Annual report (20-F) - Ono

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Cableuropa, S.A.U. (the “Company” or “Cableuropa”) is a company organized under the laws of Spain. References to the “2010 EUR Notes” are to the €113,702,000 14% Notes due 2010, references to the “2011 USD Notes” are to the $58,920,000 14% Notes due 2011 and references to the “2011 EUR Notes” are to the €8,038,000 14% Notes due 2011 (together with the 2011 USD Notes, the “2011 Notes”) and references to the “2014 Notes” are to the €180,000,000 10.5% Notes and to the €100,000,000 Euribor 3m + 8.5% Notes due 2014, all issued by ONO Finance PLC, a financing company (“ONO Finance”). The 2010 Notes, the 2011 Notes and the 2014 Notes are collectively referred to as the “Notes.” References to the “ONO Group” include Cableuropa and its subsidiaries. Unless otherwise indicated or otherwise required by the context, all references in this Form 20-F to “EUR”, “euro” or “€” are to the euro, the lawful currency of Spain. References to “U.S. dollars,” “dollars,” “USD” or “$” are to United States dollars, the lawful currency of the United States of America. Amounts stated in U.S. dollars, unless otherwise indicated, have been translated from euro at an assumed rate solely for your convenience, and should not be construed as representations that euro amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated or at any other rate. Unless indicated otherwise U.S. dollar amounts have been translated from the euro at the rate of €1.00 = $1.3621, the euro foreign exchange reference rate published by the European Central Bank (“ECB”), on December 31, 2004. Cableuropa maintains its accounting records and prepares its statutory accounts in accordance with Spanish GAAP. The audited consolidated financial statements of Cableuropa as of December 31, 2003 and 2004 and for the years ended December 31, 2002, 2003 and 2004, and, unless otherwise indicated, other financial information in this Form 20-F, have been prepared in accordance with Spanish GAAP, which differs in certain significant respects from U.S. GAAP. For a discussion of the most significant differences between Spanish GAAP and U.S. GAAP relevant to us and reconciliations of net income and shareholders’ equity to U.S. GAAP, see note 27 of the notes to our consolidated financial statements included elsewhere in this Form 20-F. Certain Operational Definitions In this Annual Report, the following defined terms have the meanings indicated below: “ARPU” means monthly average revenue per user, and is calculated by dividing total revenues generated from our telephony, Internet and cable television services provided to customers that are directly connected to our network in any quarter by the average number of customers in that quarter, the result of which is divided by three. The average number of customers for any period is calculated by adding the number of customers at the beginning of the period to the number of customers at the end of the period and dividing by two. In this Annual Report ARPU is the ARPU for the fourth quarter of the relevant year only. “Churn” means the percentage obtained by dividing the number of customers who cease to receive any of our services (either voluntarily or involuntarily) in any quarter by the average total number of customers during that quarter, multiplied by four. The average number of customers for any period is calculated by adding the number of customers at the beginning of the period to the number of customers at the end of the period and dividing by two. In this Annual Report, churn is the churn for the fourth quarter of the relevant year, multiplied by four. “Homes passed” means homes for which all of the relevant network equipment has been activated. Homes passed can be released to marketing once the customer tap (an amplifier serving between four and eight homes) and drop (the final connection to a home) have been installed. “Homes released to marketing” means a home to which we can provide either telephony, Internet or cable television service within four days. “Penetration” is the percentage of customers over homes released to marketing in our franchise areas, and with respect to any particular service, penetration is the percentage of RGUs of that service over homes released to marketing in our franchise areas. 2
“RGUs” are revenue generating units where each customer is counted as a revenue generating unit for each service for which such customer subscribes, regardless of the number of services that customer receives from us. Thus a single customer who receives telephony, Internet and cable television services from us would account for three RGUs. Non-GAAP Financial Measures EBITDA and annualized EBITDA as well as the related ratios presented in this Annual Report are supplemental measures of our performance and liquidity that are not required by, or presented in accordance with, Spanish GAAP or U.S. GAAP. EBITDA and annualized EBITDA are not measurements of our financial performance or liquidity under Spanish GAAP or U.S. GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with Spanish GAAP or U.S. GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. We believe that EBITDA and annualized EBITDA facilitate comparisons of operating performance from period to period and company to company by eliminating potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), the age and booked depreciation and amortization of assets (affecting relative depreciation and amortization of expense), extraordinary items and minority interests. We also present EBITDA and annualized EBITDA because we believe that they are frequently used by securities analysts, investors and other interested parties in evaluating similar companies in our industry, many of whom present such non-GAAP financial measures when reporting their results. Finally, we present EBITDA and annualized EBITDA as a supplemental measure of our ability to service our debt. Nevertheless, EBITDA and annualized EBITDA have limitations as analytical tools, and you should not consider them in isolation from, or as a substitute for analysis of, our financial condition or results of operations, as reported under Spanish GAAP. Some of these limitations are: • EBITDA and annualized EBITDA measures do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; • EBITDA and annualized EBITDA measures do not reflect changes in, or cash requirements for, our working capital needs; • EBITDA and annualized EBITDA measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and annualized EBITDA measures do not reflect any cash requirements for such replacements; • EBITDA and annualized EBITDA measures do not reflect extraordinary income/expense or any other non-cash items; and • other companies in our industry may calculate these measures differently than we do, limiting their usefulness as a comparative measure. Because of these limitations, EBITDA and annualized EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our Spanish GAAP results and using EBITDA measures only supplementally. See our consolidated financial statements set forth in Item 18. 3
Page 1: SECURITIES AND EXCHANGE COMMISSION
Page 5 and 6: CONTENTS Clause Item 1. Identity of
Page 7 and 8: PART I Item 1. Identity of Director
Page 9 and 10: Reconciliation between EBITDA and n
Page 11 and 12: The table below shows the high and
Page 13 and 14: significant qualifications and exce
Page 15 and 16: • consolidate our brand in the ma
Page 17 and 18: operating and financial performance
Page 19 and 20: the products and services we offer
Page 21 and 22: • our ability to access the finan
Page 23 and 24: In March 2005, Cableuropa performed
Page 25 and 26: Our Strategy experience with cable
Page 27 and 28: We offer the following bundled serv
Page 29 and 30: Digital Television The introduction
Page 31 and 32: annual revenue of around €1 milli
Page 33 and 34: them are trained in our specific in
Page 35 and 36: • Andalucía Cluster. The Andaluc
Page 37 and 38: • Television line-up. Sogecable h
Page 39 and 40: In accordance with the General Law
Page 41 and 42: Telecommunications further requires
Page 43 and 44: Obligations According to the releva
Page 45 and 46: second telephony lines. The network
Page 47 and 48: Address Current Use Size (square me
Page 49 and 50: Address Current Use Size (square me
Page 51 and 52: The following are the key factors a
Page 53 and 54:
The following table sets forth reve
Page 55 and 56:
The following table sets forth cert
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total revenues to 28.6% for the yea
Page 59 and 60:
Net Extraordinary Income/(Expense)
Page 61 and 62:
needed before commercial launch of
Page 63 and 64:
Net cash provided by financing acti
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A number of these contracts are sub
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All decisions regarding our busines
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Leopoldo Calvo-Sotelo became an ind
Page 71 and 72:
Audit and Compliance Committee GCO
Page 73 and 74:
E. Share Ownership Currently none o
Page 75 and 76:
The shareholders’ agreement provi
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Dividend and Liquidation Rights Pay
Page 79 and 80:
• the aggregate increases approve
Page 81 and 82:
As security for the senior bank fac
Page 83 and 84:
The Indentures also provide for eve
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par value shares and subject to adj
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Where interest has been paid under
Page 89 and 90:
the avoidance of double taxation. H
Page 91 and 92:
possible application of the passive
Page 93 and 94:
a sale, exchange, retirement or dis
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The table below shows the variable
Page 97 and 98:
Item 16C. Principal Accountant Fees
Page 99 and 100:
No. 333-10976)). (Now superseded.)
Page 101 and 102:
Form F-4 (File No. 333-109976)). 4.
Page 103 and 104:
INDEX TO THE CONSOLIDATED FINANCIAL
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CABLEUROPA, S.A.U. AND SUBSIDIARIES
Page 107 and 108:
CABLEUROPA, S.A.U. AND SUBSIDIARIES
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Other subsidiaries: Company Name He
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d) Foreign exchange rate options Fo
Page 113 and 114:
Had the life of this debt not been
Page 115 and 116:
6. Start-up costs Euro thousand Bal
Page 117 and 118:
) Finance leases Computer hardware
Page 119 and 120:
9. Financial assets Euro thousand B
Page 121 and 122:
The detail of short and long term d
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Cancellation in 2003 of MBCF relate
Page 125 and 126:
(e) State Subsidies Starting in 200
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Options granted under the Phantom P
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(c) Reserves (accumulated losses) i
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(c) The movement in deferred tax as
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In 2004, 2003 and 2002, the Group
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Transactions Services received Serv
Page 137 and 138:
Euro thousand 2004 2003 Audit servi
Page 139 and 140:
Euro thousand 2004 2003 2002 Change
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Reconciliation of net profit / (los
Page 143 and 144:
Management of the Group considered
Page 145 and 146:
(n) Start-up costs. Under Spanish G
Page 147 and 148:
Amortization expense related to int
Page 149:
(h) Leases The group leases certain
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Annual report (20-F) - Ono

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