LensCrafters 2010 Annual Report Download - page 68

ANNUAL REPORT 2010> 66 |
Q409
(millions of Euro) Net sales EBITDA
EBITDA
margin
Income
from
operations
Operating
margin
Income
before
provision
for income
taxes
Net income
attributable
to the
Luxottica
Group
Stockholders Base EPS
Diluted
EPS
Reported 1,157.1 145.3 12.6% 74.0 6.4% 44.6 29.3 0.06 0.06
Adjustment for goodwill
impairment loss – – 0.0% –0.0% ––––
Adjustment for discontinued
operations –––––––––
Adjusted 1,157.1 145.3 12.6% 74.0 6.4% 44.6 29.3 0.06 0.06
EBITDA AND EBITDA MARGIN
EBITDA represents net income attributable to Luxottica Group stockholders, before non–controlling interest, provision for
income taxes, other income/expense, depreciation and amortization. EBITDA margin means EBITDA divided by net sales. We
believe that EBITDA is useful to both management and investors in evaluating our operating performance compared with that
of other companies in our industry. Our calculation of EBITDA allows us to compare our operating results with those of other
companies without giving effect to financing, income taxes and 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:
improve transparency for investors;•
assist investors in their assessment of the Company’s operating performance and its ability to refinance its debt as it •
matures and incur additional indebtedness to invest in new business opportunities;
assist investors in their assessment of the Company’s level of debt;•
ensure that these measures are fully understood in light of how the Company evaluates its operating results and •
leverage;
properly define the metrics used and confirm their calculation; and•
share these measures with all investors at the same time.•
EBITDA and EBITDA margin are not meant to be considered in isolation or as a substitute for items appearing on
our financial statements prepared in accordance with IAS/IFRS. Rather, these non–IAS/IFRS measures should be used
as a supplement to IAS/IFRS results to assist the reader in better understanding the operational performance of the
Company.
The Company cautions that these measures are not defined terms under IAS/IFRS and their definitions should be carefully
reviewed and understood by investors.
Investors should be aware that our method of calculating EBITDA may differ from methods used by other companies. We
recognize that the usefulness of EBITDA has certain limitations, including:
EBITDA does not include interest expense. Because we have borrowed money in order to finance our operations, •
interest expense is a necessary element of our costs and ability to generate profits and cash flows. Therefore, any
measure that excludes interest expense may have material limitations;
EBITDA does not include depreciation and amortization expense. Because we use capital assets, depreciation and •
amortization expense is a necessary element of our costs and ability to generate profits. Therefore, any measure that
excludes depreciation and expense may have material limitations;