ANNUAL REPORT 2004 - Luxottica Group
ANNUAL REPORT 2004 - Luxottica Group
ANNUAL REPORT 2004 - Luxottica Group
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br />
3. INVENTORIES<br />
Inventories consisted of the following:<br />
In thousands of Euro<br />
At December 31<br />
Raw materials and packaging<br />
Work in process<br />
Finished goods<br />
Total<br />
4. ACQUISITIONS<br />
AND INVESTMENTS<br />
A) SUNGLASS HUT INTERNATIONAL, INC.<br />
On February 20, 2001, <strong>Luxottica</strong> <strong>Group</strong> formed an<br />
indirect wholly-owned U.S. subsidiary, Shade<br />
Acquisition Corp., for the purpose of making a<br />
tender offer for all the outstanding common stock of<br />
Sunglass Hut International, Inc. (“SGHI”), a publicly<br />
traded company on the NASDAQ National Market.<br />
The Tender Offer commenced on March 5, 2001 and<br />
was completed on March 30, 2001. On April 4,<br />
2001, Shade Acquisition Corp. was merged with and<br />
into SGHI and SGHI became an indirect whollyowned<br />
subsidiary of the Company. As such, the<br />
results of SGHI have been consolidated into the<br />
Company’s consolidated financial statements as of<br />
the acquisition date. The acquisition was accounted<br />
by using the purchase method, and accordingly, the<br />
purchase price of Euro 558 million (including<br />
approximately Euro 33.9 million of direct acquisitionrelated<br />
expenses) was allocated to the assets<br />
112<br />
2003<br />
62,209<br />
25,363<br />
316,644<br />
404,216<br />
<strong>2004</strong><br />
50,656<br />
24,486<br />
358,016<br />
433,158<br />
acquired and liabilities assumed based on their fair<br />
value at the date of the acquisition. The Company<br />
uses many different valuation techniques to<br />
determine the fair value of the net assets acquired<br />
including but not limited to discounted cash flow<br />
and present value projections. Intangible assets are<br />
recognized separate from goodwill if they arise from<br />
contractual or other legal rights or if they do not meet<br />
the definition of separable as noted in APB No. 16,<br />
Business Combinations, subsequently superseded<br />
by SFAS No. 141, Business Combinations (“SFAS<br />
141”). As a result of the final valuations, which were<br />
completed in March 2002, the aggregate balance of<br />
goodwill and other intangibles previously recorded<br />
as of December 31, 2001 increased by<br />
approximately Euro 147 million during the year<br />
ended December 31, 2002. The excess of purchase<br />
price over net assets acquired (“goodwill”) has been<br />
recorded in the accompanying consolidated<br />
balance sheet.<br />
The purchase price and expenses have been<br />
allocated based upon the valuation of the<br />
Company’s acquired assets and liabilities assumed<br />
as follows: