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iesy Repository GmbH - Irish Stock Exchange

iesy Repository GmbH - Irish Stock Exchange

future. See “Risk

future. See “Risk Factors—Risks Relating to Our Business—Customer churn, or the threat of customer churn, may adversely affect our business.” Under ish’s existing customer care and billing systems, ish tracks the number of customer contracts that are added and terminated. These numbers include, among other factors, contract renewals and terminations attributable to churn (which is the number of subscribers that disconnect from ish’s network and irrespective of whether or not such customers reconnect under a new contract). Churn is caused by a number of factors, the principal factor being house moves, as well as competition and pricing. See “Risk Factors—Risks Relating to Our Business—We operate in competitive industries, and competitive pressures could have a material adverse effect on our business” and “Business—Competition.” Although ish’s ability to reduce its customer churn rate is limited by certain factors, such as customers moving outside ish’s network service area, managing its customer churn rate is a significant component of ish’s business plan. To help meet these objectives, ish intends to continue to improve upon its historic record of customer care, improve and introduce new product offerings and enhance its direct contact with customers. ARPU ARPU (average revenues per unit) is a measure ish uses to evaluate how effectively ish is realizing potential revenues from customers. ARPU is generally calculated on a yearly, quarterly or monthly basis by dividing total sales generated from the provision of services by the average number of subscribers served in that period and by the number of months in the period. The basic cable ARPU for the three months ended March 31, 2005 was €7.21 and for the year ended December 31, 2004 was €7.36. Detailed below is ARPU for the three months ended March 31, 2004 and 2005 and for the years ended December 31, 2003 and 2004 based on segments: As of and for the twelve months ended As of and for the three months December 31, ended March 31, 2003 2004 2004 2005 Subscriber segment Basic cable television (1) 7.52 7.36 7.13 7.21 Adjusted basic cable television (2) 7.39 — 7.36 — Premium cable television (3) 6.20 8.02 5.60 7.29 High speed Internet (4) 37.75 33.07 38.22 28.97 Telephony (5) 25.11 25.11 25.75 26.62 (1) Calculated by dividing basic cable television subscription revenues (including installation fees, but excluding carriage fees) for a period by the average number of basic cable subscribers for that period and the number of months in that period. ish’s basic cable ARPU number for the 12 months ended December 31, 2003 does not include approximately 135,000 Tele Columbus subscribers, which were added to ish’s subscriber number in 2004, when its contract with Tele Columbus was renegotiated. (2) ish’s basic cable ARPU number for the 12 months ended December 31, 2003 adjusted to include approximately 135,000 Tele Columbus subscribers, which were added to ish’s subscriber number in 2004, when its contract with Tele Columbus was renegotiated. (3) Calculated by dividing its premium cable television subscription revenues (including installation fees, but excluding carriage fees) for a period by the average number of its premium cable television subscribers for that period and the number of months in that period. (4) Calculated by dividing high speed Internet subscription revenues (including installation fees) for a period by the average number of high speed Internet subscribers for that period and the number of months in that period. (5) Calculated by dividing telephony subscription revenues for a period by the average number of telephony subscribers for that period and the number of months in that period. ish’s basic cable subscriber ARPU increased by 1.1%, from €7.13 in the three months ended March 31, 2004 to €7.21 per subscriber in the three months ended March 31, 2005. This increase reflects an improvement in the mix of subscribers. ish’s basic cable subscriber ARPU decreased by 2.2%, from €7.52 per subscriber in the year ended December 31, 2003 to €7.36 in the year ended December 31, 2004. ish believes this mainly reflects a change in the way that 135,000 subscribers are counted pursuant to ish’s agreement with Tele Columbus (i.e. more subscribers are recognized, but there has been no change in the amount paid to ish by the strategic accounts customer). 120 (€)

Competition ish faces significant competition in each of its businesses. ish’s ability to acquire and retain customers and increase sales depends on its continued level of service and enhanced product offerings. If competitive forces prevent ish from charging the prices for these services that ish plans to charge, or if ish’s competition is able to attract its customers or potential customers it is targeting, ish’s results of operations will be negatively affected. For further details as to the competition that ish faces, please see “Business—Competition” and “Risk Factors—Risks Relating to Our Business—We operate in competitive industries, and competitive pressures could have a material adverse effect on our business.” Trade Receivables and Bad Debt ish’s trade receivables declined from €28.8 million as of March 31, 2004 to €13.1 million as of March 31, 2005. The decline is largely attributed to the timing of billing of Tele Columbus and a settlement with MSG for prior periods achieved in the first quarter of 2004. ish’s trade receivables declined from €21.4 million as of December 31, 2003 to €12.1 million as of December 31, 2004. The decline is largely attributed to the collection of MSG receivables on a timely basis. ish’s bad debt allowance policy is to provide general and specific allowances based on aging and customer groups on a prudent basis. Seasonality Certain aspects of ish’s business are subject to seasonal factors. In particular, ish has a disproportionately high level of annual prepayments in the months between November and February, which results in a higher level of accounts receivable and cash flow from operations in these months each year. Recent Developments On March 11, 2005, Kabelnetz NRW Ltd., the former parent of ish, entered into a definitive agreement with iesy Hessen, for the ish Acquisition. On June 24, 2005, iesy Hessen completed its acquisition of ish. The cash consideration for the ish Acquisition was funded by a combination of existing cash on hand and the proceeds of the Refinancing and the Financing. See “The ish Acquisition” for further details. On April 21, 2005 ish entered into several agreements with Premiere, SCAS Satellite Services GmbH, Nagra and BetaResearch, which were modified by an addendum dated June 14, 2005. Subject to certain restrictions, these agreements grant ish different software licenses required to operate conditional access systems in North Rhine-Westphalin using combined BetaResearch/Nagra technology. If not renewed, the licenses will expire on December 31, 2007. These licenses permit ish to use its own Nagra smart cards to provide its digital offering to those of its end customers who already have MSG/Premiere set-top boxes, or smart cards. In April/May 2005 ish entered into a cooperation agreement with Gelsennet Kommunikationsgesellschaft mbH, a medium-size Level 4 provider, under which ish provides signal delivery and several other services for approximately 16,000 homes. As of May 31, 2005, ish had approximately 4.0 million basic cable subscribers and approximately 71,000 premium cable television cable subscribers, of which approximately 60,000 subscribed to ish’s foreign-language programming packages, reflecting a decrease of approximately 2.4% subscribers to ish’s basic cable programming and an increase of approximately 63.0% subscribers to ish’s premium cable television services since December 31, 2004. This fluctuation in subscriber numbers primarily reflects disconnections by customers of their annual contracts at the end of 2004 and an adjustment of ish’s subscribers due to an error which resulted in the double counting of approximately 17,000 customers under ish’s agreement with Tele Columbus. In addition, due to the prices increase for approximately 366,000 customers that has been in effect since April 2005, ish expects some additional churn within this subscriber group in the second quarter of 2005. As of May 31, 2005, ish had approximately 20,661 high speed Internet subscribers and approximately 8,194 telephony subscribers, reflecting an increase of approximately 28.3% subscribers to ish’s high speed Internet services and an increase of approximately 81.8% subscribers to ish’s telephony services since December 31, 2004. 121

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    PROSPECTUS iesy Repository GmbH €

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    the market price of the Notes at a

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    which the issue or the offer of sec

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    “combined entity”, and “we”

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    “Tele Columbus” refers to the c

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    Revenue generating units, or “RGU

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    CURRENCY PRESENTATION AND EXCHANGE

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    end of 2005. Our subscribers can al

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    populations, with approximately 2.7

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    In April/May 2005, iesy entered int

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    Our Corporate and Financing Structu

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    THE OFFERING The summary below desc

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    Optional Redemption We may redeem a

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    SUMMARY FINANCIAL AND OPERATING INF

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    iesy Other Financial Data (unaudite

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    iesy Operational Data (unaudited) R

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    ish Income Statement Data Audited y

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    35 Three months ended Year ended De

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    37 As of December 31, As of March 3

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    RISK FACTORS You should carefully c

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    acquiring content, purchasing servi

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    agreements—MSG”). We cannot ass

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    In addition, most of our cable netw

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    Strikes or other industrial actions

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    acquisitions. In addition, any addi

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    provision and may not be abusive. S

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    €1,050.0 million would have been

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    We depend on payments from our subs

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    • Claims against the Issuer and s

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    Senior Credit Facilities before the

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    court rulings did not address the p

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    THE ISH ACQUISITION The description

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    In addition to the warranties, spec

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    CAPITALIZATION The following table

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  • Page 71 and 72: NOTES TO THE UNAUDITED PRO FORMA CO
  • Page 73 and 74: (€m, except percentages) Pro form
  • Page 75 and 76: Income Statement Data 75 Audited Ye
  • Page 77 and 78: (7) Number of subscribers at the en
  • Page 79 and 80: • iesy’s premium cable televisi
  • Page 81 and 82: egulated pricing model. Fees are pa
  • Page 83 and 84: Risks Relating to Our Indebtedness
  • Page 85 and 86: Legal, Consulting and Management Fe
  • Page 87 and 88: Subscribers iesy classifies its cus
  • Page 89 and 90: 2003 to €8.20 per subscriber in t
  • Page 91 and 92: • the senior credit facilities we
  • Page 93 and 94: average installation fees from July
  • Page 95 and 96: Cash flow from investing activities
  • Page 97 and 98: In the three months ended March 31,
  • Page 99 and 100: eview and optimization of services
  • Page 101 and 102: Cash Flow from Operating Activities
  • Page 103 and 104: oadcasters in television and radio.
  • Page 105 and 106: educed or increased by a material a
  • Page 107 and 108: Income Statement Data Audited year
  • Page 109 and 110: 109 As of December 31, As of March
  • Page 111 and 112: • ish’s premium cable televisio
  • Page 113 and 114: In addition, ish markets pay-per-vi
  • Page 115 and 116: Cost of Materials and Services Cost
  • Page 117 and 118: For accounting purposes, ish treats
  • Page 119: Subscribers ish classifies its cust
  • Page 123 and 124: This decrease was primarily due to
  • Page 125 and 126: Net Loss Net loss was €17.9 milli
  • Page 127 and 128: Pension Obligations As of March 31,
  • Page 129 and 130: Term Sheets with DTAG, BRN-ish agre
  • Page 131 and 132: estructuring liabilities, while 200
  • Page 133 and 134: accrual for pending losses. The exp
  • Page 135 and 136: International Financial Reporting S
  • Page 137 and 138: Content Providers Basic Television
  • Page 139 and 140: Digital Home” and PrimaCom offers
  • Page 141 and 142: [GRAPHIC] [GRAPHIC] Level 4 is the
  • Page 143 and 144: shared access basis. In this case,
  • Page 145 and 146: The following table shows several k
  • Page 147 and 148: In the domestic market, the German
  • Page 149 and 150: BUSINESS Unless otherwise indicated
  • Page 151 and 152: Germany, with approximately 30.2 mi
  • Page 153 and 154: Prudently deploying capital. Our de
  • Page 155 and 156: iesy’s Current Basic Cable Televi
  • Page 157 and 158: amounted to €8.0 million or 5.9%
  • Page 159 and 160: within iesy’s upgraded areas and
  • Page 161 and 162: Supply The following chart shows th
  • Page 163 and 164: Term Sheet Service Duration Offer o
  • Page 165 and 166: y the new fiber system. See “Oper
  • Page 167 and 168: part of settling arbitration procee
  • Page 169 and 170: Business of ish Products and Servic
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    ish’s Current Basic Cable Televis

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    In addition to the monthly subscrip

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    Customers who subscribe to Premiere

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    Sales ish’s sales team is divided

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    The following chart illustrates ish

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    Term Sheet Service Duration Co-use

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    Lease of space for broadband cable

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    Other Significant Supply Agreements

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    ights themselves. As an exception,

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    Competition The cable television an

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    Introduction REGULATION German law

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    We assume that we will be deemed to

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    The Amendment provides that provisi

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    • Providers who had a dominant po

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    in the Munich office of Apax Partne

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    Marketing for Germany and Austria,

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    Gerard Tyler is ish’s Treasurer.

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    CERTAIN RELATIONSHIPS AND RELATED P

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    Beneficial Ownership The following

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    DESCRIPTION OF OTHER INDEBTEDNESS T

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    period (unless the interest period

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    Subordinated Bridge Facility In con

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    • the ability of the Obligors (ot

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    owed by the Insolvent Obligor will

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    DESCRIPTION OF THE NOTES The Issuer

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    in London, the Bank of New York, Ne

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    Issuer have agreed that iesy Hessen

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    Subsidiary Guarantor outstanding wh

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    the amount of their secured claim.

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    provisions described under “—De

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    In addition, the Intercreditor Agre

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    Euro Note to and including February

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    circumstances referred to above exi

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    that it has unconditionally exercis

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    time outstanding not exceeding (i)

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    description of this covenant and no

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    Date of any Indebtedness that has b

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    (13) Investments in an aggregate am

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    supplement or other modification) t

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    (1) the assumption by the transfere

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    Reports Whether or not required by

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    of the European Union on January 1,

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    contemporaneously with any such act

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    25% in principal amount of the outs

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    (2) provide for the assumption by a

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    (6) an Officer’s Certificate stat

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    calculated based on the relevant cu

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    “Bank Indebtedness” means any a

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    Consolidated Net Income (excluding

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    (9) the impact of capitalized inter

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    “Exchange Act” means the U.S. S

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    (iii) for the avoidance of doubt, a

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    “Nationally Recognized Statistica

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    (2) Investments in another Person i

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    (15) Permitted Collateral Liens; (1

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    (5) in the case of Apollo and Golde

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    service level agreement as replaced

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    “Unrestricted Subsidiary” means

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    The Issuer and the Trustee and thei

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    Secondary Market Trading The Book-E

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    to trade tax. The taxable gain from

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    date). A U.S. Holder’s adjusted t

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    (c) for so long as the Notes are el

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    PLAN OF DISTRIBUTION We, the Subsid

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    LEGAL MATTERS Certain legal matters

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    WHERE YOU CAN FIND OTHER INFORMATIO

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    Listing LISTING AND GENERAL INFORMA

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    INDEX TO FINANCIAL STATEMENTS iesy

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    Assets iesy Hessen GmbH & Co. KG, W

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    I. Application of Legal Provisions

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    III. Explanation of Balance Sheet a

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    Last year’s extraordinary expense

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    INDEPENDENT AUDITORS’ REPORT We h

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    iesy Repository GmbH, Hamburg AMEND

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    and remaining useful life for the i

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    The movements in consolidated equit

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    iesy Repository GmbH, Hamburg AMEND

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    Assets iesy Repository GmbH, Hambur

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    I. Basis of Presentation The consol

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    V. Explanations to Material Items o

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    Network infrastructure, rental, lea

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    iesy Repository GmbH, Hamburg UNAUD

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    1. Basis of Presentation iesy Repos

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    5. Explanations to Material Items o

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    Shareholdings of iesy Repository Gm

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    iesy Hessen GmbH & Co. KG, Weiterst

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    (1) General COURTESY TRANSLATION FR

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    (3) Accounting and Valuation Princi

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    The following auditors’ report (B

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    Inventories COURTESY TRANSLATION FR

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    Goodwill COURTESY TRANSLATION FROM

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    COURTESY TRANSLATION FROM THE GERMA

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    Depreciation and Amortization COURT

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    (1) General COURTESY TRANSLATION FR

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    COURTESY TRANSLATION FROM THE GERMA

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    Cost of materials COURTESY TRANSLAT

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    [THIS PAGE INTENTIONALLY LEFT BLANK

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    Goodwill. Under German GAAP, the di

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    Under U.S. GAAP, loan origination f

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    IFRS requires a purchase price allo

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    financial liability incurred result

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    €235,000,000 10 1 /8% Senior Note

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