Non-U.S. GAAP Measures 2006

Net debt to EBITDA ratio

Net debt means the sum of bank overdrafts, current portion of long-term debt and long-term debt, less cash. EBITDA represents income from operations before depreciation and amortization.
The Company believes that EBITDA is useful to both management and investors in evaluating the Company's operating performance compared to that of other companies in its 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. The ratio of net debt to EBITDA is a measure used by management to assess the level of leverage.
EBITDA and the ratio of net debt to EBITDA are not measures of performance under accounting principles generally accepted in the United States (U.S. GAAP). These non-GAAP measures are not meant to be considered in isolation or as a substitute for items appearing on our financial statements prepared in accordance with U.S. GAAP.
In addition, Luxottica Group's method of calculating EBITDA and the ratio of net debt to EBITDA may differ from methods used by other companies. See the tables on the following pages for a reconciliation of net debt to long-term debt, which is the most directly comparable U.S. GAAP financial measure, a reconciliation of EBITDA to income from operations, which is the most directly comparable U.S. GAAP financial measure, as well as the calculation of the ratio of net debt to EBITDA. These non-GAAP measures should be used as a supplement to U.S. GAAP results to assist the reader in better understanding the operational performance of the Company.

Non-U.S. GAAP Measure: Net Debt

Non-U.S. GAAP Measure: EBITDA

Net Working Capital

Net working capital means total current assets, net of cash, minus total current liabilities, net of bank overdrafts and the current portion of long-term debt. Luxottica Group believes that net working capital is useful information to both management and investors because it allows them to assess the short-term capital used in operating the business. Net working capital is a non-GAAP measure and is not meant to be considered in isolation or as a substitute for items appearing on our financial statements prepared in accordance with U.S. GAAP. In addition, Luxottica Group’s method of calculating net working capital may differ from methods used by other companies. See the table on the next page for a reconciliation of net working capital to total current assets, which is the most directly comparable U.S. GAAP financial measure. This adjusted financial measure should be used as a supplement to U.S. GAAP results to assist the reader in better understanding the capital used in operating the Company.

Non-U.S. GAAP Measure: Net Working Capital

Constant Exchange Rates

Luxottica Group uses certain measures of financial performance that exclude the impact of fluctuations in currency exchange rates in the translation of operating results into Euro. The Company believes that these adjusted financial measures provide useful information to both management and investors by allowing a comparison of operating performance on a consistent basis. In addition, since Luxottica Group has historically reported such adjusted financial measures to the investment community, the Company believes that their inclusion provides consistency in its financial reporting. Further, these adjusted financial measures are one of the primary indicators management uses for planning and forecasting in future periods. Operating measures that assume constant exchange rates between the fourth quarter and fiscal year 2005 and the fourth quarter and the fiscal year 2004, respectively, are calculated using for each currency the average exchange rate for the three- and twelve-month periods ended December 31, 2004. Operating measures that exclude the impact of fluctuations in currency exchange rates are not measures of performance under accounting principles generally accepted in the United States (U.S. GAAP). These non-GAAP measures are not meant to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. In addition, Luxottica Group's method of calculating operating performance excluding the impact of changes in exchange rates may differ from methods used by other companies. The adjusted financial measures should be used as a supplement to U.S. GAAP results to assist the reader in better understanding the operational performance of the Company.

Additional information regarding constant exchange rate figures and retail comparable store sales, as required by Regulation G, is available in the notes to Luxottica Group’s fourth quarter of 2005 earnings release. See www.luxottica.com, section investor relations, press releases.

Forecast of net debt to EBITDA ratio for fiscal year 2006

Management believes that a forecast of the net debt to EBITDA ratio for fiscal year 2006 is useful to investors because it allows investors to assess the impact of anticipated cash flows on the Company’s future level of leverage. Forecasted EBITDA and the forecasted ratio of net debt to EBITDA are not measures of performance under accounting principles generally accepted in the United States (U.S. GAAP). These forward-looking non-GAAP measures are not meant to be considered in isolation or as a substitute for items appearing on our financial statements prepared in accordance with U.S. GAAP. In addition, Luxottica Group’s method of calculating EBITDA and the ratio of net debt to EBITDA may differ from methods used by other companies. These non-GAAP measures should be used as a supplement to U.S. GAAP results to assist the reader in better understanding the operational performance of the Company. See the table below for a reconciliation of forecasted EBITDA for FY 2006 to forecasted income from operations for 2006, which is the most directly comparable forward-looking U.S. GAAP financial measure, as well as the calculation of the forecasted ratio of net debt to EBITDA. Our forecast of net debt of between Euro 1,195.0 million and Euro 1,265.0 million at December 31, 2006 was derived by reducing our net debt of Euro 1,435.2 million at December 31, 2005 (derived as set forth elsewhere in this presentation) by an estimate of our cash flows for FY 2006 of between Euro 240.2 million and Euro 170.2 million. A reconciliation of forecasted net debt for FY 2006 to forecasted long-term debt for FY 2006 (which would be the most directly comparable forward-looking U.S. GAAP financial measure) is unavailable because it is not possible at this time to anticipate the specific components of forecasted cash flows for FY 2006. Since we are unable to quantify the components of our future cash flows with certainty, actual cash flows for FY 2006 could vary significantly from our estimate and could have a significant effect on our forecast of the net debt to EBITDA ratio for 2006.

Non-U.S. GAAP Measure: Forecast of Net Debt / EBITDA