COURTESY TRANSLATION FROM THE GERMAN LANGUAGE FOR INTERPRETATION, THE GERMAN TEXT SHALL PREVAIL KABELNETZ NRW HoldCo GmbH, Cologne NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FINANCIAL YEAR 2004—(CONTINUED) The personnel accruals in the amount of EUR 19,176k mainly comprise accruals for staff retention. The accruals for services of EUR 11,546k is related to goods and services already delivered but not yet invoiced. The accruals for cable operating costs mainly comprise leasing expenses for cable, glass fibre cable, cable ducts and GEMA-fees. In order to hedge a portion of the interest rate risk arising from the drawdowns with variable interest made within the scope of the Senior Credit Agreement, Swap contracts were concluded with three banks in the financial year 2001. The total notional amount of the Swap contracts is EUR 255,000k. The pending loss arising from the valuation of these hedge contracts by banks as per the balance sheet date was accrued in the amount of the negative fair value of EUR 9,023k that was calculated by the banks in accordance with generally accepted valuation methods. The accruals for contractual risks relate to risks from contractual disputes with third parties. Liabilities The following schedule of liabilities shows liabilities by their respective due dates: 368 Total within one) year Thereof due between one and five years in more than five years EUR k EUR k EUR k EUR k Liabilities to banks 583,273 0 583,273 0 Trade payables 8,993 8,993 0 0 Capital lease liability 383,070 8,191 39,635 335,244 Other liabilities 117,831 42,831 75,000 0 1,093,167 60,015 697,908 335,244 Included in liabilities due to banks is a loan of EUR 583,273k which derives from the Senior Credit Facility, which was renegotiated during the restructuring of ish KG in 2002, with a lender consortium of which Citibank International Plc. is agent. The total amount consists of two tranches, EUR 518,273k of non-elevated secured debt and EUR 65,000k (original amount: EUR 115,000k) of elevated secured debt. On December 15, 2004 a voluntary repayment in the amount of EUR 50 million was made on the elevated secured debt. Both tranches have interest of 3% over LIBOR and are due upon the earlier October 1, 2006 (“Exit Event”) or of the sale of ish or refinancing. Liabilities due to banks from the Senior Credit Facility are secured by the entire fixed and current assets of ish KG. The Senior Credit Facility contains certain restrictions regarding operational and financial issues. These include limitations on the sale of assets, on the occurrence of additional debt, on dividends to shareholders, on certain investments and acquisition. Additionally, the agreements require the satisfaction of certain financial covenants.
COURTESY TRANSLATION FROM THE GERMAN LANGUAGE FOR INTERPRETATION, THE GERMAN TEXT SHALL PREVAIL KABELNETZ NRW HoldCo GmbH, Cologne NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FINANCIAL YEAR 2004—(CONTINUED) Liabilities from a Term Facility Agreement dating back to the financial year 2002 (previous year: EUR 35 million; original amount: EUR 115 million) were paid back in the course of the year under review. Repayments in the amount of EUR 15 million were made on March 31, 2004 and in the amount of EUR 20 million on July 1, 2004. The elevated secured debt had interest of 3.5% over LIBOR. With the repayment of the liabilities from the Term Facility, costs incurred in the financial year 2002 in connection with the renegotiation of the Senior Credit Facility and restructuring fees in connection with the negotiation of the Term Facility, an amount of EUR 7,150k became due. Payment was made on July 1, 2004. Payments in the amount of EUR 24 million were deferred, shown under trade accounts payable. These liabilities ranked pari passu with the Term Facility and did also bear interest at 3.5% over LIBOR. The liabilities were payable upon the due date of the final installment of the Term Facility so that the total amount was paid on July 1, 2004. Also within the scope of restructuring ish KG, liabilities due to key vendors were restructured. It was agreed with these vendors to convert current trade liabilities to long-term notes payable of EUR 100 million, which are stated on the balance sheet under other liabilities. Of the long-term notes in the amount of EUR 100 million, a tranche of EUR 25 million bears interest at 3% over LIBOR and ranks pari passu with the non-elevated tranche of EUR 518,273k under the Senior Credit Facility. The remaining amount of EUR 75 million bears interest at 3.5% over LIBOR and ranks after all other secured liabilities. The long-term notes payable and the trade accounts payable with extended due dates are due upon the earlier of October 1, 2006 or the sale of ish or the refinancing (“Exit Event”). Notes in the amount of EUR 25.000k are to be paid in October 2005, if no Exit Event has occurred by this date. The long-term notes payable and the trade accounts payable with extended due dates are also secured by the entire fixed and current assets of ish KG. date. Other Liabilities Other liabilities include EUR 1,589k which relates to accrued interest from finance loans due after the balance sheet Deferred Income 369 2004 2003 EUR k EUR k 55,789 58,221 Income is deferred for payments received from customers for cable TV services to be provided after December 31, 2004. Income Statement Due to the fact that the operating companies ish KG and ish KS were only acquired on January 31, 2003, a year on year comparison of this year’s figures to last years Group financial statements is limited because prior year only includes 11 months of operating activities.