iesy Repository GmbH - Irish Stock Exchange

OPERATING AND FINANCIAL REVIEW AND PROSPECTS OF ISH
The following discussion and analysis is based on the unaudited consolidated financial information for the three
months ended March 31, 2004 and 2005 and the audited consolidated financial statements for the years ended December 31,
2003 and 2004 of ish and the unaudited financial information for the year ended December 31, 2003, including the
aggregated twelve months of operating business, for the subsidiaries of ish.
You should read the following discussion of ish’s results of operations and financial condition in conjunction with the
sections entitled “Summary—Summary Financial and Operating Information,” “Selected Financial and Operating
Information of ish” and “Risk Factors” and with the financial statements and the related notes of ish included elsewhere in
this Prospectus.
Historically, ish’s financial information has been prepared on the basis of German GAAP. In the future, ish may also
choose to or be required to adopt IFRS. For a discussion of certain significant differences between German GAAP, U.S.
GAAP and IFRS, as they apply or would apply to ish, see “Annex A: Summary of Certain Significant Differences Between
German GAAP and U.S. GAAP” and “Annex B: Summary of Certain Significant Differences Between German GAAP and
IFRS.”
In addition, you should note that the information presented is based on the unaudited financial information for the
three months ended March 31, 2004 and 2005, the audited financial information for the year ended December 31, 2004, the
audited financial information for the year ended December 31, 2003 (including eleven months of operations for the
subsidiaries acquired on January 31, 2003), and the unaudited financial information for the year ended December 31, 2003.
The unaudited financial information for the year ended December 31, 2003 is an aggregation of unaudited information for
the month ended January 31, 2003 of the operating business of ish GP, ish KG, ish KS GP, ish KS and KSG, all of which
were acquired by Kabelnetz KG on January 31, 2003, and the audited consolidated financial information for the year ended
December 31, 2003 of ish, including eleven months of operations for the subsidiaries acquired on January 31, 2003. Audited
consolidated financial information does not exist in relation to ish’s business prior to the 2003 ish Acquisition in January
2003, and comparability of actual information would also be limited because only the non-operating subsidiaries of ish,
Kabelnetz GP and Kabelnetz KG, were included in the consolidated ish financial statements prior to the 2003 ish
Acquisition. We have included the unaudited financial information for the twelve months ended December 31, 2003 because
it may be more useful for investors in comparing ish’s financial results in 2003 and 2004.
This unaudited financial information for the year ended December 31, 2003 has not been prepared in conformity with
SEC requirements, German GAAP, U.S. GAAP or any other accounting standards. Accordingly, the presentation,
assumptions and adjustments of this unaudited financial information may differ from that permitted under those standards,
and this unaudited financial information does not include adjustments to reflect the effects of purchase accounting or other
adjustments that may be necessary under those standards to reflect the effects of the acquisition discussed above as if it
occurred on January 1, 2003. The unaudited financial information may not be representative of the actual results that would
have occurred had the acquisition occurred on January 1, 2003. Investors are cautioned against placing undue reliance on
this unaudited information.
The following discussion and analysis of ish’s financial condition and results of operations contains forward-looking
statements. ish’s actual results could differ materially from those that are discussed in these forward-looking statements.
Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Prospectus,
particularly under “Risk Factors” and “Disclosure Regarding Forward-Looking Statements.”
Factors Affecting ish’s Results of Operations
ish’s results of operations have been, and will continue to be, affected by a number of events and actions, some of
which are beyond ish’s control. However, there are some specific items that ish believes have impacted ish’s results of
operations and, in some cases, will continue to impact ish’s results on a consolidated level and within ish’s individual
business units. In this section, we discuss the ways in which ish generates revenues and the main costs associated with
generating these revenues. We also discuss several additional factors that we believe have, or could have, an impact on these
results, such as ish’s indebtedness, customer churn, competition and capital expenditures. Please also see “Risk Factors.”
Overview of Total Revenues
ish derives revenues from five business activities:
• ish’s basic cable television business (including subscription and installation fees, but excluding carriage fees)
which generated €87.7 million (84.8%) of ish’s total revenues in the three months ended March 31, 2005 and
€359.5 million (84.8%) of ish’s total revenues for the year ended December 31, 2004;
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