LensCrafters 2010 Annual Report Download

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ANNUAL REPORT 2010
FISCAL YEAR ENDED DECEMBER 31, 2010

Table of contents

  • Page 1
    ANNUAL REPORT 2010 FISCAL YEAR ENDED DECEMBER 31, 2010

  • Page 2

  • Page 3
    ANNUAL REPORT 2010

  • Page 4

  • Page 5
    ... Auditors' Report Board of Directors' Proposal Board of Statutory Auditors' Report Annexes Share capital and dividend per ordinary share (ADS) 2000-2010 evolution of number of stores 1990-2009 Luxottica ADS and ordinary share performances 1995-2010 average Euro/US$ exchange rate Key contacts and...

  • Page 6
    > 4 | ANNUAL REPORT 2010

  • Page 7
    ...thanks to the exceptional work carried out. All our brands - lead by Ray-Ban, Oakley, LensCrafters and Sunglass Hut - and geographic areas - from the US to the Emerging Markets - made a major contribution to the results: consolidated net sales for fiscal year 2010 therefore reached the unprecedented...

  • Page 8
    > 6 | ANNUAL REPORT 2010

  • Page 9
    ... SALES BY DISTRIBUTION In 2010, the Company determined that it would report its financial results in accordance with the International Accounting and Reporting Standards (IAS/ IFRS) in all financial communications, including reports to the Securities and Exchange Commission of the United States...

  • Page 10
    > 8 | ANNUAL REPORT 2010

  • Page 11
    LUXOTTICA GROUP | 9 > LUXOTTICA GROUP

  • Page 12
    ... through the Sunglass Hut brand. In North America, Luxottica operates the points of sale for its licensed brands, with over 1,140 stores under the Sears Optical and Target Optical brands. In addition, Luxottica is one of the largest Managed Vision Care operators in the United States, through EyeMed...

  • Page 13
    ...Donna Karan (2005), Dolce & Gabbana (2006), Burberry (2006), Polo Ralph Lauren (2007), Tiffany (2008), Stella McCartney and Tory Burch (2009) and, starting from 2012, Coach. As for house brands, the Company expanded in the sun business by buying Vogue (1990), Persol (1995), Ray-Ban (1999) and Oakley...

  • Page 14
    ...significant eyewear manufacturer to enter the retail market, thereby maximizing synergies with its production and wholesale distribution and increasing penetration of its products through LensCrafters stores. RAY-BAN In 1999, Luxottica acquired Ray-Ban, one of the world's best-known sunglass brands...

  • Page 15
    ... that Luxottica leverages to achieve its main corporate objectives, which are customer satisfaction, the well-being of its employees and economic and social development wherever the Group operates. In general, the Company's long-term strategy is to strengthen its global position and continue...

  • Page 16
    ... design and the continuous development of new styles is key to our success. During 2010 Luxottica added approximately 1,800 new styles to its eyewear collections. The design of the Group's products is at the focal point where vision, technology and creativity converge. Ever in search of innovation...

  • Page 17
    OPERATIONS MANUFACTURING Luxottica's manufacturing system has two main platforms: Italy and China. Alongside these, the Foothill Ranch facility in California (US) manufactures high performance sunglasses, prescription frames and lenses and assembles most of Oakley's eyewear products, while Oakley's ...

  • Page 18
    ... goods through the internet, in order to remove the offers for counterfeit eyewear from certain popular on-line auction platforms and shut down the websites that violate its intellectual property rights, through the sale of counterfeit products or the unauthorized use of Luxottica trademarks...

  • Page 19
    ... to 140,000 frames per day. In late 2009, the facility, which was originally a retailonly distribution center, started serving both Luxottica's retail and wholesale businesses in the North American market. The Dongguan hub was opened in 2006 and it now ships an average of 100,000 units per day. The...

  • Page 20
    ...of the latter. The presence of Ray-Ban, one of the world's best-selling brands of sun and prescription eyewear, and Oakley, a leader in the sport and performance category, gives the portfolio a strong base, complemented by Persol and Oliver Peoples in the high-end of the market, the Arnette and REVO...

  • Page 21
    ...In 2010, Luxottica developed approximately 500 distinct new styles within its house brands, of which approximately 290 are prescription frames and 210 are sunglasses. Each style is typically produced in two sizes and five colors. Ray-Ban Style, tradition and freedom of expression are the key values...

  • Page 22
    > 20 | ANNUAL REPORT 2010 Oliver Peoples Acquired by Luxottica in 2007, Oliver Peoples began in 1987 with the introduction of a retro-inspired eyewear collection created by designer and optician Larry Leight. All eyewear is handcrafted from the finest quality materials, in colors exclusive to ...

  • Page 23
    ... a leading motocross and action sport brand based in California. Fox eyewear and ski goggles have been on the market for over five years and are currently the only brand other than Oakley to use High Definition Optics® (HDO®) technology. Fox Eyewear joined Luxottica's brand portfolio at the end of...

  • Page 24
    > 22 | ANNUAL REPORT 2010 Ralph Lauren Purple Label The Purple Label eyewear collection is the ultimate expression of modern elegance, reflecting an impeccable sense of high quality, precious materials, precise finishing and style. Ralph Lauren The Ralph Lauren eyewear collection embraces a ...

  • Page 25
    ... accounts are generally managed by employees. Customers of the wholesale business are mostly retailers of mid to premium-priced eyewear, such as independent opticians, optical retail chains, specialty sun retailers, department stores and duty-free shops. In North America and other areas, the main...

  • Page 26
    > 24 | ANNUAL REPORT 2010

  • Page 27
    DISTRIBUTION | 25 >

  • Page 28
    ...advanced eye care, everyday value and high-quality vision care health benefits. As of December 31, 2010, Luxottica's retail business consisted of 6,350 stores. OPTICAL RETAIL Luxottica's optical retail operations are anchored by leading brands such as LensCrafters and Pearle Vision in North America...

  • Page 29
    ... department stores. Both brands have a precise market positioning that Luxottica has reinforced by improving service levels while strengthening their fashion reputation by offering brands such as Ray-Ban and Vogue. As of December 31, 2010, Luxottica operated 824 Sears Optical and 322 Target Optical...

  • Page 30
    > 28 | ANNUAL REPORT 2010 of franchises. The labs in LensCrafters stores have been upgraded to help Sears and Pearle Vision stores (including those under Pearle Vision franchise) handle peak demand. In addition, the Group operates Oakley optical lens laboratories in the United States, Ireland and ...

  • Page 31
    ...Its marketing is targeted to reinforce these brand values and build long-term relationships with customers. In addition to operating optical stores, David Clulow operates a number of sunglass concessions in upmarket department stores, further reinforcing its position as a premium brand in the United...

  • Page 32
    ... | ANNUAL REPORT 2010 OneSight, a Luxottica Foundation, is a family of charitable vision care programs dedicated to improving vision through outreach, research and education. Since 1988 these efforts have reached more then 7 million people through the direct service delivery of eye care and eyewear...

  • Page 33
    ONESIGHT | 31 > BENEFITS FOR EMPLOYEES OneSight connects Luxottica Group employees worldwide as they work together towards a common goal of providing clear vision to those in need. Participation in OneSight Clinics requires intense teamwork to optimize the use of scant resources and time and, as a ...

  • Page 34
    ... locations granting needed assistance. In North America "Vision Vans", optical labs on wheels, travelled the country providing free eye exams and new eyewear to 171,000 people across 40 cities. Volunteers and doctors provided eyecare assistance in the Luxottica Retail stores and free vision care...

  • Page 35
    ... and quality of patient care by focusing on three key initiatives Establish new partnerships with organizations to help direct resources where they are needed most; Support sustainable Eye Care Clinics that will offer year round care; Increase awareness of vision care services and offer training...

  • Page 36
    ...containing primary food items with a total sales value of Euro 110. In 2010, Luxottica also signed an agreement pursuant to which all workers and employees with a permanent contract will benefit from health insurance. In order to help employees with children, Luxottica also built a nursery school in...

  • Page 37

  • Page 38

  • Page 39
    MANAGEMENTREPORT | 37 > MANAGEMENT REPORT

  • Page 40
    .... For 2011, a further decrease in financial leverage is expected. (1) We calculate constant exchange rates by applying to the current period the average exchange rates between the Euro and the relevant currencies of the various markets in which we operated during the year ended December 31, 2010...

  • Page 41
    ...the Notes were used for general corporate purposes. February On February 8, 2010, we announced that we formed a long-term joint venture for the Australian and New Zealand markets with Essilor International. The joint venture manages Eyebiz Pty Limited, Luxottica's Sydney-based optical lens finishing...

  • Page 42
    ...Sunglass Hut, Pearle Vision, OPSM, Laubman & Pank, Budget Eyewear, Bright Eyes, Oakley "O" Stores and Vaults, David Clulow and our Licensed Brands (Sears Optical and Target Optical). As a result of our numerous acquisitions and the subsequent expansion of our business activities in the United States...

  • Page 43
    ...of Euro) Net sales Cost of sales Gross profit 2010 5,798,035 1,990,205 3,807,831 % of net sales 100.0% 34.3% 65.7% 2009 5,094,318 1,762,591 3,331,727 % of net sales 100.0% 34.6% 65.4% Selling Royalties Advertising General and administrative Total operating expenses Income from operations 1,896,521...

  • Page 44
    ... offset by a 10.6 percent decrease in comparable store sales for the Australian/New Zealand retail operations. The positive effects from currency fluctuations between the Euro, which is our reporting currency, and other currencies in which we conduct business, in particular the strengthening of the...

  • Page 45
    ... in 2009. Discontinued operations were Euro 19.9 million and related to certain contingent liabilities originally recorded as part of the sale of our Things Remembered retail business in 2006, which either settled or expired. Our effective tax rate was 36.0 percent and 34.4 percent in 2010 and 2009...

  • Page 46
    ... | ANNUAL REPORT 2010 RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009 - IN ACCORDANCE WITH IAS/IFRS Three months ended December 31, (thousands of Euro) Net sales Cost of sales Gross profit Selling Royalties Advertising General and administrative Total operating expenses...

  • Page 47
    ... offset by a 6.0 percent decrease in comparable store sales for the Australian/New Zealand retail operations. The positive effects from currency fluctuations between the Euro, which is our reporting currency, and other currencies in which we conduct business, in particular the strengthening of the...

  • Page 48
    ...in the same period of 2009, primarily due to the positive effect of the selling price mix, that resulted from increased sales of higher margin products. During the three-month period ended December 31, 2010, the average number of frames produced daily in our facilities increased to approximately 228...

  • Page 49
    ... provided by operating activities Cash used in investing activities Cash used in financing activities Change in bank overdrafts Effect of exchange rate changes on cash and cash equivalents E) F) Net change in cash and cash equivalents Cash and cash equivalents at the end of the period 2010 380,081...

  • Page 50
    ... impairment charge totaling approximately Euro 20 million. Non-cash stock-based compensation expense was Euro 32.9 million in 2010 as compared to Euro 24.9 million in 2009. The increase in 2010 as compared to 2009 is mainly due to expense related to the new stock option plan granted in 2010 for...

  • Page 51
    MANAGEMENT REPORT | 49 > CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - IN ACCORDANCE WITH IAS/IFRS (thousands of Euro) ASSETS December 31, 2010 December 31, 2009 CURRENT ASSETS: Cash and cash equivalents Accounts receivable - net Inventories - net Other assets Total... Deferred tax assets Total non...

  • Page 52
    > 50 | ANNUAL REPORT 2010 LIABILITIES AND STOCKHOLDERS' EQUITY (thousands of Euro) December 31, 2010 December 31, 2009 CURRENT LIABILITIES: Short-term borrowings Current portion of long-term debt Accounts payable Income taxes payable Other liabilities Total current liabilities 158,648 197,566 537,...

  • Page 53
    ... compared to 2009 is related to the routine technology upgrades to the manufacturing structure and to the set up of a new IT infrastructure, which started in 2009. Capital expenditures in the retail distribution segment were primarily in North America (Euro 99.3 million in 2010 and Euro 99.1 million...

  • Page 54
    > 52 | ANNUAL REPORT 2010 and 2009, to the opening of new stores, the remodeling of older ones whose leases were extended during the year, and to projects for upgrading the management information system. The intangible assets of Euro 4,045.4 million reported in the financial statements primarily ...

  • Page 55
    ... business unit to fully utilize the Sunglass Hut (SGH) worldwide network; • reconfiguration of the North American organization to create shared services and strengthen commercial functions (product, marketing, operations) devoted to the individual brands (LensCrafters, Pearle Vision, Sears Optical...

  • Page 56
    ... of ensuring efficient management of capital and of executing the "Performance Share Plan". Under the 2008 Program, completed on November 13, 2009, the Company purchased a total of 1,325,916 shares on the Milan Stock Exchange's Mercato Telematico Azionario (MTA) at an average unit price of Euro 17...

  • Page 57
    ... other benefits from the acquisition; (iii) the lack of success by the acquired business in its markets; (iv) the loss of key employees of the acquired business; (v) a decrease in the focus of senior management on our operations; (vi) difficulty integrating human resources systems, operating systems...

  • Page 58
    ...in the achievement of such benefits within the forecasted period of time. C) IF WE ARE UNABLE TO SUCCESSFULLY INTRODUCE NEW PRODUCTS, OUR FUTURE SALES AND OPERATING PERFORMANCE WILL SUFFER The mid- and premium-price categories of the prescription frame and sunglasses markets in which we compete are...

  • Page 59
    ... use of vision correction alternatives could result in decreased use of our prescription eyewear products, including a reduction of sales of lenses and accessories sold in our retail outlets, which could have a material adverse impact on our business, results of operations, financial condition...

  • Page 60
    ... exchange rate fluctuations and currency controls; • cash repatriation restrictions; • application of the Foreign Corrupt Practices Act to our U.S. activities; • difficulty in enforcing intellectual property and contract rights; • disruptions of capital and trading markets; • accounts...

  • Page 61
    ... notice. If our relationship with Sears Optical or Target Optical were to end, we would suffer a loss of sales and the possible impairment of certain intangible assets. This could have a material adverse effect on our business, results of operations, financial condition and prospects. M) IF WE WERE...

  • Page 62
    ... 2002 CAUSE US TO IDENTIFY MATERIAL WEAKNESSES IN OUR INTERNAL CONTROL OVER FINANCIAL REPORTING, THE TRADING PRICE OF OUR SECURITIES MAY BE ADVERSELY IMPACTED The Luxottica Group management has assessed our internal control over financial reporting, as required under Section 404 of the U.S. Sarbanes...

  • Page 63
    ... by the premium and luxury brands, which are expected to continue in 2011 at double-digit rates, there will be four main engines behind Luxottica's growth for this year: further development in emerging markets, the global expansion of Sunglass Hut, growth in the United States and the potential of...

  • Page 64
    ...its leadership position in optical retail in North America, to the excellent performance of Sunglass Hut and to the positive trend of the Wholesale segment. In 2011, LensCrafters looks to benefit from the innovations that the Group is introducing both in terms of products and services. A major focus...

  • Page 65
    ... Investments in commercial strategy, style and technology for the optical business - whose 2010 net sales were up by 15 percent - will also increase. More specifically, in 2011 the innovative technology TrueDigital for prescription lenses, which significantly improves vision quality for athletes and...

  • Page 66
    ...| ANNUAL REPORT 2010 APPENDIX RECONCILIATION BETWEEN PARENT COMPANY NET INCOME AND STOCKHOLDERS' EQUITY AND CONSOLIDATED NET INCOME AND STOCKHOLDERS' EQUITY (thousands of Euro) Parent company financial statements Elimination of intragroup dividends Trademarks and other intangible assets (net of tax...

  • Page 67
    ... Income attributable to the before provision Luxottica Group for income taxes Stockholders 605.6 20.4 - 626.0 402.2 20.4 (19.9) 402.7 (millions of Euro) Reported Adjustment for goodwill impairment loss Adjustment for discontinued operations Adjusted Net sales 5,798.0 - - 5,798.0 EBITDA 1,013.8 20...

  • Page 68
    ... the accounting effects of capital spending, which items may vary for different companies for reasons unrelated to the overall operating performance of a company's business. EBITDA and EBITDA margin are not measures of performance under IAS/IFRS. We include them in this Management Report in order to...

  • Page 69
    ...) in working capital over the prior period, less capital expenditures, plus or minus interest income/(expense) and extraordinary items, minus taxes paid. We believe that free cash flow is useful to both management and investors in evaluating our operating performance compared with other companies in...

  • Page 70
    ... REPORT 2010 net cash from operations, which is used for mandatory debt service requirements, to fund discretionary investments, pay dividends or pursue other strategic opportunities. Free cash flow is not a measure of performance under IAS/IFRS. We include it in this Management Report in order...

  • Page 71
    ... the interest rates charged by the Company's lenders. EBITDA and ratio of net debt to EBITDA are not measures of performance under International Financial Reporting Standards as issued by the International Accounting Standards Board (IAS/IFRS). We include them in this Management Report in order to...

  • Page 72
    ... of long-term debt (+) Bank overdrafts (+) Cash (-) Net debt (=) EBITDA Net debt/EBITDA Net debt - avg. exchange rates (1) Net debt - avg. exchange rates (1)/EBITDA (1) Net debt figures are calculated using the average exchange rates used to calculate the EBITDA figures. December 31, 2010 2,435...

  • Page 73
    ... in exchange rates, changes in local conditions, our ability to protect our proprietary rights, our ability to maintain our relationships with host stores, any failure of our information technology, inventory and other asset risk, credit risk on our accounts, insurance risks, changes in tax laws...

  • Page 74

  • Page 75
    R E P O R O T N C O R P O R A T G E O V E R N A N A C N E O D W N E R S S H T P I R U C T U R E | 73 > REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE

  • Page 76
    ... AND OWNERSHIP STRUCTURE APPROVED BY THE BOARD OF DIRECTORS ON FEBRUARY 28, 2011 TRADITIONAL ADMINISTRATION AND CONTROL SYSTEM Set out below are the corporate governance rules and procedures of the management and control system of the group of joint-stock companies controlled by Luxottica Group...

  • Page 77
    ... and the New York Stock Exchange ("NYSE"), according to the highest standards of corporate governance. The values established in the Code of Ethics of Luxottica Group bind all employees to ensure that the activities of the Group are performed in compliance with applicable law, in the context of fair...

  • Page 78
    ... managing interest between Luxottica Group and the parent company, nor between Luxottica Group and the other affiliates of Delfin. More details on the stock option plans, the share capital increases approved by stockholders and reserved to stock option plans, and the performance share plan assigned...

  • Page 79
    ... for the advance payment of the loan in the event that a third party not linked to the Del Vecchio family gains control of at least 50% of the Company shares. On November 10, 2010, the Company issued a bond listed on the Luxembourg Stock Exchange (code ISIN XS0557635777) for a total amount of Euro...

  • Page 80
    ... Optic Illusions, Inc. disposed on the MTA of all of the 6,434,786 Luxottica Group shares originally in its portfolio. In total, on the date of approval of this report, the Company holds 6,500,000 treasury shares. Please note that the information concerning the characteristics of the risk management...

  • Page 81
    ... STRUCTURE | 79 > SECTION II - INFORMATION ON THE IMPLEMENTATION OF THE PROVISIONS OF THE CODE OF CONDUCT I. BOARD OF DIRECTORS Role and duties The Board of Directors plays a central role in Luxottica's corporate governance. It has the power and responsibility to direct and manage the Company...

  • Page 82
    ... related parties, please refer to section III of this Report. The members of the Board of Directors are called to carry out an annual evaluation, which is prepared internally, on the size, composition and performance of the Board of Directors, its Committees, Internal Auditing and Human Resources...

  • Page 83
    ...the Code of Conduct. The Chief Executive Officer is also an employee of the Company. Set out below is a brief profile of each member of the Board, listing the most significant other offices held by such directors in listed companies as well as in financial, banking, insurance companies or companies...

  • Page 84
    ... since 1985 and Vice Chairman since 1991. During his long career in the Group he was Group's Product & Design Director, Group's Chief Quality Officer and Technical General Manager. He is the Chairman of Luxottica S.r.l., one of the major subsidiary companies of the Group. In April 2000, he was...

  • Page 85
    ... to 1997, he was in charge of the Group business in North America. He is Chairman and Chief Executive Officer of Retail Brand Alliance, Inc. He is also a Director in Luxottica U.S. Holdings Corp. Sergio Erede Mr. Erede has been a member of the Board of Directors of the Company since 2004. He holds...

  • Page 86
    ...2005, she has also been a member of the Human Resources Committee of the Company. She was head of Investor Relations of the Group from 1996 to 2004. Between 1994 and 1996, she worked for Caboto Sim S.p.A. as a financial analyst, focusing on the Italian stock market. Between 1991 and 1993, she was an...

  • Page 87
    ...only positions to be taken into consideration are those as member of the Board of Directors or auditor for companies listed on regulated markets (domestic and foreign), in banks, insurance companies, or companies of a significant size, which are defined as companies with a total value of business or...

  • Page 88
    ... Chief Executive Officer is authorized by the Board of Directors to supervise all the business units. He also makes proposals to be submitted to the Board of Directors regarding the organization of the Company and of the Group, the general development and investment programs, the financial programs...

  • Page 89
    REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE | 87 > Mr. Luigi Francavilla, Vice Chairman, Mr. Andrea Guerra, Chief Executive Officer, and Mr. Enrico Cavatorta, member of the Board of Directors, hold offices in companies controlled by Luxottica Group. The Board of Directors, therefore, has...

  • Page 90
    ..., where appropriate, the directors who comply with the requirement of independence provided for by the codes of conduct prepared by the organizations managing regulated markets or by trade associations. At the end of the voting, the candidates of the two lists with the highest number of votes are...

  • Page 91
    ... in his capacity as Chairman of the subsidiary company Luxottica S.r.l. During 2010, he retired as an employee of Luxottica Group; he maintained the Stock Option Plans and Performance Shares Plan assigned to him by the Company. His payment as an employee was composed of a fixed amount and a variable...

  • Page 92
    > 90 | ANNUAL REPORT 2010 The aggregate remuneration of the Chief Executive Officer, also based in part on the quality of his role as manager of the Company, is composed of a fixed amount and a variable amount, linked to the attainment of predetermined objectives. In addition to the fixed ...

  • Page 93
    ... the terms of any options. Performance share plan With regard to the allocation of the Performance Share Plan, the provisions of article 7 of the regulations approved by the shareholders' meeting of May 13, 2008 are applied to the Chief Executive Officer (available on the website of the Company in...

  • Page 94
    > 92 | ANNUAL REPORT 2010 For more details on the remuneration, stock options and the performance share plan assigned to the Directors and managers in strategic roles, please refer to the information available in the notes to the financial statements as at December 31, 2010 as well as in the ...

  • Page 95
    ...incentive plans (stock option, performance share plan) to employees of the Company and of its subsidiaries; (ii) formulated proposals to the Board of Directors on the remuneration for the members of the Board pursuant to article 2389, paragraph 3 of the Italian Civil Code; (iii) reviewed the general...

  • Page 96
    ... to the changes in the operational conditions and of the legal and regulatory framework through the support of the relevant corporate structures. In October 2009, the Board of Directors updated the Financial Risk Management Policy, applicable to all the companies of Luxottica Group and introduced in...

  • Page 97
    ... the following activities: • assists the Board in the execution of its tasks regarding internal controls; • evaluates (i) the work program of the Internal Control Officer and the regular reports issued, (ii) the correct use of accounting principles, together with the manager responsible for...

  • Page 98
    ... his/her duties and has direct access to any information useful for the performance of these duties. The Internal Control Officer has been identified by the Board of Directors, upon the proposal of the Chief Executive Officer, as the manager of Internal Auditing of Luxottica Group, Mr. Luca Fadda...

  • Page 99
    ... reports every six months to the Board of Directors, the Internal Control Committee and the Board of Statutory Auditors on the activities performed. The Board of Directors allocated specific funds, totalling Euro 50,000, in order to provide the Supervisory Board with adequate financial resources...

  • Page 100
    ... statements (Internal Control Over Financial Reporting-ICFR). The disclosure controls and procedures are designed to ensure that the financial information is adequately collected and communicated to the Chief Executive Officer (CEO) and to the Chief Financial Officer (CFO), so that they may make...

  • Page 101
    ... a list of director and control duties held by these candidates in other companies. The Company makes the lists and related attachments available to the public at its registered office, on its website and using the other methods established by CONSOB, at least twenty-one days before the date fixed...

  • Page 102
    ...the correct reporting of the management-related issues, and verifies the procedures for the implementation of the corporate governance rules provided for by the Code of Conduct, and, in accordance with the provisions of Italian Legislative Decree 39/2010, supervises the financial information process...

  • Page 103
    ... and disclose financial information and the shortcomings identified through the internal controls (Section 404 "Internal Controls over financial reporting"); • examines the reports by the Chief Executive Officer and Chief Financial Officer on any fraud involving management or related officers in...

  • Page 104
    > 102 | ANNUAL REPORT 2010 Below is some background information on the members of the Board of Statutory Auditors currently in office and on the main offices held in other companies as of December 31, 2010. Francesco Vella, Chairman An attorney at law, Mr. Vella is full professor of commercial law ...

  • Page 105
    ... ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE | 103 > Manager responsible for the preparation of the Company's financial reports On April 29, 2009, the Board of Directors confirmed the Group Chief Financial Officer, Enrico Cavatorta, as the manager responsible for the preparation of the Company...

  • Page 106
    ... in charge of the Internal Audit, who in turn submits them to the Chairman of the Board of Statutory Auditors. The Code of Ethics is available on www.luxottica.com, in the Company/Values and Ethics section. Procedure for transactions with related parties On October 25, 2010, the Board of Directors...

  • Page 107
    ... in Italy and in the United States, by virtue of the fact that the Company's shares are listed both on the MTA, organized and managed by Borsa Italiana, and on the New York Stock Exchange, without prejudice to any additional constraints imposed by any local laws applicable to the individual non...

  • Page 108
    > 106 | ANNUAL REPORT 2010 The policy is available on the website www.luxottica.com, in the Governance/Procedures section. IV. SHAREHOLDERS' MEETINGS The Board of Directors determines the venue, date and time of the shareholders' meeting in order to facilitate the participation of shareholders. ...

  • Page 109
    ... CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE | 107 > V. INVESTOR RELATIONS An investor relations team, directly reporting to the Chief Executive Officer, is dedicated to relations with the national and international financial community, with investors and analysts, and with the market. The Company...

  • Page 110
    ... paragraphs above. After closing the 2010 fiscal year, the Board of Directors: (a) in accordance with the application criteria 1.C.1. (a) and 1.C.1. (b) of the Code of Conduct, approved the annual report concerning the organizational and accounting corporate structure of Luxottica Group, identifying...

  • Page 111
    REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE | 109 > COMPOSITION OF THE BOARD OF DIRECTORS AND OF THE COMMITTEES - FISCAL YEAR 2010 Directors in office Number of other offices (**) 4 1 2 3 7 - 1 5 - 1 7 1 2 7 4 X 100% X X 89% 89% X 100% X 100% X 100% X 100% X 100% Internal Control ...

  • Page 112
    > 110 | ANNUAL REPORT 2010 2. BOARD OF STATUTORY AUDITORS - 2010 FISCAL YEAR Percentage of attendance at the Board meetings 100% 100% 100% Number of other positions in office held (*) 4 - 1 of which listed 6 - 4 of which listed 7 - 3 of which listed Position Chairman Statutory Auditor Statutory ...

  • Page 113
    ... Organization department and contact details (address/telephone/fax/e-mail) of the investor relations manager YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES They may be found and downloaded on the website www.luxottica.com YES YES Internal Auditing YES Investor Relations Director...

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    > 112 | ANNUAL REPORT 2010

  • Page 115
    C O N S O L D IA T E D F N IA N C A IL S T A T E M E N T S | 113 > CONSOLIDATED FINANCIAL STATEMENTS

  • Page 116
    ...ANNUAL REPORT 2010 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (*) (thousands of Euro) ASSETS Footnote reference 2010 2009 CURRENT ASSETS: Cash and cash equivalents Accounts... Deferred tax assets Total non...

  • Page 117
    CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | 115 > (thousands of Euro) LIABILITIES AND STOCKHOLDERS' EQUITY Footnote reference 2010 2009 CURRENT LIABILITIES: Short-term borrowings Current portion of long-term debt Accounts payable Income taxes payable Other liabilities Total current ...

  • Page 118
    > 116 | ANNUAL REPORT 2010 CONSOLIDATED STATEMENT OF INCOME CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (*) (thousands of Euro) (1) Net sales Cost of sales Gross profit Selling Royalties Advertising General and administrative Total operating expenses Income from...

  • Page 119
    ... 117 > CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2010, AND 2009 (*) (thousands of Euro) Net income Other comprehensive income: Cash flow hedge - net of tax Currency translation differences Actuarial gain/(loss) on defined benefit plans - net of tax Total other...

  • Page 120
    ... - net of taxes of Euro 8.1 million Total comprehensive income as of December 31, 2009 Exercise of stock options Non-cash Stock based compensation - net of taxes of Euro 1.7 million Excess tax benefit on stock options Investments in treasury shares Dividends (Euro 0.22 per share) Allocation of legal...

  • Page 121
    ... gains/(losses) - net of taxes of Euro 4.6 million Total comprehensive income as of December 31, 2010 Exercise of stock options Non-cash Stock based compensation - net of taxes of Euro 1.7 million Excess tax benefit on stock options Investments in treasury shares net of taxes of Euro 16.5 million...

  • Page 122
    ...409) - (7,518) - (21,323) (19) Cash used in investing activities (367,283) (229,269) Long-term debt: - Proceeds - Repayments Increase (decrease) in short-term lines of credit Exercise of stock options Sale of treasury shares Dividends Cash used in financing activities 881,705 (930,362) 14,185 22...

  • Page 123
    CONSOLIDATED STATEMENT OF CASH FLOWS | 121 > (thousands of Euro) Increase in cash and cash equivalents Cash and cash equivalents, beginning of the period 2010 296,650 346,624 2009 300,746 28,426 Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents, end of the ...

  • Page 124
    > 122 | ANNUAL REPORT 2010 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2010 GENERAL INFORMATION Luxottica Group S.p.A. (henceforth, the "Company") is a corporation with a registered office in Milan, Italy, at Via C. Cantù 2. The Company and its subsidiaries (collectively, the...

  • Page 125
    ... consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the...

  • Page 126
    ... cost and subsequently measured at fair value. Translation of the financial statements of foreign companies The Group records transactions denominated in foreign currency in accordance with IAS 21 - The effect of changes in Foreign Exchange Rates. The results and financial position of all the Group...

  • Page 127
    ... comprehensive income. Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. The exchange rates used to translate foreign operations are reported within the Attachment to...

  • Page 128
    .... Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying item of property, plant and equipment are capitalized as part of the cost of that asset Upon disposal or when no future economic benefits are expected from the use of an item of property...

  • Page 129
    ... the cost of trademarks and licenses over their estimated useful lives. Contractual customer relationships acquired in a business combination are recognized at fair value at the acquisition date. The contractual customer relations have a finite useful life and are carried at cost less accumulated...

  • Page 130
    ... market data as opposed to internal sources of information. At each reporting date, the Group assesses whether there is objective evidence that a financial asset is impaired. In the case of investments classified as financial asset held for sale, a prolonged or significant decline in the fair value...

  • Page 131
    ... marked to market at the end of each reporting period and changes in fair value are recognized in the consolidated statement of income. Accounts payable and other payables Accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from...

  • Page 132
    ... than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted as of the balance sheet date and are expected to apply when the related...

  • Page 133
    ... in accordance with IAS 18 - Revenue. Revenues include sales of merchandise (both wholesale and retail), insurance and administrative fees associated with the Group's managed vision care business, eye exams and related professional services, and sales of merchandise to franchisees along with other...

  • Page 134
    ... the retail location. For internet and catalogue sales, advance payments and deposits from customers are not recorded as revenues until the product is delivered. The Retail Division also includes managed vision care revenues consisting of both fixed fee and fee-for-service managed vision care plans...

  • Page 135
    ... the discount rate, the expected return on plan assets, the rates of future compensation increases and rates relative to mortality and resignations. Any change in the abovementioned assumptions could result in significant effects on the employee benefit liabilities. Earnings per share The Company...

  • Page 136
    ... if a specified future event occurs or specific conditions are met are recognized at their acquisition date fair value and classified as a financial liability. Changes in fair value of contingent consideration are generally recorded in the consolidated statement of income. The application of IFRS...

  • Page 137
    ... in measuring the fair value of an intangible asset acquired in a business combination and permits the grouping of intangible assets as a single asset if each asset has similar useful economic lives. IFRIC 16 - Hedges of a net investment in a foreign operation: The amendment states that, in a hedge...

  • Page 138
    ... basis of the model which the company has adopted in order to manage its financial activities and on the basis of the cash flows from financing activities; (ii) initially measured at fair value plus any transaction costs in the case of financial assets not measured at fair value through profit and...

  • Page 139
    ... hedging activities, in compliance with the Financial Risk Management Policy guidelines approved by the Board of Directors, and in accordance with the Group operational units. The Policy defines the guidelines for any kind of risk, such as the exchange rate risk, the interest rate risk, credit risk...

  • Page 140
    ... that the sales of products and services are made to reliable customers on the basis of their financial position as well as past experience and other factors. Credit limits are defined according to internal and external evaluations that are based on thresholds approved by the Board of Directors.

  • Page 141
    ... an agreement with the insurance company Euler Hermes Siac in order to cover the credit risk associated with customers of Luxottica Extra Ltd. in those countries where the Group is not present. C2) With regards to credit risk related to the management of financial resources and cash availabilities...

  • Page 142
    ... as reported in the tables relating to liabilities. With regards to interest rate swaps, the cash flows include the settlement of the interest spread, both positive and negative, which expire during different periods. The various maturity date categories represent the period of time between the date...

  • Page 143
    ... 12.9 million (Euro 21.3 million as of December 31, 2009), net of tax effect, in connection with the increase/decrease of the fair value of the derivatives used for the cash flow hedges. As of December 31, 2010 Plus 100 bps (millions of Euro) Liabilities Hedging derivatives (Cash Flow Hedges) Net...

  • Page 144
    ...is reported below (in thousands of Euro): Financial assets at fair value through profit and loss - - 1,484 Financial liabilities at fair value through profit and loss 4,689 - - December 31, 2010 Cash and cash equivalents Accounts receivable Other current assets Other non-current assets Short-term...

  • Page 145
    ...traded by the Group. The models applied to value the instruments are based on a calculation obtained from the Bloomberg information service. The input data used in these models are based on observable market prices (the Euro and US$ interest rate curves as well as official exchange rates on the date...

  • Page 146
    ...Curves and Spot and Forward prices. The fair value of the interest rate derivatives portfolio is calculated using internal models that maximize the use of observable market inputs including Interest Rates, Yield Curves and Foreign Exchange Spot prices. 4. SEGMENT INFORMATION In accordance with IFRS...

  • Page 147
    ... (which includes the United States of America, Canada and Caribbean islands), Asia-Pacific (which includes Australia, New Zealand, China, Hong Kong and Japan) and Other (which includes all other geographic locations, including South and Central America and the Middle East). Sales are attributed to...

  • Page 148
    ... REPORT 2010 INFORMATION ON THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION CURRENT ASSETS 5. CASH AND CASH EQUIVALENTS Cash and cash equivalents are comprised of the following items: As of December 31, (thousands of Euro) Cash at bank and post office Checks Cash and cash equivalents on hand Total...

  • Page 149
    ... FINANCIAL STATEMENTS | 147 > Accruals and reversals of the allowance for doubtful accounts are recorded within selling expenses in the consolidated statement of income. The maximum exposure to credit risk, as of the end of the reporting date, was represented by the fair value of accounts...

  • Page 150
    ... total inventory in 2010 as compared to 2009 is mainly due to incremental production in the Chinese manufacturing facility as well as to fluctuations in currency exchange rates. 8. OTHER ASSETS Other assets comprise the following items: As of December 31, (thousands of Euro) Sales taxes receivable...

  • Page 151
    ...half of 2011. Other assets include the short-term portion of advance payments made to certain designers for future contracted minimum royalties totaling Euro 16.8 million as of December 31, 2010 (Euro 28,0 million as of December 31, 2009). Prepaid expenses mainly relates to the timing of payments of...

  • Page 152
    ... Euro 14.6 million. The acquisition was accounted for according to IFRS 3 Revised. The Group used various method to calculate the fair value of assets acquired and liabilities assumed. The goodwill recorded in the consolidated financial statements as of December 31, 2010 totals Euro 14.6 million.

  • Page 153
    ...the rates of return on long-term government bonds and the average capital structure of a group of comparable companies were taken into account. The recoverable amount of cash-generating units has been determined by utilizing post-tax cash flow forecasts based on the three-year plan for the 2011-2013...

  • Page 154
    ...152 | ANNUAL REPORT 2010 in accordance with the provisions of paragraph 7 of IAS 36, future cash flows of the cash-generating units in the Retail distribution segment were adjusted in order to reflect the transfer prices at market conditions. This adjustment was made since the cash generating units...

  • Page 155
    ... 31, (thousands of Euro) Inventories Insurance and other reserves Net operating losses carry forward Rights of return Deferred tax on derivatives Employee related reserves (Including pension liability) Occupancy reserves Trade names Fixed assets Other Total deferred tax assets 2010 72,448 11,666 26...

  • Page 156
    ... | ANNUAL REPORT 2010 15. CURRENT PORTION OF LONG-TERM DEBT This item consists of the current portion of loans granted to the Company, as further described below in Note 19 - Long- term debt. 16. ACCOUNTS PAYABLE Accounts payable consist of invoices received and not yet paid at the reporting date...

  • Page 157
    ... and discounts to suppliers Sales commissions Leasing rental Insurance Sales taxes payable Salaries payable Due to social security authorities Sales commissions payable Royalties payable Other financial liabilities Total financial liabilities Deferred income Customers' right of return Advances...

  • Page 158
    ...financial institutions for Oakley acquisition (d) Short-term capital lease obligations Other loans with banks and other third parties, including long-term capital lease obligations, interest at various rates, payable in installments through 2014 (e) Total Less: Current maturities Long-term debt 2010...

  • Page 159
    ... contain certain financial and operating covenants. The Group was in compliance with those covenants as of December 31, 2010. The proceeds from the January 2010 Notes received on January 29, 2010, were used for general corporate purposes. On September 30, 2010, the Company closed a private placement...

  • Page 160
    ...February 2008, the Company exercised an option included in the amendment to the term and revolving facility to extend the maturity date of Tranches B and C to March 2013. Tranche A, which was to be used for general corporate purposes, including the refinancing of existing Luxottica Group S.p.A. debt...

  • Page 161
    ... 2,629.2 million. The fair value of the debts was equal to the present value of future cash flows, calculated by utilizing the market rate that is currently available for similar debt and modified in order to take into account the credit rating of the Company. As of December 31, 2010, the Group had...

  • Page 162
    ... includes the liabilities related to the post-employment benefits of the Italian companies' employees (hereinafter "TFR"), accounted for in accordance with Article 2120 of the Italian Civil Code. Effective January 1, 2007, the TFR system was reformed, and under the new law, employees are given the...

  • Page 163
    ... CONSOLIDATED FINANCIAL STATEMENTS | 161 > In application of Accounting Principle IAS 19, the valuation of TFR liability accrued as of December 31, 2006 was based on Projected Unit Credit Cost method. The main assumptions utilized are reported below: 2010 Economic assumptions Discount rate Annual...

  • Page 164
    ... by the Board of Directors of Cole on the recommendation of Cole's chief executive officer at such time. This plan provides benefits in excess of amounts permitted under the provisions of the prevailing tax law. The pension liability and expense associated with this plan are accrued using the same...

  • Page 165
    ...) 11,299 2010 2009 SERPs 2010 2009 Pension Plan (thousands of Euro) Change in plan assets: Fair value of plan assets - beginning of period Expected return on plan assets Actuarial gain/(loss) on plan assets Employer contribution Benefits paid Translation difference Fair value of plan assets - end...

  • Page 166
    ... tables show the main assumptions used to determine the period benefit cost and the benefit obligation. Lux Plan 2010 Weighted-average assumptions used to determine benefit obligations: Discount Rate Rate of compensation increase Expected long-term return on plan assets 5,50% 5% - 3% - 2% 8,00...

  • Page 167
    ... CONSOLIDATED FINANCIAL STATEMENTS | 165 > SERPs 2010 Weighted-average assumptions used to determine net periodic benefit cost: Discount rate: For the year ended December 31 For the period prior to re-measurement For the period after re-measurement Expected long-term return on plan assets Rate of...

  • Page 168
    ... and excess return targets. The investment managers are monitored on an ongoing basis to evaluate performance against the established market benchmarks and return targets. Quoted market prices are used to measure the fair value of plan assets, when available. If quoted market prices are not...

  • Page 169
    ... in other long-term liabilities in the consolidated statement of financial position. Health Benefit Plans - US Holdings partially subsidizes health care benefits for eligible retirees. Employees generally become eligible for retiree health care benefits when they retire from active service between...

  • Page 170
    ... the Company with treasury shares to efficiently manage its share capital and to implement its Performance Share Plan. Under the 2009 Program, the Company purchased in 2010 on the Milan Stock Exchange's Mercato Telematico Azionario (MTA) an aggregate amount of 3,355,726 shares at an average price of...

  • Page 171
    ... the Company has provided for an accrual for income taxes related to declared dividends of earnings. For further information on the changes occurred in 2010 as compared to 2009 please refer to note 3 of the management report on the consolidated financial statements as of December 31, 2010 "Financial...

  • Page 172
    ... distribution of prescription frames and sunglasses under the Anne Klein New York brand. The new agreement extends the license through December 2012 with an option for further renewal. The terms and conditions of this agreement are in line with the prior agreement. On March 31, 2010, Luxottica Group...

  • Page 173
    ..., 2010, the Group operated approximately 470 Sunglass Hut departments in Macy's. Future minimum amounts to be paid for endorsement contracts and supplier purchase commitments at December 31, 2010 are as follows: Years ending December 31 (thousands of Euro) 2011 2012 2013 2014 Subsequent years Total...

  • Page 174
    ... Care, Inc. in California. The plaintiff asserted various claims relating to the confidentiality of medical information and the operation of Pearle Vision stores in California, including violations of California laws governing relationships among opticians, optical retailers, manufacturers of frames...

  • Page 175
    ...Inc. (now Luxottica Retail North America, Inc.) and Luxottica Group S.p.A. in the United States District Court for the Eastern District of Texas, alleging violations of the Texas Optometry Act ("TOA") and the Texas Deceptive Trade Practices Act, and tortious interference with customer relations. The...

  • Page 176
    ... December 31, 2010" of the Management Report on the Consolidated Financial Statements as of December 31, 2010. The Group paid royalties under the license to RBA of Euro 0.8 million in 2010 and Euro 0.3 million in 2009. Incentive stock option plans On September 14, 2004, the Company announced that...

  • Page 177
    ... Weighted average shares outstanding - basic Effect of dilutive stock options Weighted average shares outstanding - dilutive Options not included in calculation of dilutive shares as the exercise price was greater than the average price during the respective period or performance measures related to...

  • Page 178
    > 176 | ANNUAL REPORT 2010 29. ATYPICAL AND/OR UNUSUAL OPERATIONS There were no atypical and/or unusual transactions occurred in 2010 and 2009. 30. DERIVATIVE FINANCIAL INSTRUMENTS Derivatives are classified as current or non-current assets and liabilities. The fair value of derivatives is ...

  • Page 179
    ... the market values of Luxottica shares being equal to the greater of the stock price on the grant date of the new options or the previous 30-day average. In connection with the reassignment of options related to the Company's 2006 and 2007 ordinary plans, the employees who surrendered their options...

  • Page 180
    > 178 | ANNUAL REPORT 2010 In connection with the reassignment of options related to the Company's 2006 performance plan, the employees who surrendered their options received the right to purchase the same number of Luxottica Group ordinary shares that were subject to the options he or she ...

  • Page 181
    ... 2 on stock option plans is reported below. The fair value of the stock options was estimated on the grant date using the binomial model and following weighted average assumptions: 2010 Ordinary Plan - for citizens resident in the U.S.A. Share price at the grant date (in Euro) Expected option life...

  • Page 182
    > 180 | ANNUAL REPORT 2010 Movements reported in the various stock option plans in 2010 are reported below: No. of options outstanding as of December 31, 2009 168,900 603,250 732,400 1,208,600 375,000 1,132,500 170,000 1,100,000 120,000 1,948,000 378,000 652,000 - - - No. of options outstanding as ...

  • Page 183
    ... of 2010, the weighted average share price of the shares in 2010 was equal to Euro 19.97. The Group has recorded an expense for the ordinary stock option plans of Euro 8.6 million and Euro 8.5 million in 2010 and 2009, respectively. For the performance plans, including the 2006 performance plans and...

  • Page 184
    ... | ANNUAL REPORT 2010 The stock plans outstanding as of December 31, 2010 are conditional upon satisfying the service conditions. The 2004 and 2009 performance plans as well as all the PSP plans are conditional upon satisfying service as well as performance conditions. Trends in stock option plans...

  • Page 185
    ... 0.35 per share. Dividend distributed to non-controlling interests totals Euro 9.2 million. 33. SUBSEQUENT EVENTS For further details on events occurred after December 31, 2010, refer to the Note 16 in the Management Report. * Milan, February 28, 2011 * * On behalf of the Board of Directors Andrea...

  • Page 186
    ...184 | ANNUAL REPORT 2010 ATTACHMENT EXCHANGE RATES USED TO TRANSLATE FINANCIAL STATEMENTS PREPARED IN CURRENCIES OTHER THAN EURO Average exchange rate as of December 31, 2010 Average exchange rate as of December 31, 2009 Currency Final exchange rate as of December 31, 2010 Final exchange rate as...

  • Page 187
    ... Executive Officer and Chief Financial Officer of Luxottica Group S.p.A., having also taken into account the provisions of Article 154-bis, paragraphs 3 and 4, of Legislative Decree no. 58 of February 24, 1998, hereby certify: • • the adequacy in relation to the characteristics of the Company...

  • Page 188
    > 186 | ANNUAL REPORT 2010 INDEPENDENT AUDITORS' REPORT

  • Page 189
    INDEPENDENT AUDITORS' REPORT | 187 >

  • Page 190
    ... per American Depository Share (ADS), based on the profit of the 2010 fiscal year, which totals to Euro 294,252,234. Having taken into account the calendar approved by Borsa Italiana S.p.A., the Board of Directors recommends that the payment date of the dividend is set for May 26, 2011, with its ex...

  • Page 191
    ... years for the design, production and global distribution of glasses and sunglasses frames for the Anne Klein New York brand; the company extended the licensing contract with Retail Brand Alliance Inc., a subsidiary company of Claudio Del Vecchio, director of Luxottica Group S.p.A., until 2014 with...

  • Page 192
    ... REPORT 2010 glasses and sunglasses frames for the Coach, Coach Poppy and Reed Krakoff brands. The long-term agreement, which includes a renewal option, will be effective as of 1 January 2012; 6) the Company acquired the remaining 35.16 percent interest held by minority stockholders in Luxottica...

  • Page 193
    ... to the services provided outside the audit. It is to be noted, as far as financial information is concerned, that, starting from 2010, the Company also adopted the international accounting principles (IAS/IFRS) in preparing its reports for the Security Exchange Commission of the United States. No...

  • Page 194
    > 192 | ANNUAL REPORT 2010 for listed companies (audit of the balance sheet, the consolidated financial statements, as well as the limited audit of the six-month report and checks on the regular keeping of company accounts during the year): (thousands of Euro) Certification Services: Deloitte & ...

  • Page 195

  • Page 196
    > 194 | ANNUAL REPORT 2010

  • Page 197
    ANNEXES | 195 > ANNEXES

  • Page 198
    ... converting the dividend in Italian Lira by the fixed rate of Lire 1,936.27 = Euro 1.00. Beginning with the 2000 financial statements, the dividend is declared in Euro. (4) proposed by the board of directors and to be submitted for approval at the Annual shareholders' meeting on April 29, 2011.

  • Page 199
    ... 120 4,811 2010 | 197 > LensCrafters Pearle Vision Licensed Brands Sears Optical Target Optical The Optical Shop of Aspen Oliver Peoples Sun North America (of which Ilori) Oakley Stores and Vaults NORTH AMERICA Optical Australia - New Zealand Sunglass Hut Bright Eyes Oakley Stores and Vaults ASIA...

  • Page 200
    ...ANNUAL REPORT 2010 1990-2010 LUXOTTICA ADS AND ORDINARY SHARE PERFORMANCES 1990-2010: LUXOTTICA ADS AT NYSE (US$) Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010...303 33.925 24.228 20.991 26.502 Closing 1.019 2.750 2.513 2.925 3.413 5.850...

  • Page 201
    1990-2010 LUXOTTICA ADS AND ORDINARY SHARE PERFORMANCES | 199 > 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 45 40 35 30 25 20 15 10 5 0 ADS NYSE (US$) 20-year low US$ 0.7938 on November 7, 1990 20-year high US$ 39,38 ...

  • Page 202
    > 200 | ANNUAL REPORT 2010 1995-2010 AVERAGE EURO/US$ EXCHANGE RATE Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1st quarter 1.1793 1.2307 1.1823 1.0802 1.1207 0.9859 0.9230 0.8766 1.0731 1.2497 1.3113 1.2023 1.3016 1.4976 1.3029 1.3829 2nd quarter 1.1613 1....

  • Page 203

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    KEY CONTACTS AND ADDRESSES LUXOTTICA GROUP S.P.A. REGISTERED OFFICE AND HEADQUARTERS Via C. Cantù, 2 - 20123 Milan - Italy Tel. +39 02 86334.1 - Fax +39 02 8633 4636 E-mail: [email protected] Fiscal code and milan company register no. 00891030272 VAT no. 10182640150 | 203 > MEDIA RELATIONS Via ...

  • Page 206
    > 204 | Consultancy and coordination zero3zero9 Printing Castaldi Industria Grafica (BL)

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    ENG ANNUAL REPORT 2010