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

Non-GAAP Financial Measures

        The Company uses certain measures of financial performance that exclude the impact of fluctuations in currency exchange rates in the translation of operating results into Euro. The Company believes that these adjusted financial measures provide useful information to both management and investors by allowing a comparison of operating performance on a consistent basis. In addition, since the Company has historically reported such adjusted financial measures to the investment community, the Company believes that their inclusion provides consistency in its financial reporting. Further, these adjusted financial measures are one of the primary indicators management uses for planning and forecasting in future periods. Operating measures that assume constant exchange rates between the first three months of 2006 and the first three months of 2005 are calculated using for each currency the average exchange rate for the three-month period ended March 31, 2005.

        Operating measures that exclude the impact of fluctuation in currency exchange rates are not measures of performance under U.S. GAAP. These non-GAAP measures are not meant to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. In addition, the Company's method of calculating operating performance excluding the impact of changes in exchange rates may differ from methods used by other companies. See the table below for a reconciliation of the operating measures excluding the impact of fluctuations in currency exchange rates to their most directly comparable U.S. GAAP financial measures. The adjusted financial measures should be used as a supplement to results reported under U.S. GAAP to assist the reader in better understanding the operational performance of the Company (in millions of Euro).

        Manufacturing and wholesale net sales are gross of intercompany sales to the Retail division.

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Non-GAAP Financial Measures

        The Company uses certain measures of financial performance that exclude the impact of fluctuations in currency exchange rates in the translation of operating results into Euro, and include the results of operations of Cole for the three-month period ended September 30, 2004. The Company believes that these adjusted financial measures provide useful information to both management and investors by allowing a comparison of operating performance on a consistent basis. In addition, since the Company has historically reported such adjusted financial measures to the investment community, the Company believes that their inclusion provides consistency in its financial reporting. Further, these adjusted financial measures are one of the primary indicators management uses for planning and forecasting in future periods. Operating measures that assume constant exchange rates between the third quarter of 2005 and the third quarter of 2004 are calculated using for each currency the average exchange rate for the three-month period ended September 30, 2004.

        Operating measures that exclude the impact of fluctuation in currency exchange rates are not measures of performance under U.S. GAAP. These non-GAAP measures are not meant to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. In addition, the Company's method of calculating operating performance excluding the impact of changes in exchange rates may differ from methods used by other companies. See the table below for a reconciliation of the operating measures excluding the impact of fluctuations in currency exchange rates to their most directly comparable U.S. GAAP financial measures. The adjusted financial measures should be used as a supplement to results reported under U.S. GAAP to assist the reader in better understanding the operational performance of the Company (in millions of Euro).

        The Company has included the following table of consolidated adjusted sales and operating income for the third quarter of 2004. The Company believes that the adjusted amounts may be of

76

assistance in comparing the Company's operating performance between the 2004 and 2005 periods. However, adjusted financial information should not be viewed as a substitute for measures of performance calculated in accordance with generally accepted accounting principles. The consolidated adjusted amounts reflect the following adjustments:

1.

the inclusion in the adjusted amounts of the consolidated results of Cole for the three-month period ended September 30, 2004; and

2.

the elimination of wholesale sales to Cole from Luxottica Group entities for the three-month period ended September 30, 2004.

        This information is being provided for comparison purposes only and does not purport to be indicative of the actual results that would have been achieved had the Cole acquisition been completed as of January 1, 2004.

        The following table reflects the Company's consolidated net sales and income from operations for the third quarter of 2004 as reported and as adjusted (in millions of Euro):

        The following table summarizes the combined effect on consolidated net sales of exchange rates and the Cole acquisition, to allow a comparison of operating performance on a consistent basis (in millions of Euro):

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        The 7.9 percent increase in net sales on a consistent basis in the third quarter of 2005 as compared to the same period of 2004, as adjusted, is mainly attributable to the additional sales of our Ray-Ban product lines, as well as to the additional sales of the Prada, Versace and Bulgari product lines and increased comparable store sales⁽²⁾ of our retail division.

⁽²⁾

Comparable store sales reflects the change in sales from one period to another that, for comparison purposes, includes in the calculation only stores open in the more recent period that also were open during the comparable prior period, and applies to both periods the average exchange rate for the prior period and the same geographic area. The calculation of comparable store sales for the third quarter of 2005 includes relevant stores of the former Cole National business as if the Cole National acqusition had been completed as of January 1, 2004. Cole National results are actually consolidated with Luxottica Group results only as of the October 4, 2004 acquisition date.

        The following table summarizes the effect on consolidated income from operations of the Cole acquisition to allow a comparison of operating performance on a consistent basis (in millions of Euro):

        On a consolidated adjusted basis, including Cole's results for the three-month period ended September 30, 2004, income from operations in the three-month period ended September 30, 2005 would have increased by 23.8 percent and operating margin would have increased to 14.5 percent from 12.7 percent as compared to the same period of 2004.

Non-GAAP Financial Measures

        The Company uses certain measures of financial performance that exclude the impact of fluctuations in currency exchange rates in the translation of operating results into Euro, and include the results of operations of Cole for the three-month period ended September 30, 2004. The Company believes that these adjusted financial measures provide useful information to both management and investors by allowing a comparison of operating performance on a consistent basis. In addition, since the Company has historically reported such adjusted financial measures to the investment community, the Company believes that their inclusion provides consistency in its financial reporting. Further, these adjusted financial measures are one of the primary indicators management uses for planning and forecasting in future periods. Operating measures that assume constant exchange rates between the third quarter of 2005 and the third quarter of 2004 are calculated using for each currency the average exchange rate for the three-month period ended September 30, 2004.

        Operating measures that exclude the impact of fluctuation in currency exchange rates are not measures of performance under U.S. GAAP. These non-GAAP measures are not meant to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. In addition, the Company's method of calculating operating performance excluding the impact of changes in exchange rates may differ from methods used by other companies. See the table below for a reconciliation of the operating measures excluding the impact of fluctuations in currency exchange rates to their most directly comparable U.S. GAAP financial measures. The adjusted financial measures should be used as a supplement to results reported under U.S. GAAP to assist the reader in better understanding the operational performance of the Company (in millions of Euro).

        The Company has included the following table of consolidated adjusted sales and operating income for the third quarter of 2004. The Company believes that the adjusted amounts may be of

76

assistance in comparing the Company's operating performance between the 2004 and 2005 periods. However, adjusted financial information should not be viewed as a substitute for measures of performance calculated in accordance with generally accepted accounting principles. The consolidated adjusted amounts reflect the following adjustments:

1.

the inclusion in the adjusted amounts of the consolidated results of Cole for the three-month period ended September 30, 2004; and

2.

the elimination of wholesale sales to Cole from Luxottica Group entities for the three-month period ended September 30, 2004.

        This information is being provided for comparison purposes only and does not purport to be indicative of the actual results that would have been achieved had the Cole acquisition been completed as of January 1, 2004.

        The following table reflects the Company's consolidated net sales and income from operations for the third quarter of 2004 as reported and as adjusted (in millions of Euro):

        The following table summarizes the combined effect on consolidated net sales of exchange rates and the Cole acquisition, to allow a comparison of operating performance on a consistent basis (in millions of Euro):

77

        The 7.9 percent increase in net sales on a consistent basis in the third quarter of 2005 as compared to the same period of 2004, as adjusted, is mainly attributable to the additional sales of our Ray-Ban product lines, as well as to the additional sales of the Prada, Versace and Bulgari product lines and increased comparable store sales⁽²⁾ of our retail division.

⁽²⁾

Comparable store sales reflects the change in sales from one period to another that, for comparison purposes, includes in the calculation only stores open in the more recent period that also were open during the comparable prior period, and applies to both periods the average exchange rate for the prior period and the same geographic area. The calculation of comparable store sales for the third quarter of 2005 includes relevant stores of the former Cole National business as if the Cole National acqusition had been completed as of January 1, 2004. Cole National results are actually consolidated with Luxottica Group results only as of the October 4, 2004 acquisition date.

        The following table summarizes the effect on consolidated income from operations of the Cole acquisition to allow a comparison of operating performance on a consistent basis (in millions of Euro):

        On a consolidated adjusted basis, including Cole's results for the three-month period ended September 30, 2004, income from operations in the three-month period ended September 30, 2005 would have increased by 23.8 percent and operating margin would have increased to 14.5 percent from 12.7 percent as compared to the same period of 2004.

Non-GAAP Financial Measures

        The Company uses certain measures of financial performance that exclude the impact of fluctuations in currency exchange rates in the translation of operating results into Euro, and include the results of operations of Cole for the three-month period ended June 30, 2004. The Company believes that these adjusted financial measures provide useful information to both management and investors by allowing a comparison of operating performance on a consistent basis. In addition, since the Company has historically reported such adjusted financial measures to the investment community, the Company

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believes that their inclusion provides consistency in its financial reporting. Further, these adjusted financial measures are one of the primary indicators management uses for planning and forecasting in future periods. Operating measures that assume constant exchange rates between the second quarter of 2005 and the second quarter of 2004 are calculated using for each currency the average exchange rate for the three-month period ended June 30, 2004.

        Operating measures that exclude the impact of fluctuation in currency exchange rates are not measures of performance under U.S. GAAP. These non-GAAP measures are not meant to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. In addition, the Company's method of calculating operating performance excluding the impact of changes in exchange rates may differ from methods used by other companies. See the table below for a reconciliation of the operating measures excluding the impact of fluctuations in currency exchange rates to their most directly comparable U.S. GAAP financial measures. The adjusted financial measures should be used as a supplement to results reported under U.S. GAAP to assist the reader in better understanding the operational performance of the Company (in millions of Euro).

        The Company has included the following table of consolidated adjusted sales and operating income for the second quarter of 2004. The Company believes that the adjusted amounts may be of assistance in comparing the Company's operating performance between the 2004 and 2005 periods. However, adjusted financial information should not be viewed as a substitute for measures of performance calculated in accordance with generally accepted accounting principles. The consolidated adjusted amounts reflect the following adjustments:

1.

the inclusion in the adjusted amounts of the consolidated results of Cole for the three-month period ended June 30, 2004; and

2.

the elimination of wholesale sales to Cole from Luxottica Group entities for the three-month period ended June 30, 2004.