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

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Data in € million 2009 2010 2011 Summary Balance Sheet Data: Non-current assets 5,613 5,389 5,279 Property, plan and equipment 4,387 4,243 4,113 Deferred income tax assets 1,151 1,077 1,048 Current assets 385 202 352 Inventory, trade and other receivables 122 119 148 Cash and cash equivalents 238 59 185 Total assets 5,998 5,590 5,631 Total liabilities 4,844 4,233 4,179 Trade and other payables 404 355 316 Long-term debt (1) 3,544 3,549 3,393 Total net equity 1,153 1,358 1,452 Shareholders´ contributions (2) 963 1,088 1,106 Total equity and liabilities 5,998 5,590 5,631 1) Long-term debt includes the Senior Facility as well as payment obligations relating to the Existing Subordinated Notes, derivatives and other financial long-term debt. Long-term debt does not include subordinated participative loans from GCO. (2) Shareholders’ contributions represent subordinated participative loans from GCO to Cableuropa and include €125 million contributed in May 2010 in connection with the amendment of the Senior Facility and Capitalised in 2011. 56
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ONO MIDCO The discussion below is based on the Audited Financial Statements of ONO Midco (at the end of this report). You should also read the following commentary together with the sections entitled “Selected Historical Consolidated Financial Information of ONO Midco,” “Risk Factors,” “Business” and the Audited Financial Statements of ONO Midco and the related notes thereto included elsewhere in this <strong>Report</strong>. The following discussion contains forward-looking statements, including those described in the “Information Regarding Forward-Looking Statements” section above, that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of, among others, the factors described below and elsewhere in this <strong>Report</strong>, including in “Risk Factors”. Except as may be required by applicable law, we will not publicly update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. Overview We are the second largest provider of broadband internet, pay television and fixed telephony services in Spain. Through our proprietary state-of-the-art network, we offer our services to over 7 million homes across Spain, including the nine largest cities. We are the only fiber operator in Spain with national coverage. As of December 31, 2011, we provide over 4.4 million services under the ONO brand to approximately 1.9 million residential (Fiber and ADSL) customers and approximately 89 thousand SMEs in Spain. We also offer products and services to large corporations and public sector entities, as well as to the wholesale market. We are the principal competitor to the incumbent telecommunications and pay television operators in Spain. For the year ended December 31, 2011, we generated revenues of €1,485 million and EBITDA of €748 million and an EBITDA margin of 50.4%. In the same period our residential services generated revenues of €1,168 million (accounting for 78.7% of our total revenues), and our business and other services generated revenues of €317 million (accounting for 21.3% of our total revenues). Factors affecting our business during the periods under review The following tables sets forth certain information with respect to our network and services and the percentage change from period to period for each of the periods indicated: % change Data in units 2009 2010 2011 09/10 10/11 Residential fiber 1,825,212 1,810,639 1,806,598 (0.8%) (0.2%) Residential ADSL 76,632 87,546 93,509 14.2% 6.8% Total Residential customers 1,901,844 1,898,185 1,900,107 (0.2%) 0.1% SMEs customers 67,158 71,761 89,295 6.9% 24.4% % change Data in units, except if otherwise stated. 2009 2010 2011 09/10 10/11 Residential Fiber Homes released to marketing 7,003,679 7,029,692 7,042,797 0.4% 0.2% Customers 1,825,212 1,810,639 1,806,598 (0.8%) (0.2%) Penetration (%) 26.1% 25.8% 25.7% (0.3 pp) (0.1 pp) Net churn (%) 13.9% 15.5% 18.8% 1.6 pp 3.3 pp ARPU (€) 51.0 51.5 52.4 1.0% 1.7% RGUs 3,966,783 4,019,267 4,059,661 1.3% 1.0% Internet 1,325,781 1,379,552 1,428,850 4.1% 3.6% Television 975,005 953,387 922,537 (2.2%) (3.2%) Telephony 1,665,997 1,686,328 1,708,274 1.2% 1.3% RGUs per customer 2.17x 2.22x 2.25x 4.6 pp 2.7 pp Revenues (€m) 1,124 1,120 1,125 (0.4%) 0.4% Note: We do not report numbers of customers in the “large accounts & corporations” and “wholesale & other” business segments because such data is not meaningful. 57
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Report on ONO Midc
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• 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 and 54: programs and content in order to in
Page 55: SELECTED HISTORICAL CONSOLIDATED FI
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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Report on ONO Midco, SAU and its subsidiaries as of December 31 ...

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