ANNUAL REPORT 2004 - Luxottica Group

The Company believes that the preliminary allocation
of the purchase price is reasonable, but it is subject
to revision upon completion of the final valuation of
certain assets and liabilities, which is expected to
occur during the third quarter of 2005. As such, the
purchase price allocation set forth above may
change during 2005 to reflect the final amounts.
Included under the caption “Asset held for sale -
Pearle Europe” in the above table and on the
consolidated balance sheet at December 31, 2004
is the fair value of the Company’s investment in
Pearle Europe B.V. (“PE”) established through
negotiations with the majority shareholder of PE to
acquire the asset. As part of the acquisition of Cole,
the Company acquired approximately 21% of PE’s
outstanding shares. A change of control provision
included in the Articles of Association of PE required
Cole to make an offer to sell these shares to the
shareholders of PE within 30 days of the change of
control, which deadline was extended by agreement
of the parties. In December 2004, substantially all
the terms of the sale were established at a final cash
selling price of Euro 144.0 million, subject to
In thousands of Euro, except per share data (Unaudited)
Net sales
Income from operations
Net income
No. of shares (thousands) - Basic
No. of shares (thousands) - Diluted
Earnings per share (Euro) - Basic
Earnings per share (Euro) - Diluted
On October 17, 2004, Cole caused its subsidiary to
purchase Euro 122.2 million (US$ 150 million) of its
outstanding 8 7/8% Senior Subordinated Notes due
2012 in a tender offer and consent solicitation for Euro
143 million (US$ 175.5 million), which amount
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
customary closing conditions. The sale transaction
closed in January 2005 (see Note 15). As the asset
is denominated in Euro, which is not the functional
currency of the subsidiary that held the investment,
the Company has recorded an unrealized foreign
exchange gain of approximately Euro 13.4 million
(US$ 18.2 million) as of December 31, 2004 relating
to the changes in the U.S. Dollar/Euro exchange rate
between October 4, 2004 (the date of the
acquisition) and through December 31, 2004.
The following unaudited proforma information for the
years ended December 31, 2003 and 2004
summarizes the results of operations as if the
acquisition of Cole had been completed on January
1, 2003 and includes certain pro forma adjustments
such as additional amortization expense attributable
to identifiable intangibles.
This pro forma financial information is presented for
information purposes only and is not necessarily
indicative of the results of operations that would have
been achieved had the acquisition taken place on
January 1, 2003.
2003
3,901,288
417,598
251,605
448,664
450,202
0.56
0.56
2004
4,027,057
488,223
276,212
448,275
450,361
0.62
0.61
represented all of the issued and outstanding notes
of such series. On November 30, 2004, Cole
redeemed all of its outstanding 8 5/8% Senior
Subordinated Notes due 2007 for Euro 103.0 million
(US$ 126.4 million).
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