In 2002 extraordinary depreciation and amortization on non-current assets in the amount of € 436 Mio (prior year € 237 Mio) have been recorded. Thereof € 9 Mio (prior year € 0 Mio) relate to tangible assets, € 246 Mio (prior year € 236 Mio) relate to goodwill, and € 181 Mio to the customer base. Furthermore new business development costs in the amount of € 33 Mio (prior year € 0 Mio) have been written off extraordinarily. Basis for the extraordinary write off of goodwill and customer base was an evaluation of the business. The value has been derived based on the following factors: • In 2003, the indirect shareholder of the iesy Group has changed, furthermore distribution of ownership of the indirect shareholder took place based on a capital increase made in May 2003. • A possible market price of the business operation was determined based on the expected EBITDA 2003/2004, using the multiplier method. The existing net indebtedness was deducted. The multiplier of 5.25 which was applied was based on transactions with comparable companies which took place in Germany in 2003. As a result, an attributable value of the company of € 217.3 Mio was determined. Receivables All receivables are due within one year. Equity The net loss for 2002 (€ 556,6 mill.) was debited to the capital reserve in compliance with the Company’s articles of association. Accruals Accruals have been essentially set up for bonuses, vacation not taken, onerous contracts (rent contracts), outstanding supplier invoices and long term purchase commitments. Liabilities are falling due as follows: 312 Due in up to one year Due in one to five years Due in more than five years T€ T€ T€ Liabilities to banks 0 26,250 23,750 Trade payable—third parties 13,149 0 0 Liabilities to affiliates 4,102 0 0 Liabilities to companies with share relationship 19,787 0 0 Other liabilities 1,337 0 0 Payables to companies in which the Company has a participating interest result from trade. Deferred Income 38,375 26,250 23,750 This item comprises revenues before the closing date due to receivables for which services will not be rendered before the following business year. Sales Total sales Cable television revenues 103,696 Program revenues 5,995 Sales reductions -1,098 T € 108,593 During the business year extraordinary expenses amounting to € 16,1 Mio have been incurred, due to the financial restructuring, discontinuation of the cable network expansion and personnel cuts related to this. The expenses related to the discontinuation of the cable network result essentially from compensation payments for cancellation of long-term contracts.
Last year’s extraordinary expenses result mainly from the compensation payments for the former management of iesy Holdings GmbH, Weiterstadt. Expenses incurred by iesy Holdings GmbH are to be reimbursed according to a management services agreement. Those expenses are presented in the following table: 313 2002 2001 T€ T€ Financial restructuring 8,066 0 Expenses of iesy Holdings GmbH 5,051 5,457 Discontinuation of the cable network 2,320 0 Severance payments 653 0 16,090 5,457 Other income amounting to € 3.4 Mio comprises income of other accounting periods resulting from release of accruals as well as a reimbursement of costs overstated in preceding years from various suppliers amounting to € 1.6 Mio. IV. Other Information Contingencies and Other Financial Commitments In relation with a credit of € 100 million granted to the partner iesy Hessen Finanz GmbH & Co. KG, the Company agreed to the lending consortium of banks to certain restrictions regarding the disposal of assets. The other financial commitments result essentially from purchase commitments for infrastructural services regarding the network. Commitments for network infrastructure, rent, leasing and other 2003 29,506 2004 29,506 2005 29,367 2006 29,367 2007 29,226 2008 and later (annual amount) 29,226 Shareholdings Shareholdings of iesy Hessen GmbH & Co. KG as of December 31, 2002 are structured as follows: Name of the Company Registered office Country Shareholding in % Equity T € 176,198 Company iesy Services GmbH Mainz-Kastel Germany 99.99 190 56 Limited Partner Limited partner is iesy Hessen Verwaltungs GmbH, Weiterstadt, with a subscribed capital of € 25,000. Members of the Advisory Board and Remuneration Members of the advisory board are: • Marc Rowan, Senior Partner, Apollo Management, L.P., New York, since 24. February 2003 • Robert Falk, Senior Partner, Apollo Management, L.P., New York, since 24. February 2003 • Eric Zinterhofer, Vice President, Apollo Management, L.P., New York, since 24. February 2003 • Robert Webster, Principal, Pequot Capital Management Inc., Santa Monica, since 24. February 2003 • Steven A. Tananbaum, President—Chief Investment Officer, Golden Tree Asset Management, L.P., New York, since 24. February 2003 • Peter F. Duerr, Senior Managing Director, BFD Capital, Inc., New York, since 24. February 2003 Result 2002