Luxottica Group, S.p.A. (LUX)

Concentration of Credit Risk—

Financial instruments which potentially expose the Company to concentration of credit risk consist primarily of investments in cash and cash equivalents and accounts receivable. The Company attempts to limit its credit risk associated with cash equivalents by placing the Company’s investments with highly rated banks and financial institutions. With respect to accounts receivable, the Company limits its credit risk by performing ongoing credit evaluations. No single customer accounted for 10 percent or more of the overall accounts receivable balance. However, included in accounts receivable as of December 31, 2005 is approximately Euro 15.1 million due from the host stores of the Company’s license brands retail division. These receivables represent cash sales deposited by the Company into the host stores’ bank accounts, which are subsequently forwarded to the Company on a monthly basis. These receivables are based on contractual arrangements and are short-term in length. The Company believes that there is no significant concentration of credit risk with respect to these cash and cash equivalents investments and accounts receivable.

Concentration of Credit Risk—

Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of customers comprising the Company’s customer base. Ongoing credit evaluations of customers’ financial condition are performed.