LensCrafters 2011 Annual Report Download - page 127

| 51 >APPENDIXMANAGEMENT REPORT - APPENDIX
EBITDA and ratio of net debt to EBITDA 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 Luxottica Group’s method of calculating EBITDA and the
ratio of net debt to EBITDA may differ from methods used by other companies.
The Company recognizes that the usefulness of EBITDA and the ratio of net debt to
EBITDA as evaluative tools may have certain limitations, including:
• the ratio of net debt to EBITDA is net of cash and cash equivalents, restricted cash and
short-term investments, thereby reducing our debt position.
Because we may not be able to use our cash to reduce our debt on a Dollar-for-Dollar basis,
this measure may have material limitations. We compensate for the foregoing limitations
by using EBITDA and the ratio of net debt to EBITDA as two of several comparative
tools, together with IAS/IFRS measurements, to assist in the evaluation of our operating
performance and leverage.
See the table below for a reconciliation of net debt to long-term debt, which is the most
directly comparable IAS/IFRS financial measure, as well as the calculation of the ratio of
net debt to EBITDA.
NON-IAS/IFRS MEASURE: NET DEBT AND NET DEBT/EBITDA
(millions of Euro) December 31, 2011 December 31, 2010
Long–term debt (+) 2,244.6 2,435.1
Current portion of long–term debt (+) 498.3 197.6
Bank overdrafts (+) 193.8 158.6
Cash (–) (905.1) (679.9)
Net debt (=) 2,031.6 2,111.4
EBITDA 1,131.0 1,013.8
Net debt/EBITDA 1.8x 2.1x
Net debt at average exchange rates (1) 1,944.4 2,116.2
Net debt at average exchange rates (1)/EBITDA 1.7x 2.1x
(1) Net debt  gures are calculated using the average exchange rates used to calculate the EBITDA  gures.