LensCrafters 2008 Annual Report Download - page 74

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> 72 |ANNUAL REPORT 2008
China. These stores are located in premium and high-end commercial centers and shopping malls situated
primarily in Shanghai’s downtown area and affluent residential areas. The Company acquired 100 percent
of the equity interest in Modern Sight Optics for total consideration of RMB 140 million (approximately
Euro 14 million). The acquisition was accounted for in accordance with SFAS 141 and, accordingly, the total
consideration of Euro 16.3 million, including direct acquisition-related expenses, has been allocated to the
fair market value of the assets and liabilities of the company as of the acquisition date. All valuations of net
assets including but not limited to fixed assets and inventory have been completed during 2007 with no
material differences from the purchase price allocation done in 2006 which resulted in the recognition of
goodwill of Euro 15.9 million as of the date of acquisition. The acquisition was made as a result of the
Company’s strategy to continue expansion of its retail business in The People’s Republic of China.
6. PROPERTY, PLANT AND EQUIPMENT - NET
Property, plant and equipment-net consisted of the following (thousands of Euro):
2008 2007
Land and buildings, including
leasehold improvements 755,254 687,428
Machinery and equipment 795,126 697,776
Aircraft 40,018 40,222
Other equipment 513,631 439,696
2,104,029 1,865,122
Less: accumulated depreciation
and amortization 933,331 807,340
Total 1,170,698 1,057,782
Depreciation and amortization expense relating to property, plant and equipment for the years ended
December 31, 2008, 2007 and 2006 was Euro 191.0 million, Euro 163.3 million and Euro 151.9 million,
respectively. Included in other equipment is approximately Euro 79.7 million and Euro 71.6 million of
construction in progress as of December 31, 2008 and 2007, respectively. Construction in progress consists
mainly of the opening, remodeling and relocation of stores and the expansion of manufacturing facilities
in Italy.
Certain tangible assets are maintained in currencies other than Euro (the reporting currency) and, as such,
balances may fluctuate due to changes in exchange rates.
7. GOODWILL AND INTANGIBLE ASSETS - NET
The changes in the carrying amount of goodwill for the years ended December 31, 2007 and 2008, are as
follows (thousands of Euro):