Earnings per share has been calculated in accordance with Statement of Financial Accounting Standard no. 128 "Earnings per share" which requires dual presentation of basic and diluted earnings per share.

(*) Exchange rate: Euro 1 = Usd 1.2564 as of December 31, 2003. (See Note 5 to the Consolidated Financial Statements)

(1) Since each ADS represents two Ordinary Shares, the ADS financial data may be computed by multiplying the per share data by two.

(2) The weighted average number of common shares outstanding in 1999-2000 have been adjusted to reflect the one for ten reverse split of the Company's common shares approved by the Shareholders' Meeting of May 8, 2001.

(1) Translated at the Noon Buying Rate on the respective payment dates.

(2) Dividend paid on May 24, 2004 at the exchange rate of Euro 1 = Usd 1.1968.

(3) Restated to reflect a reverse split of the share approved by the Shareholders' Meeting on May 8, 2001.

The following table sets forth, for each of the years indicated, the high, low, average and year-end exchange rate for converting United States Dollars into Euro based on the Noon Buying Rate in New York City for cable transfers in Euro as certified for customs purposes by the Federal Reserve Bank of New York. The Noon Buying Rates are expressed in Usd per Euro 1.00.

(*) The average of the Noon Buying Rates on the last day of each month during the year.

The following table sets forth, for each month during the previous six months, the high and low exchange rate for United States Dollars into Euro based on the Noon Buying Rate in New York City for cable transfers in Euro as certified for customs purposes by the Federal Reserve Bank of New York. The Noon Buying Rates are expressed in Usd per Euro 1.00.

> Benetton's business is sensitive to changes in consumer spending patterns. Benetton's business is sensitive to changes in consumer spending patterns and may be affected by, among other factors, business conditions, interest rates, taxation, local economic conditions, uncertainties regarding future economic prospects and shifts in discretionary spending towards other goods and services. Customer preferences and economic conditions may differ or change from time to time in each market in which Benetton operates. Benetton's future performance will be subject to such factors, which are beyond its control, and there can be no assurance that such factors would not have a material adverse effect on the Group's results of operations.

> Benetton's success depends on its ability to predict fashion trends accurately. Benetton's sales and earnings depend to a significant extent upon its ability to anticipate and respond to changes in fashion trends and consumer preferences in a timely manner. If Benetton were to experience unsatisfactory customer acceptance of its merchandise, the Group would have lower than planned sales, greater than planned markdowns and lower gross margins earned on goods sold. Although Benetton is constantly reviewing emerging lifestyle and consumer preferences, any failure by Benetton to identify and respond to such trends in a timely manner could have a material adverse effect on the Group's business and results of operations.

> Benetton's business is subject to competitive pressures. Benetton operates in the highly competitive casualwear and sportswear sectors. Competition in these sectors may increase because there are few barriers to entry. Benetton competes with local, national and global department stores, specialty retailers, independent retail stores and manufacturing companies. In addition to traditional store-based retailers, Benetton also competes with direct marketers who target customers through catalogs. Benetton competes for customers principally on the basis of quality, assortment and presentation of merchandise, customer service, store ambience, sales and marketing programs and value. In addition to competing for sales, Benetton competes for favorable store locations and lease and purchase terms for its stores. Increased competition could result in pricing pressure and loss of market share, either of which could have a material adverse effect on the Group's financial condition and results of operations.

> Benetton's expansion and growth strategy has increased fixed costs and operating expenses. Although Benetton had traditionally distributed its products through independent sales representatives worldwide, in order to strengthen its image and market shares, Benetton has in the last few years instituted an investment program to sell its products directly through its own stores. As a result, Benetton operates over 120 retail store locations which have been carefully selected for the appropriate demographics and retail environment. These real property investments have led to increases in Benetton's fixed costs and operating expenses. In addition, these investments expose Benetton directly to any failure to correctly predict, or to changes in, the demographic or retail environment at any store location. Failure or changes in any areas in which the Group has megastores could have a material adverse effect on the Group's business and results of operations.

> Benetton is subject to risks associated with its strategies. As a part of its growth strategy, Benetton plans to renew the existing commercial network and to reposition the brands. Benetton's growth will be adversely affected if it is unable to (i) identify suitable markets and sites for new stores, (ii) maintain levels of service that are expected by customers, (iii) avoid reducing sales and profitability at existing third-party owned stores selling Benetton's products when opening directly-owned megastores in the same region or market area, (iv) manage inventory on an effective basis and (v) deliver products on a timely basis. In addition, there can be no assurance that the Group's systems, procedures, controls or resources will be adequate to support expanded operations. Moreover, there can be no assurance that this strategy will be successful or that the Group's overall net revenues will increase as a result of a renewal in the existing commercial network and the repositioning its brands. If the Group is unable to manage its expansion effectively, its business and results of operations could be adversely affected.

 > Benetton has a level of indebtedness which could place a burden on its operations and profitability. During 2002 and 2003, Benetton reduced its indebtedness, but it will still need to generate sufficient cash flow from operations to repay this indebtedness. The generation of cash flow, in turn, will be subject to Benetton's successful implementation of its strategy, as well as to financial, competitive, business and other factors, including factors beyond Benetton's control. Benetton's debt burden could have a material adverse effect on it, such as (i) limiting its ability to implement its business strategies and pursue other business opportunities, (ii) limiting its ability to obtain additional financing in the future for capital expenditures, acquisitions, working capital or other general corporate purposes and (iii) making it more vulnerable to withstand competitive pressures and reducing its flexibility in responding to changing business and economic conditions.

> Benetton is exposed to the impact of changes in interest rates . Benetton holds a variety of interest rate sensitive assets and liabilities to manage the liquidity and cash needs of its day-to-day operations. These interest rate sensitive assets and liabilities are subject to interest rate risk, which is, to some extent, reduced by the use of derivative financial instruments.

> Benetton is exposed to risks associated with its international operations. Benetton is exposed to risks associated with its international operations including risks relating to delayed payments from customers in certain countries or difficulties in the collection of receivables generally. Benetton's business is also subject to political and economic instability in the countries in which it does business, changes in regulatory requirements, language and other cultural barriers, tariffs and other trade barriers and price or exchange controls. If the Group's international operations were not successful, its business and results of operations would be adversely affected.

> Benetton's sales and operating results are subject to fluctuations in foreign currency exchange rates. As a result of its international operations, the Group's sales and operating results are, and will continue to be, affected by the impact of fluctuations in foreign currency exchange rates on product prices and certain operating expenses. Fluctuations in the exchange rates of certain foreign currencies relative to the Euro may have an adverse effect on the Group's sales and operating income and on the international competitiveness of its Italian-based operations. The appreciation of the Euro relative to other currencies has generally had, and in the future the appreciation of the Euro could have, an adverse effect on the Group's sales and operating incomes. While Benetton engages in foreign exchange hedging transactions to manage its foreign currency exposure, there can be no assurance that its hedging strategy will adequately protect its operating results from the effects of future exchange rate fluctuations.

Holders of our ADSs may instruct the depositary to vote the ordinary shares underlying the ADSs. For the depositary to follow the voting instructions, it must receive them on or before the date specified in our voting materials. The depositary must try, as far as practical, subject to Italian law and our articles of association, to vote the ordinary shares as instructed. Also, the depositary is not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that ADS holders may not be able to exercise their right to vote and there may be nothing they can do if their ordinary shares or other deposited securities are not voted as requested.

Benetton Group S.p.A. is a limited liability company (Società per Azioni) organized under the laws of Italy. It was established on March 2, 1965 as a partnership by the Benetton family in Ponzano Veneto, Italy. It was reorganized as a limited liability company in 1978. The Company adopted the name Benetton Group S.p.A. in a corporate reorganization effective in December 1985. Prior to June 1986, the Company was wholly owned by the Benetton family. In June 1986, shareholders affiliated with the Benetton family sold shares representing approximately 11% of the Ordinary Shares to the public in Europe. (The Company received no proceeds from such offering). The Benetton family initiated the public offering of such Ordinary Shares in order to establish a liquid public market for the Company's Ordinary Shares and to facilitate the Company's access to the international capital markets.

In June 1989, the Company made a public offering of 7,000,000 American Depositary Shares ("ADS"), each representing the right to receive two Ordinary Shares and listed the ADSs on the New York Stock Exchange. A public offer of 11,000,000 newly issued shares was made in a 1994 global offering.

In 2003, total capital expenditures came to approximately Euro 151 million, including miscellaneous in the table under "Other Investment" which refer mainly to software, concessions and licenses.

In 2003, the Group spent approximately Euro 117 million on the acquisition of commercial enterprises and buildings, and on upgrades and improvements to sales space. This was in addition to the approximately Euro 730 million invested during the period from 1998 through 2003. The majority of the investments in 2003 were made in Italy, Austria, France and Spain. Investments in production facilities consisted mainly of those in plant facilities and machinery such as looms, spoolers, thread spoolers and dye kitchens.

The remaining investments were in intangible assets: the costs incurred for software licenses and for in-house software development in 2003 amounted to approximately Euro 8 million, of which approximately Euro 5 million was for new SAP licenses and implementation advice as this project involved integrating all areas of the Company .

In the first quarter of 2004, the Group invested approximately Euro 21 million in tangible and intangible fixed assets compared with approximately Euro 66 million in the first quarter of 2003. Around Euro 6 million of investments in the first quarter of 2004 were made in connection with the purchase, modernization and restructuring of buildings that will be used for commercial activities. Production facilities-related investments in the first quarter of 2004 amounted to approximately Euro 11 million and were spent mainly on plants and renewal of machinery at certain of the Italian factories.

In the first half of 2003, the Group sold its sports equipment business (see "Sports Sector" in Item 4 below for a more detailed discussion of this sale). The divestitures of 2003 reflect the sale of the sports equipment business for an amount of Euro 97 million in intangible assets and for Euro 22 million in tangible assets. No other material divestitures occurred in 2003 and the year to date.

On February 17, 2004, Benfin S.p.A. bought the remaining 15% of Olimpias S.p.A. from third parties for Euro 15 million, and as a result, it now owns the entire company. Olimpias S.p.A. produces textiles (fabrics, knitted fabrics, yarn, woven and printed fabrics, as well as acting as a dyehouse and laundry), mainly for Group companies.

The Group's net debt stood at Euro 497 million at quarter end 2004, compared with Euro 709 million as of March 31, 2003 and Euro 468 million at the end of December 2003. The change relative to year end 2003 was mainly due to normal cyclical trends in working capital, while the decrease compared with the end of first quarter 2003 reflects the disposal of the sports equipment business and a lower level of capital expenditure.

The present term of the Company expires on December 31, 2050, unless extended by the shareholders in a general meeting.

The Company's principal offices are located at Via Villa Minelli 1, 31050 Ponzano Veneto - TV, Italy.

Its telephone number is +39-0422-519111.

Benetton is amongst the world leaders in the design, manufacture and marketing of distinctive casual apparel for men, women and children, which it markets principally under the brand names "United Colors of Benetton" and "Sisley". Following the 1997 acquisition of Benetton Sportsystem S.p.A., Benetton was active in the sportswear and sports equipment sector with brands such as Prince, Rollerblade, Nordica, Kästle, Killer Loop and Ektelon, but the equipment businesses were sold in 2003. In launching a new potential area of growth, the Group added a new sportswear brand, Playlife.

Benetton is traditionally known for knitwear and casual clothing in a wide array of colors, featuring fashionable Italian design and projecting a youthful image. Benetton's philosophy is to offer product lines on a worldwide basis that have sufficient breadth to accommodate the needs of many markets. Benetton also licenses its trademarks for products manufactured and sold by others, including fragrances and cosmetics, watches, sunglasses, houseware and other fashion accessories, which complement its product lines.

There are no material government regulations concerning the individual business sectors of activity of the Group.

Until the sale of the sports equipment business in the first half of 2003, the Group's operations were divided into two primary sectors:

- casual, which also includes footwear, accessories and other complementary items, sold through the network of Benetton stores;

- sports, comprising sportswear, distributed mainly through the Playlife stores, and equipment, marketed only through sporting goods stores.

In the first half of 2003, the Company sold the sports equipment business to third parties (see "Sports Sector" in Item 4 below for a more detailed discussion of this sale).

> Products and trademarks

Benetton's philosophy is to offer global product lines, supported by international communication campaigns that are designed to promote the Benetton name and products.

Benetton aims to offer products characterized by their creative use of exclusive designs. The Group produces two main collections each year for all its labels: spring/summer and fall/winter. For each collection, the Group presents consistent and focused collections complemented by a growing number of fresh and updated easy-to-wear looks.

Benetton's casual wear principal international trademarks are described below.

> United Colors of Benetton. A global brand, and one of the most well-known in the world, United Colors of Benetton has an international style that combines color, energy and practicality. The womenswear, menswear and childrenswear collections offer a coordinated look for everyday wear, for work and for leisure. Special attention is paid to ensuring an excellent quality/price ratio. Within the two traditional collections, the range is seasonally themed with continuous introduction of new styles required to ensure a swift response to the latest fashion trends. Benetton's commitment to research into innovative materials adds comfort and wearability to the garments. Children collections include 4 lines for different age groups: Newborn, from zero to 12 months, Baby, from 1 to 3 years, Kid, from 3 to 7 years, and Junior, from 8 to 12 years.

In 2003, as in 2002, the Euro zone continues to be the Group's main market.

> Sisley. Sisley was established in Paris in 1968 as a manufacturer of a denim line. In 1974, the Group acquired exclusive rights to the label. Today, Sisley's independent design and commercial teams create complete collections for women and men, inspired by a stylish look, combined with attention to details and wearability. Over the years, Sisley has reinforced its independent identity, underpinned by a sustained increase in all principal world markets. The growth of its commercial network is based on a dual strategy: on the one hand, the opening of single-brand megastores such as those in Milan, Florence, Brussels and New York, and on the other hand, dedicated areas selling Sisley products in multi-brand megastores.

In 2003, approximately 67% of the Group's net sales main production were products bearing the United Colors of Benetton brand name. In 2003, 19% of the Group's total sales were related to Sisley, which offers products with a distinctive "fashion" content. Sisley's prices are, on the whole, higher than those of the United Colors of Benetton line.

The following table sets forth the Group's net sales for the sector by geographic area for the last three years.

> Seasonality. The sales of casual segment show a certain seasonality connected to the main collections. Deliveries of the spring/summer base collections are mainly between December and February, whereas the fall/winter collections are concentrated between June and September of each year. A growing portion of our collections are delivered during periods of high sales volume.

 > Distribution channels. Benetton coordinates the distribution of its casual wear collections in 120 countries principally through approximately 65 independent sales representatives, each of whom is assigned a geographical territory, although Benetton owns or leases some stores directly, as described below. This system of independent sales representatives was first developed by Benetton in Italy and later applied worldwide during Benetton's international expansion after 1978. The representatives receive commissions on sales realized by Benetton in their territories and, sometimes, own stores that sell Benetton products. The representatives manage the development of the network in the area, finding investors or store operators, presenting Benetton's collections to store owners, handling the placement of orders to Benetton and generally monitoring and assisting store owners within their territories. In order to speed up time to market, the Group has developed a business to business system which connects about 70% of its worldwide shops to the headquarters to present and order real time its ready-to-wear collections.

The following tables set forth the changes in the number of stores and outlets over the past five years.

The tables separately include stores in areas where Benetton has granted manufacturing licenses:

Storeowners do not pay Benetton any fees or other consideration for establishing a Benetton store or for use of the Company's tradenames, nor do they pay any royalty based on a percentage of sales or profits. The storeowners are authorized to display and sell Benetton goods, for which Benetton provides suggested guidelines. Stores rely both on location and store appearance as fundamental features of the Benetton retail strategy. Stores are usually located in central retail areas and are presented in a fashion that generally resembles Benetton configuration and design. Under Benetton's suggested guidelines, window displays are designed to allow a clear view of the colorful merchandise on the open shelves. Attention is given to matching the atmosphere of stores to the image of the products offered for sale, with distinctive and appropriate styles of fixtures.

Benetton has established logistical support systems to facilitate the distribution of its products. A computerized information network in Europe and North America that links sales representatives to Benetton's central computer has been designed to facilitate rapid transmission of orders and to meet future needs.

In order to strengthen the Group's image and its market share, the expansion of the Benetton network is moving rapidly in the direction of large sales outlets with high quality services. The investment program involves the purchase or leasing of retail locations, characterized by their large dimensions and prestigious locations in city centers and shopping malls.

The accelerated network renewal activity resulted in 121 directly operated shops and 179 megastores (shops with a selling surface exceeding 650 square meters) at the end of 2003. Megastores are run by either Benetton or by third parties.

Refurbished in order to house the complete men, women and children's casual wear collection, megastores offer the entire range of Benetton style and quality.

 > Manufacturing

Benetton's manufacturing operations are based in its own factories and those of a network of subcontractors. Presently Benetton has 21 factories operating for the casual business, 15 of which are located in Italy and one each in Spain.

Croatia, India, Portugal, Tunisia and Hungary. The Company utilizes almost 720 subcontractors to perform one or more steps in the production process. Subcontractors are located near the Company's production facilities in northeastern Italy, although subcontractors are also used outside Italy. The Company undertakes the highest value-added portions of the manufacturing process in its own facilities. In 2003, charges from subcontractors represented approximately 70% of Benetton's production costs. The principal raw materials purchased by the Company are wool, raw cotton, yarn, cloth and denim fabrics. Although the Company does not have formal, long-term contracts with its suppliers, it has not experienced interruptions in supply that have had material impact on its activity. The Company's manufacturing processes utilize modern technology and automatization to reduce costs and accelerate its execution.

In 2003, the production of casual clothing and accessories amounted to 108 million units. The production system was improved during the year. Based on the Italian manufacturing organization, the Benetton production system model can now count on a series of industrial clusters operating in Hungary, Croatia, Tunisia and Spain, consisting of facilities directly controlled by the Group and a network of selected, external suppliers. The majority of the investments in 2003, totaling approximately Euro 18.5 million, involved principally the renewal and improvement of some of the production processes of the Italian manufacturing facilities.

The upgrade to the logistics center in Castrette in Italy brought daily capacity to 40,000 cartons of merchandise, with a capability to handle peak loads of up to 50,000 cartons. The upward trend in the Group's manufacturing output and the necessity of achieving greater integration, flexibility and speed, determined by the evolution of the commercial organization, notably the rapid development of the megastore and retail distribution network, have been sustained by the gradual introduction of state-of-the-art technology, without interruption to the center's operations. Having completed conversion of the first module of the upgrade, work started in 2001 on the second phase, which was completed by the summer of 2002 and trebled the logistic center's total capacity.

In 2003, approximately 68% of the purchases of materials were from the Group's manufacturing companies. The main raw materials used by the Group's manufacturing units are wool and cotton. To produce the materials, the Group buys the raw materials from wholesalers at prices reflecting market quotations on the relevant commodity market, which in the case of wool, is by reference to the AWEX index (Australian Wool Exchange) and in the case of cotton, is the price on the NYCE (New York Cotton Exchange). The Group purchases raw materials from suppliers or wholesalers in Australia, Europe and South America in the case of wool, and Asia, America and Africa in the case of cotton. The price includes two components: market quotation for the relevant raw material and the currency exchange rate, which, in the case of wool, is the Euro against the Australian dollar and, in the case of the cotton, is the Euro against the US Dollar. As a result, the price of the materials changes from time to time.

The rest of the materials purchased, which amounts to 32% of all materials purchased, are mainly textiles acquired from European suppliers.

  Sports sector

Benetton manufactures and markets sports garments and equipment for various sporting activities. The composition of sales by product line in year 2003 is as follows:

The figures for 2003 reflect the effect of the sale of the sports equipment business in the first half of 2003. The performances of the product lines reflect the sales in the period in 2003 when the relevant product line was still held by the Group as the various product lines were sold in separate sales. Accordingly, "Nordica", the brand of ski boots, ski and relevant accessories contributed to the profit and loss of the year for one month; "Prince", the brand of tennis racquets and relevant accessories contributed for 4 months and "Rollerblade", the brand of in-line skates, skateboards and relevant accessories contributed for 6 months.

The unsatisfactory performance of the sports segment in 2001 triggered a review of the sports sector of the Group. The overall results for the sportswear sector were not matched by those in the equipment sector, which has been particularly hard hit by the continuing downturn in the in-line skates market. As a result, it was necessary to implement a targeted program of reorganization, which began to take effect in the second half of 2001. With a general attention to controlling costs and evaluating investments, this program called for the reorganization of the sales force, including in the United States where a new Managing Director and a worldwide brand manager for Prince were appointed. It also involved an increase in outsourcing arrangements, optimization of the logistics system and consolidation of the brands' images as quality leaders, notably for the Nordica and Prince brands.

After the reorganization at the end of 2002, the decision was taken to sell the sports equipment business. This decision reflects the strategy of focusing activities on the core business of clothing.

In January 2003, the Group reached an agreement with the Tecnica group for the sale of the business activities relating to the Nordica brand. The sale took effect on February 1, 2003. The overall price for the transaction was determined on the basis of an independent valuation of all business components, such as, for example, existing plant, machinery and inventory as of January 31, 2003. The value of the intellectual property alone, including the Nordica trademark, was set at Euro 38 million.

Payment will be made in six monthly installment over five years starting in 2004. From June 2004, a further payment of 1% of the annual revenues earned by Nordica brand is expected to be received from the Tecnica Group, which will continue to make such payments for the next five years.

Under this deal, Benetton Group S.p.A. acquired 10% of the share capital of Tecnica S.p.A. for a value of Euro 15 million with a guaranteed put (sale) option which can be exercised from February 1, 2008, and a call (repurchase) option for the same 10% on the part of Tecnica S.p.A. which can be exercised between February 1, 2006 and January 31, 2008. The price cannot be lower than the amount effectively paid by Benetton Group S.p.A. (Euro 15 million) plus interest at 3-month Euribor plus a spread of 0.5%.

At the end of March 2003, the Group also formalized the sale of the Prince and Ektelon brands to Lincolnshire Management Inc., a U.S. private equity fund. The consideration for the sale of these brands and the associated intangible fixed assets amounted to Euro 36.5 million, of which Euro 10 million was received on April 30, 2003, the sale's completion date; the remaining Euro 26.5 million was received in January 2004.

Also during March 2003, the Benetton Group signed a binding preliminary agreement for the sale of the Rollerblade trademark to Prime Newco, a company within the Tecnica group. This transaction was formalized at the end of June 2003 with the receipt, collected in full on the contract date, of Euro 20 million just for the Rollerblade trademark. Other components of the business and the entire interest in the Swiss subsidiary, Benetton Sportsystem Schweiz A.G., were also transferred at the same time.

As additional consideration for the transfer of know-how, the Group will also receive 1.5% of Rollerblade's sales for the next five years, with a minimum guaranteed total payment of Euro 5 million. The results of operations associated with the Rollerblade trademark during the first six months of 2003 have been attributed to the Group.

After these operations, Benetton's principal remaining sporting goods trademarks are relevant to the sportswear as described below.

> Playlife. Playlife has established itself as the Group's sports clothing brand. The men's and women's collections offer a sporty and comfortable look, designed to provide maximum freedom for leisure wear. This brand's philosophy can be summarized as dressing with leisurely style. This philosophy is well expressed by the various Playlife apparel, shoe and accessory lines and themes which are present in selected specialized chains and department stores and more importantly within the Playlife dedicated stores. There were 154 of these stores established by the end of 2003.

> Killer Loop. Together with Playlife, Killer Loop is the brand with which Benetton Group is focusing on leisure-time sport apparel. Men's, women's and children's collections are all targeted at young, street-sport conscious consumers who can choose among a wide range of apparel, footwear and accessories with an emphasis on style and design. Playlife shops remain the priority distribution channel also for the Killer Loop sportswear offer. With an aim on concentrating attention and strengths on core category products, the decision was taken in 2001 to start selling snowboards under its license.

The following table sets forth the Group's net sales for the sector by geographic area for the last three years.

> Seasonality. Each business in the sports sector is characterized by seasonality depending on the nature of the related sports activity. The overall effect is to relatively concentrate sales in the second half of the year due to the effect of the winter sports collection, particularly sales of boots and skis.

> Distribution channels. Sports equipment was marketed through the traditional sports specialties distribution system, with particular emphasis on establishing dedicated display areas in the specialized sports stores for all the products within each of the ranges. Sportswear under the Playlife and Killer Loop brands are mainly marketed through a chain of stores identified with the Playlife brand name. Playlife stores follow the traditional Benetton entrepreneurial formula and are of an average surface of 200 square meters. At the end of year 2003, there were about 154 Playlife shops, mainly in southern Europe.

> Manufacturing

With the sale of the sports equipment business, the Group's production of racquets, skates and skis was terminated. The production in Hungary will continue for Nordica boots as subcontractors of the new owner of the brand, Tecnica Group. The Italian location in Trevignano was sold on May 31, 2003. As of December 31, 2003, the American warehouse located in Bordentown (N.J.) was considered "assets to be sold" as a preliminary agreement for the sale of the building had been signed. The sale took place in May 2004.

> Logistics

Sports equipment logistics, that operated in the past through three distribution centers: one each in the U.S.A., in the Far East and Italy ceased its operation as a result of the sale of the business.

Benetton Group S.p.A. is the holding company of the Benetton group companies. The following table sets forth the significant subsidiaries owned, directly or indirectly, by Benetton Group S.p.A.

The significant subsidiaries in the Group are

Benetton Group S.p.A. belongs to the Edizione Holding Group. Edizione Holding S.p.A. ("Edizione") is the holding company, with its registered office at Treviso, Calmaggiore 23 (Italy). Edizione has various investments in companies which operate in different business segments.

The following table sets forth the significant subsidiaries owned by Edizione, their respective business segments and controlling interest.

 D. Property, plants and equipment

The Group operates 21 factories, 16 of which are located in Italy, many in the Treviso area. In addition there is one factory each in Spain, India, Portugal, Tunisia, Hungary and Croatia.

Information on the individual locations is provided in the table below:

Trevignano was sold on May 31, 2003; Bordentown was sold in May 2004.

Most of these factories, which the Company considers suitable and adequate for its strategic purposes, are owned by the Group. The Sahline factory in Tunisia and the Maia factory in Portugal are leased. The Ponzano Veneto, Gorizia, Piobesi Torinese, Prato and Vittorio Veneto factories are owned under finance leases. The Travesio factory is partially owned under finance leases. The factory in Nagykàllò, Hungary continues to produce sports equipment for the new owner of the Nordica brand, Tecnica S.p.A.

The Company owns its headquarters in Ponzano Veneto, near Treviso, which includes offices, showrooms and design facilities covering approximately 24,000 square meters. Benetton's executive offices are located in an adjacent 17th-century villa occupying approximately 2,500 square meters. The Company also owns Villa Loredan, the old sports sector headquarters which covers approximately 9,300 square meters.

At the end of 2003, the Group owned 38 properties in Europe and Japan related to its commercial activities. Some of these properties are dedicated to the direct management of shops by the Group; others are leased to third parties which manage the shops. In addition, the Group directly manages about 120 shops in various cities worldwide which are leased.