Annual Review 2012 - Luxottica

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ANNUAL REPORT 2012
credit facility discussed above. The Intesa Swaps exchange the floating rate of Euribor
(as defined in the agreement) for an average fixed rate of 2.25 percent per annum. The
ineffectiveness of cash flow hedges is tested at the inception date and at least every three
months. The results of the Company’s ineffectiveness testing indicated that these the cash
flow hedges are highly effective. As a consequence, approximately Euro (0.5) million, net
of taxes, is included in other comprehensive income as of December 31, 2012. On May 29,
2013 the Intesa Swaps will expire.
On March 19, 2012, the Group closed an offering in Europe to institutional investors of
Euro 500 million of senior unsecured guaranteed notes due March 19, 2019. The Notes
are listed on the Luxembourg Stock Exchange under ISIN XS0758640279 with a BBB+
credit rating by Standard & Poor’s. Interest on the Notes accrues at 3.625 percent per
annum. The Notes are guaranteed on a senior unsecured basis by US Holdings and
Luxottica S.r.l.
On April 17, 2012, the Group and US Holdings, entered into a multicurrency (Euro/USD)
revolving credit facility with a group of a banks providing for loans in the aggregate
principal amount of Euro 500 million (or the equivalent in USD) guaranteed by Luxottica
Group, Luxottica S.r.l. and US Holdings with UniCredit AG Milan Branch as agent, with
Bank of America Securities Limited, Citigroup Global Markets Limited, Crédit Agricole
Corporate and Investment Bank - Milan Branch, Banco Santander S.A., The Royal Bank of
Scotland PLC and UniCredit S.p.A. as lenders. The facility, whose maturity date is April 10,
2017, was not used as of December 31, 2012.
During 2012, in addition to scheduled repayments, the Group repaid in advance Euro 500
million of Tranche E, USD 225 million of Tranche B and USD 169 million of Tranche D.
The fair value of long-term debt as of December 31, 2012 was equal to Euro 2,483.5 million
(Euro 2,804.7 as of December 31, 2011). The fair value of the debt equals the present value
of future cash flows, calculated by utilizing the market rate currently available for similar
debt and adjusted in order to take into account the Group’s current credit rating.
On December 31, 2012 the Group has unused uncommitted lines (revolving) of Euro 500
million.
Long-term debt, including capital lease obligations, as of December 31, 2012 matures as
follows:
Years ended December 31 (thousands of Euro)
2013 316,538
2014 300,000
2015 637,456
2016 -
2017 and subsequent years 1,098,230
Effect deriving from the adoption of the amortized cost method 9,954
Total 2,362,178