Supplemental Disclosure Material - Ono

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The following table sets forth details of our net revenues and the percentage change from period to period for each of the periods indicated: Year ended December 31, Percentage change 2009 2010 2011 2009/2010 2010/2011 (euro in millions) Residential ............................................. 1,158 1,159 1,168 0.1% 0.8% Residential fiber ........................................ 1,124 1,120 1,125 (0.4)% 0.4% Residential ADSL ...................................... 34 39 43 14.7% 10.3% Business, wholesale & other ............................... 334 302 310 (9.6)% 2.6% SMEs ................................................ 70 73 77 4.3% 5.5% Large Accounts/Corporations ............................. 166 142 129 (14.5)% (9.2)% Wholesale and other ..................................... 98 87 104 (11.2)% 19.5% Indirect Access and other ................................. 10 8 7 (20.0)% (12.5)% Revenues from disposed assets ............................. 10 3 — (70.0)% n.a. Total net revenues ....................................... 1,512 1,472 1,485 (2.6)% 0.9% Overall net revenues in 2011 increased by €13 million, or 0.9%, to €1,485 million from €1,472 million in 2010, reversing the negative trend of the last years on the back of our new strategy. This is noticeable given the challenging industry and macroeconomic environment in which we have operated. Overall net revenues in 2010 decreased by €40 million, or 2.6%, to €1,472 million from €1,512 million in 2009, reflecting the decrease in business and other revenues partially offset by the slight increase in residential revenues. Residential Services Residential revenues are mainly comprised of monthly fees, initial connection charges, usage charges from our residential telephony services, sales of cable modems from our internet services and set-top box rental charges and variable fees for pay-per-view events from our fiber television services, as well as from our mobile services. Most of our customers receive our products and services through our fiber network; however an increasing number receive bundled telephony and internet services through ADSL technology. In 2011, residential revenues, which represented 78.6% of our revenues, increased by €9 million, or 0.8%, to €1,168 million from €1,159 million in 2010. In 2010, residential revenues, which represented 78.7% of our revenues in 2010, increased by €1 million, or 0.1%, to €1,159 million from €1,158 million in 2009. Residential Fiber Residential fiber services provide us with revenues from monthly fees and initial activation and connection charges from residential bundled and individual services; usage charges from residential telephony services; customer premise equipment rental charges; incoming interconnection; variable fees for pay-per-view and VoD services from fiber television services and other minor items. We currently offer our residential customers double- and triple-play packages of services which consist of telephony and either internet or television, or both services. period: The following table sets forth information on residential fiber services, and the percentage change from period to Year ended December 31, Percentage change 2009 2010 2011 2009/2010 2010/2011 (unaudited unless stated otherwise) Homes released to marketing (in thousands) .................... 7,004 7,030 7,043 0.4% 0.2% Customers (in thousands) ................................... 1,825 1,811 1,807 (0.8)% (0.2)% Penetration (percentage) ................................... 26.1% 25.8% 25.7% (0.3pp) (0.1pp) Net churn (percentage; most recent quarter) .................... 13.9% 15.5% 18.8% 1.6pp 3.2pp ARPU (euro; most recent quarter) ............................ 51.0 51.5 52.4 1.1% 1.6% Total RGUs (in thousands) ................................. 3,967 4,019 4,060 1.3% 1.0% Internet ............................................. 1,326 1,380 1,429 4.1% 3.6% Television ........................................... 975 953 923 (2.2)% (3.2)% Telephony .......................................... 1,666 1,686 1,708 1.2% 1.3% RGUs per customer ....................................... 2.17x 2.22x 2.25x 0.05x 0.03x Revenues (euro in millions, except percentages) (audited) ......... 1,124 1,120 1,125 (0.4)% 0.4% 32
In 2011, residential fiber revenue, which represented 75.8% of our revenues, increased by €5 million, or 0.4%, to €1,125 million from €1,120 million in 2010. Net monthly fee revenues continued to perform well mainly as a consequence of (i) the success of our bundling strategy with almost 98% of our new customers subscribing to a bundled service, (ii) the higher quality of our customer base with 30% of our broadband customers taking high-speed Internet packages from us and 90% of our Pay TV customers subscribing to non Essential DTV packages, and (iii) the €1 price plan increase to existing and new customers implemented in July 2011. This increase has enabled us to offset the decrease in variable revenues derived from the lower number of minutes of fixed-to-mobile and fixed-to-international calls, and the decrease in pay-per-view (PPV) and pay video-on-demand (VoD) events. In addition, the performance of our residential mobile business has also positively impacted revenues in the residential fiber segment during 2011. Having over 86% of ARPU coming from the monthly fee has proven beneficial in the current environment in which consumption based products are heavily affected and the market dynamics in acquisition and retention promotions are playing a more important role. In 2010, residential fiber revenue, which represented 76.1% of our revenues, decreased by €4 million, or 0.4%, to €1,120 million from €1,124 million in 2009 as a consequence of the difficult macroeconomic environment that negatively impacted our customer figures and variable revenues derived from telephony and pay television variable consumption. Residential fiber RGUs and RGU per customer increased in both periods, reflecting increased double- and tripleplay customers. As of December 31, 2011, 39.9% of our customers subscribed to triple-play bundle, compared to 39.0% at the end of 2010 and 35.8% at the end of 2009. ARPU increased to €52.4 in the fourth quarter of 2011 as compared to €51.5 in the fourth quarter of 2010. The increase in ARPU in the periods under review primarily reflected an increase in double- and triple-play customers, the positive uptake of higher broadband and TV services and our strategic pricing management. Penetration decreased by 0.1 percentage point to 25.7% as of December 31, 2011, from 25.8% as at December 31, 2010 and 26.1% as at December 31, 2009. Total residential fiber customers decreased by 0.2% in 2011 to 1,807 thousand and by 0.8% in 2010 to 1,811 thousand. Our net churn (based on the last quarter of each period) for our residential fiber business increased from 13.9% in 2009, to 15.5% in 2010 and to 18.8% in 2011. This increase was primarily driven by some customers dropping their telecommunication services to preserve their disposable incomes, along with the increased promotional activity experienced in the Spanish telecommunication market that has impacted a portion of our most price sensitive customers (mainly single play customers). Going forward we intend to continue focusing on stabilizing net churn with the implementation of a series of initiatives to promote customer loyalty (such as our recently launched 15 Mbps upgrade campaign), the development of better products (such as Docsis 3.0, TiVo, mobile), improved customer care, customer segmentation tools and tactical promotions. Broadband Internet: In 2011, broadband internet customers increased by 49 thousand, or 3.6%, to 1,429 thousand as of December 31, 2011. Broadband internet customers as a proportion of total residential fiber customers increased by 2.9 percentage points to 79.1% in 2011. Our residential broadband internet penetration increased to 20.3% at the end of 2011 from 19.6% at the end of 2010. The increase was a result of our efforts to acquire customers with this service combined with telephony or on a triple-play basis as well as our focus in high-speed internet offerings. As of December 31, 2011, over 424 thousand customers subscribed to our high-speed internet packages (30, 50 or 100 Mbps), which represents approximately 30% of our broadband customer base. We believe these excellent commercial results position ONO as the market leader in high-speed Internet in Spain. In February 2012, we completed the deployment of DOCSIS 3.0 technology in the Canary Islands and currently we have the capacity to deliver high-speed Internet of up to 100 Mbps to over 7 million homes within our network coverage areas, representing our entire fiber customer base. In 2010, broadband internet customers increased by 54 thousand, or 4.1%, to 1,380 thousand as of December 31, 2010. Broadband internet customers as a proportion of total residential fiber customers increased by 3.6 percentage points to 76.2% in 2010. Our residential broadband internet penetration increased to 19.6% at the end of 2010 from 18.9% at the end of 2009. Television: In 2011, fiber television customers decreased by 31 thousand, or 3.2%, to 923 thousand as of December 31, 2011. Fiber television customers as a proportion of total residential fiber customers decreased by 1.6 percentage points in 2011 to 51.1% as of December 31, 2011. The penetration of fiber television services decreased by 0.5 percentage point to 13.1% at the end of 2011. The decrease in television customers was mainly derived from the negative macroeconomic environment under which we have operated in that has forced our most price sensitive customers to drop the television service to preserve their disposable incomes. In 2010, fiber television customers decreased by 22 thousand, or 2.2%, to 953 thousand as of December 31, 2010. Fiber television customers as a proportion of total residential fiber customers decreased by 0.8 percentage points in 2010 to 52.7% as of December 31, 2010. The penetration of fiber television services decreased by 0.4 percentage point to 13.6% at the end of 2010 from 13.9% at the end of 2009. During 2010, the decrease in television customers was mainly due to the fact that we ceased offering this product on a stand-alone basis and focused on acquiring customers with telephony and broadband bundles, which enjoy lower net churn rates, and a discontinuation of promotions relating to “TV Esencial”, a low-cost television package. Telephony: In 2011, the number of telephony customers increased by 22 thousand, or 1.3% to 1,708 thousand as of December 31, 2011. Telephony customers as a proportion of total residential fiber customers increased by 1.5 percentage 33
Page 1 and 2: Investor release Update to ONO Disc
Page 3 and 4: • increases in operating costs an
Page 5 and 6: capital structures (affecting inter
Page 7 and 8: SUMMARY The following summary highl
Page 9 and 10: Focusing on high-quality customers:
Page 11 and 12: Our Strategy switches already initi
Page 13 and 14: as well as through continuous cost
Page 15 and 16: RISK FACTORS An investment in the N
Page 17 and 18: The New Senior Facility and other a
Page 19 and 20: Telefónica has, among other compet
Page 21 and 22: Our reputation may be harmed if we
Page 23 and 24: could affect our ability to comply
Page 25 and 26: Telecommunications, it has defined
Page 27 and 28: MANAGEMENT’S DISCUSSION AND ANALY
Page 29 and 30: customer loyalty (such as our recen
Page 31 and 32: for a minimum contract term of 12 m
Page 33 and 34: period under review have resulted i
Page 35 and 36: The following table sets forth cust
Page 37: Interest expense is expected to inc
Page 41 and 42: Large Accounts & Corporations Reven
Page 43 and 44: decreased by €6 million, or 1.6%,
Page 45 and 46: Cash flows used in investing activi
Page 47 and 48: Quantitative and Qualitative Disclo
Page 49 and 50: INDUSTRY Certain information set fo
Page 51 and 52: depend on Telefónica’s network,
Page 53 and 54: Telefónica is the primary provider
Page 55 and 56: We were granted concessions in the
Page 57 and 58: In addition, national digital terre
Page 59 and 60: Large Accounts & Corporations: We p
Page 61 and 62: The Revolving Facility in the amoun
Page 63 and 64: take more than one of our services.
Page 65 and 66: August 2010. In October 2010, we la
Page 67 and 68: of €13.3 million. While this deve
Page 69 and 70: The installation process is the fir
Page 71 and 72: Network Architecture Access Network
Page 73 and 74: L2/L3 Packet Transport Layer ONO’
Page 75 and 76: includes the full amount received f
Page 77 and 78: latter only until the future “Nat
Page 79 and 80: CMT notification must declare compl
Page 81 and 82: to use the spectrum in the referred
Page 83 and 84: Holders of spectrum concessions are
Page 85 and 86: Finally, in order to protect viewer
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(6) Appointed as proposed by Quadra
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2012: The following table shows the
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SHAREHOLDERS AND BENEFICIAL OWNERS
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Banco Santander, S.A. is Spain’s
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DESCRIPTION OF OTHER INDEBTEDNESS T
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Date June 30, 2015 ................
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Notwithstanding the foregoing, the
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For the purposes of calculating the
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New Intercreditor Agreement Cableur
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ONO MIDCO, S.A.U. AND SUBSIDIARIES
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T SKYLAB MENTARY DISCLO RR Donnelle
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Debts and payables ONO MIDCO, S.A.U
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Credit lines ONO MIDCO, S.A.U. AND
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Clause CONTENTS 1. Definitions and
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“Agent’s Spot Rate of Exchange
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(b) in relation to an Ancillary Com
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“Charged Property” means all of
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“Consolidated Revenues” means t
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“Dormant Subsidiary” means a me
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“Facility A Loan” means a loan
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(e) (f) (g) (h) (i) (j) (k) amounts
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additional interest or fees shall n
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For the avoidance of doubt: (a) (b)
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and the Margin for the Loan under F
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“Participating Member State” me
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(ii) (iii) (iv) (v) (vi) the Chief
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“Permitted Guarantees” means: (
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(iii) (iv) (v) such security shall
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“Relevant Facility Lender Increas
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Affiliates provided that any such t
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(d) (e) (f) (g) has the right to ex
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“Total SPV Tranche 3 Commitments
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(iii) in the case of a drawn Commit
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(ii) (iii) if the Obligors have ent
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(iii) no later than the Specified T
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(ii) (iii) (iv) on the Execution Da
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documentation and other evidence ab
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(b) (c) (d) The Company may, at any
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and in each case the Obligor shall
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(ii) the amount which that Rollover
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5.5 Ancillary Commitments The maxim
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(ii) (iii) it becomes unlawful in a
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SECTION 4 REPAYMENT, PREPAYMENT AND
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(ii) the Repayment Instalments rela
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8.5 Voluntary prepayment of Revolvi
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(f) Cash sweep: If Consolidated Exc
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(c) The Agent (with which the Manda
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provided that payments to a Lender
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(ii) before close of business in Lo
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15.3 Tax Credit If an Obligor makes
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(b) Each Obligor waives any right i
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SECTION 7 GUARANTEE 20. GUARANTEE A
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20.9 Release of Guarantors’ right
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High-Yield Notes), nor do they caus
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ights of pledge by means of such fo
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(c) A review of which Group compani
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23. FINANCIAL COVENANTS 23.1 Financ
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23.2 Interpretation Following a Per
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such deadlines and under such condi
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exchange rate fluctuations in respe
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except: (A) (B) in the case of sub
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and, in the event of: (A) (B) a sha
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(f) Irrevocable power of attorney o
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(i) (j) (k) (l) (m) (n) (o) (p) Mat
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SECTION 9 CHANGES TO PARTIES 26. CH
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(ii) (iii) (iv) (v) the New Lender
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(d) (i) (ii) (iii) (iv) (v) A Debt
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(Transaction Security) over: (i) al
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28.7 Resignation and release of Sec
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29.3 Role of the Arranger Except as
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(c) (d) The Agent will not be liabl
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29.15 Credit appraisal by the Lende
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(ii) the other Finance Party had an
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(d) Promptly upon the appointment o
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34.2 Addresses The address and fax
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35. CALCULATIONS AND CERTIFICATES 3
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(b) For the purposes of this Agreem
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(iii) require such Lender to (and s
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(iv) (v) (vi) (vii) (viii) (ix) (x)
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(iv) a notarial document (acta nota
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EXECUTION COPY DATED 24 MAY 2012 CA
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THIS AGREEMENT is dated 24 May 2012
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“EIB Facilities” means one or a
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“Future Subordinated Facilities D
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(e) has instituted against it a pro
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“Payment” means, in respect of
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Senior Liabilities and none of the
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(ix) (x) a “regulation” include
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(h) The Majority of Senior Creditor
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(B) (C) (D) (E) the legality, valid
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(k) (l) (m) (n) (o) (p) (q) Each of
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(e) (f) No Party (other than the In
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3. RANKING OF LIABILITIES 3.1 Liabi
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5.2 Restrictions on Enforcement Act
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6. TURNOVER BY CREDITORS 6.1 Turnov
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7.3 Terms of Permitted Hedge Agreem
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8.5 Basis of Distribution (a) (b) F
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11. AMENDMENTS TO TRANSACTION SECUR
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(e) Each High-Yield Notes Trustee i
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13.17 Requirement for bond or suret
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(c) any new Ancillary Lender (which
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(ii) if by way of letter, when it h
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(b) (c) apply regardless of the ord
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Cable Funding Limited or for the ap
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Supplemental Disclosure Material - Ono

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