LensCrafters 2006 Annual Report Download - page 63

|63 <
Luxottica Group prepared the consolidated financial statements contained in this report in accordance
with generally accepted U.S. accounting principles known as U.S. GAAP. Luxottica Group, through the
approval of CONSOB (Report no. 27021 of April 7, 2000), decided that preparing its financial and
economic statements in accordance with U.S. GAAP, rather than the corresponding International
Accounting Standards / International Financial Reporting Standards, IAS / IFRS, was opportune for the
following reasons:
• It maintains continuity and consistency with the financial information reported in previous years,
which were prepared under U.S. GAAP, facilitating their comparison;
• It maintains continuity and consistency in the Group’s consolidated financial statements and those of
its U.S. subsidiaries (prepared under U.S. GAAP), which account for over 50% of the Group’s results.
Luxottica Group makes available the consolidated financial statements prepared in accordance
with International Accounting Standards / International Financial Reporting Standards (IAS/IFRS), in
compliance with EEC regulations (EEC Regulation no. 1606/2002). Beginning with the financial
statements for fiscal year 2005, European companies listed on the Stock Exchange must prepare
their consolidated financial statements in accordance with IAS/IFRS. In the following table, the
differences between the two consolidated financial statements are expanded upon, with reference
to the statements of consolidated income for fiscal year 2006.
RECONCILIATION
OF CONSOLIDATED INCOME
STATEMENT PREPARED ACCORDING
TO U.S. GAAP AND IAS / IFRS
(Euro/000) (1) U.S. GAAP IFRS 2 IFRS 3 IAS 19 IAS 38 IAS 39 Other minor Total IAS/IFRS
December 31, Stock Business Employee Intangibile Derivates and IAS/IFRS December 31,
2006 Option combination benefit depreciation reclassification adjustments 2006
Net sales 4,676,156 4,676,156
Cost of sales (1,426,000) (2,039) (982) 3,417 397 (1,425,603)
Gross profits 3,250,156 (2,039) (982) 3,417 397 3,250,553
Operating expenses:
Selling expenses (1,544,327) (332) 608 276 (1,544,051)
Royalties (104,579) 145 145 (104,434)
Advertising expenses (318,128) 2,258 815 3,074 (315,054)
General and administrative expenses (465,830) 1,409 4,687 2,879 8,975 (456,854)
Trademark amortization (61,306) (61,306)
Total (2,494,169) 1,409 (332) 4,687 2,258 4,447 12,469 (2,481,700)
Income from operations 755,987 1,409 (2,371) 3,705 2,258 7,865 12,866 768,853
Other income (expenses):
Interest expenses (70,622) (2,443) (296) (2,739) (73,361)
Interest income 9,804 908 908 10,712
Other - net (16,992) (1,084) (1,084) (18,076)
Other income (expenses), net (77,810) (2,443) (472) (2,915) (80,725)
Income before provision for income taxes 678,177 1,409 (2,371) 3,705 2,258 (2,443) 7,393 9,951 688,128
Provision for income taxes (238,757) 903 972 (1,223) (1,143) 937 (5,959) (5,513) (244,270)
Income before minority interest in income
of consolidated subsidiaries 439,420 2,313 (1,399) 2,482 1,115 (1,505) 1,433 4,439 443,858
Minority interest in income of consol. subsid. (8,715) 195 195 (8,520)
Net income (continuing operations) (2) 430,705 2,313 (1,399) 2,482 1,115 (1,505) 1,628 4,634 435,338
Discontinued operations (6,419) (6,419)
Net income 424,286 2,313 (1,399) 2,482 1,115 (1,505) 1,628 4,634 428,919
Earnings per share:
Continuing operations (1) (2) 0.95 0.96
Net income (1) 0.94 0.95
Fully diluted earnings per share:
Continuing operations (1) (2) 0.94 0.95
Net income (1) 0.93 0.94
Weighted av. no. of outstanding shares 452,897,854 452,897,854
Fully diluted average number of shares 456,185,650 456,405,590
(1) Except earnings per share (ADS), which are expressed in Euro.
(2) Results of Things Remembered, Inc., a former subsidiary that was sold in September 2006, are reclassified as discontinued operations and are not included in results from continuing operations.