Report on ONO Midco, SAU and its subsidiaries as of December 31 ...

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Obligations According to the General Law on Audiovisual Communication and its implementing regulation, Cableuropa (and others) are subject to the following primary obligations: • Respect the rights of viewers set forth in the General Law on Audiovisual Communication; • With respect to the television channels (including pay-per-view) over which it holds editorial responsibility, Cableuropa must reserve 51% of its channels for European audiovisual production (50% out of the 51% reserve must be reserved for European audiovisual productions in any of the Spanish languages and 10% of the total quota shall be reserved for independent producers of which 10% must have been produced in the last five years); • With respect to on-demand audiovisual services over which it holds editorial responsibility, 30% of the catalogue of programs must be reserved for European audiovisual productions and half of the said 30% for European audiovisual productions in any of the Spanish languages; • To contribute on a yearly basis 5% of the total income accrued for the preceding fiscal year, according to its exploitation account, to the pre-financing of the production of certain audiovisual works such as, amongst others, full-length feature films, television films and series and documentaries and animated series and short movies, as long as Cableuropa (either in chronological schedule or in a catalogue) or the channels it broadcasts without bearing editorial responsibility over them include full-length feature films, television films and series, as well as documentaries and animated series and movies of recent productions, that are less than seven years old as of their production date. This 5% contribution has to comply with the following rules: • 60% out of the referred 5% must be devoted to works whose original language is one of the existing official languages in Spain; • 50% out of the referred 5% must be devoted to works of independent producers; • 60% out of the referred 5% must be devoted to full-length feature films; and • 40% out of the referred 5% can be devoted to television films or television series or miniseries. Despite not providing audiovisual communication services, Tenaria is also subject to the above 5% quota, as per the General Law on Audiovisual Communication. This 5% quota obligation was also included in the former Spanish Law on Television Without Frontiers (currently replaced by the General Law on Audiovisual Communication). In April 2010, the Spanish Constitutional Court accepted the filing of a constitutional claim against the 5% quota obligation set forth in the former Spanish Law on Television Without Frontiers. A final decision is still pending; • To comply with the rules regarding programming, advertising, teleshopping, sponsorships and programming legislation should be aimed at protecting children and people with vision and hearing disabilities; and • To comply with EU provisions and national legislation on intellectual property. In order to maintain informational and audiovisual pluralism, the public broadcaster RTVE must provide cable television operators with its radio and television channels for free broadcasting through their network. Nationwide digital terrestrial television operators must provide cable television operators with their main free-to-air television channels for broadcasting through their network, subject to negotiating the relevant price to be paid by cable television operators for such carrier service. Payments According to the RTVE Financing Law, since September 2009 pay television and audiovisual communication services operators are required to pay 1.5% of their television and other audiovisual communication services revenue on a yearly basis for the financing of public broadcaster RTVE. This contribution cannot exceed 20% of the total income anticipated for the relevant year in RTVE. ONO is challenging certain aspects of the contribution requirement before the Spanish Supreme Court. ONO has challenged the revenue calculation and classification methodology used by the CMT to determine the amount of ONO’s 1.5% contribution for 2009. 54
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ONOMIDCO On November 22, 2011 the Board of Directors of GCO approved a resolution by which the consolidated financial statements of the Group were prepared in accordance with International Financial <strong>Report</strong>ing Standards as adopted by the European Union (IFRS-UE, thereafter “IFRS”) and IFRIC interpretations, for the years ended December 31, 2011 and 2010 in accordance with current mercantile legislation applicable to those entities presenting financial information under IFRS, being these the Group’s first consolidated financial statements published in accordance with these standards. The Selected Financial Data presented below has been derived from ONO Midco’s unaudited consolidated financial statements as of and for the year ended December 31, 2009, the audited consolidated financial statements as of and for the year ended December 31, 2010, and the audited consolidated annual accounts for the year ended December 31, 2011. The audited financial statements and the audited consolidated annual accounts have been prepared in accordance with IFRS, which differs in certain significant respects from U.S. GAAP. The information in this table is only a summary and does not provide all of the information contained in ONO Midco's audited consolidated annual accounts. You should read the following financial information and operating data together with our audited consolidated annual accounts and notes The information presented below also includes certain other historical financial data for the ONO Group. For the year ended 31 December Data in € million 2009 2010 2011 Summary Income Statement Data: Residential 1,158 1,159 1,168 Residential fiber 1,124 1,120 1,125 Residential ADSL 34 39 42 Business, wholesale and other 334 302 312 SMEs 70 72 77 Large Accounts/Corporations 166 142 129 Wholesale and other 98 88 106 Indirect access 10 8 6 Revenues from disposed assets 11 3 - Total revenues 1,512 1,472 1,485 Operating expenses: Cost of sales (329) (310) (317) Staff costs (171) (161) (159) Other operating expenses (344) (342) (324) Costs capitalized as fixed assets and equipment 61 65 62 Depreciation, amortisation and impairment charges (390) (385) (379) Reversal of provision - - 9 Impairment and gains or losses on disposal of fixed assets (11) (2) (10) Other-losses/gains-net - - - Total Operating expenses (1,183) (1,134) (1,117) Operating profit 330 337 368 Net financial expense (245) (233) (247) Profit/(loss) before tax 84 104 121 Income tax (31) (62) (46) Profit/(loss) before non controlling interests 53 42 75 Non controlling interests 4 (1) (1) Net profit/(loss) 57 42 75 55
Page 1 and 2:
Report on ONO Midc
Page 3 and 4: • Operating free cash flow do not
Page 5 and 6: • the effect of changes in the re
Page 7 and 8: CONTENTS INFORMATION ON THE COMPANY
Page 9 and 10: RECENT DEVELOPMENTS Key operating e
Page 11 and 12: SUMMARY FINANCIAL INFORMATION AND O
Page 13 and 14: Reconciliation of EBITDA, operating
Page 15 and 16: RISK FACTORS In addition to other i
Page 17 and 18: We do not expect to generate suffic
Page 19 and 20: RISKS RELATING TO OUR BUSINESS We m
Page 21 and 22: altogether. In addition, the broadb
Page 23 and 24: evenues could be adversely affected
Page 25 and 26: • Regulations relating to accessi
Page 27 and 28: Wholesale & Other: We provide carri
Page 29 and 30: espectively), which stands in contr
Page 31 and 32: Our Products and Services We curren
Page 33 and 34: We offer all our broadband customer
Page 35 and 36: services, ranging from simple fixed
Page 37 and 38: coming years. For example, in June
Page 39 and 40: technology, although depending on O
Page 41 and 42: Supplier Network Equipment Next Gen
Page 43 and 44: not belonging to a group (following
Page 45 and 46: Telecommunications Law, the MIET ha
Page 47 and 48: The right to provide electronic com
Page 49 and 50: As holders of spectrum concessions
Page 51 and 52: A general provision against anticom
Page 53: programs and content in order to in
Page 57 and 58: MANAGEMENT’S DISCUSSION AND ANALY
Page 59 and 60: aggregate price of these services p
Page 61 and 62: Residential Services Residential re
Page 63 and 64: Operating data in units % change Fi
Page 65 and 66: Operating Expenses Our operating ex
Page 67 and 68: Net Financial Expense Our net finan
Page 69 and 70: Cash flows from investing activitie
Page 71 and 72: Currency Risk While the vast majori
Page 73 and 74: MANAGEMENT DIRECTORS AND SENIOR MAN
Page 75 and 76: Starman AS, Elipso Finance and Vest
Page 77 and 78: Víctor Guerrero is our Director of
Page 79 and 80: The amounts and percentages of shar
Page 81 and 82: filing and the court has to evaluat
Page 83 and 84: DESCRIPTION OF OTHER INDEBTEDNESS T
Page 85 and 86: Maturity: Tranche A and Tranche B m
Page 87 and 88: the event that at the end of each C
Page 89 and 90: Senior Secured Notes On October 22,
Page 91 and 92: • Second, in payment of the follo
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