LensCrafters 2008 Annual Report Download - page 114

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> 112 |ANNUAL REPORT 2008
NON US GAAP MEASURES: EARNINGS PER SHARE BEFORE
TRADEMARK AMORTIZATION
Earnings per share before trademark amortization: Earnings per share (EPS) before trademark amortization
means earnings per share before trademark and other similar intangible asset amortization expense, net of taxes,
per share. The Company believes that EPS before trademark amortization is useful to both management and
investors in evaluating the Company’s operating performance and prospects compared to that of other
companies in its industry. Our calculation of EPS before trademark amortization allows us to compare our
earnings per share with those of other companies without giving effect to the accounting effects of the
amortization of the Company’s trademarks and other similar intangible assets, which may vary for different
companies for reasons unrelated to the overall operating performance of a company’s business.
EPS before trademark amortization is not a measure of performance under accounting principles generally
accepted in the United States (US GAAP). We include it in this presentation in order to:
• improve transparency for investors;
• assist investors in their assessment of the Company’s operating performance;
• ensure that this measure is fully understood in light of how the Company evaluates its operating results;
• properly define the metrics used and confirm their calculation; and
• share this measure with all investors at the same time.
EPS before trademark amortization is not meant to be considered in isolation or as a substitute for items
appearing on our financial statements prepared in accordance with US GAAP. Rather, this non-GAAP measure
should be used as a supplement to US GAAP results to assist the reader in better understanding the operational
performance of the Company. The Company cautions that this measure is not a defined term under US GAAP
and its definition should be carefully reviewed and understood by investors. Investors should be aware that
Luxottica Group’s method of calculating EPS before trademark amortization may differ from methods used by
other companies. The Company recognizes that the usefulness of EPS before trademark amortization as an
evaluative tool may have certain limitations, including:
• EPS before trademark amortization does not include the effects of amortization of the Company’s trademarks
and other intangible assets.
Because trademarks and other intangible assets are important to our business and to our ability to generate
sales, we consider trademark amortization expense as a necessary element of our costs. Therefore, any measure
that excludes trademark amortization expense may have material limitations.
We compensate for these limitations by using EPS before trademark amortization as one of several comparative
tools, together with US GAAP measurements, to assist in the evaluation of our operating performance.
See the table on the following pages for a reconciliation of EPS before trademark amortization to EPS, which is
the most directly comparable US GAAP financial measure.
(Euro millions) FY 2008
Operating income (+) 749.8
Depreciation & amortization (+) 264.9
EBITDA (=) 1,014.7