LensCrafters 2008 Annual Report Download - page 101

The fair value of the marketable securities are based on quoted prices that are observable in active
markets such as bond prices, including both corporate and government bonds.
The Company portfolio of foreign exchange derivatives includes only foreign exchange forward contracts
on the most traded currency pairs with maturity less than one year. The fair value of the portfolio is valued
using internal models that use market observable inputs including Yield Curves, Spot and Forward prices.
The fair value of the interest rate derivatives portfolio is calculated using internal models that maximize the
use of market observable inputs including Interest Rates, Yield Curves and Foreign Exchange Spot prices.
The fair value of the TR Note as of December 31, 2007 was based on discounted projected cash flows
utilizing an expected yield and disclosed as “Other Assets” on the consolidated balance sheet. During
2008 the Company sold such note to a third party (see Note 4 “Sale of Things Remembered”).
SFAS 159 allows the Company to elect on a financials instrument basis to fair value such instrument with
changes in its fair value recorded into operations during the period of change. As of December 31, 2008
and for the year then ended the Company has not elected any of its financial instruments to be accounted
for under SFAS 159.
17. SUBSEQUENT EVENTS
On January 28, 2009, the Company entered a new licensing agreement to design, manufacture and
globally distribute sun and prescription eyewear collection by Tory Burch and TT, two emerging American
fashion and lifestyle brands. The agreement with Tory Burch LLC will run for six years - renewable for a
further four - with an expected launch of the first collection in 2009.
The new collections will be distributed not only by Tory Burch boutiques and premium American
department stores but also in select independent optical stores and in Luxottica’s retail chains. After North
America, distribution will be extended to Europe and the rest of the world.
Tory Burch, a highly appreciated brand in the affordable luxury segment, completes Luxottica’s brand
portfolio by further strengthening its positioning in the key North American market and in the continually
expanding department store channel.
On January 30, 2009, Luxottica Group and Salvatore Ferragamo Italia S.p.A., which controls Gruppo
Ferragamo, agreed to a three-year extension of their licensing agreement covering design, manufacturing
and global distribution of prescription and sun eyewear under the Salvatore Ferragamo label. The new
agreement runs through December 2011, with an option on a two-year renewal under the same terms.
On Aprile 10, 2009, Luxottica Group and Donna Karan International Inc. agreed a five-year extension of the
license agreement for the design, production and worldwide distribution of prescription frames and
sunglasses under the Donna Karan and DKNY brands. The new agreement runs through December 2014,
with an option for a further five-year extension.
STATEMENT OF THE OFFICER RESPONSIBLE FOR PREPARING
THE COMPANY’S FINANCIAL REPORTS
The officer responsible for preparing the company’s financial reports, Enrico Cavatorta, declares, pursuant
to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information
contained in this press release corresponds to the document results, books and accounting records.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS |99 <