,392			4,143

	2012 USD			2012 EUR			2011 EUR			2010 EUR			2009 EUR			2008 EUR
	(in millions except for store count)
OTHER DATA
Store count at period end		—			3,451			3,408			2,800			2,732			2,673
Weighted average number of shares outstanding at period end		—			100.8			100.7			100.3			99.8			99.4
Net cash provided by operating activities		1,858			1,408			1,106			1,317			1,176			927
Net cash used in investing activities		(840	)		(637	)		(1,265	)		(665	)		(555	)		(758	)
Net cash used in financing activities		(346	)		(262	)		(146	)		(343	)		(496	)		(105	)
Capital expenditures		908			688			762			660			520			714

⁽¹⁾

We usually declare dividends once a year at our annual shareholders’ meeting following the fiscal year with respect to which the dividend relates. Dividends per share represent the dividend for the indicated fiscal year, which is approved at the shareholders’ meeting held the following year. Cash dividends paid represent the amount of dividend effectively paid during the indicated year.

⁽²⁾	Group share in net profit.

⁽³⁾	2011 was adjusted for the reclassification of the Albanian operations in discontinued operations.

⁽⁴⁾	2011 was revised to reflect the effects of the finalization in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

Dividends

The following table sets forth, for the periods indicated, historical dividend information per ordinary share. The 2012 dividend was proposed by the Board of Directors but still needs to be approved by the shareholders at the Ordinary General Meeting of May 23, 2013. Each year indicated in the following table represents the fiscal year of Delhaize Group to which the dividend relates. Actual payment of the annual dividend for each fiscal year occurs following Delhaize Group’s annual shareholders’ meeting in the subsequent year. The amounts set forth below in U.S. dollars represent the gross dividend per American Depositary Receipt, or ADR, paid by the depositary to holders of Delhaize Group ADRs on the dividend payment date. The dividend for the fiscal year 2012 becomes payable to ADR holders on June 5, 2013. The dividend amounts do not reflect any withholding taxes with respect to such dividends.


Dividend for Fiscal Year	Dividend per Delhaize Group Ordinary Share
	(amounts in EUR)		(amounts in USD)⁽¹⁾
2012 (proposed dividend)		1.40		1.80
2011		1.76		2.20
2010		1.72		2.50
2009		1.60		1.94
2008		1.48		2.09

⁽¹⁾	The dividends are translated into U.S. dollars at the exchange rate on each of the respective dividend payment dates for ADR holders. For the 2012 dividend, we used the indicative exchange rate of the European Central Bank of April 2, 2013 of € 1.00 = $1.2840.

Belgian law requires us to appropriate at least 5% of our annual profit to the statutory reserves until such reserve has reached an amount equal to 10% of our share capital. Subject to this requirement, our Board of Directors may propose, at a shareholders’ meeting at which statutory non-consolidated financial statements are approved, to distribute as a dividend all or a portion of our net profits from the prior accounting years available for distribution. In connection with the approval of our statutory non-consolidated financial statements, our shareholders may, at a general meeting, authorize a distribution of our net profits to shareholders from reserves, subject to the requirement to contribute to the statutory reserves referenced in the first sentence of this paragraph.

Citibank, as our depositary, holds the underlying ordinary shares represented by our American Depositary Shares, or ADSs, as evidenced by ADRs. Each ADS represents an ownership interest in the underlying ordinary share and the right to receive one ordinary share, which has been deposited with the depositary. Because Citibank holds the underlying ordinary shares, holders of the ADSs will generally receive the benefit from such underlying shares through Citibank. A deposit agreement among Citibank, Delhaize Group and all holders from time to time of the Delhaize Group ADSs sets forth the obligations of Citibank. Citibank will, as promptly as practicable after payment of a dividend, convert any cash dividend or distribution we pay on the ordinary shares, other than any dividend or distribution paid in U.S. dollars, into U.S. dollars if it can do so on a reasonable basis and can legally transfer the U.S. dollars to the United States. If that is not possible on a reasonable basis, or if any approval from any government is needed and cannot be obtained, the deposit agreement allows Citibank to distribute the foreign currency only to those Delhaize Group ADS holders to whom it is possible to do so or to hold the foreign currency it cannot convert for the account of the Delhaize Group ADS holders who have not been paid. Before making a distribution, any withholding taxes that must be paid under applicable laws will be deducted. See “Taxation” under Item 10 “Additional Information” in this Annual Report. Citibank will distribute only whole U.S. dollars and cents and will round any fractional amounts to the nearest whole cent.

Exchange Rates

Our presentation currency is the euro. The euro to U.S. dollar exchange rate was EUR 1 = USD 1.3194 on December 31, 2012 based on the reference rate of the European Central Bank. The following tables set forth, for the periods and dates indicated, certain information concerning the exchange rates for the euro expressed in U.S. dollars per euro. Information concerning the U.S. dollar exchange rate is based on the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York, which we refer to as the noon buying rate. The rate on April 2, 2013 was $1.2847 per euro.

The table below shows the average noon buying rate of the euro from 2008 to 2012.


Year ended December 31,	Average Rate⁽¹⁾
2012		1.2909
2011		1.4002
2010		1.3216
2009		1.3955
2008		1.4695

⁽¹⁾	The average of the noon buying rates for euros on the last business day of each month during the year.

The table below shows the high and low noon buying rates expressed in U.S. dollars per euro for the previous six months.


Month	High		Low
March 2013		1.3098		1.2782
February 2013		1.3692		1.3054
January 2013		1.3584		1.3047
December 2012		1.3260		1.2930
November 2012		1.3010		1.2715
October 2012		1.3133		1.2876

RISK FACTORS

The following discussion of risks should be read carefully in connection with evaluating our business, our prospects and the forward-looking statements contained in this Annual Report. Any of the following risks could have a material adverse effect on our financial condition, results of operations, liquidity, the trading price of our securities and the actual outcome of matters as to which forward-looking statements contained in this Annual Report are made. The risks and uncertainties described below are not the only ones that we may face. In addition to the following factors, please see the information under the heading entitled “Factors Affecting Financial Condition and Results of Operations” under Item 5 “Operating and Financial Review and Prospects.” For additional information regarding forward-looking statements, see “Cautionary Note Concerning Forward-Looking Statements” included in this Annual Report.

Risks Related to Operations of Our Company

Our results are subject to risks relating to competition and narrow profit margins in the food retail industry.

The food retail industry is competitive and generally characterized by narrow profit margins. Our competitors include international, national, regional and local supermarket chains, supercenters, independent grocery stores, specialty food stores, warehouse club stores, retail drug chains, convenience stores, membership clubs, general merchandisers, discount retailers and restaurants. Food retail chains generally compete on the basis of location, quality of products, service, price, product variety and store condition. We believe that we could face increased competition in the future from all of these competitors. To the extent we reduce prices to maintain or grow our market share in the face of competition, net income and cash generated from operations could be adversely affected. Some of our competitors have financial, distribution, purchasing and marketing resources that are greater than ours. Our profitability could be impacted as a result of the pricing, purchasing, financing, advertising or promotional decisions made by competitors.

We have substantial financial debt outstanding that could negatively impact our business.

We have substantial debt outstanding. At December 31, 2012, we had total consolidated financial debt outstanding of approximately €3.1 billion. Our level of debt could:

•

make it difficult for us to satisfy our obligations, including interest payments;

•

limit our ability to obtain additional financing to operate our business;

•

limit our financial flexibility in planning for and reacting to industry changes;

•

place us at a competitive disadvantage as compared to less leveraged companies;

•

increase our vulnerability to general adverse economic and industry conditions; and

•

require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing the availability of our cash flow for other purposes.

We may borrow additional funds to support our capital expenditures and working capital needs and to finance future acquisitions. The incurrence of additional debt could make it more likely that we will experience some or all of the risks described above. For additional information on liquidity and leverage risk, see “Item 5. Operating and Financial Review and Prospects —Liquidity and Capital Resources.”

If we do not generate positive cash flows, we may be unable to service our debt.

Our ability to pay principal and interest on our debt depends on our future operating performance. Future operating performance is subject to market conditions and business factors that often are beyond our control. Consequently, we cannot guarantee that we will have sufficient cash flows to pay the principal, premium, if any, and interest on our debt. If our cash flows and capital resources are insufficient to allow us to make scheduled payments on our debt, we may have to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our debt. We cannot guarantee that the terms of our debt will allow these alternative measures or that such measures would satisfy our scheduled debt service obligations. If we cannot make scheduled payments on our debt, we will be in default and, as a result:

•

our debt holders could declare all outstanding principal and interest to be due and payable;

•

our lenders could terminate their commitments and commence foreclosure proceedings against our assets; and

•

we could be forced into bankruptcy or liquidation.

Certain of our debt agreements require us to maintain specified financial ratios and meet specific financial tests. Our failure to comply with these covenants could result in an event of default that, if not cured or waived, could result in our being required to repay these borrowings before their due date. If we were unable to make this repayment or otherwise refinance these borrowings, our lenders could foreclose on our assets. If we were unable to refinance these borrowings on favorable terms, our business could be adversely impacted.

We target to generate an average of approximately €500 million free cash flow annually over fiscal years 2013-2015. While we were able to exceed a free cash flow of €500 million for fiscal year 2012, there can be no assurance that we will be able to achieve our targeted free cash flow for each of the next three years.

General economic factors may adversely affect our financial performance.

General economic conditions in the areas where we operate may adversely affect our financial performance. Higher interest rates, higher fuel and other energy costs, weakness in the housing market, inflation, deflation, higher levels of unemployment, unavailability of consumer credit, higher consumer debt levels, higher tax rates and other changes in tax laws, overall economic slowdown and other economic factors could adversely affect consumer demand for the products and services we sell, change the mix of products we sell to one with a lower average gross margin and result in slower inventory turnover and greater markdowns on inventory. Higher interest rates, higher fuel and other energy costs, transportation costs, inflation, higher costs of labor, insurance and healthcare, foreign exchange rates fluctuations, higher tax rates and other changes in tax laws, changes in other laws and regulations and other economic factors can increase our cost of sales and operating, selling, general and administrative expenses, and otherwise adversely affect our operations and operating results. These factors affect not only our operations, but also the operations of suppliers from whom we purchase goods, a factor that can result in an increase in the cost to us of the goods we sell to our customers. In Europe and in particular Greece, we are exposed to the possible aftermath of the sovereign debt crisis and the breakup of the eurozone, which will likely have an adverse impact on consumer spending and may cause us to impair assets related to our operations in Greece and record lower contributions from those assets in our operating results.

Our operations are subject to economic conditions that impact consumer spending.

Our results of operations are sensitive to changes in overall economic conditions in the areas where we operate, including Greece, that impact consumer spending, including discretionary spending. Consumers may reduce spending or change purchasing habits due to certain economic conditions such as decreasing employment levels, slowing business activity, increasing interest rates, increasing energy and fuel costs, increasing healthcare costs and increasing tax rates. A general reduction in the level of consumer spending or our inability to respond to shifting consumer attitudes regarding products, store location and other factors could adversely affect our growth and profitability.

Turbulence in the global credit markets and economy may adversely affect our financial condition and liquidity.

Current economic conditions have been and continue to be volatile. Disruptions in the capital and credit markets could adversely affect our ability to draw on our bank credit facilities or enter into new bank credit facilities. Our access to funds under our bank credit facilities is dependent on the ability of the banks that are parties to the facilities to meet their funding commitments. Those banks may not be able to meet their funding commitments to us if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests from Delhaize Group and other borrowers within a short period of time. Also, disruptions in the capital and credit markets may impact our ability to renew those bank credit facilities or enter into new bank credit facilities as needed. In addition, our suppliers and third-party service providers could experience credit or other financial difficulties that could result in their inability or delays in their ability to supply us with necessary goods and services.

The significance of the contributions of our U.S. operations to our revenues and the geographic concentration of our U.S. operations on the east coast of the United States make us vulnerable to economic downturns, natural disasters and other catastrophic events that impact that region.

During 2012, 64.4% of our revenues were generated through our U.S. operations. We depend in part on our U.S. operations, for dividends and other payments to generate the funds necessary to meet our financial obligations. Substantially all of our U.S. operations are located on the east coast of the United States. Consequently, our operations depend significantly upon economic and other conditions in this area, in addition to those that may affect the United States or the world as a whole. Our results of operations may suffer based on a general economic downturn, natural disaster or other adverse condition impacting the east coast of the United States.

Increases in interest rates and/or a downgrade of our credit ratings could negatively affect our financing costs and our ability to access capital.

We have exposure to future interest rates based on the variable rate debt held by us and to the extent we raise debt in the capital markets to meet maturing debt obligations, to fund our capital expenditures and working capital needs and to finance future acquisitions. Daily working capital requirements are typically financed with operational cash flow and through the use of various committed and uncommitted lines of credit and a commercial paper program. The interest rate on these short and medium term borrowing arrangements is generally determined either as the inter-bank offering rate at the borrowing date plus a pre-set margin or based on market quotes from banks. Although we employ risk management techniques to hedge against interest rate volatility, significant and sustained increases in market interest rates could materially increase our financing costs and negatively impact our reported results.

We rely on access to bank and capital markets as sources of liquidity for cash requirements not satisfied by cash flows from operations. A downgrade in our credit ratings from the internationally-recognized credit rating agencies, particularly to a level below investment grade, could negatively affect our ability to access the bank and capital markets, especially in a time of uncertainty in either of those markets. A ratings downgrade could also impact our ability to grow our businesses by substantially increasing the cost of, or limiting access to, capital. Our senior unsecured debt ratings from Standard & Poor’s and Moody’s are BBB- and Baa3 investment grades, respectively.

A rating is not a recommendation to buy, sell or hold debt, inasmuch as the rating does not comment as to market price or suitability for a particular investor. The ratings assigned to our debt address the likelihood of payment of principal and interest pursuant to their terms. A rating may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating that may be assigned to our securities.

A competitive labor market as well as changes in labor conditions may increase our costs.

Our success depends in part on our ability to attract and retain qualified personnel in all areas of our business, including executives to lead our business. We compete with other businesses in our markets in attracting and retaining employees. Tight labor markets, increased overtime, collective labor agreements, increased healthcare costs, government mandated increases in the minimum wage and a higher proportion of full-time employees could result in an increase in labor costs, which could materially impact our results of operations. A shortage of qualified employees may require us to increase our wage and benefit offerings to compete effectively in the hiring and retention of qualified employees or to retain more expensive temporary employees. In addition, while we believe that relations with our employees are good, we cannot provide assurance that we will not become the target of future campaigns to unionize our employees or that such campaigns will not be successful. Also, we always face the risk that legislative bodies will approve law that liberalizes the procedures for union organization. If more of our workforce were to become unionized, it could affect our operating expenses. Increased labor costs could increase our costs, resulting in a decrease in our profits or an increase in our losses. There can be no assurance that we will be able to fully absorb any increased labor costs through our efforts to increase efficiencies in other areas of our operations.

Because of the number of properties that we own and lease, we have a potential risk of environmental liability.

We are subject to laws, regulations and ordinances that govern activities and operations that may have adverse environmental effects and impose liabilities for the costs of cleaning, and certain damages arising from sites of past spills, disposals or other releases of hazardous materials. Under applicable environmental laws, we may be responsible for the remediation of environmental conditions

and may be subject to associated liabilities relating to our stores, warehouses and offices, as well as the land on which they are situated, regardless of whether we lease, sublease or own the stores, warehouses, offices or land in question and regardless of whether such environmental conditions were created by us or by a prior owner or tenant. The costs of investigation, remediation or removal of environmental conditions may be substantial. Certain environmental laws also impose liability in connection with the handling of or exposure to asbestos-containing materials, pursuant to which third parties may seek recovery from owners, tenants or sub-tenants of real properties for personal injuries associated with asbestos-containing materials. There can be no assurance that environmental conditions relating to prior, existing or future store sites will not harm us through, for example, business interruption, cost of remediation or harm to reputation.

If we are unable to locate appropriate real estate or enter into real estate leases on commercially acceptable terms, we may be unable to open new stores.

Our ability to open new stores is dependent on our success in identifying and entering into leases on commercially reasonable terms for properties that are suitable for our needs. If we fail to identify and enter into leases on a timely basis for any reason, including our inability due to competition from other companies seeking similar sites, our growth may be impaired because we may be unable to open new stores as anticipated. Similarly, our business may be harmed if we are unable to renew the leases on our existing stores on commercially acceptable terms.

Unfavorable exchange rate fluctuations may negatively impact our financial performance.

Our operations are conducted primarily in the U.S. and Belgium and to a lesser extent in other parts of Europe, including Romania and Serbia, and Indonesia. The results of operations and the financial position of each of our entities outside the euro zone are accounted for in the relevant local currency and then translated into euro at the applicable foreign currency exchange rate for inclusion in the Group’s consolidated financial statements, which are presented in euro (see also Note 2.3 in the consolidated financial statements with respect to translation of foreign currencies, being included under Item 18 in this document). Exchange rate fluctuations between these foreign currencies and the euro may have a material adverse effect on our consolidated financial statements. These risks are monitored on a regular basis at a centralized level.

Because a substantial portion of our assets, liabilities and operating results are denominated in U.S. dollars, we are particularly exposed to currency risk arising from fluctuations in the value of the U.S. dollar against the euro. We do not hedge the U.S. dollar translation exposure. The translation risk resulting from the substantial portion of U.S. operations is managed by striving to achieve a natural currency offset between assets and liabilities and between revenues and expenditures denominated in U.S. dollars using foreign exchange forward contracts and currency swaps.

Remaining intra-Group cross-currency transaction risks which are not naturally offset concern primarily dividend payments by the U.S. subsidiary and cross-currency lending, which in accordance with IFRS survive the consolidation process. When appropriate, we enter into agreements to hedge against the variation in the U.S. dollars in relation to dividend payments between the declaration by the U.S. operating companies and payment dates. Intra-Group cross-currency loans not naturally offset are generally fully hedged through the use of foreign exchange forward contracts or currency swaps. After cross-currency swaps, 65% of net financial debt is denominated in U.S. dollar while 62% of net cash provided by operating activities were generated in U.S. dollars.

If the average U.S. dollar exchange rate had been 1 cent higher/lower and all other variables were held constant, our 2012 net profit would have increased/decreased by €2 million (2011 €2 million and 2010 €3 million). For additional information on exchange rate fluctuations, see “Item 3. Key Information — Selected Financial Data — Exchange Rates.”

Various aspects of our business are subject to federal, regional, state and local laws and regulations in the U.S., Belgium and other countries, in addition to environmental regulations. Our compliance with these laws and regulations may require additional expenses or capital expenditures and could adversely affect our ability to conduct our business as planned.

In addition to environmental regulations, we are subject to federal, regional, state and local laws and regulations in the U.S., Belgium and other countries relating to, among other things, zoning, land use, workplace safety, public health, community right-to-know, store size, alcoholic beverage sales and pharmaceutical sales. A number of jurisdictions regulate the licensing of supermarkets, including retail alcoholic beverage license grants. In addition, under certain regulations, we are prohibited from selling alcoholic beverages in certain of our stores. Employers are also subject to laws governing their relationship with employees, including minimum wage requirements, overtime, working conditions, collective bargaining, disabled access and work permit requirements.

Compliance with, or changes in, these laws could reduce the revenue and profitability of our supermarkets and could otherwise adversely affect our business, financial condition or results of operations. A number of laws exist which impose obligations or restrictions on owners with respect to access by disabled persons. Our compliance with these laws may result in modifications to our properties, or prevent us from performing certain further renovations.

As a result of selling food products, we face the risk of exposure to product liability claims and adverse publicity.

The preparation, packaging, marketing, distribution and sale of food products purchased from others entail an inherent risk of product liability, product recall and resultant adverse publicity. Such products may contain contaminants that may be inadvertently redistributed by us. These contaminants may, in certain cases, result in illness, injury or death if processing at the foodservice or consumer level does not eliminate the contaminants. Even an inadvertent shipment of adulterated products is a violation of law and may lead to an increased risk of exposure to product liability claims. There can be no assurance that such claims will not be asserted against us or that we will not be obligated to perform such a recall in the future. If a product liability claim is successful, our insurance may not be adequate to cover all liabilities we may incur, and we may not be able to continue to maintain such insurance, or obtain comparable insurance at a reasonable cost, if at all. If we do not have adequate insurance or contractual indemnification available, product liability claims relating to defective products could have a material adverse effect on our ability to successfully market our products and on our business, financial condition and results of operations. In addition, even if a product liability claim is not successful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could have a material adverse effect on our reputation with existing and potential customers and on our business and financial condition and results of operations.

Strikes, work stoppages and slowdowns could negatively affect our financial performance.

A number of employees of our companies, mostly outside of the United States, are members of unions. It is possible that relations with the unionized portion of our workforce will deteriorate or that our workforce would initiate a strike, work stoppage or slowdown in the future. In such an event, our business, financial condition and results of operations could be negatively affected, and we cannot provide assurance that we would be able to adequately meet the needs of our customers utilizing our remaining workforce. In addition, similar actions by our non-unionized workforce are possible.

We may not be able to successfully complete renovation, conversion and brand repositioning plans.

A key to our business strategy has been, and will continue to be, the renovation and/or conversion of our existing stores, as well as the renovation of our infrastructure. Although it is expected that cash flows generated from operations, supplemented by the unused borrowing capacity under our credit facilities and the availability of capital lease financing, will be sufficient to fund our capital renovation programs and conversion initiatives, sufficient funds may not be available. Our inability to successfully renovate and/or convert our existing stores and other infrastructure could adversely affect our business, results of operations and ability to compete successfully.

On May 4, 2011, Food Lion re-launched approximately 170 stores in the Raleigh, North Carolina market (Phase One). In addition to price, we took action to strengthen other attributes of our Food Lion brand in those markets, focusing on the quality of the assortment, the ease and convenience of the shopping experience as well as making additional price investments. In 2012, the brand repositioning has been implemented in several additional markets as part of Phase 2 and Phase 3 and at the end of 2012 the brand repositioning had been implemented in 704 Food Lion stores. As part of Phase 4 we will reposition 180 stores in the Washington DC/Baltimore market in the second quarter of 2013. While these initiatives have resulted in increased revenues, there can be no assurance that they will continue to be successful and that we will achieve the expected results.

We may not achieve the annual positive impact on operating profit that we expect will result from our closure of underperforming stores that we completed in the first quarter of 2012 and 2013.

In January 2012, we announced the decision to close 146 stores across our network in the U.S. and Southeastern Europe and the planned conversion of 64 Bloom and Bottom Dollar Food stores to Food Lion in the U.S. This included the closure of 113 underperforming Food Lion stores, most of which were in markets with the lowest store density, and one distribution center, as well as converting 42 Bloom stores to Food Lion, the closure of the remaining 7 Bloom stores and the retirement of the Bloom brand. In addition, it included the conversion or closure of the Bottom Dollar Food brand stores in North Carolina, Virginia and Maryland. This resulted in the conversion of 22 Bottom Dollar Food stores to Food Lion and the closing of 6 stores in these markets. Finally, the

announcement included the decision to close 20 underperforming stores in Southeastern Europe. These included small convenience stores, supermarkets and hypermarkets in Serbia, Bulgaria and Bosnia and Herzegovina.

In January 2013, we announced the decision to close 52 stores, consisting of 45 stores in the U.S. (34 Sweetbay, 8 Food Lion and 3 Bottom Dollar Food), 6 stores in Southeastern Europe and 1 store in Belgium. As a result, we recorded an impairment charge of €49 million in the fourth quarter of 2012. In the first quarter of 2013, earnings were impacted by approximately €80 million to reflect store closing liabilities including a reserve for ongoing lease and severance obligations. In addition, we recorded charges of approximately $20 million (€15 million) in the first quarter of 2013 related to the severance of support services senior management and employees in the U.S. While we expect this portfolio optimization will have an annual positive impact on operating profit once the conversions and closings are complete, there can be no assurance an annual positive impact will be achieved.

We may be unsuccessful in managing the growth of our business or the integration of acquisitions we have made.

As part of our long-term strategy, we continue to reinforce our presence in the geographic locations where we currently operate and in adjacent regions, by pursuing acquisition opportunities in the retail grocery store industry and opening new stores (e.g. the expansion of our Bottom Dollar Food operations into the greater Philadelphia and Pittsburgh areas, and into the Youngstown, Ohio area). We also occasionally consider opportunities to expand into new regions (e.g. our 2011 acquisition of Delta Maxi, which at acquisition date, operated 485 stores and 7 distribution centers in five countries in Southeastern Europe-Serbia, Bulgaria, Bosnia and Herzegovina, Montenegro and Albania).

As the food retail industry consolidates, we face the risk that certain of our competitors may have more resources to make acquisitions, or expand operations, or that they otherwise may make acquisitions that we would have been interested in making. In addition, we face risks commonly encountered with growth through acquisition and conversion or expansion. These risks include, but are not limited to, as applicable, incurring significantly higher than anticipated financing related risks and operating expenses, failing to assimilate the operations and personnel of acquired businesses, failing to install and integrate all necessary systems and controls, the loss of customers, entering markets where we have no or limited experience, the disruption of our ongoing business and the dissipation of our management resources. Realization of the anticipated benefits of an acquisition, store renovation, market renewal or store opening may take several years or may not occur at all. Our growth strategy may place a significant strain on our management, operational, financial and other resources. In particular, the success of our acquisition strategy will depend on many factors, including our ability to:

•

identify suitable acquisition opportunities;

•

successfully complete acquisitions at valuations that will provide anticipated returns on invested capital;

•

quickly and effectively integrate acquired operations to realize operating synergies;

•

obtain necessary financing on satisfactory terms; and

•

make payments on the indebtedness that we might incur as a result of these acquisitions.

There can be no assurance that we will be able to execute successfully our acquisition and integration strategy or store openings. In addition, while our acquisition of Delta Maxi and the recent expansion of our Bottom Dollar Food operations into the greater Philadelphia, Pennsylvania area, the Pittsburgh, Pennsylvania area and the Youngstown, Ohio area has been implemented, there can be no assurance that those businesses will be successful, and the failure of any acquisitions or expansions to be successful may have a material adverse effect on our business, financial condition and results of operations.

Unexpected outcomes with respect to jurisdictional audits of income tax filings could result in an adverse effect on our financial performance.

We are regularly audited in the various jurisdictions in which we do business, which we consider to be part of our ongoing business activity. While the ultimate outcome of these 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 statements for potential exposures. Unexpected outcomes as a result of these audits could adversely affect our financial condition and results of operations.

Risks associated with the suppliers from whom our products are sourced could adversely affect our financial performance.

Significant disruptions in operations of our vendors and suppliers could materially impact our operations by disrupting store-level product selection or costs, resulting in reduced sales. The products we sell are sourced from a wide variety of domestic and international suppliers. Our ability to find qualified suppliers who meet our standards and to access products in a timely and efficient manner is a significant challenge. Political and economic instability in the countries in which suppliers are located, the financial instability of suppliers, suppliers’ failure to meet our standards, labor problems experienced by our suppliers, the availability of raw materials to suppliers, competition for products from other retailers, the impact of adverse weather conditions, product quality issues, currency exchange rates, transport availability and cost, inflation, deflation, and other factors relating to the suppliers and the countries in which they are located are beyond our control. In addition, tariffs and other impositions on imported goods, trade sanctions imposed on certain countries, the limitation on the importation of certain types of goods or of goods containing certain materials from other countries and other factors relating to foreign trade are beyond our control. These factors and other factors affecting our suppliers and access to products may result in decreased product selection and increased out-of-stock conditions, as well as higher product costs, which could adversely affect our operations and financial performance.

Risks associated with our franchised and affiliated stores could adversely affect our financial performance.

Approximately 20% of the stores in our sales network are franchised or affiliated. Our franchised and affiliated stores account for approximately 9.4% of our sales. The operators of our affiliated and franchised stores operate and oversee the daily operations of their stores and are independent third parties. Although we attempt to properly select, train and support the operators of our affiliated and franchised stores, the ultimate success and quality of any affiliated or franchised store rests with its operator. If the operators of our affiliated and franchised stores do not successfully operate in a manner consistent with our standards, our image and reputation could be harmed, which could adversely affect our business and operating results. In addition, we have large accounts receivables associated with our franchised and affiliated stores. If the operators of these stores do not operate successfully, we could be forced to write-off a portion of or all of the accounts receivables associated with such franchised and affiliated stores.

Natural disasters and geopolitical events costs could adversely affect our financial performance.

The occurrence of one or more natural disasters, such as hurricanes, earthquakes, tsunamis or pandemics, or other severe weather, whether as a result of climate change or otherwise, or geopolitical events, such as civil unrest in a country in which we operate or in which our suppliers are located, and attacks disrupting transportation systems, could adversely affect our operations and financial performance. Such events could result in physical damage to one or more of our properties, the temporary closure of one or more stores or distribution centers, the temporary lack of an adequate work force in a market, the temporary decrease in customers in an affected area, the temporary or long-term disruption in the supply of products from some local and overseas suppliers, the temporary disruption in the transport of goods from overseas, delay in the delivery of goods to our distribution centers or stores within a country in which we are operating and the temporary reduction in the availability of products in our stores. These factors could otherwise disrupt and adversely affect our operations and financial performance.

In our control systems there are inherent limitations, and misstatements due to error or fraud may occur and not be detected, which may harm our business and financial performance and result in difficulty meeting our reporting obligations.

Effective internal control over financial reporting is necessary for us to provide reasonable assurance with respect to our financial reports and to effectively prevent fraud. If we cannot provide reasonable assurance with respect to our financial reports and effectively prevent fraud, our business and operating results could be harmed. Internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. In addition, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risks that the control may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in its implementation of internal controls, our business and operating results could be harmed and we could fail to meet our reporting obligations.

Our operations are dependent on information technology, or IT, systems, the failure or breach of security of any of which may harm our reputation and adversely affect our financial performance.

Many of the functions of our operations are dependent on IT systems developed and maintained by internal experts or third parties. The failure of any of these IT systems may cause disruptions in our operations, adversely affecting our sales and profitability. We have disaster recovery plans in place to reduce the negative impact of such IT systems failures on our operations, but there is no assurance that these disaster recovery plans will be completely effective in doing so. If third parties or our employees are able to penetrate our network security or otherwise misappropriate our customers’ personal information or credit or debit card information, or if we give third parties or our employees improper access to our customers’ personal information or credit card information, we could be subject to liability. This liability could include claims for unauthorized purchases with credit card information, identity theft or other similar fraud-related claims. This liability could also include claims for other misuses of personal information, including for unauthorized marketing purposes. Other liability could include claims alleging misrepresentation of our privacy and data security practices. Any such liability for misappropriation of this information could decrease our profitability. Our security measures are designed to protect against security breaches, but our failure to prevent such security breaches could subject us to liability, damage our reputation and diminish the value of our brand-names.

Our Hannaford and Sweetbay banners experienced an unauthorized intrusion, which we refer to as the Computer Intrusion, into portions of their computer system that process information related to customer credit and debit card transactions, which resulted in the potential theft of customer credit and debit card data. Also affected was credit card data from cards used at certain independently-owned retail locations in the Northeast of the U.S. that carry products delivered by Hannaford. The Computer Intrusion was discovered during February 2008, and we believe the exposure window for the Hannaford and Sweetbay credit and debit card data was approximately December 7, 2007 through early March 2008. There is no evidence that any customer personal information, such as names or addresses, was obtained by any unauthorized person. Various legal actions have been taken, and various claims have been otherwise asserted, against Hannaford and affiliates relating to the Computer Intrusion, several of which already have been dismissed or resolved without any monetary payments by us. While we intend to continue to defend the remaining legal actions and claims vigorously, we cannot predict the outcome of all legal actions and claims.

A change in supplier terms could adversely affect our financial performance.

We receive allowances, credits and income from suppliers primarily for volume incentives, new product introductions, in-store promotions and co-operative advertising. Certain of these funds are based on our volume of net sales or purchases, growth rate of net sales or purchases and marketing programs. If we do not grow our net sales over prior periods or if we are not in compliance with the terms of these programs, there could be a material negative effect on the amount of incentives offered or paid to us by our suppliers. Additionally, suppliers routinely change the requirements for, and the amount of, funds available. No assurance can be given that we will continue to receive such incentives or that we will be able to collect outstanding amounts relating to these incentives in a timely manner, or at all. A reduction in, the discontinuance of, or a significant delay in receiving such incentives, as well as the inability to collect such incentives, could have a material adverse effect on our business, results of operation, and financial condition.

We are subject to antitrust and similar legislation in the jurisdictions in which we operate.

We are subject to a variety of antitrust and similar legislation in the jurisdictions in which we operate. In a number of markets, we have market positions which may make future significant acquisitions more difficult and may limit our ability to expand by acquisition or merger, in the event we wish to do so.

In addition, we are subject to legislation in many of the jurisdictions in which we operate relating to unfair competitive practices and similar behavior. We have been subject to and may in the future be subject to allegations of, or further regulatory investigations or proceedings into, such practices. Such allegations or investigations or proceedings (irrespective of merit), may require us to devote significant management resources to defending ourselves against such allegations. In the event that such allegations are proven, we may be subject to significant fines, damages awards and other expenses, and our reputation may be harmed.

vigorously defend ourselves. The investigation report does not contain sufficient information, and there is no similar case precedent, that would allow estimating a possible financial impact that could result from any future decision of the Belgian Competition Council. According to Belgian legislation, compensation payments are calculated on the turnover of the last year of the alleged infringement and capped at 10% of the Belgian annual revenues of the year preceding the decision of the Competition Council. Such compensation payments, if any, will therefore be capped at 10% of the Belgian annual revenues of 2012 or 2013, depending on the timing of the decision. A decision by the Council is not expected before the end of 2013 and, under the current legislation, the parties involved have the right to appeal in court. Consequently, we currently do not have sufficient information available to make a reliable estimate of any financial impact or the timing thereof.

Unexpected outcomes in our legal proceedings could materially impact our financial performance.

From time to time, we are party to legal proceedings including matters involving personnel and employment issues, personal injury, intellectual property, competition/antitrust matters, landlord-tenant matters, tax matters and other proceedings arising in the ordinary course of business. We have estimated our exposure to the claims and litigation arising in the normal course of business and believe we have made adequate provisions for such exposure. Unexpected outcomes in these matters could have an adverse effect on our financial condition and results of operations.

We may experience adverse results arising from claims against our self-insurance programs.

Our U.S. operations are self-insured for workers’ compensation, general liability, automotive accident, pharmacy claims and healthcare (including medical, pharmacy, dental and short-term disability). We use self-insured retention programs for workers’ compensation, general liability, automotive accident, pharmacy claims, and healthcare (including medical, pharmacy, dental and short-term disability). We also use captive insurance arrangements for some of our self-insurance programs to provide flexibility and optimize costs.

Self-insurance liabilities are estimated based on actuarial valuations of claims filed and an estimate of claims incurred but not reported. We believe that the actuarial estimates are reasonable. These estimates are subject to a high degree of variability and uncertainty caused by such factors as future interest and inflation rates, future economic conditions, litigation and claims settlement trends, legislative and regulatory changes, changes in benefit levels and the frequency and severity of incurred but not reported claims (“IBNR”), making it possible that the final resolution of some of these claims may require us to make significant expenditures in excess of existing reserves.

Self-insurance reserves of €142 million are included as liabilities on the balance sheet as of December 31, 2012. More information on self-insurance can be found in Note 20.2 to the consolidated financial statements included in this document.

Increasing costs associated with our defined benefit pension plans may adversely affect our results of operations, financial position or liquidity.

Most of our operating companies have pension plans, the structures and benefits of which vary with conditions and practices in the countries concerned. Pension benefits may be provided through defined contribution plans or defined benefit plans.

A defined contribution plan is a post-employment benefit plan under which we and / or the employee pays fixed contributions usually to a separate entity. Under such a plan, there are no legal or constructive obligations to pay further contributions, regardless of the performance of the funds held to satisfy future benefit payments. The actual retirement benefits are determined by the value of the contributions paid and the subsequent performance of investments made with these funds.

A defined benefit plan is a post-employment benefit plan which normally defines an amount of benefit that an employee will receive upon retirement, usually dependent on one or more factors such as age, years of services, compensation and / or guaranteed returns on contributions made.

We have defined benefit plans at several of our entities and a total of approximately 30% of our employees were covered by defined benefit plans at the end of 2012. Assumptions related to future costs, return on investments, interest rates and other actuarial assumptions have a significant impact on our funding requirements related to these plans. These estimates and assumptions may change based on actual return on plan assets, changes in interest rates and any changes in governmental regulations. Therefore, our funding requirements may change and additional contributions could be required in the future. If, as of a balance sheet date, the fair

value of any plan assets of a defined benefit plan is lower than the defined benefit obligations (determined based on actuarial assumptions), we bear a theoretical “underfunding risk” at that moment in time. At the end of 2012, we recognized a net liability of €129 million. Details on our pension plans can be found in Note 21.1 to the consolidated financial statements included in this document.

We may not achieve all cost savings anticipated through our internal restructuring and brand repositioning work, which may reduce, delay or otherwise hinder our ability to implement our “New Game Plan” strategy involving our operating companies’ fine-tuning their pricing strategies to achieve local value leadership and accelerated growth.

Effective February 1, 2010, the support functions for Food Lion, Bloom, Harveys, Bottom Dollar Food, Hannaford and Sweetbay began to be integrated within the U.S. segment of Delhaize Group, while maintaining the unique go-to-market strategies of each of these banners. In this new structure, the U.S. banner organizations can benefit from common U.S. support services for supply chain, IT, finance, human resources, organizational change management, legal and government relations, communications, strategy and research, and corporate development. The goal of the common support services is to create greater efficiencies and scale, and the elimination of redundancies, as well as to become more flexible in the integration of acquisitions, and ultimately better serve our banners and customers. This restructuring is designed to simplify our legal, accounting and tax compliance requirements. We anticipate that cost savings achieved through our U.S. support services restructuring will help fund our New Game Plan strategy. Also, since October 2012, we have made management changes at Delhaize America aimed at operating more effectively and efficiently going forward. We plan to re-invest any realized cost savings and any future cost savings in order to accelerate our revenue growth in line with the New Game Plan. Additionally, a significant component of our New Game Plan involves, among other things, our operating companies’ fine-tuning their pricing strategies to achieve local value leadership. Our New Game Plan is intended to accelerate our growth. Our brand repositioning work is discussed above, under “We may not be able to successfully complete renovation, conversion and brand repositioning plans.” However, we cannot provide assurance that we will achieve all cost savings anticipated through our internal restructuring, management changes at Delhaize America, or through other related initiatives, which may reduce, delay or otherwise hinder our ability to implement our New Game Plan.

Risks Relating to Our Securities and Our Incorporation in Belgium

The trading price of our ADRs and dividends paid on our ordinary shares underlying the ADRs may be materially adversely affected by fluctuations in the exchange rate for converting euros into U.S. dollars.

Fluctuations in the exchange rate for converting euros into U.S. dollars may affect the value of our ADRs and ordinary shares. Specifically, as the relative value of the euro to the U.S. dollar declines, each of the following values will also decline (and vice versa):

•

the U.S. dollar equivalent of the euro trading price of Delhaize Group ordinary shares in Belgium, which may consequently cause the trading price of Delhaize Group ADRs in the United States to also decline;

•

the U.S. dollar equivalent of the proceeds that a holder of Delhaize Group ADRs would receive upon the sale in Belgium of any Delhaize Group ordinary share withdrawn from the depositary; and

•

the U.S. dollar equivalent of cash dividends paid in euros on the Delhaize Group shares represented by the ADRs.

Due to delays in notification to and by the depositary, the holders of Delhaize Group ADRs may not be able to give voting instructions to the depositary or to withdraw the Delhaize Group ordinary shares underlying their ADRs to vote such shares in person or by proxy.

Despite our best efforts, the depositary may not receive voting materials for Delhaize Group ordinary shares represented by Delhaize Group ADRs in time to ensure that holders of Delhaize Group ADRs can either instruct the depositary to vote the shares underlying their ADRs or withdraw such shares to vote them in person or by proxy. In addition, the depositary’s liability to holders of Delhaize Group ADRs for failing to execute voting instructions or for the manner of executing voting instructions is limited by the deposit agreement. As a result, holders of Delhaize Group ADRs may not be able to exercise their right to give voting instructions or to vote in person or by proxy and they may not have any recourse against the depositary or our company if their shares are not voted as they have requested or if their shares cannot be voted.

We are incorporated in Belgium, which provides for different and in some cases more limited shareholder rights than the laws of jurisdictions in the United States.

We are a Belgian company and our corporate affairs are governed by Belgian corporate law. Although provisions of Belgian company law resemble various provisions of the corporation laws of a number of states in the United States, principles of law relating to such matters as:

•

the validity of corporate procedures,

•

the fiduciary duties of management,

•

the dividend payment dates, and

•

the rights of shareholders,

may differ from those that would apply if we were incorporated in a jurisdiction within the United States. For example, there are no statutory dissenters’ rights under Belgian law with respect to share exchanges, mergers and other similar transactions, and the rights of shareholders of a Belgian company to sue derivatively, on the company’s behalf, are more limited than in the United States.

In addition, the rights of a shareholder to attend the general meeting of shareholders and to vote are subject to the registration of these shares in the name of this shareholder at midnight (European Central Time) on the record date, which is the fourteenth day before the meeting, either by registration of registered shares in the register of registered shares of the company, or by registration of dematerialized shares in the accounts of an authorized securities account keeper or clearing institution, or by delivery of printed bearer shares to a financial intermediary. Shareholders must notify the company (or the person designated by the company for this purpose) of their intent to participate in the general meeting of shareholders, no later than six days before the date of the meeting pursuant to the modalities set forth in the notice to the meeting. Similarly, a holder of our ADRs who gives voting instructions to the depositary must arrange for having those ADSs registered on the record date set by the Company, which is the fourteenth day before the meeting.

Belgian insolvency laws may adversely affect a recovery by the holders of amounts payable under our debt securities.

We are incorporated, and have our registered office, in Belgium and, consequently, may be subject to insolvency laws and proceedings in Belgium.

There are two types of insolvency procedures under Belgian law:

•

the judicial reorganization procedure (reorganisation judiciaire/gerechtelijke reorganisatie) which was introduced by the Belgian Act on Continuity of January 31, 2009; and

•

the bankruptcy (faillite/faillissement) procedure.

Belgian Act on Continuity

Amicable settlement

Any company can enter into an amicable settlement with some or all of its creditors to address its difficult financial situation or to reorganize its enterprise. The amicable settlement does not affect the rights of third parties. The Belgian Act on Continuity provides a safe haven against the risk of the amicable settlement and the related transactions being set aside. In order to benefit from this safe haven, the company has to file a copy of the amicable settlement with the court registry.

Judicial reorganization

The aim of a judicial reorganization is to maintain, under court’s supervision, the continuity of all or part of a stressed enterprise or of its activities.

Moratorium

The judicial reorganization involves a moratorium granted to the debtor for a period of up to six months (extendable in certain circumstances). During this moratorium period, no enforcement can take place against the debtor’s assets and no bankruptcy

proceedings can be opened in respect of the debtor. Creditors will however be able to effect set-off in certain circumstances, enforce security over financial collateral and enforce pledges on receivables.

Judicial reorganization by way of amicable settlement

During the moratorium period, the debtor can negotiate an amicable settlement with two or more of its creditors. This negotiation takes place under court’s supervision. Once agreed, the amicable settlement will be presented to the court and the moratorium will end. The amicable settlement as presented to the court benefits from the same safe haven as the amicable settlement reached outside of the judicial reorganization (as set out above).

Judicial reorganization by way of a collective agreement

The debtor can also prepare a reorganization plan involving a description of the restructuring it intends on implementing and a description of the creditors’ rights following that restructuring. Certain secured creditors can see their payments deferred and enforcement rights suspended in the reorganization plan for a period of up to 24 months on the condition that they are being paid interest. The reorganization plan must be approved by more than half of the creditors representing more than half of the principal amount of the claims involved. If the plan is approved, the court will sanction the reorganization plan and the moratorium will end. The debtor will be held to implement and comply with the reorganization plan and if it fails to do so, the creditors may require the court to revoke its approval of the reorganization plan.

Judicial reorganization by way of a transfer of enterprise under court supervision

The court can order the transfer of all or part of the activity of the debtor either with the debtor’s consent or without such consent at the request of any interested party in the event the debtor is bankrupt or if an attempted reorganization of the debtor has failed. The court will appoint a representative who will manage the sale and transfer. Once an offer has been selected, the court will hear the various stakeholders, including the creditors, and will approve, where appropriate subject to conditions, or reject the sale. The employment contracts will transfer with the enterprise but the purchaser can decide how many employees are transferred and can renegotiate the terms of the employment contracts. Following the completion of the sale of the enterprise, the creditors will be entitled to exercise their rights on the sale proceeds and the judicial reorganization will be closed. The remaining part of the enterprise can then be submitted to other insolvency, reorganization or winding-up proceedings.

Bankruptcy

A company which, on a sustained basis, has ceased to make payments and whose credit is impaired, will be deemed to be in a state of bankruptcy. Within one month after the cessation of payments, the company must file for bankruptcy. Bankruptcy procedures may also be initiated on the request of unpaid creditors or on the initiative of the public prosecutor.

Once the court decides that the requirements for bankruptcy are met, the court will establish a date before which claims for all unpaid debts must be filed by creditors. A bankruptcy trustee will be appointed to assume the operation of the business and to organize a sale of the debtor’s assets, the distribution of the proceeds thereof to creditors and the liquidation of the debtor.

Payments or other transactions (as listed below) made by a company during a certain period of time prior to that company being declared bankrupt (the “suspect period”) (période suspecte/verdachte periode) can be voided for the benefit of the creditors. The court will determine the date of commencement and the duration of the suspect period. This period starts on the date of sustained cessation of payment of debts by the debtor. The court can only determine the date of sustained cessation of payment of debts be a date earlier than the bankruptcy judgment if it has been requested to do so by a creditor proceeding for a bankruptcy judgment or if proceedings are initiated to that effect by the bankruptcy trustee or by any other interested party. This date can in principle not be earlier than six months before the date of the bankruptcy judgment. The ruling determining the date of commencement of the suspect period or the bankruptcy judgment itself can be opposed by third parties, such as other creditors, within 15 days following the publication of that ruling in the Belgian Official Gazette.

The rules on transactions which can or must be voided for the benefit of the bankrupt estate in the event of bankruptcy include the following:

•

Any transaction entered into by a Belgian company during the suspect period is ineffective if the value given to such creditors significantly exceeded the value the company received in consideration.

•

Security interests granted during the suspect period must be declared ineffective if they intend to secure a debt which existed prior to the date on which the security interested was granted.

•

Any payments (in whatever form, i.e. money or in kind or by way of set-off) made during the suspect period of any debt which was not yet due as well as all payments made during the suspect period other than with money or monetary instruments (checks, promissory notes, etc.) must be declared ineffective.

Following a judgment commencing a bankruptcy proceeding, enforcement rights of individual creditors are suspended. Creditors secured by in rem rights, such as share pledges, will, as a rule, regain their ability to enforce their rights under the security after the bankruptcy trustee has verified the creditors’ claims.

We are a Belgian company and a majority of our directors and many of our officers are not residents of the United States. As a result, a litigant may be unable to serve legal process within the United States or enforce in the U.S. judgments against us and our non-resident directors and officers.

We are a Belgian company and a majority of our directors and many of our officers are not residents of the United States. Furthermore, a substantial portion of the assets of these non-resident persons are located outside the United States. As a result, a litigant may be unable to effect service of process within the United States upon these non-resident persons or to enforce in the United States any judgments obtained in U.S. courts against any of these non-resident persons or us based upon the civil liability provisions of the securities or other laws of the United States.

Civil liabilities based upon the securities and other laws of the United States may not be enforceable in original actions instituted in Belgium, or in actions instituted in Belgium to enforce judgments of U.S. courts. Actions for the enforcement of judgments of U.S. courts might be successful only if the Belgian court confirms the substantive correctness of the judgment of the U.S. court, and is satisfied that:

•

the effect of the enforcement judgment is not manifestly incompatible with Belgian public policy;

•

the judgment did not violate the rights of the defendant;

•

the judgment was not rendered in a matter where the parties transferred rights subject to transfer restrictions with the sole purpose of avoiding the application of the law applicable according to Belgian international private law;

•

the judgment is not subject to further recourse under U.S. law;

•

the judgment is not incompatible with a judgment rendered in Belgium or with a subsequent judgment rendered abroad that might be enforced in Belgium;

•

a claim was filed both outside Belgium and in Belgium, whereas the claim filed in Belgium is still pending;

•

the Belgian courts did not have exclusive jurisdiction to rule on the matter;

•

the U.S. court did not accept its jurisdiction solely on the basis of either the nationality of the plaintiff or the location of the disputed goods; and

•

the judgment submitted to the Belgian court is authentic.

Holders of our ADRs or ordinary shares have limited rights to call shareholders’ meetings or to submit shareholder proposals, which could adversely affect their ability to participate in the governance of Delhaize Group.

Except under limited circumstances, only our Board of Directors may call a shareholders’ meeting. Shareholders who collectively own at least 20% of the ordinary shares of Delhaize Group may require the Board of Directors or the statutory auditor to convene an extraordinary general meeting of shareholders. One or more shareholders holding together at least 3% of the share capital can request to put an item on the agenda of the shareholders’ meeting and table resolution proposals for items included on the agenda of the shareholders’ meeting. As a result, the ability of holders of our ADRs or ordinary shares to participate in and influence the governance of Delhaize Group is limited.

Holders of our ADRs have limited recourse if we or the depositary fails to meet its respective obligations under the deposit agreement or if they wish to involve Delhaize Group or the depositary in a legal proceeding.

The deposit agreement expressly limits the obligations and liability of Delhaize Group and the depositary. Neither we nor the depositary will be liable to the extent that liability results from the fact that they:

•

are prevented or hindered in performing any obligation by circumstances beyond their control;

•

exercise or fail to exercise discretion under the deposit agreement;

•

perform their obligations without negligence or bad faith;

•

take any action based upon advice of or information from legal counsel, accountants, any person presenting shares for deposit, any holder of our ADRs or any other qualified person; or

•

rely on any documents they believe in good faith to be genuine and properly executed.

In addition, neither we nor the depositary has any obligation to participate in any action, suit or other proceeding in respect of our ADRs which may involve it in expense or liability unless it is indemnified to its satisfaction. These provisions of the deposit agreement will limit the ability of holders of our ADRs to obtain recourse if Delhaize Group or the depositary fails to meet its respective obligations under the deposit agreement or if they wish to involve us or the depositary in a legal proceeding.

The audit report included in this annual report is prepared by an auditor who is not inspected by the Public Company Accounting Oversight Board and, as such, you are deprived of the benefits of such inspection

Auditors of companies that are registered with the U.S. Securities and Exchange Commission and traded publicly in the United States, including our independent registered public accounting firm, must be registered with the U.S. Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required by the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with the laws of the United States and professional standards. Because our auditors are located in Belgium, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Belgian authorities, our auditors are not currently inspected by the PCAOB.

This lack of PCAOB inspections in Belgium currently prevents the PCAOB from regularly evaluating audits and quality control procedures of any auditors operating in Belgium, including our auditors. As a result, investors may be deprived of the benefits of PCAOB inspections.

The inability of the PCAOB to conduct inspections of auditors in Belgium makes it more difficult to evaluate the effectiveness of our auditor’s audit procedures or quality control procedures as compared to auditors outside of Belgium that are subject to PCAOB inspections.

We, as a non-U.S. issuer, are subject to disclosure standards that differ from those applicable to U.S. domestic issuers, which may limit the information available to holders of our ADRs, and corporate governance standards that differ from those applicable to U.S. domestic issuers, which may limit the transparency and independence of corporate governance, in each case as compared to U.S. domestic issuers.

As a non-U.S. issuer, we are not subject to the U.S. insider “short-swing” profit disclosure and reporting rules under Section 16 of the Securities Exchange Act. Although we are subject to the periodic reporting requirements of the Exchange Act, the periodic

disclosure required of non-U.S. issuers under the Exchange Act is more limited than the periodic disclosure required of U.S. issuers. Therefore, there may be less publicly available information about us than is regularly published by or about U.S. domestic issuers in the U.S. In addition, as a Belgian company subject to the rules and regulations of the Securities and Exchange Commission, or SEC, we may publicly file our earnings reports later than U.S. issuers. We are required to file with the SEC annual reports on Form 20-F and reports on Form 6-K. We historically have filed reports on Form 6-K containing financial information on a quarterly basis, but such reports may not contain the same information as would be found in quarterly periodic reports filed by U.S. domestic issuers.

Our ordinary shares are listed on NYSE Euronext Brussels under the symbol “DELB” and our American Depositary Shares, or ADSs, as evidenced by American Depositary Receipts, or ADRs, are listed on the New York Stock Exchange, NYSE, under the symbol “DEG.” Delhaize Group, as a non-U.S. company listed on the New York Stock Exchange (“NYSE”), is permitted to follow home country practice in lieu of certain corporate governance provisions of the NYSE applicable to US domestic companies. Under the NYSE’s corporate governance listing standards and the requirements of Form 20-F, we must disclose any significant ways in which our corporate governance practices differ from those followed by U.S. domestic companies under NYSE listing standards. For more information, see Item 16G, “Corporate Governance” below.

ITEM 4.

INFORMATION ON THE COMPANY

INTRODUCTION

The commercial name of our company is Delhaize Group. The legal names of our company are in French “Etablissements Delhaize Frères et Cie “Le Lion” (Groupe Delhaize)”, in Dutch “Gebroeders Delhaize en Cie “De Leeuw” (Delhaize Groep)” and in English “Delhaize Brothers and Co. “The Lion” (Delhaize Group)”, in abridged in French “Groupe Delhaize”, in Dutch “Delhaize Groep” and in English “Delhaize Group”, the company being allowed to use any of its full legal corporate names or any of its abridged legal corporate names. Delhaize Group is a limited liability company incorporated and domiciled in Belgium. Our principal executive offices are located at Square Marie Curie 40, 1070 Brussels, Belgium. Our telephone number at that location is +32 2 412 22 11. Our Internet address is www.delhaizegroup.com. The information on our website is not a part of this document.

We are a food retailer headquartered in Belgium with operations in ten countries on three continents — North America, Europe and Asia. At December 31, 2012, our sales network (which includes company-operated, affiliated and franchised stores) consisted of 3,451 stores, and we employed approximately 158,000 people. In 2012, we recorded revenues of €22.7 billion and Group share in net profit of €105 million.

Our primary store format consists of retail food supermarkets. Our sales network also includes other store formats such as proximity stores and specialty stores. In total, approximately 96% of our sales network is engaged in food retailing. In addition to food retailing, we engage in food wholesaling and non-food retailing of products such as pet products and prescription drugs.

Delhaize Group SA is the parent company of a number of direct and indirect subsidiaries. A list of subsidiaries and related information is included in Note 36 to the consolidated financial statements included in this annual report on Form 20-F.

The following table sets forth, at the dates indicated, our sales network in the United States, Belgium, Southeastern Europe and Asia:

Sales Network (number of stores)


	At December 31,
	2012		2011		2010
United States		1,553		1,650		1,627
Belgium⁽¹⁾		840		821		805
Greece		268		251		223
Romania		193		105		72
Serbia		363		366		—
Bulgaria		43		42		—
Bosnia and Herzegovina		41		44		—
Albania⁽²⁾		23		18		—
Montenegro		24		22		—
Indonesia		103		89		73
Total		3,451		3,408		2,800

⁽¹⁾	Includes 38 stores in the Grand Duchy of Luxembourg.

⁽²⁾	Divested in February 2013.

Revenues (in millions of €)


	At December 31,
	2012		2011		2010
United States		14,632		13,815		14,187
Belgium		4,922		4,845		4,800
SEE & Asia⁽¹⁾		3,183		2,450		1,863
Total		22,737		21,110		20,850

⁽¹⁾

The segment “Southeastern Europe & Asia” includes Maxi (Serbia, Bulgaria, Bosnia and Herzegovina and Montenegro) since August 1, 2011, Alfa Beta (Greece), Mega Image (Romania) and 51% of Super Indo (Indonesia). 2011 figures have been adjusted as Albanian operations are now included in discontinued operations.

In 2012, operations in the United States accounted for 64.4% of revenues. Operations in Belgium and the Grand Duchy of Luxembourg accounted for 21.6% of revenues. Operations in Southeastern Europe and Asia accounted for 14.0% of revenues.

HISTORY AND DEVELOPMENT OF THE DELHAIZE GROUP

In 1867, the brothers Jules and Edouard Delhaize and their brother-in-law Jules Vieujant founded our company as a wholesale supplier of groceries in Charleroi, Belgium. In 1957, we opened our first supermarket in Belgium. Since that date, we have expanded our supermarket operations across Belgium and into other parts of Europe, North America and Southeast Asia. We were converted from a limited partnership to a limited liability company on February 22, 1962.

We entered the United States in 1974, acquiring approximately 35% of Food Town Stores, Inc., a food retailer that operated 22 stores in the southeastern United States. In 1976, we increased our stake to 52%. In 1983, Food Town Stores, Inc. was renamed Food Lion, Inc. In December 1996, our U.S. operations were expanded when Food Lion acquired Kash n’ Karry. In July 2000, we acquired Hannaford Bros. Co, a supermarket chain operating in the Northeastern U.S. In October 2003, we acquired J.H. Harvey Co., a supermarket business operating in Georgia and Florida, and added it to our U.S. store network. In November 2004, we acquired Victory Distributors, Inc., a 19-store business operating in Massachusetts and New Hampshire under the trade name Victory Super Markets, and added it to our U.S. store network and converted the stores to the Hannaford banner.

In April 2001, we and Delhaize America, our consolidated subsidiary through which our U.S. operations are conducted, consummated a share exchange transaction in which we acquired all of the outstanding shares of Delhaize America that we did not already own. Delhaize America shareholders exchanged their shares of Delhaize America common stock for either our American Depositary Receipts, or ADRs, which are listed on the New York Stock Exchange, or our ordinary shares, which are listed on NYSE Euronext Brussels.

The 1990s were a period of international expansion outside of Belgium and the United States for our company. The following subsidiaries were integrated into our company in the following countries during this time: Delvita – Czech Republic (1991), Alfa Beta – Greece (1992), PG – France (1994), Food Lion Thailand – Thailand (1997), Super Indo – Indonesia (1997), Delvita – Slovakia (1998), Shop N Save – Singapore (1999), Mega Image – Romania (2000) and Delhaize Deutschland – Germany (2003). Since then, some of these businesses have been divested to focus our resources on better investment opportunities or because the activity had become non-strategic: PG – France (2000), Shop N Save – Singapore (2003), Food Lion Thailand – Thailand (2004), Delvita – Slovakia (2005), Delvita – Czech Republic (2007) and Delhaize Deutschland – Germany (2009).

In 2001, Alfa Beta, our Greek operating company, acquired Trofo, a chain of stores operating in Greece that were subsequently re-branded into one of the Alfa Beta banners. In 2005, we acquired Cash Fresh, a chain of 43 supermarkets located mainly in the northeastern part of Belgium. In April 2008, Alfa Beta acquired 34 Plus Hellas stores (of which five were closed) and a brand new distribution center located in the North of Greece. In September 2008, we completed the acquisition of the La Fourmi chain of 14 supermarkets in Romania. In January 2009, Delhaize Group opened a new concept store in Belgium called Red Market. This store serves as a laboratory for new concepts in the Belgian market and elsewhere throughout the Group. Red Market focuses on ease and speed of shopping, a reduced assortment, convenience and low prices.

In 2009, we acquired 4 supermarkets in Romania previously operated under the Prodas name and the Greek retailer Koryfi which operated 11 stores and a distribution center in the Northeast of Greece

In 2010, our wholly owned Dutch subsidiary Delhaize “The Lion” Nederland B.V. (Delned) obtained 100% of the voting rights of Alfa Beta following two tender offers and the exercise of its squeeze-out right. On October 1, 2010, Alfa Beta was delisted from the Athens Stock Exchange.

On July 27, 2011, we acquired 100% of the shares and voting rights of Delta Maxi, a Serbian based food retailer active in five countries in the Southeastern part of Europe and with a network of approximately 485 stores, including convenience stores, supermarkets and hypermarkets and 7 distribution centers.

On January 12, 2012, we announced a thorough portfolio review and our decision to close 146 underperforming stores across our network (126 in the U.S. and 20 in Southeastern Europe) and to convert 42 Bloom and 22 Bottom Dollar Food stores to Food Lion in the U.S. In addition, we decided to retire the Bloom brand and to focus on a roll-out of Bottom Dollar Food stores in markets which provide the greatest opportunity for growth such as in the Philadelphia and Pittsburgh area. Bottom Dollar Food is a soft discount format offering customers an easy and full shopping experience at affordable prices.

During 2012, 2011 and 2010, we also acquired several individual stores in various parts of the world.

On January 17, 2013, we announced the closing of 52 stores, consisting of 45 stores in the U.S. (34 Sweetbay, 8 Food Lion and 3 Bottom Dollar Food), 6 stores in Southeastern Europe and 1 store in Belgium. In February 2013, we completed the sale of our Albanian operations.

Competitive Strengths

We believe that we are well positioned to capitalize on opportunities that exist in the supermarket industry in the geographical markets in which we operate. We seek to differentiate ourselves from our competitors through our competitive strengths, which include:

•

Leading market shares and strong brand recognition.We aim to be among the top three supermarket operators in terms of annual revenues in the markets in which we operate. We believe that our leading market shares result in distribution and advertising synergies, competitive buying conditions and allow us to maintain customer loyalty and strong brand recognition.

•

Good cost management.We focus on controlling and reducing elements of our cost of sales through centralized buying practices, distribution efficiencies, improved category management and an increased mix of private brand products. Effective use of information technology, store labor scheduling and attention to cost controls has allowed us to control our expense structure. Our ability to control operating and administrative expenses has allowed us to achieve one of the lowest operating cost structures in the supermarket industry.

•

Track record of reducing leverage (i.e., debt to equity ratio). We have historically been able to generate free cash flow and reduce leverage in our balance sheet. This has been possible through our strong profitability, disciplined working capital management and selective investments.

•

Diversification through multiple banners and multiple markets. We operate under multiple banners, each of which has a distinct strategy and a well established and consistent brand image. Through our multiple banners, we are able to target the needs and requirements of specific markets, customize our product and service offerings and maintain strong brand recognition with our local customers.

•

Experienced management team. Our executive officers have an average of 15 years of experience in the food retailing industry. In addition, many of our company’s senior operating managers have spent much of their careers in their respective local markets.

•

Attractive store base.Our store locations include many sites in developed urban and suburban locations that would be difficult to replicate. We have invested significant capital in our store base over the years through the addition of new stores and the renovation of existing stores in order to improve the overall quality of our customers’ shopping experience. In 2013 our capital expenditures should amount to €650 million (based on the average exchange rate in 2012 of €1= $1.2848). These capital expenditures include renovations of existing stores and store support functions, particularly information technology and logistics.

•

Distribution capacity and efficiency.We currently operate 33 distribution centers. Our warehousing and distribution systems are conveniently located within the areas we serve. Our distribution centers are capable of serving our existing store base and can service additional stores. We plan to continue to develop and invest in our warehousing and distribution systems in the future.

•

Loyalty card programs.Transactions using the loyalty card program accounted for 81%, 75% and 83% of revenues at Delhaize Belgium, Alfa Beta and Food Lion respectively, during 2012. Customers utilize our loyalty cards for buying incentives and discounts on select purchases.

•

Significant investment in management information systems.All of our operating companies use computer systems that allow us to monitor store operating performance, manage merchandise categories and procure and distribute merchandise on a centralized basis by banner. We regularly update our information technology systems so that we can continue to efficiently operate our stores and logistics network.

•

Operate as a global group.We are organized into different geographic regions that engage in global and regional purchasing, share retail knowledge and implement best practices. We have regional and company-wide coordination groups focusing on procurement, equipment purchasing, information technology, food safety, talent development, communication, risk management and legal.

Our Strategy

Delhaize Group achieves its success through the combination of a local go-to-market strategy, regional leadership, the Group’s knowledge and expertise and a firm commitment to stay focused on the long-term while addressing short-term challenges. Our operating companies all rally around the same vision and group values that are the basis of everything we do. Our values are determination, integrity, courage, humility, and humor. Our goal is to achieve value leadership in all of our markets leading to superior top-line and operating profit growth and make Delhaize Group an effective acquirer. The sustainability of our business is based on a clear strategy, called our “New Game Plan”, of generating profitable revenue growth, pursuing best-in-class execution and operating as a responsible citizen.

•

Generate profitable revenue growth.Concept differentiation, competitive prices and leading local market positions are key elements of our strategy to generate profitable revenue growth. Attractive assortments in convenient locations lead to superior customer experiences. In 2011, we began repositioning Food Lion, the biggest brand in the Delhaize Group portfolio. The brand repositioning focuses on several elements of the Food Lion brand which can be summarized as price, assortment, and shopping experience. By the end of 2012, 704 stores had benefited from the brand repositioning. As part of Phase 4 we will reposition 180 stores in the Washington DC/Baltimore market in the second quarter of 2013.

•

Pursue best-in-class execution.Retail is all about detail. The enormous volumes we move every day from supplier to customer pose a formidable challenge to planning and execution. We continually invest in the development of customer tools, supply chain technology, logistics and IT systems. Executional excellence strongly depends on our employees’ positive engagement and on synergies we realize with our vendors. Pursuing best-in-class execution with a strong focus on cost management enables us to fund sales building initiatives that respond to our customers’ high expectations while driving profitable growth. In 2010, major steps in this area were taken with the process to set up one common procurement organization, one supply chain organization and one platform for common back office services, supporting all our U.S. operations.

•

Operate as a responsible corporate citizen.The combination of sustainable growth and operating as a best-in-class corporate citizen has always been an essential part of how we do business. Sustainability is fully integrated into our day-to-day operations. However, we recognize we can improve, for the benefit of our millions of customers, our approximately 158,000 employees and the planet. The last separate report on Corporate Responsibility was issued in June 2012.

BUSINESS OVERVIEW

Delhaize Group’s segment reporting is geographical, based on the location of customers and stores, which matches the way we manage our operations. In 2012, reportable segments include the United States, Belgium (including Belgium and the Grand Duchy of Luxembourg) and Southeastern Europe and Asia, which includes Maxi (Serbia, Bulgaria, Bosnia and Herzegovina, Montenegro and Albania, which was sold in February 2013), Alfa Beta (Greece), Mega Image (Romania) and 51% of Super Indo (Indonesia).

As of December 31, 2012, we operated the following banners:


United States	Belgium⁽¹⁾	Southeastern Europe & Asia
• Food Lion	• Delhaize “Le Lion”/Delhaize “De Leeuw” Supermarket	• Alfa Beta
• Hannaford	• AD Delhaize	• ENA
• Sweetbay Supermarket	• Delhaize City	• AB Shop & Go
• Bottom Dollar Food	• Proxy Delhaize	• AB City
• Harveys	• Shop ‘n Go	• AB Food Market
• Reid’s	• Tom & Co • Red Market	• Mega Image • Mega Image Shop & Go • Super Indo • Maxi • Mini Maxi • Euromax • Tempo • Tempo Express • Picadilly • Picadilly Express

⁽¹⁾	Including 38 stores in the Grand Duchy of Luxembourg.

United States

Overview.We engage in one line of business in the United States, the operation of food supermarkets in the southeastern, mid-Atlantic and northeastern regions of the United States under the banners Food Lion, Hannaford, Sweetbay Supermarket, Bottom Dollar Food, Reid’s and Harveys.

In 2012, we had revenues of €14.6 billion ($18.8 billion) in the United States, representing 64.4% of the total Group revenues. At the end of 2012, we employed approximately 105,000 people in the United States.

Food Lion stores are located in 10 different states in the Southeast of the United States. Hannaford and Sweetbay are located respectively throughout New England and Florida. Harveys is located primarily in Georgia and Florida. Bottom Dollar Food stores can be found in the Philadelphia and Pittsburgh markets.

Sales network.The growth of our U.S. sales network has historically been based on store openings, complemented by selective acquisitions. In January 2012, we announced the closing of 126 underperforming stores in the United States. In addition, in 2012 we opened 29 new stores in the United States and converted 53 stores. This resulted in a net decrease of 97 stores. As a result, as of December 31, 2012, we operated 1,553 supermarkets in 18 states in the eastern United States.


State	Food Lion⁽¹⁾		Harveys		Bottom Dollar Food		Hannaford		Sweetbay		TOTAL
Delaware		23										23
Florida				8						105		113
Georgia		27		64								91
Kentucky		3										3
Maine								56				56
Maryland		79										79
Massachusetts								26				26
New Hampshire								33				33
New Jersey						11						11
New York								49				49
North Carolina		507										507
Ohio						3						3
Pennsylvania		8				42						50
South Carolina		129		1								130
Tennessee		32										32
Vermont								17				17
Virginia		312										312
West Virginia		18										18
TOTAL		1,138		73		56		181		105		1,553
Number of states		10		3		3		5		1		18

⁽¹⁾	Includes 11 Reid’s stores.


Banner	Store Sizes ft²
Food Lion, Harvey’s, Reid’s		25,000 – 45,000
Bottom Dollar Food		18,000 – 20,000
Hannaford		25,000 – 55,000
Sweetbay Supermarket		25,000 – 50,000

On May 4, 2011, Food Lion re-launched approximately 170 stores in the Raleigh, North Carolina market (Phase One). In addition to price, we took action to strengthen other attributes of our Food Lion brand in that market, focusing on the quality of the assortment, the ease and convenience of the shopping experience as well as making additional price investments. In 2012, the brand repositioning was implemented in several additional markets as part of Phase 2 and Phase 3 and by the end of 2012 the brand repositioning had been implemented in 704 Food Lion stores. As part of Phase 4 we will reposition 180 stores in the Washington DC/Baltimore market in the second quarter of 2013.

In late 2010, the low-cost grocery store Bottom Dollar Food entered into the greater Philadelphia, Pennsylvania area, a new market for the Group. In early 2012, Bottom Dollar Food entered a second market, Pittsburgh.

On January 12, 2012, we announced the completion of a thorough portfolio review and the subsequent decision to close 126 underperforming stores in the U.S. and to convert 42 Bloom and 22 Bottom Dollar Food stores to Food Lion. In addition, we decided to retire the Bloom brand and to focus on a roll-out of Bottom Dollar Food stores in markets that provide the greatest opportunity for growth such as in the Philadelphia and Pittsburgh areas.

On January 17, 2013, we announced the closing of 34 underperforming Sweetbay stores in Florida, 8 Food Lion stores and 3 Bottom Dollar Food stores.

Competition and regulation. The U.S. business in which we are engaged is competitive and characterized by narrow profit margins. We compete in the United States with international, national, regional and local supermarket chains, supercenters, independent grocery stores, specialty food stores, convenience stores, warehouse club stores, retail drug chains, membership clubs,

general merchandisers, discount retailers and dollar stores. Competition is based primarily on location, price, consumer loyalty, product quality, variety and service. In order to support decisions on the competitiveness of the pricing level, Delhaize Group’s operating companies have developed detailed systems to compare prices with the competition.

The major competitors of Food Lion are Wal-Mart, Kroger, Harris Teeter, Bi-Lo, Lowes Food and Save-A-Lot. The major competitors of Hannaford are Supervalu (Shaws), Price Chopper, Wal-Mart, DeMoulas (Market Basket), Royal Ahold (Stop & Shop) and ShopRite. The major competitors of Sweetbay are Publix, Winn-Dixie and Wal-Mart.

The opening of new stores is largely unconstrained by regulation in most of the states where Food Lion and Sweetbay operate. The majority of the states in which Hannaford operates are more restrictive through regulation of the opening of new stores. Shopping hours are mostly unconstrained by regulation in all of the states in which we are active. Most of our U.S. stores are open 17 to 18 hours a day and seven days a week.

Assortment. Our U.S. supermarkets sell a wide variety of groceries, produce, meats, dairy products, seafood, frozen food, deli/bakery products and non-food items such as prescriptions, health and beauty care and other household and personal products. Our U.S. stores offer nationally and regionally advertised brand name merchandise as well as products manufactured and packaged under private brands. Food Lion and Harvey’s offer between 15,000 and 20,000 stock-keeping units (“SKUs”) in their supermarkets, Bottom Dollar Food between 6,000 and 8,000 SKUs, Sweetbay between 28,000 and 42,000 SKUs and Hannaford between 25,000 and 46,000 SKUs.

Fresh products are a key category throughout the Group. Organic, natural and international foods are becoming more prevalent in the assortment. Hannaford, Food Lion and Sweetbay feature a strong organic and natural food department, Nature’s Place, in their stores. In Florida, our Sweetbay Supermarket concept strongly focuses on fresh products and specialty foods.

Private brand products. Each of our principal U.S. banners offers their own line of private brand products. The Food Lion, Hannaford and Sweetbay private brand programs are consolidated into a single procurement program where appropriate, enhancing the sales and marketing of the various private brands, reducing the cost of goods sold for private brands and strengthening the margins for these products. Revenues from private brand products represented 26.1%, 28.7% and 24.8% of Food Lion’s, Hannaford’s and Sweetbay respective revenues in fiscal year 2012. As of December 31, 2012, Food Lion carried almost 7,700 private brand SKUs, Hannaford approximately 7,200 private brand SKUs and Sweetbay offered more than 5,800 SKUs under its private brand program. We have a common three-tier private brand program in our U.S. operations, including a premium brand, a house brand and a value line as well as category-specific private brand lines for organic products, general merchandise and prepared meals. In the second quarter of 2011, we introduced My Essentials, a new value line of private brands that replaced the Smart Option assortment.

Loyalty cards. Food Lion operates a customer loyalty card program, which is called the MVP card program, through which customers can benefit from additional savings. Transactions using the MVP card accounted for approximately 83% of revenues at Food Lion in 2012.

Pharmacies. As of December 31, 2012, there were 147 pharmacies in Hannaford stores, 78 in Sweetbay stores, 38 in Food Lion stores and 27 in Harveys stores.

Belgium and the Grand Duchy of Luxembourg

Overview. Belgium is our historical home market. The Belgian food retail market is characterized by a large presence of supermarkets, discount stores and independent shopkeepers. Over the years, we have built a strong market position (second in terms of sales with 25.4% in 2012 – source: AC Nielsen), providing our customers with quality products and services at competitive prices. In 2012, we had revenues of €4.9 billion in Belgium and the Grand Duchy of Luxembourg, representing 21.6% of the total Group revenues. At the end of 2012, we employed approximately 16,400 people in Belgium and the Grand Duchy of Luxembourg.

Sales network. In Belgium and the Grand Duchy of Luxembourg our sales network consists of several banners, depending on the specialty, the store size and whether the store is company-operated, franchised or affiliated (that is, stores with a Delhaize banner that are operated by independent third parties to whom we sell our products at wholesale prices). As of December 31, 2012, our sales network increase by 19 stores since 2011 to 840 stores and consisted of 802 stores in Belgium and 38 stores in the Grand Duchy of Luxembourg.

The network included 378 supermarkets under the Delhaize “Le Lion”/Delhaize “De Leeuw”, AD Delhaize and Red Market banners, 326 proximity stores under the Proxy Delhaize, Delhaize City and Shop ‘n Go banners, and 136 specialty stores operated under the Tom & Co banner. We are also active in E-commerce.

Supermarkets. At the end of 2012, there were 146 company-operated supermarkets under the Delhaize “Le Lion”/Delhaize “De Leeuw” banner and 223 affiliated supermarkets under the AD Delhaize banner in Belgium and the Grand Duchy of Luxembourg. 30 company-operated supermarkets were remodeled in 2012. The Delhaize “Le Lion”/Delhaize “De Leeuw” supermarkets have an average size of 1,900 square meters and offer around 17,000 SKUs, depending on their size. The AD Delhaize supermarkets have an average size of 1,125 square meters and offer approximately 12,000 SKUs.

At the end of 2012, Delhaize Group operated nine Red Market stores in Belgium. The Red Market concept is a low-cost supermarket, able to offer permanent low prices on a limited range of approximately 5,700 SKUs including dry and fresh products and national as well as private brand products, in a pleasant and fast shopping experience at the quality standards for which Delhaize Belgium is renowned.

Proximity stores. At the end of 2012, our network of smaller conveniently located stores in Belgium and the Grand Duchy of Luxembourg consisted of 326 stores under Proxy Delhaize (208 stores), Shop ‘n Go (100 stores) and Delhaize City (18 stores) banners. The Delhaize City stores are company-operated proximity stores targeting primarily urban customers. In 2012 we announced the planned conversion of our 15 Delhaize City stores located in Belgium to the banner Proxy Delhaize, while the remaining 3 stores located in the Grand Duchy of Luxembourg will continue to operate under the Delhaize City banner. Proxy Delhaize and Shop ‘n Go are affiliated stores. Proxy Delhaize stores have an average selling area of approximately 500 square meters and offer approximately 6,500 SKUs. Most Shop ‘n Go stores are located in Q8 gas stations and address customer expectations regarding proximity, convenience, speed and longer operating hours. These stores have an average selling area of 140 square meters and offer approximately 2,000 SKUs.

Specialty stores. Tom & Co is a specialty chain focusing on food, care products, care services and accessories for pets. At the end of 2012, the large majority of the 136 Tom & Co stores were operated under franchise agreements with independent operators.

E-commerce. Caddy-Home, our food products home delivery banner in Belgium, sells food products to customers for which orders can be placed by the Internet, telephone or fax. In 2009, Delhaize Belgium launched Delhaize Direct, allowing customers to order their groceries through the Internet and pick them up at their local store. By the end of 2012, 112 stores were equipped with Delhaize Direct. In addition, customers can order wine on the dedicated website Delhaize Wineworld that offers a selection of 1,300 different wines from all over the world. After completing the ordering process, the wines are delivered to the customer at home.

Competition and regulation. The Belgian food retail market is competitive and characterized by a large presence of international retailers: Carrefour (France), Albert Heijn (Ahold – The Netherlands), Louis Delhaize-Cora (France), Aldi (Germany), Makro-Metro (Germany), Lidl (Germany) and Intermarché (France). In addition, we face competition from national retailers in Belgium, such as Colruyt and Mestdagh.

Competition is based primarily on location, price, consumer loyalty, product quality, variety and service. In Belgium, we focus on providing consistently competitive prices supplemented with regular promotions. In early 2007, Delhaize Belgium had its price comparison methodology certified by an independent consumer organization.

Belgian law requires that permits be obtained for the opening and extension of stores exceeding certain sizes (always above 400 square meters selling area). Operating hours are regulated and company-operated stores cannot open on Sunday, except in a small number of designated tourist zones.

Assortment. Our supermarkets in Belgium and the Grand Duchy of Luxembourg sell a wide variety of groceries, produce, meats, dairy products, seafood, frozen food, deli/bakery products and nonfood items such as health and beauty care and other household and personal products.

Management believes that we are a market leader in Belgium for prepared meals. In Belgium, we have also developed a large range of organic products.

Private brand. In Belgium, we actively promote three different lines of private brand products, including more than 6,000 different SKUs under the brands “Delhaize,” “Taste of Inspirations” and “365.” In 2012, private brand sales under our brand accounted for approximately 56% of total revenues generated in company-operated stores in Belgium. Our products, which are marketed as value priced products, aim to be comparable in quality to national brand products but are sold for lower prices. Private brand products under our brand are also used as a vehicle to increase differentiation and customer loyalty. “365” products are marketed as low price products with a “no frills” packaging. This private brand was launched in May 2004, initially in our Belgian operations, followed by our Greek and Romanian operations. At the end of 2012, the “365” offering included approximately 580 SKUs in Belgium and accounted for approximately 5% of revenues. Other private brands include “Care” (general merchandise and health and beauty products), Delhaize “Kids” and Delhaize “Baby.”

Loyalty Card. Our stores in Belgium use a loyalty card known as the Plus card, which was used by customers for approximately 81% of total sales in Delhaize “Le Lion” supermarkets in 2012. The Plus card also provides benefits for shoppers at our other stores in Belgium. We have developed partnerships with other companies in Belgium to offer additional benefits to holders of the Plus Card.

Southeastern Europe & Asia

Overview. In 2012, the Southeastern Europe and Asia segment (including Alfa Beta in Greece, Mega Image in Romania, 51% of Super Indo in Indonesia, and since August 1, 2011 Maxi in Serbia, Bulgaria, Bosnia and Herzegovina, Montenegro and Albania, the last of which was sold in February 2013) recorded revenues of €3.2 billion and represented 14.0% of the total Group revenues.

Sales network. At year-end, the Southeastern Europe and Asia sales network included 1,058 stores, 121 more than at the end of 2011.

Greece. As of December 31, 2012, Alfa Beta had 268 stores, of which 162 company-operated supermarkets under the Alfa Beta banner, 42 company-operated AB City stores, 12 company-operated cash & carry stores under the ENA banner, and 52 affiliated stores operated under the AB Food Market and AB Shop & Go banners. At the end of 2012, Alfa Beta employed approximately 10,600 people.

Alfa Beta seeks to attract customers looking for competitive pricing as well as quality products and services. Since 2005, we have focused on expanding our company-operated and affiliated network. We also reinforced our consumer appeal by focusing on assortment, price competitiveness and service. Alfa Beta continued to reinforce its product range, including organic products and private brand items.

The Greek retail market is a fragmented, competitive market characterized by a large number of local retailers. Competition is based primarily on location, price, consumer loyalty, product quality, variety and service. Our company, Lidl (Germany) and Makro (Germany) are the only foreign food retail chains with a significant presence in Greece. The most important local food retailers are Sklavenitis, Veropoulos, Marinopoulos and Massoutis. Alfa Beta competes with supermarket chains, hypermarkets, discount stores and traditional Greek grocery stores and markets.

Permits from municipal, health regulation and fire protection authorities are required to open new stores and often require long periods to obtain. Operating hours tend to be strictly enforced, especially in the provinces. Operating stores on Sunday is prohibited, except in select designated tourist zones.

Romania. We own 100% of Mega Image since 2004. As of December 31, 2012, Mega Image operated 193 supermarkets in Romania and employed approximately 5,700 people. Mega Image’s network is concentrated in the Romanian capital of Bucharest, one of the most densely populated areas in Europe. During 2012, Mega Image accelerated its expansion with the opening of 89 stores. Mega Image stores all offer the private brand ranges “365”, “Care” and the house brands available at Delhaize Belgium and Alfa Beta.

Indonesia. In 1997, we entered Indonesia by acquiring an interest in P.T. Lion Super Indo LLC, an operator of 11 stores at that time. We were jointly operating 103 stores as of December 31, 2012, employing almost 5,500 employees. We own 51% of Super Indo. The remaining 49% is owned by the Indonesian Salim Group.

Serbia, Bulgaria, Bosnia and Herzegovin, Montenegro and Albania. On July 27, 2011, we acquired 100% of Delta Maxi, a Serbian food retailer present in five Balkan countries. At year-end 2012, we operated 363 stores in Serbia, 41 in Bosnia and Herzegovina, 43 in Bulgaria, 24 in Montenegro, and 23 stores in Albania. The 23 stores in Albania were sold in February 2013. We

had approximately 11,000 employees in Serbia, 2,000 in Bulgaria, 1,000 in Bosnia and Herzegovina, 700 in Montenegro and 500 in Albania.

DESCRIPTION OF PROPERTY

Store Ownership of Sales Network (as of December 31, 2012)


	Owned		Finance Leases		Operating Leases		Other⁽¹⁾		Total
United States		229		593		731		—		1,553
Belgium		153		32		208		447		840
Southeastern Europe & Asia		318		—		694		46		1,058
Total		700		625		1,633		493		3,451

⁽¹⁾	Affiliated and franchised stores owned by their operators or directly leased by their operators from a third party.

The majority of our company-operated stores are leased, with lease terms (including reasonably certain renewal options) generally ranging from 1 to 45 years and with renewal options ranging from 3 to 30 years. At the end of 2012, we operated 11 warehousing and distribution facilities (totaling approximately 938,000 square meters or approximately 10.1 million square feet) in the United States. We also own and operate most of our U.S. transportation fleet. In Belgium, as of December 31, 2012, we owned 153 of our stores (or 18.2% of our total Belgian sales network). At December 31, 2012, we owned 318 stores, leased 740 stores and operated 12 distribution centers in our Southeastern Europe and Asia segment.

ITEM 4A.

UNRESOLVED STAFF COMMENTS

None.

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following section contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” of Item 3 “Key Information” above and those set forth under “Factors Affecting Financial Condition and Results of Operations” of this Item 5 below.

INTRODUCTION

This discussion is intended to provide information that will assist the reader in understanding our consolidated financial statements, the changes in certain key items in those financial statements from year to year, and the primary causes for those changes, as well as how certain accounting principles affect our financial statements. The discussion also includes information about the financial results of the various segments of our business to provide a better understanding of how those segments and their results affect the financial condition and results of our operations as a whole.

In reading the following discussion and analysis, please refer to our audited consolidated financial statements for fiscal years 2012, 2011 and 2010, included under Item 18 in this document. The consolidated financial statements referred to, were prepared using accounting policies in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, and as adopted by the European Union, or EU. Currently, the only difference between the effective IFRS as issued by the IASB and as adopted by the EU relates to certain paragraphs of IAS 39Financial Instruments: Recognition and Measurement, which are not required to be applied in the EU (so-called “carve-out”). We are not affected by the carve-out. Therefore, for us, there is no difference between the effective IFRS as issued by the IASB and the pronouncements adopted by the EU, as of December 31, 2012. We further refer to our comments made in connection with Changes in Accounting Policies and Disclosures and Standards and Interpretations issued but not yet effective, which are included under Item 18 in this document.

Amounts in U.S. dollars in the following discussion and analysis are translated into euros at the exchange rates used to prepare the consolidated financial statements. The year-end exchange rate is used for balance sheet related items; the average daily exchange rate (i.e., the yearly average of exchange rates on each working day) is used for income statement and cash flow statement related items.

The results of operations of our company and those of our subsidiaries outside the United States are presented on a calendar year basis. The fiscal year for our wholly-owned U.S. subsidiaries ends on the Saturday nearest to December 31. Our consolidated results for 2012, 2011, and 2010 include the results of operations of its U.S. subsidiaries for the 52 weeks ended December 29, 2012, December 31, 2011 and January 1, 2011, respectively. Our financial information includes all of the assets, liabilities, sales and expenses of all fully consolidated subsidiaries, i.e., those over which we can exercise control.

EXECUTIVE SUMMARY

The Food Retail Industry

We are an international food retailer committed to growing by offering a locally differentiated shopping experience to our customers. This is accomplished through strong local companies benefiting from and contributing to our Group’s strength, expertise and successful practices.

In 2012, almost 90 percent of our consolidated revenues were generated through the operation of retail food supermarkets in the United States, Europe and Indonesia. We also sell consumer products at wholesale, mainly to franchised and affiliated stores. Our profits are generated by selling products at prices that produce revenues in excess of direct procurement costs and operating expenses. These costs and expenses include procurement and distribution costs, facility occupancy and other operational expenses, and overhead expenses.

Our financial results are influenced by various factors such as, but not limited to, cost of goods, inflation, deflation, currency exchange fluctuations, fuel prices, consumer preferences, general economic conditions and weather patterns. In addition, we also compete with numerous companies to attract and retain quality employees, as well as for prime retail site locations.

Operations

At the end of 2012, our store network totaled 3,451 stores. Our sales network consists primarily of retail food supermarkets, and also includes proximity and specialty stores, particularly in Europe. In addition, we have a limited number of company-operated cash n’ carry stores in Greece, which provide food products to commercial customers. Approximately 80% of our stores are company-operated and 20% are operated as affiliated or franchised stores.

Our stores sell a variety of groceries, produce, meats, dairy products, seafood, frozen food, deli-bakery and non-food items such as health and beauty care products, pet products, prescriptions and other household and personal products. Our companies offer nationally and regionally advertised brand name merchandise as well as products under private brands.

In 2012, our operations were comprised of three reportable segments:

•

United States:Our U.S. business is the largest segment, accounting for 64% of our 2012 revenues. At the end of 2012, we operated 1,553 stores in the United States, under the banners Food Lion, Hannaford, Sweetbay Supermarket, Bottom Dollar Food, Harveys and Reid’s.

•

Belgium:Belgium is our historical home market. At the end of 2012, our Delhaize Belgium sales network (including Grand Duchy of Luxembourg) consisted of 840 stores operating under different banners. The segment accounted for 22% of revenues for the year ended December 31, 2012.

•

Southeastern Europe and Asia:This segment comprises our operations in all other countries: Greece, Romania, Serbia, Bulgaria, Albania, Bosnia and Herzegovina, Montenegro and Indonesia. At the end of 2012, we operated 1,058 stores throughout the segment, representing 14% of our revenues. In February 2013, we sold our Albanian operations (23 stores).

2012 Financial Result

In 2012, we had:

•

Revenues of €22.7 billion, an increase of 7.7% compared to 2011, driven by the strengthening of the U.S. dollar against the euro by 8.3% compared to 2011 and the acquisition of Delta Maxi in July 2011, which was partly offset by the closing of 126 stores in the U.S. in the first quarter of 2012;

•

Other operating expenses totaling €428 million in 2012 compared to €169 million in 2011, due to €125 million store closing expenses primarily resulting from the portfolio optimization announced in January 2012 and €272 million impairment charges mainly related to Maxi and, to a lesser extent, to Sweetbay store closures, which occurred at the beginning of 2013;

•

Operating margin of 1.7%, compared to an operating margin of 3.9% in 2011;

•

Net financial expenses of €241 million, being €61 million higher than 2011, mainly due to the premiums paid as part of the debt refinancing and to the additional debt to partially finance the Maxi acquisition;

•

A decrease of the effective tax rate from 24.6% in 2011 to 15.8% in 2012, primarily due to the resolution of several tax matters in the U.S., partially compensated by non-deductible goodwill impairment charges;

•

A Group share in net profit of €105 million, representing a decrease of 77.8% compared with 2011.

During the first half of 2012, we completed the purchase price allocation process of the Delta Maxi acquisition and the initial goodwill of €467 million was increased to €507 million, with the 2011 consolidated financial statements being revised accordingly. Additional information can be found in Note 4.1 of our consolidated financial statements, included under Item 18 in this document.

During 2012, we issued $300 million senior notes with an annual interest rate of 4.125% due 2019 and €400 million senior fixed rate bonds due 2020 with an annual coupon of 3.125%. The proceeds of these issuances were primarily used to fund the following tender offers: (i) €285 million of the €500 million 5.625% senior notes due 2014 and (ii) $201 million of our outstanding $300 million 5.875% senior notes due 2014. In January 2013, we redeemed the remaining $99 million of the latter senior notes. Additional information on these debt transactions and related derivatives as well as the accounting treatment can be found in Notes 18.1 and 19 of our consolidated financial statements, included under Item 18 in this document.

CRITICAL ACCOUNTING ESTIMATES

We have selected accounting policies that we believe provide an accurate, true and fair view of our consolidated financial condition and results of operations. Those accounting policies are applied in a consistent manner, unless stated otherwise, which is mainly a result of the application of new accounting pronouncements. Details on changes in accounting policies are provided in Note 2.2 to the consolidated financial statements. For a summary of all of our significant accounting policies, please see Note 2.3 to the consolidated financial statements. These consolidated financial statements are included under Item 18 in this document.

The preparation of the consolidated financial statements in conformity with IFRS, as issued by the IASB, requires that we make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions, although based on historical and other factors that we believe to be reasonable under the circumstances, inherently contain some degree of uncertainty. We evaluate these estimates and assumptions on an ongoing basis and may retain outside consultants, accountants, lawyers and actuaries to assist us in our evaluation, with the final decision remaining with us. By definition, actual results may and will often differ from these estimates under different assumptions and conditions. In the past, our estimates generally have not deviated materially from actual results.

We believe the following accounting estimates and assumptions are critical because they involve the most significant judgments and estimates used in the preparation of our consolidated financial statements and the impact of the estimates and assumptions on financial condition or operating performance might be material.

Asset Impairment (excluding goodwill)

As explained in our description of accounting policies, we test assets with finite useful lives or groups of assets for which identifiable cash flows are independent of other groups of assets and liabilities (so-called “cash generating units”) for impairment whenever events or circumstances indicate that impairment may exist. Due to the importance to our business, we particularly monitor the carrying value of our retail stores, each representing for this purpose a cash generating unit, for potential impairment, which we discuss further below.

An impairment loss is recorded for stores for which the recoverable value (the higher of value in use, calculated on the basis of projected discounted cash flows, or fair value less costs to sell) is less than its carrying amount, in which case the carrying amount of the store is written down to its recoverable amount. Only if events or circumstances indicate that impairment no longer exists, the impairment loss is reversed.

Testing retail stores for impairment is significantly impacted by estimates of future operating cash flows, discount rates and estimates of fair values. Future operating cash flows are estimated using our past experience and knowledge of the markets in which our stores are located. These estimates are adjusted for various factors such as inflation and general economic conditions. We estimate fair values based on our experience and knowledge of the real estate markets where our stores are located and sometimes use independent third-party appraisers to help estimate the fair values of the stores.

We believe the assumptions we use are reasonable, however, as indicated above, changes in economic conditions and operating performance impacting the assumptions used in projecting future operating cash flows will have a potential impact on the determination of the recoverable amount and the resulting impairment losses, if any. For example, a 200 basis point increase in the sales growth assumption used in the cash flow projections would not have resulted in fewer stores being identified for impairment, but would have decreased the impairment losses recognized by €1 million. On the other hand, a 200 basis point decrease in the sales growth assumption used in the cash flow projections would not have resulted in additional stores being identified for impairment, and the impairment losses of the year would have increased by an insignificant amount.

Goodwill and Intangible Assets Impairment

In accordance with our accounting policies, we conduct an annual impairment assessment for goodwill and intangible assets with indefinite useful lives in the fourth quarter of each year and, in addition, whenever events or circumstances indicate that impairment may have occurred.

The impairment calculation for goodwill involves comparing the recoverable amount of the cash generating unit (“CGU”) that is benefiting from the synergies of the underlying business combination, with its carrying amount which includes goodwill allocated to that CGU. The recoverable amount of the cash generating unit is determined based on the higher of the value in use (“VIU”) and the fair value less cost to sell (“FVLCTS”) calculations. Both the VIU and the FVLCT calculations use cash flow projections based on financial plans approved by management covering a three-year period. Cash flows beyond that period are extrapolated using estimated growth rates. Earning multiples paid for similar companies in the market have been used to ensure appropriateness of the FVLCTS estimates and overall consistency. The assumptions applied for our most significant CGUs are described in Note 6 to our consolidated financial statements, included under Item 18 to this document. An impairment loss is recorded if the carrying value exceeds the recoverable amount. Goodwill impairments are never reversed.

Goodwill relating to our U.S., Belgian, Greek and Romanian operations was tested estimating the VIU. Considering the expected growth of the relatively young operations in the Maxi countries (Serbia, Bosnia & Herzegovina, Bulgaria and Montenegro) the recoverable amount of these operations was estimated based on FVLCTS.

The evaluation of goodwill for impairment testing requires management to use significant judgments and estimates regarding most importantly, but not limited to, projected future cash flows, growth rates and discount rates. We believe the assumptions used are reasonable. However, changes in economic conditions and operating performance can impact the assumptions used in projecting future operating cash flows and the selection of an appropriate discount rate, which can potentially impact the determination of the recoverable amount and the resulting impairment losses, if any.

The assumptions employed to estimate the VIU represent our best estimates of future developments and we are of the opinion that no reasonably possible change in any of the key assumptions mentioned would cause the carrying value of the significant cash generating units of the U.S., Belgium, Greece and Romania to exceed their recoverable amounts. For information purposes only, an increase of 100 basis points in the discount rate applied and a simultaneous reduction of the terminal growth rate by 50 basis points would have decreased the total value in use by €2.5 billion in 2012 and would not have resulted in the carrying amounts of the significant CGUs exceeding their recoverable amounts.

We impaired 100% of the goodwill recognized in connection with Albania, Bulgaria, Bosnia & Herzegovina and Montenegro and recognized an impairment loss of €85 million with respect to the Serbian goodwill. We estimated that an increase of 100 basis points in the discount rate applied and a simultaneous reduction of 50 basis points in the terminal growth rate used to estimate the FVLCTS for Serbia would have decreased the recoverable amount of the Serbian goodwill by an additional €84 million.

Trade receivables

We maintain an allowance for doubtful trade receivables to account for estimated losses resulting from the inability of customers to make required payments. When evaluating the adequacy of that allowance, we base our estimates on the aging of accounts receivable balances and historical write-off experience, customer credit worthiness, changes in customer payment terms and insurance coverage, if any. If the financial condition of customers were to deteriorate, actual write-offs might be higher than expected. Due to our large and unrelated customer and vendor base, and as there are no individually significant outstanding amounts, we are not exposed to any concentrations of credit risk.

Income Taxes

Current and deferred income tax needs to be determined for each of the jurisdictions in which we operate. Management judgment is required for the calculation of current and deferred taxes. Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted, or substantively enacted, at the balance sheet date, and any adjustment to tax payable (receivable) for prior periods. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities and the corresponding tax basis used in the computation of taxable income. Deferred tax is calculated, considering (i) the tax rates that are expected to apply in the period when the liability is settled or the asset is realized and (ii) the expected manner of realization or settlement of the carrying amount of assets and liabilities. Deferred tax assets are recognized to the extent that their utilization is probable. The utilization of deferred tax assets will depend on whether it is possible to generate sufficient taxable income in the respective jurisdiction, taking into account any legal restrictions on the utilization of the asset. Various factors are used to assess the probability of the future utilization of deferred tax assets, including, but not limited to, past operating results, and future operational plans. The financial position, net income or cash flows may be impacted if the actual results differ from these estimates or if these estimates must be adjusted in future periods. In the event that the assessment of future utilization of deferred tax assets changes, the impact on recognized deferred tax assets will be recognized in profit or loss or directly in equity.

In addition, we are subject to periodic audits and examinations by tax authorities. The assessment of our tax position relies on the judgment of management to estimate the exposures associated with our various filing positions. Based on our evaluation of the potential tax liabilities and the merits of our filing positions, we believe it is unlikely that any potential tax exposures, in excess of the amounts currently recorded as liabilities in our consolidated financial statements, would be material to our future financial condition or results of operations.

Self Insurance

As explained in Note 20.2 to our consolidated financial statements, included under Item 18 of this document, in the United States we are self-insured for workers compensation, general liability, vehicle accident and pharmacy claims up to a certain retention and we hold excess insurance contracts with external insurers for any costs in excess of these retentions.

Our self-insurance liability is determined actuarially, based on claims filed and an estimate of claims incurred but not reported (“IBNR”). The significant assumptions used in the development of the actuarial estimates are based upon our historical claims data, including the average monthly claims and the average duration between incurrence and payment.

In addition, our property insurance in the United States includes self-insured retentions per occurrence of $15 million for named windstorms, $5 million for Zone A flood losses and $2.5 million for all other losses.

We are also self-insured in the United States for health care which includes medical, pharmacy, dental and short-term disability. The self-insurance liability for IBNR claims is estimated quarterly by management based on available information and considers an annual actuarial evaluation based on historical claims experience, claims processing procedures and medical cost trends.

Actuarial estimates are subject to a high degree of uncertainty due to, among other things, changes in claim reporting patterns, claim settlement patterns, judicial decisions, legislation and economic conditions. We believe that the actuarial estimates are reasonable and represent our best estimate of the total exposure. However, it is in the nature of such estimates that significant differences between actual and estimates could materially affect our self-insurance obligations. For example, a negative shift in the yield curve used to discount the provision by 100 basis points would increase the provision by approximately €5 million.

Share-Based Payments

We have equity-settled share-based compensation plans covering employees in the United States and Europe. The fair value of the employee-related services received in exchange for the grant of the share-based awards is recognized as an expense. The fair value of the share-based awards is calculated using the Black-Scholes-Merton option pricing model, except for the restricted stock unit awards for which the fair value is based on the share price on the date of grant. The resulting cost is charged to the income statement over the vesting period of the related share-based awards. Compensation expense is adjusted to reflect expected and actual levels of vesting.

The Black-Scholes-Merton option pricing model incorporates certain assumptions, which are our estimates of the risk-free interest rate, expected volatility, expected dividend yield and expected life of options, to arrive at a fair value estimate. Our assumptions are based on historical, mainly observable market data and are reviewed at each grant date and explained in Note 21.3 of our consolidated financial statements, included under Item 18 of this document. We revise our valuation assumptions as appropriate to value share-based awards granted in future periods.

Closed Store Provisions

We regularly review the operational performance of our retail stores and make assessments of the future developments of these stores. In some cases, we decide to close stores, which results in a number of accounting activities in order to ensure that assets and liabilities resulting from these decisions are appropriately reflected in our financial statements. This involves testing assets for impairment, see above, but also the recognition of closed store and severance (“termination”) provisions.

The provision for closed stores expenditures is estimated based on remaining lease obligations, expected sub-lease income and exit costs associated with store closing commitments. Other exit costs include estimated utilities, real estate taxes, common area maintenance and insurance costs to be incurred after the store closes, all of which are contractually required payments under the lease agreements, over the remaining lease term.

The estimates are based on past experience and are reviewed regularly to ensure that accrued amounts continue to reflect our best estimate of the outstanding commitments. By the nature of such estimates, the actual amounts recorded may differ. Adjustments to closed store provisions and other exit costs primarily relate to changes in subtenant income and actual exit costs. Such adjustments are made in the period in which the change becomes known. Any excess store closing provision remaining upon settlement of the obligation is reversed in the period that such settlement is determined.

Calculating the estimated store closing losses requires significant judgments and estimates that could be impacted by factors such as the extent of interested buyers, the ability to obtain subleases, the creditworthiness of sub-lessees, and our success at negotiating early termination agreements with lessors. These factors are significantly dependent on general economic conditions and resulting demand for commercial property. Finally, applying an appropriate discount rate on the estimated long-term cash flow projection requires the application of judgment.

Varying the discount rate applied by 200 basis points would have increased / decreased the expenses charged to profit or loss for 2012 store closing activities by €13 million and increased / decreased the total closed store provision by €9 million.

Supplier Allowances

We receive allowances and credits from suppliers primarily for in-store promotions, co-operative advertising, new product introductions and volume incentives. Allowances for in-store promotions, co-operative advertising and volume incentives are included in cost of inventory and recognized when the product is sold unless they represent reimbursement of a specific, identifiable cost incurred by us to sell the vendor’s product. Such reimbursements are recorded as a reduction in selling, general and administrative expenses. Income from new product introductions constitutes an allowance received to compensate us for costs incurred for product handling and are recognized over the product introduction period in cost of sales.

Estimating rebates from suppliers requires in certain cases the use of assumptions and judgment regarding the achievement of specified purchase or sales level and related inventory turnover. We regularly review the relevant significant assumptions and estimates and make adjustments as necessary. Although we believe the assumptions and estimates used are reasonable, significant changes in these arrangements or purchase volumes could have a significant effect on future cost of sales.

Amounts owed to us under these arrangements are subject to counterparty credit risk. In addition, the terms of the contracts covering these programs can be complex and subject to interpretation, which can potentially result in disputes.

We provide an allowance for uncollectible amounts and to cover disputes in the event that our interpretation of the contract terms differs from that of vendors and vendors seek to recover some of the consideration from us. These allowances are based on the current financial condition of the vendors, specific information regarding disputes and historical experience, and changes to these factors could impact these allowances.

Defined Benefit Plans

Approximately 30% of our employees are covered by defined benefit plans, which typically define an amount of benefit that an employee will receive upon retirement, usually depending on factors such as age, years of service and similar criteria. Such plans are either funded or unfunded and our net liability (asset) recognized in the balance sheet is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, adjusted by any unrecognized past service cost and, in case of net asset, limited to the present value of the economic benefits available in the form of a refunds from the plan or reductions in future contributions to the plan.

Calculating the net pension liability (asset) involves the application of actuarial valuation methods, which are subject to a number of estimates and assumptions about the future, as detailed in Note 21.1 to our consolidated financial statements, as included under Item 18 of this document. We review all significant assumptions periodically, which are based on observable market inputs and historical experience.

Differences between estimates and actual outcomes and changes in assumptions represent actuarial gains and losses, which are fully recognized in the period they occur in the statement of other comprehensive income, and impact immediately the net pension liability. However, such actuarial gains or losses do not have an immediate impact on our future contributions to the pension plan. In the event that changes in the key assumptions applied to estimate the annual pension costs are required, the future amounts of the pension benefit costs may be materially affected.

SELECTED RESULTS OF OPERATIONS

Overview

In December 2012, our Board of Directors approved the plan to sell Delhaize Albania SHPK and consequently we classified our Albanian retail operations as a disposal group held for sale. Simultaneously Delhaize Albania qualified as discontinued operations and the 2011 results and disclosure were represented to reflect the reclassification to discontinued operations.

During 2012, our revenues increased 7.7% compared to 2011, while in 2011, our revenues increased 1.2% compared 2010. In 2012, there was a positive translation effect in our sales as a result of the strengthening of the average rate of the U.S. dollar against the euro by 8.3% compared to 2011. 2011 was impacted by a negative translation effect in our sales as a result of the weakening of the U.S. dollar against the euro by 4.8% compared to 2010. This translation effect represents the impact of fluctuations in the exchange rates in the functional currencies of certain of our subsidiaries to the euro, our reporting currency. When discussing our results of operations in this section, we recalculated certain key measures at identical exchange rates by converting the results of our operations denominated in a currency other than the euro at the exchange rate prevailing for the comparative year. For instance, 2012 revenue growth at identical exchange rates was calculated by converting 2012 revenues of our U.S., Romanian and Indonesian operations at the 2011 average exchange rates. For the activities we acquired in Southeastern Europe during 2011 (with floating currencies in Serbia and Albania), we used the average 2011 rates as from August 1, 2011 to calculate data at identical exchange rates.

We ended 2012 with a sales network of 3,451 stores, an increase of 43 stores compared to 2011. 2011 ended with a sales network of 3,408 stores, an increase of 608 stores compared to 2010.

Net profit attributable to equity holders of our company (our company share in net profit) for 2012 decreased by 77.8% compared with 2011. This decrease was mainly a result of a lower operating profit and higher net financial expenses, partly offset by lower income taxes. In 2011, net profit attributable to equity holders of our company decreased by 17.4% compared to 2010. This decrease was mainly a result of a lower operating profit partly offset by lower income taxes and lower net financial expenses.


	Year Ended December 31,
	2012			2011⁽¹⁾			2010
	(in millions of euros)
Revenues		22,737			21,110			20,850
Gross profit⁽²⁾		5,567			5,361			5,353
Other operating income		122			118			85
Selling, general and administrative expenses		(4,871	)		(4,497	)		(4,394	)
Other operating expenses		(428	)		(169	)		(20	)
Operating profit		390			813			1,024
Net financial expenses⁽³⁾		(241	)		(180	)		(203	)
Profit before taxes and discontinued operations		149			633			821
Income tax expense		(24	)		(156	)		(245	)
Net profit from continuing operations		125			477			576
Result from discontinued operations (net of tax)		(22	)		(2	)		(1	)
Group share in net profit		105			475			574

⁽¹⁾	2011 was adjusted for the reclassification of the Albanian operations in discontinued operations.

⁽²⁾	Represents revenues less cost of sales. Cost of sales includes all costs associated with getting products to the retail stores including buying, warehousing and transportation costs.

⁽³⁾	Represents the net total of finance costs and income from investments.

Revenues

The following table sets forth, for the periods indicated, our revenues contribution by geographic region:


	Year Ended December 31,
	2012				2011				2010
	€		%		€		%		€		%
	(in millions, except percentages)
United States		14,632		64.4		13,815		65.4		14,187		68.1
Belgium		4,922		21.6		4,845		23.0		4,800		23.0
Southeastern Europe and Asia		3,183		14.0		2,450		11.6		1,863		8.9
Total		22,737		100.0		21,110		100.0		20,850		100.0

Revenues increased 7.7% for 2012 compared to 2011, positively impacted by the strengthening of the U.S. dollar by 8.3% against the euro. Revenue growth was 2.9% at identical exchange rates. This growth was driven by a full year of operations of the acquired Maxi companies, a net increase in the sales network in our new markets and banners and a positive comparable store sales evolution of 0.6% in Belgium partly offset by the closure of 126 stores in the U.S. in the first quarter of 2012 and a negative comparable store sales evolution of -0.8% in the U.S. Comparable store sales are sales of the same stores, including relocations and expansions and adjusted for calendar effects.

In 2011, revenues increased by 1.2% compared to 2010, negatively impacted by the weakening of the U.S. dollar by 4.8% against the euro. Revenue growth was 4.6% at identical exchange rates. This growth was the result of the acquisition of Maxi (a total of 492 stores at year-end 2011), a net increase in the sales network in our other operations of 116 stores and a comparable store sales growth of 0.8% in the U.S., partially offset by a negative comparable store sales evolution of -0.6% in Belgium.

United States

During 2012, revenues increased by 5.9% compared to 2011. This increase was a result of the strengthening of the U.S. dollar by 8.3% against the euro partly offset by the closure of 126 stores in the first quarter of 2012. At identical exchange rates, revenues decreased by 2.2%. Comparable store sales evolution was -0.8% in 2012, impacted by challenging economic conditions. We finished 2012 with 1,553 supermarkets in the U.S., a decrease of 97 stores in comparison to 2011, due to the 126 store closures partly offset by the opening of 29 stores, of which 27 Bottom Dollar Food stores.

Revenues decreased by 2.6% in 2011 compared to 2010. This decrease was a result of the weakening of the U.S. dollar by 4.8% against the euro. At identical exchange rates, revenues increased by 2.2%. Comparable store sales evolution was 0.7% in 2011

impacted by challenging economic conditions, especially in Southeastern U.S., with food inflation particularly high in the second half of the year. We finished 2011 with 1,650 supermarkets in the U.S., an addition of 23 stores in comparison to 2010, of which 13 were Bottom Dollar Food stores.

Belgium

Revenues increased by 1.6% in 2012 compared to 2011. This increase was the result of a net increase of 19 stores and a comparable stores sales growth of 0.6%. Delhaize Belgium had a market share of 25.4% in 2012 (source: AC Nielsen), representing a decrease of 49 basis points compared to 2011.

In 2011, revenues increased by 0.9% over 2010. This increase was the result of a net increase of 16 stores and VAT refunds amounting to €15 million partly offset by a comparable store sales decline of 0.6%. Delhaize Belgium was negatively impacted by low consumer confidence and had a market share of 25.9% in 2011 (source: AC Nielsen), a decrease of 41 basis points compared to 2010.

Southeastern Europe and Asia

Revenues increased by 29.9% for 2012 over 2011 (increase of 9.2% excluding Maxi) primarily driven by the acquisition of Maxi, which was consolidated as of August 1, 2011, and to a lesser extent as a result of revenue growth in Greece. We also reported good revenue increases in Romania and Indonesia, mainly due to store openings but also positive comparable store sales growth. The number of stores in the segment increased by 121 to a total of 1,058 stores.

During 2011, revenues increased by 31.5% over 2010 (increase of 7.3% excluding Maxi) primarily driven by the acquisition of Maxi and store openings across the segment. The number of stores in the segment increased by 569 to a total of 937 stores, of which 492 were Maxi stores.

Gross Profit


	Year Ended December 31,
	2012				2011				2010
	€		% of revenues		€		% of revenues		€		% of revenues
	(in millions, except percentages)
United States		3,832		26.2		3,766		27.3		3,915		27.6
Belgium		1,001		20.3		1,020		21.0		997		20.8
Southeastern Europe and Asia		734		23.1		575		23.5		441		23.7
Total		5,567		24.5		5,361		25.4		5,353		25.7

Gross profit increased by 3.8% for 2012 compared to 2011 (decrease of 1.3% at identical exchange rates), while gross margin decreased by 91 basis points compared to 2011. In the U.S., gross margin decreased by 107 basis points from 27.3% to 26.2% as a result of price investments especially at Food Lion and the negative impact of the 126 store closures. At Delhaize Belgium, gross margin decreased by 71 basis points to 20.3% as a result of price investments and the comparison with 2011 which included €15 million of VAT refunds. Gross margin for the Southeastern Europe and Asia segment decreased by 43 basis points due to the lower margin of Maxi. Excluding Maxi, gross margin for the segment increased by 32 basis points resulting from better supplier terms partly offset by price investments.

Gross profit increased by 0.2% for 2011 compared to 2010 (increase of 3.7% at identical exchange rates), while gross margin decreased by 28 basis points compared to 2010. In the U.S., gross margin decreased by 33 basis points from 27.6% to 27.3% primarily as a result of price investments especially at Food Lion, partly offset by procurement savings. At Delhaize Belgium, gross margin increased by 28 basis points from 20.8% to 21.0% as a result of €15 million VAT refunds and better supplier terms which were used to fund price investments. Gross margin for the Southeastern Europe and Asia segment decreased by 20 basis points due to the lower margin of Maxi. Excluding Maxi, gross margin for the segment increased by 65 basis points resulting from better supplier terms partly offset by price investments.

Other Operating Income

Other operating income includes income generated from activities other than sales and point of sale services to retail and wholesale customers, including mainly waste recycling income, rental income and gains on sale of property, plant and equipment.

Other operating income in 2012 was €122 million, an increase of €4 million compared to last year, but flat at identical exchange rates. The non recurrent insurance reimbursement related to damages suffered from tornado storms in 2011 and the lower recycling income was offset by gains on lease terminations and disposal of fixed assets (both mainly related to the portfolio optimization) and government grants in Greece.

In 2011, other operating income was €118 million and increased by 38.8% compared to 2010. This increase is mainly due to an insurance reimbursement related to tornado damages, higher rental income and more waste recycling income, all at Delhaize America.

Selling, General and Administrative Expenses (“SG&A”)


	Year Ended December 31,
	2012				2011				2010
	€		% of revenues		€		% of revenues		€		% of revenues
	(in millions, except percentages)
United States		3,360		23.0		3,142		22.7		3,189		22.5
Belgium		823		16.7		814		16.8		795		16.5
Southeastern Europe and Asia		647		20.3		501		20.5		377		20.3
Corporate		41				40				33
Total		4,871		21.4		4,497		21.3		4,394		21.1

SG&A increased during 2012 by 8.3% compared to 2011 (increase of 2.9% at identical exchange rates). SG&A as a percentage of revenues increased by 12 basis points to 21.4%. In the U.S., SG&A as a percentage of U.S. revenues increased by 21 basis points to 23.0%, mainly as a result of lower sales and the impact of the Food Lion brand repositioning, partly offset by lower incentive compensation. At Delhaize Belgium, SG&A expenses decreased by 6 basis points to 16.7% of Belgian revenues, mainly as a result of a payroll tax refund related to 2011, which was partly offset by salary indexation that continues to impact our cost structure. In the Southeastern Europe and Asia segment, SG&A decreased by 15 basis points to 20.3% of related revenues (increase by 25 basis points excluding Maxi), due to new store openings throughout the segment.

SG&A increased by 2.4% for 2011 compared to 2010 (increase of 5.9% at identical exchange rates). SG&A as a percentage of revenues increased by 23 basis points to 21.3%. In the U.S., SG&A as a percentage of U.S. revenues increased by 27 basis points to 22.7% of revenues mainly due to the impact of limited sales growth, partly offset by cost reduction efforts. At Delhaize Belgium, SG&A expenses increased by 24 basis points to 16.8% of Belgian revenues mainly due to the negative impact of automatic salary indexation, partly offset by cost reduction efforts. In the Southeastern Europe and Asia segment, SG&A increased by 20 basis points to 20.5% of related revenues mainly as a result of higher taxes in Greece due to austerity measures and higher rents due to new store openings. At Corporate, SG&A includes €11 million costs related to the acquisition of Maxi.

Other Operating Expenses

Other operating expenses include expenses incurred outside the normal cost of operating stores, including losses on disposal of property, plant and equipment, impairment losses, store closing expenses and restructuring charges.

In 2012, other operating expenses amounted to €428 million, compared to €169 million in 2011. The 2012 results included €125 million store closing expenses, primarily resulting from the portfolio optimization announced in January 2012 (see below) and €272 million impairment charges, which can be summarized as follows (in millions of euros):


Goodwill			136
Intangible assets			17
Property, plant & equipment			87
Investment property			14
Assets held for sale			18

Total			272

As part of the 2012 annual goodwill impairment review, we impaired 100% of the goodwill recognized in Bulgaria, Bosnia & Herzegovina and Montenegro (totaling €51 million) and €85 million with respect to the Serbian goodwill. We further recognized impairment charges in connection with the Piccadilly brand in Bulgaria for €15 million, and other intangible assets at Delhaize America for €2 million. In addition, the Group recognized impairment charges of €87 million in property, plant and equipment relating to (i) 45 stores (34 Sweetbay, 8 Food Lion and 3 Bottom Dollar Food) that were closed early 2013 and 9 underperforming stores, all in the United States, for a total amount of €54 million, (ii) the closing of 6 stores and underperformance of 57 stores in Southeastern Europe (€28 million), and (iii) 1 store closing and the underperformance of 6 stores in Belgium (€5 million). Further, impairment charges of €14 million were recognized on investment properties, primarily on 15 properties in the United States and a warehouse in Albania. Finally, assets held for sale at Maxi were impaired by €18 million as a result of the weakening real estate market and the deteriorating state of the property for sale.

Other operating expenses amounted to €169 million in 2011 and increased by €149 million compared to 2010. The 2011 results included €135 million impairment charges (€14 million in 2010). During the fourth quarter of 2011, we performed a review of our store portfolio (“Portfolio Review”) and concluded that 146 underperforming stores would be closed during the first quarter of 2012. We recorded €127 million impairment charges relating to 126 stores in the U.S. (113 Food Lion, seven Bloom and six Bottom Dollar stores), one distribution center and several investment properties, while the underperformance of 20 Maxi stores (in Serbia, Bulgaria and Bosnia and Herzegovina) was already reflected in the fair values of the related assets in the opening balance sheet.

Operating Profit

The following table sets forth, for the periods indicated, our operating profit contribution by segment:


	Year Ended December 31,
	2012						2011					2010
	€			% of revenues			€			% of revenues		€			% of revenues
	(in millions, except percentages)
United States		343			2.3			534			3.9		753			5.3
Belgium		202			4.1			243			5.0		236			4.9
Southeastern Europe and Asia		(113	)		(3.5	)		81			3.3		68			3.7
Corporate		(42	)					(45	)				(33	)
Total		390			1.7			813			3.9		1,024			4.9

Our operating margin for 2012 decreased to 1.7% compared to 3.9% in 2011. The operating margin of the U.S. operations decreased to 2.3%, driven by impairment and store closing charges and price investments. The operating margin of the Belgian operations decreased from 5.0% in 2011 to 4.1% in 2012, primarily due to €15 million VAT refunds in 2011, additional price investments and the impact of salary indexation, partly offset by a payroll tax refund related to 2011. In 2012, the operating margin of the Southeastern Europe and Asia segment decreased from 3.3% in 2011 to -3.5% in 2012, as a result of the integration of Maxi and related significant impairment charges recorded in the fourth quarter (excluding Maxi, operating margin would have been 4.1%, increasing 26 basis points compared to 2011, driven by a higher gross margin and higher other operating income partly offset by higher SG&A as a percentage of revenues).

Our operating margin for 2011 decreased to 3.9% compared to 4.9% in 2010. The operating margin of the U.S. operations decreased from 5.3% in 2010 to 3.9% in 2011, as a result of impairment charges related to the Portfolio Review and price investments, partly offset by procurement savings. The operating margin of the Belgian operations increased slightly from 4.9% in 2010 to 5.0% in 2011, mainly due to €15 million VAT refunds, favorable supplier terms and cost reductions partly offset by the negative impact of salary indexation and additional price investments. In 2011, the operating margin of the Southeastern Europe and Asia segment decreased from 3.7% in 2010 to 3.3% in 2011 as a result of the integration of Maxi (excluding Maxi, operating margin would have been 3.9%, increasing 19 basis points vs. 2010 driven by a higher gross margin partly offset by higher SG&A as a percentage of revenues).

Compared to 2011, operating profit decreased by 52.0% to €390 million in 2012. At identical exchange rates, operating profit decreased 56.1%.

Operating profit decreased by 20.6% to €813 million for 2011 compared to 2010. At identical exchange rates, operating profit decreased 18.0%.

Net Financial Expenses


	Year Ended December 31,
	2012				2011				2010
	€		% of revenues		€		% of revenues		€		% of revenues
	(in millions, except percentages)
Finance costs		258		1.1		203		1.0		215		1.0
Income from investments		17		0.1		23		0.1		12		0.1
Net financial expenses		241		1.1		180		0.9		203		1.0

The 2012 net financial expenses were €61 million higher than 2011 and represented, as a percentage of revenues, 1.1% and 0.9%, for 2012 and 2011, respectively. At identical exchange rates, net financial expenses increased by €50 million mainly due to the premiums paid as part of the debt refinancing in 2012 and to the additional debt to partially finance the Maxi acquisition.

Net financial expenses during 2011 were €23 million below 2010 and represented, as a percentage of revenues, 0.9% in 2011 and 1.0% in 2010. At identical exchange rates, net financial expenses decreased by €16 million mainly due to fair value gains on derivatives, gains on the disposal of financial assets, the positive impact of the 2010 bond exchange and a $50 million bond reimbursement in April 2011, partly offset by the financing of the acquisition of Maxi.

Income Tax Expense


	Year Ended December 31,
	2012						2011					2010
	€			Effective tax rates			€		Effective tax rate			€		Effective tax rate
	(in millions, except percentages)
Income tax expense from continuing operations		24			15.8	%		156		24.6	%		245		29.8	%
Income tax expense from discontinued operations		(2	)					—					—
Total income tax expense		22			17.6	%		156		24.7	%		245		29.8	%

Our effective tax rate for continuing operations (total income tax expense from continuing operations divided by profit before tax and discontinued operations) was 15.8%, 24.6% and 29.8% for 2012, 2011 and 2010, respectively. The effective tax rate for continuing operations for 2012 decreased by 8.8 percentage points in comparison to 2011, mainly due to the resolution of certain state tax matters in the U.S. in the third quarter, partly offset by non-deductible goodwill impairment charges of €136 million in the fourth quarter of 2012. The effective tax rate for continuing operations for 2011 decreased by 5.2 percentage points in comparison to 2010, mainly as a result of the lower weight of our U.S. operations, due to the recorded impairment charges.

The effective tax rate (including discontinued operations) was 17.6%, 24.7% and 29.8% for 2012, 2011 and 2010, respectively.

We refer to Note 22 in Item 18 for a reconciliation of our Belgian statutory income tax rate of 34% to our effective income tax rate.

Result from Discontinued Operations

In 2012, the result from discontinued operations, net of tax, amounted to a loss of €22 million and is primarily related to the Albanian operations (including an impairment charge of €16 million) following the sale of these operations in February 2013.

In 2011, the result from discontinued operations, net of tax, amounted to a loss of €2 million.

In 2010, the result from discontinued operations, net of tax, amounted to a loss of €l million.

Group Share in Net Profit

The lower operating profit, higher net financial expenses and loss on discontinued operations partly offset by lower income taxes resulted in a 77.8% decrease in the 2012 net profit attributable to equity holders of our company (our Group share in net profit) compared to 2011.

The lower operating profit partly offset by lower income taxes and lower net financial expenses resulted in a 17.4% decrease in our Group share in net profit for 2011 compared to 2010.

LIQUIDITY AND CAPITAL RESOURCES

We had €932 million of cash and cash equivalents as of December 31, 2012, compared to €432 million at December 31, 2011. Our principal source of liquidity is cash generated from operations. Debt is also an important tool in our capital structure. Cash flow from operations is reinvested each year into new stores, store remodeling and store expansions, as well as in store efficiency-improvement measures and retailing innovations. Cash flow from operations is also used to service debt, for working capital needs, the payment of dividends and for financing acquisitions. We believe that our working capital and existing credit lines will be sufficient for our anticipated capital requirements for the foreseeable future.

Operating Activities

Net cash provided by operating activities was €1,408 million, €1,106 million and €1,317 million during 2012, 2011 and 2010, respectively. The increase in 2012 over 2011 was primarily due to higher cash provided by changes in operating assets and liabilities (€428 million provided in 2012 compared to €196 million used in 2011), primarily driven by inventory reduction initiatives across the group and especially in the U.S., an improved vendor payment process in Belgium and improved working capital position at Maxi over the course of 2012, partly offset by a lower profit from operations.

The decrease in 2011 over 2010 was primarily due to a lower net profit (€100 million), lower income tax and net finance expenses (€112 million) and higher cash used in operating assets and liabilities (€196 million in 2011 compared to €67 million in 2010 primarily due to reducing overdue supplier balances at Maxi) partly offset by higher impairment expenses (€121 million) due primarily to the Portfolio Review.

Investing Activities

Net cash used in investing activities was €637 million for 2012, compared to €1,265 million during 2011 and €665 million for 2010. The decrease in 2012 is primarily due to lower amounts for business acquisitions (€574 million in 2011 for the acquisition of Maxi) and capital expenditures that were €74 million lower than in 2011. The increase in 2011 is primarily due to higher amounts for business acquisitions (increase resulting from the acquisition of Maxi) and capital expenditures that were €102 million higher than in 2010.

Capital Expenditures

Capital expenditures were €688 million for 2012 compared with €762 million for 2011 and €660 million for 2010. The decrease of 9.7% in 2012 (12.5% decrease at identical exchange rates) is mainly due to (i) lower new store capex in the U.S. and Greece partly offset by higher capex for new stores in Romania and (ii) non recurrent distribution center related expenditures in 2011 in the U.S. following last year’s tornado storm, partly offset by higher remodeling expenses in the U.S. (Food Lion Brand Strategy) and in Belgium. The 2011 increase of 15.5% (18.7% increase at identical rates) was mainly a result of additional store openings in Southeastern Europe and Asia, the start of the construction of a new automated distribution center in Belgium and distribution center related expenditures in the U.S. in 2011 following a tornado storm.

Capital Expenditures by Geographical Area


	Year Ended December 31,
	2012		2011		2010
	(amounts in millions of euros)
United States		354		416		410
Belgium		153		142		128
Southeastern Europe and Asia		157		185		113
Corporate		24		19		9
Total		688		762		660

Capital Expenditures by Type


	Year Ended December 31,
	2012				2011				2010
	€		% of capital expenditure		€		% of capital expenditure		€		% of capital expenditure
	(in millions, except percentages)
New stores		160		23.3		231		30.3		196		29.7
Remodeling existing stores		235		34.1		185		24.3		167		25.3
Other		293		42.6		346		45.4		297		45.0
Total		688		100.0		762		100.0		660		100.0

In 2012, we remodeled or expanded 61 supermarkets in the U.S. (compared to 66 in 2011) and 25 supermarkets were remodeled in Belgium (23 in 2011). The other capital expenditures mainly relate to capital spending for information technology, logistics and distribution.

Business Acquisitions

Our growth strategy includes selective acquisitions. During 2012, we entered into several small agreements in Belgium and Romania that have resulted in the acquisition of businesses. The total consideration transferred during the year for these transactions was €5 million and resulted in an increase of goodwill of €3 million.

During 2011, we entered into one significant and several small agreements. The small agreements allowed for the acquisition of 17 individual stores in various parts of the world, and the total consideration transferred during 2011 for these transactions was €16 million and resulted in an increase of goodwill of €10 million, which mainly represented expected benefits from the integration of the stores into the existing sales network, the locations and customer base of the various stores acquired, which are expected to result in synergy effects for the Group.

On July 27, 2011, we acquired 100% of the shares and voting rights of Delta Maxi for a purchase price of €615 million, which was subject to customary purchase price adjustments, but not any earn-out or similar clauses. At December 31, 2011, the total consideration transferred amounted to (i) €574 million in cash, net of €21 million cash acquired, of which €100 million was held in escrow by the seller and (ii) €20 million held in escrow by us. The acquired business, in combination with our existing operations in Greece and Romania, made us a leading retailer in Southeastern Europe. At acquisition date, Delta Maxi operated 485 stores and seven distribution centers in five countries in Southeastern Europe. Delta Maxi is included in our consolidated financial statements as of August 1, 2011 and is part of our Southeastern Europe & Asia segment. We incurred approximately €11 million acquisition-related costs that were included in selling, general and administrative expenses in the “Corporate” segment. This transaction is also detailed in Note 4.1 of our consolidation financial statements, included in Item 18 in this document.

During the first half of 2012, the Group completed the purchase price allocation of the transaction and revised the provisional amounts previously recognized to reflect additional information obtained on the acquisition date fair values for assets acquired and liabilities assumed. As part of this process, the Group completed its assessment and quantification of legal contingencies that were assumed as part of the acquisition and recognized corresponding provisions in accordance with IFRS 3. The contingent liabilities mainly related to pending legal disputes for a number of property ownership related cases. The agreement with the former owner of Delta Maxi contains specific indemnification clauses for all known significant contingencies and, consequently, the Group recognized indemnification assets of €33 million for such contingencies as it expects to be compensated by the former owner for any potential losses. As a result, acquisition date goodwill increased from €467 million to €507 million. The €20 million held in escrow by the Group was entirely released during the year.

Financing Activities

Net cash used in financing activities was €262 million in 2012, compared to €146 million and €343 million in 2011 and 2010, respectively. Net cash used in financing activities increased by €116 million in 2012 mainly due to the repayment of long-term debt exceeding the increase in cash provided by new long-term debt.

Purchase of non-controlling interests

In June 2012, the minority shareholder of Ela d.o.o. Kotor irrevocably and unconditionally exercised its put option selling its share of 49% in the subsidiary to us. We recognized, as part of the purchase price allocation, (i) a liability of approximately €13 million in connection with the put option, representing our best estimate of the expected cash outflow, and (ii) an indemnification asset of approximately €6 million towards the former owner of Delta Maxi. We reclassified the remaining non-controlling interest into retained earnings and recognized the subsequent immaterial changes in value of the liability and the indemnification asset in profit or loss.

During 2012, we acquired additional non-controlling interests for a total amount of €10 million, including transaction costs, recognized in equity, mainly relating to other Delta Maxi subsidiaries.

Subsequent to the acquisition of Delta Maxi, we started the process of acquiring non-controlling interests held by third parties in several Delta Maxi subsidiaries. Until December 31, 2011, we acquired non-controlling interests of a carrying amount of €14 million. The cash consideration transferred for the acquired non-controlling interests was €10 million. The difference between the carrying amount of non-controlling interests and the fair value of the consideration paid was recognized directly in retained earnings and attributed to the shareholders of the Group for an amount of €4 million.

In March, 2010, we launched a final tender offer to acquire the remaining shares of Alfa Beta at €35.73 per share. After approval from the Hellenic Capital Market Commission of the squeeze-out in July, we own since August 9, 2010, 100% of the voting rights in Alfa Beta. We delisted Alfa Beta from the Athens Exchange as of October 1, 2010. We paid €47 million for the remaining 10.07% of Alfa Beta shares we purchased in 2010.

Long-term debt

In 2012, our long-term debt increased by €3 million. This increase is primarily the combined effect of (i) the issuance of $300 million senior notes in April 2012, which was partly used to early repay €191 million of the existing €500 million senior notes due 2014, (ii) the issuance of €400 million senior fixed rate bonds in November 2012, which was partly used to early repay an additional €94 million of the original €500 million senior notes due 2014 (remaining outstanding amount at year-end 2012 is €215 million) and the repayment of $201 million of the existing $300 million senior notes due 2014, (iii) premiums and financing costs paid on the refinancing of €38 million, (iv) repayment at maturity of a $113 million floating term loan and (v) €54 million less finance lease obligations. On January 3, 2013, we redeemed the remaining $99 million of the $300 million 5.875% senior notes due 2014.

In 2011, our long-term debt increased by €131 million. This increase is primarily the combined effect of the issuance of a 7-year retail bond of €400 million in October 2011, which was partly used to early repay the existing debt of the acquired Delta Maxi Group (€186 million), the repayment at maturity of a $50 million bond (€38 million) and €53 million finance lease obligations.

In 2010, our long-term debt decreased by €92 million. During 2010, we repaid at maturity a bond of €40 million (issued by Alfa Beta) and €49 million finance lease obligations.

In October 2010, we exchanged $533 million in principal amount of the 9.00% debentures due 2031 and $55 million of the 8.05% notes due 2027 issued by the wholly-owned subsidiary Delhaize America, LLC, for $827 million in principal amount of 5.70% Senior Notes due 2040 issued by Delhaize Group.

In 2003, Hannaford invoked the defeasance provisions of several of its outstanding notes and placed sufficient funds in an escrow account to satisfy the remaining principal and interest payments due on these notes. As a result of this defeasance, Hannaford is no longer subject to the negative covenants contained in the agreements governing the notes. As of December 31, 2012, 2011 and 2010, €6 million, €6 million and €8 million in aggregate principal amount of the notes was outstanding, respectively. Cash committed to fund the escrow and not available for general corporate purposes is considered restricted. At December 31, 2012, 2011 and 2010, restricted securities of €8 million, €9 million and €10 million, respectively, were recorded in investment in securities on the balance sheet.

At December 31, 2012, the carrying value of our long-term borrowings (including current portion and excluding finance leases), net of discounts and premiums, deferred transaction costs and including hedge accounting fair value adjustments, can be summarized as follows:


Instruments, Interest Rate and Maturity	(in millions of euros)
Bonds, 5.10%, due 2013		80
Senior notes, 5.875%, due 2014 (redeemed in January 2013)		75
Notes, 5.625%, due 2014		229
Bonds, 6.50%, due 2017		339
Retail bond, 4.25%, due 2018		400
Senior notes, 4.125%, due 2019		232
Senior fixed rate bonds, 3.125%, due 2020		397
Notes, 8.05%, due 2027		52
Debentures, 9.00%, due 2031		204
Senior notes, 5.70%, due 2040		438
Senior notes, 7.06%, due until 2016		6
Mortgages payable, 8.25%, due until 2016		1
Other debt, 4.58% to 7%, due 2013 to 2031		15
Bank borrowings		1
Total		2,469

The table below provides per currency the expected principal payments (undiscounted) and related interest rates of our long-term borrowings by year of maturity as of December 31, 2012. For the definition of “fair value,” see Note 18.1 to the consolidated financial statements included in this document.

USD denominated debt


(in millions of U.S. dollars)	2013			2014			2015		2016			2017			Thereafter			Fair Value
Notes due 2014, redeemed in 2013		99			—			—		—			—			—			105
Average interest rate		5.88	%		—			—		—			—			—
Bonds due 2017		—			—			—		—			450			—			513
Average interest rate		—			—			—		—			6.50	%		—
Notes due 2019		—			—			—		—			—			300			310
Average interest rate		—			—			—		—			—			4.13	%
Notes due 2027		—			—			—		—			—			71			82
Average interest rate		—			—			—		—			—			8.05	%
Debentures due 2031		—			—			—		—			—			270			323
Average interest rate		—			—			—		—			—			9.00	%
Notes due 2040		—			—			—		—			—			827			806
Average interest rate		—			—			—		—			—			5.70	%
Senior and other notes		—			—			—		9			—			—			10
Average interest rate		—			—			—		7.06	%		—			—
Mortgages payable		—			—			—		2			—			—			2
Average interest rate		—			—			—		8.25	%		—			—
Other debt		1			12			—		—			—			7			20
Average interest rate		2.88	%		5.36	%		—		—			—			4.50	%

Euro denominated debt


(in millions of euros)	2013			2014			2015		2016		2017		Thereafter			Fair Value
Bonds due 2013		80			—			—		—		—		—			80
Average interest rate		5.10	%		—			—		—		—		—
Notes due 2014		—			215			—		—		—		—			227
Average interest rate		—			5.63	%		—		—		—		—
Bonds due 2018		—			—			—		—		—		400			423
Average interest rate		—			—			—		—		—		4.25	%
Senior notes due 2020		—			—			—		—		—		400			413
Average interest rate		—			—			—		—		—		3.13	%
Bank borrowings		1			—			—		—		—		—			1
Average interest rate		0.70	%		—			—		—		—		—

Debt Covenants for Long-Term Debt

We are subject to certain financial and non-financial covenants related to the long-term debt instruments indicated above.

Indentures covering the notes due in 2014 ($ and €), 2017 ($), 2019 ($), 2020 (€), 2027 ($) and 2040 ($), the debentures due in 2031 ($) and the retail bond due in 2018 (€) contain customary provisions related to events of default as well as restrictions in terms of negative pledge, liens, sale and leaseback, merger, transfer of assets and divestiture. The 2014 ($ and €), 2017 ($), 2019 ($), 2020 (€) and 2040 ($) notes and the 2018 (€) bonds also contain a provision granting their holders the right to early repayment for an amount not in excess of 101% of the outstanding principal amount thereof in the event of a change of control in combination with a rating event. While these long-term debt instruments contain certain accelerated repayment terms, none contains accelerated repayment clauses that are subject solely to downgrades in our credit rating (“rating event”). None of the debt covenants restrict the abilities of our subsidiaries to transfer funds to the parent.

The bonds due in 2013 contain customary defined non-GAAP measure based minimum fixed charge coverage and maximum leverage ratios.

At December 31, 2012, 2011 and 2010, we were in compliance with all covenants for long-term debt.

Short-Term Borrowings

At April 15, 2011, we and certain of our subsidiaries, including Delhaize America LLC, entered into a €600 million, five-year multi-currency, unsecured revolving credit facility (the “Facility Agreement”).

Delhaize America

At that date, Delhaize America, LLC terminated all of its commitments under the 2009 Credit Agreement and joined the Facility Agreement. Delhaize America, LLC had no outstanding borrowings under this agreement as of December 31, 2012 and December 31, 2011, and no outstanding borrowings under the 2009 Credit Agreement as of December 31, 2010.

Under the credit facilities that were in place at the various reporting dates, Delhaize America, LLC had $1 million (€1 million) average daily borrowings during 2012 at an average rate of 1.69%, no average daily borrowings during 2011 and $2 million (€2 million) during 2010. In addition to the Facility Agreement, Delhaize America, LLC had a committed credit facility exclusively to fund letters of credit of $35 million (€27 million) of which approximately $12 million (€9 million) was drawn for issued letters of credit as of December 31, 2012, compared to an outstanding of $16 million (€13 million) and $20 million (€15 million) as of December 31, 2011 and 2010, respectively.

Further, Delhaize America, LLC has periodic short-term borrowings under uncommitted credit facilities that are available at the lenders’ discretion and these facilities were $100 million (€76 million) at December 31, 2012. As of December 31, 2012, 2011 and 2010, Delhaize America, LLC had no borrowings outstanding under such arrangements, but used in 2012 and 2011 $5 million (€4 million) to fund letters of credit.

Europe and Asia

At December 31, 2012, 2011 and 2010, our European and Asian entities together had credit facilities (committed and uncommitted) of €846 million (of which €725 million of committed credit facilities and including the €600 million Facility Agreement described above), €864 million and €490 million, respectively.

Borrowings under the credit facilities generally bear interest at the inter-bank offering rate at the borrowing date plus a pre-set margin, or based on market quotes from banks. In Europe and Asia, we had no outstanding short-term bank borrowings at December 31, 2012, compared to €60 million outstanding at December 31, 2011 and €14 million outstanding at December 31, 2010, respectively, with an average interest rate of 2.95% in 2011 and 4.83% in 2010. During 2012, our European and Asian average borrowings were €5 million at a daily average interest rate of 2.06%.

In addition, European and Asian entities have credit facilities (committed and uncommitted) of €17 million (of which €3 million of committed credit facilities), exclusively to issue bank guarantees. Of these credit facilities approximately €11 million was outstanding to fund letters of guarantee as of December 31, 2012 (€10 million at December 31, 2011 and €4 million at December 31, 2010).

Debt Covenants for Short-Term Borrowings

The Facility Agreement of €600 million and the €125 million committed European bilateral credit facilities require maintenance of various financial and non-financial covenants. The agreements contain customary provisions related to events of default and affirmative and negative covenants applicable to Delhaize Group. The negative covenants contain restrictions in terms of negative pledge, liens, indebtedness of subsidiaries, sale of assets and merger, as well as minimum fixed charge coverage ratios and maximum leverage ratios based on non-GAAP measures. For information regarding covenants in the Facility Agreement, see “Item 10. Additional Information — Material Contracts — Delhaize Group Facility Agreement.” None of the debt covenants restrict the ability of our subsidiaries to transfer funds to the parent.

At December 31, 2012, 2011 and 2010, we were in compliance with all covenants conditions for Short-term Bank Borrowings.

Credit Ratings

Standard & Poor’s Rating Services (S&P) and Moody’s Investors Service, Inc. (Moody’s) rate our senior unsecured long-term debt. S&P and Moody’s assign investment grade credit ratings of BBB- and Baa3, respectively, with stable outlooks to our long-term debt. The ratings of both agencies remained unchanged during 2012.

Debt ratings are an assessment by the rating agencies of the credit risk associated with us and are based on information provided by us or other sources. Lower ratings generally result in higher borrowing costs and reduced access to capital markets. See “Increases in interest rates and/or a downgrade of our credit ratings could negatively affect our financing costs and our ability to access capital” under Item 3 “Key Information—Risk Factors.”

Debt ratings are not a recommendation to buy, sell or hold securities. Ratings may be subject to revision or withdrawal by the rating agencies at any time. As rating agencies may have different criteria in evaluating the risks associated with a company, you should evaluate each rating independently of other ratings.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations and commitments as of December 31, 2012:


	Payments due by period
	Total		2013		2014		2015		2016		2017			Thereafter
	(in millions of euros)
Long-term debt (excluding finance lease obligations)⁽¹⁾		2,647		156		224		—		8		341	1,918
Interest on fixed rate debt		1,806		139		133		120		120		109	1,185
Finance lease obligations (minimum payments)⁽²⁾		674		62		51		52		47		42	420
Self-insurance obligations		142		52		26		18		12		8	26
Operating lease obligations (minimum lease payments)⁽²⁾		1,916		312		260		231		195		164	754
Purchase obligations⁽³⁾		164		113		33		7		4		3	4
Pension benefits⁽⁴⁾		187		19		13		18		15		18	104
Other post-retirement benefits⁽⁴⁾		3		1		1		—		—		—	1
Total		7,539		854		741		446		401		685	4,412

⁽¹⁾	Long-term debt excludes any hedging effects and does not take into account premiums and discounts.

⁽²⁾	Both the finance lease and operating lease obligations include closed store lease obligations.

⁽³⁾

Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable pricing and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable within 30 days without penalty and/or contain contingent payment obligations.

⁽⁴⁾	As per SEC guidance, the ‘Thereafter’ category is limited to years N+6 to N+10.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations or cash flows.

FACTORS AFFECTING FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition to the following factors, please see the information under the heading entitled “Risk Factors” under Item 3 “Key Information.”

Financial Risks. We have identified the exposure associated with the ability to continuously fund our operations, adverse interest rate and currency movements, the credit quality of our financial counterparties, fluctuations in our share price within the framework of our share-based compensation plans, and the funding of our pension plans as our principal financial risks.

In order to manage our identified and quantified market risks we use derivative financial instruments - such as foreign exchange forward contracts, interest rate swaps, currency swaps and other derivative instruments - and do not hold such positions for speculative purposes.

Funding and Liquidity Risk. Funding and liquidity risk is the risk that we will encounter difficulty in meeting payment obligations when they come due. We manage this exposure by closely monitoring our cash resources, consisting of a combination of retained cash flows, bank facilities, long-term debt capital markets and leases, essential to fulfill our working capital, capital expenditures and debt requirements.

We operate an international cash-pooling structure in order to centralize cash on a daily basis whenever possible. At year-end 2012 our Cash and Cash Equivalents amounted to €932 million.

We also monitor the amount of short-term funding, the mix of short-term funding to total debt and the availability of committed credit facilities in relation to the level of outstanding short-term debt (see also Note 18.2 “Short-term Borrowings” to the consolidated financial statements). At year-end 2012, we had committed and undrawn credit lines totaling €725 million. These credit lines consisted of a syndicated multicurrency credit facility of €600 million for the Company and certain of its subsidiaries including Delhaize America, LLC and €125 million of bilateral credit facilities for our European entities. In addition, we had €30 million of committed credit facilities for Letters of Credit and guarantees of which €11 million was used. At December 31, 2012, the maturities of the committed credit facilities were as follows: €77 million maturing in 2013, €28 million maturing in 2014, €50 million maturing in 2015 and €600 million maturing in 2016.

We monitor the maturities of our outstanding debt in order to reduce refinancing risk. As described in Note 18.1 “Long-term Debt” to the consolidated financial statements, the debt maturing in 2014 has been largely refinanced and no significant principal payment of financial debt is due until 2017. At December 31, 2012, the maturities of the long-term debt through 2017 were €156 million in 2013, €232 million in 2014, €1 million in 2015, €7 million in 2016 and €341 million in 2017 after the effect of interest rate swaps and cross-currency interest rate swaps. We rely on a strong credit rating to optimally refinance maturing debt. Our long-term issuer ratings from Standard & Poor’s and Moody’s are BBB- (stable) and Baa3 (stable) investment grade ratings, respectively. These credit ratings are supported by cross-guarantee arrangements among the Group and substantially all of our U.S. subsidiaries, whereby the entities are guaranteeing each other’s financial debt obligations.

As also described in Notes 18.1 “Long-term Debt” and 18.2 “Short-term Borrowings” to the consolidated financial statements included in Item 18 of this document, we are subject to certain financial and non-financial covenants related to our long- and short-term debt instruments, which contain certain accelerated repayment terms that are detailed in these Notes.

Interest Rate Risk. Interest rate risk arises on interest-bearing financial instruments and represents the risk that the fair value or the associated interest cash flows of the underlying financial instrument will fluctuate because of future changes in market interest rates.

Our interest rate risk management objectives are to reduce earnings volatility, to minimize interest expense over the long term, and to protect future cash flows from the impact of material adverse movements in interest rates.

We review our interest rate risk exposure on a quarterly basis and at the inception of any new financing operation. As part of our interest rate risk management activities, we enter into interest rate swap agreements when appropriate (see Note 19 “Derivative Financial Instruments and Hedging” to the consolidated financial statements included in Item 18 of this document). At the end of 2012, 75.8% of our financial debt after swaps were fixed-rate debts (2011: 75.1%; 2010: 72.3%).

The sensitivity analysis presented in the table on the right estimates the impact on the income statement and equity of a parallel shift in the interest rate curve. The size of the shift in that curve is based on the standard deviation of daily volatilities of the “Reference Interest Rates” (Euribor 3 months and Libor 3 months) during this year, within a 95% confidence interval.

December 31, 2012 (in millions of €)

Currency

Reference Interest
Rate

Shift

Impact on Net
Profit

Impact
on Equity

EUR

0.19

+/-7 basis points

+/-0.09

—

USD

0.31

+/-4 basis points

-/+ 0.17

+/-0.2

Total

Increase/Decrease

-/+ 0.08

+/-0.2

December 31, 2011 (in millions of €)

Currency

Reference Interest
Rate

Shift

Impact on Net
Profit

Impact
on Equity

EUR

1.36

+/-29 basis points

+/-0.1

—

USD

0.58

+/-11 basis points

-/+ 0.5

+/-0.6

Total

Increase/Decrease

-/+ 0.4

+/-0.6

December 31, 2010 (in millions of €)

Currency

Reference Interest
Rate

Shift

Impact on Net
Profit

Impact
on Equity

EUR

1.01

+/-16 basis points

-/+0.2

—

USD

0.30

+/-13 basis points

-/+0.7

+/-0.9

Total

Increase/Decrease

-/+0.9

+/-0.9

Currency Risk. Our foreign currency risk management objectives are to minimize the impact of currency fluctuations on the Group’s profit & loss account, cash flows and balance sheet, using foreign exchange contracts, including derivative financial instruments such as currency swaps and forward instruments (see Note 19 “Derivative Financial Instruments and Hedging” to the consolidated financial statements included in Item 18 of this document).

Translation exposure. The results of operations and the financial position of each of our entities outside the euro zone are accounted for in the relevant local currency and then translated into euro at the applicable foreign currency exchange rate for inclusion in our consolidated financial statements, which are presented in euros (see also Note 2.3 “Summary of Significant Accounting Policies” to the consolidated financial statements, included in Item 18 of this document, with respect to translation of foreign currencies). If the average U.S. dollar exchange rate had been 1 cent higher/lower and all other variables were held constant, our net profit would have increased/decreased by €2 million in 2012 and 2011 (2010: €3 million), solely due to the translation of the financial statements denominated in U.S. dollars. The effect from the translation of the functional currency to the reporting currency of the Group does not affect the cash flows in local currencies.

To reduce the overall foreign exchange exposure from foreign currency earnings we strive to achieve a natural currency offset between assets and liabilities and between revenues and expenditures denominated in local currencies using foreign exchange forward contracts and currency swaps. Because a substantial portion of our assets, liabilities and operating results are denominated in U.S. dollars, we are particularly exposed to currency risk arising from fluctuations in the value of the U.S. dollar against the euro. After cross-currency swaps, 65% of the Group’s financial debt is denominated in U.S. dollars (71% and 85% in 2011 and 2010, respectively). In 2012, 62% of net cash provided by operating activities were generated in U.S. dollars (77% and 61% in 2011 and 2010, respectively).

Foreign currency risk on financial instruments is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of future changes in foreign currency exchange rates. From an accounting perspective, we are exposed to foreign currency risks only on monetary items not denominated in the functional currency of the respective reporting entities, such as trade receivables and payables denominated in a foreign currency, financial assets classified as available for sale, derivatives, financial instruments not designated for hedge relationship and borrowings denominated in a foreign currency. If at December 31, 2012, the U.S. Dollar had weakened/strengthened by 17% (estimate based on the standard deviation of daily volatilities of the €/$ rate during 2011 using a 95% confidence interval), our net profit (all other variables held constant) would have been €3.7 million lower/higher (2011: €3.8 million higher/lower with a rate shift of 22%, 2010: €1.4 million higher/lower with a rate shift of 20%). Due to our financing structure, such a change in €/$ exchange rate would have no impact on our equity.

Transaction exposure. Our exposure to fluctuations in foreign currency movements in our business operations is limited as our operating companies’ purchases and sales are primarily denominated in local currency.

Credit Risk/Counterparty Risk. Credit risk is the risk that one party to an agreement will cause a financial loss to another party by failing to discharge its obligation. Credit risk covers trade receivables, cash and cash equivalents, short term deposits and derivative instruments.

The credit risk on trade receivables relates to the wholesale activity in Belgium and Greece. We cover part of this risk by entering into credit insurance policies with external insurers. The contracts contain stop-loss clauses and maximum liability amounts that provide sufficient cover against possible annual credit losses. In connection with the cash and cash equivalents, short-term deposits and derivative instruments we require a minimum credit quality for our financial investments (see also Notes 11 “Investments in Securities” and 14 “Receivables” to the consolidated financial statements in Item 18 of this document for further details).

Our policy is to require short-term investments to have a short-term credit rating of at least A1 (Standard & Poor’s) / P1 (Moody’s). Our long-term investment policy requires a minimum long-term credit rating of A-/A3 for our financial investments. See Note 11 “Investments in Securities” to the consolidated financial statements in Item 18 of this document in connection with the credit

quality of our investments. Deposits should be maintained with banks having a minimum long-term credit rating of A-/A3, although we might deviate from this policy from time to time for operational reasons.

Our exposure to changes in credit ratings of our counterparties is continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Counterparty risk is always assessed with reference to the aggregate exposure to a single counterparty or group of related parties to avoid or minimize concentration risk.

Share-Based Incentive Plans Risk. We offer various equity-settled incentive plans (Stock Options, U.S. warrants and Restricted Stock Units). We hedge the risk arising from those plans by occasionally buying treasury shares and/or derivatives.

Our exposure to share-based incentive plans is reviewed at least on a quarterly basis and at inception of any new plan. For further information about share-based incentive plans, refer to Note 21.3 “Share-Based Compensation” to the consolidated financial statements in Item 18 of this document.

Pension Plan Risk. Most of our operating companies have pension plans, the structures and benefits of which vary with conditions and practices in the countries concerned. Pension benefits may be provided through defined contribution plans or defined benefit plans.

A defined contribution plan is a post-employment benefit plan under which we and/or the employee pays fixed contributions usually to a separate entity. Under such a plan, there are no legal or constructive obligations to pay further contributions, regardless of the performance of the funds held to satisfy future benefit payments. The actual retirement benefits are determined by the value of the contributions paid and the subsequent performance of investments made with these funds.

A defined benefit plan is a post-employment benefit plan which normally defines an amount of benefit that an employee will receive upon retirement, usually dependent on one or more factors such as age, years of service, compensation and/or guaranteed returns on contributions made.

We operate defined benefit plans at several of our entities and approximately 30% of our employees were covered by defined benefit plans at the end of 2012.

If, at balance sheet date, the fair value of the plan assets of a defined benefit plan, is lower than the defined benefit obligations (determined based on actuarial assumptions), we would bear a theoretical “underfunding risk” at that moment in time. At the end of 2012, we recognized a net liability of €129 million (2011: €90 million; 2010: €79 million).

Details on our pension plans at the Group and our subsidiaries can be found in Note 21.1 “Employee Benefit Plans” to the consolidated financial statements in Item 18 of this document.

Self-Insurance Risk. We manage our insurable risk through a combination of external insurance coverage and self-insurance. In deciding whether to purchase external insurance or manage risk through self-insurance, we consider the frequency and severity of losses, our success in managing risk through safety and other internal programs, the cost and terms of external insurance coverage and whether external insurance coverage is mandatory.

External insurance is used when available at a reasonable cost and terms. The amount and terms of insurance purchased are determined by an assessment of our risk exposure, by comparison with standard industry practices and by assessment of the available financing capacity in the insurance market. The main risks covered by our insurance policies are property, liability and health care.

Our U.S. operations are self-insured for workers’ compensation, general liability, automotive accident and pharmacy claims and healthcare including medical, pharmacy, dental and short-term disability. We use self-insured retention programs for workers’ compensation, general liability, automotive accident, pharmacy claims, and healthcare. We also use captive insurance arrangements for some of our self-insurance programs to provide flexibility and optimize costs.

Self-insurance liabilities are estimated based on actuarial valuations of claims filed and an estimate of claims incurred but not yet reported. Maximum retention, including defense costs per occurrence, are $1 million per accident for workers’ compensation, $3 million per accident for vehicle liability and $3 million per accident for general liability, with an additional $2 million retention in excess of the primary $3 million general liability retention for pharmacy liability. We are insured for costs related to the covered

claims, including defense costs, in excess of these retentions. We believe that the actuarial estimates are reasonable; however, these estimates are subject to a high degree of variability and uncertainty caused by such factors as future interest and inflation rates, future economic conditions, litigation and claims settlement trends, legislative and regulatory changes, changes in benefit levels and the frequency and severity of incurred but not reported claims, making it possible that the final resolution of some of these claims may require us to make significant expenditures in excess of its existing reserves.

Our property insurance in the United States includes self-insured retentions per occurrence of $15 million for named wind storms, $5 million for Zone A flood losses and $2.5 million for all other losses.

Self-insurance provisions of €142 million are included as liabilities on the balance sheet. It is possible that the final resolution of some of the claims against these self-insurance programs may require us to make significant expenditures in excess of our existing reserves over an extended period of time and in a range of amounts that cannot be reasonably estimated.

Foreign Investment Risks.In addition to our significant operations in the United States and Belgium, we operate in a number of other countries. Foreign operations and investments are subject to the risks typically associated with conducting business in foreign countries such as:

•

labor disputes;

•

uncertain political, legal and economic environments;

•

risks of war and civil disturbances;

•

risks associated with the movement of funds;

•

deprivation of contract rights;

•

loss of property by nationalization or expropriation without fair compensation;

•

risks relating to changes in laws or policies of particular countries, such as foreign taxation;

•

risks associated with obtaining necessary governmental permits, limitations on ownership and on repatriation of earnings; and

•

foreign currency exchange rate fluctuations.

There can be no assurance that these risks or other risks relating to foreign operations will not be encountered by us in the future. Foreign operations and investments may also be adversely affected by laws and policies governing foreign trade, investment and taxation in the United States, Belgium and the other countries where we operate.

Inflation and Changing Prices.Labor and cost of merchandise sold, our primary operating costs, increase with inflation and, where possible, are recovered through operating efficiencies and retail price adjustments.

In 2012, according to the U.S. Bureau of Labor Statistics, the U.S. overall inflation was 1.7% (3.0% in 2011 and 1.5% in 2010) primarily driven by higher energy prices which increased at a slower pace than in 2011 and higher food prices. Food inflation was 1.8% (4.7% in 2011 and 1.5% in 2010) and food at home inflation rose 1.3% following an increase of 6.0% in 2011(source:B.L.S.).

For Delhaize Belgium, national food inflation in 2012 was 3.0% compared to 2.4% in 2011. Competition remained strong in 2012 and Delhaize Belgium performed price investments leading to an internal retail inflation rate below the national food inflation rate.

Although there is the risk that inflation in Southeast Asia and in other European countries where we operate could have an effect on our results, such inflation did not have a material effect on our sales or results of operations to date.

Economic Conditions. The U.S. economic environment remained challenging in 2012. Real gross domestic product growth (GDP) was 2.2%, slightly higher than the 1.8% growth in 2011. The increase in real GDP in 2012 primarily reflected positive contributions from personal consumption expenditures, non-residential fixed investment and private inventory investment that were partly offset by negative contributions from federal government spending and from state and local government spending (source:U.S. department of commerce). Unemployment in the U.S. was at 7.8% in December 2012 down from 8.5% in December 2011. SNAP (Supplemental Nutrition Assistance Program) national participation was almost 47.8 million persons in December 2012 and was nearly 1.3 million more than end 2011. General inflation was 1.7% in 2012 compared to 3.0% in 2011 still driven by increasing energy and Food prices. Food inflation for the year was 1.8% for the year compared to 4.7% in 2011.

In Belgium, GDP evolution was negative in 2012 at -0.2%. General inflation increased moderately (2.8% in 2012) and food inflation came out at 3.0%. The unemployment rate was 7.3% compared to 7.2% in 2011. The competitive environment remained challenging and focused on price.

Within our Southeastern Europe and Asia segment, economic conditions in Greece, our largest market of the segment, were very difficult and resulted in a real GDP evolution of -6.4% whereas general inflation was 1.5% in 2012, down from 3.3% in 2011.

RECENT EVENTS AND OUTLOOK

Recent Events

On January 3, 2013, we redeemed the remaining $99 million of the $300 million 5.875% senior notes due 2014 and the underlying cross-currency swap.

On January 17, 2013, we announced the decision to close 52 stores, of which 45 stores in the U.S. (34 Sweetbay, 8 Food Lion and 3 Bottom Dollar Food), 6 stores in Southeastern Europe and 1 store in Belgium. As a result, the group recorded an impairment charge of €49 million in the fourth quarter of 2012. In the first quarter of 2013, earnings were impacted by approximately €80 million to reflect store closing liabilities including a reserve for ongoing lease and severance obligations. In addition, we recorded charges of approximately $20 million (€15 million) in the first quarter of 2013 related to the severance of support services senior management and employees in the U.S.

Outlook

Operational initiatives.In the U.S., we strive to accelerate growth at Food Lion. Phase 4 of the brand strategy which will cover 180 stores mainly in the Baltimore/Washington D.C. markets will be launched in the second quarter of 2013. Additionally, we will seek to continue to improve Hannaford’s price competitiveness. Cost savings throughout Delhaize America, and improved results at Bottom Dollar Food and Sweetbay, will partly help us fund the planned price investments.

In Europe, Delhaize Belgium will focus on further revitalizing its brand by reinforcing its historical strengths (private brands, quality and health, freshness, assortment and shopping experience) while it further improves its overall pricing and cost structures. For Southeastern Europe and Asia, we will continue to focus on market share gains in Greece despite the current economic environment, and to strive for growth in all other markets in this segment.

2013 capital expenditures and store opening outlook.We expect capital expenditures of approximately €650 million (excluding leases and at identical exchange rates) and plan to open 200 new stores for the year, mostly in Southeastern Europe and Asia.

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

BOARD OF DIRECTORS

In accordance with Belgian law, our affairs are managed by our Board of Directors. Under our Articles of Association, the Board of Directors must consist of at least three directors. Our Board of Directors consists of 11 directors. Ten of the directors are non-executive directors and one director, Pierre-Olivier Beckers, our Chief Executive Officer, is an executive director.

In March 2013, the Board of Directors determined that the current directors, with the exception of Chief Executive Officer Pierre-Olivier Beckers, Didier Smits and Hugh G. Farrington, are independent under the criteria of the Belgian Companies Code, the Belgian

Code on Corporate Governance and the rules of the NYSE. The Board made its determination based on information furnished by all directors regarding their relationships with us. Mr. Smits is no longer considered independent under the Belgian Companies Code because he has served on the board of directors as a non-executive director for more than three consecutive terms. Mr. Farrington is no longer considered independent under the Belgian Companies Code because he was compensated formerly as an executive of our subsidiary Hannaford Brothers. The Board of Directors met ten times in 2012.

On the recommendation of the Remuneration and Nomination Committee, the Board proposes the appointment of directors to the shareholders for approval at the Ordinary General Meeting. Pursuant to our Articles of Association, directors may be appointed for a maximum term of office of six years. From 1999 to 2009, our Board of Directors set the length of director terms for persons elected during such period at a maximum of three years. Starting with elections in 2010, our Board of Directors decided to set the term of the mandate of a director to three years for the first term, then, provided that our Board of Directors determines such director is independent at re-election, up to four years for subsequent terms. The term of directors who are not considered independent by our Board of Directors at the time of their election has been set by our Board of Directors at three years. Unless otherwise decided by our Board of Directors, a person who is up for election to our Board of Directors and who would turn age 70 during our standard director term length may instead be elected to a term that would expire at the ordinary general meeting occurring in the year in which such director would turn 70. Directors may be removed from office at any time by a majority vote at any meeting of shareholders. Each year, typically, there are a few directors who have reached the end of their current term of office and may be reappointed.

On May 24, 2012, the shareholders at the Ordinary General Meeting (i) renewed the mandate of Ms. Claire H. Babrowski for a term of four years and Mr. Pierre-Olivier Beckers and Mr. Didier Smits each for a term of three years and (ii) appointed Ms. Shari L. Ballard as director for a term of three years.

Upon the recommendation of the Remuneration and Nomination Committee, the Board of Directors will propose to the shareholders for approval at the Ordinary General Meeting to be held on May 23, 2013 the appointment of Ms. Elizabeth Doherty as a director for a term of three years.

Our current Board of Directors and nominee, and biographical information concerning such individuals, are set forth below. The business address of each of our directors is Square Marie Curie 40, 1070 Brussels, Belgium.


Name	Position	Director Since	Term Expires
Mats Jansson	Chairman	May 2011	2014
Pierre-Olivier Beckers	President, Chief Executive Officer & Director	May 1995	2015
Claire H. Babrowski	Director	May 2006	2016
Jacques de Vaucleroy	Director	May 2005	2015
Hugh G. Farrington	Director	May 2005	2014
Jean-Pierre Hansen	Director	May 2011	2014
William G. McEwan	Director	May 2011	2014
Shari L. Ballard	Director	May 2012	2015
Didier Smits	Director	May 1996	2015
Jack Stahl	Director	August 2008	2014
Luc Vansteenkiste	Director	May 2005	2015
Elizabeth Doherty⁽¹⁾	Nominee	—	—

⁽¹⁾	Upon the recommendation of the Remuneration and Nomination Committee, the Board of Directors will propose to the shareholders for approval at the Ordinary General Meeting to be held on May 23, 2013 the appointment of Elizabeth Doherty as director for a term of three years.

Mats Jansson (1951).Mr. Jansson has served as Chairman of our Board of Directors since May 24, 2012. Mr. Jansson currently serves as an independent board member of TeliaSonera and is a member of the JPMorgan European Advisory Council. Mr. Jansson began his career with ICA, a leading Swedish food retailer, holding positions of increasing responsibility over a period of more than 20 years and serving as President of ICA Detaljhandel and Deputy CEO and Chairman of the Group from 1990 to 1994. He then served as CEO of Catena/Bilia (1994 to 1999) and Karl Fazor Oy (1999 to 2000). From 2000 to 2005 Mr. Jansson held the position of CEO with Axfood, a publicly-traded Swedish food retailer. From 2005 to 2006 Mr. Jansson served as President and CEO of Axel Johnson AB, a family owned conglomerate of distribution and services companies. Mr. Jansson was President and CEO of SAS, the

Scandinavian airline company, from 2006 to 2010. He also previously served as a director of Axfood, Mekonomen, Swedish Match, Hufvudstaden and Danske Bank. Mr. Jansson studied economical history and sociology at the University of Örebro.

Pierre-Olivier Beckers (1960).Mr. Beckers has been President and Chief Executive Officer of Delhaize Group since January 1, 1999. Mr. Beckers earned a Master’s degree in applied economics at I.A.G., Louvain-La-Neuve and an MBA from Harvard Business School. He began working in the food retail industry in 1982 as a store manager for a bakery chain in Belgium. Mr. Beckers joined us in 1983, to work initially three years in our U.S. operations as a store manager. After his return to Belgium, he broadened his retail experience as a buyer, director of purchasing, member of the Executive Committee and Director and Executive Vice-President in charge of international activities. In January 2000, Mr. Beckers was named Manager of the Year by the leading Belgian business magazine Trends/Tendances. In 2009, he was named Belgium’s BEL 20 CEO of the year by the Belgian newspapers Le Soir and De Standaard. Until June 2010, he was Co-Chairman of the Consumer Good Forum, a global association of leading consumer goods retailers and manufacturers. Previously, Mr. Beckers served as chairman of the CIES, the Food Business Forum, from 2002 to 2004 and again from July 2008 until its merger and transformation into the Consumer Goods Forum. Mr. Beckers serves on the Board of Directors of The Consumer Goods Forum. He is also on the Board of Directors of the Food Marketing Institute and is Vice-Chairman of the Executive Committee of FEB/VBO, the Belgian Employers Federation. He is a member of Guberna and, until 2010, the Belgian Commission on Corporate Governance. He has been President of the BOIC (Belgian Olympic Interfederal Committee) since December 2004, with his current term expiring in 2013. He also was elected to the International Olympic Committee in July 2012.

Claire H. Babrowski (1957).Ms. Babrowski is a retired retail executive. She serves on the Board of Directors of Pier 1 Imports, Inc. and Quiznos. From 2007 until 2010, Ms. Babrowski was the Executive Vice President, Chief Operating Officer of Toys “R” Us, a specialty toy retailer operating more than 1,500 stores throughout the world. She started her career spending 30 years at McDonald’s Corporation, where her last position was Senior Executive Vice President and Chief Restaurant Operations Officer. From 2005 to 2006, she worked for RadioShack, serving as Executive Vice President and Chief Operating Officer, and then President, Chief Operating Officer and acting Chief Executive Officer. In 1998, she received the Emerging Leader Award from the U.S. Women’s Service Forum. Ms. Babrowski holds a Master in Business Administration from the University of North Carolina.

Shari L. Ballard (1966). Ms. Ballard has been President, International - Enterprise Executive Vice President of Best Buy Co., Inc. since January 2012. Ms. Ballard began her career with Best Buy in 1993 as an assistant store manager, and in 1997 joined its Retail Change Implementation Team. She then moved to Best Buy’s human resources department, ultimately assuming the role of Executive Vice President of Human Resources and Legal in 2004. She also served as Executive Vice President, Retail Channel Management of Best Buy from 2007 until 2010 and as Co-President of the Americas and Executive Vice President from 2010 until January 2012. Ms. Ballard graduated from the University of Michigan - Flint with a Bachelors Degree in Social Work.

Jacques de Vaucleroy (1961).Mr. de Vaucleroy is CEO of the Northern, Central and Eastern Europe business unit of AXA since March 2010. He is also in charge of AXA Bank Europe. Since April 2010, he has been a member of the AXA Management Committee. On January 1, 2011, he assumed global responsibility for the AXA Group’s Life and Savings and Health businesses. Mr. de Vaucleroy has made most of his career within the ING Group, where he was a member of the Executive Board of ING Group and CEO of ING Insurance and Investment Management Europe. He has extensive experience in the banking and insurance and asset management business, both in Europe and in the U.S. Jacques de Vaucleroy holds a law degree (Université Catholique de Louvain, Belgium) and a Master in Business Law (Vrije Universiteit Brussels, Belgium).

Hugh G. Farrington (1945).Following a retail management career starting in 1968 at Hannaford, a U.S. subsidiary of Delhaize Group, Mr. Farrington served as President and Chief Executive Officer of Hannaford from 1992 to 2001. In 2000, he was appointed as Vice Chairman of Delhaize America, and in 2001, he became our Executive Vice President and member of our Board of Directors. In 2003, Mr. Farrington left the Board of Directors and resigned from his executive functions within our company. He rejoined the Board as a director in 2005. Mr. Farrington holds a Bachelor’s degree from Dartmouth College, Hanover, New Hampshire and a Master of Arts in teaching from the University of New Hampshire.

Jean-Pierre Hansen (1948).Mr. Hansen is Chairman of the Energy Policy Committee of GDF SUEZ Group. From 1992 to March 1999 and from January 2005 to April 2010, Mr. Hansen served as Chief Executive Officer of Electrabel and as Chairman of the Board of Directors of Electrabel from 1999 till 2004. Mr. Hansen was Chief Operating Officer and Vice-Chairman of the Executive Committee of the Suez Group from 2003 till 2008. He was Vice-President of the Federation of Enterprises in Belgium (FEB) and a Member of the Council of Regency of the National Bank of Belgium. He is a member of the Board of Directors of Electrabel and of a number of other companies belonging to the GDF SUEZ Group. From July 2008 until the end of February 2013, he was a member of the GDF Suez Executive Committee. He is Chairman of the Board of SNCB/NMBS Logistics. He is also director of ORES, Group De Boeck (Publihold) and of the Institut Français des Relations Internationales, and an independent director of Compagnie Maritime

Belge (CMB). Mr. Hansen is Chairman of the Management Committee of Forem. He is a professor at UCL and the Ecole Polytechnique (Paris), and a member of the Royal Academy of Belgium. Mr. Hansen holds a degree in Civil Engineering (Liège), a Ph. D. in Engineering (Paris VI) and a Master’s degree in Economics (Paris II).

William G. McEwan (1956).Mr. McEwan is a Canadian grocery and consumer packaged goods executive. Between 1989 and 2000, Mr. McEwan held a variety of progressively senior marketing and merchandising roles in the consumer packaged goods industry with Coca-Cola Limited and Coca-Cola Bottling as well as in grocery retail with The Great Atlantic and Pacific Tea Company (A&P) both in Canada and in the United States. He served as President of A&P’s Canadian operations before his appointment as President and Chief Executive Officer of the company’s US Atlantic Region, the position he held immediately prior to joining Sobeys Inc. He served as President and Chief Executive Officer of Sobeys Inc. and member of the Board of Directors of its parent company, Empire Company Limited until June 2012. Mr. McEwan served on the Board of Directors of The Consumer Goods Forum. In November, 2005 Mr. McEwan was presented the Golden Pencil Award, The Food Industry Association of Canada’s highest distinction. In May 2006, the Canadian Council of Grocery Distributors presented Mr. McEwan with the Robert Beaudry Award of Excellence for leadership in the grocery industry. In June 2012, Mr. McEwan was honoured by the Retail Counsil of Canada with its Lifetime Achievement Award, recognizing a career of outstanding leadership, business success and community service.

Didier Smits (1962).Mr. Smits has been Managing Director of Papeteries Aubry SPRL since 1991. From 1986 to 1991, Mr. Smits was a Manager at Advanced Technics Company. Didier Smits received a Master’s degree in economic and financial sciences at I.C.H.E.C. in Brussels.

Jack Stahl (1953).Mr. Stahl served in the role of President and Chief Executive Officer of cosmetics company Revlon from 2002 until his retirement in September 2006. Prior to joining Revlon, Mr. Stahl had a 22-year career as an executive with the Coca-Cola Company culminating in the role of President and Chief Operating Officer. He also served as Group President of Coca-Cola Americas and Chief Financial Officer. Mr. Stahl started his professional career as an auditor at Arthur Andersen & Co. Mr. Stahl served on the Board of pharmaceutical company Schering-Plough until December 2009 and currently serves on the Board of Dr Pepper Snapple Group, Saks Incorporated and Coty Inc. and serves as a member of the US Board of Advisors on CVC Capital Partners Advisory, Inc. He is also a Board member of The Boys and Girls Clubs of America. Mr. Stahl received his undergraduate degree from Emory University and holds an MBA from the Wharton Business School of the University of Pennsylvania.

Luc Vansteenkiste (1947).Baron Vansteenkiste is President of the Board of the Belgian company Sioen and Vice President of the Board of Recticel. Baron Vansteenkiste is also a member of the Board of the Belgian company Spector Photo Group. BaronVansteenkiste is Honorary Chairman of the Federation of Belgian Companies. Baron Vansteekiste was Chief Executive Officer of Recticel until April 1, 2010. Baron Vansteenkiste earned his degree in civil engineering at the Katholieke Universitéit Leuven, Belgium.

Elizabeth Doherty (1957). Ms. Doherty began her career with Unilever in 1979 as an assistant internal auditor and then spent the following 22 years serving the organization, assuming positions of increasing responsibility in audit, accounting, supply chain, commercial operations, and finance in multiple countries across Europe and Asia. She left Unilever as Senior Vice President Finance, Central & Eastern Europe in 2001 to enlist with Tesco as its Group International Finance Director where she led that function for six years. In 2007 she joined Brambles Industries as its Chief Financial Officer and most recently served as CFO of Reckitt Benckiser, from 2011 to 2013. In addition to her executive experience she has also served on the Boards of both Brambles Industries and Reckitt Benckiser as well as that of SABMiller. Ms. Doherty graduated from the University of Manchester, in the United Kingdom with a Bachelor of Science (Honors) in Liberal Studies in Science (Physics). She also is a Fellow of the Chartered Institute of Management Accountants in the United Kingdom.

COMMITTEES OF THE BOARD OF DIRECTORS

Our Board of Directors has two standing committees: the Audit Committee and the Remuneration and Nomination Committee.

Audit Committee

The principal responsibilities of the Audit Committee are to assist the Board in monitoring:

•

the integrity of our financial statements;

•

our compliance with legal and regulatory requirements;

•

the statutory auditor’s qualification and independence;

•

the performance of our internal audit function and statutory auditor; and

•

our internal controls and risk management.

The Audit Committee’s specific responsibilities are set forth in the Terms of Reference of the Audit Committee, which is attached as Exhibit B to our Corporate Governance Charter, which is posted on our website atwww.delhaizegroup.com.

The Audit Committee is composed solely of independent directors. The members of the Audit Committee are Jack Stahl, who is the Chair, Claire Babrowski, Jean-Pierre Hansen and Luc Vansteenkiste.

Our Terms of Reference of the Audit Committee require that all members satisfy the independence requirements of Belgian law, the Belgian Code on Corporate Governance, and the New York Stock Exchange. The Board of Directors has determined that Mr. Stahl, Ms. Babrowski, Mr. Hansen and Baron Vansteenkiste are “audit committee financial experts” as defined in Item 16A of Form 20-F under the Exchange Act. In 2012, the Audit Committee met five times.

Remuneration and Nomination Committee

The principal responsibilities of the Remuneration and Nomination Committee are to:

•

identify individuals qualified to become Board members, consistent with criteria approved by the Board;

•

recommend to the Board the director nominees for each Ordinary General Meeting;

•

recommend the Board director nominees to fill vacancies;

•

recommend to the Board qualified and experienced directors for service on the committees of the Board;

•

recommend to the Board the compensation of the members of executive management;

•

recommend to the Board any incentive compensation plans and equity-based plans, and awards thereunder, and profit-sharing plans for our employees;

•

submit the Remuneration Report to the Board;

•

evaluate the performance of the Chief Executive Officer; and

•

advise the Board on other compensation issues.

The Remuneration and Nomination Committee’s specific responsibilities are set forth in the Terms of Reference of the Remuneration and Nomination Committee, which is attached as Exhibit C to our Corporate Governance Charter, which is posted on our website atwww.delhaizegroup.com.

The members of the Remuneration and Nomination Committee are Hugh G. Farrington, who is the Chair, Jacques de Vaucleroy, William G. McEwan and Mats Jansson. Jacques de Vaucleroy, William G. McEwan and Mats Jansson are independent directors, while Mr. Farrington is no longer considered independent under the Belgian Companies Code effective May 26, 2011 because he has been compensated formerly as an executive of our subsidiary Hannaford Brothers. For additional information, see “Item 16G. Corporate Governance.” In 2012, the Remuneration and Nomination Committee met nine times. Our Remuneration Policy for Directors and the Executive Management can be found as Exhibit E to our Corporate Governance Charter, which is posted on our website atwww.delhaizegroup.com.

EXECUTIVE OFFICERS

Executive Committee

Our Chief Executive Officer, Pierre-Olivier Beckers, is in charge of our day-to-day management with the assistance of the Executive Committee. The Executive Committee, chaired by our Chief Executive Officer, prepares the strategy proposals for the

Board of Directors, oversees the operational activities and analyzes the business performance of our company. The age limit set by the Board for the Chief Executive Officer is 65.

Our Executive Committee does not qualify as a management committee(“comité de direction / directiecomité”)under Belgian law and as such does not hold the Board of Directors’ management powers.

The members of the Executive Committee are appointed by the Board of Directors. Our Chief Executive Officer is the only member of the Executive Committee who is also a member of the Board of Directors. Our Board of Directors decides on the compensation of the members of the Executive Committee and our other senior officers upon recommendation by our Remuneration and Nomination Committee. Our Chief Executive Officer recuses himself from any Board of Directors decision regarding his own compensation.

Our current Executive Committee members and biographical information concerning such individuals are set forth below (except for the biographical information of our President and Chief Executive Officer who is also a member of the Board of Directors, which is set forth above).


Name	Position	Executive Officer/ Member of the Executive Committee Since
Pierre-Olivier Beckers	President and Chief Executive Officer	1990
Pierre Bouchut⁽¹⁾	Executive Vice President and Chief Financial Officer	2012
Stéfan Descheemaeker⁽²⁾	Executive Vice President	2009
Nicolas Hollanders	Executive Vice President	2007
Kostas Macheras	Executive Vice President	2010
Roland Smith⁽³⁾	Executive Vice President	2012
Michael Waller	Executive Vice President and General Counsel	2001

⁽¹⁾	Mr. Bouchut began as Executive Vice President and Chief Financial Officer on March 19, 2012.

⁽²⁾	Mr. Descheemaeker, who was Chief Financial Officer until December 31, 2011, became the Chief Executive Officer of Delhaize Europe on January 1, 2012.

⁽³⁾	Mr. Smith began as Executive Vice President on October 15, 2012.

Pierre Bouchut (1955). Mr. Bouchut is Executive Vice President and Chief Financial Officer of Delhaize Group since March 19, 2012. Mr. Bouchut began his career in 1979 with Citibank Paris. He joined Bankers Trust France SA in 1987 to become Vice-President, Finance. In 1988, he joined McKinsey & Company as a consultant in the Corporate Finance and Integrated Logistics practices. Between 1990 and 2005, Mr. Bouchut was with Group Casino, where he successively held the positions of Chief Financial Officer, Managing Director and CEO responsible for both the French and international operations (USA, Poland, the Netherlands, Taiwan, Brazil, Argentina, Columbia and Venezuela). Between 2005 and 2009, Mr. Bouchut served with Schneider Group as CFO, developing numerous initiatives in the field of structured finance, risk management and external growth. He joined Carrefour in 2009 as Chief Financial Officer and was most recently Executive Director Growth Markets of Carrefour, overlooking operations in Latin America (Brazil, Columbia and Argentina) and in Turkey, India, Indonesia and Malaysia. He was also overlooking Carrefour Personal Financial Services operations worldwide. Mr. Bouchut graduated from HEC and holds a Master’s Degree in Applied Economics from Paris Dauphine University.

Stéfan Descheemaeker (1960).Mr. Descheemaeker is Executive Vice President and CEO Delhaize Europe. Mr. Descheemaeker was Chief Financial Officer of Delhaize Group from January 2009 until January 2012. He started his career with Cobepa, at that time the Benelux investment company of BNP-Paribas. He later joined the holding company Defi as CEO of its financial subsidiary Definance. In 1996, he joined the Belgian brewer Interbrew, where he became head of Strategy & External Growth, managing its M&A operations, culminating with the merger of Interbrew and AmBev in 2004. At that point in time, he transitioned to operational management, in charge of respectively the brewer’s operations in the U.S. and Mexico, Central and Eastern Europe, and, eventually, Western Europe. In 2008, Mr. Descheemaeker ended his operational responsibilities at Anheuser-Busch InBev and joined its Board as non-executive director. Mr. Descheemaeker holds a Master’s degree as Commercial Engineer, Solvay Business School, Brussels, Belgium.

Nicolas Hollanders (1962).Mr. Hollanders has been Executive Vice President of Delhaize Group since 2007, currently in charge of Human Resources, IT and Sustainability. He started his career as a lawyer. In 1989, he joined Delvaux, a Brussels-based manufacturer and distributor of luxury leather goods and accessories, first as General Manager, and from 1993 as Managing Director. In 1995, Mr. Hollanders joined the executive search firm Egon Zehnder International, where he served successively as consultant, principal and partner. Mr. Hollanders is founding member and Chairman of Child Planet, a foundation aimed at improving conditions in children’s hospitals and also serves on the board of Face Children. Mr. Hollanders holds Master’s degrees in Law and Notary Law and a Post Graduate degree in Economics from the University of Leuven.

Kostas Macheras (1953).Mr. Macheras is Executive Vice President of Delhaize Group and Chief Executive Officer Southeastern Europe. Mr. Macheras joined Delhaize Group in 1997 as General Manager of Alfa Beta Vassilopoulos. In 2009 Mr. Macheras added Mega Image, the Romanian operations of Delhaize Group, to his responsibilities. Mr. Macheras started his professional career in retailing in the U.S., as purchasing manager at the Quality Super Market Company in Chicago. He worked for 14 years for Mars, Inc. In 1982, he was in charge of sales, marketing and export in The Netherlands, and later became General Manager for Greece and Italy. From 1996-1997 he served as General Manager of Chipita International in Greece. He has been a Board member of EEDE (Hellenic Management Association) for nine years. He has been a member of the Board of Directors at EASE (Association of Greek Executive Officers) since 2008, and is also currently a Board member of SEET (Association of Greek Food Enterprises). In 2005, he was named Officer in the Order of Leopold II by King Albert II of Belgium. In April 2009, Mr. Macheras was elected Manager of the Year 2008 by the Hellenic Management Association. Mr. Macheras holds a BA from Piraeus University and an MBA from the Roosevelt University of Chicago (Business Administration & Marketing).

Roland Smith (1954). Mr. Smith is President and Chief Executive Officer of Delhaize America and Executive Vice President of Delhaize Group. Mr. Smith served as an officer in the U.S. Army for seven years. Mr. Smith held senior management positions at Kentucky Fried Chicken, Pepsi Cola International, Schering-Plough and Procter & Gamble before joining in 1994 Arby’s Inc. (predecessor to Arby’s Restaurant Group Inc.). He was promoted to President and CEO of Arby’s Inc. in February 1997, serving in that capacity until 1999. From April 1999 until January 2003, Mr. Smith was Chief Executive Officer of AMF Bowling Worldwide, Inc. Between February 2003 and November 2005, Mr. Smith served as Chief Executive Officer of American Golf Corporation. In April 2006, Mr. Smith returned to Arby’s Restaurant Group, Inc. He served as Chief Executive Officer of Arby’s Restaurant Group, Inc. from April 2006 until September 2008, and as Chief Executive Officer of Triarc Companies, Inc. from June 2007 until September 2008. From September 2008 until July 2011, Mr. Smith served as President and Chief Executive Officer of Wendy’s/Arby’s Group Inc. From July 2011 until September 2011, he served as President and Chief Executive Officer of The Wendy’s Company. Mr. Smith is currently a Director of The Wendy’s Company and Chairman of the Board of Directors for Carmike Cinemas, Inc., a national trustee of the Boys & Girls Clubs of America and a member of the World Presidents’ Organization International. Mr. Smith is a graduate of the U.S. Military Academy at West Point, New York.

Michael R. Waller (1953).Mr. Waller is Executive Vice President, General Counsel and General Secretary of Delhaize Group. Mr. Waller served as President Director and Member of the Board of Directors of PT. Lion Super Indo from April 2011 to December 2012. Previously, Mr. Waller was a partner in the international law firm Akin, Gump, Strauss, Hauer & Feld, L.L.P. In the years prior to joining Delhaize America, Mr. Waller served as Managing Partner of Akin Gump’s Moscow and London offices, and maintained an international corporate practice. Mr. Waller earned a Bachelor of Arts degree in psychology from Auburn University and a Juris Doctorate degree from the University of Houston, where he served as Editor-in-Chief of the Houston Law Review. Prior to entering private practice, Mr. Waller served as a law clerk for U.S. District Judge Robert O’Conor, Jr. in the Southern District of Texas.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS OF DELHAIZE GROUP

Our directors are remunerated for their services with a fixed compensation, decided by the Board of Directors and not to exceed the maximum amounts set by our shareholders. The maximum amount approved by the shareholders is €80,000 per year per director, increased by an additional amount of up to €15,000 per year for the Chairman of any standing committee of the Board and an amount of up to €10,000 per year for services as a member of any standing committee of the Board. For the Chairman of the Board, the maximum remuneration amount is €160,000 per year (exclusive of any amount due as Chairman or member of any standing committee).

Our non-executive directors do not receive any remuneration, benefits or equity-linked or other incentives from us and our subsidiaries other than their remuneration for their service as directors of our company. For some non-Belgian directors, we pay a portion of the cost of preparing the Belgian and U.S. tax returns for such directors. The aggregate amount of remuneration granted for fiscal year 2012 to our directors by us and our subsidiaries is set out in the table below. The compensation of the executive director as set forth in the table below relates solely to his compensation as director and excludes his compensation as an executive of our

company. Delhaize Group has not extended credit, arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for any director.

Remuneration Granted for Fiscal Year 2012 to Directors of Delhaize Group by Delhaize Group and its Subsidiaries


(in EUR)	2012
Non-Executive Directors
Claire Babrowski		90,000
Shari L. Ballard		48,352
Count Jacobs de Hagen		69,231
Jacques de Vaucleroy		90,000
Hugh G. Farrington		93,022
Jean-Pierre Hansen		86,044
Mats Jansson		138,352
William G. McEwan		86,044
Robert J. Murray		31,648
Didier Smits		80,000
Jack L. Stahl		95,000
Baron Vansteenkiste		90,000
Total remuneration non-executive directors		997,693
Executive Director
Pierre-Olivier Beckers⁽¹⁾		80,000
Total remuneration to all directors		1,077,693

⁽¹⁾	The amounts solely relate to the remuneration of the executive director and exclude his compensation as CEO that is separately disclosed below.

Remuneration Granted for Fiscal Year 2012 to Executive Officers of Delhaize Group by Delhaize Group and its Subsidiaries

The aggregate compensation for the members of the Executive Committee recognized in the Company’s consolidated income statements for 2012 and 2011, respectively, is stated below. Amounts are gross amounts before deduction of withholding taxes and social security levy. They do not include the compensation of the CEO as director of the Company that is separately disclosed above.


(in millions of EUR)	2012		2011
Short-term benefits⁽¹⁾		6		5
Retirement and post-employment benefits⁽²⁾		1		1
Other long-term benefits⁽³⁾		1		2
Termination Benefits		1		—
Share-based compensation		3		3
Employer social security contributions		2		1
Total compensation expense recognized in the income statement		14		12

^(I)

Short-term benefits include the base salary, other short term benefits and annual bonus payable during the subsequent year for performance achieved during the respective years and is a reflection for 50% of company performance against Board approved targets for Operating Profit and for 50% of individual performance against individual targets. A scale is used to correlate actual performance with target performance to determine the actual bonus payment. Actual payment, if the minimum performance threshold is met, can range from 50 to 125%. If the actual performance has not reached the minimum performance threshold, the payment of the bonus is entirely at the discretion of the Board of Directors upon recommendation of the Remuneration and Nomination Committee. Taking into account the current environment the Executive Committee has voluntarily recommended to the Board of Directors, who agreed, to adjust the annual bonus related to their performance in 2012: the annual bonus was set at 50% of target for the CEO and, for the other members of the Executive Committee, the annual bonus was reduced to 80% of what they would have been entitled to if the regular scale had been applied.

⁽²⁾	The members of the Executive Committee benefit from corporate pension plans, which vary regionally (see Note 21.1 of Item 18). Amounts represent the employer contributions for defined contribution plans and the employer service cost for defined benefit plans.

⁽³⁾

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. Amounts represent the expense recognized by the Company during the respective years, as estimated based on realized and projected performance. Estimates are adjusted every year and when payment occurs.

Pierre-Oliver Beckers, our President and Chief Executive Officer is compensated both with a director fee and as an executive. Mr. Beckers’ director fee is set forth in the table above. In 2012, the aggregate amount of compensation paid to Mr. Beckers as an executive was €2.93 million. The compensation of Mr. Beckers was comprised of base pay of €0.97 million, an annual bonus of €0.39 million, other short-term benefits valued at €0.05 million, retirement and post-employment benefits valued at €0.76 million and other long-term benefits valued at €0.76 million. A total of 32,000 Delhaize Group stock options/warrants and 12,000 restricted stock units were granted to Mr. Beckers in 2012, the value of which is not included in the €2.93 million

The members of Executive Management benefit from corporate pension plans, which vary regionally. U.S. members of Executive Management participate in defined benefit and contribution plans in their respective operating companies. The European defined benefit plan is contributory and based on the individual’s career length with the Company. In 2010, the members of the Executive Management in Belgium were offered the option to switch to a non-contributory defined contribution plan or to continue in the existing defined benefit plan. We expensed an aggregate amount of €1.3 million with respect to these various plans for the members of the Executive Committee as a group for the year ended December 31, 2012, which amount is included in the €14 million aggregate amount of compensation attributed by us and our subsidiaries to members of the Executive Committee as a group for services in all capacities. The members of the Executive Committee also participate in our stock option, restricted stock unit and performance cash plans. Delhaize Group has not extended credit, arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for any members of the Executive Committee.

Equity Compensation of Executive Management.In 2012, 527,737 stock options and 62,349 restricted stock unit awards were granted to members of our Executive Committee. The exercise price per share for the stock options granted in May 2012 amounted to €30.99 for options on ordinary shares traded on Euronext Brussels. The exercise price for options related to our American Depositary Shares traded on the New York Stock Exchange amounted to $38.86 and $39.62 for the grants in May and August 2012, respectively. The options granted in May and August 2012 under the Delhaize Group 2002 Stock Incentive Plan for executives of our U.S. operating companies vest in equal annual installments of one third over a three-year period following the grant date. Options granted in May 2012 under the 2007 Stock Option Plan for other executives vest after a three and a half year period following the grant date.

The restricted stock unit awards granted in 2012, represent a commitment of Delhaize Group to deliver shares of our stock to the award recipient, at no cost to the recipient (one restricted stock unit equals one ordinary share). The fair value of the restricted stock unit awards granted in May 2012 is $38.86 and $39.62 for the August 2012 grant. The shares are delivered over a five-year period starting at the end of the second year after the award. These shares can be sold by the award recipient at any time following the delivery of the shares consistent with the guidelines and restrictions contained in our trading policies.

The table below sets forth the number of restricted stock unit awards, stock options and warrants granted by our company and its subsidiaries during 2012 to our Chief Executive Officer and the other members of the Executive Committee. For additional information regarding equity compensation of executive management, see “Long-Term Incentive Plans” and Note 21.3 to the consolidated financial statements included in this document.


	2012
	Stock Options/ Warrants			Restricted Stock Unit Awards
Executive Management
Pierre-Olivier Beckers		32,000			12,000
Pierre Bouchut		38,072			—
Stéfan Descheemaeker		35,576			—
Michel Eeckhout		23,176			—
Ron Hodge		25,381			5,198
Nicolas Hollanders		14,238			1,466
Kostas Macheras		41,299			—
Roland Smith		300,000	(*)		40,000	(*)
Michael Waller		17,995			3,685
Total		527,737			62,349

(*)	including the following components: (1) special grant upon appointment as CEO of Delhaize America and (2) long-term incentive grant 2013.

Share Ownership Guidelines.We believe that our executive officers should be encouraged to maintain a minimum level of share ownership in order to align the interests of the shareholders and our executive officers. In 2008, our Board of Directors adopted share ownership guidelines based on the recommendation of our Remuneration and Nomination Committee. Under these guidelines and during their active employment, each of our Chief Executive Officer and our other executive officers is expected to acquire and maintain ownership of Delhaize Group stock equal to a multiple of such officer’s annual base salary. These multiples are as follows:

•

Chief Executive Officer: 300% of annual base salary

•

U.S.-based executive officers: 200% of annual base salary

•

European-based executive officers: 100% of annual base salary

The difference in share ownership guidelines between U.S.-based and European-based management is due to the different market practices in these regions and the differences between the instruments available for executive officer remuneration. In the U.S., equity based compensation is more widely encouraged than in Europe.

Our executive officers, with the exception of Mr. Bouchut and Mr. Smith who joined the Company in 2012, were expected to achieve the share ownership levels by the end of 2012. New executive officers will be allowed a period of 5 years to achieve the recommended share ownership levels. Our Remuneration and Nomination Committee monitors the compliance with these guidelines at least once a year. The Board of Directors is currently satisfied with the progress that has been made so far.

Main Contractual Terms of Hiring and Termination of Executive Management.

Our Executive Management, in accordance with employment-related agreements and applicable law, is compensated in line with our Remuneration Policy and is assigned duties and responsibilities in line with current market practice for its position and with our Terms of Reference of Executive Management. Executive Management is required to abide by our policies and procedures, including our Guide for Ethical Business Conduct, and is subject to confidentiality and non-compete obligations to the extent authorized by law. Executive Management is also subject to other clauses typically included in employment agreements for executives.

The employment agreements of the Chief Executive Officer Pierre-Olivier Beckers, Nicolas Hollanders, Stéfan Descheemaeker and Pierre Bouchut, who all have a Belgian employment contract do not provide for a severance payment in case of termination. Should the employment be terminated, the parties will negotiate in good faith to determine the terms and conditions applicable to such termination. In case of disagreement, the case will be settled by the Courts applying Belgian law.

The employment agreement of Kostas Macheras, who has a Greek employment contract, provides for a severance payment of twice the annual base salary and annual incentive bonus in certain cases of termination of the agreement, for example in the event of retirement. Such payment is not due in case of dismissal of Kostas Macheras for serious misconduct or serious fault. The above-mentioned Greek employment contract relates to the activities of Kostas Macheras as CEO of the relevant Greek subsidiary and has been referred to for the sake of completeness.

The U.S. employment agreement of Michael Waller provides the payment of 2 times the base salary and annual incentive bonus and the continuation of our health and welfare benefits for a comparable period in the event of the termination of his employment by our company without cause or by Michael Waller for good reason. The termination would also result in accelerated vesting of all or substantially all of the long-term incentive awards.

The U.S. employment agreement of Roland Smith provides for a severance payment of eighteen months base salary and annual incentive bonus and the continuation of the Company health and welfare benefits for a comparable period in the event of the termination of his employment by the Company without cause or by Roland Smith for good reason. The termination would also result in accelerated vesting of all or substantially all of the long-term incentive awards.

Ron Hodge retired in December 2012 and received in this context a lump sum representing the total cash compensation of one year. Michel Eeckhout retired in December 2012 and did not receive any payment in the framework hereof with the exception of a special contribution to the retirement benefits in order to guarantee normal retirement benefits at the age of 65.

The contracts with the members of Executive Management do not provide for a claw-back right for the Company in cases where the variable remuneration paid was calculated on the basis of erroneous financial data.

EMPLOYEES

As of December 31, 2012, we employed approximately 158,000 employees (of which approximately 77,500 were full-time employees and approximately 80,500 were part-time employees). As of December 31, 2012, we employed approximately 104,600 employees in the United States, approximately 16,400 in Belgium, and approximately 37,000 in other regions.

As of December 31, 2011, we employed approximately 160,000 employees (of which approximately 79,000 were full-time employees and approximately 81,000 were part-time employees). As of December 31, 2011, we employed approximately 107,200 employees in the United States, approximately 17,000 in Belgium, and approximately 35,800 in other regions.

As of December 31, 2010, we employed approximately 138,600 employees (of which approximately 61,600 were full-time employees and approximately 77,000 were part-time employees). As of December 31, 2010, we employed approximately 103,800 employees in the United States, approximately 17,300 in Belgium, and approximately 17,500 in other regions.

Our policy with respect to labor unions is to comply with local regulations and collective bargaining agreements. We consider our relations with our employees to be good.

SHARE OWNERSHIP OF DELHAIZE GROUP MANAGEMENT

On December 31, 2012, the directors and the members of our Executive Committee (17 persons as of that date) as a group owned 725,700 Delhaize Group ordinary shares or ADRs, which represented approximately 0.72% of our outstanding shares. To our knowledge, none of our directors or executive officers beneficially own more than 1% of our shares. On December 31, 2012, the members of our Executive Committee owned as a group 1,187,576 stock options, warrants and restricted stock representing an equal number of our existing or new ordinary shares or ADRs.

LONG-TERM INCENTIVE PLANS

Overview

We offer to certain of our management employees, including the members of our Executive Committee, a long-term incentive plan which includes a combination of stock options, restricted stock units and performance cash awards that are awarded generally on the basis of the following:

•

Stock options represent approximately 25% of the total expected value of the annual award and have a strike price equal, depending on the rules applicable to the relevant stock option plans, to (i) the Delhaize Group share price on the date of the grant; (ii) the share price on the working day preceding the offering of the option; or (iii) the average price of the Delhaize Group share price for the 30 days prior to the offering of the option. Options can be exercised in accordance with our securities trading policies, which allow for vested options to be exercised only during specified trading windows. Options granted under stock option plans targeting executives of U.S. subsidiaries vest over a three-year period following the grant date. Options granted under stock option plans for other executives vest after a period of three and a half years following the grant date. Options typically expire 7-10 years after the grant date.

•

Restricted stock unit awards represent approximately 25% of the total expected value of each annual award. Restricted stock unit awards represent our commitment to deliver shares of Delhaize Group stock to the award recipient, at no cost to the award recipient, over a five-year period starting at the end of the second year after the award. After vesting, these shares can be sold by the award recipient at any time consistent with the guidelines and restrictions contained in our trading policies.

•

Performance cash grants represent 50% of the total expected value of each annual award. These grants provide for cash payments to the grant recipients at the end of three-year performance periods. The amount of the cash payments is dependent on performance against Board-approved financial targets (Return on Invested Capital (“ROIC”) and revenue growth) that are closely correlated to building long-term shareholder value. Board-approved minimum performance thresholds must be met before any payments are earned. Actual payments, if the minimum threshold is met, can range from 30% to 150% of the initial award. In exceptional circumstances, the Board may authorize certain payments even though minimum performance thresholds are not met.

To support the Company strategy and to recognize at the same time the need for a continuous effort to maximize the alignment with the shareholders’ interest, the following changes will be made to the grants under the U.S. Long Term Incentive plans:

•

As from 2013 for the Vice President level and above in the U.S., the grant of Restricted Stock Units will be turned into a grant of Performance Shares by submitting the vesting of the shares to the achievement of a financial performance condition (ROIC targets over a cumulative 3-year period).

•

As from 2013, the vesting scheme of Restricted Stock Units (Director level and below) and the Performance Shares will be changed into a cliff vesting after 3 years (instead of the current vesting scheme that foresees a vesting in equal installments of one fourth starting at the end of the second year following the grant date)

•

Finally, for the Vice President Level and above in the U.S., the 2013 grant will consist solely of Performance Shares and Stock Options (evenly split in expected value).

Equity-Based Compensation

As a component of long-term incentive compensation, we offer stock-related incentive plans to certain of our management employees (vice president and above), including the members of the Executive Committee. For employees of our non-U.S. operating companies, we offer stock option plans and warrant plans. For employees of our U.S.-based companies, the incentive plans are based on options, warrants and restricted stock units. The exercise of warrants under the warrant plans results in the creation of new shares and, as a consequence, in a dilution of current shareholdings. Because stock option plans and the restricted stock unit plan are based on existing shares held in treasury or purchased in the market, no dilution occurs due to exercises under these plans. For additional information regarding equity-based compensation, see “Equity Compensation of Executive Management” above and Note 21.3 to the consolidated financial statements included in this document.

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

Our capital stock consists of ordinary shares, without nominal value, each having a par value of €0.50. Our shares may be in dematerialized form, bearer form or registered form. Each shareholder is entitled to one vote for each share held, on each matter submitted to a vote of shareholders. Major shareholders do not have different voting rights. For additional information regarding our ordinary shares, see “Description of Delhaize Group Ordinary Shares” under “Item 10. Additional Information.”

Based on currently applicable Belgian law and our Articles of Association, any person or legal entity which owns or acquires (directly or indirectly, by ownership of American Depositary Shares or otherwise) shares or other securities of Delhaize Group granting voting rights (representing the share capital or not) must disclose to us and to the Belgian Financial Services and Markets Authority (“FSMA”) the number of securities that such person owns, alone or jointly, when his/her voting rights amount to three percent or more of the total existing voting rights of Delhaize Group. Such person must make the same type of disclosure in case of transfer or acquisition of additional securities when his/her voting rights reach five percent, 10 percent, and so on by blocks of five percent, or when the voting rights fall below one of these thresholds.

The same disclosure requirement applies if a person transfers the direct or indirect control of a corporation or other legal entity which owns itself three percent at least of the voting rights of Delhaize Group. Similarly, if as a result of events changing the breakdown of voting rights, the percentage of the voting rights reaches, exceeds or falls below any of the above thresholds, a disclosure is required even when no acquisition or disposal of securities has occurred (e.g., as a result of a capital increase or a capital decrease). Finally, a disclosure is also required when persons acting in concert enter into, modify or terminate their agreement which results in their voting rights reaching, exceeding or falling below any of the above thresholds.

The disclosure statements must be addressed to the FSMA and to us at the latest the fourth trading day following the day on which the circumstance giving rise to the disclosure occurred. Unless otherwise provided by law, a shareholder shall only be allowed to vote at a shareholders’ meeting of Delhaize Group for the number of securities he/she validly disclosed at the latest twenty days before such meeting.

As of April 2, 2013, the following shareholders and groups of shareholders currently have declared holdings of at least 3% of the outstanding shares of Delhaize Group.


Date of Notification	Name of Shareholder	Number of Shares Held		Percentage of total voting rights on date of notification
October 23, 2008	Rebelco SA (subsidiary of Sofina SA)		4,050,000		4.04	%
February 18, 2009	Citibank N.A. (*)		10,682,499		10.62	%
October 22, 2012	Silchester International Investors LLP		10,242,561		10.05	%
December 28, 2011	Black Rock Group		4,076,066		4.00	%

(*)	As Depositary for the American Depositary Receipts program of Delhaize Group

Number of Shares and Potential Voting Rights of Delhaize Group⁽¹⁾


Effective voting rights attached to shares representing the capital (= number of outstanding shares)			101,921,498
Future potential voting rights resulting from exercise of warrants			3,588,813

⁽¹⁾	As of April 2, 2013.

Based on information received by Citibank, our depositary for our ADSs evidenced by ADRs, there were 8,717,985 ADRs outstanding and 14,684 record owners with a registered address in the United States as of March 31, 2013.

Related Party Transactions

Several of our subsidiaries provide for post-employment benefit plans for the benefit of our employees. Payments made to these plans and receivables from and payables to these plans are disclosed in Note 21 to our annual consolidated financial statements included elsewhere in this Annual Report.

For additional information regarding related party transactions, see Note 32 to the consolidated financial statements included in this document.

Interests of Experts and Counsel

Not Applicable.

ITEM 8.

FINANCIAL INFORMATION

A. Consolidated Financial Statements and Other Financial Information

Our consolidated financial statements appear in Item 18 “Financial Statements” of this Annual Report on Form 20-F. Our consolidated financial statements presented herein and the Notes to the financial statements have been prepared using accounting policies in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, and as adopted by the European Union, or EU. Currently, the only difference between the effective IFRS as issued by the IASB and adopted by the EU relates to certain paragraphs of IAS 39Financial Instruments: Recognition and Measurement,which are not required to be applied in the EU (so called “carve-out”). We are not affected by the carve-out and therefore there is no difference for us between the effective IFRS as issued by the IASB and adopted by the EU, as of December 31, 2012. We further refer to our comments made in connection with Changes in Accounting Policies and Disclosures and Standards and Interpretations issued but not yet effective.

The Company’s consolidated financial statements prepared in accordance with IFRS have been audited by independent registered public auditors in accordance with legal requirements and auditing standards applicable in Belgium, as issued by the “Institut des Réviseurs d’Entreprises/Instituut der Bedrijfsrevisoren” and with the standards of the Public Company Accounting Oversight Board (United States).

Legal Proceedings

In April 2007, representatives of the Belgian Competition Council visited our Procurement Department in Zellik, Belgium, and requested the provision of certain documents. This visit was part of a local investigation affecting several companies active in Belgium in the supply and retail of health and beauty products and other household goods. On October 1, 2012, the Auditor to the Belgian Competition Council issued its investigation report. The investigation involves 11 suppliers and 7 retailers, including Delhaize Belgium, on an alleged coordination of price increases on the concerned market from 2002 to 2007. As a next step, the Belgian Competition Council will hear the parties and establish a calendar for the exchange of arguments where we intend to vigorously defend ourself. The investigation report does not contain sufficient information, and there is no similar case precedent, that would allow estimating a possible financial impact that could result from any future decision of the Belgian Competition Council. According to Belgian legislation, compensation payments are calculated on the turnover of the last year of the alleged infringement and capped at 10% of the Belgian annual revenues of the year preceding the decision of the Competition Council. Such compensation payments, if any, will therefore be capped at 10% of the Belgian annual revenues of 2012 or 2013, depending on the timing of the decision. A decision by the Council is not expected before the end of 2013 and, under the current legislation, the parties involved have the right to appeal in court. Consequently, we currently do not have sufficient information available to make a reliable estimate of any financial impact or the timing thereof.

such as names or addresses, was obtained by any unauthorized person. Various legal actions have been taken, and various claims have been otherwise asserted, against Hannaford and affiliates relating to the Computer Intrusion, several of which already have been dismissed or resolved without any monetary payments by us. While we intend to continue to defend the remaining legal actions and claims vigorously, it cannot predict the outcome of all legal actions and claims, and thus, does not have sufficient information to reasonably estimate possible expenses and losses, if any, which may result from such litigation and claims.

We are from time to time a party to legal proceedings including matters involving personnel and employment issues, personal injury, intellectual property, landlord-tenant matters, tax matters and other proceedings arising in the ordinary course of business. We have estimated our exposure to the claims and litigation arising in the normal course of business and believe we have made adequate provisions for such exposure. Unexpected outcomes in these matters could have a material adverse effect on our financial condition and results of operations. For more information, see the discussion under the heading “B. Risk Factors” under Item 3 “Key Information.”

Dividend Policy

The Company’s objectives for managing capital are to safeguard the Delhaize 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 Company may, besides others, return capital to shareholders, issue new shares and / or debt or refinance / exchange existing debt. Further, Delhaize Group’s dividend policy aims at paying out a regularly increasing dividend while retaining free cash flow at an amount consistent with the opportunities to finance the future growth of the Group and maintaining the finance structure in accordance with the objectives stated above.

B. Significant Changes

On January 3, 2013, we redeemed the remaining $99 million of the $300 million 5.875% senior notes due 2014, as well as the underlying cross-currency swap.

On January 17, 2013, we announced the decision to close 52 stores, of which 45 stores in the U.S. (34 Sweetbay, 8 Food Lion and 3 Bottom Dollar Food), 6 stores in Southeastern Europe and 1 store in Belgium. As a result, we recorded an impairment charge of €49 million in the fourth quarter of 2012. During the first quarter of 2013, earnings were impacted by approximately €80 million to reflect store closing liabilities including a reserve for ongoing lease and severance obligations. In addition, we recorded charges of approximately $20 million (€15 million) in the first quarter of 2013 related to the severance of support services senior management and employees in the U.S.

ITEM 9.

THE OFFER AND LISTING

Trading Markets

The trading market for Delhaize Group ordinary shares is the regulated market NYSE Euronext Brussels in Belgium, where Delhaize Group ordinary shares trade under the symbol “DELB.” Delhaize Group ordinary shares have been listed in Belgium since 1962. Delhaize Group ordinary shares are included in the Bel20 Index, an index of the largest Belgian publicly traded companies, the Euronext 100 index, the pan-European Dow Jones Stoxx 600 index, the FTSE Eurofirst 300 index.

Delhaize Group American Depositary Shares, or ADSs, each representing one of the Company’s ordinary shares, are traded on the New York Stock Exchange under the symbol “DEG.” The ADSs are evidenced by American Depositary Receipts, or ADRs, issued by Citibank, as Depositary under the Deposit Agreement dated as of February 18, 2009, among the Company, Citibank and holders from time to time of ADRs issued thereunder.

Stock Price Information

At the end of 2012, the Delhaize Group market capitalization was €3.1 billion. An aggregate of 128.2 million Delhaize Group ordinary shares were traded on NYSE Euronext Brussels in 2012 for a total of €4.2 billion, and an aggregate of 11.7 million Delhaize Group ADRs were traded on the New York Stock Exchange for a total of $502 million. The highest closing share price on NYSE Euronext Brussels was €46.85 and the lowest was €25.615, and the highest closing ADR price on the New York Stock Exchange was $59.60 and the lowest was $32.20. The average daily trading volume on NYSE Euronext Brussels was €16.4 million, or an average daily volume of 500,935 shares, and the average daily trading volume on the New York Stock Exchange was $2.0 million, or an average daily volume of 46,789 ADRs.

At the end of 2011, the Delhaize Group market capitalization was €4.4 billion. An aggregate of 74.7 million Delhaize Group ordinary shares were traded on NYSE Euronext Brussels in 2011 for a total of €3.9 billion, and an aggregate of 8.8 million Delhaize Group ADRs were traded on the New York Stock Exchange for a total of $629 million. The highest closing share price on NYSE Euronext Brussels was €59.97 and the lowest was €41.53, and the highest closing ADR price on the New York Stock Exchange was $88.78 and the lowest was $54.72. The average daily trading volume on NYSE Euronext Brussels was €15.2 million, or an average daily volume of 293,468 shares, and the average daily trading volume on the New York Stock Exchange was $2.5 million, or an average daily volume of 34 991 ADRs.

As of April 2, 2013, Delhaize Group had a market capitalization of €4.4 billion.

The table below sets forth, for the periods indicated, the high and low closing price per Delhaize Group ordinary share as reported on NYSE Euronext Brussels and the high and low closing price per Delhaize Group ADR as reported on the New York Stock Exchange. On April 2, 2013, the last reported price for a Delhaize Group ordinary share, as reported on NYSE Euronext Brussels, was €43.25. On April 2, 2013, the last reported price for a Delhaize Group ADR, as reported on the New York Stock Exchange, was $55.06


Period	Delhaize Group Ordinary Shares				Delhaize Group ADRs
	High		Low		High		Low
	(in EUR)				(in USD)
Monthly Highs and Lows:
2013
April (through April 8)		43.25		40.09		55.06		52.30
March		42.56		35.86		54.81		46.96
February		37.32		35.35		50.04		46.75
January		36.21		30.84		48.56		40.55
2012
December		30.50		27.65		40.55		36.17
Quarterly Highs and Lows:
2013
First Quarter		42.56		30.84		54.81		40.55
2012
First Quarter		46.85		38.75		59.60		51.19
Second Quarter		40.00		25.62		53.39		32.20
Third Quarter		33.77		26.91		42.64		32.85
Fourth Quarter		31.43		26.18		40.69		33.48
2011
First Quarter		59.74		55.61		82.81		71.80
Second Quarter		59.97		50.77		88.78		72.98
Third Quarter		51.92		41.77		75.09		56.40
Fourth Quarter		48.37		41.53		69.00		54.72
Annual Highs and Lows:
2012		46.85		25.62		59.60		32.20
2011		59.97		41.53		88.78		54.72
2010		66.67		48.51		85.41		66.30
2009		54.49		43.22		79.30		55.19
2008		58.74		35.29		89.05		43.68
2007		75.47		56.05		102.97		81.34
2006		66.85		49.55		84.98		62.06

Custody, Clearing and Settlement of Delhaize Group Ordinary Shares

Since January 1, 2008, Delhaize Group ordinary shares underlying the Delhaize Group ADRs are available only in dematerialized form and are represented by entries, under the name of ING Bank SA, acting on as local depositary of Citibank, in the books of Euroclear Belgium (the commercial name for CIK SA/NV).

Euroclear Belgium is the Belgian central securities depositary. Euroclear Belgium holds securities in custody for its participants to facilitate the settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Euroclear Belgium participants include banks, securities brokers and dealers and other financial institutions. Non-participants of Euroclear Belgium may hold and transfer book-entry interests in Delhaize Group ordinary shares through accounts with a financial institution that is a direct participant of Euroclear Belgium or any other securities intermediary that holds a book-entry interest in Delhaize Group ordinary shares through one or more securities intermediaries standing between such other securities intermediary and Euroclear Belgium.

Since February 1, 2001, all trades in cash, derivatives and other products executed on NYSE Euronext markets are cleared and netted through LCH Clearnet.

ITEM 10.

ADDITIONAL INFORMATION

SUMMARY OF PROVISIONS OF THE ARTICLES OF ASSOCIATION AND OTHER MATTERS

Register Information

We are registered with the Register of legal entities of Brussels under the registration number 0402.206.045.

Object and Purpose

Under Article 2 of our Articles of Association, our corporate purpose is the trade of durable or non-durable merchandise and commodities, of wine and spirits, the manufacture and sale of all articles of mass consumption, household articles, and others, as well as all service activities. We may carry out in Belgium or abroad all industrial, commercial, movable, real estate, or financial transactions that favor or expand directly or indirectly our industry and trade. We may acquire an interest in all businesses, corporations or enterprises with an identical, similar or related corporate purpose or which favor the development of our enterprise, acquire raw materials for our company or facilitate the distribution of our products.

Directors

Nomination, Election, Retirement and Removal of Directors.On the recommendation of the Remuneration and Nomination Committee, our Board proposes the appointment of directors to our shareholders for approval at the Ordinary General Meeting. Pursuant to our Articles of Association, directors may be appointed for a maximum term of office of six years. From 1999 to 2009, our Board of Directors set the length of director terms for persons elected during such period at a maximum of three years. Starting with elections in 2010, our Board of Directors decided to set the term of the mandate of a director to three years for the first term, then, provided that our Board of Directors determines such director is independent at re-election, up to four years for subsequent terms. The term of directors who are not considered independent by our Board of Directors at the time of their election has been set by our Board of Directors at three years. Unless otherwise decided by our Board of Directors, a person who is up for election to our Board of Directors and who would turn age 70 during our standard director term length may instead be elected to a term that would expire at the ordinary general meeting occurring in the year in which such director would turn 70. Directors may be removed from office at any time by a majority vote at any meeting of shareholders. Each year, typically, there are a few directors who have reached the end of their current term of office and may be reappointed.

Quorum and Manner of Acting; Interested Director Transactions.The Board may deliberate and resolve only if at least half of its members are present or represented. Any director who is excused or absent may authorize one of such director’s peers in writing, by telegram, telecopy or any other form of written proxy to represent such director at a Board meeting and to vote on such director’s behalf. However, no proxy holder may represent more than one director at a time.

Decisions of the Board are adopted by majority vote. In case of equality of vote casts, the vote of the Chairman of the meeting will prevail. In case of conflict of interests, the directors will comply with legal provisions in force. If, during a Board meeting at which a quorum is present, one or more present or represented directors must abstain as a result of the preceding sentence, resolutions are validly adopted by a majority vote of the other present or represented directors.

Borrowing Powers Exercisable by the Directors.Belgian law does not regulate specifically the ability of directors to borrow money from Delhaize Group. Section 402 of the U.S. Sarbanes-Oxley Act and the Terms of Reference of our Board of Directors provide that we will not extend or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the form of a personal loan to or for any Board member or member of our executive management.

Compensation of Directors.For information on the compensation of directors, see “Item 6. Directors, Senior Management and Employees — Compensation of Directors and Executive Officers of Delhaize Group.”

Description of Delhaize Group Ordinary Shares

Our capital stock consists of ordinary shares, without nominal value, each having a par value of €0.50. As of April 2, 2013, our corporate capital was € 50,960,749. The issuance premium on our capital was € 2,797,655,746. This corporate capital was represented by 101,921,498 Delhaize Group ordinary shares. At an extraordinary general meeting held on May 24, 2007, our

shareholders approved the proposal to authorize our Board of Directors to increase the corporate capital or issue convertible bonds or subscription rights that might result in a further increase of capital by a maximum of €9,678,897. At the Ordinary and Extraordinary General Meeting held on May 24, 2012, our shareholders approved an amendment to our Articles of Association that authorized our Board of Directors to increase the share capital of the Company by up to €5,094,609 for a new period of five years beginning on the date of publication of such authorization in the Belgian State Gazette.

Form of Ordinary Shares.Our ordinary shares may be in dematerialized form, bearer form or registered form. Each shareholder is entitled to one vote for each ordinary share held on each matter submitted to a vote of shareholders. Bearer securities (titres au porteur / effecten aan toonder) are securities represented by a certificate which entitle its holder to exercise all rights attached to the security merely by holding it. Dematerialized securities (titres dématérialisés / gedematerialiseerde effecten) are securities represented by entries, under the name of their holders, in the book of a depositary institution. Registered securities (titres nominatifs / effecten op naam) are securities that can only be represented by entries in a shares register held by the company.

On request, our shareholders may convert their shares into another form at their own expense. The ownership of registered shares can be transferred by informing us and returning the certificate of record in the shareholder register to us. Under Belgian law, as from January 1, 2008, bearer shares booked into a securities account have been automatically converted into dematerialized shares. Bearer shares not yet booked in a securities account shall be automatically converted into dematerialized shares as from the time they are booked into a securities account. All remaining bearer shares that shall not have been deposited in a securities account shall be converted at the choice of their holder into dematerialized or registered shares by December 31, 2013.

Dividends.Under Belgian law, we are required to contribute at least 5% of our net profits during each fiscal year and contribute such sum to our statutory reserve until such reserve has reached an amount equal to one-tenth of our capital. As of December 31, 2012, our statutory reserve amounted to 10% of our capital. Subject to this requirement, the Board of Directors may propose to the meeting of shareholders, at which the annual accounts are reviewed, to distribute as a dividend all or a portion of our net profits relating to the prior accounting years available for distribution. At the annual general meeting, in connection with the approval of our accounts, our shareholders may decide to make a distribution of our net profits to all shareholders out of available reserves.

Liquidation Rights.In the event of a liquidation of Delhaize Group, the proceeds from the sale of assets remaining after payment of all debts, liquidation expenses and taxes are to be distributed ratably to the holders of our ordinary shares, subject to prior liquidation rights of any preferred stock then outstanding.

Preferential Subscription Rights.Under Belgian law, our shareholders have preferential subscription rights with respect to the issuance of new Delhaize Group ordinary shares in proportion to the number of Delhaize Group ordinary shares they hold. Shareholders may exercise these subscription rights in consideration for cash contributions. These rights, however, may be limited or removed by a resolution passed at a general meeting of shareholders or by our Board of Directors if our Board of Directors has been authorized to do so by our shareholders at a general meeting. At an extraordinary general meeting of shareholders held on May 24, 2007, the Delhaize Group shareholders approved the proposal to authorize the Delhaize Group Board of Directors to limit or remove these rights in connection with an increase in Delhaize Group’s capital of up to €9,678,897 for a period of five years expiring on June 18, 2012. At our Extraordinary General Meeting of shareholders held on May 24, 2012, the shareholders approved a proposal to authorize the Delhaize Group Board of Directors to limit or remove these rights in connection with an amendment to our Articles of Association that authorized our Board of Directors to increase the share capital of the Company by up to €5,094,609 for a new period of five years beginning on the date of publication of such authorization in the Belgian State Gazette.

Voting and General Meetings of Shareholders.Each holder of our ordinary shares is entitled to attend any general meeting of shareholders and to vote on all matters on the agenda. The rights of a shareholder to attend the general meeting of shareholders and to vote are subject to the registration of these shares in the name of this shareholder at midnight (European Central Time) on the record date, which is the fourteenth day before the meeting, either by registration of registered shares in the register of registered shares of the company, or by registration of dematerialized shares in the accounts of an authorized securities account keeper or clearing institution, or by delivery of printed bearer shares to a financial intermediary. Shareholders must notify the company (or the person designated by the company for this purpose) of their intent to participate in the general meeting of shareholders, no later than six days before the date of the meeting pursuant to the modalities set forth in the notice to the meeting.

Each share is entitled to one vote. A shareholder’s right to vote all Delhaize Group ordinary shares that such shareholder holds may be limited if the shareholder fails to comply with the ownership reporting requirements under Belgian law and the Articles of Association as described below.

Neither Belgian law nor the Articles of Association limit the rights of non-resident or foreign investors to hold or vote the Delhaize Group ordinary shares or, subject to tax laws, to receive dividends paid on the Delhaize Group ordinary shares.

Under our Articles of Association, the annual general meeting of our shareholders takes place on the fourth Thursday of May at the time and place stipulated in the notice of the meeting. If the fourth Thursday of May is not a business day, our Articles of Association provide that the meeting must take place either the preceding or the following business day. Extraordinary general meetings of the shareholders may be called by our Board of Directors or by our statutory auditor.

The Board of Directors or the statutory auditor is required to call an extraordinary general meeting of our shareholders upon the written request of holders of 20% of the outstanding Delhaize Group ordinary shares.

Under Belgian law, shareholders have sole authority with respect to the following matters, among others:

•

the approval of annual accounts;

•

the election and removal of directors and statutory auditors;

•

granting a discharge of liability to the directors and statutory auditors;

•

determining the compensation of directors and the fee of the statutory auditors;

•

the bringing of a suit against the directors on behalf of the Company;

•

an increase or decrease in the share capital, except to the extent the shareholders have previously authorized the Board of Directors to increase the capital; and

•

any other amendment to the Articles of Association.

Belgian law does not require a quorum for the annual general meetings of shareholders, which we refer to sometimes as our ordinary general meeting of shareholders. Decisions are taken by a simple majority of votes cast at the meeting, irrespective of the number of Delhaize Group ordinary shares present or represented at the meeting.

Resolutions to amend any provision of our Articles of Association, including any decision to increase the capital (except if taken by the Board of Directors) or to create an additional class of capital stock, require a quorum of 50% of the issued capital (provided that if the 50% quorum is not reached, our Board may call a second meeting for which no quorum is required), as well as the affirmative vote of at least 75% of the shareholders present or represented and voting at the meeting, or 80% of such shareholders if the amendment would change our corporate object or authorize our Board of Directors to repurchase Delhaize Group ordinary shares.

Under Belgian law, we are required to publish a notice for each meeting of the shareholders in a Belgian newspaper available throughout the territory of Belgium and in the Belgian Official Gazette at least thirty days prior to a meeting. However, if a second meeting is to be held with the same agenda, the notice of this second meeting may be published in a Belgian newspaper available throughout the territory of Belgium and in the Belgian State Gazette at the latest seventeen days prior to the second meeting provided that the notice of the first meeting indicated the date of the second meeting. In addition, a copy of the notice must be sent to each holder of Delhaize Group ordinary shares in registered form the same day as the day of publication of the notice of the meeting. Each notice must indicate the place, date and time of the meeting and set forth the agenda of the meeting, as well as the proposals to be considered and voted upon at the meeting. Business transacted at any general meeting of our shareholders is limited to the purposes stated in the notice of the meeting. Each notice also specifies the formalities that shareholders must satisfy in order to attend and vote at the meeting.

One or more shareholders holding together at least 3% of the share capital can request to put an item on the agenda of the shareholders’ meeting and table resolution proposals for items included on the agenda of the shareholders’ meeting. Such requests should be addressed to the Board of Directors and must be received at least twenty-two days prior to the meeting. The Company will publish a revised agenda by the fifteenth day prior to the meeting if it has validly received within the above-mentioned period one or more requests to add new items or new resolutions to the agenda. More information concerning the above rights and their exercise modalities is available on the Company’s websitewww.delhaizegroup.com.

For a description of the procedures by which holders of Delhaize Group ADRs may vote the underlying Delhaize Group ordinary shares, see the information under the heading “Description of Delhaize Group American Depositary Receipts—Voting Rights” below.

Annual Financial Statements.Under Belgian law, the annual general meeting of shareholders must be held within six months after the close of our fiscal year for the purpose of approving the annual accounts prepared by the Board of Directors and reported on by the statutory auditor. Not later than one month before the date of the annual general meeting of shareholders, our Board of Directors is to provide the annual accounts to our statutory auditor. The auditor is required to review the accounts and prepare a report on the accounts for the benefit of our shareholders. The shareholders are entitled to review, at Delhaize Group’s registered office, a copy of the annual accounts as prepared by our Board of Directors, and the reports drawn up by our Board of Directors and by our statutory auditor as from the day of publication of the notice to our annual general meeting. In addition, we are required to provide a copy of each of these documents with the notice sent to each holder of Delhaize Group ordinary shares in registered form. So long as ADRs are outstanding, we will furnish to our shareholders, and cause the depositary to furnish to holders of ADRs, annual reports in English. The adoption of the annual financial statements by our shareholders must be followed by a separate vote of the shareholders with respect to the discharge of liability of our Directors and our statutory auditor. This discharge of liability is valid only when the financial statements submitted by our Board of Directors contain no omissions of necessary information or misstatements as to the true condition of our company. In addition, this discharge of liability regarding actions contrary to, or inconsistent with, our Articles of Association, is valid only if such actions have been mentioned in the notice of our annual general meeting of shareholders.

Ownership Reporting

Belgian Law.Pursuant to legal provisions in force and our Articles of Association, any person or legal entity which owns or acquires (directly or indirectly, by ownership of American Depositary Shares or otherwise) shares or other securities of Delhaize Group granting voting rights (representing the share capital or not) must disclose to us and to the FSMA the number of securities that such person owns, alone or jointly, when his/her voting rights amount to three percent or more of the total existing voting rights of Delhaize Group. Such person must make the same type of disclosure in case of transfer or acquisition of additional securities when his/her voting rights reach five percent, 10 percent, and so on by blocks of five percent, or when the voting rights fall below one of these thresholds.

The disclosure statements must be addressed to the FSMA and to us at the latest the fourth trading day following the day on which the circumstance giving rise to the disclosure occurred. Unless otherwise provided by law, a shareholder shall only be allowed to vote at a shareholders’ meeting of Delhaize Group the number of securities he/she validly disclosed at the latest twenty days before such meeting.

We are not aware of the existence of any shareholders’ agreement with respect to the voting rights pertaining to the securities of the Company.

Members of a corporate body, persons discharging executive responsibilities within Delhaize Group, and persons closely associated with them, who acquire or transfer Delhaize Group ordinary shares or Delhaize Group ADRs must also disclose such acquisition or transfer to the FSMA within five business days from the date of the relevant transaction. However, if the aggregate euro amount of all transactions by such person for any calendar year has not yet reached five thousand euros, the report to the FSMA may be delayed until January 31 of the following year. Failure to comply with such requirements may give rise to administrative fines.

U.S. Law.In accordance with U.S. law, holders of Delhaize Group ordinary shares and holders of ADRs are required to comply with U.S. securities requirements relating to their ownership of securities. Any person must disclose to us and the U.S. Securities and Exchange Commission on Schedule 13D or, as applicable, Schedule 13G the number of Delhaize Group ordinary shares or the ordinary shares underlying ADRs that such person has acquired (whether alone or jointly with one or more other persons) when such shares represent more than 5% of the outstanding Delhaize Group ordinary shares. In addition, if any material change occurs in the facts set forth in the report filed on Schedule 13D (including a more than 1% increase or decrease in the percentage of the total shares beneficially owned), the beneficial owner must promptly file an amendment disclosing such change.

Acquisition, Holding in Pledge and Transfer by Delhaize Group of Delhaize Group Ordinary Shares.Under our Articles of Association, we may acquire or hold in pledge our own shares in accordance with effective law. Our Board of Directors is authorized

to transfer through public or private transactions the shares that we acquired, under conditions determined by our Board of Directors, without the prior approval of shareholders, in accordance with effective law.

At the Extraordinary General Meeting held on May 26, 2011, our shareholders authorized our Board of Directors to acquire in the ordinary course of business up to 10% of our outstanding shares at a minimum share price of €1.00 and a maximum share price not higher than 20% above the highest closing price of the Delhaize Group ordinary share on NYSE Euronext Brussels during the 20 trading days preceding the acquisition. This authorization is granted for a period of five years. Such authorization also relates to the acquisition of our shares by one or several of our direct subsidiaries.

In May 2004, the Board of Directors approved the repurchase of up to €200 million of the Company’s shares or ADRs from time to time in the open market, in compliance with applicable law and subject to the limits of an outstanding authorization granted to the Board of Directors by the shareholders, to satisfy exercises under the stock option plans that we offer our employees. No time limit has been set for these repurchases and they may be discontinued at any time. On August 3, 2011, the Board of Directors approved the increase of the amount remaining for repurchases under the May 2004 repurchases approval to €100 million to satisfy exercises under the stock option plans that we (including our subsidiaries) offer to employees and to hedge certain stock option plan exposures.

In 2012, we neither acquired any Delhaize Group ordinary shares (having a par value of €0.50 per share), nor did we transfer shares to satisfy the exercise of stock options granted to employees of non-U.S. operating companies. Also in 2012, Delhaize America, LLC did not repurchase any Delhaize Group ADRs, but did transfer 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.

As a consequence, at the end of 2012, our management 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 by the shareholders.

At the end of 2012, we owned 1,044,135 treasury shares (including ADRs), all of which were acquired prior to 2012, representing approximately 1.02% of our share capital.

We provided a Belgian credit 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 us, and without our influence with regard to the timing of the purchases. The credit 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.

Change in Control

Ability of Delhaize Group to issue ordinary shares in response to a takeover bid.Under Belgian law, the person intending to make a takeover bid must provide advance notice to the FSMA, which must then notify the target company on the next business day. Upon receipt of that notice and until the bid has closed, the target company has limited ability to issue new shares. If the target company’s board of directors was previously authorized to issue new shares, it may decide to issue such shares to the extent that:

^(a)

the issuance price is at least equal to the price offered by the bidder,

^(b)

the new shares are fully paid-up upon issuance, and

^(c)

the number of new shares does not exceed 10% of the number of shares outstanding immediately prior to the capital increase.

The Board of Directors of a Belgian company also has the ability to convene an extraordinary general meeting of the shareholders to vote upon a proposal to issue new shares or warrants without, or with limited, preferential subscription rights.

Right of bond, convertible bonds and medium-term notes holders to early repayment in case of change of control of Delhaize Group. At the ordinary and extraordinary general meeting of the shareholders held on May 24, 2012, our shareholder approved the inclusion of a provision in the bonds, convertible bonds or medium term notes that the Company may issue within 12 months from

such meeting, with a maturity or maturities not exceeding 30 years, for a maximum equivalent aggregate amount of €1.5 billion, granting the holders of such securities the right to early repayment for an amount not in excess of 101% of the aggregate principal amount of such securities repurchased in the event of a change of control of Delhaize Group, as would be provided in the terms and conditions relating to such securities. At the combined ordinary and extraordinary general Meeting of the shareholders held on May 26, 2011, our shareholders approved the inclusion of a provision in the bonds, convertible bonds or medium-term notes that we may issue within the 12 months from such meeting, with a maturity or maturities not exceeding 30 years, for a maximum equivalent aggregate amount of €1.5 billion, granting the holders of such securities the right to early repayment for an amount not in excess of 101% of the aggregate principal amount of such securities repurchased in the event of a change of control of Delhaize Group, as would be provided in the terms and conditions relating to such securities.

At the ordinary general meeting of shareholders held on May 27, 2010, our shareholders approved the inclusion of a provision in the bonds, convertible bonds or medium-term notes that we may issue within the 12 months from such meeting, with a maturity or maturities not exceeding 30 years, for a maximum equivalent aggregate amount of €1.5 billion, granting the holders of such securities the right to early repayment for an amount not in excess of 101% of the aggregate principal amount of such securities repurchased in the event of a change of control of Delhaize Group, as would be provided in the terms and conditions relating to such securities.

Right of lenders under credit agreement to accelerate repayment.The combined ordinary and extraordinary general meeting of shareholders held on May 26, 2011 approved a change in control clause set out in the €600 million five-year revolving credit facility dated April 15, 2011 entered into by, among others, Delhaize Group, Delhaize America, LLC, Delhaize Griffin SA, Delhaize The Lion Coordination Center SA, as borrowers and guarantors, the subsidiary guarantors party thereto, the lenders party thereto, and Fortis Bank SA/NV, Banc of America Securities Limited, JP Morgan PLC and Deutsche Bank AG, London Branch as bookrunning mandated lead arrangers. The “Change in Control” clause provides that, in case any person (or persons acting in concert) gains control over the Company or becomes the owner of more than 50 percent of the issued share capital of the Company, this will lead to a mandatory prepayment and cancellation under the credit facility.

Ability of stock option holders to exercise options in case of change of control of Delhaize Group.At the ordinary and extraordinary general meeting held on May 24, 2012, our shareholders approved a provision of the Delhaize Group 2012 U.S. Stock Incentive Plan and a provision of the Delhaize America, LLC 2012 Restricted Stock Unit Plan that provides that in the event of a change of control of Delhaize Group a holder of stock options and/or restricted stock units under either plan will have the right to acquire shares of the Company, regardless of the vesting period of the stock options and/or restricted stock units.At the combined ordinary and extraordinary general meeting of our shareholders held on May 24, 2007, our shareholders approved a provision of the Delhaize Group 2007 Stock Option Plan for Employees of Non-U.S. Companies and an amendment to the Delhaize Group 2002 Stock Incentive Plan that provide that in the event of a change of control of Delhaize Group the beneficiaries under the plans will have the right to exercise their options to acquire Delhaize Group shares regardless of the vesting period of the options.

Management employees of non-U.S. operating companies received stock options granted by our Board of Directors under the Stock Option Plan 2001 to 2007, granting to the beneficiaries the right to acquire ordinary shares of Delhaize Group. Management employees of U.S. operating companies received options, which qualify as warrants under Belgian law, issued by our Board of Directors under the Delhaize Group 2002 and 2012 Stock Incentive Plans, as amended, pursuant to which grants could be made to the beneficiaries of the right to subscribe to new American Depositary Receipts of the Company. The General Meeting of Shareholders approved a provision of these plans that provide that in the event of a change of control over Delhaize Group the beneficiaries will have the right to exercise their options and warrants, regardless of their vesting period. The number of options outstanding under those plans as of December 31, 2012 can be found under Note 21.3 to the consolidated financial statements included in this document.

Ability of Performance Cash Plan beneficiaries to receive the full cash payment with respect to any outstanding grant in case of change of control of Delhaize Group. In 2003, we adopted a global long term incentive program which incorporates a Performance Cash Plan. The grants under the Performance Cash Plan provide for cash payments to the beneficiaries at the end of a three-year period that are dependent on Delhaize Group performance against Board approved financial targets that are closely correlated to building long-term shareholder value. The General Meeting of Shareholders approved a provision of the Performance Cash Plan that provides that the beneficiaries are entitled to receive the full cash payment with respect to any outstanding grant in the event of a change of control over Delhaize Group.

Description of Delhaize Group American Depositary Shares

General.Citibank, N.A., or Citibank, succeeded The Bank of New York Mellon as Depositary for the American Depositary Receipts program of Delhaize Group as of February 18, 2009. Citibank, as our depositary bank, issues the Delhaize Group American

Depositary Shares, or ADSs. ADSs may be represented by certificates that are commonly referred to as American Depositary Receipts, or ADRs, or may be issued in un-certificated form. Delhaize Group ADSs represent ownership interests in the Delhaize Group ordinary shares on deposit with Citibank. Each Delhaize Group ADS represents the right to receive one Delhaize Group ordinary share as well as any other securities, cash or other property in respect thereof deposited with Citibank, as depositary, but not distributed to Delhaize Group ADS holders. Citibank’s principal executive office is located at 388 Greenwich Street, New York, New York 10013. Citibank has appointed Citibank International PLC in London to act as custodian for the property on deposit in respect of the Delhaize Group ADSs.

Because Citibank actually holds the underlying Delhaize Group ordinary shares, ADS holders generally receive the benefit from such underlying shares through Citibank. An amended and restated deposit agreement among Citibank, as depositary bank, Delhaize Group, and the holders and beneficial owners of Delhaize Group ADSs issued thereunder, which we refer to as the deposit agreement, sets out the obligations of Citibank. New York law governs the deposit agreement, the Delhaize Group ADSs, and any ADRs issued to evidence Delhaize Group ADSs. Belgian law governs the Delhaize Group ordinary shares underlying the Delhaize Group ADSs.

Delhaize Group ADSs may be held either directly (by having an ADS registered in your name — whether issued in certificated or in un-certificated form), or indirectly through a broker or financial institution. This description assumes Delhaize Group ADSs are held directly. If you hold Delhaize Group ADSs indirectly, you must rely on the procedures of your broker or financial institution to assert the rights of Delhaize Group ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

The following description is meant to be only a summary of certain provisions of the deposit agreement. It does not restate the terms of the deposit agreement in its entirety. You are urged to carefully read the deposit agreement, and the form of Delhaize Group ADR, as those documents, and not this description, govern the rights of holders of Delhaize Group ADSs. The form of deposit agreement and of Delhaize Group ADR are available as exhibits to the registration statement on Form F-6 filed with the SEC on January 20, 2009 (Reg. No. 333-156798) and may be retrieved from the SEC’s website atwww.sec.gov and from the SEC’s public reference room at 100 F Street N.E., Washington D.C. 20549. Copies of the deposit agreement and the form of Delhaize Group ADR are also available for inspection at the principal executive office of the depositary set forth above, and at the office of the custodian, Citibank International Plc located at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB.

Dividends and Distributions.Citibank will pay to Delhaize Group ADS holders as of a record date established by Citibank under the terms of the deposit agreement the cash dividends or other distributions it receives on Delhaize Group ordinary shares or other deposited securities, after deducting its fees and expenses. Delhaize Group ADS holders will receive these distributions in proportion to the number of Delhaize Group ordinary shares represented by the Delhaize Group ADSs held.

•

Cash.Citibank will, as promptly as practicable after payment, convert any cash dividend or distribution Delhaize Group pays on its ordinary shares, other than any dividend or distribution paid in U.S. dollars, into U.S. dollars if it can do so on a practicable basis and can legally transfer the U.S. dollars to the United States. If at any time Citibank shall determine that in its judgment that such conversion and transfer is not practicable or lawful, or if any approval from any government is required and denied or, in the opinion of Citibank, not obtainable at a reasonable cost or within a reasonable period, the deposit agreement allows Citibank to distribute the foreign currency only to those Delhaize Group ADS holders to whom it is possible to do so or to hold the foreign currency it cannot convert for the account of the Delhaize Group ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest. Before making a distribution, any withholding taxes that must be paid under applicable laws will be deducted. See “Taxation.” It will distribute only whole U.S. dollars and cents and will round any fractional amounts to the nearest whole cent.

•

Shares.Citibank may distribute additional Delhaize Group ADSs representing any ordinary shares Delhaize Group distributes as a dividend or free distribution, if Delhaize Group requests Citibank to make this distribution. Citibank will only distribute whole Delhaize Group ADSs. In lieu of delivering fractional ADSs, Citibank shall sell the number of ordinary shares or ADSs, as the case may be, represented by the aggregate of such fractions and distribute the net proceeds to the holders entitled thereto. If Citibank does not distribute additional cash or Delhaize Group ADSs, each Delhaize Group ADS will thenceforth, to the extent permitted by law, also represent the right to receive the new Delhaize Group ordinary shares Delhaize Group distributed to Citibank.

•

Elective Distributions in Cash or Shares.If Delhaize Group offers to make a distribution payable at the election of Delhaize Group shareholders in cash or in additional ordinary shares, Citibank may, if so requested by Delhaize Group and provided making such elective distribution available to Delhaize Group ADS holders is lawful and reasonably practicable, establish

procedures to enable you to elect to receive either cash or additional ADSs, in each case as described in the deposit agreement. If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in Belgium would receive upon failing to make an election, as more fully described in the deposit agreement. Citibank is not obligated to make any process available to you to receive an elective distribution of our shares rather than ADSs. There can be no assurances that you will have the opportunity to receive elective distributions on the same terms as the holders of our ordinary shares in Belgium or at all.

•

Rights To Receive Additional Shares.If Delhaize Group offers holders of securities any rights, including rights to subscribe for additional ordinary shares, Citibank may, if so requested by Delhaize Group and provided making the rights available to Delhaize Group ADS holders is lawful and reasonably practicable, take actions necessary to make these rights available to Delhaize Group ADS holders. If Citibank determines that it is not legal or not reasonably practicable to make these rights available to Delhaize Group ADS holders, Citibank may sell the rights and distribute the net cash proceeds to the applicable holders of Delhaize Group ADSs upon the terms of the deposit agreement. Citibank may allow rights that are not distributed or sold to lapse.

•

United States securities laws may restrict the sale, offer, deposit, cancellation, and transfer of the Delhaize Group ADSs issued after the exercise of rights. Citibank will not offer holders of Delhaize Group ADSs rights unless those rights and the securities to which the rights relate are either exempt from registration or have been registered under the Securities Act with respect to a distribution to ADR holders. Delhaize Group has no obligation to register under the Securities Act those rights or the securities to which they relate.

•

Other Distributions.Whenever we intend to distribute property other than cash, ordinary shares or rights to purchase additional ordinary shares, Citibank will, if it is reasonably practicable to distribute such property to you and if we have requested that such property be distributed to holders of Delhaize Group ADSs, distribute the property to the holders in a manner it deems practicable. The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes and governmental charges, Citibank may sell all or a portion of the property received. If Citibank does not so distribute the property to holders of Delhaize Group ADSs, it may sell the property. The net proceeds of such a sale will be distributed to holders of Delhaize Group ADSs as in the case of a cash distribution.

Delhaize Group has no obligation to take any other action to permit the distribution of Delhaize Group ADSs, shares, rights or anything else to Delhaize Group ADS holders. Citibank will not be responsible if it determines that it is unlawful or impractical to make a distribution available to any Delhaize Group ADS holders.

Deposit and Issuance; Partial Entitlement ADSs; Withdrawal and Cancellation.

Deposit and Issuance.Citibank will issue additional Delhaize Group ADSs if you or your broker deposit Delhaize Group ordinary shares with the custodian, along with any appropriate instruments of transfer, or endorsement, together with all such certifications as may be required by Citibank or the custodian in accordance with the deposit agreement. Citibank may also require you to deliver evidence of any necessary approvals of the authority in Belgium, if any, that is responsible for regulating currency exchange at that time, and an agreement transferring your right as a shareholder to receive dividends or other property. Upon payment of its fees and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, Citibank will register the appropriate number of Delhaize Group ADSs in the names you request and will issue book-entry Delhaize Group ADSs or, if you specifically request, deliver the Delhaize Group ADRs at its principal executive office to the persons you request. Citibank will only issue Delhaize Group ADSs in whole numbers.

Partial Entitlement ADSs.If any Delhaize Group ordinary shares are deposited which entitle the holders thereof to receive a per-share distribution or other entitlement in an amount different from all other Delhaize Group ordinary shares then on deposit or are not fully fungible with Delhaize Group ordinary shares then on deposit, Citibank may (i) cause its custodian to hold Delhaize Group ordinary shares with partial entitlements separate and distinct from the Delhaize Group ordinary shares with full entitlements, and (ii) subject to the terms of the deposit agreement, issue and deliver partial entitlement ADSs representing Delhaize Group ordinary shares with partial entitlements that are separate and distinct from the ADSs representing Delhaize Group ordinary shares with full entitlements by means of separate CUSIP numbering and legending, as applicable. If and when Delhaize Group ordinary shares with partial entitlements become fully “assimilated” with the Delhaize Group ordinary shares outstanding, Citibank shall (a) cause its custodian to transfer Delhaize Group ordinary shares with partial entitlements into Citibank’s account containing Delhaize Group ordinary shares with full entitlements, (b) take such actions as are necessary to remove the distinctions between (i) the partial entitlement ADSs and ADRs, on the one hand, and (ii) the ADSs and ADRs with full entitlements, on the other hand and (c) give

notice thereof to holders of partial entitlement ADSs and give holders of partial entitlement ADRs the opportunity to exchange their partial entitlement ADRs for ADRs with full entitlements. Holders and beneficial owners of partial entitlement ADSs shall be limited to the entitlements of those Delhaize Group ordinary shares with partial entitlements.

Withdrawal and Cancellation.You may withdraw Delhaize Group ordinary shares underlying your Delhaize Group ADSs upon delivery of your Delhaize Group ADSs for such purpose to Citibank together with instructions for such purpose. Any deposited securities that you withdraw will be delivered to you in book-entry form in Belgium. Upon payment of its fees and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, Citibank will deliver the deposited securities underlying the Delhaize Group ADSs at the office of the custodian along with any dividends or distributions with respect to the deposited securities represented by the Delhaize Group ADSs, or any proceeds from the sale of any dividends, distributions or rights, which may be held by Citibank. Citibank will only accept Delhaize Group ADSs for cancellation that represent a whole number of securities on deposit.

A Delhaize Group ADS holder has the right to cancel its Delhaize Group ADSs and withdraw the underlying Delhaize Group ordinary shares at any time except:

•

due to temporary delays caused by Citibank, Delhaize Group or a settlement system (when applicable) closing its transfer books, the deposit of Delhaize Group ordinary shares in connection with voting at a shareholders’ meeting, or the payment of dividends;

•

when such Delhaize Group ADS holder owes money to pay fees, taxes and similar charges; or

•

when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to Delhaize Group ADSs or to the withdrawal of ordinary shares or other deposited securities.

Voting.Upon receipt of notice of any meeting of holders of Delhaize Group ordinary shares underlying your Delhaize Group ADSs, Citibank will notify Delhaize Group ADS holders of the upcoming meeting and arrange to deliver certain materials to Delhaize Group ADS holders. The materials will contain:

(1)

such information as is contained in such notice of meeting;

(2)

a statement that the holders of Delhaize Group ADSs as of the close of business on a specified record date will be entitled, subject to any applicable law and the Articles of Association of Delhaize Group, to give instructions to the Citibank as to the exercise of the voting right, if any, pertaining to the securities underlying the Delhaize Group ADSs;

(3)

a statement as to the manner in which such instructions and notification may be given; and

(4)

information on how a Delhaize Group ADS holder may instruct Citibank how to vote at such meeting.

For voting instructions to be valid, Citibank must receive them on or before the date specified in the materials delivered to Delhaize Group ADS holders. Citibank will, to the extent practical, subject to any applicable law and the Articles of Association of Delhaize Group, vote the underlying securities as each Delhaize Group ADS holder instructs and Citibank will only vote as each Delhaize Group ADS holder instructs.

Under the deposit agreement, a holder of Delhaize Group ADSs who gave voting instructions to Citibank must arrange for having those ADSs registered on the record date set by the Company, which is the fourteenth day before the meeting. Only shareholders of Delhaize Group, including persons who have timely have their securities registered on the record date set by the Company, may attend the meeting and vote in person or by proxy.

Persons who hold Delhaize Group ADRs through a brokerage account or otherwise in “street name” will need to follow the procedures of their broker in order to give voting instructions to Citibank.

Under the deposit agreement, Delhaize Group may request Citibank to provide to Delhaize Group copies of any voting instructions the depositary receives as promptly as practicable after receipt of such instructions. In addition, under the terms of the deposit agreement, holders of Delhaize Group ADSs who have delivered voting instructions agree that such voting instructions may, at the request of Delhaize Group, be disclosed by Delhaize Group, for purposes of compliance with Belgian law, in connection with any shareholders’ meeting of Delhaize Group, whether prior, during or after such shareholders’ meeting.

In connection with shareholders’ meetings, Delhaize Group or Citibank will not be able to assure that holders of Delhaize Group ADSs will receive the voting materials in time to ensure that holders can either instruct Citibank to vote the securities underlying the Delhaize Group ADSs or withdraw the underlying securities to vote them in person or by proxy. In addition, Citibank and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions.

Unless otherwise indicated in the meeting notice distributed by Citibank referred to above, if Citibank receives from a Delhaize Group ADS Holder (who has otherwise satisfied all conditions to voting) voting instructions which fail to specify the manner in which Citibank is to vote the Delhaize Group ordinary shares represented by such holder’s Delhaize group ADSs, Citibank will deem such holder (unless otherwise specified in the notice distributed to holders) to have instructed Citibank to vote in favor of all resolutions for which Delhaize Group’s board of directors recommends approval.

The right to give voting instructions to Citibank or to vote the Delhaize Group ordinary shares may be limited if the holders or beneficial owners of Delhaize Group ADSs or ordinary shares fail to comply with ownership and information reporting requirements and requests under applicable law and stock exchange rules. For certain additional information see “Description of Delhaize Group Ordinary Shares — Ownership Reporting” above.

Fees and Expenses Payable by Delhaize Group ADS Holders

As a Delhaize Group ADS holder, you will be required to pay the following service fees to Citibank:


Service:		Fees:
Issuance of Delhaize Group ADSs upon deposit of ordinary shares		$5.00 (or less) per 100 Delhaize Group ADSs (or portion thereof) issued
Delivery of ordinary shares against surrender of Delhaize Group ADSs		$5.00 (or less) per 100 Delhaize Group ADSs (or portion thereof) surrendered
Distributions of cash proceeds (i.e., upon sale of rights or other entitlements)		$5.00 (or less) per 100 Delhaize Group ADSs (or portion thereof) held
Distribution of cash dividends		None
Distribution of Delhaize Group ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs		$5.00 (or less) per 100 Delhaize Group ADSs (or portion thereof) held
Distribution of securities other than Delhaize Group ADSs or rights to purchase additional Delhaize Group ADSs (i.e., spin—off shares)		$5.00 (or less) per 100 Delhaize Group ADSs (or portion thereof) held

As a Delhaize Group ADS holder, you will also be responsible for paying certain fees and expenses incurred by Citibank and certain taxes and governmental charges such as:

•

taxes (including applicable interest and penalties) and other governmental charges;

•

such registration fees as may from time to time be in effect for the registration of ordinary shares or other deposited securities on the share register and applicable to transfers of ordinary shares or other deposited securities to or from the name of the custodian, Citibank or any nominees upon the making of deposits and withdrawals respectively;

•

expenses for cable, telex and fax transmissions and for delivery of securities;

•

expenses incurred for converting foreign currency into U.S. dollars;

•

fees and expenses incurred by Citibank in connection with exchange control regulations and other regulatory requirements; and

•

fees and expenses incurred by Citibank, the custodian or any nominee in connection with the delivery or servicing of Delhaize Group ordinary shares on deposit.

Payment of Taxes.Delhaize Group ADS holders are responsible for the taxes and other governmental charges payable on the Delhaize Group ADSs and the securities represented by the Delhaize Group ADSs. Citibank may deduct the amount of any taxes owed from any payments to a Delhaize Group ADS holder. It may also restrict the transfer of Delhaize Group ADSs or restrict the

withdrawal of underlying deposited securities until the Delhaize Group ADS holder pays any taxes owed on such holder’s Delhaize Group ADSs or underlying securities. It may also withhold dividends or other distributions, or sell deposited securities to pay any taxes owed.

Such Delhaize Group ADS holder will remain liable if the proceeds of the sale are not enough to pay the taxes. If Citibank sells deposited securities, it will, if appropriate, reduce the number of Delhaize Group ADSs held by such Delhaize Group ADS holder to reflect the sale and pay to such Delhaize Group ADS holder any proceeds, or send to such Delhaize Group ADS holder any property, remaining after it has paid the taxes. Delhaize Group ADS holders are required to indemnify Delhaize Group, Citibank and the custodian for any claims with respect to taxes based on any tax benefit obtained for such Delhaize Group ADS holders.

Depositary Payments to Delhaize Group

In 2012, we received the following payments from Citibank, N.A., the Depositary Bank for our American Depositary Receipt program:


Reimbursement of settlement infrastructure fees (including DTC feeds):	$	170
Reimbursement of proxy process expenses (printing, postage and distribution) for registered and beneficial holders:	$	151,171.10

As part of its service to the Company, Citibank, N.A. has agreed to waive fees for the standard costs associated with the administration of the ADR Program, including transfer agent costs in the amount of $127,282.71 for 2012.

Reclassifications, Recapitalizations and Share Exchanges. If Delhaize Group:

•

reclassifies, splits or consolidates any of the Delhaize Group ordinary shares;

•

distributes securities on any of the Delhaize Group ordinary shares that are not distributed to Delhaize Group ADS holders; or

•

recapitalizes, reorganizes, merges, consolidates or takes any similar action,

then:

•

the cash, shares or other securities received by Citibank will become new deposited securities under the deposit agreement, and each Delhaize Group ADS will automatically represent its equal share of the new deposited securities; and

•

Citibank may, and will if Delhaize Group asks it to, distribute some or all of the cash, shares or other securities it received. It may also deliver new Delhaize Group ADRs or ask each Delhaize Group ADR holder to surrender its outstanding Delhaize Group ADRs in exchange for new Delhaize Group ADRs identifying the new deposited securities.

Disclosure of Interests.The obligation of a holder of Delhaize Group ordinary shares and other persons with an interest in the shares to disclose information to Delhaize Group and the FSMA under Belgian law also applies to Delhaize Group ADS holders and any other persons with an interest in the Delhaize Group ADSs. The consequences for failure to comply with these provisions will be the same for Delhaize Group ADS holders and any other persons with an interest therein as for a holder of Delhaize Group ordinary shares. Under the deposit agreement, each holder of Delhaize Group ADSs or person with an interest in Delhaize Group ADSs is deemed to have authorized Citibank and the custodian to comply with any request from Delhaize Group or any competent authority to disclose any information about any interest or any transaction of such person in Delhaize Group ADSs or ordinary shares. For additional information see “Description of Delhaize Group Ordinary Shares — Ownership Reporting” above.

Amendment and Termination of the Deposit Agreement

Amendment.Delhaize Group may agree with Citibank to amend the deposit agreement and the Delhaize Group ADRs without Delhaize Group ADS holder consent for any reason. If the amendment adds or increases fees or charges, except for taxes and governmental charges, or prejudices any substantial existing right of Delhaize Group ADS holders, it will only become effective 30 days after notice of such amendment shall have been given to Delhaize Group ADS holders. At the time an amendment becomes effective, a Delhaize Group ADS holder is considered, by continuing to hold Delhaize Group ADSs, to have agreed to the amendment and to be bound by the agreement as amended. However, no amendment will impair a Delhaize Group ADS holder’s right to receive the deposited securities in exchange for Delhaize Group ADSs, except in order to comply with mandatory provisions of any applicable laws.

Termination.Citibank will terminate the deposit agreement if Delhaize Group asks it to do so, in which case it must notify Delhaize Group ADS holders at least 30 days before termination. Citibank may also terminate the deposit agreement after notifying Delhaize Group ADS holders if Citibank informs Delhaize Group that it would like to resign and Delhaize Group does not appoint a new depositary bank within 60 days.

If any Delhaize Group ADSs remain outstanding after termination, Citibank will stop registering the transfer of Delhaize Group ADSs, will stop distributing dividends to Delhaize Group ADS holders, and will not give any further notices or do anything else under the deposit agreement other than:

(1)

collect dividends and distributions on the deposited securities;

(2)

sell rights offered to holders of deposited securities; and

(3)

deliver Delhaize Group ordinary shares and other deposited securities upon cancellation of Delhaize Group ADSs.

At any time after the expiration of 30 days from the date of termination of the deposit agreement, Citibank may sell any remaining deposited securities. After that, Citibank will hold the money it received on the sale, as well as any cash it is holding under the deposit agreement, for the pro rata benefit of the Delhaize Group ADS holders that have not surrendered their ADSs. It will not invest the money and has no liability for interest. Citibank’s only obligations will be to account for the money and cash. After termination, Delhaize Group’s only obligations will be with respect to indemnification of, and to pay specified amounts to, Citibank.

Limitations on Obligations and Liability to Delhaize Group ADS Holders.The deposit agreement expressly limits the obligations and liabilities of Delhaize Group and Citibank to Delhaize Group ADS holders. Delhaize Group and Citibank:

•

are obligated only to take the actions specifically set forth in the deposit agreement without negligence or bad faith;

•

are not liable if either of them is prevented or delayed by law, any provision of the Delhaize Group Articles of Association or circumstances beyond their control from performing their obligations under the deposit agreement;

•

have no obligation to become involved in a lawsuit or proceeding related to the Delhaize Group ADSs or the deposit agreement on behalf of ADR holders or on behalf of any other party unless they are indemnified to their satisfaction;

•

are not liable for any action or non-action by it in reliance upon any advice of or information from any legal counsel, accountants, any person depositing ordinary shares, any Delhaize Group ADS holder or any other person whom they believe in good faith is competent to give them that advice or information; and

•

may rely and shall be protected in action upon any written notice, request or other document believe by it to be genuine and to have been signed or presented by the proper party or parties.

Citibank shall not be responsible for any failure to carry out any instructions to vote any of the Delhaize group ordinary shares represented by the Delhaize Group ADSs, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or non-action is without negligence or bad faith.

Requirements for Depositary Actions.Before Citibank will issue or register the transfer of a Delhaize Group ADS, make a distribution on a Delhaize Group ADS, or permit withdrawal of Delhaize Group ordinary shares, Delhaize Group or Citibank may require:

•

payment of taxes, including stamp duty reserve and stock transfer taxes or other governmental charges, and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities, as well as fees and expenses of Citibank;

•

production of satisfactory proof of the identity of the person presenting ordinary shares for deposit or Delhaize Group ADSs upon withdrawal, and of the genuineness of any signature or other information they deem necessary; and

•

compliance with regulations Citibank may establish consistent with the deposit agreement, including presentation of transfer documents.

Citibank may refuse to deliver, transfer, or register transfers of Delhaize Group ADSs generally when the transfer books of Citibank are closed or at any time if Citibank or Delhaize Group thinks it advisable to do so.

Pre-Release of ADRs.Citibank may deliver Delhaize Group ADSs before deposit of the underlying Delhaize Group ordinary shares. This is called a pre-release of Delhaize Group ADSs. Citibank may also deliver Delhaize Group ordinary shares prior to the receipt and cancellation of Delhaize Group ADSs. This is called a pre-release of Delhaize Group ordinary shares and may occur before the pre-releases of Delhaize Group ADSs have been closed out. A pre-release of Delhaize Group ADSs is closed out as soon as the underlying Delhaize Group ordinary shares are delivered to Citibank. Citibank may receive Delhaize Group ADSs instead of Delhaize Group ordinary shares to close out a pre-release of Delhaize Group ADSs and may receive Delhaize Group ordinary shares instead of Delhaize Group ADSs to close out a pre-release of Delhaize Group ordinary shares. Citibank may pre-release Delhaize Group ADSs and Delhaize Group ordinary shares only under the following conditions:

(1)

before or at the time of the pre-release, the person to whom the pre-release is being made must represent to Citibank in writing that it or its customer, as the case may be, owns the Delhaize Group ordinary shares or Delhaize Group ADSs to be remitted;

(2)

the pre-release must be fully collateralized with cash or collateral that Citibank considers appropriate; and

(3)

Citibank must be able to close out the pre-release on not more than five business days’ notice.

The pre-releases will also be subject to certain limitations provided in the deposit agreement and to whatever indemnities and credit regulations that Citibank considers appropriate. In addition, Citibank will limit the number of Delhaize Group ADSs that may be outstanding at any time as a result of pre-release, although Citibank may disregard the limit from time to time if it deems it appropriate to do so.

Form of Second Amended and Restated Deposit Agreement. On April 23, 2013, Delhaize Group filed with the SEC post-effective amendment no. 1 to Form F-6 registration statement, which contains as an exhibit a form of second amended and restated deposit agreement among Citibank, as depositary bank, Delhaize Group, and the holders and beneficial owners of Delhaize Group ADSs issued thereunder, which we refer to herein as the Second Amended and Restated Deposit Agreement. On April 24, 2013, Citibank, as depositary bank, provided notice to holders of Delhaize Group ADSs of the Second Amended and Restated Deposit Agreement. Pursuant to the terms of the Second Amended and Restated Deposit Agreement, the deposit agreement and all American Depositary Receipts, which we refer to as ADRs, will be amended, inter alia, (a) to reflect Citibank’s updated schedule of fees and related charges associated with the administration of Delhaize Group’s ADS facility, (b) to permit Citibank to assess such fees and related charges in accordance with the terms, and subject to any conditions, set forth therein, (c) to add a section that allows Citibank to give notice of an amendment to the Second Amended and Restated Deposit Agreement by identifying a means for the holders and beneficial owners to retrieve or receive a text of such amendment, and (d) to add language indicating that the obligations under the terms of the Second Amended and Restated Deposit Agreement of holders and beneficial owners of ADSs outstanding as of the termination date shall survive the termination date and shall be discharged only when the applicable ADSs are presented by their holders to Citibank for cancellation under the terms of the Second Amended and Restated Deposit Agreement. As indicated in the notice, the Second Amended and Restated Deposit Agreement will become effective upon the later to occur of (i) the expiration of 30 days after the date of the notice, and (ii) the date upon which the SEC declares effective the post-effective amendment no. 1 to Form F-6 registration statement. The description of the Second Amended and Restated Deposit Agreement contained herein is qualified in its entirety by reference to the copy of the Second Amended and Restated Deposit Agreement filed as Exhibit (a)(i) to Delhaize Group’s post-effective amendment no. 1 to Form F-6 registration statement, which is incorporated herein by reference.

MATERIAL CONTRACTS

Delhaize Group April and November 2012 Debt Issuances and Tender Offers

In April 2012, we issued $300 million aggregate principal amount of senior notes with an annual interest rate of 4.125% due 2019. The senior notes were issued at a discount of 0.193% of their principal amount. The offering of the notes was made to qualified investors pursuant to an effective registration statement filed by Delhaize Group with the U.S. Securities and Exchange Commission (SEC) and are not listed on any stock exchange. At the same time, we completed a tender offer for cash prior to maturity of up to €300 million aggregate principal amount of its outstanding €500 million 5.625% senior notes due 2014. The net proceeds of the debt issuance were used in part to fund the partial repurchase of these senior notes of a nominal amount of €191 million at a price of 108.079%. Simultaneously, we entered into (i) matching interest rate swaps to hedge the Group’s exposure to changes in the fair value of the 4.125% notes due, which are designated and documented as a fair value hedge, and (ii) cross-currency swaps, exchanging the principal amount ($300 million for €225 million) and interest payments (both variable), to cover the foreign currency exposure.

During November 2012, we issued €400 million senior fixed rate bonds due 2020 at an annual coupon of 3.125%, issued at 99.709% of their principal amount. Delhaize Group entered into matching interest rate swaps to hedge €100 million of the Group’s exposure to changes in the fair value of the 3.125% bonds due to variability in market interest rates and applied fair value hedge accounting to this portion of the debt. The net proceeds of the issuance were primarily used to fund the following tender offers:

In December 2012, we completed a second tender offer for cash and purchased an aggregate nominal amount of €94 million of the above mentioned €500 million 2014 notes at a price of 107.740%. Following the completion of both offers, an aggregate nominal amount of €215 million of the notes remained outstanding.

Simultaneously, we also completed an offer for cash for any and all of its outstanding $300 million 5.875% senior notes due 2014 and purchased $201 million of the tendered notes at a purchase price of 105.945%. Following the completion of the tender, an aggregate nominal amount of $99 million of the notes remained outstanding. Delhaize Group exercised its right to redeem these remaining outstanding notes, which was completed on January 3, 2013 and prospectively discontinued hedge accounting.

Delhaize Group Facility Agreement

We are a party to a €600 million, five-year unsecured multicurrency (euros and US dollars) revolving credit facility agreement, dated as of April 15, 2011 (the“Facility Agreement”),by and among, us, Delhaize The Lion Coordination Center SA/NV, Delhaize Griffin SA/NV and Delhaize America, LLC, as original borrowers (the“Original Borrowers”),and substantially all of our U.S. subsidiaries, as original guarantors (the“Original Guarantors”),Fortis Bank SA/NV, Banc of America Securities Limited, Deutsche Bank AG, London Branch and J.P. Morgan PLC, as bookrunning mandated lead arrangers, the financial institutions listed in Part II of Schedule 1 thereto as lenders, and Fortis Bank SA/NV as agent of the arrangers and the original lenders. As of December 31, 2012. we had not drawn under the Facility Agreement. This summary of the Facility Agreement is qualified in its entirety by reference to the actual Facility Agreement filed as Exhibit 4.10 to Delhaize Group’s Report on Form 20-F filed June 24, 2011. Concurrently with the execution of the Facility Agreement, our subsidiary Delhaize America, LLC terminated all of the commitments under its 2009 Credit Agreement.

The Facility Agreement will mature on April 15, 2016. Funds are available under the Facility Agreement for the refinancing of financial indebtedness, working capital needs, capital expenditures and general corporate purposes of Delhaize Group or any subsidiary of Delhaize Group. Subject to certain conditions stated in the Facility Agreement, Delhaize Group may borrow, prepay and re-borrow amounts under the Facility Agreement at any time up to the date falling one month before the maturity date of the Facility Agreement.

Borrowings under the Facility Agreement will bear interest at the percentage rate per annum which is the aggregate of the London interbank offered rate (“LIBOR”), in relation to loans in US dollars, or EURIBOR in relation to loans in euros, plus an applicable margin of 120 basis points and 90 basis points, respectively as of April 15, 2011. The Facility Agreement provides that if Delhaize Group’s credit rating changes the margin may increase or decrease as set forth in the Facility Agreement. In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Facility Agreement, Delhaize Group is required to pay a commitment fee computed at the annual rate of 40% of the applicable margin and a utilization fee if the aggregate amount of all outstanding loans exceeds 33.33% of the Total Commitments (as defined in the Facility Agreement). The accrued commitment fee and, if applicable, the accrued utilization fee are payable quarterly.

Delhaize Group’s ability to borrow under the Facility Agreement is subject to compliance by Delhaize Group with the covenants and conditions set forth in the Facility Agreement. The Facility Agreement contains customary representations, warranties and

covenants, including two financial covenants applicable to Delhaize Group: (i) a maximum ratio of consolidated adjusted debt to consolidated EBITDA, which must not exceed 3.00 to 1.00, and (ii) a minimum ratio of consolidated EBITDA to Consolidated Net Interest Expense (as such terms are specified in the Facility Agreement), which must be at least 4.00 to 1.00.

The Facility Agreement also contains customary events of default, including but not limited to, failure to perform or observe terms, covenants or agreements included in the Facility Agreement. If an event of default occurs the lenders may, among other things, terminate their commitments and declare all outstanding borrowings to be immediately due and payable together with accrued interest and fees.

The foregoing description is qualified in its entirety by reference to the Facility Agreement, which is filed as Exhibit 4.10 to this Annual Report on Form 20-F and is incorporated herein by reference.

Delta Maxi Acquisition Agreement

On March 3, 2011, we entered into an agreement to acquire 100% of the registered share capital and voting rights of Delta Maxi, a retail company operating more than 450 stores in five countries in Southeastern Europe. We closed the transaction on July 27, 2011 for a purchase price of €615 million subject to customary price adjustments, but not any earn-out or similar clauses. We began consolidating the results of Delta Maxi into our consolidated financial statements as of August 1, 2011. During the first half of 2012, we completed the purchase price allocation of the transaction and recorded indemnification assets of €33 million for legal contingencies as we expect to be compensated by the former owner for these potential losses. The foregoing description is qualified in its entirety by reference to the Delta Maxi Transaction Agreement, which was filed as Exhibit 4.9 to our Annual Report on Form 20-F filed on June 24, 2011 and our report on Form 6-K filed on July 28, 2011, which are both incorporated herein by reference.

Delhaize Group 2010 Debt Exchange Offer

On October 8, 2010 we completed a debt exchange transaction, which offered eligible debt holders of our 2027 and 2031 debt securities, issued by Delhaize America, to exchange those for new notes issued by Delhaize Group. In the debt exchange offer, we offered to exchange any and all outstanding 9.00% Debentures due 2031 and 8.05% Notes due 2027 (together the“Existing Securities”)for new unregistered 5.70% Notes due 2040 represented by certificated depositary interests (the“New 5.70% Notes”).In total $588 million of the total principal of $931 million of the Existing Securities were tendered by eligible holders and exchanged for $827 million in principal of the New 5.70% Notes. In March 2011, we completed a registered exchange offer of our $827 million New 5.70% Notes, (the“Old Notes”)for substantially identical notes registered under the Securities Act (the“Registered 5.70% Notes”and together with the New 5.70% Notes, the“5.70% Notes”).A total of $826,888,000 aggregate principal amount of New 5.70% Notes was exchanged for an equal principal amount of Registered 5.70% Notes pursuant to the exchange offer. The 5.70% Notes were issued pursuant to an Indenture dated as of October 8, 2010, between us and The Bank of New York Mellon, as trustee (the“2010 Indenture”).The 5.70% Notes will mature on October 1, 2040. We pay interest on the 5.70% Notes semiannually on April 1 and October 1 each year. All or a portion of the 5.70% Notes may be subject to redemption at any time, as described in the 2010 Indenture. The 5.70% Notes are unsecured unsubordinated senior obligations of Delhaize Group, and Delhaize Group’s obligations under the 5.70% Notes fall within the scope of the Cross Guarantee Agreement. The 5.70% Notes are not listed on any stock exchange. The foregoing description of our 5.70% Notes is qualified in its entirety by reference to the Indenture, dated as of October 8, 2010, by and between Delhaize Group and The Bank of New York Mellon, as trustee, which is filed as Exhibit 4.3 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011 and is incorporated herein by reference.

Cross Guarantee Agreement

We are party to a Cross Guarantee Agreement, dated as of May 21, 2007, with Delhaize America and substantially all of our other U.S. subsidiaries, under which each company party to the agreement guarantees fully and unconditionally, jointly and severally Delhaize Group existing financial indebtedness, Delhaize America existing financial indebtedness, specific financial indebtedness of two of our European subsidiaries and all future unsubordinated financial indebtedness of each party to the agreement from the date such party joined the agreement.

If any sum owed to a creditor by a guarantor pursuant to its guarantee under the Cross Guarantee Agreement is not recoverable from such guarantor for any reason whatsoever, then such guarantor is obligated, forthwith upon demand by such creditor, to pay such sum by way of a full indemnity.

As of the date of filing this Annual Report on Form 20-F the parties to the Cross Guarantee Agreement are Delhaize Group, Delhaize US Holding, Inc., Delhaize America, Food Lion, LLC, Hannaford Bros. Co., Kash N’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp., Victory Distributors, Inc., Bottom Dollar Food Holding, LLC, Bottom Dollar Food Southeast, LLC, and Bottom Dollar Food Northeast, LLC. Information with respect to our subsidiaries that are Cross Guarantors is included in Note 37 to the consolidated financial statements included in this document. All guarantor subsidiaries are 100% owned by us.

The description of the Cross Guarantee Agreement contained in this Annual Report on Form 20-F is qualified in its entirety by reference to a copy of such agreement filed as exhibit 99.2 to our Report on Form 6-K filed with the U.S. Securities and Exchange Commission on May 29, 2007 (second of three reports) and incorporated in this Annual Report on Form 20-F by reference.

Financial Indebtedness

Under the Cross Guarantee Agreement, the term “financial indebtedness” of any person means, without duplication (and as each may be amended, modified, extended or renewed from time to time): (i) all obligations of such person under agreements for borrowed money; (ii) all obligations of such person evidenced by bonds, debentures, notes or similar instruments; (iii) all hedging obligations of such person; and (iv) all guarantees by such person of obligations of other persons of the type referred under clauses (i), (ii) or (iii).

The term “person” means any individual, company, corporation, firm, partnership, joint venture, association, organization, state or agency or a state or other entity, whether or not having separate legal personality.

The term “hedging obligations” means, with respect to any person, the obligations of such person under: (i) currency exchange, interest rate or commodity swap agreements, cap agreements, floor agreements or collar agreements; and (ii) other similar agreements or arrangements designed to protect such person against fluctuations in currency exchange, interest rates or commodity prices.

Intercompany financial indebtedness is not guaranteed under the Cross Guarantee Agreement.

Ranking; Limit of Liability

The obligations of each company party to the Cross Guarantee Agreement constitute direct, general, unconditional and unsubordinated obligations of such company that shall at all times rank at least pari passu with all of its other existing financial indebtedness set forth on a schedule to the Cross Guarantee Agreement and its future unsubordinated financial indebtedness, save for such obligations as may be preferred by mandatory provisions of law. The obligations of each party under the Cross Guarantee Agreement are limited to the maximum amount that can be guaranteed without constituting a fraudulent conveyance or fraudulent transfer under applicable insolvency laws.

Applicability of Cross Guarantee Agreement

To the extent a guarantor’s guarantee of financial indebtedness is addressed in an agreement to which such guarantor is a party or is otherwise contractually bound, which contains such guarantee, other than the Cross Guarantee Agreement, the Cross Guarantee Agreement does not apply to such guarantor’s guarantee of such financial indebtedness and, to be clear, nothing contained in the Cross Guarantee Agreement in any way supersedes, modifies, replaces, amends, changes, rescinds, waives, exceeds, expands, enlarges or in any way affects the provisions, including warranties, covenants, agreements, conditions, representations or, in general, any of the rights and remedies, and any of the obligations, of such guarantor and any creditor with respect to such guarantee of such financial indebtedness set forth in such other agreement.

Release of Guarantors and Guarantor Obligations

The obligations of a guarantor under the Cross Guarantee Agreement, which we refer to as a released guarantor in this paragraph, any lien created by such released guarantor with respect to such obligations, and the obligations under the Cross Guarantee Agreement of all other guarantors with respect to the financial indebtedness of the released guarantor will be automatically and unconditionally released without any action on the part of any creditor:

•

in connection with any sale, exchange, transfer or other disposition by such released guarantor of all or substantially all of the assets of that released guarantor, provided that the proceeds of that sale or other disposition are applied in accordance with the applicable provisions of any applicable financial indebtedness, or

•

in connection with any sale, exchange, transfer or other disposition (including by way of merger, consolidation or otherwise), directly or indirectly, of capital stock of such released guarantor, by Delhaize Group or any subsidiary thereof, to any person that is not Delhaize Group or a subsidiary of Delhaize Group, or an issuance by such released guarantor of its capital stock, in each case as a result of which such released guarantor ceases to be a subsidiary of Delhaize Group,

provided, that: (i) such transaction is made in accordance with the applicable provisions of any applicable financial indebtedness; and (ii) such released guarantor is also released from all of its obligations, if any, in respect of all other financial indebtedness of each other guarantor under the Cross Guarantee Agreement.

In addition to any other releases for which a guarantor qualifies under the Cross Guarantee Agreement, notwithstanding any other provision of the Cross Guarantee Agreement to the contrary, without limiting the validity of any agreement into which a guarantor and a creditor may enter, a guarantor that obtains a written release from a creditor releasing such guarantor from its obligations under the Cross Guarantee Agreement with respect to the financial indebtedness owing to such creditor specified in such release shall be so released.

Termination of Agreement with Respect to Future Financial Indebtedness

Subject to certain limitations, the Cross Guarantee Agreement may be terminated with respect to a guarantor at any time by such guarantor providing written notice to the other parties to the Cross Guarantee Agreement or by mutual agreement; provided, however, that termination by Delhaize America or any other subsidiary of Delhaize Group party to the Cross Guarantee requires the written consent of Delhaize Group; and provided, further, except as otherwise provided, any termination of the Cross Guarantee Agreement with respect to a guarantor affects neither:

•

Such guarantor’s obligations under the Cross Guarantee Agreement in relation to any financial indebtedness that came into existence prior to that termination, nor

•

The obligations of the other guarantors with respect to such guarantor’s financial indebtedness that came into existence prior to that termination. Financial indebtedness that comes into existence after that termination shall not be covered by the Cross Guarantee Agreement with respect to the terminating guarantor.

Third Parties

Subject to the release provisions of the Cross Guarantee Agreement discussed under the headings “Cross Guarantee Agreement—Release of Guarantors and Guarantor Obligations” and “—Termination of Agreement with Respect to Future Financial Indebtedness” above, creditors of financial indebtedness guaranteed under the Cross Guarantee Agreement are entitled to rely on the Cross Guarantee Agreement and on the guarantees constituted pursuant to the Cross Guarantee Agreement. The Cross Guarantee Agreement constitutes a stipulation pour autrui or third party beneficiary contract for their benefit. Accordingly, such creditors shall be entitled to rely on and enforce the Cross Guarantee Agreement.

The foregoing description is qualified in its entirety by reference to the Cross Guarantee Agreement, which is filed as Exhibit 99.2 to Delhaize Group’s Report on Form 6-K filed May 29, 2007 and is incorporated herein by reference.

EXCHANGE CONTROLS

See Item 11 “Quantitative and Qualitative Disclosures About Market Risk” in this document.

TAXATION

The following is a description of U.S. and Belgian tax consequences of owning and disposing of Delhaize Group ADRs and ordinary shares. The discussion applies only to U.S. Holders (as defined below) who hold Delhaize Group ADRs and/or ordinary shares as “capital assets” within the meaning of Section 1221 of the U.S. Internal Revenue Code, and does not address all potential tax effects that may be relevant to U.S. Holders in light of their particular circumstances such as:

•

persons who own (actually or constructively) 5% or more of either the total voting power or total value of all capital stock of Delhaize Group or 5% or more of the outstanding ordinary shares of Delhaize Group (including ordinary shares represented by American Depositary Shares);

•

persons who are residents of Belgium or engaged in a trade or business in Belgium through a permanent establishment or a fixed base;

•

persons subject to the U.S. federal alternative minimum tax;

•

persons who acquired their Delhaize Group ADRs or ordinary shares pursuant to the exercise of employee stock options or otherwise as compensation; or

•

U.S. Holders who are subject to special treatment under U.S. federal income tax law, such as financial institutions, insurance companies, tax-exempt organizations, retirement plans, dealers in securities, traders in securities that elect to apply a mark-to-market method of accounting and U.S. Holders that hold Delhaize Group ADRs or ordinary shares as a part of a hedge, straddle, constructive sale or conversion transaction.

The following discussion does not address the effect of applicable U.S. state or local tax laws or of U.S. federal tax laws other than those related to the income tax. Tax matters are complicated.Each U.S. Holder is urged to consult such person’s tax advisor regarding the tax consequences of owning and disposing of Delhaize Group ADRs and/or ordinary shares in light of such U.S. Holder’s particular circumstances, including the application of any state, local or foreign tax law.

This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing and proposed U.S. Treasury Regulations promulgated thereunder, published rulings by the U.S. Internal Revenue Service (the “IRS”), the Belgium Income Tax Code, the Belgium Code on Miscellaneous Taxes and Duties, the Belgium Code of Registration Duties, the Convention between the United States of America and the Kingdom of Belgium for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (the “Belgium — United States tax treaty”), administrative rulings and practice and judicial precedent in effect at the date of this document, all of which are subject to change. Any such change, which may or may not be retroactive, could alter the tax consequences discussed in this document. We have not sought any ruling from the IRS with respect to the statements made and the conclusions reached in this summary, and cannot assure you that the IRS will agree with such statements or conclusions.

A holder that is treated as a partnership for U.S. federal tax purposes is not subject to U.S. income tax on income derived from holding the Delhaize Group ADRs or ordinary shares. A partner of the partnership may be subject to tax on such income depending on whether (i) the partner is a U.S. Holder and (ii) the partnership is engaged in a U.S. trade or business to which income or gain from the Delhaize Group ADRs or ordinary shares is effectively connected. If you are a partner of a partnership acquiring or holding the Delhaize Group ADRs or ordinary shares, you should consult your tax advisor about the U.S. tax consequences of holding and disposing of the Delhaize Group ADRs or ordinary shares.

Certain U.S. Tax Consequences of Ownership of Delhaize Group ADRs or Ordinary Shares

Ownership of ADRs.For U.S. federal income tax purposes, U.S. Holders of Delhaize Group ADRs will generally be treated as the owners of the Delhaize Group ordinary shares underlying the ADRs.

A “U.S. Holder” means a holder of Delhaize Group ADRs or ordinary shares that is:

^(a)

a citizen or resident of the United States;

^(b)

a corporation or other entity taxable as a corporation, created in or organized under the laws of the United States, any state thereof, or the District of Columbia;

^(c)

an estate the income of which is subject to U.S. federal income tax regardless of its source; or

^(d)

a trust if a U.S. court can exercise primary supervision over the administration of such trust, and one or more U.S. persons have the authority to control all of the substantial decisions of such trust.

Taxation of Distributions.The gross amount of any distributions of cash or property with respect to Delhaize Group’s ordinary shares, including amounts withheld in respect of Belgian withholding taxes, will be included in income by a U.S. Holder as foreign source dividend income at the time of receipt to the extent such distributions are made from the current and accumulated earnings and profits, as determined under U.S. federal income tax principles, of Delhaize Group. In the case of a U.S. Holder of Delhaize Group ADRs, the time of receipt of such a distribution generally will be the date of receipt by the depositary. Dividends paid to a non-corporate U.S. Holder in tax years beginning on or after January 1, 2013 that constitute “qualified dividend income” are taxable currently at a maximum income tax rate of 20%, provided that certain holding period and other requirements are met. Dividends paid to U.S. corporate holders with respect to Delhaize Group ordinary shares or ADRs will not be eligible for the dividends received deduction. To the extent, if any, that the amount of any distribution by Delhaize Group exceeds current and accumulated earnings and profits, as determined under U.S. federal income tax principles, it will be treated first as a tax-free return of capital to the extent of the U.S. Holder’s tax basis in Delhaize Group ordinary shares or ADRs, as the case may be, and thereafter as capital gain.

Subject to certain limitations, a U.S. Holder may claim a foreign tax credit against its federal income taxes for Belgian tax withheld from dividends. U.S. Holders who do not choose to claim a foreign tax credit may instead claim a deduction for Belgian tax withheld, in computing taxable income. Under the Internal Revenue Code, the limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. U.S. Holders should consult their tax advisors regarding the application of these rules. Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the 20% maximum income tax rate described above.

If dividends are paid in euros, the amount of the dividend distribution includible in the income of a U.S. Holder will be the U.S. dollar value of the payments made in euros, determined at the spot exchange rate between euros and U.S. dollars on the date the dividend is includible in the income of the U.S. Holder, regardless of whether the payment is in fact converted into U.S. dollars. Generally, gain or loss, if any, resulting from currency fluctuations during the period from the date the dividend is paid to the date such payment is converted into U.S. dollars will be treated as ordinary gain or loss. A U.S. Holder may be required to recognize foreign currency gain or loss on the receipt of a refund in respect of Belgian withholding tax to the extent the U.S. dollar value of the refund differs from the U.S. dollar equivalent of that amount on the date of receipt of the underlying dividend. Generally, the gain or loss will be income or loss from sources within the U.S. for foreign tax credit limitation purposes.

Disposition.A U.S. Holder generally will recognize gain or loss on the sale or exchange of Delhaize Group ordinary shares or Delhaize Group ADRs equal to the difference between the amount realized on such sale or exchange and the U.S. Holder’s tax basis in the Delhaize Group ordinary shares or ADRs, as the case may be. Any gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the Delhaize Group ordinary shares or ADRs, as the case may be, were held for more than one year. For non-corporate U.S. Holders, long-term capital gains recognized in tax years beginning on or after January 1, 2013 are currently subject to a maximum U.S. federal income tax rate of 20%. The deduction for capital losses is subject to limitations. A gain or loss, if any, recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. The deductibility of losses is subject to limitations.

Medicare Tax.Under the “Health Care and Education Reconciliation Act of 2010,” dividends received or capital gains recognized by individuals and trusts with respect to the Delhaize Group ordinary shares of Delhaize Group ADRs may be subject to a new 3.8% “Medicare Tax” imposed for tax years beginning after 2012. This tax will generally apply to the net investment income of individuals and trusts if the adjusted gross income of such taxpayers exceeds certain threshold amounts. The threshold amounts are $250,000 in the case of married couples filing joint tax returns and $200,000 in the case of single individuals. The threshold amount for trusts is where the highest marginal income tax bracket for trusts begins.

Passive Foreign Investment Company.U.S. Holders should be aware that special U.S. tax laws would apply to U.S. Holders of Delhaize Group ordinary shares and ADRs if Delhaize Group is characterized as a passive foreign investment company (“PFIC”). Delhaize Group believes that it is not, nor will it become, a PFIC. However, since PFIC status is a factual matter that must be determined annually, Delhaize Group can provide no assurance as to such conclusion.

U.S. Backup Withholding and Information Reporting.A U.S. Holder may, under certain circumstances, be subject to certain information reporting requirements and backup withholding tax at a current rate of 28% with respect to dividends paid on the Delhaize Group ordinary shares or ADRs, or the proceeds of sale of Delhaize Group ordinary shares or ADRs, unless such U.S. Holder (a) is a corporation or comes within certain other exempt categories, and when required, demonstrates this fact or (b) provides a correct taxpayer identification number, certifies that such U.S. Holder is not subject to backup withholding and otherwise complies with applicable requirements of the backup withholding rules. A U.S. Holder who does not provide a correct taxpayer identification number may be subject to penalties imposed by the U.S. Internal Revenue Service. Any amount withheld under these rules will

generally be creditable against the holder’s U.S. federal income tax liability. Under recent legislation, certain U.S. holders will be required to report information with respect to Delhaize Group ordinary shares or ADRs that are held through foreign accounts. U.S. Holders who fail to report information required could become subject to substantial penalties. Holders are advised to consult their own tax advisors as to the applicability of the information reporting and backup withholding rules to their ownership and disposition of the Delhaize Group ordinary shares or ADRs.

Certain Belgian Tax Consequences of Ownership of Delhaize Group ADRs or Ordinary Shares

Ownership of ADRs.In addition to the assumptions mentioned above, it is also assumed in this discussion that for purposes of the domestic Belgian tax legislation, the owners of Delhaize Group ADRs will be treated as the owners of Delhaize Group ordinary shares represented by such ADRs and that the ADRs will be treated as the shares represented by such ADRs. Therefore, in this discussion no distinction is made between ordinary shares and ADRs and reference is only made to ADRs, unless otherwise stipulated. However, the above assumption has not been confirmed or verified with the Belgian Tax Administration.

Taxation of distributions.For Belgian income tax purposes, dividends include:

^(a)

all benefits from shares attributed to the shareholders by or on behalf of the Company, in any form whatsoever, including liquidation and redemption proceeds; and

^(b)

reimbursements of share capital and issuance premiums (except for reimbursements carried out in accordance with the provisions of the Belgian Companies Code and to the extent the statutory capital and issue premiums qualify as so-called fiscal capital).

Generally, dividends distributed by a Belgian resident company are subject to a 25% withholding tax under Belgian domestic law. However, redemption proceeds paid on shares listed on a regulated market (such as Eurolist by Euronext Brussels) are, in principle, exempted from the 25% Belgian withholding tax provided the transaction was carried out on Eurolist by Euronext or another similar stock market. A 10% withholding tax is due on liquidation proceeds. The dividends distributed with respect to the ADRs will be subject to a 25% withholding tax rate.

Withholding Tax Reduction Under Belgium-United States Tax Treaty.Under the Belgium-United States tax treaty, the Belgian withholding tax will be reduced to 15% of the gross amount of the dividends if the U.S. Holder, a resident of the United States for purposes of the treaty, is the beneficial owner of the Delhaize Group ADRs and is entitled to the benefits of the treaty under the limitation of benefits article included in the treaty. The rate is further reduced to 5% if the U.S. Holder owns directly at least 10% of the voting stock. No withholding tax is however applicable if the beneficial owner of the dividend is i) a company, resident of the U.S. that has owned directly shares representing at least 10% of the capital of Delhaize Group for a 12-month period ending on the date the dividend is declared, or ii) a pension fund, resident of the U.S. provided that the dividends are not derived from carrying on a business by the pension fund or through an associated enterprise.

Generally, the full Belgian withholding tax must be withheld by Delhaize Group (i.e., 25% of the gross amount of the dividends, without taking into consideration the applicable treaty rate). Qualifying U.S. Holders may make a claim for reimbursement of the amounts withheld in excess of the treaty rate by filing a Form 276 Div.-Aut. with the Bureau Central de Taxation Bruxelles-Etranger at the following address: FINTO, Bureau Central de Taxation Bruxelles-Etranger, Boulevard du Jardin Botanique 50 (18 étage P) bte 3429, B-1000 Brussels, Belgium (phone: +32 2 576 90 09, fax: +32 2 576 17 78,e-mail: bct.cd.bruxelles.etr@minfin.fed.be). As a general rule, the reduced treaty rate can also be obtained at source. A U.S. Holder should file, within eight days following the attribution of the dividend, a duly completed Form 276 Div.-Aut. with Delhaize Group. U.S. Holders should consult their own tax advisors as to whether they qualify for the reduced withholding upon the payment or attribution of dividends, and as to the procedural requirements for obtaining the reduced withholding rate immediately at source upon the attribution or payment of the dividends or through the filing of a claim for reimbursement.

Withholding Tax Reduction under Belgian tax law.Provided that the required formalities are complied with, dividends paid by Delhaize Group to certain U.S. pension funds are exempted from withholding tax pursuant to Belgian domestic tax law, subject to the following cumulative conditions: they are neither conducting a business nor engaged in any activity of a lucrative nature, their statutory purpose is limited to the management and investment of funds raised in order to pay statutory or complementary pensions, and they are exempted from income tax in the United States.

Disposition.According to the Belgium-United States tax treaty, capital gains derived by a U.S. Holder from the sale, exchange or other disposition of ADRs are exempt from Belgian tax, provided such U.S. Holder qualifies as a resident of the United States who is entitled to the benefits of this treaty and the ADRs do not form part of a business property of a Belgian permanent establishment.

Inheritance Duty and Gift Tax.A transfer of Delhaize Group ADRs by reason of death will not be subject to Belgian inheritance duty provided that the deceased is not domiciled in Belgium and does not have the seat of his estate or fortune in Belgium at the time of his death.

A transfer of Delhaize Group ADRs by gift will be subject to Belgian gift taxes only if the deed incorporating the gift is registered in Belgium. Gifts executed by a Belgian notarial deed must be registered in Belgium and will consequently be subject to gift tax.

Belgian Tax on Stock Market Transactions.The tax on stock market transactions (taxe sur les opérations de bourse, or “TOB”) is not due from non-Belgian resident investors acting for their own account if they provide a certificate evidencing their non-resident status.

The TOB is due when investors purchase or sell shares through a Belgian professional intermediary. The TOB is due in the amount of 0.25% (but limited to €740 per transaction and per party) on the purchase and on the sale in Belgium of existing shares of a Belgian company. Under current Belgian tax law, this rate and this maximum amount will reduce to 0.22% and € 650 for transactions occurring as from January 1, 2015.

The following persons do not need to pay the TOB:

•

professional intermediaries referred to in Article 2, 9° and 10° of the Law of August 2, 2002 acting for their own account;

•

insurance companies referred to in Article 2, §1° of the Law of July 9, 1975 acting for their own account;

•

pension funds referred to in Article 2, 1 of the Law of October 27, 2006 acting for their own account;

•

undertakings for collective investment referred to in Part II of the Law of July 20, 2004 acting for their own account; and

•

non-residents, acting for their own account, upon delivery of a certificate of non-residence.

No Belgian tax on stock market transactions will thus be due by U.S. Holders on the subscription, purchase or sale of ADRs, if the U.S. Holders are acting for their own account. In order to benefit from this exemption, the U.S. Holders must file with the Belgian professional intermediary a certificate evidencing that they are non-residents for Belgian tax purposes.

Belgian Tax on Conversion of Bearer Securities.The Law dated 28 December 2011 “on various provisions” introduced a tax on the conversions of bearer securities into either registered or dematerialized securities according to the Law of 14 December 2005 introducing a gradual abolition of bearer securities. The tax rate laid down by this Law amounts to 1% for conversions occurred during 2012 and to 2% for conversions taking place in 2013.

DOCUMENTS ON DISPLAY

Copies of this Annual Report on Form 20-F of Delhaize Group, the exhibits referred to within this Annual Report and our Articles of Association are available for review upon request at the corporate office of Delhaize Group located at Square Marie Curie 40, 1070 Brussels, Belgium (tel. +32-2-412-2151). In addition, Delhaize Group files reports and other information with the SEC. Any documents that Delhaize Group files with the SEC may be read and copied at the SEC’s public reference rooms at 100 F Street, N.E., Washington, D.C. 20549. The SEC also maintains a website atwww.sec.gov that contains reports and other information regarding companies that file electronically with the SEC. This Annual Report on Form 20-F and other information submitted electronically to the SEC by Delhaize Group may be accessed through the SEC’s website.

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information About Market Risk

See the information under “Factors Affecting Financial Condition and Results of Operations” located in Item 5 “Operating and Financial Review and Prospects” above.

Exchange Rates

Fluctuations in the exchange rate between the euro and the U.S. dollar will affect the U.S. dollar price of Delhaize Group ADRs that are listed on the New York Stock Exchange. In addition, since any cash dividends that Delhaize Group pays to its shareholders will be denominated in euros, exchange rate fluctuations will affect the U.S. dollar amounts that owners of ADRs will receive on conversion of dividends.

See the information under the headings entitled “Selected Financial Data — Exchange Rates” and “Risk Factors — Risks Relating to Our Securities and Our Incorporation in Belgium” under Item 3 “Key Information” and the heading titled “Factors Affecting Financial Condition and Results of Operations” under Item 5 “Operating and Financial Review and Prospects.”

Exchange Controls

There are no foreign exchange controls in place in Belgium. The amount of cash payments that may be remitted by Delhaize Group to residents of the United States is not legally capped.

However, Delhaize group is in principle under an obligation to report to the National Bank of Belgium certain cross-border payments, transfers of funds, investments and other transactions in accordance with applicable balance-of-payments statistical reporting obligations. Where a cross-border transaction is carried out by a Belgian credit institution on behalf of Delhaize Group, the credit institution will in certain circumstances be responsible for the reporting obligations.

Ownership of Delhaize Group Shares

The European Takeover Directive 2004/25/CE of 21 April 2004 has been implemented in Belgium through the law of 1 April 2007 on public takeovers (the Takeover Law), the Royal Decree of 27 April 2007 on public takeovers (the Takeover Decree) and the Royal Decree of 27 April 2007 on squeeze-out bids. Most provisions of this new takeover regime entered into force on 1 September 2007.

The main regulatory authority for public bids in Belgium is the Financial Services and Markets Authority (FSMA). It controls compliance with the applicable rules by all parties to bids and, in practice, interprets the rules in accordance with their underlying purpose.

The Takeover Decree provides specific rules for voluntary bids and mandatory bids.

Voluntary bids

The rules of the Belgian Takeover Decree on voluntary bids will apply where there is a public offer in Belgium to acquire securities in Delhaize Group. For the purpose of the Takeover Law, a public takeover is an offer to holders of securities of a company aimed at acquiring all or part of their securities. The test is whether the bid is public for Belgian law purposes. Under the Takeover Law, a bid is deemed to be public in Belgium if it meets either of the following conditions:

^(a)

a communication is made in Belgium in any form and by any means presenting sufficient information about the terms of the bid to enable a holder of securities to decide whether to transfer its securities, and this communication is made by the bidder (or by a person acting on behalf of or in concert with the bidder); or

^(b)

the bidder (or a person acting on behalf of or in concert with the bidder) uses any advertising medium (including circulars or any standard documents, whether for pure information or for solicitation purposes, even when addressed personally to specific people) that announces or recommends the bid.

For the purposes of the conditions set out above, any person receiving either direct or indirect remuneration in connection with the bid is deemed to be acting on behalf of or in concert with the bidder.

Despite this, the following offers made in Belgium are not considered public under Belgian law:

^(c)

offers for securities held solely by ‘qualified investors’ within the meaning of article 10 of the law of 16 June 2006 relating to public offerings of securities and the admission of securities to trading on regulated markets (which implements in Belgium the EU Prospectus Directive 2003/71/EC of 4 November 2003);

^(d)

offers to fewer than 100 persons, other than ‘qualified investors’ within the meaning of the law of 16 June 2006 referred to above; and

^(e)

offers for securities whose denomination per unit amounts to at least 50,000.

Mandatory bids

Under the regime applicable from 1 September 2007, a mandatory takeover bid must be launched where a person (and/or persons acting together) acquires more than 30% of the voting securities in a Belgian company whose securities are admitted to trading on a regulated market, such as Euronext Brussels. The Takeover Decree provides for certain exemptions to the obligation to launch a mandatory bid when the 30% threshold is exceeded.

The price to be offered to shareholders in a mandatory bid must be at least equal to the higher of:

^(a)

the highest price paid for the securities subject to the bid by the bidder (or persons acting in concert with it) during the 12 months preceding the bid announcement; and

^(b)

the weighted average market price of such securities during the 30 calendar days preceding the event triggering the obligation to launch the mandatory bid (i.e., when the 30% threshold is reached).

Prior to making a bid, a bidder must issue a prospectus which must be approved by the FSMA.

In case of a public takeover bid, the transaction is subject to approval by the European Commission under the EC Merger Regulation if:

^(a)

the combined aggregate world-wide turnover of the bidder and the target to be acquired exceeds €5 billion; and

^(b)

the European Community-wide turnover of each of the bidder and the target to be acquired exceeds €250 million.

provided, however, that the transaction is not subject to approval by the European Commission where each of the bidder and the target to be acquired achieves more than two-thirds of its aggregate European Community-wide turnover within one and the same member state;

or if:

^(a)

the combined aggregate worldwide turnover of the bidder and the target to be acquired exceeds €2.5 billion;

^(b)

the European Community-wide turnover of each of the bidder and the target to be acquired exceeds €100 million;

^(c)

in each of at least three Member States, the combined aggregate turnover of the bidder and the target to be acquired exceeds €100 million; and

^(d)

in each of at least three Member States mentioned in (c) above, the aggregate turnover of each of the bidder and the target to be acquired exceeds €25 million;

For purposes of the EU Merger Regulation, the relevant turnover is the amount derived from the sale of products and the provision of services in the previous financial year (subject to certain adjustments) and the turnover of the bidder is the aggregate turnover of the group or person that controls the bidder and of all entities controlled by that group or person.

The acquisition of a business through a public takeover bid that does not fall within the scope of the EU Merger Regulation may be subject to approval by one or several national competition authorities. It will be subject to approval by the Belgian Competition Authority under the Belgian Competition Act if:

(1)

the combined aggregate turnover in Belgium of the bidder and the target to be acquired exceeds €100 million; and

(2)

the turnover in Belgium of each of the bidder and the target to be acquired exceeds €40 million.

For purposes of the Belgian Competition Act, the relevant turnover is the amount derived from the sale of products and the provision of services in the previous financial year on the Belgian market (subject to certain adjustments) and the turnover of the bidder is the aggregate turnover of the group or person that controls the bidder and of all entities controlled by that group or person.

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Reference is made to the disclosure under the subheading “Item 10. Additional Information — Summary of Provisions of the Articles of Association and Other Matters — Description of Delhaize Group American Depositary Shares — Fees and Expenses Payable by Delhaize Group ADS Holders” and “— Depositary Payments to Delhaize Group,” which is incorporated by reference herein.

PART II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Annual Report on Form 20-F. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as the term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting, even when determined to be effective, may not prevent or detect all misstatements and can only provide reasonable assurance with respect to the reliability of financial reporting.

Our management, including our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of internal control over financial reporting using the criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2012.

Attestation Report of the Registered Public Accounting Firm

DELOITTE Bedrijfsrevisoren / Réviseurs d’Entreprises BV o.v.v.e. CVBA/SC s.f.d. SCRL, the independent registered public accounting firm that audited the financial statements included in this Annual Report, has issued an attestation report on internal control over financial reporting on page F-1 of this report.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting, as the term is defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act, that occurred during the period covered by this Annual Report on Form 20-F that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16.

[RESERVED]

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that Mr. Jack Stahl, Ms. Claire Babrowski, Jean-Pierre Hansen and Baron Vansteenkiste are “audit committee financial experts” as defined in Item 16A of Form 20-F under the Exchange Act. Our board of directors has also determined that all members of our audit committee are “independent” as defined in the listing standards of the New York Stock Exchange and the SEC rules under the Exchange Act.

ITEM 16B.

CODE OF ETHICS

On January 13, 2010 our Board of Directors approved our revised and restated code of ethics, as defined in Item 16B of Form 20-F, which we refer to as the Delhaize Group Guide for Ethical Business Conduct. Our Guide for Ethical Business Conduct is applicable to all our employees and directors, including our Chief Executive Officer, our Chief Financial Officer, and other senior financial officers. We filed our Guide for Ethical Business Conduct with the SEC as Exhibit 11.1 to our Annual Report on Form 20-F on June 28, 2010. Our Guide for Ethical Business Conduct is also posted on our website and may be accessed atwww.delhaizegroup.com.

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees and Services.The following table details the aggregate fees of our principal accountant, Deloitte Réviseurs d’Entreprises SC sfd SCRL, and its affiliates with respect to the last two fiscal years for various services:


Type of Services Provided (amounts in euros)	2012		2011
Audit Fees^(a)		2,974,143		2,701,300
Audit-Related Fees^(b)		106,289		52,175
Tax Fees^(c)		145,024		110,275
All Other Fees^(d)		16,311		365,682

^(a)

Audit feesfor the years ended December 31, 2012 and 2011 consist, for purposes of U.S. law, of fees for professional services rendered for the audits and reviews of the consolidated financial statements of Delhaize Group and other services normally provided in connection with statutory and regulatory filings, which mainly include the statutory audits of financial statements of Delhaize Group subsidiaries.

^(b)

Audit-related feesfor the years ended December 31, 2012 and 2011 consist, for purposes of U.S. law, of fees for services that are traditionally performed by the independent accountants. These services include consultations concerning financial accounting and reporting, and the issuance of comfort letters.

^(c)

Tax feesfor the year ended December 31, 2012 and 2011 consist of fees for tax compliance, tax advice and tax planning.

^(d)

All other fees for the year ended December 31, 2012 and 2011 consist primarily of fees for consulting services.

All audit related fees and tax fees for the years ended December 31, 2012 and 2011 were pre-approved under the pre-approval policies of the Audit Committee.

Audit Committee Pre-Approval Policies and Procedures.Our Board of Directors has adopted a Delhaize Group Audit Committee Pre-Approval Policy that sets forth procedures and conditions for pre-approving audit, audit-related and non-audit services performed by a public accounting firm that acts as the statutory independent registered public auditor (including affiliates, the “Auditor”) responsible for auditing the consolidated and unconsolidated financial statements of Delhaize Group and its subsidiaries and affiliates. The Audit Committee may delegate pre-approval authority to one or more of its independent members, and approval by such member or members within the parameters of the policy will constitute approval of the Audit Committee. The member or members to whom such authority is delegated must report any pre-approval decisions to the Audit Committee at its next meeting. Pre-approved fee levels for all services to be provided by the Auditor to the Company and its subsidiaries are established periodically by the Audit Committee. Any proposed services exceeding these levels will require separate pre-approval by the Audit Committee. With respect to each proposed pre-approved service, the Auditor will provide appropriate documentation, which will be provided to the Audit Committee, regarding the specific services to be provided.

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

The following table sets forth certain information related to purchases made by Delhaize Group of its shares or ADSs (in thousands, except the number of shares):


Period	Total Number of Shares Purchased		Average Price Paid per Share (EUR)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Euro Value of Shares that May Yet Be Purchased under the Plans or Programs (in millions) (b)
April 2013^(a)		—		—		—		87
March 2013		—		—		—
February 2013		—		—		—
January 2013		—		—		—
December 2012		—		—		—
November 2012		—		—		—
October 2012		—		—		—
September 2012		—		—		—
August 2012		—		—		—
July 2012		—		—		—
Total		—		—		—

^(a)	Through April 2, 2013.

^(b)

In May 2004, Delhaize Group’s Board of Directors approved the repurchase of up to €200 million of the Company’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 (see note (c), to satisfy exercises under the stock option plans that Delhaize Group offers its employees. No time limit has been set for these repurchases and they may be discontinued at any time. On August 3, 2011, the Board of Directors approved the increase of the amount remaining for repurchases under the May 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.

ITEM 16F.

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

ITEM 16G.

CORPORATE GOVERNANCE

Disclosure in accordance with the listing standards of the New York Stock Exchange (NYSE)

Delhaize Group, as a non-U.S. company listed on the New York Stock Exchange (“NYSE”), is permitted to follow home country practice in lieu of certain corporate governance provisions of the NYSE applicable to U.S. domestic companies listed on the NYSE. In accordance with SEC and NYSE requirements, Delhaize Group must disclose any significant ways in which its corporate governance practices differ from those followed by U.S. domestic companies under NYSE listing standards. Delhaize Group believes that its corporate governance practices are consistent with those followed by U.S. domestic companies under NYSE listing standards, but notes that one member of the Remuneration and Nomination Committee, Hugh G. Farrington, does not satisfy the independence requirements of the Belgian Companies Code applicable to Delhaize Group because Mr. Farrington has been compensated formerly as an executive of our subsidiary Hannaford Brothers. While the NYSE listing standards require that such committee be composed entirely of independent directors, the NYSE listing standards do not indefinitely disqualify a director from being deemed independent as a result of being compensated formerly as an executive of the listed company or any subsidiary thereof. A description of the differences between Delhaize Group’s corporate governance practices and those applicable to U.S. companies as required by the NYSE corporate governance listing standards is also available on our website athttp://www.delhaizegroup.com/en/CorporateGovernance.aspx.

Belgian Corporate Governance Code Declaration

We, like other publicly traded companies in Belgium, are subject to the Belgian Code on Corporate Governance, which we refer to as the Corporate Governance Code, that recommends specific governance practices. In line with the “comply-or-explain” principle of the Corporate Governance Code, we concluded in 2012 that Delhaize Group was in compliance with the provisions of the Corporate Governance Code.

ITEM 16H.

MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17.

FINANCIAL STATEMENTS

Not applicable. See Item 18 “Financial Statements” below.

ITEM 18.

FINANCIAL STATEMENTS

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

AT DECEMBER 31, 2012, 2011 AND 2010 AND FOR EACH OF THE THREE YEARS

IN THE PERIOD ENDED DECEMBER 31, 2012.


Consolidated Balance Sheet			F-2

Consolidated Income Statement			F-4

Consolidated Statement of Comprehensive Income			F-5

Consolidated Statement of Changes in Equity			F-6

Consolidated Statement of Cash Flows			F-8

Notes to the Financial Statements			F-9

ITEM 19.

EXHIBITS


Exhibit No.		Description

1.1		Articles of Association of Delhaize Group (English translation)

2.1		Indenture, dated as of April 15, 2001, by and among Delhaize America, Food Lion, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.1 to Delhaize America’s current report on Form 8-K/A (File No. 1-15275) filed with the SEC on April 26, 2001)

2.2		First Supplemental Indenture, dated as of April 19, 2001, by and among Delhaize America, Food Lion, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.2 to Delhaize America’s current report on Form 8-K/A (File No. 1-15275) filed with the SEC on April 26, 2001)

2.3		Second Supplemental Indenture, dated as of September 6, 2001, by and among Delhaize America, Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4(e) to Delhaize America’s Registration Statement on Form S-4 (File No. 333-69520) filed with the SEC on September 17, 2001)

2.4		Form of Third Supplemental Indenture, dated as of November 15, 2001, by and among Delhaize America, Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Shop N Save-Mass., Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4(f) of Amendment No. 2 to Delhaize America’s Registration Statement on Form S-4 (File No. 333-69520) filed with the SEC on November 15, 2001)

2.5		Fourth Supplemental Indenture, dated March 10, 2004 and effective as of December 31, 2003, by and among Delhaize America, Inc., Food Lion, LLC, Hannaford Bros. Co, Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Shop ‘n Save-Mass, Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4(h) to Delhaize America’s Annual Report on Form 10-K (File No. 0-6080) filed with the SEC on April 2, 2004)

2.6		Fifth Supplemental Indenture, dated as of May 17, 2005, by and among Delhaize America, Food Lion, LLC, Hannaford Bros. Co., Kash N’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods Of South Burlington, Inc., Shop ‘N Save-Mass., Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp., Victory Distributors, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4 to Delhaize America’s Quarterly Report on Form 10-Q filed May 17, 2005)

2.7		Agreement of Resignation, Appointment and Acceptance, dated as of April 19, 2006, among Delhaize America, the guarantors signatory thereto, and The Bank of New York, as resigning trustee, and The Bank of New York Trust Company, N.A., as new trustee (incorporated by reference to Exhibit 4(k) to Delhaize America’s Annual Report on Form 10-K filed March 30, 2007)

2.8		Sixth Supplemental Indenture, dated as of May 21, 2007, among Delhaize America, Inc, as issuer, Delhaize Group, Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Shop ‘n Save-Mass, Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp. and Victory Distributors, Inc. and The Bank of New York Trust Company N.A., as Trustee, to that certain Indenture, dated as of April 15, 2001 (incorporated by reference to Exhibit 99.5 to Delhaize Group’s Report on Form 6-K, filed on May 29, 2007)


Exhibit No.		Description

2.9		Seventh Supplemental Indenture, dated as of December 17, 2009, among Delhaize America, Inc., Delhaize Group, Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Boney Wilson & Sons, Inc., J. H. Harvey Co., LLC, Hannaford Licensing Corp., Victory Distributors, Inc., and The Bank of New York Mellon Trust Company, N.A., as Trustee, to that certain Indenture, dated as of April 15, 2001 (incorporated by reference to Exhibit 2.9 to Delhaize Group’s Annual Report on Form 20-F, filed on June 28, 2010)

2.10		Indenture, dated as of June 27, 2007, by and among Delhaize Group and The Bank of New York, as trustee (incorporated by reference to Exhibit 2.11 to Delhaize Group’s Annual Report on Form 20-F, filed on June 29, 2007)

2.11		Indenture, dated as of June 27, 2007, by and among Delhaize Group and The Bank of New York, as trustee (incorporated by reference to Exhibit 2.12 to Delhaize Group’s Annual Report on Form 20-F, filed on June 29, 2007)

2.12		Deposit Agreement, dated as of June 27, 2007, among Delhaize Group, The Bank of New York and the owners of book-entry interests (incorporated by reference to Exhibit 2.13 to Delhaize Group’s Annual Report on Form 20-F, filed on June 29, 2007)

2.13		Indenture, dated as of October 8, 2010, by and between Delhaize Group and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.3 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011)

2.14		Form of Global Security representing Delhaize Group’s 5.70% Senior Notes due 2040 (incorporated by reference to Exhibit 4.4 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011)

2.15		Deposit Agreement, dated as of October 8, 2010, by and between Delhaize Group and The Bank of New York Mellon and the owners of book-entry interests (incorporated by reference to Exhibit 4.5 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011)

2.16		Domiciliary Agency Agreement, dated as of October 8, 2010, by and between Delhaize Group and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.6 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011)

4.1		Agreement and Plan of Share Exchange dated November 16, 2000 by and between Delhaize Group and Delhaize America, as amended (incorporated by reference to Annex A to Delhaize Group’s registration statement on Form F-4 (File No. 333-13302) filed with the SEC on March 23, 2001)

4.2		Fiscal Agency Agreement dated May 18, 1999 between Delhaize Group, as issuer, Banque Bruxelles Lambert S.A., as fiscal agent, and Banque Bruxelles Lambert S.A. and Banque Générale du Luxembourg S.A., as paying agents (incorporated by reference to Exhibit 10.2 to Delhaize Group’s registration statement on Form F-4 (File No. 333-13302) filed with the SEC on March 23, 2001)

4.3		Revolving Credit Agreement dated November 4, 1999 among Delhaize Group, Delhaize The Lion Coordination Center and Fortis Banque (incorporated by reference to Exhibit 10.4 to Delhaize Group’s registration statement on Form F-4 (File No. 333-13302) filed with the SEC on March 23, 2001)

4.4		Fiscal Agency Agreement dated February 13, 2001 between Delhaize “The Lion” Nederland B.V., as issuer, Delhaize Group, as guarantor, Fortis Bank nv-sa, as fiscal agent, and Banque Générale du Luxembourg S.A. and Fortis Bank nvsa, as paying agents (incorporated by reference to Exhibit 10.5 to Delhaize Group’s registration statement on Form F-4 (File No. 333-13302) filed with the SEC on March 23, 2001)

4.5		Fiscal Agency Agreement dated May 20, 2002 between Delhaize Finance B.V., as issuer, Delhaize Group, as guarantor, Fortis Bank NV-SA, as fiscal agent, and Banque Générale du Luxembourg S.A., Fortis Bank (Nederland) N.V. and Fortis Bank NV-SA, as paying agents (incorporated by reference to Exhibit 4.6 to Delhaize Group’s Annual Report on Form 20-F (File No. 333-13302) filed with the SEC on June 30, 2003)


Exhibit No.		Description

4.6		Cross Guarantee Agreement, dated May 21, 2007, by and among Delhaize Group, Delhaize America, Inc. Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Shop ‘n Save-Mass, Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp. and Victory Distributors, Inc. (incorporated by reference to Exhibit 99.2 to Delhaize Group’s Report on Form 6-K, filed on May 29, 2007)

4.7		Joinder Letter Agreement, dated December 18, 2009, by Delhaize US Holding, Inc., whereby Delhaize US Holding, Inc. agrees to be bound as a Guarantor by all of the terms, covenants and conditions set forth in the Cross-Guarantee Agreement (incorporated by reference to Exhibit 4.7 to Delhaize Group’s Annual Report on Form 20-F, filed on June 28, 2010)

4.8		Joinder Letter Agreement, dated April 3, 2013, by Bottom Dollar Food Holding, LLC, whereby Bottom Dollar Food Holding, LLC agrees to be bound as a Guarantor by all of the terms, covenants and conditions set forth in the Cross-Guarantee Agreement

4.9		Joinder Letter Agreement, dated April 3, 2013, by Bottom Dollar Food Northeast, LLC, whereby Bottom Dollar Food Holding, LLC agrees to be bound as a Guarantor by all of the terms, covenants and conditions set forth in the Cross-Guarantee Agreement

4.10		Joinder Letter Agreement, dated April 3, 2013, by Bottom Dollar Food Southeast, LLC, whereby Bottom Dollar Food Holding, LLC agrees to be bound as a Guarantor by all of the terms, covenants and conditions set forth in the Cross-Guarantee Agreement

4.11		Amended and Restated Deposit Agreement dated as of February 18, 2009, among Delhaize Group, Citibank, N.A. and the holders and beneficial owners of American depositary shares issued thereunder (incorporated by reference to Exhibit (a)(ii) to Delhaize Group’s Post Effective Amendment No. 1 to registration statement on Form F-6 (File No. 333-156798) filed with the SEC on April 23, 2013)

4.12		Form of Second Amended and Restated Deposit Agreement among Delhaize Group, Citibank N.A. and the holders and beneficial owners of American Depositary Shares issued thereunder (incorporated by reference to Exhibit (a)(i) to Delhaize Group’s Post Effective Amendment No. 1 to registration statement on Form F-6 (File No. 333-156798) filed with the SEC on April 23, 2013)

4.13		Transaction Agreement dated March 2, 2011, between Hitomi Financial Limited, Delhaize ‘The Lion’ Nederland B.V. and Delhaize Group SA. (incorporated by reference to Exhibit 4.9 to Delhaize Group’s Annual Report on Form 20-F (File No. 333-13302) filed with the SEC on June 24, 2011)

4.14		Facility Agreement dated April 15, 2011, among Delhaize Group SA/NV, the original borrowers party thereto, the original guarantors party thereto, the lenders party thereto, Fortis Bank SA/NV, Banc of America Securities Limited, Deutsche Bank AG, London Branch and J.P. Morgan PLC as bookrunning mandated lead arrangers (incorporated by reference to Exhibit 4.10 to Delhaize Group’s Annual Report on Form 20-F (File No. 333-13302) filed with the SEC on June 24, 2011)

8.1		Subsidiaries of Delhaize Group (as of December 31, 2012)

11.1		Delhaize Group Guide for Ethical Business Conduct (incorporated by reference to Exhibit 11.1 to Delhaize Group’s Annual Report on Form 20-F (File No. 333-13302) filed with the SEC on June 28, 2010)

12.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. § 7241)

12.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. § 7241)

13.1		Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)

15.1		Consent of Deloitte Réviseurs d’Entreprises SC sfd SCRL

15.2		Undertaking of Delhaize Group to file exhibits pursuant to Instruction 2(b)(i) as to exhibits to Form 20-F

100

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.


ETABLISSEMENTS DELHAIZE FRÈRES ET
CIE “LE LION” (GROUPE DELHAIZE)

BY:		/s/ Pierre-Olivier Beckers
		Pierre-Olivier Beckers
		President and Chief Executive Officer

Date: April 26, 2013

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the board of directors and shareholders of

Etablissements Delhaize Frères et Cie “Le Lion” (Groupe Delhaize) S.A.

We have audited the accompanying consolidated balance sheet of Etablissements Delhaize Frères et Cie “Le Lion” (Groupe Delhaize) S.A. and subsidiaries (“the Company”) as of December 31, 2012, 2011 and 2010, and the related consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and notes to the consolidated financial statements for each of the three years in the period ended December 31, 2012. We have also audited the Company’s internal control over financial reporting as of December 31, 2012, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with legal requirements and auditing standards applicable in Belgium, as issued by the “Institut des Réviseurs/Instituut van de Bedrijfsrevisoren” and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Etablissements Delhaize Frères et Cie “Le Lion” (Groupe Delhaize) S.A. and subsidiaries as of December 31, 2012, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), and as adopted by the European Union. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on the criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.

Diegem, Belgium

April 26, 2013

The statutory auditor

/s/ Michel Denayer

DELOITTE Bedrijfsrevisoren /Réviseurs d’Entreprises

BV o.v.v.e. CVBA / SC s.f.d. SCRL

Represented by Michel Denayer

F-1

Consolidated Balance Sheet

Consolidated Assets


(in millions of €)	Note		2012		2011⁽¹⁾		2010
Goodwill		6		3 189		3 414		2 828
Intangible assets		7		848		878		634
Property, plant and equipment		8		4 331		4 550		4 075
Investment property		9		116		83		60
Investment in securities		11		11		13		125
Other financial assets		12		19		18		17
Deferred tax assets		22		89		97		95
Derivative instruments		19		61		57		61
Other non-current assets				53		48		19

Total non-current assets				8 717		9 158		7 914
Inventories		13		1 401		1 717		1 460
Receivables		14		634		697		637
Income tax receivables				21		10		1
Investment in securities		11		93		93		43
Other financial assets		12		—		22		3
Derivative instruments		19		—		1		5
Prepaid expenses				79		56		44
Other current assets				41		50		37
Cash and cash equivalents		15		932		432		758

				3 201		3 078		2 988

Assets classified as held for sale		5.2		18		56		—

Total current assets				3 219		3 134		2 988
Total assets				11 936		12 292		10 902

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition (see Note 4.1).

F-2

Consolidated Liabilities and Equity


(in millions of €)	Note		2012			2011⁽¹⁾			2010
Share capital		16		51			51			51
Share premium		16		2 791			2 785			2 778
Treasury shares		16		(59	)		(65	)		(59	)
Retained earnings		16		3 646			3 728			3 426
Other reserves		16		(60	)		(47	)		(34	)
Cumulative translation adjustments		16		(1 178	)		(1 038	)		(1 094	)

Shareholders’ equity				5 191			5 414			5 068
Non-controlling interests		16		2			5			1

Total equity				5 193			5 419			5 069

Long-term debt		18.1		2 313			2 325			1 966
Obligations under finance leases		18.3		612			689			684
Deferred tax liabilities		22		570			624			543
Derivative instruments		19		10			20			16
Provisions		20, 21		369			289			233
Other non-current liabilities				70			98			68

Total non-current liabilities				3 944			4 045			3 510
Short-term borrowings		18.2		—			60			16
Long-term debt - current portion		18.1		156			88			40
Obligations under finance leases		18.3		62			61			57
Derivative instruments		19		4			—			—
Provisions		20, 21		88			76			52
Income taxes payable				19			57			17
Accounts payable				1 884			1 845			1 574
Accrued expenses		23		437			442			393
Other current liabilities				145			199			174

				2 795			2 828			2 323

Liabilities associated with assets held for sale		5.2		4			—			—

Total current liabilities				2 799			2 828			2 323

Total liabilities				6 743			6 873			5 833

Total liabilities and equity				11 936			12 292			10 902

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition (see Note 4.1).

F-3

Consolidated Income Statement


(in millions of €)	Note		2012			2011⁽¹⁾			2010
Revenues				22 737			21 110			20 850
Cost of sales		24, 25		(17 170	)		(15 749	)		(15 497	)

Gross profit				5 567			5 361			5 353
Gross margin				24.5	%		25.4	%		25.7	%
Other operating income		27		122			118			85
Selling, general and administrative expenses		24		(4 871	)		(4 497	)		(4 394	)
Other operating expenses		28		(428	)		(169	)		(20	)

Operating profit				390			813			1 024
Operating margin				1.7	%		3.9	%		4.9	%
Finance costs		29.1		(258	)		(203	)		(215	)
Income from investments		29.2		17			23			12

Profit before taxes and discontinued operations				149			633			821
Income tax expense		22		(24	)		(156	)		(245	)

Net profit from continuing operations				125			477			576
Result from discontinued operations (net of tax)		5.3		(22	)		(2	)		(1	)

Net profit				103			475			575
Net profit (loss) attributable to non-controlling interests				(2	)		—			1
Net profit attributable to equity holders of the Group (Group share in net profit)				105			475			574

(in €)
Earnings per share		31
Basic
Net profit from continuing operations				1.27			4.74			5.74
Group share in net profit				1.05			4.71			5.73
Diluted
Net profit from continuing operations				1.26			4.70			5.69
Group share in net profit				1.04			4.68			5.68

(in thousands)
Weighted average number of shares outstanding
Basic				100 777			100 684			100 271
Diluted				101 134			101 426			101 160

(1)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

F-4

Consolidated Statement of Comprehensive Income


(in millions of €)	Note		2012			2011⁽¹⁾			2010
Net profit				103			475			575

Deferred gain (loss) on discontinued cash flow hedge				—			—			—
Reclassification adjustment to net profit				—			—			1
Tax (expense) benefit				—			—			—

Deferred gain (loss) on discontinued cash flow hedge, net of tax		16, 19		—			—			1
Gain (loss) on cash flow hedge				2			—			23
Reclassification adjustment to net profit				4			(5	)		(15	)
Tax (expense) benefit				(2	)		2			(3	)

Gain (loss) on cash flow hedge, net of tax		16, 19		4			(3	)		5
Unrealized gain (loss) on financial assets available for sale				(1	)		6			3
Reclassification adjustment to net profit				(6	)		(4	)		(1	)
Tax (expense) benefit				1			—			—

Unrealized gain (loss) on financial assets available for sale, net of tax		16		(6	)		2			2
Actuarial gain (loss) on defined benefit plans				(16	)		(17	)		1
Tax (expense) benefit				4			7			(1	)

Actuarial gain (loss) on defined benefit plans, net of tax		16, 21		(12	)		(10	)		—
Exchange gain (loss) on translation of foreign operations				(140	)		53			263
Reclassification adjustment to net profit				—			—			—

Exchange gain (loss) on translation of foreign operations		16		(140	)		53			263

Other comprehensive income				(154	)		42			271
Attributable to non-controlling interests				(1	)		(1	)		—
Attributable to equity holders of the Group				(153	)		43			271

Total comprehensive income for the period				(51	)		517			846
Attributable to non-controlling interests		16		(3	)		(1	)		1
Attributable to equity holders of the Group				(48	)		518			845

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition (see Note 4.1).

F-5

Consolidated Statement of Changes in Equity


(in millions of €, except number of shares)
	Attributable to Equity Holders of the Group
	Issued Capital							Treasury Shares									Other Reserves
	Number of Shares		Amount		Share Premium			Number of Shares			Amount			Retained Earnings			Discontinued Cash Flow Hedge Reserve			Cash Flow Hedge Reserve			Available- for-sale Reserve		Actuarial Gains and Losses Reserve			Cumulative Translation Adjustment			Share- holders’ Equity			Non- controlling Interests			Total Equity
Balances at January 1, 2010		*100 870 626*		50		2 752			*955 586*			(54	)		3 044			(9	)		(6	)		2		(27	)		(1 360	)		4 392			17			4 409
Other comprehensive income		—		—		—			—			(1	)		—			—			5			2		(1	)		266			271			—			271
Net profit		—		—		—			—			—			574			—			—			—		—			—			574			1			575

Total comprehensive income for the period		—		—		—			—			(1	)		574			—			5			2		(1	)		266			845			1			846
Capital increases		684 655		1		25			—			—			—			—			—			—		—			—			26			—			26
Treasury shares purchased		—		—		—			441 996			(26	)		—			—			—			—		—			—			(26	)		—			(26	)
Treasury shares sold upon exercise of employee stock options		—		—		(11	)		(408 722	)		22			—			—			—			—		—			—			11			—			11
Excess tax benefit (deficiency) on employee stock options and restricted shares		—		—		1			—			—			—			—			—			—		—			—			1			—			1
Tax payment for restricted shares vested		—		—		(5	)		—			—			—			—			—			—		—			—			(5	)		—			(5	)
Share-based compensation expense		—		—		16			—			—			—			—			—			—		—			—			16			—			16
Dividend declared		—		—		—			—			—			(161	)		—			—			—		—			—			(161	)		(1	)		(162	)
Purchase of non-controlling interests		—		—		—			—			—			(31	)		—			—			—		—			—			(31	)		(16	)		(47	)

Balances at December 31, 2010		*101 555 281*		51		2 778			*988 860*			(59	)		3 426			(9	)		(1	)		4		(28	)		(1 094	)		5 068			1			5 069
Other comprehensive income		—		—		—			—			—			—			—			(3	)		2		(12	)		56			43			(1	)		42
Net profit		—		—		—			—			—			475			—			—			—		—			—			475			—			475

Total comprehensive income for the period		—		—		—			—			—			475			—			(3	)		2		(12	)		56			518			(1	)		517
Capital increases		336 909		—		13			—			—			—			—			—			—		—			—			13			—			13
Call option on own equity instruments		—		—		(6	)		—			—			—			—			—			—		—			—			(6	)		—			(6	)
Treasury shares purchased		—		—		—			408 138			(20	)		—			—			—			—		—			—			(20	)		—			(20	)

F-6


(in millions of €, except number of shares)
	Attributable to Equity Holders of the Group
	Issued Capital							Treasury Shares									Other Reserves
	Number of Shares		Amount		Share Premium			Number of Shares			Amount			Retained Earnings			Discontinued Cash Flow Hedge Reserve			Cash Flow Hedge Reserve			Available- for-sale Reserve			Actuarial Gains and Losses Reserve			Cumulative Translation Adjustment			Share- holders’ Equity			Non- controlling Interests			Total Equity
Treasury shares sold upon exercise of employee stock options		—		—		(10	)		(213 050	)		14			—			—			—			—			—			—			4			—			4
Excess tax benefit (deficiency) on employee stock options and restricted shares		—		—		1			—			—			—			—			—			—			—			—			1			—			1
Tax payment for restricted shares vested		—		—		(4	)		—			—			—			—			—			—			—			—			(4	)		—			(4	)
Share-based compensation expense		—		—		13			—			—			—			—			—			—			—			—			13			—			13
Dividend declared		—		—		—			—			—			(174	)		—			—			—			—			—			(174	)		—			(174	)
Non-controlling interests resulting from business combinations		—		—		—			—			—			—			—			—			—			—			—			—			15			15
Purchase of non-controlling interests		—		—		—			—			—			1			—			—			—			—			—			1			(10	)		(9	)

Balances at December 31, 2011⁽¹⁾		*101 892 190*		51		2 785			*1 183 948*			(65	)		3 728			(9	)		(4	)		6			(40	)		(1 038	)		5 414			5			5 419
Other comprehensive income		—		—		—			—			—			—			—			4			(6	)		(11	)		(140	)		(153	)		(1	)		(154	)
Net profit		—		—		—			—			—			105			—			—			—			—			—			105			(2	)		103

Total comprehensive income for the period		—		—		—			—			—			105			—			4			(6	)		(11	)		(140	)		(48	)		(3	)		(51	)
Capital increases		29 308		—		1			—			—			—			—			—			—			—			—			1			—			1
Treasury shares sold upon exercise of employee stock options		—		—		(6	)		(139 813	)		6			—			—			—			—			—			—			—			—			—
Tax payment for restricted shares vested		—		—		(2	)		—			—			—			—			—			—			—			—			(2	)		—			(2	)
Share-based compensation expense		—		—		13			—			—			—			—			—			—			—			—			13			—			13
Dividend declared		—		—		—			—			—			(177	)		—			—			—			—			—			(177	)		—			(177	)
Purchase of non-controlling interests		—		—		—			—			—			(10	)		—			—			—			—			—			(10	)		—			(10	)

Balances at December 31, 2012		*101 921 498*		51		2 791			*1 044 135*			(59	)		3 646			(9	)		—			—			(51	)		(1 178	)		5 191			2			5 193

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition (see Note 4.1).

F-7

Consolidated Statement of Cash Flows


(in millions of €)	Note		2012			2011			2010
Operating activities
Net profit attributable to equity holders of the Group (Group share in net profit)				105			475			574
Net profit attributable to non-controlling interests				(2	)		—			1
Adjustments for:
Depreciation and amortization				650			586			575
Impairment		28		288			135			14
Allowance for losses on accounts receivable				3			11			6
Share-based compensation		21.3		13			13			16
Income taxes		22		22			156			245
Finance costs				259			204			216
Income from investments				(17	)		(23	)		(12	)
Other non-cash items				(16	)		7			(2	)
Changes in operating assets and liabilities:
Inventories				291			(147	)		(108	)
Receivables				74			(10	)		(39	)
Prepaid expenses and other assets				(31	)		(15	)		(10	)
Accounts payable				54			(24	)		98
Accrued expenses and other liabilities				2			(4	)		16
Provisions				38			4			(24	)
Interest paid				(229	)		(196	)		(202	)
Interest received				10			11			11
Income taxes paid				(106	)		(77	)		(58	)

Net cash provided by operating activities				1 408			1 106			1 317
Investing activities
Business acquisitions, net of cash and cash equivalents acquired		4.1		(12	)		(591	)		(19	)
Business disposals, net of cash and cash equivalents disposed		5.1		3			—			—
Purchase of tangible assets (capital expenditures)		8, 9		(596	)		(675	)		(568	)
Purchase of intangible assets (capital expenditures)		7		(92	)		(87	)		(92	)
Sale of tangible and intangible assets				39			11			14
Sale and maturity of (investment in) debt securities, net				(1	)		72			(13	)
Purchase of other financial assets				—			(21	)		(2	)
Sale and maturity of other financial assets				22			28			15
Settlement of derivatives instruments				—			(2	)		—

Net cash used in investing activities				(637	)		(1 265	)		(665	)

Cash flow before financing activities				771			(159	)		652
Financing activities
Proceeds from the exercise of share warrants and stock options		16		(1	)		13			32
Purchase of call option on own equity instruments		16		—			(6	)		—
Treasury shares purchased		16		—			(20	)		(26	)
Purchase of non-controlling interests		4.2		(23	)		(10	)		(47	)
Dividends paid		17		(180	)		(173	)		(161	)
Dividends paid by subsidiaries to non-controlling interests				—			—			(1	)
Escrow maturities				—			2			2
Borrowing under long-term loans, net of financing costs				621			408			(1	)
Repayment of long-term loans				(564	)		(224	)		(42	)
Repayment of lease obligations				(54	)		(53	)		(49	)
Borrowings (repayments) of short-term loans, net				(60	)		(85	)		(49	)
Settlement of derivative instruments				(1	)		2			(1	)

Net cash used in financing activities				(262	)		(146	)		(343	)

Effect of foreign currency translation				(8	)		(21	)		10

Net (decrease) increase in cash and cash equivalents				501			(326	)		319
Cash and cash equivalents at beginning of period		15		432			758			439
Cash and cash equivalents at end of period		15		933	⁽¹⁾		432			758

(1)	Includes €1 million in assets classified as held for sale.

F-8

Notes to the Financial Statements

1.	General Information

The principal activity of Delhaize Group (also referred to, with its consolidated and associated companies, except where the context otherwise requires, as “we,” “us,” “our,” “the Group” and “the Company”) is the operation of food supermarkets. The Company is present in ten countries on three continents. The Group’s sales network also includes other store formats such as convenience stores. In addition to food retailing, Delhaize Group engages in food wholesaling to affiliated stores in its sales network and independent wholesale customers and in retailing of non-food products such as pet products.

The Company is a limited liability company incorporated and domiciled in Belgium, with its shares listed on NYSE Euronext Brussels and on the New York Stock Exchange (“NYSE”), under the symbols “DELB” and “DEG,” respectively.

The consolidated financial statements for the year ended December 31, 2012 as presented in this annual report were prepared under the responsibility of the Board of Directors and authorized for issue by the Board of Directors on March 6, 2013 subject to approval of the statutory non-consolidated financial statements by the shareholders at the Ordinary General Meeting to be held on May 23, 2013. In compliance with Belgian law, the consolidated financial statements will be presented for information purposes to the shareholders of Delhaize Group at the same meeting. The consolidated financial statements are not subject to amendment except conforming changes to reflect decisions, if any, of the shareholders with respect to the statutory non-consolidated financial statements affecting the consolidated financial statements.

2.	Significant Accounting Policies

2.1

Basis of Preparation

The consolidated financial statements comprise the financial statements of Delhaize Group and its subsidiaries as of December 31, 2012 except for the Delhaize Group’s U.S. subsidiaries for which the fiscal year ends the Saturday closest to December 31. Consequently, the consolidated results of Delhaize Group for 2012, 2011, and 2010 include the results of operations of its U.S. subsidiaries for the 52 weeks ended December 29, 2012, December 31, 2011 and January 1, 2011, respectively.

Delhaize Group’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and as adopted by the European Union (EU). Currently, the only difference between the effective IFRS as issued by the IASB and as adopted by the EU relates to certain paragraphs of IAS 39Financial Instruments: Recognition and Measurement, which are not mandatory applicable in the EU (so-called “carve-out”). Delhaize Group is not affected by the carve-out and therefore for the Group there is no difference between the effective IFRS as issued by the IASB and adopted by the EU. We further refer to the comments made in connection with the “Initial Application of New, Revised or Amended IASB Pronouncements” in Note 2.2 and “Standards and Interpretations Issued but not yet Effective” in Note 2.5.

These financial statements have been prepared under the historical cost convention except for derivative financial instruments, available-for-sale financial assets and financial liabilities being part of a designated fair value hedge relationship that have been measured at their relevant fair values, as disclosed in the corresponding notes. Assets and disposal groups classified as held for sale have been measured at the lower of carrying value and fair value less costs to sell.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 2.4.

2.2

Initial Application of New, Revised or Amended IASB Pronouncements

The accounting policies adopted are consistent with those of the previous financial year except for the following new, amended or revised IASB pronouncements that have been adopted as of January 1, 2012:

•

Amendments to IAS 12Income Taxes; and

•

Amendments to IFRS 7Disclosures – Transfers of Financial Assets.

The adoption of these new, amended or revised pronouncements did not have any material impact on the consolidated financial statements of the Group.

F-9

2.3

Summary of Significant Accounting Policies

The principle accounting policies applied in the preparation of these consolidated financial statements are described below. These policies have been consistently applied for all financial years presented except as explained in Note 2.2.

In the event of the presentation of discontinued operations, the comparative income statement is re-presented as if the operation presented as discontinued operations during the period had been discontinued from the start of the comparative period (see Note 5.3).

Principles of Consolidation

Subsidiaries are all entities - including special purpose entities - over which the Group has - directly or indirectly - the power to govern the financial and operating policies, which is generally accompanying a shareholding of more than half of the voting rights. The existence and effect of potential voting rights that would be exercisable or convertible at year-end, if any, are considered when assessing whether the Group controls another entity. All subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date such control ceases. For a list of all subsidiaries, see Note 36.

All intragroup balances and transactions are eliminated in full when preparing the consolidated financial statements.

Joint ventures are entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic, financial and operating decisions. Joint ventures are proportionally consolidated from the date joint control is established until such joint control ceases (see Note 36).

The Group currently holds no investments in entities over which Delhaize Group has significant influence, but no control (“associates”).

The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. Accounting policies of subsidiaries or joint ventures have been adjusted, where necessary, to ensure consistency with the policies adopted by the Group.

Non-controlling interests (also referred to as “minority interests”) represent the portion of profit or loss and net assets that is not held by the Group and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet, separately from the parent shareholders’ equity. Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions between shareholders and therefore neither have an impact on profit or loss (this applies also to related acquisition costs) nor on goodwill. The difference between fair value of any consideration received or paid and the relevant share acquired or disposed of the carrying value of net assets of the subsidiary is recorded directly in retained earnings.

Business Combinations and Goodwill

In accordance with IFRS 3, business combinations are accounted for using the acquisition method. Under this method, the cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree, that present ownership interests and that entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation, either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in “Selling, general and administrative expenses.” When Delhaize Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation based on the facts and circumstances at the acquisition date (except for lease and insurance agreements, which are classified on the basis of the contractual terms and other factors at the inception of the respective contract). This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss. Any contingent consideration to be transferred by the acquirer will be initially recognized and subsequently measured at fair value. Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss.

After initial recognition, goodwill is not amortized, but annually reviewed for impairment and whenever there is an indication that goodwill may be impaired. For the purpose of testing goodwill for impairment, goodwill is allocated to each of the Group’s cash generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Non-current Assets / Disposal Groups Held for Sale and Discontinued Operations

Non-current assets and disposal groups are classified and presented in the balance sheet as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use.

F-10

This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. When a subsidiary is held for sale, all of its assets and liabilities are classified as held for sale, when the conditions are met, even when the Group retains a non-controlling interest. Non-current assets that will be abandoned are excluded from the scope of IFRS 5.

Immediately before classification as held for sale, the assets (or components of a disposal group) are re-measured in accordance with the Group’s accounting policies. Thereafter, non-current assets (or disposal group) held for sale are measured at the lower of their carrying amount or fair value less costs to sell. If the impairment exceeds the carrying value of the non-current assets within the scope of IFRS 5Non-current Assets Held for Sale and Discontinued Operations measurement guidance, Delhaize Group recognizes a separate provision to reflect the difference in its financial statements. Non-current assets are not depreciated or amortized once classified as held for sale. See further details in Note 5.2.

A discontinued operation is a component of a business that either has been disposed of, or is classified as held for sale, and:

•

represents a separate major line of business or geographical area of operations;

•

is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or

•

is a subsidiary acquired exclusively with a view to resale.

When an operation is classified as a discontinued operation, the comparative income statements are re-presented as if the operation had been discontinued from the start of the comparative periods. The resulting profit or loss after taxes is reported separately in the income statements (see Note 5.3).

Translation of Foreign Currencies

•

Functional and presentation currency:Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). Delhaize Group’s financial statements are presented in (millions of) euros, the parent entity’s functional and the Group’s “presentation currency,” except where stated otherwise.

•

Foreign currency transactions and balances: Foreign currency transactions of an entity are initially translated into its functional currency and recognized in its financial records at the exchange rate prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are subsequently re-translated at the balance sheet date exchange rate into the functional currency of the entity. All gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are included in the income statement, except for exchange differences arising on monetary items that form part of a net investment in a foreign operation (i.e., items that are receivable from or payable to a foreign operation, for which settlement is neither planned, nor likely to occur in the foreseeable future), which are recognized in the “Cumulative translation adjustment” component of equity. Foreign exchange gains and losses that relate to financial liabilities are presented in the income statement within “Finance costs” (see Note 29.1), while gains and losses on financial assets are shown as “Income from investments” (see Note 29.2).

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as of the dates of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value is determined and gains or losses are included in the income statement except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognized directly in equity.

•

Foreign group entities: The results and balance sheets of all Group entities that have a functional currency different from the Group’s presentation currency are translated into the presentation currency as follows:

(a)

the balance sheets of foreign subsidiaries are converted to euros at the year-end exchange rate (closing exchange rate);

(b)

goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rate; and

(c)

the income statements are translated at the average daily exchange rate (i.e., the yearly average of exchange rates on each working day).

The differences arising from the use of the average daily exchange rate for the income statement and the closing exchange rate for the balance sheet are recorded in the “Cumulative translation adjustment” being part of “Other Comprehensive Income” (OCI). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in the income statement (as a “reclassification adjustment”).

None of the Group entities has the currency of a hyper-inflationary economy nor does Delhaize Group currently hedge net investments in foreign operations.

F-11


(in €)		Closing Rate						Average Daily Rate
(in €)	Country	2012		2011		2010		2012		2011		2010
1 USD	U.S.		0.757920		0.772857		0.748391		0.778331		0.718391		0.754318
100 RON	Romania		22.499719		23.130479		23.463163		22.42504		23.589913		23.740563
1 BGN	Bulgaria		0.511292		0.511292		—		0.511292		0.511292		—
100 RSD	Serbia		0.879353		0.955657		—		0.883939		0.980873		—
100 ALL	Albania		0.716384		0.719787		—		0.719373		0.713878		—
1 BAM	Bosnia & Herzegovina		0.511292		0.511292		—		0.511292		0.511292		—
100 IDR	Indonesia		0.007865		0.008524		0.008332		0.008302		0.008192		0.008304

Intangible Assets

Intangible assets include trade names, customer relationships and favorable lease rights that have been acquired in business combinations (unfavorable lease rights are recognized as “Other liabilities” and released in analogy with SIC 15Operating Leases - Incentives), computer software, various licenses and prescription files separately acquired. Separately acquired intangible assets are initially recognized at cost, while intangible assets acquired as part of a business combination are measured initially at fair value (see “Business Combinations and Goodwill”). Intangible assets acquired as part of a business combination that are held to prevent others from using them (“defensive assets”) - often being brands with no intended future usage - are recognized separately from goodwill, as required by IFRS 3. Such assets are not used by the Group, but prevent others from using them and are therefore amortized over the expected useful life, which will depend on the facts and circumstances surrounding the specific defensive asset.

Expenditures on advertising or promotional activities, training activities and start-up activities, and on relocating or reorganizing part or all of an entity are recognized as an expense as incurred, i.e., when Delhaize Group has access to the goods or has received the services in accordance with the underlying contract.

Intangible assets are subsequently carried at cost less accumulated amortization and accumulated impairment losses. Amortization begins when the asset is available for use as intended by management. Residual values of intangible assets are assumed to be zero and are reviewed at each financial year-end.

Costs associated with maintaining computer software programs are recognized as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique “for-own-use software” controlled by the Group are recognized as intangible assets when the following criteria are met:

•

it is technically feasible to complete the software product so that it will be available for use;

•

management intends to complete the software product and use it;

•

there is an ability to use the software product;

•

it can be demonstrated how the software product will generate probable future economic benefits;

•

adequate technical, financial and other resources to complete the development and to use the software product are available; and

•

the expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs capitalized as part of the software product include software development employee costs and directly attributable overhead costs. Other development expenditures that do not meet these criteria are recognized as an expense as incurred. Development costs recognized in a previous reporting period as an expense are not recognized as an asset in a subsequent period.

Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. The useful lives of (internally and externally developed) intangible assets with finite lives are reviewed annually and are as follows:


• Prescription files		15 years

• Favorable lease rights		Remaining lease term

• Customer relationships		5 to 20 years

• Computer software		3 to 8 years

• Other intangible assets		3 to 15 years

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually and when there is an indication that the asset may be impaired. The Group believes that acquired and used trade names have indefinite lives because they

F-12

contribute directly to the Group’s cash flows as a result of recognition by the customer of each banner’s characteristics in the marketplace.

There are no legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of the trade names. The assessment of indefinite life is reviewed annually to determine whether the indefinite life assumption continues to be supportable. Changes, if any, would result in prospective amortization.

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and impairment, if any. Acquisition costs include expenditures that are directly attributable to the acquisition of the asset. Such costs include the cost of replacing part of the asset and dismantling and restoring the site of an asset if there is a legal or constructive obligation and borrowing costs for long-term construction projects if the recognition criteria are met. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Costs of day-to-day servicing of property, plant and equipment are recognized in the income statement as incurred.

Depreciation is calculated using the straight-line method based on the estimated useful lives of the related assets and starts when the asset is available for use as intended by management. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate components of property, plant and equipment. Land is not depreciated. The useful lives of tangible fixed assets are as follows:


• Buildings		33 to 50 years

• Permanent installations		3 to 25 years

• Machinery and equipment		3 to 14 years

• Furniture, fixtures, equipment and vehicles		5 to 10 years

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within “Other operating income” (see Note 27) or “Other operating expenses” (see Note 28) in the income statement.

Residual values, useful lives and methods of depreciation are reviewed at each financial year-end and adjusted prospectively, if appropriate.

Investment Property

Investment property is defined as property (land or building - or part of a building - or both) held by Delhaize Group to earn rental income or for capital appreciation or both, rather than for sale in the ordinary course of business or for use in supply of goods or services or for administrative purposes and includes investment property under construction. Delhaize Group recognizes any part of an owned (or leased under a finance lease) property that is leased to third-parties as investment property, unless it represents an insignificant portion of the property.

Investment property is measured initially at cost including transaction costs. Subsequent to initial recognition, Delhaize Group elected to measure investment property at cost less accumulated depreciation and accumulated impairment losses, if any (i.e., applying the same accounting policies (including useful lives) as for property, plant and equipment). The fair values, which reflect the market conditions at the balance sheet date, are disclosed in Note 9.

Leases

The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at inception date. Leases are classified as finance leases when the terms of the lease agreement transfer substantially all the risks and rewards incidental to ownership to the Group. All other leases are classified as operating leases.

Assets held under finance leases are recognized as assets at the lower of fair value or present value of the minimum lease payments at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are allocated between finance costs and a reduction of the lease obligation to achieve a constant rate of interest over the lease term. Finance lease assets and leasehold improvements are depreciated over the shorter of the expected useful life of similar owned assets or the relevant lease term.

Rents paid on operating leases are recognized as an expense on a straight-line basis over the lease term. Benefits received and receivable as an incentive to enter into an operating lease are spread over the relevant lease term on a straight-line basis as a reduction of rent expense.

F-13

In connection with investment property, where the Group is the lessor, leases where the Group does not transfer substantially all the risk and rewards incident to the ownership of the investment property are classified as operating leases and are generating rental income. Contingent rents are recognized as “Other operating income” (see Note 27) in the period in which they are earned.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use (“qualifying assets”) are capitalized as part of the respective asset. All other borrowing costs are expensed as incurred. Borrowing costs consist of interest and other costs that Delhaize Group incurs in connection with the borrowing of funds.

Government Grants

Government grants are recognized when there is reasonable assurance that the grant will be received and the Group will comply with all attached conditions. When a grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. When a grant relates to an asset, it is recognized as deferred income and recognized in the income statement as “Other operating income” (see Note 27) on a systematic basis over the expected useful life of the related asset.

Inventories

Inventories are valued at the lower of cost on a weighted average cost basis and net realizable value. Costs of inventory include all costs incurred to bring each product to its present location and condition. Inventories are regularly reviewed and written down on a case-by-case basis if the anticipated net realizable value (anticipated selling price in the course of ordinary business less the estimated costs necessary to make the sale) declines below the carrying amount of the inventories. When the reason for a write-down of the inventories has ceased to exist, the write-down is reversed.

Delhaize Group receives allowances and credits from suppliers primarily for in-store promotions, cooperative advertising, new product introduction and volume incentives. These “vendor allowances” are included in the cost of inventory and recognized in the income statement when the product is sold, unless they represent reimbursement of a specific, incremental and identifiable cost incurred by the Group to sell the vendor’s product in which case they are recorded immediately as a reduction of the corresponding selling, general and administrative expenses. Estimating rebates from suppliers requires in certain cases the use of assumptions and judgment regarding the achievement of specified purchase or sales level and related inventory turnover.

Cash and Cash Equivalents

Cash and cash equivalents include cash on call with banks and on hand, short-term deposits and other highly liquid investments with an original maturity of three months or less which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Negative cash balances (bank overdrafts) are reclassified on the balance sheet to “Other current liabilities.”

Impairment of Non-Financial Assets

At each reporting date, the Group assesses whether there is an indication that a non-financial asset (hereafter “asset”) may be impaired. If such indications are identified, the asset’s recoverable amount is estimated. Further, goodwill and intangible assets with indefinite lives or that are not yet available for use are tested annually for impairment, which at Delhaize Group is in the fourth quarter of the year and whenever there is an indication that goodwill may be impaired.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. As independent cash flows are often not available for individual assets for the purpose of impairment testing, assets need to be grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (“cash generating unit” or CGU).

In determining fair value less costs to sell for individual assets or CGUs, appropriate valuation models are used, which are supported by valuation multiples or other available fair value indicators.

Goodwill acquired in a business combination is, for the purpose of impairment testing, allocated to the CGUs that are expected to benefit from the synergies of the combination and that represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and that is not larger than an operating segment before aggregation (see Note 6).

An impairment loss of a continuing operation is recognized in the income statement in “Other operating expenses” (see Note 28) if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses recognized for CGUs are allocated first

F-14

to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

If the impairment of assets, other than goodwill, is no longer justified in future periods due to a recovery in fair value or value in use of the asset, the impairment is reversed. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Goodwill impairment is never reversed.

F-15

Non-derivative Financial Assets

Delhaize Group classifies its non-derivative financial assets (hereafter “financial assets”) within the scope of IAS 39Financial Instruments: Recognition and Measurement into the following categories: held-to-maturity, loans and receivables and available-for-sale. Delhaize Group currently holds no financial assets that would be classified as measured at fair value through profit or loss. The Group determines the classification of its financial assets at initial recognition.

These financial assets are initially recorded at fair value plus transaction costs that are directly attributable to the acquisition or issuance of the financial assets.

•

Loans and receivables:Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Such financial assets are subsequent to initial recognition carried at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement when the loans and receivables are derecognized or impaired and through the amortization process. The Group’s loans and receivables comprise “Other financial assets” (see Note 12), “Receivables” (see Note 14) and “Cash and cash equivalents” (see Note 15).

Trade receivables are subsequently measured at amortized cost less a separate impairment allowance. The allowance for impairment of trade receivables is established (on a separate allowance account) when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables and the amount of the loss is recognized in the income statement within “Selling, general and administrative expenses.” Impaired trade receivables are derecognized when they are determined to be uncollectible.

•

Available-for-sale investments: Available-for-sale investments are financial assets that are either designated in this category or not classified in any of the other categories. After initial measurement, available-for-sale investments are measured at fair value with unrealized gains or losses recognized directly in OCI, until the investment is derecognized or impaired, at which time the cumulative gain or loss recorded in the available-for-sale reserve is recognized in the income statement as a reclassification adjustment.

Delhaize Group mainly holds quoted investments and the fair value of these are predominately based on current bid prices (see further Note 10.1). The Group monitors the liquidity of the quoted investments to identify inactive markets, if any. In a very limited number of cases, e.g., if the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques making maximum use of market inputs, including broker prices from independent parties, and relying as little as possible on entity-specific inputs, in which case the Group ensures that they are consistent with the fair value measurement objective and is consistent with any other market information that is available.

For available-for-sale financial assets, the Group assesses at each balance sheet date whether there is objective evidence that an investment or a group of investments is impaired. For investments in debt instruments, the impairment is assessed based on the same criteria as financial assets carried at amortized cost (see above “Loans and receivables”). Interest continues to be accrued at the original effective interest rate on the reduced carrying amount of the asset. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in the income statement, the impairment loss is reversed through the income statement. For investments in equity instruments the objective evidence for impairment includes a significant or prolonged decline in the fair value of the investment below its costs. Where there is evidence of impairment, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognized in the income statement – is removed from equity and recognized in the income statement. Impairment losses on equity investments are not reversed through the income statement. Increases in their fair value after impairment are recognized directly in OCI.

Available-for-sale financial assets are included in “Investments in securities” (see Note 11). They are classified as non-current assets except for investments with a maturity date less than 12 months from the balance sheet date.

Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired, or if the Group transferred the financial asset to another party and does not retain control or substantially all risks and rewards of the financial asset.

Non-derivative Financial Liabilities

IAS 39Financial Instruments: Recognition and Measurementcontains two categories for non-derivative financial liabilities (hereafter “financial liabilities”): financial liabilities at fair value through profit or loss and financial liabilities measured at amortized cost. Delhaize Group mainly holds financial liabilities measured at amortized cost that are included in “Debts,” “Borrowings,” “Accounts payable” and “Other liabilities.” In addition, the Group issued financial liabilities, which are part of a designated fair value hedge relationship (see Note 19).

All financial liabilities are recognized initially at fair value, plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs.

F-16

•

Financial liabilities measured at amortized cost are measured at amortized cost after initial recognition. Amortized cost is computed using the effective interest method less principal repayment. Associated finance charges, including premiums and discounts are amortized or accreted to finance costs using the effective interest method and are added to or subtracted from the carrying amount of the instrument.

•

An exchange between existing borrower and lenders ora modification in terms of a debt instrument is accounted for as a debt extinguishment of the original financial liability and the recognition of a new financial liability, if the terms are substantially different. For the purpose of IAS 39, the terms are substantially different if the discounted presented value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortized, together with the difference in present values, over the remaining term of the modified financial liability.

Financial liabilities are derecognized when the Group’s obligations specified in the contract expire or are discharged or cancelled.

Derivative Financial Instruments

While at recognition the initial measurement of derivative contracts is at fair value, the subsequent accounting for derivative financial instruments depends on whether the derivative is designated as an effective hedging instrument and, if so, the nature of the item being hedged (see “Hedge Accounting” below).

•

Economic hedges: Delhaize Group does not hold or issue derivatives for speculation/trading purposes. The Group uses derivative financial instruments - such as foreign exchange forward contracts, interest rate swaps, currency swaps and other derivative instruments - solely to manage its exposure to interest rates and foreign currency exchange rates. Derivatives not being part of an effective designated hedge relationship are therefore only entered into in order to achieve “economic hedging.” This means that, e.g., foreign exchange forward contracts and currency swaps are not designated as hedges and hedge accounting is not applied as the gain or loss from re-measuring the derivative is recognized in profit or loss and naturally offsets the gain or loss arising on re-measuring the underlying instrument at the balance sheet exchange rate (see Note 19).

These derivatives are mandatory classified as held-for-trading and initially recognized at fair value, with attributable transaction costs recognized in profit or loss when incurred. Subsequently, they are re-measured at fair value. Derivatives are accounted for as assets when the fair value is positive and as liabilities when the fair value is negative (see Note 19).

The fair value of derivatives is the value that Delhaize Group would receive or have to pay if the financial instruments were discontinued at the reporting date. This is calculated on the basis of the contracting parties’ relevant exchange rates, interest rates and credit ratings at the reporting date. In the case of interest-bearing derivatives, the fair value corresponds to the “dirty price” or “full fair value” (i.e., including any interest accrued).

Any gains or losses arising from changes in fair value on these derivatives are taken directly to the income statement. As Delhaize Group enters into derivative financial instruments contracts only for economic hedging purposes, the classification of the changes in fair value of the derivative follow the underlying (i.e., if the economically hedged item is a financial asset, the changes in fair value of the derivative are classified as “Income from investment,” Note 29.2; if the underlying is a financial liability, the changes in fair value of the derivative are classified as “Finance costs,” Note 29.1).

Derivatives are classified as current or non-current or separated into a current or non-current portion based on an assessment of the facts and circumstances.

•

Embedded derivatives are components of hybrid instruments that include non-derivative host contracts. Such embedded derivatives are separated from the host contract and accounted for separately, if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instruments are not measured at fair value through profit or loss. The accounting for any separated derivative follows the general guidance described above.

Hedge Accounting

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group intends to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or (forecast) transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

Hedges which meet the criteria for hedge accounting are accounted for as follows:

F-17

•

Cash flow hedges are used to protect the Group against fluctuations in future cash flows of assets and liabilities recognized in the balance sheet, from firm commitments (in the case of currency risk) or from highly probable forecast transactions. In such a cash flow hedge relationship, the changes in the fair value of the derivative hedging instrument are recognized directly in OCI to the extent that the hedge is effective.

To the extent that the hedge is ineffective, changes in fair value are recognized in profit or loss. Amounts accumulated in OCI are recycled in the income statement in the periods when the hedged item affects profit or loss (e.g., when the forecast sale that is hedged takes place).

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in OCI and presented in the discontinued cash flow hedge reserve in equity remains in there until the hedged item affects profit or loss.

•

Fair value hedges are used to hedge the fair values of assets or liabilities recognized in the balance sheet or firm commitments not yet recognized in the financial statements. When designated as such a fair value hedge, the gain or loss from re-measuring the hedging instrument at fair value is recognized in profit or loss. Additionally, the gain or loss on the hedged item, attributable to the hedged risk, is recognized in profit or loss by adjusting the carrying amount of the hedged item. Delhaize Group usually hedges financial liabilities. As for economic hedges, the changes in the hedging instrument follow the hedged item and, therefore, they are usually presented in the income statement as “Finance costs” (see Note 29.1).

•

Hedges of a net investment: Delhaize Group currently does not hedge any of its net investments in any of its foreign operations.

Share Capital and Treasury Shares

•

Ordinary shares: Delhaize Group’s ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

•

Treasury shares: Shares of the Group purchased by the Group or companies within the Group are included in equity at cost (including any costs directly attributable to the purchase of the shares) until the shares are cancelled, sold or otherwise disposed. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the company’s equity holders.

Income Taxes

The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement except to the extent that it relates to items recognized directly in OCI or equity.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group’s subsidiaries and associates operate and generate taxable income. Provisions and receivables are established on the basis of amounts expected to be paid to or recovered from the tax authorities.

Deferred tax liabilities and assets are recognized, using the liability method, on temporary differences arising between the carrying amount in the consolidated financial statements and the tax basis of assets and liabilities. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined, considering (i) tax rates and laws that have been enacted or substantively enacted at the balance sheet date that are expected to apply when the temporary differences reverse and (ii) the expected manner of realization or settlement of the carrying amount of assets and liabilities.

Deferred tax liabilities are recognized for temporary differences arising on investments in subsidiaries, associates and interests in joint ventures, if any, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profit will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are only offset if there is a legally enforceable right to offset current tax liabilities and assets and the deferred income taxes relate to the same taxable entity and the same taxation authority.

The Group elected to present interests and penalties relating to income taxes in “Income tax expense” in the income statement.

Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are

F-18

measured at balance sheet date at management’s best estimate of the expenditures expected to be required to settle the obligation, discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risk specific to the liability, if material. Where discounting is used, the increase in the provision due to the passage of time (“unwinding of the discount”) is recognized in “Finance costs” (see Note 29.1).

•

Closed store provisions: Delhaize Group regularly reviews its stores operating performance and assesses the Group’s plans for certain store closures. Closing stores results in a number of activities required by IFRS in order to appropriately reflect the value of assets and liabilities and related store closing costs, such as a review of net realizable value of inventory or review for impairment of assets or cash generating units (for both activities see accounting policies described above). In addition, Delhaize Group recognizes “Closed store provisions,” which consist primarily of provisions for onerous contracts and severance (“termination”) costs (for both see further below). Costs recognized as part of store closings are included in “Other operating expenses” (see Note 28), except for inventory write-downs, which are classified as “Cost of sales” (see Note 25). If appropriate (see accounting policy for “Non-Current Assets / Disposal Groups and Discontinued Operations” above), stores are accounted for in accordance with IFRS 5Non-current Assets Held for Sale and Discontinued Operations.

Onerous contracts: IAS 37Provisions, Contingent Liabilities and Contingent Assets requires the recognition of a provision for a present obligation arising under an onerous contract, which is defined as a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Judgment is required in determining if a present obligation exists, taking into account all available evidence. Once the existence has been established, at the latest upon actual closing, Delhaize Group recognizes provisions for the present value of the amount by which the unavoidable costs to fulfill the agreements exceed the expected benefits from such agreements, which comprises the estimated non-cancellable lease payments, including contractually required real estate taxes, common area maintenance and insurance costs, net of anticipated subtenant income. The adequacy of the closed store provision is dependent upon the economic conditions in which stores are located which will impact the Group’s ability to realize estimated sublease income. Owned and finance leased stores that are closed and rented to third-parties are reclassified as investment property (see Note 9).

When termination costs are incurred in connection with a store closing, a liability for the termination benefits is recognized in accordance with IAS 19 Employee Benefits, when the Group is demonstrably committed to the termination for the estimated settlement amount, which is when the implementation of a formal plan has started or the main features have been announced to those affected (see also “Employee Benefits” below).

Closed store provisions are reviewed regularly to ensure that accrued amounts appropriately reflect management’s best estimate of the outstanding commitments and that additional expenses are provided for or amounts that are no longer needed for their originally intended purpose are released.

•

Self-insurance:Delhaize Group is self-insured for workers’ compensation, general liability, vehicle accidents, pharmacy claims, health care and property insurance in the U.S. The self-insurance liability is determined actuarially, based on claims filed and an estimate of claims incurred but not reported. Excess loss protection above certain maximum retained exposures is provided by external insurance companies.

•

Restructuring provisions are recognized when the Group has approved a detailed formal restructuring plan, and the restructuring either has commenced or has been announced to those affected by it. Any restructuring provision contains only those expenditures that are directly arising from the restructuring and are both necessarily entailed by the restructuring and not associated with the ongoing activity of the Group. Future operating losses are therefore not provided for.

Employee Benefits

•

A defined contribution plan is a post-employment benefit plan under which the Group pays fixed contributions - usually to a separate entity - and has no legal or constructive obligation to pay further contributions regardless of the performance of the funds held to satisfy future benefit payments. The Group makes contributions to defined contribution plans on a contractual and voluntary basis. The contributions are recognized as “Employee benefit expense” when they are due (see Note 21.1).

•

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan (see above), which normally defines an amount of benefit that an employee will receive upon retirement, usually dependent on one or more factors such as age, years of service and compensation. The Group’s net obligation recognized in the balance sheet for defined benefit plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets - which in the case of funded plans are usually held by a long-term employee benefit fund or qualifying insurance company and are not available to the creditors of the Group nor can they be paid directly to the Group - and adjustments for past service costs. The defined benefit obligation is calculated regularly by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have maturity terms approximating the duration of the related pension liability. In countries where there is no deep market in such bonds, the market rates on government bonds are used.

When the calculation results in a benefit to the Group, the recognized asset is limited to the total of any unrecognized past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the Group if it is realizable during the life of the plan or on settlement of the plan liabilities.

F-19

Delhaize Group recognizes actuarial gains and losses, which represent adjustments due to experience and changes in actuarial assumptions, fully in the period in which they occur in OCI.

Past service costs are recognized immediately in the income statement unless the changes to the plan are conditional on the employee remaining in service for a specified period of time (the vesting period). In this case, the past service costs are amortized on a straight-line basis over the vesting period.

Pension expense is included in “Cost of sales” and in “Selling, general and administrative expenses.” See for details of Delhaize Group’s defined benefit plans Note 21.1.

•

Other post-employment benefits: some Group entities provide post-retirement health care benefits to their retirees. The Group’s net obligation in respect of long-term employee benefit plans other than pension plans is the amount of future benefit that employees have earned in return for their services in the current or prior periods. Such benefits are discounted to determine their present value and the fair value of any related asset is deducted. The calculation is performed using the projected unit credit method and any actuarial gain or loss is recognized in OCI in the period in which it arises. These obligations are valued annually by independent qualified actuaries. For details, see Delhaize Group’s other post-employment benefit plans in Note 21.2.

•

Termination benefits: are recognized when the Group is demonstrably committed, without realistic possibility of withdrawal, to a detailed formal plan to terminate employment before the normal retirement date. In addition, Delhaize Group recognizes expenses in connection with termination benefits for voluntary terminations if the Group has made an offer of voluntary termination, if it is probable that the offer will be accepted and the number of acceptances can be measured reliably.

•

Profit-sharing and bonus plans:the Group recognizes a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration the profit attributable to the company’s shareholders after certain adjustments. The Group recognizes a provision if contractually obliged or if there is a past practice that has created a constructive obligation (see Note 21.3).

•

Share-based payments: the Group operates various equity-settled share-based compensation plans,under which the entity receives services from employees as consideration for equity instruments (options, warrants or restricted stock units) of the Group. The fair value of the employee services received in exchange for the grant of the share-based awards is recognized as an expense. The total amount to be expensed is determined by reference to the grant date fair value of the share-based awards and is calculated using the Black-Scholes-Merton valuation model (for details see Note 21.3). The share-based compensation plans operated by Delhaize Group currently do not contain any (non-)market vesting conditions, but only service vesting conditions.

The total amount expensed is recognized in the income statement - together with a corresponding increase in equity - over the vesting period of the share-based award, which is the period over which all of the specified vesting conditions are to be satisfied. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. No expense is recognized for awards that do not ultimately vest.

In the event of a modification of the terms of an equity-settled award, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense would be recognized for any modification which increases the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. However if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award.

Any proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when options are exercised. The dilutive effect of outstanding (vested and unvested) options is reflected as additional share dilution in the computation of diluted earnings per share (see Note 31).

Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received net of discounts, rebates, and sales taxes or duty. The Group assesses its revenue arrangements against the criteria included in the appendix to IAS 18Revenue to determine if it is acting as principal or agent.

•

Sales of products to the Group’s retail customers are recognized at the point of sale and upon delivery of groceries to internet or telephone order customers. In addition, Delhaize Group generates revenue from sales to its wholesale customers, which are recognized upon delivery to or pick-up by the wholesale customer.

As stated above, sales are recorded net of sales taxes, value-added taxes and discounts and incentives. These include discounts from regular retail prices for specific items and “buy-one, get-one-free”-type incentives that are offered to retail customers through the Group’s customer loyalty programs. Discounts provided by vendors are recorded as a receivable.

Revenue from the sale of gift cards and gift certificates is recognized when the gift card or gift certificate is redeemed by the retail customer.

The Group maintains various loyalty points programs whereby customers earn points for future purchases. These customer loyalty credits are accounted for as a separate component of the sales transaction in which they are granted. A portion of the fair

F-20

value of the consideration received is allocated to the award credits and deferred. This is recognized as revenue when the award credits are redeemed.

•

The Group generates limited revenues fromfranchise fees, which are recognized in net sales when the services are provided or franchise rights used.

•

For certain products or services, such as the sale of lottery tickets, third-party prepaid phone cards, etc., Delhaize Group acts as an agent and consequently records the amount of commission income in its net sales.

•

Rental income from investment property is recognized in profit or loss on a straight-line basis over the term of the lease and included in “Other operating income” (see Note 27).

•

Interest Income is recognized as interest accrues (using the effective interest method) and is included in “Income from investments” (see Note 29.2).

•

Dividend income is recognized when the Group’s right to receive the payment is established. The income is included in “Income from investments” (see Note 29.2).

Cost of Sales

Cost of sales includes the purchase cost of products sold and all costs associated with getting the products into the retail stores including buying, warehousing and transportation costs. Finally, cost of sales includes appropriate vendor allowances (see also accounting policy for “Inventories” above).

Selling, General and Administrative Expenses

Selling, general and administrative expenses include store operating expenses, costs incurred for activities which serve securing sales, administrative and advertising expenses.

Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM), who is responsible for allocating resources and assessing performance of the operating segments (see Note 3).

2.4

Significant Use of Estimates, Assumptions and Judgment

The preparation of financial statements in conformity with IFRS requires Delhaize Group to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and income and expenses, which inherently contain some degree of uncertainty. These estimates are based on experience and assumptions Delhaize Group believes to be reasonable under the circumstances. By definition, actual results could and will often differ from these estimates. In the past, the Group’s estimates generally have not deviated materially from actual results. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts in the consolidated financial statements is included in, but not limited to, the following notes:

•

Note 4.1 - Business combinations;

•

Notes 6, 7, 8, 11, 14, 19 - Assessing assets for impairment and fair values of financial instruments;

•

Notes 13, 25 - Accounting for vendor allowances;

•

Note 20 - Provisions;

•

Note 21 - Employee Benefits; and

•

Note 22 - Income Taxes.

2.5

Standards and Interpretations Issued but not yet Effective

The following standards, amendments to or revisions of existing standards or interpretations have been published and are mandatory for the Group’s accounting periods beginning on January 1, 2013 or later periods. Unless otherwise indicated below, Delhaize Group is still in the process of assessing the impact of these new standards, interpretations, or amendments to its consolidated financial statements and does not plan to early adopt them:

•

Amendments to IAS 1Presentation of Items of Other Comprehensive Income (applicable for annual periods beginning on or after July 1, 2012): Following the adoption of the amendment the Group will have to modify its presentation by grouping items presented in OCI on the basis of whether they are potentially reclassifiable to profit or loss subsequently. The initial application will have little impact on the Group’s consolidated financial statements.

F-21

•

Amendments to IAS 19Employee Benefits (applicable for annual periods beginning on or after January 1, 2013): The amendment will require, besides others, replacing interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset), including the impact of taxes in the measurement of the defined benefit obligation and immediate recognition of all past service costs. The amendments to IAS 19 require retrospective application. Based on the Group’s assessment, the revised IAS 19 standard would have increased the 2012 defined benefit cost by €2 million, and will increase the 2013 defined benefit cost by €1 million.

•

Amendments to IAS 32Offsetting Financial Assets and Financial Liabilities (applicable for annual periods beginning on or after January 1, 2014). The amendment adds application guidance to the existing financial asset and financial liabilities offsetting requirements in IAS 32. The Group believes that the initial application of the amendment should have minimal impact on its consolidated financial statements.

•

Amendments to IFRS7 Disclosures - Offsetting Financial Assets and Financial Liabilities (applicable for annual periods beginning on or after January 1, 2013). The change will require specific disclosures to all recognized financial instruments that are offset or that are subject to enforceable master netting arrangements and will have limited impact on the Group’s consolidated financial statements, mainly in connection with financial derivative contracts.

•

Improvements to IFRS (applicable for annual periods beginning after January 1, 2013): On May 17, 2012, the IASB issued the final omnibus annual improvements standard containing six changes to five IASB pronouncements. The Group believes that these amendments will have no impact on the consolidated financial statements.

•

IFRS 9Financial Instruments (applicable for annual periods beginning on or after January 1, 2015): On November 12, 2009, the IASB published the first part of IFRS 9, the accounting standard that will eventually replace IAS 39Financial Instruments: Recognition and Measurement. The revised guidance included in IFRS 9 relates to classification and measurement of financial assets alone and applies a “business model” and “characteristics of the financial asset” test to assess if, after initial recognition at fair value, a financial asset is subsequently measured at amortized cost or at fair value. All financial assets that are equity investments are measured at fair value either through OCI or profit or loss. This is an irrevocable choice the entity makes by instrument unless the equity investments are held for trading, in which case they must be measured at fair value through profit or loss.

On October 28, 2010, the IASB issued the second part of IFRS 9 dealing with theRecognition and Measurement of Financial Liabilities, which is also applicable for annual periods beginning on or after January 1, 2015. The IASB has retained the existing guidance in IAS 39 regarding classifying and measuring financial liabilities, except for those liabilities where the fair value option has been elected, which is currently not the case for any of Delhaize Group’s financial liabilities. Therefore, the Group does not expect that the IFRS 9 guidance will have an impact on its consolidated financial statements with respect to financial liabilities.

On December 16, 2011, the IASB modified the mandatory effective date of IFRS 9 for annual periods beginning on or after January 1, 2015. The change modified the guidance about the disclosure requirements an entity needs to make when it first applies IFRS 9. In parallel with the amendment of IFRS 9, the IASB also modified IFRS 7Financial Instruments: Disclosures and added specific requirements that an entity should disclose upon the initial application of IFRS 9.

Delhaize Group continues reviewing the revised guidance and the ongoing progress and subsequent changes made by the IASB with respect to the new standard in order to assess the full impact IFRS 9 might have on its consolidated financial statements, but will only be able to conclude once the IASB has finalized the development of IFRS 9, including the remaining phases on hedge accounting and impairment.

•

IFRS 10Consolidated Financial Statements and Amendments to IAS 27Separate Financial Statements (applicable for annual periods beginning on or after January 1, 2013). IFRS 10 builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where it is difficult to assess. The remaining guidance of IAS 27 deals now solely with separate financial statements. The Group concluded that the implementation of IFRS 10 will have no material impact on its consolidated financial statements.

•

IFRS 11Joint Arrangements and Amendments to IAS 28Investments in Associates and Joint Ventures (applicable for annual periods beginning on or after January 1, 2013): Although IFRS 11 modifies the currently existing definition of joint control of IAS 31, the determination will still be based on the concept of unanimous consent. IFRS 11 classifies joint arrangements into two types - joint operations and joint ventures - and will require that investments in joint ventures are accounted for using the equity method in accordance with IAS 28, which has been amended to include additional guidance on the application of the equity method. The requirement to account for joint ventures using the equity method will impact the accounting of the Group’s investment in P.T. Lion Super Indo, LLC (“Super Indo”) which is currently proportionately consolidated and will be equity accounting as from January 1, 2013. Further, Super Indo will no longer represent an operating segment. Besides the investment in Super Indo, the Group does not have any other interest in jointly controlled entities.

•

IFRS 12Disclosures of Interests in Other Entities(applicable for annual periods beginning on or after January 1, 2013): The standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The disclosures are generally more extensive than under current IFRS guidance.

•

IFRS 13Fair Value Measurements(applicable for annual periods beginning on or after January 1, 2013): The standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRS. The requirements will not extend the use of fair value

F-22

accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRS.

•

Investment Entities: Amendments to IFRS 10, IFRS 12 and IAS 27 (applicable for annual periods beginning on or after January 1, 2014): On October 31, 2012, the IASB issued an amendment to IFRS 10, IFRS 12 and IAS 27 that introduced an exception to the principle that all subsidiaries shall be consolidated. This amendment defines the term investment entity and requires a parent that is an investment entity to measure its investments in particular subsidiaries at fair value through profit or loss in accordance with IAS 39. The Group expects that the new guidance will have no impact on its consolidated financial statements.

•

Transition Guidance(Amendments to IFRS 10, IFRS 11 and IFRS 12): On June 28, 2012, the IASB issued an amendment to IFRS 10, IFRS 11 and IFRS 12 which clarifies that the “date of initial application” means “the beginning of the annual reporting period” in which these standards have to be applied for the first time. The requirement means that for Delhaize Group the date of initial application of these standards will be January 1, 2013.

2.6

Financial Risk Management, Objectives and Policies

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. Delhaize Group’s principal financial liabilities, other than derivatives, comprise mainly debts and borrowings and trade and other payables. These financial liabilities are mainly held in order to raise funds for the Group’s operations. On the other hand, the Group holds notes receivables, other receivables and cash and cash equivalents that result directly from the Group’s activities. The Group also holds several available-for-sale investments. Delhaize Group exclusively uses derivative financial instruments to hedge certain risk exposures.

The risks to which the Group is exposed are evaluated by Delhaize Group’s management and Board of Directors and discussed in the section “Risk Factors” in this annual report.

F-23

3.	Segment Information

IFRS 8 applies the so-called “management approach” to segment reporting and requires the Group to report financial and descriptive information about its reportable segments. Such reportable segments are operating segments or aggregations of operating segments that meet specified criteria.

Operating segments are components of an entity which engage in business activities from which they may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components, about which discrete financial information is available that is evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and in assessing performance. The Group is required to report separate information about each operating segment that:

•

has been identified as described above or results from aggregating two or more of those segments if they exhibit similar long-term financial performance and have similar economic characteristics; and

•

exceeds certain quantitative thresholds.

Delhaize Group identified the Executive Committee as its CODM and defined operating segments based on the information provided to the Executive Committee. Subsequently, the Group reviewed these operating segments in order to establish if any of these individual operating segments can be considered to have similar economic characteristics and exhibit similar long-term financial performance as described by IFRS 8, which are then aggregated into one single aggregated operating segment. In a final step, reportable segments have been identified, which represent (aggregated) operating segments that exceed the quantitative thresholds defined by IFRS 8 and require individual disclosure. Operating segments that do not pass these thresholds are by default combined into the “All Other Segments” category of IFRS 8, which the Group has labeled as “Southeastern Europe and Asia.”

Management concluded that the reader of the Group’s financial statements would benefit from distinguishing operating from non-operating - other business activities - and, therefore, decided to disclose separately the corporate activities of the Group in the segment “Corporate.”

During 2012, the CODM started, in addition to the financial information of Delhaize America as a whole, to review discrete financial information of the different U.S. banners, in order to better assess the performance and allocate resources to the main banners of the U.S. operations. Consequently, the Group’s U.S. banners represent individual operating segments. Delhaize Group reviewed these operating segments for similar economic characteristics and long-term financial performance, using, for example, operating profit margin, gross margin and comparable store sales development as quantitative benchmarks and concluded that aggregating them into the segment “United States” meets the requirements of IFRS 8 and is consistent with the core principle of the standard. While this has no immediate impact on the segment reporting, as the composition of the reportable segments did not change, goodwill is tested at operating segment level, before aggregation, in accordance with IAS 36 (see Note 6), i.e., separately for Food Lion and Hannaford.

Overall, this results in a geographical segmentation of the Group’s business, based on the location of customers and stores, which matches the way Delhaize Group manages its operations.

The Executive Committee internally reviews the performance of Delhaize Group’s segments against a number of measures, of which operating profit represents the most important measure of profit or loss. The amount of each segment item reported is measured using the amounts reported to the CODM, which equals consolidated IFRS financial information. Therefore, as the information provided to the CODM and disclosed as segment information represents consolidated IFRS financial information, no reconciling items need to be disclosed.

F-24

The operating segments information for 2012, 2011 and 2010 is as follows:


Year ended December 31, 2012(in millions of €)	United States			Belgium⁽²⁾			Southeastern Europe and Asia⁽³⁾			Corporate			Total
Revenues⁽¹⁾		14 632			4 922			3 183			—			22 737
Cost of sales		(10 800	)		(3 921	)		(2 449	)		—			(17 170	)
Gross profit		3 832			1 001			734			—			5 567
Gross margin		26.2	%		20.3	%		23.1	%		—			24.5	%
Other operating income		63			39			20			—			122
Selling, general and administrative expenses		(3 360	)		(823	)		(647	)		(41	)		(4 871	)
Other operating expenses		(192	)		(15	)		(220	)		(1	)		(428	)
Operating profit (loss)		343			202			(113	)		(42	)		390
Operating margin		2.3	%		4.1	%		(3.5	%)		—			1.7	%
Operating result of discontinued operations		(2	)		—			(5	)		—			(7	)
Other information
Assets		7 191			1 838			2 318			589			11 936
Liabilities		2 511			1 342			887			2 003			6 743
Capital expenditures		354			153			157			24			688
Non-cash operating activities:
Depreciation and amortization		444			116			81			9			650
Impairment loss⁽⁶⁾		63			5			220			—			288
Share-based compensation		11			1			—			1			13

Year ended December 31, 2011(in millions of €)	United States			Belgium⁽²⁾			Southeastern Europe and Asia^(3),(4)			Corporate			Total⁽⁴⁾
Revenues⁽¹⁾		13 815			4 845			2 450			—			21 110
Cost of sales		(10 049	)		(3 825	)		(1 875	)		—			(15 749	)
Gross profit		3 766			1 020			575			—			5 361
Gross margin		27.3	%		21.0	%		23.5	%		—			25.4	%
Other operating income		67			41			10			—			118
Selling, general and administrative expenses		(3 142	)		(814	)		(501	)		(40	)		(4 497	)
Other operating expenses		(157	)		(4	)		(3	)		(5	)		(169	)
Operating profit (loss)		534			243			81			(45	)		813
Operating margin		3.9	%		5.0	%		3.3	%		—			3.9	%
Operating result of discontinued operations		—			—			(1	)		—			(1	)
Other information
Assets⁽⁵⁾		7 752			1 886			2 477			177			12 292
Liabilities⁽⁵⁾		2 765			1 211			844			2 053			6 873
Capital expenditures		416			142			185			19			762
Non-cash operating activities:
Depreciation and amortization		410			107			60			9			586
Impairment loss⁽⁶⁾		130			1			1			3			135
Share-based compensation		11			1			—			1			13

F-25


Year ended December 31, 2010(in millions of €)	United States			Belgium⁽²⁾			Southeastern Europe and Asia⁽³⁾			Corporate			Total
Revenues⁽¹⁾		14 187			4 800			1 863			—			20 850
Cost of sales		(10 272	)		(3 803	)		(1 422	)		—			(15 497	)
Gross profit		3 915			997			441			—			5 353
Gross margin		27.6	%		20.8	%		23.7	%		—			25.7	%
Other operating income		43			36			6			—			85
Selling, general and administrative expenses		(3 189	)		(795	)		(377	)		(33	)		(4 394	)
Other operating expenses		(16	)		(2	)		(2	)		—			(20	)
Operating profit (loss)		753			236			68			(33	)		1 024
Operating margin		5.3	%		4.9	%		3.7	%		—			4.9	%
Operating result of discontinued operations		—			—			—			—			—
Other information
Assets		7 850			1 806			1 014			232			10 902
Liabilities		2 592			1 141			508			1 592			5 833
Capital expenditures		410			128			113			9			660
Non-cash operating activities:
Depreciation and amortization		423			104			39			9			575
Impairment loss⁽⁶⁾		13			—			1			—			14
Share-based compensation		14			1			—			1			16

(1)	All revenues are from external parties.

(2)	Belgium includes Delhaize Group’s operations in Belgium and the Grand Duchy of Luxembourg.

(3)	Southeastern Europe and Asia includes the Group’s operations in Greece, Romania, Indonesia and since August 1, 2011 Serbia, Bulgaria, Bosnia and Herzegovina and Montenegro.

(4)	The 2011 consolidated income statement was adjusted for the reclassification of the Albanian operations to discontinued operations.

(5)	The December 31, 2011 consolidated balance sheet was revised to reflect the effects of the completion in the second quarter 2012 of the purchase price allocation of the Delta Maxi acquisition.

(6)	No impairment loss was recorded or reversed in equity. The 2012 impairment loss includes €16 million on the re-measurement of assets of the disposal group (see Note 5.3.)

Delhaize Group’s operation of retail supermarkets represents approximately 90% of the Group’s consolidated revenues. The remaining revenue represents wholesale retail revenues. Total revenues can be further analyzed as follows:


(as a percentage of revenues)	2012			2011			2010
Retail revenues
- Food - perishable		40.0	%		37.9	%		40.0	%
- Food - non-perishable		35.6	%		36.1	%		35.5	%
- Non-food		13.4	%		15.0	%		13.8	%

Total retail revenues		89.0	%		89.0	%		89.3	%
Wholesale revenues		11.0	%		11.0	%		10.7	%

Total revenues		100.0	%		100.0	%		100.0	%

Delhaize Group is not reliant on any individual major customer and, consequently, there are no individual customers where the total amount of revenue derived from that customer would be more than 10% of Delhaize Group’s revenue.

4.	Business Combinations and Acquisition of Non-controlling Interests

4.1

Business Combinations

Acquisitions during 2012

During 2012, Delhaize Group entered into several agreements in Belgium and Romania that have resulted in the acquisition of businesses and were accounted for in accordance with IFRS 3. The total consideration transferred during the year for these transactions was €5 million and resulted in an increase of goodwill of €3 million.

F-26

Acquisitions during 2011

Acquisition of Delta Maxi

On July 27, 2011, Delhaize Group acquired 100% of the shares and voting rights of Delta Maxi for a purchase price of €615 million, subject to customary purchase price adjustments, but not any earn-out or similar clauses.

At December 31, 2011, the total consideration transferred amounted to (i) €574 million in cash, net of €21 million cash acquired, of which €100 million was held in escrow by the seller and (ii) €20 million held in escrow by the Group (see Note 12). The acquired business, in combination with the Group’s existing operations in Greece and Romania, makes Delhaize Group a leading retailer in Southeastern Europe. At acquisition date, Delta Maxi operated 485 stores and 7 distribution centers in five countries in Southeastern Europe. Delta Maxi was included into Delhaize Group’s consolidated financial statements as of August 1, 2011 and is part of the Southeastern Europe & Asia segment (see Note 3). Delhaize Group incurred approximately €11 million acquisition-related costs in 2011 that were included in selling, general and administrative expenses in the “Corporate” segment.


(in millions of €)	August 1, 2011
Cash paid		595
Cash held in escrow		20

Total consideration transferred		615
Indemnification assets		(33	)

Total consideration		582

The above noted adjustments have been, in accordance with the guidance provided in IFRS 3, recognized in the consolidated financial statements of Delhaize Group as if the accounting had been completed at the acquisition date, and comparative information has been revised correspondingly. The revision of acquisition date fair values did not have a significant impact on the profit and loss of the year ended December 31, 2011.

The table below summarizes the total consideration paid for Delta Maxi and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, comparing the provisional fair values (as disclosed in our 2011 annual report) and revised final acquisition date fair values.


	August 1, 2011 Acquisition date Fair Values
(in millions of €)	Provisional Fair Values⁽¹⁾			Final Fair Values
Intangible assets		194			218
Property, plant and equipment		426			394
Investment property		44			34
Financial assets		24			24
Inventory		69			68
Receivables		59			54
Other assets		9			9
Cash and cash equivalents		21			21
Assets classified as held for sale		15			16

		861			838
Long-term debt, including current portion		(211	)		(211	)
Obligations under finance lease		(8	)		(8	)
Short-term borrowings		(132	)		(132	)
Provisions		(14	)		(45	)
Accounts payable		(259	)		(261	)
Other liabilities		(37	)		(69	)
Deferred tax liabilities		(24	)		(22	)
Total identified net assets		176			90

Non-controlling interests (measured at the proportionate shares of the net assets)		(28	)		(15	)
Goodwill arising on acquisition		467			507

Total		615			582

F-27

⁽¹⁾	As disclosed in the 2011 annual report.

Receivables mainly consist of trade receivables and other receivables. The gross contractual amount of the receivables due is €65 million, of which €11 million is expected to be uncollectible, resulting in a final acquisition date fair value of €54 million.

The acquisition date goodwill was €507 million (Note 6) and has been allocated to the specific cash-generating units that were expected to benefit from the synergies of the combination, resulting in the following split between the various countries where Maxi operates, which represent the lowest level at which management monitors goodwill:


(in millions of €)	Final Acquisition Date value
Serbia		448
Bosnia & Herzegovina		26
Bulgaria		15
Montenegro		10
Albania		8

Total		507

The goodwill reflected the anticipated synergies that could be realized from integrating Delta Maxi into Delhaize Group’s international network, especially in the areas of improved procurement, better inventory management and optimized IT and supply chain systems and processes and is deductible for income tax purposes.

From the date of acquisition, Maxi (including Albania which was reclassified to discontinued operations) has contributed €460 million to the Group’s revenues and €(0.2) million to the net profit of the year in 2011. If the business combination had occurred at the beginning of the year, the 2011 revenues of Delhaize Group would have been approximately €584 million higher. This pro forma information is provided for informational purposes only and is not necessarily indicative of the revenues that actually would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future revenues. Due to significant differences in accounting policies applied before acquisition date by Delta Maxi and existing policies applied within Delhaize Group, it was concluded that it would be impracticable to estimate the pro forma impact on the Group’s consolidated net profit for the full year.

Other 2011 acquisitions

In addition, Delhaize Group entered into several small agreements acquiring 17 individual stores in various parts of the world. The total consideration transferred during 2011 for these transactions was €16 million and resulted in an increase of goodwill of €10 million, mainly representing expected benefits from the integration of the stores into the existing sales network, the locations and customer base of the various stores acquired, all resulting in synergy effects for the Group.

Acquisitions during 2010

During 2010, Delhaize Group entered into several small agreements acquiring a total of 15 individual stores in various parts of the world, which meet the business definition under IFRS 3 and were accounted for accordingly. Total consideration transferred during 2010 was €16 million in cash, and additional final payments of €1 million were paid in 2011. These transactions resulted in an increase of goodwill of €12 million, mainly representing expected benefits from the integration of the stores into the existing sales network and the locations and customer base of the various stores acquired, all resulting in synergy effects for the Group.

In addition, the Group made a final payment of €3 million during 2010, relating to the acquisition of Koryfi SA, which occurred in 2009 and for which acquisition accounting was completed during 2010.

4.2

Acquisitions of Non-controlling Interests

Acquisitions during 2012

In June 2012, the minority shareholder of Ela d.o.o. Kotor irrevocably and unconditionally exercised its put option selling to Delhaize Group its share of 49% in the subsidiary. In accordance with IAS 32, the Group recognized, as part of the purchase price allocation, (i) a liability of approximately €13 million in connection with the put option, representing its best estimate of the expected cash outflow, and (ii) an indemnification asset of approximately €6 million towards the former owner of Delta Maxi. The Group reclassified

F-28

the remaining non-controlling interest into retained earnings and recognized the subsequent immaterial changes in value of the liability and the indemnification asset in profit or loss.

During 2012, Delhaize Group acquired additional non-controlling interests for a total amount of €10 million, including transaction costs, recognized in equity, mainly relating to other Maxi subsidiaries.

Acquisitions during 2011

Subsequent to the acquisition of Delta Maxi, Delhaize Group started the process of acquiring non-controlling interests held by third parties in several Delta Maxi subsidiaries. Until December 31, 2011, the Group acquired non-controlling interests of a carrying amount of €10 million for a total cash consideration of approximately the same amount.

Acquisitions during 2010

On May 18, 2009, Delhaize Group announced the launch of a voluntary tender offer for all of the shares of its Greek subsidiary Alfa Beta Vassilopoulos S.A. (“Alfa Beta”) which were not yet held by any of the consolidated companies of Delhaize Group at a price of €30.50 per Alfa Beta share. On June 29, 2009, the offer price was increased to €34.00 per share, based on an agreement with two major shareholders (approximately 12%) of Alfa Beta. At the end of the acceptance period on July 9, 2009, Delhaize Group held 89.56% of Alfa Beta shares. During the second half of 2009, Delhaize Group acquired additional shares on the market and at December 31, 2009 Delhaize Group owned 11 451 109 shares (representing 89.93%).

On March 12, 2010, Delhaize Group launched through its wholly owned Dutch subsidiary Delhaize “The Lion” Nederland BV (“Delned”) a new tender offer to acquire the remaining shares of Alfa Beta at €35.73 per share.

On June 4, 2010, Delned requested from the Hellenic Capital Market Commission the approval to squeeze-out the remaining minority shares in Alfa Beta, which was granted on July 8, 2010. The last date of trading Alfa Beta shares at the Athens Exchange was July 29, 2010 and settlement occurred on August 9, 2010.

Since August 9, 2010, Delhaize Group owns 100% of the voting rights in Alfa Beta, which was delisted from the Athens Exchange as of October 1, 2010.

The difference between the carrying amount of non-controlling interest (€16 million) and the fair value of the consideration paid (€47 million), including transactions costs (€1 million), was recognized directly in equity and attributed to the shareholders of the Group and, therefore, had no impact on goodwill or profit or loss.

5.	Divestitures, Disposal Group / Assets Held for Sale and Discontinued Operations

5.1

Divestitures

On February 14, 2012, Delhaize Group reached a binding agreement to sell Wambacq & Peeters SA, a Belgian transport company, to Van Moer Group. This transaction did not meet the criteria of a “Discontinued Operation” and was completed on April 30, 2012.

Delhaize Group received €3 million in cash and recorded a gain on disposal of €1 million in 2012.

No divestitures took place in 2011 and 2010.

5.2

Disposal Group / Assets Classified as Held for Sale

Disposal of Delhaize Albania SHPK

The assets and liabilities related to the Group’s operations in Albania (part of the Southeastern Europe & Asia segment) have been presented as held for sale following the approval of Delhaize Group’s Board of Directors on December 19, 2012 to sell Delhaize Albania SHPK. In January 2013, Delhaize Group reached a binding agreement with Balfin SHPK and agreed on a sales price of €2 million, subject to contractual adjustments. The transaction was completed in February 2013.

At December 31, 2012, the carrying value of assets classified as assets held for sale and associated liabilities were as follows:

F-29


(in millions of €)	2012
Property, plant and equipment		1
Inventories		3
Receivables and other current assets		1
Cash and cash equivalents		1

Assets classified as held for sale		6
Less:
Non-current liabilities		(1	)
Accounts payable and accrued expenses		(3	)

Assets classified as held for sale, net of associated liabilities		2

The Group recognized an impairment loss of €16 million (see also Note 5.3) to write down the carrying value of Delhaize Albania to its fair value less costs to sell, which includes goodwill impairment charges of approximately €8 million.

F-30

Disposal of individual properties

As part of the acquisition of Delta Maxi (see Note 4.1), the Group identified a number of properties, mainly small shops, office buildings, pharmacies or bank branches, which it considered not being incremental to its retail operations. At year-end 2011, the revised carrying value of the assets held for sale amounted to €56 million. During 2012, the Group sold properties for a total amount of €17 million. As a result of the weakening real estate market and the deteriorating state of the property for sale, the fair value less cost to sell of a number of properties decreased during 2012 resulting in impairment losses of €18 million. As due to these conditions, a sale within the anticipated timeframe was considered to be no longer feasible, properties for a total net book value of €7 million have been reclassified to investment property (see Note 9). Consequently, at December 31, 2012, the remaining properties held for sale amount to €10 million and are part of the Southeastern Europe & Asia Segment.

In addition, Delhaize America intends to dispose a parcel of land within the next 12 months for €2 million.

5.3

Discontinued Operations

As mentioned in Note 5.2, Delhaize Albania was classified as a disposal group held for sale and qualified simultaneously as discontinued operations. The Group recognized an impairment loss of €16 million in order to write down the carrying value of Delhaize Albania to its estimated fair value less cost to sell and classified the operations of Delhaize Albania in 2012 and 2011 as “Result from discontinued operations (net of tax).” No pre-tax loss or gain was recognized on the re-measurement of assets held for sale in 2011 and 2010.

The overall “Result from discontinued operations” and corresponding net cash flows of the entities classified as discontinued operations are summarized as follows:


(in millions of €, except per share information)	2012			2011⁽¹⁾			2010
Revenues		21			9			—
Cost of sales		(18	)		(7	)		—
Other operating income		1			—			—
Selling, general and administrative expenses		(8	)		(3	)		—
Other operating expenses		(3	)		—			—
Finance costs		(1	)		(1	)		(1	)

Result before tax		(8	)		(2	)		(1	)
Income taxes		2			—			—

Result of discontinued operations (net of tax)		(6	)		(2	)		(1	)
Pre-tax loss recognized on re-measurement of assets of disposal groups		(16	)		—			—
Income taxes		—			—			—

Result from discontinued operations (net of tax), fully attributable to equity holders of the Group		(22	)		(2	)		(1	)

Basic earnings per share from discontinued operations		(0.22	)		(0.03	)		(0.01	)
Diluted earnings per share from discontinued operations		(0.22	)		(0.02	)		(0.01	)

Operating cash flows		(6	)		(5	)		—
Investing cash flows		9			(3	)		—
Financing cash flows		(3	)		9			—

Total cash flows		—			1			—

(1)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

F-31

6.	Goodwill


(in millions of €)	2012			2011⁽¹⁾			2010
Gross carrying amount at January 1		3 487			2 900			2 707
Accumulated impairment at January 1		(73	)		(72	)		(67	)

Net carrying amount at January 1		3 414			2 828			2 640
Acquisitions through business combinations and adjustments to initial purchase accounting		3			517			12
Classified as held for sale		(8	)		—			—
Impairment loss		(136	)		—			—
Currency transaction effect		(84	)		69			176

Gross carrying amount at December 31		3 396			3 487			2 900
Accumulated impairment at December 31		(207	)		(73	)		(72	)

Net carrying amount at December 31		3 189			3 414			2 828

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

Goodwill is allocated and tested for impairment at the cash-generating unit (CGU) level that is expected to benefit from synergies of the combination the goodwill resulted from, which at Delhaize Group represents an operating entity or country level, being also the lowest level at which goodwill is monitored for internal management purpose.

During 2012, the Group revised its reporting to the CODM for its U.S. operations (see Note 3). As a consequence, Delhaize Group’s U.S. operations represent separate operating segments at which goodwill needs to be reviewed for impairment testing purposes.

In 2011, Delhaize Group acquired 100% of the retail company Delta Maxi Group, operating in five countries in the Balkan area. During the first half of 2012, Delhaize Group completed the purchase price allocation of the Delta Maxi acquisition and recognized goodwill of €507 million at acquisition date (see Note 4.1).

The Group’s CGUs with significant goodwill allocations are detailed below:

(in millions)

2012

2011

2010

Food Lion

USD

1 259

Hannaford

USD

1 984

United States

EUR

2 458

2 507

2 427

Serbia

RSD

36 228

45 844

—

Bulgaria

BGN

—

Bosnia & Herzegovina

BAM

—

Montenegro

EUR

—

Albania

ALL

—

1 161

—

Maxi⁽¹⁾

EUR

318

497

—

Belgium

EUR

186

184

182

Greece

EUR

207

202

Romania

EUR

Total

EUR

3 189

3 414

2 828

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

In accordance with the accounting policies stated in Note 2.3, Delhaize Group conducts an annual impairment assessment for goodwill and, in addition, whenever events or circumstances indicate that an impairment may have occurred. The impairment test of goodwill involves comparing the recoverable amount of each CGU with its carrying value, including goodwill, and recognition of an impairment loss if the carrying value exceeds the recoverable amount.

The recoverable amount of each operating entity is determined based on the higher of value in use calculations and the fair value less cost to sell:

•

The value in use (“VIU”) calculations use local currency cash flow projections based on the latest available financial plans approved by management for all CGUs, adjusted to ensure that the CGUs are tested in its current condition, covering a three-year period, based on actual results of the past and using observable market data, where possible. Cash flows beyond the three-year period are extrapolated to five years.

F-32

Growth rates and operating margins used to estimate future performance are equally based on past performance and experience of growth rates and operating margins achievable in the relevant market and in line with market data, where possible. Beyond five years, perpetual growth rates are used which do not exceed the long-term average growth rate for the supermarket retail business in the particular market in question and the long-term economic growth of the respective country. These pre-tax cash flows are discounted applying a pre-tax rate, which is derived from the CGU’s WACC (Weighted Average Cost of Capital) in an iterative process as described by IAS 36.

•

The fair value less cost to sell (“FVLCTS”) is based on discounted cash flow calculations, in local currencies, using cash flow projections based on the latest available financial plans approved by management for all CGUs, as explained above. Cash flows beyond the three-year period are extrapolated to ten years in line with market participant assumptions. Beyond ten years, perpetual growth rates do not exceed the long-term average growth rate for the supermarket retail business in the particular market in question and the long-term economic growth of the respective country. Operating margins are kept in line with longer term market assumptions. Delhaize Group uses pre-tax cash flows which are discounted applying a pre-tax rate, being derived from the CGU’s WACC as described above. Earnings multiples paid for similar companies in the market are used to ensure appropriateness of the FVLCTS estimates and overall consistency.

United States

The recoverable amount of the U.S. operating segments Food Lion and Hannaford has been determined based on VIU calculations. The key assumptions used for the VIU calculations were as follows:


	Perpetual Growth Rate			Pre-tax discount rate
2012:
Food Lion		2.3	%		10.1	%
Hannaford		2.3	%		9.6	%
2011:
Food Lion		2.3	%		10.4	%
Hannaford		2.3	%		10.4	%
2010:
Food Lion		2.3	%		11.7	%
Hannaford		2.3	%		10.8	%

Management believes that the assumptions used in the VIU calculations represent the best estimates of future development and is of the opinion that no reasonable possible change in any of the key assumptions mentioned above would cause the carrying value of the cash generating units to exceed their recoverable amounts. The Group estimated that a decrease in growth rate by 50 basis points, keeping all other assumptions constant, would decrease the 2012 VIU for both Food Lion and Hannaford by $396 million. An increase of the discount rate by 100 basis points, keeping all other constant, would decrease the 2012 VIU for Food Lion and Hannaford by $891 million and $893 million, respectively. A simultaneous increase in discount rate and decrease in growth rates by the before mentioned amounts would not result in the carrying amount of Food Lion or Hannaford exceeding the VIU. Alternatively, a reduction in the total projected future cash flows by 10%, keeping all other constant, would decrease the 2012 VIU for Food Lion and Hannaford by $485 million and $493 million, respectively and would not result in the carrying amount of Food Lion or Hannaford exceeding the VIU.

Europe

The recoverable amount of the operating segments Belgium, Greece and Romania has been determined based on VIU calculations. The key assumptions used for the VIU calculations were as follows:


	Perpetual Growth Rate			Pre-tax discount rate
2012:
Belgium		2.4	%		9.9	%
Greece		1.6	%		14.4	%
Romania		2.3	%		11.7	%
2011:
Belgium		3.3	%		10.3	%
Greece		2.5	%		14.3	%
Romania		2.7	%		11.9	%
2010:
Belgium		2.9	%		7.8	%
Greece		2.5	%		7.0	%
Romania		3.7	%		14.7	%

F-33

Management believes that the assumptions used in the VIU calculations represent the best estimates of future development and is of the opinion that no reasonable possible change in any of the key assumptions mentioned above would cause the carrying value of the cash generating units to exceed their recoverable amounts. The Group estimated that a decrease in growth rate by 50 basis points, keeping all other constant, would decrease the 2012 VIU for Belgium, Greece and Romania by €201 million, €60 million and €15 million respectively. An increase of the discount rate by 100 basis points, keeping all other constant, would decrease the 2012 VIU for Belgium, Greece and Romania by €444 million, €104 million and €40 million, respectively. A simultaneous increase in discount rate and decrease in growth rates by the before mentioned amounts would not result in the carrying amount of Belgium, Greece or Romania exceeding the VIU. Alternatively, a reduction in the total projected future cash flows by 10%, keeping all other constant, would decrease the 2012 VIU for Belgium, Greece and Romania by €258 million, €96 million and €37 million, respectively and would not result in the carrying amount of Belgium, Greece or Romania exceeding the VIU.

Considering the expected growth of the relatively young operations in the Maxi countries, the recoverable amount of these countries has been determined based on FVLCTS calculations. Delhaize Group impaired 100% of the goodwill related to Bulgaria, Bosnia & Herzegovina and Montenegro and recognized a €85 million impairment loss with respect to the Serbian goodwill. The Group believes that this brings the value of the operations in line with its revised current expectations and reflects market conditions in the various countries, resulting from less optimistic expectations on growth rates, due to lower sales square meters assumptions, and higher competitive environment compared to the initial assumptions applied, having a negative impact on revenue growth, despite maintaining profitability. The key assumptions used and the recognized impairment losses were as follows:


	Perpetual Growth Rate			Pre-tax discount rate			Impairment Loss (in millions)
Serbia		3.7	%		14.6	%		RSD	9 616
Bulgaria		2.7	%		10.7	%		BGN	30
Bosnia & Herzegovina		2.3	%		16.1	%		BAM	50
Montenegro		3.4	%		14.1	%		EUR	10
Total								EUR	136

The Group estimated that a decrease in growth rate by 50 basis points, keeping all other constant, would further decrease the FVLCTS for Serbia by €16 million. An increase of the discount rate by 100 basis points, keeping all other constant, would decrease the FVLCTS by €72 million. A simultaneous increase in discount rate and decrease in growth rates by the before mentioned amounts would result in the carrying amount of Serbia exceeding the FVLCTS by an additional €84 million. Alternatively, a reduction in the total projected future cash flows by 10%, keeping all other constant, would result in the carrying amount of Serbia exceeding the FVLCTS by an additional €68 million.

Impairment losses are recognized in profit or loss in “Other operating expenses” (Note 28).

As a result of the decision to dispose the Group’s Albanian operations (see Note 5.2), relating goodwill has been fully impaired to reflect the measurement of Albania at FVLCTS, as required by IFRS 5. The remeasurement loss has been included in “Result from discontinued operations (net of tax)” (Note 5.3).

F-34

7.	Intangible Assets

Intangible assets consist primarily of trade names, customer relationships, purchased and developed software, favorable lease rights, prescription files and other licenses.

Delhaize Group has determined that its trade names have an indefinite useful life and are not amortized, but are tested annually for impairment and whenever events or circumstances indicate that impairment may have occurred. Trade names are tested for impairment by comparing their recoverable amount, being their value in use, with their carrying amount. The recoverable amount is estimated using revenue projections of each operating entity (see Note 6) and applying an estimated royalty rate of 0.45% and 0.70% for Food Lion and Hannaford, respectively.

During 2012, the Group fully impaired the Albanian trade name (€3 million), reflecting the measurement of the disposal group in accordance with IFRS 5, and included this impairment in “Result from discontinued operations (net of tax)” (Note 5.3). Further, the Group recognized impairment charges in connection with the Piccadilly brands in Bulgaria (part of the “Southeastern Europe & Asia” segment) for €15 million, reflecting the Group’s revised expectations on market conditions. The recoverable amount has been estimated using the royalty-relief-method and royalty rates for the various Maxi brands range from 0.68% (Piccadilly) to 1.34% (Maxi), depending on the individual local strengths of the different brands. No impairment loss of trade names was recorded or reversed in 2011 or 2010.

See Note 8 for a description of the impairment test for assets with finite lives.


(in millions of €)	Trade Names			Developed Software			Purchased Software			Favorable Lease Rights			Other			Total
Cost at January 1, 2012		599			222			281			170			65			1 337
Additions		—			71			17			—			4			92
Sales and disposals		—			—			(2	)		(12	)		(4	)		(18	)
Transfers (to) from other accounts		—			(20	)		30			—			—			10
Classified as held for sale		(3	)		—			—			—			—			(3	)
Currency translation effect		(21	)		(2	)		(5	)		(4	)		(2	)		(34	)
Cost at December 31, 2012		575			271			321			154			63			1 384
Accumulated amortization at January 1, 2012		—			(116	)		(171	)		(105	)		(30	)		(422	)
Accumulated impairment at January 1, 2012		(36	)		—			—			—			(1	)		(37	)
Amortization expense		—			(27	)		(36	)		(11	)		(3	)		(77	)
Impairment loss		(15	)		—			—			—			(2	)		(17	)
Sales and disposals		—			—			1			12			4			17
Transfers to (from) other accounts		—			—			(8	)		—			—			(8	)
Currency translation effect		—			1			3			2			2			8
Accumulated amortization at December 31, 2012		—			(142	)		(211	)		(102	)		(28	)		(483	)
Accumulated impairment at December 31, 2012		(51	)		—			—			—			(2	)		(53	)

Net carrying amount at December 31, 2012		524			129			110			52			33			848

Cost at January 1, 2011		390			192			230			195			56			1 063
Additions		—			58			27			—			2			87
Sales and disposals		—			(12	)		(6	)		(36	)		—			(54	)
Acquisitions through business combinations		200			—			1			8			9			218
Transfers (to) from other accounts		—			(19	)		21			—			(3	)		(1	)
Currency translation effect		9			3			8			3			1			24
Cost at December 31, 2011⁽¹⁾		599			222			281			170			65			1 337
Accumulated amortization at January 1, 2011		—			(94	)		(138	)		(129	)		(28	)		(389	)
Accumulated impairment at January 1, 2011		(35	)		(2	)		(3	)		—			—			(40	)
Amortization expense		—			(23	)		(32	)		(11	)		(4	)		(70	)
Impairment loss		—			(1	)		(1	)		—			(1	)		(3	)
Sales and disposals		—			12			5			37			—			54
Transfers to (from) other accounts		—			(5	)		3			—			3			1
Currency translation effect		(1	)		(3	)		(5	)		(2	)		(1	)		(12	)
Accumulated amortization at December 31, 2011		—			(116	)		(171	)		(105	)		(30	)		(422	)
Accumulated impairment at December 31, 2011		(36	)		—			—			—			(1	)		(37	)

Net carrying amount at December 31, 2011⁽¹⁾		563			106			110			65			34			878

F-35


(in millions of €)	Trade Names			Developed Software			Purchased Software			Favorable Lease Rights			Other			Total
Cost at January 1, 2010		362			151			175			201			49			938
Additions		—			43			43			—			6			92
Sales and disposals		—			(4	)		(2	)		(22	)		—			(28	)
Transfers (to) from other accounts		—			(4	)		5			—			(2	)		(1	)
Currency translation effect		28			6			9			16			3			62
Cost at December 31, 2010		390			192			230			195			56			1 063
Accumulated amortization at January 1, 2010		—			(71	)		(103	)		(123	)		(24	)		(321	)
Accumulated impairment at January 1, 2010		(33	)		(3	)		(2	)		(5	)		—			(43	)
Amortization expense		—			(21	)		(32	)		(12	)		(4	)		(69	)
Sales and disposals		—			4			1			22			—			27
Transfers to (from) other accounts		—			(1	)		1			(1	)		2			1
Currency translation effect		(2	)		(4	)		(6	)		(10	)		(2	)		(24	)
Accumulated amortization at December 31, 2010		—			(94	)		(138	)		(129	)		(28	)		(389	)
Accumulated impairment at December 31, 2010		(35	)		(2	)		(3	)		—			—			(40	)

Net carrying amount at December 31, 2010		355			96			89			66			28			634

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

Trade name assets are allocated to the following cash generating units:


(in millions of €)	December 31,
(in millions of €)	2012		2011⁽¹⁾		2010
Food Lion		196		200		193
Hannaford		163		167		162

Delhaize America		359		367		355
Serbia		151		164		—
Bulgaria		14		29		—
Albania		—		3		—

Maxi		165		196		—

Total		524		563		355

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

Amortization expenses are mainly charged to selling, general and administrative expenses.

F-36

8.	Property, Plant and Equipment


(in millions of €)	Land and Buildings			Leasehold Improvements			Furniture, Fixtures, Equipment and Vehicles			Construction in Progress and Advance Payments			Property under Finance Leases			Total Property, Plant and Equipment
Cost at January 1, 2012		2 539			1 902			3 624			87			969			9 121
Additions		96			101			246			147			14			604
Sales and disposals		(21	)		(110	)		(228	)		(4	)		(26	)		(389	)
Acquisitions through business combinations		3			—			1			—			—			4
Transfers (to) from other accounts		29			56			41			(187	)		(86	)		(147	)
Currency translation effect		(49	)		(28	)		(56	)		—			(15	)		(148	)
Divestitures / Classified as held for sale		(1	)		(1	)		(12	)		—			—			(14	)
Balance at December 31, 2012		2 596			1 920			3 616			43			856			9 031
Accumulated depreciation at January 1, 2012		(735	)		(1 126	)		(2 117	)		—			(422	)		(4 400	)
Accumulated impairment at January 1, 2012		(19	)		(35	)		(62	)		—			(55	)		(171	)
Depreciation expense		(93	)		(132	)		(294	)		—			(49	)		(568	)
Impairment loss		(15	)		(23	)		(36	)		(1	)		(12	)		(87	)
Sales and disposals		14			109			210			—			25			358
Transfers to (from) other accounts		10			1			4			—			78			93
Currency translation effect		11			17			34			—			8			70
Divestitures / Classified as held for sale		—			—			5			—			—			5
Accumulated depreciation at December 31, 2012		(801	)		(1 160	)		(2 203	)		—			(407	)		(4 571	)
Accumulated impairment at December 31, 2012		(26	)		(29	)		(53	)		(1	)		(20	)		(129	)

Net carrying amount at December 31, 2012		1 769			731			1 360			42			429			4 331

Cost at January 1, 2011		1 930			1 861			3 217			94			930			8 032
Additions		112			92			265			204			35			708
Sales and disposals		(8	)		(22	)		(96	)		(5	)		(18	)		(149	)
Acquisitions through business combinations		297			21			77			5			—			400
Transfers (to) from other accounts		167			(90	)		76			(213	)		(6	)		(66	)
Currency translation effect		41			40			85			2			28			196
Balance at December 31, 2011⁽¹⁾		2 539			1 902			3 624			87			969			9 121
Accumulated depreciation at January 1, 2011		(587	)		(1 055	)		(1 881	)		—			(380	)		(3 903	)
Accumulated impairment at January 1, 2011		—			(12	)		(23	)		—			(19	)		(54	)
Depreciation expense		(74	)		(126	)		(264	)		—			(49	)		(513	)
Impairment loss		(17	)		(24	)		(39	)		—			(35	)		(115	)
Sales and disposals		4			20			89			—			19			132
Transfers to (from) other accounts		(60	)		65			(3	)		—			3			5
Currency translation effect		(20	)		(29	)		(58	)		—			(16	)		(123	)
Accumulated depreciation at December 31, 2011		(735	)		(1 126	)		(2 117	)		—			(422	)		(4 400	)
Accumulated impairment at December 31, 2011		(19	)		(35	)		(62	)		—			(55	)		(171	)

Net carrying amount at December 31, 2011⁽¹⁾		1 785			741			1 445			87			492			4 550

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

F-37


(in millions of €)	Land and Buildings			Leasehold Improvements			Furniture, Fixtures, Equipment and Vehicles			Construction in Progress and Advance Payments			Property under Finance Leases			Total Property, Plant and Equipment
Cost at January 1, 2010		1 764			1 652			2 891			62			845			7 214
Additions		59			82			228			184			54			607
Sales and disposals		(11	)		(29	)		(124	)		—			(27	)		(191	)
Acquisitions through business combinations		1			1			2			—			—			4
Transfers (to) from other accounts		45			58			55			(154	)		—			4
Currency translation effect		72			97			165			2			58			394
Balance at December 31, 2010		1 930			1 861			3 217			94			930			8 032
Accumulated depreciation at January 1, 2010		(503	)		(899	)		(1 633	)		—			(330	)		(3 365	)
Accumulated impairment at January 1, 2010		—			(14	)		(34	)		—			(16	)		(64	)
Depreciation expense		(71	)		(127	)		(254	)		—			(51	)		(503	)
Impairment loss		—			(2	)		(5	)		—			(5	)		(12	)
Sales and disposals		8			29			115			—			27			179
Transfers to (from) other accounts		(1	)		(2	)		1			—			—			(2	)
Currency translation effect		(20	)		(52	)		(94	)		—			(24	)		(190	)
Accumulated depreciation at December 31, 2010		(587	)		(1 055	)		(1 881	)		—			(380	)		(3 903	)
Accumulated impairment at December 31, 2010		—			(12	)		(23	)		—			(19	)		(54	)

Net carrying amount at December 31, 2010		1 343			794			1 313			94			531			4 075

Depreciation expense is included in the following line items of the income statement:

(in millions of €)

2012

2011

2010

Cost of sales

Selling, general and administrative expenses

507

457

447

Total depreciation

568

513

503

Property, plant and equipment can be summarized by reportable segment as follows:


(in millions of €)	December 31,
(in millions of €)	2012		2011⁽¹⁾		2010
United States		2 510		2 750		2 794
Belgium		828		808		784
Southeastern Europe and Asia		983		983		488
Corporate		10		9		9

Total property, plant and equipment		4 331		4 550		4 075

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

In accordance with the accounting policy in Note 2.3, Delhaize Group tests assets with finite lives for impairment whenever events or circumstances indicate that an impairment may exist. The Group monitors the carrying value of its operating retail stores, the lowest level asset group for which identifiable cash inflows of store assets are independent of other (groups of) assets (“cash-generating unit” or CGU), for potential impairment based on historical and projected cash flows. The value in use, applying the main assumptions detailed in Note 6, is estimated using projected discounted cash flows based on past experience and knowledge of the markets in which the stores are located, adjusted for various factors such as inflation and general economic conditions. The fair value less cost to sell is estimated based on a multiples approach or independent third-party appraisals, based on the location and condition of the stores. Closed stores are reviewed for impairment on a fair value less cost to sell basis, based on actual results of the past and using observable market data, where possible.

Management believes that the assumptions applied when testing for impairment are reasonable estimates of the economic conditions and operating performance of the different CGUs. Changes in these conditions or performance will have an impact on the projected cash flows used to determine the recoverable amount of the CGUs and might result in additional stores identified as being possibly impaired and/or on the impairment amount calculated.

F-38

Impairment losses of property, plant and equipment are recorded in other operating expenses (Note 28).

During the fourth quarter of 2012, the Group recognized impairment charges of €87 million related to (i) 45 stores (34 Sweetbay, 8 Food Lion and 3 Bottom Dollar Food) that were closed early 2013 and 9 underperforming stores, both in the United States, for a total amount of €54 million, (ii) the closing of 6 stores and underperformance of 57 stores in Southeastern Europe (€28 million), and (iii) 1 store closing and the impairment of 6 stores in Belgium (€5 million).

A store portfolio review resulted in the decision to close 146 underperforming stores in the first quarter of 2012. Consequently, the Group recorded in 2011 €115 million impairment charges relating to 126 stores in the U.S. (113 Food Lion, 7 Bloom and 6 Bottom Dollar stores) and one distribution center, while the underperformance of 20 Maxi stores (in Serbia, Bulgaria and Bosnia and Herzegovina) was already reflected in the fair values of the related assets in the opening balance sheet (see Note 4). In addition, Delhaize Group recognized impairment reversals of €3 million in the United States, which was offset by impairment charges in various other parts of the Group.

The 2010 impairment losses of €12 million relate to underperforming stores, mainly in the United States, with only insignificant amounts incurred in connection with store closings.

The impairment charges can be summarized by property, plant and equipment categories as follows:


(in millions of €)	December 31,
(in millions of €)	2012		2011		2010
Land and buildings		15		17		—
Leasehold improvements		23		24		2
Furniture, fixtures, equipment and vehicles		36		39		5
Construction in progress		1		—		—
Property under finance leases		12		35		5

Total		87		115		12

In 2012 and 2011, the Group reclassified property, plant and equipment to investment property (see Note 9) for €44 million and €31 million, respectively. In accordance with the Group’s policy, closed stores held under finance lease agreements are reclassified to investment property. In 2011 the Group also transferred €16 million of assets acquired from Delta Maxi to “Assets classified as held for sale.”

Property under finance leases consists mainly of buildings. The number of owned versus leased stores by segment at December 31, 2012 is as follows:


	Owned		Finance Leases		Operating Leases		Affiliated and Franchised Stores Owned by their Operators or Directly Leased by their Operators from a Third Party		Total
United States		229		593		731		—		1 553
Belgium		153		32		208		447		840
Southeastern Europe & Asia		318		—		694		46		1 058

Total		700		625		1 633		493		3 451

F-39

9.	Investment Property

Investment property, principally comprised of owned rental space attached to supermarket buildings and excess real estate, is held for long-term rental yields or appreciation and is not occupied by the Group.

In accordance with the Group’s accounting policy in Note 2.3, investment property is accounted for at cost less accumulated depreciation and accumulated impairment losses, if any. When stores held under finance lease agreements are closed (see Note 20.1) or if land will no longer be developed for construction purposes, they are reclassified from property, plant and equipment to investment property.

In 2012, €44 million of property, plant and equipment was transferred to investment property (see Note 8), of which €34 million related to the store portfolio review, which took place at the beginning of 2012. In 2011, Delhaize Group acquired investment property of €34 million as part of the Delta Maxi acquisition (see Note 4.1), of which €21 million was subsequently classified as “held for sale.” In 2012, as a result of the weakening real estate market and the deteriorating state of the property for sale, making a sale within the foreseeable future unlikely, part of these properties (net book value of €7 million) has been reclassified into investment property (see Note 5.2).

During 2012, the Group recorded €14 million of impairment charges, primarily on 15 properties in the United States and a warehouse in Albania. In 2011, an impairment loss of €17 million was recorded, primarily due to the portfolio review (€12 million).


(in millions of €)	2012			2011⁽¹⁾			2010
Cost at January 1		137			91			79
Additions		6			2			15
Sales and disposals		(29	)		(7	)		(6	)
Acquisition through business combinations		—			34			—
Transfers (to) from other accounts		142			12			(3	)
Currency translation effect		(6	)		5			6
Cost at December 31		250			137			91
Accumulated depreciation and impairment at January 1		(54	)		(31	)		(29	)
Depreciation expense		(4	)		(3	)		(3	)
Sales and disposals		26			3			5
Impairment		(14	)		(17	)		(2	)
Transfers to (from) other accounts		(91	)		(3	)		—
Currency translation effect		3			(3	)		(2	)
Accumulated depreciation and impairment at December 31		(134	)		(54	)		(31	)

Net carrying amount at December 31		116			83			60

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

At December 31, 2012, 2011 and 2010, the Group only had insignificant investment property under construction.

The fair value of investment property amounted to €146 million, €115 million and €92 million at December 31, 2012, 2011 and 2010, respectively. The fair values for disclosure purposes have been determined using either the support of qualified independent external valuers or by internal valuers with the necessary recognized and relevant professional qualification, applying a combination of the present value of future cash flows and observable market values of comparable properties.

Rental income from investment property recorded in other operating income was €7 million for 2012, €5 million for 2011 and €3 million for 2010. Operating expenses arising from investment property generating rental income, included in selling, general and administrative expenses, were €6 million in 2012, €5 million in 2011 and €4 million in 2010. Operating expenses arising from investment property not generating rental income, included in selling, general and administrative expenses were €4 million in 2012, €2 million in 2011 and €4 million in 2010.

F-40

10.

Financial Instruments by Category

10.1Financial Assets

Financial Assets by Class and Measurement Category


(in millions of €)	December 31, 2012
	Financial assets measured at amortized cost				Financial assets measured at fair value
	Note		Loans and Receivables		Derivatives - through profit or loss		Derivatives - through equity		Available for sale - through equity		Total
Non-Current
Investments in securities		11		—		—		—		11		11
Other financial assets		12		19		—		—		—		19
Derivative instruments		19		—		61		—		—		61
Current
Receivables		14		634		—		—		—		634
Investments in securities		11		—		—		—		93		93
Other financial assets		12		—		—		—		—		—
Derivative instruments		19		—		—		—		—		—
Cash and cash equivalents		15		932		—		—		—		932

Total financial assets				1 585		61		—		104		1 750


(in millions of €)	December 31, 2011
	Financial assets measured at amortized cost				Financial assets measured at fair value
	Note		Loans and Receivables		Derivatives - through profit or loss		Derivatives - through equity		Available for sale - through equity		Total
Non-Current
Investments in securities		11		—		—		—		13		13
Other financial assets		12		18		—		—		—		18
Derivative instruments		19		—		57		—		—		57
Current
Receivables⁽¹⁾		14		697		—		—		—		697
Investments in securities		11		—		—		—		93		93
Other financial assets		12		22		—		—		—		22
Derivative instruments		19		—		1		—		—		1
Cash and cash equivalents		15		432		—		—		—		432

Total financial assets				1 169		58		—		106		1 333

(1)	2011 was revised to reflect the effects of the completion of the purchase price allocation of the Delta Maxi acquisition in the second quarter of 2012.

F-41


(in millions of €)	December 31, 2010
	Financial assets measured at amortized cost				Financial assets measured at fair value
	Note		Loans and Receivables		Derivatives - through profit or loss		Derivatives - through equity		Available for sale - through equity		Total
Non-Current
Investments in securities		11		—		—		—		125		125
Other financial assets		12		17		—		—		—		17
Derivative instruments		19		—		61		—		—		61
Current
Receivables		14		637		—		—		—		637
Investments in securities		11		—		—		—		43		43
Other financial assets		12		3		—		—		—		3
Derivative instruments		19		—		5		—		—		5
Cash and cash equivalents		15		758		—		—		—		758

Total financial assets				1 415		66		—		168		1 649

Financial Assets measured at fair value by Fair Value Hierarchy

Fair value is the amount for which an asset could be exchanged or a liability settled in an arm’s length transaction. IFRS 7 requires, for financial instruments that are measured in the balance sheet at fair value, the disclosure of fair value measurements by level of the following fair value measurement hierarchy:

•

Level 1:The fair value of a financial instrument that is traded in an active market is measured based on quoted (unadjusted) prices for identical assets or liabilities. A market is considered as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis.

•

Level 2:The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, either directly (i.e., as prices) or indirectly (i.e., derived from prices), the instrument is included in level 2.

•

Level3: If one or more of the significant inputs used in applying the valuation technique is not based on observable market data, the financial instrument is included in level 3.


December 31, 2012
(in millions of €)	Note		Level 1		Level 2		Level 3		Total
Non-Current
Available for sale - through equity		11		8		3		—		11
Derivatives - through profit or loss		19		—		61		—		61
Derivatives - through equity		19		—		—		—		—
Current
Available for sale - through equity		11		93		—		—		93
Derivatives - through profit or loss		19		—		—		—		—
Derivatives - through equity		19		—		—		—		—

Total financial assets measured at fair value				101		64		—		165

F-42


December 31, 2011
(in millions of €)	Note		Level 1		Level 2		Level 3		Total
Non-Current
Available for sale - through equity		11		12		1		—		13
Derivatives - through profit or loss		19		—		57		—		57
Derivatives - through equity		19		—		—		—		—
Current
Available for sale - through equity		11		93		—		—		93
Derivatives - through profit or loss		19		—		1		—		1
Derivatives - through equity		19		—		—		—		—

Total financial assets measured at fair value				105		59		—		164


December 31, 2010
(in millions of €)	Note		Level 1		Level 2		Level 3		Total
Non-Current
Available for sale - through equity		11		122		3		—		125
Derivatives - through profit or loss		19		—		61		—		61
Derivatives - through equity		19		—		—		—		—
Current
Available for sale - through equity		11		43		—		—		43
Derivatives - through profit or loss		19		—		5		—		5
Derivatives - through equity		19		—		—		—		—

Total financial assets measured at fair value				165		69		—		234

During 2010, €1 million of securities were transferred from Level 2 to Level 1. No transfers between the different fair value hierarchy levels took place in 2012 and 2011.

10.2Financial Liabilities

Financial Liabilities by Class and Measurement Category


	December 31, 2012
(in millions of €)	Financial liabilities measured at fair value						Financial liabilities being part of a fair value hedge relationship		Financial liabilities at amortized cost		Total
(in millions of €)	Note		Derivatives - through profit or loss		Derivatives - through equity				Financial liabilities at amortized cost		Total
Non-Current
Long-term debt		18.1		—		—		561		1 752		2 313
Obligations under finance lease		18.3		—		—		—		612		612
Derivative instruments		19		10		—		—		—		10
Current
Short-term borrowings		18.2		—		—		—		—		—
Long-term debt - current portion		18.1		—		—		—		156		156
Obligations under finance leases		18.3		—		—		—		62		62
Derivative instruments		19		4		—		—		—		4
Accounts payable				—		—		—		1 884		1 884

Total financial liabilities				14		—		561		4 466		5 041

F-43


	December 31, 2011
(in millions of €)	Financial liabilities measured at fair value							Financial liabilities being part of a fair value hedge relationship		Financial liabilities at amortized cost		Total
(in millions of €)	Note		Derivatives - through profit or loss		Derivatives - through equity					Financial liabilities at amortized cost		Total
Non-Current
Long-term debt		18.1		—		—			541		1 784		2 325
Obligations under finance lease		18.3		—		—			—		689		689
Derivative instruments		19		9		11			—		—		20
Current
Short-term borrowings		18.2		—		—			—		60		60
Long-term debt - current portion		18.1		—		—			—		88		88
Obligations under finance leases		18.3		—		—	��		—		61		61
Derivative instruments		19		—		—			—		—		—
Accounts payable⁽¹⁾				—		—			—		1 845		1 845

Total financial liabilities				9		11			541		4 527		5 088

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.


	December 31, 2010
(in millions of €)	Financial liabilities measured at fair value						Financial liabilities being part of a fair value hedge relationship		Financial liabilities at amortized cost		Total
(in millions of €)	Note		Derivatives - through profit or loss		Derivatives - through equity				Financial liabilities at amortized cost		Total
Non-Current
Long-term debt		18.1		—		—		544		1 422		1 966
Obligations under finance lease		18.3		—		—		—		684		684
Derivative instruments		19		3		13		—		—		16
Current
Short-term borrowings		18.2		—		—		—		16		16
Long-term debt - current portion		18.1		—		—		—		40		40
Obligations under finance leases		18.3		—		—		—		57		57
Derivative instruments		19		—		—		—		—		—
Accounts payable				—		—		—		1 574		1 574

Total financial liabilities				3		13		544		3 793		4 353

F-44

Financial Liabilities measured at fair value by Fair Value Hierarchy


December 31, 2012
(in millions of €)	Note		Level 1		Level 2		Level 3		Total
Non-Current
Derivatives - through profit or loss		19		—		10		—		10
Derivatives - through equity		19		—		—		—		—
Current
Derivatives - through profit or loss		19		—		4		—		4
Derivatives - through equity		19		—		—		—		—

Total financial liabilities measured at fair value				—		14		—		14

December 31, 2011
(in millions of €)	Note		Level 1		Level 2		Level 3		Total
Non-Current
Derivatives - through profit or loss		19		—		9		—		9
Derivatives - through equity		19		—		11		—		11
Current
Derivatives - through profit or loss		19		—		—		—		—
Derivatives - through equity		19		—		—		—		—

Total financial liabilities measured at fair value				—		20		—		20

December 31, 2010
(in millions of €)	Note		Level 1		Level 2		Level 3		Total
Non-Current
Derivatives - through profit or loss		19		—		3		—		3
Derivatives - through equity		19		—		13		—		13
Current
Derivatives - through profit or loss		19		—		—		—		—
Derivatives - through equity		19		—		—		—		—

Total financial liabilities measured at fair value				—		16		—		16

During 2012, 2011 and 2010, no transfers between the different fair value hierarchy levels took place. See Note 10.1 with respect to the definition of the fair value hierarchy levels.

11.

Investments in Securities

Investments in securities contain investments in debt securities and equity investments, which are held as available for sale. Securities are included in current assets, except for debt securities with maturities of more than 12 months from the balance sheet date, which are classified as non-current assets. The carrying amounts of the available-for-sale financial assets are as follows:

December 31,

(in millions of €)

2012

2011

2010

Non-current

125

Current

Total

104

106

168

At December 31, 2012, the Group’s non-current investments in debt securities were €11 million, of which €8 million (2011: €9 million, 2010: €10 million) were held in escrow related to defeasance provisions of outstanding Hannaford debt and were therefore not available for general company purposes (see Note 18.1). The escrow funds have the following maturities:


(in millions)	2013		2014-2015		2016		Total
Cash flows in USD		1		1		9		11
Cash flows translated into EUR		—		1		7		8

F-45

Delhaize Group further holds smaller non-current investments in money market and investment funds (€3 million at December 31, 2012) in order to satisfy future pension benefit payments for a limited number of employees, which however do not meet the definition of plan assets as per IAS 19. The maximum exposure to credit risk at the reporting date is the carrying value of the investments.

At December 31, 2012, the Group’s current investments in securities were €93 million and consisted primarily of investment funds that are entirely invested in U.S. Treasuries. These investments are predominately held by the Group’s captive reinsurance company, covering the Group’s self-insurance exposure (see Note 20.2).

The fair values of Delhaize Group’s available-for-sale securities (both debt and equity investments) were predominantly determined by reference to current bid prices in an active market (see Notes 2.3 and 10.1). As mentioned in Note 2.3, the Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. In 2012, 2011 and 2010, none of the investments in securities were either past due or impaired.

12.

Other Financial Assets

Other financial assets, non-current and current, include notes receivable, guarantee deposits, restricted cash in escrow, collateral for derivatives and term deposits and are carried at amortized cost, less any impairment. The fair value of other financial assets approximates the carrying amount and represents the maximum credit risk.


	December 31,
(in millions of €)	2012		2011		2010
Non-current		19		18		17
Current		—		22		3

Total		19		40		20

The 2011 current financial assets included an amount of €20 million held in escrow relating to the acquisition of Delta Maxi (see Note 4.1), which has been released during 2012. The 2010 current financial assets contained collateral for derivatives of €2 million in connection with derivatives under existing International Swap Dealer Association Agreements (“ISDAs”).

13.

Inventories

Inventory predominately represents goods for resale. In 2012, 2011 and 2010, Delhaize Group did not recognize any (or reverse any previously recognized) material write-downs of inventory in order to reflect decreases in anticipated selling prices below the carrying value and ensure that inventory at hand is not carried at an amount in excess of amounts expected to be realized from its future sale or use.

Inventory recognized as an expense during the period is disclosed in Note 25 as “Product cost.”

F-46

14.

Receivables


(in millions of €)	2012			2011⁽¹⁾			2010
Trade receivables		630			674			640
Trade receivables - bad debt allowance		(31	)		(36	)		(29	)
Other receivables		35			59			26

Total current receivables		634			697			637

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

The aging of the current receivables is as follows:


(in millions of €)	December 31, 2012
(in millions of €)	Net Carrying Amount			Neither Impaired nor Past Due on the Reporting Date			Past Due - Less than 30 Days			Past Due - Between 30 and 180 Days			Past Due - More than 180 Days
Trade receivables		630			433			123			43			31
Trade receivables - bad debt allowance		(31	)		(3	)		(7	)		(4	)		(17	)
Other receivables		35			25			7			2			1

Total		634			455			123			41			15

(in millions of €)	December 31, 2011⁽¹⁾
(in millions of €)	Net Carrying Amount			Neither Impaired nor Past Due on the Reporting Date			Past Due - Less than 30 Days			Past Due - Between 30 and 180 Days			Past Due - More than 180 Days
Trade receivables		674			504			100			49			21
Trade receivables - bad debt allowance		(36	)		(6	)		(3	)		(11	)		(16	)
Other receivables		59			45			5			5			4

Total		697			543			102			43			9

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.


(in millions of €)	December 31, 2010
(in millions of €)	Net Carrying Amount			Neither Impaired nor Past Due on the Reporting Date			Past Due - Less than 30 Days			Past Due - Between 30 and 180 Days			Past Due - More than 180 Days
Trade receivables		640			521			71			29			19
Trade receivables - bad debt allowance		(29	)		(2	)		(3	)		(9	)		(15	)
Other receivables		26			17			2			4			3

Total		637			536			70			24			7

Trade receivables are predominantly to be paid, in full, between 30 days and 60 days.

Trade receivables credit risk is managed by the individual operating entities and credit rating is continuously monitored either based on internal rating criteria or with the support of third party service providers and the requirement for an impairment is analyzed at each reporting date on an individual basis for major positions. Additionally, minor receivables are grouped into homogenous groups and assessed for impairment collectively based on past experience. The maximum exposure to risk for the receivables is the carrying value minus any insurance coverage. The Group is not exposed to any concentrated credit risk as there are no outstanding receivables that are individually material for the Group or the operating entity because of the Group’s large and unrelated customer and vendor base. Management believes there is no further credit risk provision required in excess of the normal individual and collective impairment analysis performed at each reporting date. The fair values of the trade and other receivables approximate their (net) carrying values.

F-47

The movement of the bad debt allowance account was as follows:


(in millions of €)	Note		2012			2011			2010
Bad debt allowance as of January 1				36			29			30
Addition (recognized in profit or loss)		24		2			11			6
Usage				(7	)		(4	)		(8	)
Currency translation effect				—			—			1

Bad debt allowance at December 31				31			36			29

The 2011 increase of other receivables was predominantly due to the amounts receivable from insurance companies in connection with tornado and hurricane damages in the United States (€29 million).

15.

Cash and Cash Equivalents

Cash and cash equivalents were as follows:


(in millions of €)	2012		2011		2010
Deposits with original maturity of three months or less		500		100		491
Cash at banks		349		244		203
Cash on hand		83		88		64

Cash and cash equivalents at December 31		932		432		758

Supplemental Cash Flow information:


(in millions of €)	2012		2011		2010
Non-cash investing and financing activities:
Finance lease obligations incurred for store properties and equipment		14		35		54
Finance lease obligations terminated for store properties and equipment		24		2		1

As a result of the store closings (announced in the beginning of 2012 as a consequence of the portfolio review), Delhaize America terminated several finance lease agreements.

16.

Equity

Issued capital

There were 101 921 498, 101 892 190 and 101 555 281 Delhaize Group ordinary shares issued and fully paid at December 31, 2012, 2011 and 2010, respectively (par value of €0.50), of which 1 044 135, 1 183 948 and 988 860 ordinary shares were held in treasury at December 31, 2012, 2011 and 2010, respectively. Delhaize Group’s ordinary shares may be in either dematerialized, bearer or registered form, within the limits provided for by applicable law. Each shareholder is entitled to one vote for each ordinary share held on each matter submitted to a vote of shareholders.

In the event of a liquidation, dissolution or winding up of Delhaize Group, holders of Delhaize Group ordinary shares are entitled to receive, on a pro-rata basis, any proceeds from the sale of Delhaize Group’s remaining assets available for distribution. Under Belgian law, the approval of holders of Delhaize Group ordinary shares is required for any future capital increases. Existing shareholders are entitled to preferential subscription rights to subscribe to a pro-rata portion of any such future capital increases of Delhaize Group, subject to certain limitations.

Authorized Capital

As authorized by the Extraordinary General Meeting held on May 24, 2012, the Board of Directors of Delhaize Group may, for a period of five years expiring in June 2017, within certain legal limits, increase the capital of Delhaize Group or issue convertible bonds or subscription rights which might result in an increase of capital by a maximum of €5.1 million, corresponding to approximately 10.2 million shares. The authorized increase in capital through issuance of new shares, convertible debt or warrants, may be achieved by contributions in cash or, to the extent permitted by law, by contributions in kind or by incorporation of available or unavailable reserves or of the share premium account. The Board of Directors of Delhaize Group may, for this increase in capital, limit or remove the preferential subscription rights of Delhaize Group’s shareholders, within certain legal limits.

F-48

In 2012, Delhaize Group issued 29 308 shares of common stock (2011: 336 909; 2010: 684 655) for €1 million (2011: €13 million; 2010: €26 million), net of €0 million (2011: €6 million; 2010: €13 million) representing the portion of the subscription price funded by Delhaize America, LLC in the name and for the account of the optionees and net of issue costs.

Recent Capital Increases(in €, except number of shares)

Capital

Share Premium
(Belgian GAAP)⁽¹⁾

Number of
Shares

Capital on January 1, 2010

50 435 313

2 739 020 552

100 870 626

Capital increase as a consequence of the exercise of warrants under the 2002 Stock Incentive Plan

342 328

38 587 734

684 655

Capital on December 31, 2010

50 777 641

2 777 608 286

101 555 281

Capital increase as a consequence of the exercise of warrants under the 2002 Stock Incentive Plan

168 454

18 875 623

336 909

Capital on December 31, 2011

50 946 095

2 796 483 909

101 892 190

Capital increase as a consequence of the exercise of warrants under the 2002 Stock Incentive Plan

14 654

1 171 837

29 308

Capital on December 31, 2012

50 960 749

2 797 655 746

101 921 498

(1)	Share premium as recorded in the non-consolidated statutory accounts of Delhaize Group SA, prepared under Belgian GAAP.


Authorized Capital - Status(in €, except number of shares)	Maximum Number of Shares			Maximum Amount (excluding Share Premium)
Authorized capital as approved at the May 24, 2007 General Meeting with effect as of June 18, 2007		19 357 794			9 678 897
May 30, 2008 - Issuance of warrants under the Delhaize Group 2002 Stock Incentive Plan		(528 542	)		(264 271	)
June 9, 2009 - Issuance of warrants under the Delhaize Group 2002 Stock Incentive Plan		(301 882	)		(150 941	)
June 8, 2010 - Issuance of warrants under the Delhaize Group 2002 Stock Incentive Plan		(232 992	)		(116 496	)
Balance of remaining authorized capital as of December 31, 2010		18 294 378			9 147 189
June 15, 2011 - Issuance of warrants under the Delhaize Group 2002 Stock Incentive Plan		(318 524	)		(159 262	)
Balance of remaining authorized capital as of December 31, 2011		17 975 854			8 987 927
May 24, 2012 - Issuance of warrants under the Delhaize Group U.S. 2012 Stock Incentive Plan		(291 727	)		(145 864	)
Unused authorized capital as approved at the May 24, 2007 General Meeting, expired in June 2012		17 684 127			8 842 063
Authorized capital as approved at the May 24, 2012 General Meeting with effect as of June 21, 2012		10 189 218			5 094 609
August 31, 2012 - Issuance of warrants under the Delhaize Group U.S. 2012 Stock Incentive Plan		(300 000	)		(150 000	)
Balance of remaining authorized capital as of December 31, 2012		9 889 218			4 944 609

Share Premium

During 2011, Delhaize Group acquired euro denominated call options on its own shares in order to hedge its potential exposure arising from the possible future exercise of stock options granted to the employees of its non-U.S. operating companies. These call options met the requirements of IFRS to qualify as equity instruments and are recognized in share premium at their initial transaction cost of €6 million. The first tranche of the options will expire in June 2013, and the second and third tranches in May 2015 and May 2016, respectively.

Treasury Shares

On May 26, 2011, at an Ordinary and Extraordinary General Meeting, the Delhaize Group’s shareholders authorized the Board of Directors, in the ordinary course of business, to acquire up to 10% of the outstanding shares of the Group at a minimum share 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 May 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 stock option plans that Delhaize Group offers to its employees. No time limit has been set for these repurchases. On August 3, 2011, the Board of Directors approved the increase of the amount remaining for repurchases under the May 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.

F-49

During 2012, Delhaize Group SA did not acquire Delhaize Group shares and did not transfer shares to satisfy the exercise of stock options granted to employees of non-U.S. operating companies (see Note 21.3).

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,
(in millions of €)	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

F-50

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.

•

Unrealized gain (loss) on securities available for sale: The Group recognizes in this reserve fair value changes on financial assets classified as available-for-sale.

•

Actuarial gain (loss) on defined benefit plans:Delhaize Group elected to recognize actuarial gains and losses, which represent adjustments to the defined benefit net liabilities due to experience and changes in actuarial assumptions, fully in the period in which they occur in OCI (see Note 21.1). Actuarial gains and losses are never reclassified into profit or loss.

Cumulative Translation Adjustment

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.

Non-controlling Interests

Non-controlling interests represent third-party interests in the equity of fully consolidated companies that are not wholly owned by Delhaize Group.


Non-controlling interests(in millions of €)	December 31,
Non-controlling interests(in millions of €)	Note		2012		2011⁽¹⁾		2010
Belgium				—		—		1
Southeastern Europe and Asia		4.2		2		5		—

Total				2		5		1

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

With the acquisition of Delta Maxi in July 2011, Delhaize Group recognized €15 million of non-controlling interests (see Note 4.1). Subsequently, the Group acquired additional non-controlling interests in several Maxi subsidiaries (see Note 4.2), reducing the amount to €5 million. The decrease in 2012 is the result of (i) the purchase of additional non-controlling interests and (ii) the loss of the period attributable to non-controlling interests.

During 2010, Delhaize Group acquired the remaining non-controlling interests in Alfa Beta.

Capital Management

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, besides others, return capital to shareholders, issue new shares and / or debt or refinance / exchange existing debt. Further, Delhaize Group’s dividend policy aims at paying out a regularly increasing dividend while retaining free cash flow at an amount consistent with the opportunities to finance the future growth of the Group and maintaining the finance structure in accordance with the objectives stated above.

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).

F-51

17.

Dividends

On May 24, 2012, the shareholders approved the payment of a gross dividend of €1.76 per share (€1.32 per share after deduction of the 25% Belgian withholding tax) or a total gross dividend of €179 million (including the dividend on treasury shares). On May 26, 2011, the shareholders approved the payment of a gross dividend of €1.72 per share (€1.29 per share after deduction of the 25% Belgian withholding tax) or a total gross dividend of €175 million.

With respect to the financial year 2012, the Board of Directors proposes a gross dividend of €1.40 per share to be paid to owners of ordinary shares against coupon no. 51 on May 31, 2013. This dividend is subject to approval by shareholders at the Ordinary General Meeting of May 23, 2013 and, therefore, has not been included as a liability in Delhaize Group’s consolidated financial statements prepared under IFRS. The financial year 2012 dividend, based on the number of shares issued at March 6, 2013, is €143 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 2013 of the 2012 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 23, 2013. The Board of Directors will communicate at this Ordinary General Meeting the aggregate number of shares entitled to the 2012 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 2012 will be modified accordingly. The maximum number of shares which could be issued between March 6, 2013, and May 23, 2013, assuming that all vested warrants were to be exercised, is 2 786 792. This would result in an increase in the total amount to be distributed as dividends to a total of €4 million. Total outstanding non-vested warrants at March 6, 2013 amounted to 666 974, representing a maximum additional dividend to be distributed of €1 million.

F-52

18.

Financial Liabilities

18.1

Long-term Debt

Delhaize Group manages its debt and overall financing strategies using a combination of short, medium and long-term debt and interest rate and currency swaps. The Group finances its daily working capital requirements, when necessary, through the use of its various committed and uncommitted lines of credit. The short and medium-term borrowing arrangements generally bear interest at the inter-bank offering rate at the borrowing date plus a pre-set margin. Delhaize Group also has a treasury notes program available.

The carrying values of long-term debt (excluding finance leases, see Note 18.3), net of discounts and premiums, deferred transaction costs and including hedge accounting fair value adjustments were as follows:


(in millions of €)	Nominal Interest Rate			Maturity			Currency		December 31,
(in millions of €)	Nominal Interest Rate			Maturity			Currency		2012			2011			2010
Senior notes, unsecured		5.70	%		2040			USD		438			445			430
Debentures, unsecured		9.00	%		2031			USD		204			208			201
Notes, unsecured		8.05	%		2027			USD		52			53			51
Senior fixed rate bonds⁽¹⁾		3.125	%		2020			EUR		397			—			—
Senior notes⁽¹⁾		4.125	%		2019			USD		232			—			—
Retail bond, unsecured		4.25	%		2018			EUR		400			400			—
Bonds, unsecured		6.50	%		2017			USD		339			345			334
Notes, unsecured⁽¹⁾		5.625	%		2014			EUR		229			541			544
Senior notes, unsecured⁽¹⁾		5.875	%		2014	⁽³⁾		USD		75			231			223
Bonds, unsecured⁽²⁾		5.10	%		2013			EUR		80			80			80
Notes, unsecured		8.125	%		2011			USD		—			—			38
Other debt		4.58% to 7	%		2013 to 2031			USD		15			14			10
Mortgages payable		8.25	%		2010 to 2016			USD		1			2			2
Senior notes		7.06	%		2010 to 2016			USD		6			6			7
Other notes, unsecured		13.21	%		2010 to 2013			USD		—			—			1
Floating term loan, unsecured		LIBOR 6m+45bps			2012			USD		—			87			84
Bank borrowings								EUR		1			1			1

Total non-subordinated borrowings										2 469			2 413			2 006
Less current portion										(156	)		(88	)		(40	)

Total non-subordinated borrowings, non-current										2 313			2 325			1 966

(1)	Notes are part of hedging relationship (see Note 19) and refinancing transactions that took place in 2012 (see below).

(2)	Bonds issued by Delhaize Group’s Greek subsidiary Alfa Beta.

(3)	Redeemed in January 2013 (see below).

The interest rate on long-term debt (excluding finance leases, see Note 18.3) was on average 4.4%, 5.0% and 5.1% at December 31, 2012, 2011 and 2010, respectively. These interest rates were calculated considering the interest rate swaps discussed in Note 19.

Delhaize Group has a multi-currency treasury note program in Belgium. Under this program, Delhaize Group may issue both short-term notes (commercial paper) and medium-term notes in amounts up to €500 million, or the equivalent thereof in other eligible currencies. No notes were outstanding at December 31, 2012, 2011 and 2010.

Refinancing of Long-term Debts

In April 2012, Delhaize Group issued $300 million aggregate principal amount of senior notes with an annual interest rate of 4.125% due 2019. The senior notes were issued at a discount of 0.193% on their principal amount. The offering of the notes was made to qualified investors pursuant to an effective registration statement filed by Delhaize Group with the U.S. Securities and Exchange Commission (SEC), and are not listed on any stock exchange. At the same time, the Group completed a tender offer for cash prior to maturity of up to €300 million aggregate principal amount of its outstanding €500 million 5.625% senior notes due 2014. The net proceeds of the debt issuance were used in part to fund the partial repurchase of these senior notes for a nominal amount of €191 million, at a price of 108.079%.

F-53

Simultaneously, Delhaize Group entered into (i) matching interest rate swaps to hedge the Group’s exposure to changes in the fair value of the 4.125% notes due, and (ii) cross-currency swaps, exchanging the principal amount ($300 million for €225 million) and interest payments (both variable), to cover the foreign currency exposure (economic hedge). See Note 19 for additional information on the hedge accounting applied.

During November 2012, Delhaize Group issued €400 million senior fixed rate bonds due 2020, at an annual coupon of 3.125%, issued at 99.709% of their principal amount. Delhaize Group entered into matching interest rate swaps to hedge €100 million of the Group’s exposure to changes in the fair value of the 3.125% bonds due to variability in market interest rates (see Note 19).

The net proceeds of the issuance were primarily used to fund the following tender offers:

•

During December 2012, Delhaize Group completed a second tender offer for cash and purchased an aggregate nominal amount of €94 million of the above mentioned €500 million notes at a price of 107.740%. Following the completion of both offers, an aggregate nominal amount of €215 million of the notes remained outstanding.

•

Simultaneously, the Group also completed an offer for cash for any and all of its outstanding $300 million 5.875% senior notes due 2014 and purchased $201 million of the tendered notes at a purchase price of 105.945%. Following the completion of the tender, an aggregate nominal amount of $99 million of the notes remained outstanding. Delhaize Group exercised its right to redeem these remaining outstanding notes, which was completed on January 3, 2013.

These refinancing transactions did not qualify as a debt modification and resulted in the derecognition of existing notes and recognition of new notes (see also Note 29.1).

Both the €400 and $300 million notes issued in 2012 contain a change of control provision allowing their holders to require Delhaize Group to repurchase the notes in cash for an amount equal to 101% of their aggregated principal amount plus accrued and unpaid interest thereon, if any, upon the occurrence of both (i) a change in control and (ii) a downgrade of the rating of the notes by the rating agencies Moody’s and Standard & Poors within 60 days of Delhaize Group’s public announcement of the occurrence of the change of control.

In October 2010, Delhaize Group exchanged $533 million of the 9.00% debentures due 2031 and $55 million of the 8.05% notes due 2027 (together the “Existing Securities”) issued in a private offering by the wholly-owned subsidiary Delhaize America, LLC, for $827 million, 5.70% senior notes due 2040 issued by Delhaize Group.

The transaction qualified as a “debt modification” under IFRS (see Note 2.3) and any costs or fees incurred adjusted the carrying amount of the Existing Securities, being the carrying amount of the new senior notes, and are amortized over the remaining term of the senior notes due 2040. In line with IFRS, the non-cash premium granted, being the difference between the principal amounts of the Existing Securities tendered and the principal amount of the new senior notes issued, had no immediate impact on the carrying amount of the new notes and is also amortized over the remaining term of the senior notes, i.e., until 2040.

Issuance of new Long-term Debts

During October 2011, Delhaize Group completed the public offering of a 7-year 4.25% retail bond in Belgium and in the Grand Duchy of Luxembourg for a total amount of €400 million. The majority of the proceeds of the retail bond were used for the voluntarily early repayment of long-term and short-term debt assumed as part of the Delta Maxi acquisition.

The bonds contain a change of control provision allowing their holders to require Delhaize Group to repurchase their bonds in cash for an amount equal to 101% of the aggregate principal amount of the bonds plus accrued and unpaid interest thereon (if any), upon the occurrence of (i) the acquisition by an offeror of more than 50% of the ordinary shares or other voting rights of Delhaize Group or if a majority of the members of the Board of Directors of Delhaize Group no longer are so-called continuing directors and (ii) 60 days after the change in control described under (i), there is a downgrade of the rating of Delhaize Group by two rating agencies.

Repayment of Long-term Debts

On June 27, 2012, the $113 million floating term loan issued by the Group matured and was repaid.

On April 15, 2011, the $50 million notes issued in 2001 by Delhaize Group’s U.S. subsidiary Delhaize America matured and were repaid.

Defeasance of Hannaford Senior Notes

In 2003, Hannaford invoked the defeasance provisions of several of its outstanding senior notes and placed sufficient funds in an escrow account to satisfy the remaining principal and interest payments due on these notes (see Note 11). As a result of this defeasance, Hannaford is no longer subject to the negative covenants contained in the agreements governing the notes.

F-54

As of December 31, 2012 and 2011, $8 million (€6 million) and in 2010 $11 million (€8 million) in aggregate principal amounts of the notes were outstanding. At December 31, 2012, 2011 and 2010, restricted securities of $11 million (€8 million), $12 million (€9 million) and $13 million (€10 million), respectively, were recorded in investment in securities on the balance sheet (see Note 11).

Long-term Debt by Currency, Contractually Agreed Payments and Fair values

The main currencies in which Delhaize Group’s long-term (excluding finance leases, see Note 18.3) debt are denominated are as follows:

December 31,

(in millions of €)

2012

2011

2010

U.S. dollar

1 362

1 391

1 381

Euro

1 107

1 022

625

Total

2 469

2 413

2 006

The following table summarizes the contractually agreed (undiscounted) interest payments and repayments of principals of Delhaize Group’s non-derivative financial liabilities, excluding any hedging effects and not taking premiums and discounts into account:


(in millions of $)	2013			2014			2015		2016			2017			Thereafter			Fair Value
*Fixed rates*
Notes due 2014, redeemed in 2013		99			—			—		—			—			—			105
Average interest rate		5.88	%		—			—		—			—			—
Interest due		2			—			—		—			—			—
Bonds due 2017		—			—			—		—			450			—			513
Average interest rate		—			—			—		—			6.50	%		—
Interest due		29			29			29		29			15			—
Notes due 2019		—			—			—		—			—			300			310
Average interest rate		—			—			—		—			—			4.13	%
Interest due		12			12			12		12			12			19
Notes due 2027		—			—			—		—			—			71			82
Average interest rate		—			—			—		—			—			8.05	%
Interest due		6			6			6		6			6			54
Debentures due 2031		—			—			—		—			—			270			323
Average interest rate		—			—			—		—			—			9.00	%
Interest due		24			24			24		24			24			330
Notes due 2040		—			—			—		—			—			827			806
Average interest rate		—			—			—		—			—			5.70	%
Interest due		47			47			47		47			47			1 084
Senior and other notes		—			—			—		9			—			—			10
Average interest rate		—			—			—		7.06	%		—			—
Interest due		1			1			1		—			—			—
Mortgage payable		—			—			—		2			—			—			2
Average interest rate		—			—			—		8.25	%		—			—
Interest due		—			—			—		—			—			—
Other debt		1			12			—		—			—			7			20
Average interest rate		2.88	%		5.36	%		—		—			—			4.50	%
Interest due		1			1			—		—			—			4

Total $ cash flows		222			132			119		129			554			2 966			2 171
Total cash flows translated in millions of €		168			100			90		98			420			2 248			1 645

F-55


(in millions of €)	2013			2014			2015		2016		2017		Thereafter			Fair Value
*Fixed rates*
Bonds due 2013		80			—			—		—		—		—			80
Average interest rate		5.10	%		—			—		—		—		—
Interest due		4			—			—		—		—		—
Notes due 2014		—			215			—		—		—		—			227
Average interest rate		—			5.63	%		—		—		—		—
Interest due		12			12			—		—		—		—
Retail Bond due 2018		—			—			—		—		—		400			423
Average interest rate		—			—			—		—		—		4.25	%
Interest due		17			17			17		17		17		17
Senior Notes due 2020		—			—			—		—		—		400			413
Average interest rate		—			—			—		—		—		3.13	%
Interest due		13			13			13		13		13		38
*Floating rates*		—			—			—		—		—		—
Bank borrowings		1			—			—		—		—		—			1
Average interest rate		0.70	%		—			—		—		—		—
Interest due		—			—			—		—		—		—

Total € cash flows		127			257			30		30		30		855			1 144
Total cash flows in €		295			357			120		128		450		3 103			2 789

The variable interest payments arising from financial liabilities with variable coupons were calculated using the last interest rates fixed before year-end. In the event where a counterparty has a choice of when an amount is paid (e.g., on demand deposits), the liability is allocated to the earliest period in which Delhaize Group can be required to pay. Delhaize Group is managing its liquidity risk based on contractual maturities.

The fair value of the Group’s long-term debt (excluding finance leases, see Note 18.3) is based on the current market quotes for publicly traded debt in an active market (multiplying the quoted price with the nominal amount). Fair values of non-public debt or debt for which there is no active market are estimated using rates publicly available for debt of similar terms and remaining maturities offered to the Group and its subsidiaries.

Collateralization

The portion of Delhaize Group’s long-term debt that was collateralized by mortgages and security charges granted or irrevocably promised on Delhaize Group’s assets was €23 million at December 31, 2012, €37 million at December 31, 2011 and €17 million at December 31, 2010.

At December 31, 2012, 2011 and 2010, €39 million, €56 million and €38 million, respectively, of assets were pledged as collateral for mortgages.

Debt Covenants for Long-term Debt

Delhaize Group is subject to certain financial and non-financial covenants related to the long-term debt instruments indicated above. While these long-term debt instruments contain certain accelerated repayment terms, as further described below, none contain accelerated repayment clauses that are subject solely to changes in the Group’s credit rating (“rating event”). Further, none of the debt covenants restrict the abilities of subsidiaries of Delhaize Group to transfer funds to the parent.

The bonds due in 2013 contain customary defined non-GAAP measure based minimum fixed charge coverage and maximum leverage ratios.

At December 31, 2012, 2011 and 2010, Delhaize Group was in compliance with all covenants for long-term debt.

F-56

18.2

Short-term Borrowings

Short-term Borrowings by Currency


(in millions of €)	December 31,
(in millions of €)	2012		2011		2010
U.S. Dollar		—		—		2
Euro		—		45		14
Other currencies		—		15		—

Total		—		60		16

The carrying amounts of short-term borrowings approximate their fair values.

Short-term credit facilities

At April 15, 2011, Delhaize Group and certain of its subsidiaries, including Delhaize America, LLC, entered into a €600 million, five-year multi-currency, unsecured revolving credit facility agreement (the “New Facility Agreement”).

U.S. Entities

At April 15, 2011, Delhaize America, LLC terminated all of its commitments under the 2009 Credit Agreement and joined the New Facility Agreement.

Delhaize America, LLC had no outstanding borrowings under this agreement as of December 31, 2012 and December 31, 2011, and no outstanding borrowings under the 2009 Credit Agreement as of December 31, 2010.

Under the credit facilities that were in place at the various reporting dates, Delhaize America, LLC had $1 million (€1 million) average daily borrowings during 2012 at an average rate of 1.69%, no average daily borrowings during 2011 and $2 million (€2 million) during 2010. In addition to the New Facility Agreement, Delhaize America, LLC had a committed credit facility exclusively to fund letters of credit of $35 million (€27 million) of which approximately $12 million (€9 million) was drawn for issued letters of credit as of December 31, 2012, compared to an outstanding of $16 million (€13 million) and $20 million (€15 million) as of December 31, 2011 and 2010, respectively.

Further, Delhaize America, LLC has periodic short-term borrowings under uncommitted credit facilities that are available at the lenders’ discretion and these facilities were $100 million (€76 million) at December 31, 2012, of which $35 million (€27 million) may also be used to fund letters of credit. As of December 31, 2012, 2011 and 2010, Delhaize America, LLC had no borrowings outstanding under such arrangements but used in 2012 and 2011 $5 million (€4 million) to fund letters of credit.

European and Asian Entities

At December 31, 2012, 2011 and 2010, the Group’s European and Asian entities together had credit facilities (committed and uncommitted) of €846 million (of which €725 million of committed credit facilities and including the €600 million New Facility Agreement: see above), €864 million and €490 million, respectively.

Borrowings under these facilities generally bear interest at the inter-bank offering rate at the borrowing date plus a pre-set margin, or based on market quotes from banks. In Europe and Asia, Delhaize Group had no outstanding short-term bank borrowings at December 31, 2012, compared to €60 million at December 31, 2011 and €14 million at December 31, 2010, respectively, with an average interest rate of 2.95% in 2011 and 4.83% in 2010. During 2012, the Group’s European and Asian entities had €5 million average daily borrowings at an average interest rate of 2.06%.

Debt Covenants for Short-term Borrowings

The New Facility Agreement of €600 million and the €125 million committed European bilateral credit facilities require maintenance of various financial and non-financial covenants. The agreements contain customary provisions related to events of default and affirmative and negative covenants applicable to Delhaize Group. The negative covenants contain restrictions in terms of negative pledge, liens, indebtedness of subsidiaries, sale of assets and mergers, as well as minimum fixed charge coverage ratios and maximum leverage ratios based on non-GAAP measures. None of the debt covenants restrict the abilities of subsidiaries of Delhaize Group to transfer funds to the parent.

F-57

At December 31, 2012, 2011 and 2010, Delhaize Group was in compliance with all covenants conditions for short-term bank borrowings.

18.3

Leases

As described in Note 2.3, the classification of a lease agreement depends on the allocation of risk and rewards incidental to the ownership of the leased item. When assessing the classification of a lease agreement, certain estimates and assumptions need to be made and applied, which include, but are not limited to, the determination of the expected lease term and minimum lease payments, the assessment of the likelihood of exercising options and estimation of the fair value of the lease property.

Delhaize Group as Lessee - Finance and operating lease commitments

As detailed in Note 8, Delhaize Group operates a significant number of its stores under finance and operating lease arrangements. Various properties leased are (partially or fully) subleased to third parties, where the Group is therefore acting as a lessor (see further below). Lease terms (including reasonably certain renewal options) generally range from 1 to 45 years with renewal options ranging from 3 to 30 years.

The schedule below provides the future minimum lease payments, which were not reduced by expected minimum sublease income of €35 million, due over the term of non-cancellable subleases, as of December 31, 2012:


(in millions of €)	2013			2014			2015			2016			2017			Thereafter			Total
Finance Leases
Future minimum lease payments		129			115			111			101			90			772			1 318
Less amount representing interest		(67	)		(64	)		(59	)		(54	)		(48	)		(352	)		(644	)

Present value of minimum lease payments		62			51			52			47			42			420			674
Of which related to closed store lease obligations		6			5			5			5			4			33			58
Operating Leases
Future minimum lease payments (for non-cancellable leases)		312			260			231			195			164			754			1 916
Of which related to closed store lease obligations		21			18			15			14			12			49			129

The average effective interest rate for finance leases was 11.6%, 11.8% and 12.0% at December 31, 2012, 2011 and 2010, respectively. The fair value of the Group’s finance lease obligations using an average market rate of 5.1% at December 31, 2012 was €842 million (2011: 4.5%, €1 016 million, 2010: 5.1%, €994 million).

The Group’s obligation under finance leases is secured by the lessors’ title to the leased assets.

Rent payments, including scheduled rent increases, are recognized on a straight-line basis over the minimum lease term. Total rent expense under operating leases was €330 million (of which €2 million related to discontinued operations), €311 million (of which €1 million related to discontinued operations) and €295 million in 2012, 2011 and 2010, respectively, being included predominantly in “Selling, general and administrative expenses.”

Certain lease agreements also include contingent rent requirements which are generally based on store sales and were insignificant in 2012, 2011 and 2010.

Sublease payments received and recognized into income for 2012 were €21 million and €16 million in 2011 and 2010.

Delhaize Group signed lease agreements for additional store facilities under construction at December 31, 2012. The corresponding lease terms as well as the renewal options generally range from 10 to 30 years. Total future minimum lease payments for these agreements relating to stores under construction were approximately €52 million.

Provisions for €107 million, €46 million and €44 million at December 31, 2012, 2011 and 2010, respectively, representing the discounted value of remaining lease payments, net of expected sublease income, for closed stores, were included in “Closed Store Provisions” (see Note 20.1). The discount rate is based on the incremental borrowing rate for debt with similar terms to the lease at the time of the store closing.

Delhaize Group as Lessor – Expected Finance and Operating Lease Income

As noted above, occasionally, Delhaize Group acts as a lessor for certain owned or leased property, mainly in connection with closed stores that have been sub-leased to other parties, retail units in Delhaize Group shopping centers or within a Delhaize Group store. At December 31, 2012, the Group did not enter into any lease arrangements with independent third party lessees that would qualify as finance leases. Rental income is included in “Other operating income” in the income statement.

F-58

The undiscounted expected future minimum lease payments to be received under non-cancellable operating leases as at December 31, 2012 can be summarized as follows:


(in millions of €)	2013		2014		2015		2016		2017		Thereafter		Total
Future minimum lease payments to be received		43		27		11		6		4		16		107
Of which related to sub-lease agreements		14		10		5		2		1		3		35

The total amount of €107 million represents expected future lease income to be recognized as such in the income statement and excludes expected future sub-lease payments to receive in relation to stores being part of the “Closed store provision” (see Note 20.1).

Contracts including contingent rent clauses are insignificant to the Group.

F-59

19.

Derivative Financial Instruments and Hedging

The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. The calculation of fair values for derivative financial instruments depends on the type of instruments:

•

Derivative interest rate contracts:the fair value of derivative interest rate contracts (e.g., interest rate swap agreements) is estimated by discounting expected future cash flows using current market interest rates and yield curve over the remaining term of the instrument.

•

Derivative currency contracts:the fair value of forward foreign currency exchange contracts is based on forward exchange rates.

•

Derivative cross-currency contracts:the fair value of derivative cross-currency contracts is estimated by discounting expected future cash flows using current market interest rates and yield curve over the remaining term of the instrument, translated at the rate prevailing at measurement date.

The fair values of derivative assets and liabilities are summarized below:


	December 31,
	2012				2011				2010
(in millions of €)	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
Interest rate swaps		60		4		57		—		61		—
Cross-currency swaps		1		10		1		20		5		16

Total		61		14		58		20		66		16

As described in Note 2.3, Delhaize Group does not enter into derivative financial instrument arrangements for speculation / trading, but for hedging (both economic and accounting) purposes only. As the Group currently holds no derivatives where net settlement has been agreed, the following table indicates the contractually agreed (undiscounted) gross interest and principal payments associated with derivative financial instruments (assets and liabilities) at December 31, 2012:


(in millions of €)	1 - 3 months						4 - 12 months					2014						2015 and beyond
(in millions of €)	Principal			Interest			Principal		Interest			Principal			Interest			Principal			Interest
Interest rate swaps being part of a fair value hedge relationship
Inflows		—			1			—		22			—			25			—			61
Outflows		—			(3	)		—		(8	)		—			(9	)		—			(38	)
Interest rate swaps without a designated hedging relationship
Inflows		—			1			—		18			—			18			—			—
Outflows		—			(1	)		—		(6	)		—			(5	)		—			—
Cross-currency interest rate swaps without a designated hedging relationship
Inflows		107			6			—		9			500			9			227			27
Outflows		(108	)		(9	)		—		(9	)		(508	)		(8	)		(225	)		(23	)

Total Cash Flows		(1	)		(5	)		—		26			(8	)		30			2			27

Interest Rate Swaps

Fair value hedges:

In 2007, Delhaize Group issued €500 million senior notes with a 5.625% fixed interest rate and a 7-year term, exposing the Group to changes in the fair value due to changes in market interest rates (see Note 18.1). In order to hedge that risk, Delhaize America, LLC swapped 100% of the proceeds to a EURIBOR 3-month floating rate for the 7-year term. The maturity dates of these interest rate swap arrangements (“hedging instrument”) match those of the underlying debt (“hedged item”). The transactions were designated and qualify for hedge accounting in accordance with IAS 39, and were documented as a fair value hedge. The aim of the hedge is to transform the fixed rate notes into variable interest debt (“hedged risk”). In April 2012 and December 2012, Delhaize Group refinanced in total €285 million of these €500 million senior notes (see Note 18.1). The Group prospectively and proportionally discontinued the hedge accounting for the tendered amounts.

F-60

In April 2012, Delhaize Group issued $300 million senior notes (see Note 18.1) with a 4.125% fixed interest rate due 2019 (“hedged item”), exposing the Group to changes in the fair value due to changes in market interest rates (“hedged risk”). In order to hedge that risk, Delhaize Group entered into matching interest rate swaps and swapped 100% of the proceeds of the bond to a LIBOR 3-month floating rate for the 7-year term (“hedging instrument”). The Group designated and documented this transaction as a fair value hedge.

Finally, in November 2012, Delhaize Group issued €400 million senior notes (see Note 18.1) with a 3.125% fixed interest rate due 2020 (“hedged item”), exposing the Group to changes in the fair value due to changes in market interest rates (“hedged risk”). Delhaize Group partially hedged this exposure through an interest rate swap (3 months EURIBOR floating rate) with a nominal of €100 million and a maturity equal to the maturity of the bond. The Group designated and documented this transaction as a fair value hedge.

Hedge effectiveness for fair value hedges is tested using regression analysis. Credit risks are not part of the hedging relationships. The testing did not result in any material ineffectiveness. Changes in fair values on the hedging instruments and hedged items were recognized in the income statement as finance costs as follows (see Note 29.1):


(in millions of €)	December 31,
(in millions of €)	Note		2012			2011			2010
Losses (gains) on
Interest rate swaps (“hedging instruments”)		29.1		(6	)		5			3
Related debt instruments (“hedged risks”)		29.1		3			(5	)		(3	)

Total				(3	)		—			—

Following the refinancing transaction in April 2012, the Group entered into an interest rate swap maturing in 2014 in order to offset the changes in future interest cash flows on a notional amount of €191 million on which the Group pays a fixed interest rate of 1.80% and receives a floating interest rate EURIBOR 3-month plus 0.94%, resulting from the hedging instrument entered into in 2007 (see above).

Discontinued cash flow hedges:

In 2001, the Group recorded a deferred loss ($16 million) on the settlement of a hedge agreement related to securing financing for the Hannaford acquisition by Delhaize America. In 2007, as a result of the debt refinancing and the consequent discontinuance of the hedge accounting, Delhaize Group recorded a deferred gain (€2 million). Both the deferred gain/loss were recorded in OCI (“discontinued cash flow hedge reserve”) and amortized to finance costs over the term of the underlying debt, which matures in 2031 and 2017, respectively.

Currency Swaps

The Group uses currency swaps to manage some of its currency exposures.

Cash flow hedge:

Delhaize Group issued in 2009 a $300 million bond with a 5.875% fixed interest rate and a 5-year term (“hedged item”), exposing Delhaize Group to currency risk on dollar cash flows (“hedged risk”). In order to hedge that risk, Delhaize Group swapped 100% of the proceeds to a euro fixed rate liability with a 5-year term (“hedging instrument”). The maturity dates, the dollar interest rate, the interest payment dates, and the dollar flows (interest and principal) of the hedging instrument, match those of the underlying debt. The transactions were designated and qualified for hedge accounting in accordance with IAS 39, and were documented and historically reflected in the financial statements of Delhaize Group as a cash flow hedge. Delhaize Group tested effectiveness by comparing the movements in cash flows of the hedging instrument with those of a “hypothetical derivative” representing the “perfect hedge.” The terms of the hedging instrument and the hypothetical derivative were the same, with the exception of counterparty credit risk, which was closely monitored by the Group.

During 2012, a total credit of €4 million, net of taxes (2011: debit of €3 million; 2010: credit of €5 million), was recognized in the “Cash flow hedge reserve” (see Note 16) of which €2 million was reclassified into profit or loss during the year. In 2012, following the refinancing and exercise of early redemption option on the $300 million senior notes due 2014 (see Note 18.1), the Group prospectively discontinued hedge accounting. The outstanding amount from the cash flow hedge reserve related to those transactions of €2 million was recycled to profit and loss (see Note 29.1).

Economic hedges:

Delhaize Group entered into other currency swap contracts, which are not designated as cash flow, fair value or net investment hedges. Those contracts are generally entered into for periods consistent with currency transaction exposures where hedge accounting is not necessary, as the transactions naturally offset the exposure hedged in profit or loss. Consequently, the Group does not designate and document such transactions as hedge accounting relationships.

F-61

In April 2012, and simultaneously to entering into interest rate swaps for the 4.125% senior notes due 2019 (see above), the Group also entered into cross-currency swaps, exchanging the principal amount ($300 million for €225 million) and interest payments (both variable), to cover the foreign currency exposure of these senior notes. In 2007, Delhaize Group’s U.S. operations also entered into cross-currency interest rate swaps, exchanging the principal amounts (€500 million for $670 million) and interest payments (both variable), in order to cover the foreign currency exposure of the entity in connection with the transaction described above. Delhaize Group did not apply hedge accounting to this transaction because this swap constitutes an economic hedge with Delhaize America, LLC’s underlying €500 million term loan.

Also, Delhaize Group enters into foreign currency swaps with various commercial banks to hedge foreign currency risk on intercompany loans denominated in currencies other than its reporting currency.

The table below indicates the principal terms of the currency swaps outstanding at December 31, 2012. Changes in fair value of these swaps are recorded in “Finance costs” or “Income from investments” in the income statement:


(in millions)	Foreign Currency Swaps
Year Trade Date	Year Expiration Date		Amount Received from Bank at Trade Date, and to be Delivered to Bank at Expiration Date		Interest Rate			Amount Delivered to Bank at Trade Date, and to Receive from Bank at Expiration Date		Interest Rate			Fair Value Dec. 31, 2012 (€)			Fair Value Dec. 31, 2011 (€)			Fair Value Dec. 31, 2010 (€)
2012		2019	€	225		3m EURIBOR +2.06	%	$	300		3m LIBOR +2.31	%		1			—			—
2012		2013	€	30		12m EURIBOR +3.77	%	$	40		12m LIBOR +3.85	%		—			—			—
2012		2013	€	1		12m EURIBOR +4.30	%	$	1		12m LIBOR +4.94	%		—			—			—
2011		2012	€	12		12m EURIBOR +4.83	%	$	17		12m LIBOR +4.94	%		—			1			—
2010		2011	€	53		6m EURIBOR +3.33	%	$	75		6m LIBOR +3.40	%		—			—			3
2010		2011	€	26		12m EURIBOR +5.02	%	$	35		12m LIBOR +4.94	%		—			—			1
2009		2014	€	76		6.60	%	$	100		5.88	%		(4	)⁽¹⁾		(11	)		(13	)
2007		2014	$	670		3m LIBOR +0.98	%	€	500		3m EURIBOR +0.94	%		(6	)		(9	)		(2	)

(1)	As of December 31, 2012, $100 million €76 million remained outstanding from the $300 million/€228 million currency swap. Following the redemption on the $300 million senior notes due 2014, the remaining outstanding amount of this swap was unwound and settled on January 3, 2013.

Debt Covenants for Derivatives

The Group has several ISDAs in place containing customary provisions related to events of default and restrictions in terms of sale of assets, merger and rating.

The maximum exposure of derivative financial instruments to credit risk at the reporting date equals their carrying values at balance sheet date (i.e., €61 million at December 31, 2012). See Note 12 in connection with collateral posted on derivative financial liabilities.

F-62

20.

Provisions


			December 31,
(in millions of €)	Note		2012		2011⁽¹⁾		2010
Closed stores:		20.1
Non-current				89		37		36
Current				18		9		8
Self-insurance:		20.2
Non-current				90		89		82
Current				52		54		39
Pension benefit and other post-employment benefits:		21
Non-current				126		90		80
Current				10		3		2
Other:		20.3
Non-current				64		73		35
Current				8		10		3

Total provisions				457		365		285
Non-current				369		289		233
Current				88		76		52

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

20.1

Closed Store Provisions

As explained in Note 2.3, Delhaize Group records closed store provisions for present obligations in connection with store closing activities, which consist primarily of provisions for onerous contracts and severance (“termination”) costs. The amounts recognized reflect management’s best estimate of the expected expenditures required to settle the present obligation at balance sheet date and requires the application of judgment and estimates that could be impacted by factors such as the discount rate applied, the ability to sub-lease, the creditworthiness of the sub-lessee or the success when negotiating any early termination of lease agreements. Most of the factors are significantly dependent on general economic conditions and the interrelated demand for commercial property. Consequently, the cash flows projected, and the risk reflected in those, might change, if applied assumptions change.

Most obligations recognized relate to onerous lease contracts, predominantly for stores located in the U.S., with remaining lease terms ranging from 1 to 23 years. The average remaining lease term for closed stores was 5 years at December 31, 2012. The following table reflects the activity related to closed store provisions:


(in millions of €)	2012			2011			2010
Closed store provision at January 1		46			44			54
Additions:
Store closings - lease obligations		131	⁽¹⁾		3			1
Store closings - other exit costs		12			—			—
Update of estimates		(15	)		5			1
Interest expense (unwinding of discount)		7			4			4
Acquisition through business combination		—			2			—
Utilization:
Lease payments made		(27	)		(12	)		(14	)
Lease terminations		(42	)		—			(5	)
Payments made for other exit costs		(13	)		(1	)		(2	)
Transfer from (to) other accounts		11			—			—
Currency translation effect		(3	)		1			5

Closed store provision at December 31		107			46			44

(1)	Of which €3 million included in discontinued operations (see Note 5.3).

During 2012, Delhaize Group recorded €143 million of additions to the closed store provision, which were primarily related to the

F-63

store portfolio review announced at the beginning of 2012, resulting in the decision to close 146 stores (126 stores in the United States and 20 underperforming Maxi stores) (see Note 28). During the year, additional stores were closed as part of the ordinary course of business, resulting in 180 stores being closed during 2012.

The “Other exit costs” primarily relate to termination benefits (€10 million) and were negligible in 2011 and 2010. During 2012, Delhaize Group paid €42 million of lease termination fees, primarily at Delhaize America (€20 million) and Bulgaria (€17 million).

In 2011 and 2010, Delhaize Group recorded additions to the closed store provision of €3 million and €1 million, respectively, primarily related to 18 and 7 store closings, respectively, made in the ordinary course of business.

The following table presents a reconciliation of the number of closed stores included in the closed store provision:


	Number of Closed Stores
Balance at January 1, 2010		146
Store closings added		7
Stores sold/lease terminated		(49	)

Balance at December 31, 2010		104
Store closings added		18
Stores sold/lease terminated		(20	)

Balance at December 31, 2011		102
Store closings added		163
Stores sold/lease terminated		(86	)

Balance at December 31, 2012		179

Expenses relating to closed store provisions were recorded in the income statement as follows:


(in millions of €)	Note		2012		2011		2010
Other operating expenses		28		125		8		2
Interest expense included in “Finance costs”		29.1		7		4		4
Results from discontinued operations		5.3		3		—		—

Total				135		12		6

20.2

Self-insurance Provision

Delhaize Group’s U.S. operations are self-insured for their workers’ compensation, general liability, vehicle accident and pharmacy claims up to certain retentions and hold excess-insurance contracts with external insurers for any costs in excess of these retentions. The self-insurance liability is determined actuarially, based on claims filed and an estimate of claims incurred but not reported. The assumptions used in the development of the actuarial estimates are based upon historical claims experience, including the average monthly claims and the average lag time between incurrence and payment.

The maximum retentions, including defense costs per occurrence, are:

•

$1.0 million per accident for workers’ compensation;

•

$3.0 million per occurrence for general liability;

•

$3.0 million per accident for vehicle accident; and

•

$5.0 million per occurrence for pharmacy claims.

Our property insurance in the U.S. includes self-insured retentions per occurrence of $15 million for named windstorms, $5 million for Zone A flood losses and $2.5 million for all other losses.

Delhaize Group is also self-insured in the U.S. for health care, which includes medical, pharmacy, dental and short-term disability. The self-insurance liability for claims incurred but not reported is based on available information and considers annual actuarial evaluations of historical claims experience, claims processing procedures and medical cost trends.

F-64

The movements of the self-insurance provision were as follows:


(in millions of €)	2012			2011			2010
Self-insurance provision at January 1		143			121			108
Expense charged to earnings		190			168			179
Claims paid		(188	)		(151	)		(174	)
Currency translation effect		(3	)		5			8

Self-insurance provision at December 31		142			143			121

Actuarial estimates are judgmental and subject to uncertainty, due to, among many other things, changes in claim reporting patterns, claim settlement patterns or legislation. Management believes that the assumptions used to estimate the self-insurance provision are reasonable and represent management’s best estimate of the expenditures required to settle the present obligation at the balance sheet date. Nonetheless, it is in the nature of such estimates that the final resolution of some of the claims may require making significant expenditures in excess of the existing provisions over an extended period and in a range of amounts that cannot be reasonably estimated. Future cash flows are discounted with period specific discount rates.

20.3

Other Provisions

The other provisions mainly consist of long-term incentive and early retirement plans, but also include amounts for asset removal obligations and provisions for litigation. The movements of the other provisions were as follows:


(in millions of €)	2012			2011⁽¹⁾			2010
Other provisions at January 1		83			38			35
Acquisitions through business combinations		—			43			—
Expense charged to profit and loss		6			6			9
Payments made		(17	)		(4	)		(4	)
Transfer (to) from other accounts		4			—			(3	)
Currency translation effect		(4	)		—			1

Other provisions at December 31		72			83			38

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

In 2012, Delhaize Group finalized the purchase price allocation of the Delta Maxi acquisition (see Note 4.1) and as a result recognized €43 million of legal contingencies (compared to €12 million disclosed in our 2011 annual report). These contingent liabilities mainly related to pending legal disputes for a number of property ownership related cases and €4 million of these provisions was settled and paid in 2012. Simultaneously, the Group recognized indemnification assets of €33 million relating to these legal disputes, in line with the ownership percentage the Group holds in the Maxi entities being subject to these legal disputes.

21.

Employee Benefits

21.1

Pension Plans

Delhaize Group’s employees are covered by defined contribution and defined benefit pension plans, mainly in the U.S., Belgium, Greece, Serbia and Indonesia. In addition, the Group has also other post-retirement defined benefit arrangements, being principally health care arrangements in the U.S.

The actuarial valuations performed on the defined benefit plans involve making a number of assumptions about, e.g., discount rate, expected rate of return on plan assets, future salary increase or mortality rates. For example, in determining the appropriate discount rate, management considers the interest rate of high-quality corporate bonds (at least AA rating) in the respective country, in the currency in which the benefits will be paid and with the appropriate maturity date; mortality rates are based on publicly available mortality tables for the specific country; the expected return on plan assets is determined by considering the expected returns on the assets underlying the long-term investment strategy. Any changes in the assumptions applied will impact the carrying amount of the pension obligations, but will not necessarily have an immediate impact on future contributions. All significant assumptions are reviewed periodically. Plan assets are measured at fair value, using readily available market prices, or using the minimum return guaranteed by an independent insurance company. Actuarial gains and losses (i.e., experience adjustments and effects of changes in actuarial assumptions) are directly recognized in OCI. The assumptions are summarized below.

F-65

Defined Contribution Plans

•

InBelgium, Delhaize Group sponsors for substantially all of its employees a defined contribution plan, under which the Group and the employees (starting in 2005) also, contribute a fixed monthly amount. The contributions are adjusted annually according to the Belgian consumer price index. Employees that were employed before implementation of the plan were able to choose not to participate in the employee contribution part of the plan. The plan assures the employee a lump-sum payment at retirement based on the contributions made. Based on Belgian law, the plan includes a minimum guaranteed return, which is guaranteed by an external insurance company that receives and manages the contributions. Since July 2010, the Group also sponsors an additional defined contribution plan, without employee contribution, for a limited number of employees who decided to change pension plans (see below “Defined Benefit Plans”). The expenses related to these plans were €10 million in 2012, €9 million in 2011 and €6 million in 2010, respectively.

•

In theU.S., Delhaize Group sponsors profit-sharing retirement plans covering all employees at Food Lion, Sweetbay, Hannaford and Harveys with one or more years of service. Profit-sharing contributions substantially vest after three years of service. Forfeitures of profit-sharing contributions are used to reduce future employer contributions or offset plan expenses. The profit-sharing contributions to the retirement plan are discretionary and determined by Delhaize America, LLC’s Board of Directors. The profit-sharing plans also include a 401(k) feature that permits participating employees to make elective deferrals of their compensation and requires that the employer makes matching contributions.

The defined contribution plans generally provide benefits to participants upon death, retirement or termination of employment.

The expenses related to these U.S. defined contribution retirement plans were €46 million in 2012 and €37 million in 2011 and 2010.

•

In addition, Delhaize Group operates defined contribution plans inGreece to which only a limited number of employees are entitled and where the total expense is insignificant to the Group as a whole.

Defined Benefit Plans

Approximately 30% of Delhaize Group employees are covered by defined benefit plans.

•

InBelgium, Delhaize Group has a defined benefit pension plan covering approximately 7% of its employees. The plan is subject to legal funding requirements and is funded by contributions from plan participants and the Group. The plan provides lump-sum benefits to participants upon death or retirement based on a formula applied to the last annual salary of the employee before his/her retirement or death. An independent insurance company guarantees a minimum return on plan assets and mainly invests in debt securities in order to achieve that goal. Delhaize Group bears any risk above this minimum guarantee.

During 2010, Delhaize Group offered its employees who participate in the defined benefit plan on a going forward basis the opportunity to participate in a new defined contribution plan (new plan), instead of continuing earning benefits under the defined benefit pension plan (old plan). Approximately 40% of the eligible employees accepted the offer, reducing the number of people covered by the old plan to the above mentioned 7%. Under Belgian legislation, employees that decided to participate in the new plan for future service, remain entitled to retirement benefits under the old defined benefit plan for past service. Due to the plan amendment, a negative past service cost related to death-in-service benefits of €3 million was recognized in 2010.

•

In theU.S., DelhaizeGroup operates several defined benefit pension plans that can be grouped into three different types:

(a)

Cash balance plans set up a hypothetical individual account for each employee, and credits each participant annually with a plan contribution that is a percentage of the participant’s monthly compensation. The contributions are transferred to a separate plan asset that generates return based on the investment portfolio. The largest plan is funded and covers approximately 65% of the Hannaford employees.

As of December 31, 2012 the actuarial calculation resulted in a benefit to the Group that is not subject to asset ceiling restrictions and an asset of $5 million (€4 million) has been recognized in “Other non-current assets.”

In 2011, when aligning the benefits and compensation across its operating entities, Delhaize America modified the terms of the plan and froze it for new employees and for further accruals of current employees. The plan amendment led to the recognition of net actuarial losses of $8 million (€6 million), recognized in OCI and of net curtailment gain of $13 million (€10 million), included in “Selling, general and administrative expenses.”

Following the plan amendment, the investment policy for the funded plan was also changed and as from 2012 it mainly invests in debt securities.

(b)

Delhaize America sponsors further unfundednon-qualified deferred compensation plans offered to a very limited number of Hannaford, Food Lion, Sweetbay and Harveys officers. These plans provide benefit to the participant at some time in the future by deferring a part of their annual cash compensation that is adjusted based on returns of a hypothetical investment account. The balance is payable upon termination or retirement of the participant.

F-66

Further, during 2012, Delhaize America amended a defined contribution retirement and savings plan offered to Hannaford executives by closing it for new employees and future services and at the same time offering existing participants a guaranteed return achieved by an hypothetical investment account. Consequently, the plan classification changed to a defined benefit plan and the net liability of $28 million (€22 million) was transferred from other non-current liabilities to pension benefit provisions.

(c)

Further, Delhaize America operates unfundedsupplemental executive retirement plans (“SERP”), covering a limited number of executives of Food Lion and Hannaford. Benefits generally are based on average earnings, years of service and age at retirement. In 2011, Delhaize America decided to discontinue the SERP for Hannaford executives.

•

Alfa Beta has an unfunded defined benefit post-employment plan. This plan relates to termination indemnities prescribed by Greek law, consisting of lump-sum compensation granted only in cases of normal retirement or termination of employment. All employees of Alfa Beta are covered by this plan.

•

In Serbia,Delhaize Group has an unfunded defined benefit that provides a lump-sum retirement indemnity upon retirement of the employee. The plan and the benefit to be provided are subject to the requirements of local law. The benefit is based on a certain multiple of the average salary upon retirement of the employee.

•

Super Indo operates an unfunded defined benefit post-employment plan, which provides benefits upon retirement, death and disability, as required by local law and regulation. All employees of Super Indo that were employed for at least two years are covered by this plan.

F-67

Defined Benefit Plans


(in millions of €)	2012									2011									2010
(in millions of €)	United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total
*Change in benefit obligation*:
Benefit obligation at January 1		175			121			296			161			115			276			136			121			257
Current service cost		2			4			6			9			4			13			9			5			14
Interest cost		8			5			13			8			5			13			8			6			14
Plan participants’ contributions		1			1			2			1			1			2			2			2			4
Amendments		—			—			—			—			1			1			(1	)		(3	)		(4	)
Actuarial (gain)/loss		(5	)		28			23			11			3			14			4			—			4
Benefits paid		(19	)		(12	)		(31	)		(11	)		(9	)		(20	)		(12	)		(17	)		(29	)
Business combinations/divestures/ transfers		22			1			23			—			—			—			4			—			4
Plan curtailments		—			—			—			(10	)		—			(10	)		—			—			—
Plan settlements		—			1			1			—			1			1			—			1			1
Currency translation effect		(4	)		—			(4	)		6			—			6			11			—			11

Benefit obligation at December 31		180			149			329			175			121			296			161			115			276
*Change in plan assets:*
Fair value of plan assets at January 1		131			74			205			123			74			197			99			78			177
Expected return on plan assets		7			3			10			8			3			11			8			3			11
Actuarial gain/(loss) on plan assets		2			5			7			(6	)		3			(3	)		5			1			6
Employer contributions		6			3			9			12			2			14			13			7			20
Plan participants’ contributions		1			1			2			1			1			2			2			2			4
Benefits paid		(19	)		(12	)		(31	)		(11	)		(9	)		(20	)		(12	)		(17	)		(29	)
Currency translation effect		(3	)		—			(3	)		4			—			4			8			—			8

Fair value of plan assets at December 31		125			74			199			131			74			205			123			74			197
Actual return on plan assets		9			8			17			2			6			8			13			4			17
*Amounts recognized in the balance sheet:*
Present value of funded obligation		122			115			237			140			97			237			131			92			223
Fair value of plan assets		(125	)		(74	)		(199	)		(131	)		(74	)		(205	)		(123	)		(74	)		(197	)

Net deficit/(surplus) for funded plans		(3	)		41			38			9			23			32			8			18			26
Deficit for funded plans		1			41			42			9			23			32			8			18			26
Surplus for funded plans		(4	)		—			(4	)		—			—			—			—			—			—
Present value of unfunded obligations		58			34			92			35			24			59			30			23			53
Unrecognized past service cost		—			(1	)		(1	)		—			(1	)		(1	)		—			—			—

Net liability		55			74			129			44			46			90			38			41			79
*Weighted average assumptions used to determine benefit obligations:*
Discount rate		3.49	%		2.27	%								4.17	%		3.99	%					5.00	%		4.54	%
Rate of compensation increase		4.25	%		2.66	%								4.25	%		3.02	%					4.25	%		3.20	%
Rate of price inflation		3.05	%		2.00	%								3.05	%		2.00	%					3.03	%		2.00	%

F-68


(in millions of €)	2012									2011									2010
(in millions of €)	United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total
*Component of pension cost:*
Amounts recognized in the income statement:
Current service cost		2			4			6			9			4			13			9			5			14
Interest cost		8			5			13			8			5			13			8			6			14
Expected return on plan assets		(7	)		(3	)		(10	)		(8	)		(3	)		(11	)		(8	)		(3	)		(11	)
Amortization of past service cost		—			—			—			—			—			—			(1	)		(3	)		(4	)
Curtailment gain recognized		—			—			—			(10	)		—			(10	)		—			—			—
Settlement loss recognized		—			1			1			—			1			1			—			1			1

Total pension cost recognized in the income statement		3			7			10			(1	)		7			6			8			6			14
Amounts recognized in OCI:
Actuarial (gains)/losses immediately recognized		(7	)		23			16			17			—			17			(1	)		(1	)		(2	)
Effect of changes in exchange rates		(1	)		—			(1	)		3			—			3			3			—			3

Cumulative amount of actuarial gains and losses recognized		45			34			79			53			11			64			33			11			44

Weighted average assumptions used to determine pension cost:
Discount rate		4.17	%		3.99	%					5.00	%		4.54	%					5.54	%		4.66	%
Expected long-term rate of return on plan assets during year		5.00	%		4.00	%					6.99	%		4.00	%					7.75	%		4.00	%
Rate of compensation increase		4.25	%		3.02	%					4.25	%		3.20	%					4.74	%		3.29	%
Rate of price inflation		3.05	%		2.00	%					3.03	%		2.00	%					3.50	%		2.00	%

(in millions of €)	2012									2011									2010
(in millions of €)	United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total
Historical Information
Defined benefit obligation		180			149			329			175			121			296			161			115			276
Plan assets		125			74			199			131			74			205			123			74			197

Deficit		55			75			130			44			47			91			38			41			79
Experience (gains) and losses:
Related to plan assets		(2	)		(5	)		(7	)		6			(3	)		3			(5	)		(1	)		(6	)
Percentage of plan assets		-1.89	%		-6.54	%		-3.59	%		4.65	%		-3.54	%		1.71	%		-3.89	%		-1.02	%		-3.05	%
Related to plan liabilities		(2	)		5			3			(2	)		—			(2	)		2			(2	)		—
Percentage of plan liabilities		-0.89	%		3.21	%		0.95	%		-1.02	%		0.21	%		-0.53	%		1.14	%		-1.96	%		0.00	%

F-69


(in millions of €)	2009									2008
(in millions of €)	United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total
Historical Information
Defined benefit obligation		136			121			257			111			106			217
Plan assets		99			78			177			79			69			148

Deficit		37			43			80			32			37			69
Experience (gains) and losses:
Related to plan assets		(9	)		1			(8	)		28			1			29
Percentage of plan assets		-9.15	%		-0.93	%		-4.52	%		35.61	%		0.87	%		19.38	%
Related to plan liabilities		—			1			1			2			1			3
Percentage of plan liabilities		-0.04	%		0.49	%		0.39	%		1.83	%		1.13	%		1.51	%


(in millions of €)	2012									2011									2010
(in millions of €)	United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total			United States Plans			Plans Outside of the United States			Total
*Balance sheet reconciliation*:
Balance sheet liability at January 1		44			46			90			38			41			79			37			43			80
Pension expense recognized in the income statement in the year		3			7			10			(1	)		7			6			8			6			14
Amounts recognized in OCI		(7	)		23			16			17			—			17			(1	)		(1	)		(2	)
Employer contributions made in the year		(3	)		—			(3	)		(11	)		—			(11	)		(12	)		(5	)		(17	)
Benefits paid directly by company in the year		(3	)		(3	)		(6	)		(1	)		(2	)		(3	)		(1	)		(2	)		(3	)
Business combinations/divestures/transfers		22			1			23			—			—			—			4			—			4
Currency translation effect		(1	)		—			(1	)		2			—			2			3			—			3
Balance sheet liability at December 31		55			74			129			44			46			90			38			41			79

The asset portfolio of the Group‘s defined benefit pension plan in Belgium is funded through a group insurance program. The plan assets, which benefit from a guaranteed minimum return, are part of the insurance company’s overall investments. The insurance company’s asset allocation was as follows:


	December 31,
	2012			2011			2010
Equities		5	%		5	%		5	%
Debt		91	%		94	%		91	%
Real estate		0	%		0	%		0	%
Other assets (e.g., cash equivalents)		4	%		1	%		4	%

In 2013, the Group expects to contribute an insignificant amount to the defined benefit pension plan in Belgium.

The expected long-term rate of return for the Belgian defined benefit pension plan is based on the guaranteed return by the insurance company and the expected insurance dividend.

F-70

The Hannaford plan asset allocation was as follows:


	December 31,
	2012			2011			2010
Equities		0	%		49	%		66	%
Debt		95	%		49	%		32	%
Other assets (e.g., cash equivalents)		5	%		2	%		2	%

In 2012, Delhaize America performed a review of the plan’s funding position and the investment policy applied by the plan. Following the closure of the plan, the Group’s exposure to continuously growing defined benefit obligations has decreased and Delhaize America changed the investment strategy of the plan and intends to invest going forward mainly in debt securities.

The 2012 year-end actuarial calculation resulted in a benefit to the Group and due to the improved funding position Delhaize Group expects that only insignificant contribution will be made to the plan during 2013.

Total defined benefit expenses in profit or loss equal €10 million, €6 million and €14 million for 2012, 2011 and 2010, respectively, and can be summarized as follows:


(in millions of €)	2012		2011		2010
Cost of sales		1		2		2
Selling, general and administrative expenses		9		4		12

Total defined benefit expense recognized in profit or loss		10		6		14

21.2

Other Post-Employment Benefits

Hannaford and Sweetbay provide certain health care and life insurance benefits for retired employees, which qualify as defined benefit plans. Substantially all Hannaford employees and certain Sweetbay employees may become eligible for these benefits, however, currently a very limited number is covered. The post-employment health care plan is contributory for most participants with retiree contributions adjusted annually.

The total benefit obligation as of December 31, 2012 was €3 million (2011 and 2010: €3 million). The medical plans are unfunded and the total net liability, impacted by unrecognized past service benefits, was €3 million in 2012, 2011 and 2010, respectively. During 2012, the changes in actuarial assumptions did not result in significant actuarial gains or losses.

The assumptions applied in determining benefit obligation and costs are summarized in the table below:


	December 31,
	2012			2011			2010
Weighted-average actuarial assumptions used to determine benefit obligations:
Discount rate		3.30	%		3.80	%		4.77	%
Current health care cost trend		7.80	%		9.09	%		9.00	%
Ultimate health care cost trend		5.00	%		5.00	%		5.00	%
Year of ultimate trend rate		2018			2017			2017
Weighted-average actuarial assumptions used to determine benefit cost:
Discount rate		3.80	%		4.77	%		5.38	%
Current health care cost trend		9.09	%		9.00	%		9.25	%
Ultimate health care cost trend		5.00	%		5.00	%		5.00	%
Year of ultimate trend rate		2017			2017			2016

A change by 100 basis points in the assumed health care trend rates would have an insignificant effect on the post-retirement benefit obligation or expense.

F-71

21.3

Share-Based Compensation

Delhaize Group offers share-based incentives to certain members of its senior management: stock option plans for employees of its non-U.S. operating companies; stock option, warrant and restricted stock unit plans for employees of its U.S. based companies.

•

Under awarrant planthe exercise by the employee of a warrant results in the creation of a new share, whilestock option or restricted stock unit plans are based on existing shares. Due to the sizeable administrative requirements that Belgian law imposes on capital increases, a certain amount of time passes between the moment warrants have been exercised and the capital increase is formally performed. In cases when the capital increase occurs after year-end for warrants exercised before year-end, which usually concern a limited number of warrants, Delhaize Group accounts for the actual exercise of the warrants at the date of the following capital increase. Consequently, no movement occurs in equity due to warrants exercised pending a subsequent capital increase, until such a capital increase takes place. If considered dilutive, such exercised warrants pending a subsequent capital increase are included in the diluted earnings per share calculation.

•

Restricted stock unit awardsrepresent the right to receive the number of ADRs set forth in the award at the vesting date at no cost to plan participants.

The remuneration policy of Delhaize Group can be found as Exhibit E to the Delhaize Group’s Corporate Governance Charter available on the Company’s website (www.delhaizegroup.com).

As explained in Note 2.3, the share-based compensation plans operated by Delhaize Group are accounted for as equity-settled share-based payment transactions, do not contain cash settlement alternatives and the Group has no past practice of cash settlement. The cost of such transactions with employees is measured by reference to the fair value of the equity instruments at grant date and is expensed over the applicable vesting period. The Group’s share-based compensation plans are subject to service vesting conditions and do not contain any performance conditions.

Delhaize Group uses the Black-Scholes-Merton valuation model to estimate the fair value of the warrants and options underlying the share-based compensation. This requires the selection of certain assumptions, including the expected life of the option, the expected volatility, the risk-free rate and the expected dividend yield:

•

Theexpected lifeof the option is based on management’s best estimate and based on historical option activity.

•

Theexpected volatilityis determined by calculating the historical volatility of the Group’s share price over the expected option term.

•

Therisk-free rateis determined using a generic price of government bonds with corresponding maturity terms.

•

Theexpected dividend yieldis determined by calculating a historical average of dividend payments made by the Group.

The exercise price associated with stock options is dependent on the rules applicable to the relevant stock option plan. The exercise price is either the Delhaize Group share price on the date of the grant (U.S. plans) or the Delhaize Group share price on the working day preceding the offering of the option (non-U.S. plans).

The usage of historical data over a period similar to the life of the options assumes that the past is indicative of future trends, and - as with all assumptions - may not necessarily be the actual outcome. The assumptions used for estimating fair values for various share-based payment plans are given further below.

Total share-based compensation expenses recorded - primarily in selling, general and administrative expenses - were €13 million in 2012 and 2011 and €16 million in 2010.

Non-U.S. Operating Entities Stock Options Plans

During 2009, Delhaize Group significantly reduced in its European entities the number of employees that are entitled to future stock options and replaced this part of the long-term incentive plan with a “performance cash” plan. As a consequence, since 2009, only vice presidents and above are granted stock options.

25% of the options granted to employees of non-U.S. operating companies vest immediately and the remaining options vest after a service period of approximately 3¹/₂ years, the date at which all options become exercisable. Options expire seven years from the grant date.

F-72

Delhaize Group stock options granted to employees of non-U.S. operating companies were as follows:


Plan	Effective Date of Grants		Number of shares Underlying Award Issued		Number of shares Underlying Awards Outstanding at December 31, 2012		Exercise Price		Number of Beneficiaries (at the moment of issuance)		Exercise Period
2012 grant under the 2007 Stock option plan		November 2012		35 000		35 000	€	26.39		1		Jan. 1, 2016 – May 24, 2019
		May 2012		362 047		362 047	€	30.99		95		Jan. 1, 2016 – May 24, 2019
2011 grant under the 2007 Stock option plan		June 2011		290 078		278 302	€	54.11		83		Jan. 1, 2015 – June 14, 2018
2010 grant under the 2007 Stock option plan		June 2010		198 977		188 294	€	66.29		80		Jan. 1, 2014 – June 7, 2017
2009 grant under the 2007 Stock option plan		June 2009		230 876		215 357	€	50.03		73		Jan. 1, 2013 – June 8, 2016
2008 grant under the 2007 Stock option plan		May 2008		237 291		224 256	€	49.25		318		Jan. 1, 2012 – May 29, 2015
2007 grant under the 2007 Stock option plan		June 2007		185 474		166 920	€	71.84		619		Jan. 1, 2011 – June 7, 2017	⁽¹⁾
2006 Stock option plan		June 2006		216 266		136 079	€	49.55		601		Jan. 1, 2010 – June 8, 2013

(1)

In 2009, Delhaize Group offered to the beneficiaries of the 2007 grant (under the 2007 stock option plan) the exceptional choice to extend the exercise period from 7 to 10 years. This was accounted as a modification of the plan and the non-significant incremental fair value granted by this extension, measured in accordance with IFRS 2, was accounted over the remaining vesting period. In accordance with Belgian law, most of the beneficiaries of the 2007 Stock option plan agreed to extend the exercise period of their stock options for a term of three years. The very few beneficiaries who did not agree to extend the exercise period of their stock options continue to be bound by the initial expiration dates of the exercise period of the plan, i.e., June 7, 2014.

Activity associated with non-U.S. stock option plans was as follows:


2012	Shares			Weighted Average Exercise Price (in €)
Outstanding at beginning of year		1 379 150			55.71
Granted		397 047			30.58
Exercised		—			—
Forfeited		(16 463	)		55.73
Expired		(153 479	)		50.97

Outstanding at end of year		1 606 255			49.95
Options exercisable at end of year		742 612			54.61

2011	Shares			Weighted Average Exercise Price (in €)
Outstanding at beginning of year		1 328 980			55.92
Granted		290 078			54.11
Exercised		(80 506	)		41.75
Forfeited		(58 767	)		58.00
Expired		(100 635	)		63.65

Outstanding at end of year		1 379 150			55.71
Options exercisable at end of year		687 629			55.23

F-73


2010	Shares			Weighted Average Exercise Price (in €)
Outstanding at beginning of year		1 381 791			52.37
Granted		198 977			66.29
Exercised		(244 176	)		44.47
Forfeited		(7 362	)		51.82
Expired		(250	)		25.81

Outstanding at end of year		1 328 980			55.92
Options exercisable at end of year		663 909			57.22

The weighted average remaining contractual term for the share options outstanding as at December 31, 2012 was 4.34 years (2011: 4.20; 2010: 4.09 years). No options were exercised during 2012. The weighted average share price for options exercised during 2011 and 2010 amounted to, respectively €57.00 and €60.50.

The following table summarizes options outstanding and options exercisable as of December 31, 2012, and the related weighted average remaining contractual life (years) and weighted average exercise price under the Delhaize Group stock option plans of non-U.S. operating companies:


Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price (in €)
€26.39 - €30.99		397 047		6.40		30.58
€49.25 - €54.11		853 994		3.35		51.08
€66.29 - €71.84		355 214		4.44		68.90

€26.39 - €71.84		1 606 255		4.34		49.95

Options exercisable at the end of 2012 had a weighted average remaining contractual term of 2.80 years (2011: 2.85; 2010: 2.80).

The weighted average fair values of options granted was €3.86 per option for the May 2012 grant and €4.27 for the November 2012 grant (2011: €8.62; 2010: €9.73) and were estimated on the date of grant using the following assumptions:


	Nov. 2012		May 2012		2011		2010
Share price (in €)		26.39		28.41		49.99		60.55
Expected dividend yield (%)		3.4		3.3		2.6		2.5
Expected volatility (%)		26.7		26.0		25.9		26.6
Risk-free interest rate (%)		0.6		0.7		2.3		1.5
Expected term (years)		5.8		5.8		5.3		5.0

U.S. Operating Entities Stock Options and Warrants Plans

Since 2009, Delhaize Group also limited in its U.S. operating entities the number of employees that are entitled to future grants to vice presidents and above.

Warrants granted under the “Delhaize Group 2012 Stock Incentive Plan” and the “Delhaize Group 2002 Stock Incentive Plan” vest ratably over a three-year service period, are exercisable when they vest and expire ten years from the grant date.

F-74

Options and warrants granted to employees of U.S. operating companies under the various plans were as follows:


Plan	Effective Date of Grants		Number of shares Underlying Award Issued		Number of Shares Underlying Awards Outstanding at December 31, 2012		Exercise Price		Number of Beneficiaries (at the moment of issuance)		Exercise Period (exercisable until)
Delhaize Group 2012 Stock Incentive plan - Warrants		August 2012		300 000		300 000	$	39.62		1		2022
		May 2012		291 727		280 160	$	38.86		75		2022
Delhaize Group 2002 Stock Incentive plan - Warrants		June 2011		318 524		303 771	$	78.42		75		2021
		June 2010		232 992		213 946	$	78.33		74		2020
		June 2009		301 882		242 121	$	70.27		88		2019
		May 2008		528 542		335 867	$	74.76		237		2018
		June 2007		1 165 108		876 470	$	96.30		3 238		2017
		June 2006		1 324 347		442 906	$	63.04		2 983		2016
		May 2005		1 100 639		248 396	$	60.76		2 862		2015
		May 2004		1 517 988		167 112	$	46.40		5 449		2014
		May 2003		2 132 043		108 973	$	28.91		5 301		2013
Delhaize Group 2002 Stock Incentive plan - Options not backed by warrants		Various		3 221		2 154	$	74.76 - $78.33		11		Various

Activity related to the “Delhaize Group 2012 Stock Incentive Plan” and the “Delhaize America 2002 Stock Incentive Plan” was as follows:


2012	Shares			Weighted Average Exercise Price (in $)
Outstanding at beginning of year		3 195 599			74.22
Granted		591 727			39.25
Exercised⁽¹⁾		(28 561	)		42.14
Forfeited/expired		(236 889	)		64.27

Outstanding at end of year		3 521 876			69.27
Options exercisable at end of year		2 322 027			74.56

2011	Shares			Weighted Average Exercise Price (in $)
Outstanding at beginning of year		3 313 126			72.31
Granted		318 524			78.42
Exercised		(318 545	)		56.54
Forfeited/expired		(117 506	)		79.82

Outstanding at end of year		3 195 599			74.22
Options exercisable at end of year		2 206 490			73.87

2010	Shares			Weighted Average Exercise Price (in $)
Outstanding at beginning of year		3 703 267			69.90
Granted		234 316			78.33
Exercised		(530 525	)		56.87
Forfeited/expired		(93 932	)		79.35

Outstanding at end of year		3 313 126			72.31
Options exercisable at end of year		2 314 195			71.77

(1)	Includes warrants exercised by employees, for which a capital increase had not occurred before the end of the year. The number of shares for which a capital increase had not yet occurred was 964 at December 31, 2012.

F-75

The weighted average remaining contractual term for the share options outstanding as at December 31, 2012 is 4.76 (2011: 5.10; 2010: 5.52). The weighted average share price for options exercised during 2012 amounts to $52.87 (2011: $79.73; 2010: $79.22).

The following table summarizes options and warrants outstanding as of December 31, 2012, and the related weighted average remaining contractual life (years) and weighted average exercise price under the stock option plans for employees of U.S. operating companies:


Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price (in $)
$28.91 - $46.40		856 245		6.40		39.33
$60.76 - $74.76		1 270 623		3.52		67.08
$78.33 - $96.30		1 395 008		4.89		89.64

$28.91 - $96.30		3 521 876		4.76		69.27

Options exercisable at the end of 2012 had a weighted average remaining contractual term of 3.60 years (2011: 4.40; 2010: 4.90).

The fair values of options granted were $5.89 (August 2012), $6.10 (May 2012), $12.61 and $13.03 per option for the years 2012, 2011 and 2010, respectively, and were estimated using the following weighted average assumptions:


	August 2012		May 2012		2011		2010
Share price (in $)		39.62		38.86		78.42		78.33
Expected dividend yield (%)		3.6		3.5		2.9		2.5
Expected volatility (%)		27.1		27.9		26.0		25.2
Risk-free interest rate (%)		0.5		0.6		1.2		1.6
Expected term (years)		4.2		4.2		4.0		4.0

U.S. Operating Entities Restricted Stock Unit Awards Plan

Restricted stock unit awards follow a graded vesting plan over a five-year period, with a first 25% tranche of restricted stock units to be transferred to employees starting at the end of the second year after the award has been granted. As the award vests, the employee receives - at no cost for the employee - ADRs equal to the number of restricted stock units that have vested, free of any restriction.

Restricted stock unit awards granted to employees of U.S. operating companies under the “Delhaize America 2012 Restricted Stock Unit Plan” and the “Delhaize America 2002 Restricted Stock Unit Plan” (grants prior to 2012) were as follows:


Effective Date of Grants	Number of Shares Underlying Award Issued		Number of Shares Underlying Awards Outstanding at December 31, 2012		Number of Beneficiaries (at the moment of issuance)
August 2012		40 000		40 000		1
May 2012		126 123		116 671		253
June 2011		128 717		104 331		249
June 2010		123 917		69 351		243
June 2009		150 073		48 402		245
May 2008		466 503		79 978		3 421

Activity related to the restricted stock plans was as follows:


2012	Shares
Outstanding at beginning of year		520 584
Granted		166 123
Released from restriction		(210 611	)
Forfeited/expired		(17 363	)

Outstanding at end of year		458 733

F-76


2011	Shares
Outstanding at beginning of year		597 111
Granted		128 717
Released from restriction		(185 549	)
Forfeited/expired		(19 695	)

Outstanding at end of year		520 584


2010	Shares
Outstanding at beginning of year		716 350
Granted		123 917
Released from restriction		(221 141	)
Forfeited/expired		(22 015	)

Outstanding at end of year		597 111

The fair value at date of grant for restricted stock unit awards granted during August 2012, May 2012, 2011 and 2010 was $39.62, $38.86, $78.42 and $78.33 based on the share price at the grant date, respectively.

F-77

22.

Income Taxes

The major components of income tax expense for 2012, 2011 and 2010 were:


(in millions of €)	2012			2011			2010
Continuing operations
Current tax		110			103			17	⁽¹⁾
Taxes related to prior years recorded in the current year		(57	)⁽²⁾		5			(2	)
Utilization of previously unrecognized tax losses and tax credits		—			(1	)		—
Other (current tax related)		2			—			—
Deferred tax		(62	)	��	52			226	⁽¹⁾
Deferred taxes related to prior years recorded in the current year		6			(5	)		3
Recognition of deferred tax on previously unrecognized tax losses and tax credits		(6	)		(2	)		—
Derecognition of previously recorded deferred tax assets		18			3			2
Deferred tax expense relating to changes in tax rates or the imposition of new taxes⁽³⁾		13			1			(1	)

Total income tax expense from continuing operations		24			156			245
Total income tax expense from discontinued operations		(2	)		—			—

Total income tax expense from continuing and discontinued operations		22			156			245

(1)	In 2010, current tax decreased and deferred tax increased primarily due to a change in tax treatment of capital expenditures in the U.S., which are considered deductible for tax purposes and therefore increase the deferred tax liabilities.

(2)	Primarily related to the resolution of several tax matters in the U.S. which resulted in the recognition of an income tax benefit.

(3)	In December 2012, the Serbian government enacted an increase in tax rate from 10 to 15%, effective as from January 1, 2013.

Profit before taxes can be reconciled with net profit as follows:


(in millions of €)	2012			2011⁽¹⁾			2010
Continuing operations		149			633			821
Discontinued operations		(24	)		(2	)		(1	)

Total profit before taxes		125			631			820
Continuing and discontinued operations
Current tax		109			103			17	⁽²⁾
Taxes related to prior years recorded in the current year		(57	)⁽³⁾		5			(2	)
Utilization of previously unrecognized tax losses and tax credits		—			(1	)		—
Other (current tax related)		2			—			—
Deferred tax		(63	)		52			226	⁽²⁾
Deferred taxes related to prior years recorded in the current year		6			(5	)		3
Recognition of deferred tax on previously unrecognized tax losses and tax credits		(6	)		(2	)		—
Derecognition of previously recorded deferred tax assets		18			3			2
Deferred tax expense relating to changes in tax rates or the imposition of new taxes⁽⁴⁾		13			1			(1	)

Total income tax expense from continuing and discontinued operations		22			156			245

Net profit		103			475			575

(1)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

(2)	In 2010, current tax decreased and deferred tax increased primarily due to a change in tax treatment of capital expenditures in the U.S., which are considered deductible for tax purposes and therefore increase the deferred tax liabilities.

(3)	Primarily related to the resolution of several tax matters in the U.S. which resulted in the recognition of an income tax benefit.

(4)	In December 2012, the Serbian government enacted an increase in tax rate from 10 to 15%, effective as from January 1, 2013.

F-78

The following reconciles Delhaize Group’s Belgian statutory income tax rate to the Group’s effective income tax rate:


	2012⁽¹⁾			2011			2010
Belgian statutory income tax rate		34.0	%		34.0	%		34.0	%
Items affecting the Belgian statutory income tax rate:
Different statutory tax rates in jurisdictions outside Belgium		25.7	⁽²⁾		(1.2	)		1.0
Non taxable income		(25.9	)		(0.6	)		(0.8	)
Non deductible expenses		21.6			1.2			1.0
Tax charges on dividend income		6.5			0.7			—
Deductions from taxable income⁽³⁾		(35.6	)		(10.0	)		(5.9	)
(Recognition) non recognition of tax assets		18.7			0.4			0.3
Taxes related to prior years recorded in current year		(40.5	)⁽⁴⁾		—			(0.5	)
Changes in tax rate or imposition of new taxes		10.7			0.1			0.5
Other		2.4			0.1			0.2

Effective tax rate		17.6	%		24.7	%		29.8	%

(1)	The weight of each item affecting the Belgian statutory income tax rate is higher in 2012 due to the lower profit before tax.

(2)	The increase is mainly due to tax losses incurred in the Balkan countries at a lower tax rate.

(3)	Deductions from taxable income relate to notional interest deduction in Belgium and tax credits in other countries.

(4)	Primarily related to the resolution of several tax matters in the U.S. which resulted in the recognition of an income tax benefit.

The aggregated amount of current and deferred tax charged or (credited) directly to equity was as follows:


(in millions of €)	2012			2011			2010
Current tax		2			(1	)		(2	)
Deferred tax		(5	)		(9	)		5

Total tax charged (credited) directly to equity		(3	)		(10	)		3

Delhaize Group has not recognized income taxes on undistributed earnings of its subsidiaries and proportionally consolidated joint venture as the undistributed earnings will not be distributed in the foreseeable future. The cumulative amount of undistributed earnings on which the Group has not recognized income taxes was approximately €4.1 billion at December 31, 2012, €4.2 billion at December 31, 2011 and €3.6 billion at December 31, 2010.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred income taxes relate to the same fiscal authority. Deferred income taxes recognized on the balance sheet were as follows:

(in millions of €)

December 31,

2012

2011⁽¹⁾

2010

Deferred tax liabilities

570

624

543

Deferred tax assets

Net deferred tax liabilities

481

527

448

(1)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

F-79

The changes in the overall net deferred tax liabilities were as follows:


(in millions of €)	Accelerated Tax Depreciation			Closed Store Provision			Leases			Pension			Other			Total
Net deferred tax liabilities at January 1, 2010		344			(15	)		(69	)		(25	)		(31	)		204
Charge (credit) to equity for the year		—			—			—			1			4	⁽¹⁾		5
Charge (credit) to profit or loss for the year		201	⁽²⁾		3			(3	)		(2	)		32			231
Effect of change in tax rates		1			—			—			—			(2	)		(1	)
Acquisition		—			—			—			—			(1	)		(1	)
Transfers (to) from other accounts		14			(4	)		—			(6	)		(4	)		—
Currency translation effect		20			(1	)		(5	)		(1	)		(3	)		10

Net deferred tax liabilities at December 31, 2010		580			(17	)		(77	)		(33	)		(5	)		448
Charge (credit) to equity for the year		—			—			—			(7	)		(2	)⁽¹⁾		(9	)
Charge (credit) to profit or loss for the year		(41	)		1			2			1			85			48
Effect of change in tax rates		—			—			—			—			1			1
Acquisition		36			(3	)		—			—			(9	)		24
Transfers (to) from other accounts		(1	)		1			1			—			(1	)		—
Currency translation effect		12			—			(2	)		(1	)		6			15

Net deferred tax liabilities at December 31, 2011⁽³⁾		586			(18	)		(76	)		(40	)		75			527
Charge (credit) to equity for the year		—			—			—			(4	)		(1	)⁽¹⁾		(5	)
Charge (credit) to profit or loss for the year		(45	)		(26	)		1			(2	)		28			(44	)
Effect of change in tax rates		14			—			—			—			(1	)		13
Divestiture		(1	)		—			—			—			1			—
Transfers (to) from other accounts		(1	)		—			—			—			1			—
Currency translation effect		(11	)		1			1			—			(1	)		(10	)

Net deferred tax liabilities at December 31, 2012		542			(43	)		(74	)		(46	)		102			481

(1)	In 2012, 2011 and 2010, includes €2 million, €(2) million and €3 million, respectively, in relation to the cash flow hedge reserve.

(2)	Primarily due to a change in tax treatment of capital expenditures in the U.S., which are considered deductible for tax purposes and therefore increase the deferred tax liabilities.

(3)	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

At December 31, 2012, Delhaize Group did not recognize deferred tax assets of €112 million, of which:

•

€42 million related to U.S. tax loss carry-forwards of €901 million (mainly at a 4.0% U.S. State effective tax rate) and U.S. tax credits, which if unused would expire at various dates between 2013 and 2032;

•

€8 million related to tax loss carry-forwards of €84 million in Europe, which if unused would expire at various dates between 2013 and 2017;

•

€8 million related to tax credits in Europe, which if unused would expire at various dates between 2014 and 2022; and

•

€54 million related to tax loss carry-forwards of €170 million in Europe which can be utilized without any time limitation.

The unused tax losses and unused tax credits may not be used to offset taxable income or income taxes in other jurisdictions.

Delhaize Group recognized deferred tax assets only to the extent that it is probable that future taxable profit will be available against which the unused tax losses, the unused tax credits and deductible temporary differences can be utilized. At December 31, 2012, the recognized deferred tax assets relating to unused tax losses and unused tax credits was €29 million.

F-80

23.

Accrued Expenses


(in millions of €)	December 31,
(in millions of €)	2012		2011		2010
Accrued payroll and short-term benefits		327		329		299
Accrued interest		33		42		37
Other		77		71		57

Total accrued expenses		437		442		393

24.

Expenses from Continuing Operations by Nature

The aggregate of cost of sales and selling, general and administrative expenses from continuing operations can be specified by nature as follows:


(in millions of €)	Note		2012		2011⁽²⁾		2010
Product cost, net of vendor allowances and cash discounts		25		16 504		15 138		14 905
Employee benefit expenses		26		3 069		2 849		2 839
Supplies, services and utilities purchased				889		827		761
Depreciation and amortization		7, 8, 9		649		585		575
Operating lease expenses		18.3		328		310		295
Bad debt allowance		14		2		11		6
Other expenses⁽¹⁾				600		526		510

Total expenses by nature				22 041		20 246		19 891
Cost of Sales		25		17 170		15 749		15 497
Selling, general and administrative expenses				4 871		4 497		4 394

Total expenses by function				22 041		20 246		19 891

(1)	Allowances and credits received from suppliers that represent a reimbursement of specific and identifiable non-product costs incurred by the Group (see Note 25) have been included for the purposes of this overview in “Other expenses.”

(2)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

25.

Cost of Sales

(in millions of €)

Note

2012

2011⁽¹⁾

2010

Product cost, net of vendor allowances and cash discounts

16 504

15 138

14 905

Purchasing, distribution and transportation costs

666

611

592

Total

17 170

15 749

15 497

(1)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

Delhaize Group receives allowances and credits from suppliers mainly for in-store promotions, co-operative advertising, new product introduction and volume incentives. In accordance with the Group’s accounting policies, described in Note 2.3, these allowances are included in the cost of inventory and recognized as a reduction to cost of sales when the product is sold, unless they represent the reimbursement of a specific and identifiable cost incurred by the Group to sell the vendor’s product in which case they are recorded as a reduction in “Selling, general and administrative expenses” (€14 million, €18 million and €9 million in 2012, 2011 and 2010, respectively).

F-81

26.

Employee Benefit Expenses

Employee benefit expenses for continuing operations can be summarized and compared to prior years as follows:


(in millions of €)	Note		2012		2011⁽¹⁾		2010
Wages, salaries and short-term benefits including social security				2 987		2 784		2 766
Share-based compensation expenses		21.3		13		13		16
Retirement benefits (including defined contribution, defined benefit and other post-employment benefits)		21.1, 21.2		69		52		57

Total		24		3 069		2 849		2 839

(1)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

Employee benefit expenses were recognized in the income statement as follows:

(in millions of €)

2012

2011⁽¹⁾

2010

Cost of sales

375

354

Selling, general and administrative expenses

2 694

2 495

2 485

Employee benefits for continuing operations

3 069

2 849

2 839

Results from discontinued operations

—

Total

3 071

2 850

2 839

(1)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

27.

Other Operating Income

Other operating income includes income generated from activities other than sales and point of sale services to retail and wholesale customers.


(in millions of €)	2012		2011		2010
Rental income		52		46		33
Income from waste recycling activities		20		26		23
Services rendered to wholesale customers		7		11		12
Gains on sale of property, plant and equipment		10		3		4
Other		33		32		13

Total		122		118		85

“Other” primarily includes, amongst others, litigation settlement income and income from government grants. During 2012, Delhaize Group recognized €3 million of government grant income and €5 million of lease termination/settlement income in “Other.” In 2011, the caption “Other,” contained an insurance reimbursement related to tornado damages in the U.S. (€13 million).

28.

Other Operating Expenses

Other operating expenses include expenses incurred outside the normal course of operating supermarkets.


(in millions of €)	2012		2011		2010
Store closing expenses		125		8		(2	)
Impairment		272		135		14
Losses on sale of property, plant and equipment		22		13		3
Other		9		13		5

Total		428		169		20

During 2012, Delhaize Group closed a total of 180 stores, of which 146 stores (126 in the United States and 20 Maxi stores) were closed early 2012 following a store portfolio review both in the United States and Europe, resulting in total store closing charges of

F-82

€140 million. These charges were partly offset by €15 million resulting from the periodic update of estimates used for the store closing provision (see Note 20.1). In 2011, Delhaize Group incurred store closing expenses of €8 million of which €5 million related to the update of estimates for closed store provisions.

In 2010, the update and revision of the provision for store closing and U.S. organizational restructuring was €3 million income, which, together with incurred store closing expenses of €1 million, resulted in a net gain of €2 million.

At year-end 2012, the impairment losses recognized amounted to €272 million and can be summarized as follows:


(in millions of €)	Note		2012		2011		2010
Goodwill		6		136		—		—
Intangible assets		7		17		3		—
Property, plant & equipment		8		87		115		12
Investment property		9		14		17		2
Assets held for sale		5.2		18		—		—

Total				272		135		14

As part of the 2012 annual goodwill impairment review, the Group impaired 100% of the goodwill recognized in Bulgaria, Bosnia & Herzegovina and Montenegro (totaling €51 million) and €85 million with respect to the Serbian goodwill. The Group further recognized impairment charges in connection with the Piccadilly brand in Bulgaria for €15 million, and other intangible assets at Delhaize America for €2 million. In addition, the Group recognized impairment charges of €87 million in property, plant and equipment relating to (i) 45 stores (34 Sweetbay, 8 Food Lion and 3 Bottom Dollar Food) that were approved for closure early 2013 and 9 underperforming stores, all in the United States, for a total amount of €54 million, (ii) the closing of 6 stores and underperformance of 57 stores in the Southeastern Europe (€28 million), and (iii) 1 store closing and the underperformance of 6 stores in Belgium (€5 million). Further, impairment charges of €14 million were recognized on investment properties, primarily on 15 properties in the United States and a warehouse in Albania. Finally, assets held for sale at Maxi Group were impaired by €18 million as a result of the weakening real estate market and the deteriorating state of the property for sale.

During the fourth quarter of 2011, the Group performed a review of its store portfolio and concluded to impair 126 stores and one distribution center in the U.S. (€115 million) and several of its investment properties (€12 million). The 2010 impairment charges resulted from the periodic impairment review of underperforming stores for €12 million and investment property for €2 million, mainly located in the U.S.

“Other” primarily consists of hurricane and other natural disasters related expenses, as well as legal settlement expenses.

29.

Financial Result

29.1

Finance Costs


(in millions of €)	Note		2012			2011⁽¹⁾			2010
Interest on short and long-term borrowings				134			120			117
Amortization of debt discounts (premiums) and financing costs				5			7			4
Interest on obligations under finance leases				78			78			81
Interest charged to closed store provisions (unwinding of discount)		20.1		7			4			4

Total interest expenses				224			209			206
Foreign currency losses (gains) on debt covered by cash flow hedge		30		(1	)		7			16
Reclassification of fair value losses (gains) from OCI on cash flow hedge		19		4			(5	)		(15	)

Total cash flow hedging impact				3			2			1
Fair value losses (gains) on debt instruments — fair value hedges		19		3			(5	)		(3	)
Fair value losses (gains) on derivative instruments — fair value hedges		19		(6	)		5			3

Total fair value hedging impact				(3	)		—			—
Foreign currency losses (gains) on debt instruments		30		13			(17	)		(33	)
Fair value losses (gains) on cross currency interest rate swaps				(4	)		2			34
Amortization of deferred loss on hedge		16		—			—			1
Other finance costs				27			9			9
Less: capitalized interest				(2	)		(2	)		(3	)

Total				258			203			215

(1)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

F-83

In February 2009, $300 million senior notes due 2014 were issued, which generated a foreign currency gain of €1 million in 2012 compared to a loss of €7 million and €16 million in respectively 2011 and 2010. As the debt was part of a designated cash flow hedge relationship (see Note 19), this amount, and corresponding effects on interest, is offset by reclassification adjustments from OCI to profit or loss relating to the hedging instrument (€2 million loss in 2012, €5 million gain in 2011 and €15 million gain in 2010). Additionally, a loss of €2 million has been recycled from OCI to profit or loss following the tender of the senior notes in December 2012 (see Note 18.1) and the termination of hedge accounting.

At December 31, 2012, Delhaize Group had three outstanding debts which are part of a fair value hedge relationship (see Note 19), which had a combined positive impact of €3 million.

Other finance costs mainly contain €17 million net debt refinancing transactions costs (see Note 18.1) and consist of (i) €36 million of agreed early repayment premiums, (ii) settlement of the underlying cross- currency interest swaps (€3 million), partially offset by (iii) fair value gains of €22 million on the related notes.

Borrowing costs attributable to the construction or production of qualifying assets were capitalized using an average interest rate of 5.6%, 6.2% and 7.5% in 2012, 2011 and 2010, respectively.

29.2

Income from Investments


(in millions of €)	Note		2012		2011			2010
Interest and dividend income from bank deposits and securities				6		9			9
Gains on disposal of securities				6		8			2
Foreign currency gains on financial assets		30		3		7			—
Fair value gains (losses) on currency swaps and foreign exchange forward contracts				—		(2	)		—
Other investing income				2		1			1

Total				17		23			12

No impairment losses on financial assets were incurred during 2012, 2011 and 2010.

30.

Net Foreign Exchange Losses (Gains)

The exchange differences charged (credited) to the income statement, excluding the impact of hedge accounting and economic hedges, were as follows:


(in millions of €)	Note		2012			2011			2010
Cost of sales				1			—			—
Selling, general and administrative expenses				(2	)		1			—
Finance costs		29.1		12			(10	)		(17	)
Income from investments		29.2		(3	)		(7	)		—

Total				8			(16	)		(17	)

31.

Earnings Per Share (“EPS”)

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the year, excluding ordinary shares bought by the Group and held as treasury shares (see Note 16).

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Group only has dilutive potential share-based awards (see Note 21.3). Dilutive share-based awards are assumed to have been exercised, and the assumed proceeds from these instruments are regarded as having been received from the issue of ordinary shares at the average market price of ordinary shares during the period. The difference between the number of ordinary shares issued and the number of ordinary shares that would have been issued at the average market price of ordinary shares during the period is treated as an issue of ordinary shares for no consideration.

F-84

Approximately 4 581 153, 2 651 448 and 1 917 112 shares attributable to the exercise of outstanding stock options and warrants were excluded from the calculation of diluted earnings per share for 2012, 2011 and 2010, respectively, as their effect was anti-dilutive because their average exercise price was higher than the average market price during the year.

Basic and diluted earnings per share for 2012, 2011 and 2010 were as follows:


(in millions of €, except numbers of shares and earnings per share)	2012			2011⁽¹⁾			2010
Net profit from continuing operations		125			477			576
Net profit (loss) from continuing operations attributable to non-controlling interests		(2	)		—			1

Group share in net profit from continuing operations		127			477			575
Result from discontinued operations, net of tax		(22	)		(2	)		(1	)

Group share in net profit for diluted earnings		105			475			574

Weighted average number of ordinary shares outstanding		100 777 257			100 683 828			100 270 861
Adjusted for dilutive effect of share-based awards		356 326			742 075			888 825

Weighted average number of diluted ordinary shares outstanding		101 133 583			101 425 903			101 159 686

*Basic earnings per ordinary share*(in €):
From continuing operations		1.27			4.74			5.74
From discontinued operations		(0.22	)		(0.03	)		(0.01	)

Basic EPS attributable to the equity holders of the Group		1.05			4.71			5.73
*Diluted earnings per ordinary share*(in €):
From continuing operations		1.26			4.70			5.69
From discontinued operations		(0.22	)		(0.02	)		(0.01	)

Diluted EPS attributable to the equity holders of the Group		1.04			4.68			5.68

(1)	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

32.

Related Party Transactions

Several of the Group’s subsidiaries provide post-employment benefit plans for the benefit of employees of the Group. Payments made to these plans and receivables from and payables to these plans are disclosed in Note 21.

Compensation of Directors

The individual Directors’ remuneration granted for the fiscal years 2012, 2011 and 2010 is set forth in the “Corporate Governance” section of this annual report. The total remuneration of Directors is as follows, gross before deduction of withholding taxes:

(in thousands of €)

2012

2011

2010

Total remuneration non-executive Directors

998

1 049

1 000

Executive Director

Pierre-Olivier Beckers⁽¹⁾

Total

1 078

1 129

1 080

⁽¹⁾	The amounts solely relate to the remuneration of the Executive Director and exclude his compensation as CEO.

F-85

Compensation of Executive Management

The table below sets forth the number of restricted stock unit awards, stock options and warrants granted by the Group during 2012, 2011 and 2010 to its Executive Management. For more details on the share-based incentive plans, see Note 21.3.


	2012		2011		2010
Restricted stock unit awards		62 349		24 875		22 677
Stock options and warrants		527 737		173 583		106 341

For information regarding the number of restricted stock unit awards, stock options and warrants granted as well as the compensation effectively paid (for services provided in all capacities to the Group) during the respective years to the Chief Executive Officer and the members of the Executive Committee, we refer to the Remuneration Report included in the “Corporate Governance Statement” of this annual report.

The aggregate compensation for the members of Executive Management recognized in the income statement is summarized below.

Amounts are gross amounts before deduction of withholding taxes and social security levy. They do not include the compensation of the CEO as director of the Company that is separately disclosed above. In 2012, the aggregate compensation includes the pro-rata share of compensation of two members of the Executive Management who joined the company in 2012 (one member in March and one in August), and the pro-rata share of compensation of one member of the Executive Management who left the company on October 15 as well as his termination benefits. In 2010, the aggregate compensation includes the pro-rata share of compensation of one member of the Executive Management who left the Company in May 2010, as well as his termination benefits.


(in millions of €)	2012		2011		2010
Short-term benefits⁽¹⁾		6		5		7
Retirement and post-employment benefits⁽²⁾		1		1		1
Other long-term benefits⁽³⁾		1		2		2
Termination benefits		1		—		5
Share-based compensation		3		3		2
Employer social security contributions		2		1		1

Total compensation expense recognized in the income statement		14		12		18

(1)	Short-term benefits include the annual bonus payable during the subsequent year for performance achieved during the respective years.

(2)	The members of Executive Management benefit from corporate pension plans, which vary regionally (see Note 21.1). Amounts represent the employer contributions for defined contribution plans and the employer service cost for defined benefit plans.

(3)

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. Amounts represent the expense recognized by the Group during the respective years, as estimated based on realized and projected performance. Estimates are adjusted every year and when payment occurs.

33.

Commitments

Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Group 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. Agreements that can be cancelled within 30 days of the reporting date without penalty are excluded.

As of December 31, 2012, purchase obligations amounted to €164 million (2011: €238 million and 2010: €177 million), of which €44 million related to the acquisition of property, plant and equipment and intangible assets.

Commitments related to lease obligations are disclosed in Note 18.3.

F-86

34.

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 currently existing or which may arise in the future will not have a material adverse effect on our business or consolidated financial statements.

The Group continues to be subject to tax audits in jurisdictions where we conduct business. Although some audits have been completed during 2010, 2011 and 2012, Delhaize Group expects continued audit activity in 2013. 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 statements 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.

Delhaize Group is from time to time subject to investigations or inquiries by the competition authorities related to potential violations of competition laws in jurisdictions where we conduct business. None of these investigations are currently in a stage where Delhaize Group could reliably assess their merits, if any. In this context, in April 2007, representatives of the Belgian Competition Council visited Delhaize Group’s Procurement Department in Zellik, Belgium, and requested the provision of certain documents. This visit was part of a local investigation affecting several companies active in Belgium in the supply and retail of health and beauty products and other household goods. On October 1, 2012, the Auditor to the Belgian Competition Council issued its investigation report. The investigation involves 11 suppliers and 7 retailers, including Delhaize Belgium, on an alleged coordination of price increases on the concerned market from 2002 to 2007. As a next step, the Belgian Competition Council will hear the parties and establish a calendar for the exchange of arguments where Delhaize Group intends to vigorously defend itself. The investigation report does not contain sufficient information, and there is no similar case precedent, that would allow estimating a possible financial impact that could result from any future decision of the Belgian Competition Council. According to Belgian legislation, compensation payments are calculated on the turnover of the last year of the alleged infringement and capped at 10% of the Belgian annual revenues of the year preceding the decision of the Competition Council. Such compensation payments, if any, will therefore be capped at 10% of the Belgian annual revenues of 2012 or 2013, depending on the timing of the decision. A decision by the Council is not expected before the end of 2013 and, under the current legislation, the parties involved have the right to appeal in court. Consequently, the Group does currently not have sufficient information available to make a reliable estimate of any financial impact or the timing thereof.

The Group’s Hannaford and Sweetbay banners experienced an unauthorized intrusion (“Computer Intrusion”) into portions of their computer system that process information related to customer credit and debit card transactions, which resulted in the potential theft of customer credit and debit card data. Also affected was credit card data from cards used at certain independently-owned retail locations in the Northeast of the U.S. that carry products delivered by Hannaford. The Computer Intrusion was discovered during February 2008, and Delhaize Group believes the exposure window for the Hannaford and Sweetbay credit and debit card data was approximately from December 7, 2007 through early March 2008. There is no evidence that any customer personal information, such as names or addresses, was obtained by any unauthorized person. Various legal actions have been taken, and various claims have been otherwise asserted, against Hannaford and affiliates relating to the Computer Intrusion, several of which already have been dismissed or resolved without any monetary payments by us. While the Group intends to continue to defend the remaining legal actions and claims vigorously, it cannot predict the outcome of such legal actions and claims, and thus, does not have sufficient information to reasonably estimate possible expenses and losses, if any, which may result from all litigation and claims.

In February 2011, Delhaize Group was notified that some former Greek shareholders of Alfa Beta Vassilopoulos S.A., who together held 7% of Alfa Beta shares, have filed a claim in front of the Court of First Instance of Athens challenging the price paid by the Group during the squeeze-out process that was approved by the Hellenic Capital Markets Commission. Delhaize Group is convinced that the squeeze-out transaction has been executed and completed in compliance with all legal and regulatory requirements. Delhaize Group continues to assess the merits and any potential exposure of this claim and will vigorously defend itself. The first hearing has been scheduled in October 2013.

35.

Subsequent Events

On January 3, 2013, Delhaize Group redeemed the remaining $99 million of the $300 million 5.875% senior notes due 2014 (see Note 18.1), as well as the underlying cross-currency swap (Note 19).

F-87

On January 17, 2013, Delhaize Group announced the decision to close 52 stores, of which 45 stores in the U.S. (34 Sweetbay, 8 Food Lion and 3 Bottom Dollar Food), 6 stores in Southeastern Europe and 1 store in Belgium. As a result, the group recorded an impairment charge of €49 million in the fourth quarter of 2012. During the first part of 2013, the Group expects earnings to be impacted by approximately €80 million to reflect store closing liabilities including a reserve for ongoing lease and severance obligations. In addition, the Group will record charges of approximately $20 million (€15 million) in the first quarter of 2013 related to the severance of support services senior management and employees in the U.S.

In January 2013, the Greek parliament enacted the increase in the Greek corporate tax rate from 20 to 26%. The impact on Alfa Beta will be immaterial.

In February 2013, Delhaize Group launched a tender offer to acquire 16% non-controlling interest in C-Market (Serbian subsidiary), held by the Serbian Privatization Agency, at a price of €300 per share. At December 31, 2012 Delhaize Group owned 75.4% of C-Market, or 150 254 shares.

In February 2013, Delhaize Group finalized the sale of its Albanian activities and recorded a gain of €1 million.

36.

List of Consolidated and Associated Companies and Joint Ventures

A.	Fully Consolidated


		Ownership Interest in %
		2012		2011		2010
Alfa Beta Vassilopoulos S.A.	81, Spaton Avenue, Gerakas, Athens, Greece		100.0		100.0		100.0
Alliance Wholesale Solutions, LLC⁽¹⁾	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A		100.0		—		—
Anadrasis S.A.	81, Spaton Avenue, Gerakas, Athens, Greece		100.0		100.0		—
Aniserco SA	Rue Osseghemstraat 53, 1080 Brussels, Belgium		100.0		100.0		100.0
Athenian Real Estate Development, Inc.	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.		100.0		100.0		100.0
ATTM Consulting and Commercial, Ltd.⁽²⁾	Kyriakou Matsi, 16 Eagle House, 10th floor, Agioi Omologites, P.C. 1082, Nicosia, Cyprus		100.0		100.0		100.0
Boney Wilson & Sons, Inc.	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.		100.0		100.0		100.0
Bottom Dollar Food Holding, LLC	2110 Executive Drive, Salisbury, NC 28147, U.S.A.		100.0		100.0		100.0
Bottom Dollar Food Northeast, LLC	2110 Executive Drive, Salisbury, NC 28147, U.S.A.		100.0		100.0		100.0
Bottom Dollar Food Southeast, LLC	2110 Executive Drive, Salisbury, NC 28147, U.S.A.		100.0		100.0		100.0
Centar za obuchenie i prekvalifikacija EOOD	Bitolya 1A str, Varna, Bulgaria		100.0		100.0		—
C Market a.d. Beograd	Jurija Gagarina Street, 14, 11 070 Novi Beograd, Serbia		75.4		75.4		—
Delhaize Albania SHPK⁽³⁾	Autostrada Tiranë – Durrës, Km. 7, Kashar, Albania		100.0		100.0		—
Delhaize America, LLC	2110 Executive Drive, Salisbury, NC 28147, U.S.A.		100.0		100.0		100.0
Delhaize America Shared Services Group, LLC	2110 Executive Drive, Salisbury, NC 28147, U.S.A.		100.0		100.0		100.0
Delhaize BH d.o.o. Banja Luka	Branka Popovića 115, 78000 Banja Luka, Bosnia and Herzegovina		100.0		100.0		—
Delhaize Distribution Luxembourg S.A.	Rue d’Olm 51, 8281 Kehlen, Grand Duchy of Luxembourg		100.0		100.0		100.0
Delhaize Finance B.V.	Martinus Nijhofflaan 2, 2624 ES Delft, The Netherlands		100.0		100.0		100.0
Delhaize Griffin SA	Square Marie Curie 40, 1070 Brussels, Belgium		100.0		100.0		100.0
Delhaize Insurance Company, Inc	76 St. Paul Street, Suite 500, Burlington, VT 05401, U.S.A.		100.0		100.0		100.0
Delhaize Luxembourg S.A.	Rue d’Olm 51, 8281 Kehlen, Grand Duchy of Luxembourg		100.0		100.0		100.0
Delhaize Montenegro d.o.o. Podgorica	Josipa Broza Tita 23a, 81 000 Podgorica, Montenegro		100.0		100.0		—
Delhaize Serbia d.o.o. Beograd	Jurija Gagarina Street, 14, 11 070 Novi Beograd, Serbia		100.0		100.0		—
Delhaize The Lion America, LLC	2110 Executive Drive, Salisbury, NC 28147, U.S.A.		100.0		100.0		100.0
Delhaize The Lion Coordination Center SA	Rue Osseghemstraat 53, 1080 Brussels, Belgium		100.0		100.0		100.0
Delhaize “The Lion” Nederland B.V.	Martinus Nijhofflaan 2, 2624 ES Delft, The Netherlands		100.0		100.0		100.0
Delhaize US Holding, Inc.	2110 Executive Drive, Salisbury, NC 28147, U.S.A.		100.0		100.0		100.0
Delhome SA	Bld de l’Humanité 219/221, 1620 Drogenbos, Belgium		100.0		100.0		100.0
Delimmo SA	Rue Osseghemstraat 53, 1080 Brussels, Belgium		100.0		100.0		100.0
DZA Brands, LLC	2110 Executive Drive, Salisbury, NC 28147, U.S.A.		100.0		100.0		100.0

F-88


Ela d.o.o. Kotor	Trg od oruzja bb, Kotor, Montenegro	100.0	51.0	—
ENA SA.⁽⁴⁾	81, Spaton Avenue, Gerakas, Athens, Greece	—	100.0	100.0
FL Food Lion, Inc.	2110 Executive Drive, Salisbury, NC 28187, U.S.A.	100.0	100.0	100.0
Food Lion, LLC	2110 Executive Drive, Salisbury, NC 28147, U.S.A	100.0	100.0	100.0
Guiding Stars Licensing Company	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Hannaford Bros. Co.	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Hannaford Energy, LLC	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Hannaford Licensing Corp.	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Hannaford Trucking Company	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Hannbro Company	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Harveys Stamping Company, LLC	2110 Executive Drive, Salisbury, NC 28187, U.S.A.	100.0	100.0	100.0
Holding and Food Trading Company Single Partner LLC	81, Spaton Avenue, Gerakas, Athens, Greece	100.0	100.0	100.0
Holding and Food Trading Company Single Partner LLC & Co Ltd Partnership	81, Spaton Avenue, Gerakas, Athens, Greece	100.0	100.0	100.0
Huro NV⁽⁴⁾	Rue Osseghemstraat 53, 1080 Brussels, Belgium	—	100.0	100.0
I-Del Retail Holdings, Ltd.	70 Sir John Rogerson’s Quay, Dublin 2, Ireland	100.0	100.0	—
J.H. Harvey Co., LLC	727 South Davis Street, Nashville, GA 31639, U.S.A	100.0	100.0	100.0
Kash n’ Karry Food Stores, Inc.	3801 Sugar Palm Drive, Tampa, FL 33619, U.S.A.	100.0	100.0	100.0
Kingo C.V.A.⁽¹⁾	Melchelseweg 50, 1880 Kappelle-op-den-Bos, Belgium	100.0	—	—
Knauf Center Pommerlach S.A.⁽⁴⁾	Rue d’Olm 51, 8281 Kehlen, Grand Duchy of Luxembourg	—	—	100.0
Knauf Center Schmëtt S.A.⁽⁴⁾	Rue d’Olm 51, 8281 Kehlen, Grand Duchy of Luxembourg	—	—	100.0
Leoburg NV	Lommelsesteenweg 8, 3970 Leopoldsburg, Belgium	100.0	100.0	100.0
Liberval SA⁽¹⁾	Rue Osseghemstraat 53, 1080 Brussels, Belgium	100.0	—	—
Lion Lux Finance S.à r.l.	Rue d’Olm 51, 8281 Kehlen, Grand-Duchy of Luxembourg	100.0	100.0	—
Lion Real Estate Albania SHPK⁽¹⁾	Autostrada Tiranë – Durrës, Km. 7, Kashar, Albania	100.0	—	—
Lion Retail Holding S.à r.l.	Rue d’Olm 51, 8281 Kehlen, Grand-Duchy of Luxembourg	100.0	100.0	—
Lithia Springs, LLC	2110 Executive Drive, Salisbury, NC 28187, U.S.A.	60.0	60.0	60.0
Marietta Retail Holdings, LLC	3735 Beam Rd, Unit B, Charlotte, NC 28217, U.S.A.	0.0	0.0	0.0
Marion Real Estate Investments, LLC	2110 Executive Drive, Salisbury, NC 28187, U.S.A.	100.0	100.0	100.0
Martin’s Food of South Burlington, Inc.	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
MC Portland, LLC	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Mega Doi S.R.L.⁽²⁾	39-49 Nicolae Titulescu Avenue, 1st district, Bucharest, Romania	99.2	99.2	99.2
Mega Image S.R.L.	95 Siret Street, 1st district, Bucharest, Romania	100.0	100.0	100.0
Molmart NV	Rue Osseghemstraat 53, 1080 Brussels, Belgium	100.0	100.0	100.0
Morrills Corner, LLC	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Oxon Run Inc.	2110 Executive Drive, Salisbury, NC 28187, U.S.A.	75.0	75.0	75.0
Pekabeta a.d. Beograd⁽⁴⁾	Jurija Gagarina Street, 14, 11 070 Novi Beograd, Serbia	—	95.6	—
Piccadilly AD	Istoria Slavianabulgarska 21, 1220 Sofia, Bulgaria	100.0	100.0	—
Points Plus Punten SA	Rue Osseghemstraat 53, 1080 Brussels, Belgium	100.0	100.0	100.0
Progressive Distributors, Inc.	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Redelcover S.A.	Rue de Merl 74, 2146 Luxembourg, Grand Duchy of Luxembourg	100.0	100.0	100.0
Risk Management Services, Inc.	2110 Executive Drive, Salisbury, NC 28187, U.S.A.	100.0	100.0	100.0
Rousseau NV⁽⁴⁾	Kouter 158, 9000 Gent, Belgium	—	100.0	—
Serdelco S.A.S.	Parc des Moulins, Avenue de la Créativité 4, 59650 Villeneuve d’Ascq, France	100.0	100.0	100.0
Sinking Spring Retail Holdings, LLC	3735 Beam Rd, Unit B, Charlotte, NC 28217, U.S.A.	0.0	0.0	0.0
Smart Food Shopping SA	Chaussée de Wavre 42A, 5030 Gembloux, Belgium	100.0	100.0	100.0
SS Morrills, LLC	145 Pleasant Hill Road, Scarborough, ME 04074, U.S.A.	100.0	100.0	100.0
Summit Commons Retail Holdings, LLC	3735 Beam Rd, Unit B, Charlotte, NC 28217, U.S.A.	0.0	0.0	0.0
Superb Beverage Inc.	2110 Executive Drive, Salisbury, NC 28187, U.S.A.	0.0	0.0	0.0
The Pride Reinsurance Company, Ltd.	The Metropolitan Building, 3rd Floor, James Joyce Street, Dublin 1, Ireland	100.0	100.0	100.0
TP Srbija a.d. Kragujevac	Crvenog barjaka bb, 34000 Kragujevac, Serbia	100.0	95.4	—

F-89


TP Stadel d.o.o. Kragujevac	Crvenog barjaka bb, 34000 Kragujevac, Serbia	100.0	95.4	—
Victory Distributors, Inc.	P.O. Box 1000, Portland, ME 04104, U.S.A.	100.0	100.0	100.0
Wambacq & Peeters NV⁽⁵⁾	Isidoor Crockaertstraat 25, 1731 Zellik, Belgium	—	85.0	85.0
Wintrucks NV⁽⁶⁾	Rue Osseghem 53, 1080 Brussels, Belgium	—	88.0	88.0
Zvezdara a.d. Beograd	Zivka Davidovica 64, Belgrade, Serbia	68.2	68.2	—

(1)	Newly created or acquired company during 2012.

(2)	In liquidation.

(3)	Sold in February 2013 (classified as held for sale in 2012).

(4)	Merged into a group company during 2012.

(5)	Sold in February 2012.

(6)	Liquidated in 2012.

B.	Joint Ventures - Proportionally Consolidated

Ownership Interest in %

2012

2011

2010

P.T. Lion Super Indo, LLC

Menara Bidakara 2, 19th Floor

Jl. Jend. Gatot Soebroto Kav. 71 -73

Pancoran, Jakarta Selatan 12870, Indonesia

51.0

P.T. Lion Super Indo, LLC (“Super Indo”) is accounted for as a joint venture because Delhaize Group shares control with another party. Delhaize Group’s interest in assets and liabilities of Super Indo was:


(in millions of €)	December 31,
(in millions of €)	2012		2011		2010
Non-current assets		19		17		10
Current assets		27		26		25
Non-current liabilities		1		1		1
Current liabilities		18		15		13

Cash flows of Super Indo included in Delhaize Group’s cash flow statements were:


(in millions of €)	2012			2011			2010
Net cash provided by operating activities		6			6			6
Net cash used in investing activities		(7	)		(8	)		(3	)
Net cash used in financing activities		—			—			—

Revenue of Super Indo included in the Group’s result was €141 million, €119 million and €110 million for 2012, 2011 and 2010, respectively. Net income of Super Indo included in the Group’s results was approximately €4 million in 2012, 2011 and 2010.

F-90

37.

Guarantor subsidiaries

The Senior Notes issued by Delhaize Group SA (the “Parent Company”) are guaranteed under a Cross Guarantee Agreement, dated as of May 21, 2007 (the “Cross Guarantee Agreement”), among the Parent Company, Delhaize America, a wholly-owned subsidiary of the Parent Company, and substantially all of our other U.S. subsidiaries, under which each company party to the agreement guarantees fully and unconditionally, jointly and severally Parent Company existing financial indebtedness, Delhaize America existing financial indebtedness, specific financial indebtedness of two European subsidiaries of the Parent Company (i.e., Delhaize The Lion Coordination Center SA/NV and Delhaize Finance B.V.) and all future unsubordinated financial indebtedness of each party to the agreement from the date such party joined the agreement. All guarantor subsidiaries are 100% owned by us. The following condensed consolidating financial information presents the results of the Parent Company, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and the eliminations to arrive at Delhaize Group financial information on a consolidated basis as of December 31, 2012, 2011 and 2010 and for the years then ended. The principal elimination entries eliminate investments in subsidiaries and inter-company balances and transactions.

CONSOLIDATED PROFIT & LOSS AND COMPREHENSIVE INCOME FOR 2012


(in millions of €)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Consolidated
Revenues		4 725			14 632			3 542			(162	)		22 737
Cost of sales		(3 792	)		(10 800	)		(2 740	)		162			(17 170	)
Gross profit		933			3 832			802			—			5 567
Other operating income		30			61			119			(88	)		122
Selling, general and administrative expenses		(803	)		(3 372	)		(784	)		88			(4 871	)
Other operating expenses		(13	)		(191	)		(224	)		—			(428	)
Operating profit		147			330			(87	)		—			390
Finance costs		(250	)		(255	)		(36	)		283			(258	)
Income from investments		6			64			358			(411	)		17
Share of result of subsidiaries		182			—			—			(182	)		—
Profit before taxes and discontinued operations		85			139			235			(310	)		149
Income tax expense		20			8			(52	)		—			(24	)
Net profit from continuing operations		105			147			183			(310	)		125
Result from discontinued operations (net of tax)		—			(2	)		(20	)		—			(22	)
Net profit		105			145			163			(310	)		103
Net profit (loss) attributable to non-controlling interests		—			—			(2	)		—			(2	)
Net profit attributable to equity holders of the Group (Group share in net profit)		105			145			165			(310	)		105

Other comprehensive income		(7	)		(19	)		(128	)		—			(154	)
Total comprehensive income		98			126			35			(310	)		(51	)

F-91

CONSOLIDATED PROFIT & LOSS AND COMPREHENSIVE INCOME FOR 2011


(in millions of €)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries⁽¹⁾			Elimination			Consolidated⁽¹⁾
Revenues		4 713			13 815			2 737			(155	)		21 110
Cost of sales		(3 751	)		(10 049	)		(2 104	)		155			(15 749	)
Gross profit		962			3 766			633			—			5 361
Other operating income		32			66			98			(78	)		118
Selling, general and administrative expenses		(797	)		(3 148	)		(630	)		78			(4 497	)
Other operating expenses		(7	)		(156	)		(6	)		—			(169	)
Operating profit		190			528			95			—			813
Finance costs		(176	)		(230	)		(29	)		232			(203	)
Income from investments		9			163			399			(548	)		23
Share of result of subsidiaries		465			—			—			(465	)		—
Profit before taxes and discontinued operations		488			461			465			(781	)		633
Income tax expense		(13	)		(105	)		(38	)		—			(156	)
Net profit from continuing operations		475			356			427			(781	)		477
Result from discontinued operations (net of tax)		—			—			(2	)		—			(2	)
Net profit		475			356			425			(781	)		475
Net profit attributable to non-controlling interests		—			—			—			—			—
Net profit attributable to equity holders of the Group (Group share in net profit)		475			356			425			(781	)		475

Other comprehensive income		(6	)		(29	)		77			—			42
Total comprehensive income		469			327			502			(781	)		517

⁽¹⁾	2011 was adjusted for the reclassification of the Albanian operations to discontinued operations.

CONSOLIDATED PROFIT & LOSS AND COMPREHENSIVE INCOME FOR 2010


(in millions of €)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Consolidated
Revenues		4 670			14 187			2 120			(127	)		20 850
Cost of sales		(3 729	)		(10 272	)		(1 623	)		127			(15 497	)
Gross profit		941			3 915			497			—			5 353
Other operating income		28			43			99			(85	)		85
Selling, general and administrative expenses		(782	)		(3 195	)		(502	)		85			(4 394	)
Other operating expenses		(1	)		(16	)		(3	)		—			(20	)
Operating profit		186			747			91			—			1 024
Finance costs		(90	)		(252	)		(3	)		130			(215	)
Income from investments		6			3			133			(130	)		12
Share of result of subsidiaries		561			—			—			(561	)		—
Profit before taxes and discontinued operations		663			498			221			(561	)		821
Income tax expense		(89	)		(192	)		36			—			(245	)
Net profit from continuing operations		574			306			257			(561	)		576
Result from discontinued operations (net of tax)		—			(1	)		—			—			(1	)
Net profit		574			305			257			(561	)		575
Net profit attributable to non-controlling interests		—			—			1			—			1
Net profit attributable to equity holders of the Group (Group share in net profit)		574			305			256			(561	)		574

Other comprehensive income		6			161			104			—			271
Total comprehensive income		580			466			361			(561	)		846

F-92

CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2012


(in millions of €)	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Elimination			Consolidated
Goodwill		157		2 458		574		—			3 189
Intangible assets		118		468		262		—			848
Property, plant and equipment		610		2 481		1 240		—			4 331
Investment property		—		94		22		—			116
Investment in subsidiaries		8 792		8 763		2 267		(19 822	)		—
Investment in securities		—		11		—		—			11
Other financial assets		1		3		4 668		(4 653	)		19
Deferred tax assets		—		—		89		—			89
Derivative instruments		104		49		—		(92	)		61
Other non-current assets		6		21		32		(6	)		53
*Total non-current assets*		9 788		14 348		9 154		(24 573	)		8 717
Inventories		190		959		252		—			1 401
Receivables		444		300		329		(439	)		634
Income tax receivables		—		18		3		—			21
Investment in securities		—		—		93		—			93
Other financial assets		237		—		672		(909	)		—
Prepaid expenses		25		26		28		—			79
Other current assets		3		22		70		(54	)		41
Cash and cash equivalents		50		186		925		(229	)		932
Assets classified as held for sale		—		2		16		—			18
*Total current assets*		949		1 513		2 388		*(1 631*	)		3 219
Total assets		10 737		15 861		11 542		(26 204	)		11 936

Shareholders’ equity		5 191		10 156		9 666		(19 822	)		5 191
Non-controlling interests		—		—		2		—			2
*Total equity*		5 191		10 156		9 668		(19 822	)		5 193
Long-term debt		3 563		3 402		1		(4 653	)		2 313
Obligations under finance lease		52		537		28		(5	)		612
Deferred tax liabilities		106		391		73		—			570
Derivative instruments		4		6		92		(92	)		10
Provisions		58		138		173		—			369
Other non-current liabilities		2		41		28		(1	)		70
Total non-current liabilities		3 785		4 515		395		(4 751	)		3 944
Short-term borrowings		375		—		236		(611	)		—
Long-term debt - current		370		1		81		(296	)		156
Obligations under finance lease - current		12		49		3		(2	)		62
Bank overdrafts		78		—		151		(229	)		—
Derivative instruments		4		—		—		—			4
Provisions - current		—		49		39		—			88
Income taxes payable		5		—		14		—			19
Accounts payable		673		809		841		(439	)		1 884
Accrued expenses		215		180		81		(39	)		437
Other current liabilities		29		102		29		(15	)		145
Total current liabilities		1 761		1 190		1 475		(1 631	)		2 795
Liabilities associated with assets classified as held for sale		—		—		4		—			4
*Total liabilities*		*5 546*		*5 705*		*1 874*		*(6 382*	)		*6 743*
Total liabilities and equity		10 737		15 861		11 542		(26 204	)		11 936

F-93

CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2011


(in millions of €)	Parent⁽¹⁾		Guarantor Subsidiaries		Non-Guarantor Subsidiaries⁽¹⁾		Elimination⁽¹⁾			Consolidated⁽¹⁾
Goodwill		157		2 507		750		—			3 414
Intangible assets		107		486		285		—			878
Property, plant and equipment		585		2 719		1 246		—			4 550
Investment property		— ��		71		12		—			83
Investment in subsidiaries		8 738		9 092		1 956		(19 786	)		—
Investment in securities		—		13		—		—			13
Other financial assets		100		3		4 557		(4 642	)		18
Deferred tax assets		—		—		97		—			97
Derivative instruments		122		57		—		(122	)		57
Other non-current assets		—		20		36		(8	)		48
*Total non-current assets*		*9 809*		*14 968*		*8 939*		*(24 558*	)		*9 158*
Inventories		234		1 229		254		—			1 717
Receivables		470		149		128		(50	)		697
Income tax receivables		7		—		3		—			10
Investment in securities		—		—		93		—			93
Other financial assets		141		—		740		(859	)		22
Derivative instruments		4		—		—		(3	)		1
Prepaid expenses		7		32		18		(1	)		56
Other current assets		4		25		61		(40	)		50
Cash and cash equivalents		66		148		408		(190	)		432
Assets classified as held for sale		—		—		56		—			56
*Total current assets*		*933*		*1 583*		*1 761*		*(1 143*	)		*3 134*
Total assets		10 742		16 551		10 700		(25 701	)		12 292

Shareholders’ equity		5 414		10 656		9 130		(19 786	)		5 414
Non-controlling interests		—		—		5		—			5
*Total equity*		*5 414*		*10 656*		*9 135*		*(19 786*	)		*5 419*
Long-term debt		3 757		3 030		180		(4 642	)		2 325
Obligations under finance lease		57		615		25		(8	)		689
Deferred tax liabilities		130		444		50		—			624
Derivative instruments		11		9		122		(122	)		20
Provisions		42		83		164		—			289
Other non-current liabilities		1		65		32		—			98
Total non-current liabilities		3 998		4 246		573		(4 772	)		4 045
Short-term borrowings		121		—		200		(261	)		60
Long-term debt - current		138		548		—		(598	)		88
Obligations under finance lease - current		11		50		1		(1	)		61
Bank overdrafts		190		—		—		(190	)		—
Derivative instruments		—		—		3		(3	)		—
Provisions - current		—		34		42		—			76
Income taxes payable		5		51		1		—			57
Accounts payable		648		643		604		(50	)		1 845
Accrued expenses		195		223		64		(40	)		442
Other current liabilities		22		100		77		—			199
Total current liabilities		1 330		1 649		992		(1 143	)		2 828
*Total liabilities*		*5 328*		*5 895*		*1 565*		*(5 915*	)		*6 873*
Total liabilities and equity		10 742		16 551		10 700		(25 701	)		12 292

⁽¹⁾	2011 was revised to reflect the effects of the completion in the second quarter of 2012 of the purchase price allocation of the Delta Maxi acquisition.

F-94

CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2010


(in millions of €)	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Elimination			Consolidated
Goodwill		156		2 427		245		—			2 828
Intangible assets		94		533		7		—			634
Property, plant and equipment		571		2 794		710		—			4 075
Investment property		—		59		1		—			60
Investment in subsidiaries		7 933		9 283		481		(17 697	)		—
Investment in securities		—		12		113		—			125
Other financial assets		99		5		4 607		(4 694	)		17
Deferred tax assets		1		—		94		—			95
Derivative instruments		84		61		—		(84	)		61
Other non-current assets		—		18		11		(10	)		19
*Total non-current assets*		*8 938*		*15 192*		*6 269*		*(22 485*	)		*7 914*
Inventories		213		1 102		145		—			1 460
Receivables		489		125		98		(75	)		637
Income tax receivables		—		—		1		—			1
Investment in securities		—		2		41		—			43
Other financial assets		272		56		365		(690	)		3
Derivative instruments		—		—		5		—			5
Prepaid expenses		4		33		8		(1	)		44
Other current assets		5		25		43		(36	)		37
Cash and cash equivalents		58		492		208		—			758
*Total current assets*		*1 041*		*1 835*		*914*		*(802*	)		*2 988*
Total assets		9 979		17 027		7 183		(23 287	)		10 902
Shareholders’ equity		5 068		11 786		5 910		(17 696	)		5 068
Non-controlling interests		—		—		1		—			1
*Total equity*		*5 068*		*11 786*		*5 911*		*(17 696*	)		*5 069*
Long-term debt		3 457		3 024		179		(4 694	)		1 966
Obligations under finance lease		59		609		25		(9	)		684
Deferred tax liabilities		122		400		21		—			543
Derivative instruments		13		3		84		(84	)		16
Provisions		40		82		111		—			233
Other non-current liabilities		1		61		6		—			68
Total non-current liabilities		3 692		4 179		426		(4 787	)		3 510
Short-term borrowings		291		2		340		(617	)		16
Long-term debt - current		56		55		1		(72	)		40
Obligations under finance lease - current		12		46		1		(2	)		57
Provisions - current		—		18		34		—			52
Income taxes payable		4		10		3		—			17
Accounts payable		615		634		401		(76	)		1 574
Accrued expenses		204		198		28		(37	)		393
Other current liabilities		37		99		38		—			174
Total current liabilities		1 219		1 062		846		(804	)		2 323
*Total liabilities*		*4 911*		*5 241*		*1 272*		*(5 591*	)		*5 833*
Total liabilities and equity		9 979		17 027		7 183		(23 287	)		10 902

F-95

CONSOLIDATED STATEMENT OF CASH FLOWS FOR 2012


(in millions of €)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Consolidated
Operating activities
Net profit		105			145			163			(310	)		103
Adjustment for equity in earnings of subsidiaries		(182	)		—			—			182			—
Adjustments for:
Depreciation and amortization		113			406			131			—			650
Impairment		2			63			223			—			288
Allowance for losses on accounts receivable		1			—			2			—			3
Share–based compensation		2			6			5			—			13
Income taxes		(20	)		(9	)		51			—			22
Finance costs		250			256			36			(283	)		259
Income from investments		(6	)		(64	)		(358	)		411			(17	)
Other non–cash items		9			(20	)		(5	)		—			(16	)
Changes in operating assets and liabilities:
Inventories		42			254			(5	)		—			291
Receivables		36			(157	)		(185	)		380			74
Prepaid expenses and other assets		(24	)		9			(15	)		(1	)		(31	)
Accounts payable		21			160			253			(380	)		54
Accrued expenses and other liabilities		40			(52	)		14			—			2
Provisions		2			52			(16	)		—			38
Interest paid		(205	)		(243	)		(42	)		261			(229	)
Interest received		3			—			264			(257	)		10
Income taxes paid		6			(86	)		(26	)		—			(106	)
Net cash provided by operating activities		195			720			490			3			1 408
Investing activities
Capital contributions in subsidiaries		(509	)		—			—			509			—
Purchases of shares in consolidated companies, net of cash and cash equivalents		(3	)		—			(14	)		5			(12	)
Sale of shares in consolidated companies, net of cash and cash equivalents		8			—			—			(5	)		3
Purchase of tangible assets		(122	)		(299	)		(175	)		—			(596	)
Purchase of intangible assets		(41	)		(13	)		(38	)		—			(92	)
Sale of tangible and intangible assets		1			10			28			—			39
Dividends from investments under the equity method		476			64			64			(604	)		—
Sale and maturity of debt securities		—			2			(3	)		—			(1	)
Purchase of other financial assets		(295	)		—			(204	)		499			—
Sale and maturity of other financial assets		300			—			114			(392	)		22
Net cash used in investing activities		(185	)		(236	)		(228	)		12			(637	)
Financing activities
Proceeds from the exercise of share warrants and stock options		4			(2	)		—			(3	)		(1	)
Capital contributions received		—			—			509			(509	)		—
Treasury shares purchased		—			(3	)		—			3			—
Purchase of non-controlling interests		(1	)		—			(22	)		—			(23	)
Dividends paid by parent		(180	)		—			—			—			(180	)
Dividends paid by subsidiaries		—			(303	)		(301	)		604			—
Borrowing under long–term loans, net of financing costs		620			—			1			—			621
Repayment of long–term loans		(612	)		(89	)		(102	)		239			(564	)
Repayment of lease obligations		(3	)		(50	)		(2	)		1			(54	)
Borrowings (repayments) of short–term loans, net		254			—			36			(350	)		(60	)
Settlement of derivative instruments		4			—			(5	)		—			(1	)
Net cash provided by (used in) financing activities		86			(447	)		114			(15	)		(262	)
Effect of foreign currency translation		—			1			(9	)		—			(8	)
Net increase (decrease) in cash and cash equivalents		96			38			367			—			501
Cash and cash equivalents at beginning of period		(124	)		148			408			—			432
Cash and cash equivalents at end of period		(28	)		186			775	⁽¹⁾		—			933	⁽¹⁾

⁽¹⁾	Includes €1 million in assets classified as held for sale

F-96

CONSOLIDATED STATEMENT OF CASH FLOWS FOR 2011


(in millions of €)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Consolidated
Operating activities
Net profit		475			356			425			(781	)		475
Adjustment for equity in earnings of subsidiaries		(465	)		—			—			465			—
Adjustments for:
Depreciation and amortization		105			377			104			—			586
Impairment		3			130			2			—			135
Allowance for losses on accounts receivable		2			5			4			—			11
Share–based compensation		2			11			—			—			13
Income taxes		13			105			38			—			156
Finance costs		176			230			30			(232	)		204
Income from investments		(9	)		(163	)		(399	)		548			(23	)
Other non–cash items		4			2			1			—			7
Changes in operating assets and liabilities:
Inventories		(21	)		(88	)		(38	)		—			(147	)
Receivables		17			(19	)		16			(24	)		(10	)
Prepaid expenses and other assets		(5	)		(1	)		(9	)		—			(15	)
Accounts payable		34			8			(90	)		24			(24	)
Accrued expenses and other liabilities		(31	)		17			10			—			(4	)
Provisions		1			(6	)		9			—			4
Interest paid		(179	)		(220	)		(34	)		237			(196	)
Interest received		6			3			246			(244	)		11
Income taxes paid		(7	)		(37	)		(33	)		—			(77	)
Net cash provided by operating activities		121			710			282			(7	)		1 106
Investing activities
Capital contributions in subsidiaries		(1 016	)		—			—			1 016			—
Capital reductions in subsidiaries		501			23			—			(524	)		—
Purchases of shares in consolidated companies, net of cash and cash equivalents		(1	)		(1	)		(589	)		—			(591	)
Purchase of tangible assets		(99	)		(367	)		(209	)		—			(675	)
Purchase of intangible assets		(42	)		(16	)		(29	)		—			(87	)
Sale of tangible and intangible assets		1			4			6			—			11
Dividends from investments under the equity method		233			160			156			(549	)		—
Sale and maturity of debt securities		—			—			72			—			72
Purchase of other financial assets		(168	)		—			(96	)		243			(21	)
Sale and maturity of other financial assets		303			54			329			(658	)		28
Settlement of derivative instruments		(2	)		—			—			—			(2	)
Net cash used in investing activities		(290	)		(143	)		(360	)		(472	)		(1 265	)
Financing activities
Proceeds from the exercise of share warrants and stock options		16			(3	)		—			—			13
Capital contributions received		—			—			1 016			(1 016	)		—
Capital reductions		—			(501	)		(23	)		524
Purchase of call option on own equity instruments		(6	)		—			—			—			(6	)
Treasury shares purchased		(20	)		—			—			—			(20	)
Purchase of non-controlling interests		—			—			(10	)		—			(10	)
Dividends paid by parent		(173	)		—			—			—			(173	)
Dividends paid by subsidiaries		—			(303	)		(245	)		548			—
Escrow maturities		—			2			—			—			2
Borrowing under long–term loans, net of financing costs		400			1			8			(1	)		408
Repayment of long–term loans		—			(38	)		(186	)		—			(224	)
Repayment of lease obligations		(3	)		(44	)		(8	)		2			(53	)
Borrowings (repayments) of short–term loans, net		(227	)		1			(266	)		407			(85	)
Settlement of derivative instruments		—			—			(13	)		15			2
Net cash provided by (used in) financing activities		(13	)		(885	)		273			479			(146	)
Effect of foreign currency translation		—			(26	)		5			—			(21	)
Net increase (decrease) in cash and cash equivalents		(182	)		(344	)		200			—			(326	)
Cash and cash equivalents at beginning of period		58			492			208			—			758
Cash and cash equivalents at end of period		(124	)		148			408			—			432

F-97

CONSOLIDATED STATEMENT OF CASH FLOWS FOR 2010


(in millions of €)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Consolidated
Operating activities
Net profit		574			305			257			(561	)		575
Adjustment for equity in earnings of subsidiaries		(561	)		—			—			561			—
Adjustments for:
Depreciation and amortization		100			423			52			—			575
Impairment		—			13			1			—			14
Allowance for losses on accounts receivable		—			3			3			—			6
Share–based compensation		2			14			—			—			16
Income taxes		89			192			(36	)		—			245
Finance costs		90			253			3			(130	)		216
Income from investments		(6	)		(3	)		(133	)		130			(12	)
Other non–cash items		(1	)		—			(1	)		—			(2	)
Changes in operating assets and liabilities:
Inventories		4			(104	)		(8	)		—			(108	)
Receivables		(9	)		(6	)		(7	)		(17	)		(39	)
Prepaid expenses and other assets		16			(9	)		(17	)		—			(10	)
Accounts payable		(9	)		77			8			22			98
Accrued expenses and other liabilities		28			(18	)		4			2			16
Provisions		(6	)		(21	)		3			—			(24	)
Interest paid		(116	)		(244	)		(12	)		170			(202	)
Interest received		—			3			173			(165	)		11
Income taxes paid		—			(35	)		(23	)		—			(58	)
Net cash provided by operating activities		195			843			267			12			1 317
Investing activities
Capital contributions in subsidiaries		—			(30	)		(126	)		156			—
Purchases of shares in consolidated companies, net of cash and cash equivalents		(860	)		(8	)		849			—			(19	)
Purchase of tangible assets		(75	)		(363	)		(130	)		—			(568	)
Purchase of intangible assets		(43	)		(47	)		(2	)		—			(92	)
Sale of tangible and intangible assets		2			9			3			—			14
Dividends from investments under the equity method		1			—			—			(1	)		—
Net investment in debt securities		—			—			(13	)		—			(13	)
Purchase of other financial assets		(268	)		(70	)		(1 300	)		1 636			(2	)
Sale and maturity of other financial assets		80			19			172			(256	)		15
Net cash used in investing activities		(1 163	)		(490	)		(547	)		1 535			(665	)
Financing activities
Proceeds from the exercise of share warrants and stock options		50			(18	)		—			—			32
Capital contributions received		—			30			126			(156	)		—
Treasury shares purchased		(19	)		(7	)		—			—			(26	)
Purchase of non-controlling interests		—			—			(47	)		—			(47	)
Dividends paid by parent		(161	)		—			—			—			(161	)
Dividends paid by subsidiaries		—			—			(1	)		—			(1	)
Escrow maturities		—			2			—			—			2
Borrowing under long–term loans (net of financing costs)		1 158			5			99			(1 263	)		(1	)
Repayment of long–term loans		(146	)		(3	)		(40	)		147			(42	)
Repayment of lease obligations		(2	)		(47	)		(2	)		2			(49	)
Net borrowings (repayments) of short–term loans		95			(36	)		169			(277	)		(49	)
Settlement of derivative instruments		—			—			(1	)		—			(1	)
Net cash used in financing activities		975			(74	)		303			(1 547	)		(343	)
Effect of foreign currency translation		—			8			2			—			10
Net increase (decrease) in cash and cash equivalents		7			287			25			—			319
Cash and cash equivalents at beginning of period		51			205			183			—			439
Cash and cash equivalents at end of period		58			492			208			—			758

F-98

EXHIBITS


Exhibit No.		Description

1.1		Articles of Association of Delhaize Group (English translation)

2.1		Indenture, dated as of April 15, 2001, by and among Delhaize America, Food Lion, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.1 to Delhaize America’s current report on Form 8-K/A (File No. 1-15275) filed with the SEC on April 26, 2001)

2.2		First Supplemental Indenture, dated as of April 19, 2001, by and among Delhaize America, Food Lion, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.2 to Delhaize America’s current report on Form 8-K/A (File No. 1-15275) filed with the SEC on April 26, 2001)

2.3		Second Supplemental Indenture, dated as of September 6, 2001, by and among Delhaize America, Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4(e) to Delhaize America’s Registration Statement on Form S-4 (File No. 333-69520) filed with the SEC on September 17, 2001)

2.4		Form of Third Supplemental Indenture, dated as of November 15, 2001, by and among Delhaize America, Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Shop N Save-Mass., Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4(f) of Amendment No. 2 to Delhaize America’s Registration Statement on Form S-4 (File No. 333-69520) filed with the SEC on November 15, 2001)

2.5		Fourth Supplemental Indenture, dated March 10, 2004 and effective as of December 31, 2003, by and among Delhaize America, Inc., Food Lion, LLC, Hannaford Bros. Co, Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Shop ‘n Save-Mass, Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4(h) to Delhaize America’s Annual Report on Form 10-K (File No. 0-6080) filed with the SEC on April 2, 2004)

2.6		Fifth Supplemental Indenture, dated as of May 17, 2005, by and among Delhaize America, Food Lion, LLC, Hannaford Bros. Co., Kash N’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods Of South Burlington, Inc., Shop ‘N Save-Mass., Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp., Victory Distributors, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4 to Delhaize America’s Quarterly Report on Form 10-Q filed May 17, 2005)

2.7		Agreement of Resignation, Appointment and Acceptance, dated as of April 19, 2006, among Delhaize America, the guarantors signatory thereto, and The Bank of New York, as resigning trustee, and The Bank of New York Trust Company, N.A., as new trustee (incorporated by reference to Exhibit 4(k) to Delhaize America’s Annual Report on Form 10-K filed March 30, 2007)

2.8		Sixth Supplemental Indenture, dated as of May 21, 2007, among Delhaize America, Inc, as issuer, Delhaize Group, Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Shop ‘n Save-Mass, Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp. and Victory Distributors, Inc. and The Bank of New York Trust Company N.A., as Trustee, to that certain Indenture, dated as of April 15, 2001 (incorporated by reference to Exhibit 99.5 to Delhaize Group’s Report on Form 6-K, filed on May 29, 2007)

E-1


Exhibit No.		Description

2.9		Seventh Supplemental Indenture, dated as of December 17, 2009, among Delhaize America, Inc., Delhaize Group, Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp., Victory Distributors, Inc., and The Bank of New York Mellon Trust Company, N.A., as Trustee, to that certain Indenture, dated as of April 15, 2001 (incorporated by reference to Exhibit 2.9 to Delhaize Group’s Annual Report on Form 20-F, filed on June 28, 2010)

2.10		Indenture, dated as of June 27, 2007, by and among Delhaize Group and The Bank of New York, as trustee (incorporated by reference to Exhibit 2.11 to Delhaize Group’s Annual Report on Form 20-F, filed on June 29, 2007)

2.11		Indenture, dated as of June 27, 2007, by and among Delhaize Group and The Bank of New York, as trustee (incorporated by reference to Exhibit 2.12 to Delhaize Group’s Annual Report on Form 20-F, filed on June 29, 2007)

2.12		Deposit Agreement, dated as of June 27, 2007, among Delhaize Group, The Bank of New York and the owners of book-entry interests (incorporated by reference to Exhibit 2.13 to Delhaize Group’s Annual Report on Form 20-F, filed on June 29, 2007)

2.13		Indenture, dated as of October 8, 2010, by and between Delhaize Group and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.3 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011)

2.14		Form of Global Security representing Delhaize Group’s 5.70% Senior Notes due 2040 (incorporated by reference to Exhibit 4.4 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011)

2.15		Deposit Agreement, dated as of October 8, 2010, by and between Delhaize Group and The Bank of New York Mellon and the owners of book-entry interests (incorporated by reference to Exhibit 4.5 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011)

2.16		Domiciliary Agency Agreement, dated as of October 8, 2010, by and between Delhaize Group and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.6 to Delhaize Group’s Registration Statement on Form F-4 (File No. 333-171613) filed with the SEC on January 11, 2011)

E-2


Exhibit No.		Description

4.1		Agreement and Plan of Share Exchange dated November 16, 2000 by and between Delhaize Group and Delhaize America, as amended (incorporated by reference to Annex A to Delhaize Group’s registration statement on Form F-4 (File No. 333-13302) filed with the SEC on March 23, 2001)

4.2		Fiscal Agency Agreement dated May 18, 1999 between Delhaize Group, as issuer, Banque Bruxelles Lambert S.A., as fiscal agent, and Banque Bruxelles Lambert S.A. and Banque Générale du Luxembourg S.A., as paying agents (incorporated by reference to Exhibit 10.2 to Delhaize Group’s registration statement on Form F-4 (File No. 333-13302) filed with the SEC on March 23, 2001)

4.3		Revolving Credit Agreement dated November 4, 1999 among Delhaize Group, Delhaize The Lion Coordination Center and Fortis Banque (incorporated by reference to Exhibit 10.4 to Delhaize Group’s registration statement on Form F-4 (File No. 333-13302) filed with the SEC on March 23, 2001)

4.4		Fiscal Agency Agreement dated February 13, 2001 between Delhaize “The Lion” Nederland B.V., as issuer, Delhaize Group, as guarantor, Fortis Bank nv-sa, as fiscal agent, and Banque Générale du Luxembourg S.A. and Fortis Bank nv-sa, as paying agents (incorporated by reference to Exhibit 10.5 to Delhaize Group’s registration statement on Form F-4 (File No. 333-13302) filed with the SEC on March 23, 2001)

4.5		Fiscal Agency Agreement dated May 20, 2002 between Delhaize Finance B.V., as issuer, Delhaize Group, as guarantor, Fortis Bank NV-SA, as fiscal agent, and Banque Générale du Luxembourg S.A., Fortis Bank (Nederland) N.V. and Fortis Bank NV-SA, as paying agents (incorporated by reference to Exhibit 4.6 to Delhaize Group’s Annual Report on Form 20-F (File No. 333-13302) filed with the SEC on June 30, 2003)

4.6		Cross Guarantee Agreement, dated May 21, 2007, by and among Delhaize Group, Delhaize America, Inc. Food Lion, LLC, Hannaford Bros. Co., Kash n’ Karry Food Stores, Inc., FL Food Lion, Inc., Risk Management Services, Inc., Hannbro Company, Martin’s Foods of South Burlington, Inc., Shop ‘n Save-Mass, Inc., Hannaford Procurement Corp., Boney Wilson & Sons, Inc., J.H. Harvey Co., LLC, Hannaford Licensing Corp. and Victory Distributors, Inc. (incorporated by reference to Exhibit 99.2 to Delhaize Group’s Report on Form 6-K, filed on May 29, 2007)

4.7		Joinder Letter Agreement, dated December 18, 2009, by Delhaize US Holding, Inc., whereby Delhaize US Holding, Inc. agrees to be bound as a Guarantor by all of the terms, covenants and conditions set forth in the Cross-Guarantee Agreement (incorporated by reference to Exhibit 4.7 to Delhaize Group’s Annual Report on Form 20-F, filed on June 28, 2010)

4.8		Joinder Letter Agreement, dated April 3, 2013, by Bottom Dollar Food Holding, LLC, whereby Bottom Dollar Food Holding, LLC agrees to be bound as a Guarantor by all of the terms, covenants and conditions set forth in the Cross-Guarantee Agreement

4.9		Joinder Letter Agreement, dated April 3, 2013, by Bottom Dollar Food Northeast, LLC, whereby Bottom Dollar Food Holding, LLC agrees to be bound as a Guarantor by all of the terms, covenants and conditions set forth in the Cross-Guarantee Agreement

4.10		Joinder Letter Agreement, dated April 3, 2013, by Bottom Dollar Food Southeast, LLC, whereby Bottom Dollar Food Holding, LLC agrees to be bound as a Guarantor by all of the terms, covenants and conditions set forth in the Cross-Guarantee Agreement

4.11		Amended and Restated Deposit Agreement dated as of February 18, 2009, among Delhaize Group, Citibank, N.A. and the holders and beneficial owners of American depositary shares issued thereunder (incorporated by reference to Exhibit (a)(ii) to Delhaize Group’s Post Effective Amendment No. 1 to registration statement on Form F-6 (File No. 333-156798) filed with the SEC on April 23, 2013)

4.12		Form of Second Amended and Restated Deposit Agreement among Delhaize Group, Citibank N.A. and the holders and beneficial owners of American Depositary Shares issued thereunder (incorporated by reference to Exhibit (a)(i) to Delhaize Group’s Post Effective Amendment No. 1 to registration statement on Form F-6 (File No. 333-156798) filed with the SEC on April 23, 2013)

4.13		Transaction Agreement dated March 2, 2011, between Hitomi Financial Limited, Delhaize ‘The Lion’ Nederland B.V. and Delhaize Group SA. (incorporated by reference to Exhibit 4.9 to Delhaize Group’s Annual Report on Form 20-F (File No. 333-13302) filed with the SEC on June 24, 2011)

E-3


Exhibit No.		Description

4.14		Facility Agreement dated April 15, 2011, among Delhaize Group SA/NV, the original borrowers party thereto, the original guarantors party thereto, the lenders party thereto, Fortis Bank SA/NV, Banc of America Securities Limited, Deutsche Bank AG, London Branch and J.P. Morgan PLC as bookrunning mandated lead arrangers (incorporated by reference to Exhibit 4.10 to Delhaize Group’s Annual Report on Form 20-F (File No. 333-13302) filed with the SEC on June 24, 2011)

8.1		Subsidiaries of Delhaize Group (as of December 31, 2012)

E-4


Exhibit No.		Description

11.1		Delhaize Group Guide for Ethical Business Conduct (incorporated by reference to Exhibit 11.1 to Delhaize Group’s Annual Report on Form 20-F (File No. 333-13302) filed with the SEC on June 28, 2010)

12.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. § 7241)

12.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. § 7241)

13.1		Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)

15.1		Consent of Deloitte Réviseurs d’Entreprises SC sfd SCRL

15.2		Undertaking of Delhaize Group to file exhibits pursuant to Instruction 2(b)(i) as to exhibits to Form 20-F

E-5

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Avg

Delhaize (DEG) Inactive 20-F2012 FY Annual report (foreign)

Content analysis