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2014 Registration Document
Company financial statement year ended December 31, 2014
6
Notes to the Company Financial Statements
There are two types of plans:
■
Presence Plans, for which the only condition is that grantees must
remain employed by the Group between the grant date and the starting
date of the exercise period for each tranche of options (50% of options
vest after two years, 25% after three years and 25% after four years);
■
Performance Plans, for which the above presence conditions apply as
well as two conditions based on the Group’s financial performance, with
50% of the options vesting when each of these conditions are met:
■
Performance conditions for the 2009 Performance Plan concern
(i) sales growth for the period 2008 to 2010 and (ii) the level
of 2010 free cash flow,
■
Performance conditions for the 2010 Performance Plan concern
growth in (i) sales and (ii) recurring operating income over the
period 2009 to 2011.
1.12
RISK INFORMATION
INTEREST RATE AND FOREIGN EXCHANGE RISK
Interest rate hedging instruments are used mainly to limit the effects of
changes in exchange rates on the Company’s variable rate borrowings.
The main instruments are interest rate swaps and options and forward
foreign exchange purchase and sale contracts, purchased over-the-
counter from leading banking counterparties.
Gains and losses on hedging instruments are recognized on a symmetrical
basis with the loss or gain on the hedged item. A provision is booked
at the year-end for losses on derivative instruments that do not qualify
for hedge accounting.
Details of derivative instruments outstanding at December 31 are
presented in Note 10.
EQUITY RISK
Equity risk concerns Carrefour shares acquired for allocation upon
exercise of stock options. When their market price is less than the
option exercise price, the shares are reclassified as “Shares available
for allocation” in the marketable securities account, and an impairment
loss is recognized for the difference between their purchase price and
the average Carrefour share price for the month of December.
See Note 5 for details.
Note 2
Significant events of the year
2.1
FINANCIAL INCOME, NET
Financial income, net amounted to €1,906 million in 2014 compared
with €1,198 million in 2013. The €708 million increase can be explained
as follows:
■
the recognition of a €309 million merger surplus from the Actis merger;
■
financial provision charges decreased by a net €374 million, reflecting:
■
€326 million in net reversals to provisions for impairment of shares
in subsidiaries and affiliates versus net additions of €292 million
in 2013 (positive impact of €618 million),
■
an increase in net provisions for impairment of treasury stock,
due to the fall in Carrefour’s share price between 2013 and 2014
(negative impact of €185 million),
■
an increase in net charges to provisions for other financial risks
(€60 million negative impact);
■
dividend income from subsidiaries was lower, with a negative impact
of €129 million;
■
interest expense on intra-group and external borrowings decreased
year-on-year, with a positive impact of €154 million.