iesy Repository GmbH - Irish Stock Exchange

OPERATING AND FINANCIAL REVIEW AND PROSPECTS OF IESY
The following discussion and analysis is based on the unaudited consolidated financial information for the three
months ended March 31, 2004 and 2005, and audited consolidated financial statements for the years ended December 31,
2003 and 2004 of iesy Repository.
iesy Repository is a holding company that conducts limited business operations of its own. Substantially all of its assets
consist of equity interests of New iesy and iesy Hessen. In this Operating and Financial Review and Prospects, we use the
term “iesy” to refer, prior to January 1, 2003, to the business of iesy reflected in the financial statements of iesy Hessen.
From and after January 1, 2003, we use “iesy” to refer to the business of iesy reflected in its financial statements. See “Risk
Factors—Risks Relating to Our Business—Certain of iesy’s financial information may not be representative of its actual
results and its subscriber and operating data may not be accurate. It has not provided any discussion or analysis of the iesy
Predecessor’s financial results or condition.”
You should read the following discussion of our results of operations and financial condition in conjunction with the
sections entitled “Summary—Summary Financial and Operating Information,” “Selected Financial and Operating
Information of iesy” and “Risk Factors” and with both the Issuer’s and the iesy Predecessor’s financial statements and the
related Notes included elsewhere in this Prospectus.
Historically, iesy’s financial information has been prepared in accordance with German GAAP. In the future, we 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 us, 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.”
The following discussion and analysis of our financial condition and results of operations contains forward-looking
statements. Our actual results could differ materially from those that we discuss 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.”
The period after the iesy Acquisition has involved significant changes in our strategic direction. Among other things,
iesy has significantly enhanced its management information and financial processes and systems since the iesy Acquisition.
Prior to the iesy Acquisition, certain deficiencies existed with respect to iesy’s operating and financial data. Accordingly, our
ability to provide detailed management discussion and analysis of the iesy Predecessor’s performance is limited. We have not
included in this Prospectus a discussion or analysis of the iesy Predecessor’s financial results or condition.
Certain subscriber and other operating data have been included in the tables below. The installation of a new
information technology system and changes to iesy’s financial accounting system during the course of 2002 revealed
inconsistencies in iesy’s subscriber data necessitating data cleansing and subscriber data corrections throughout 2003,
which may affect the accuracy of subscriber and other operating data for this period. You should not place undue reliance on
this operating data, which may not be indicative of our future results of operations. See “Risk Factors—Risks Relating to
Our Business—Certain of iesy’s financial information may not be representative of its actual results and its subscriber and
operating data may not be accurate. It has not provided any discussion or analysis of the iesy Predecessor’s financial results
or condition.”
Factors Affecting Our Results of Operations
Our results of operations have been, and will continue to be, affected by a number of events and actions, some of which
are beyond our control. However, there are some specific items that we believe have impacted iesy’s results of operations
and, in some cases, will continue to impact our results on a consolidated level and within our individual business units. In this
section, we discuss the ways in which iesy 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 iesy’s
indebtedness, customer churn, competition, capital expenditures and possible acquisitions. Please also see “Risk Factors.”
Overview of Total Revenues
iesy derives revenues from three main business activities:
• iesy’s basic cable television business (including subscription, installation, and carriage fees), which generated
€31.8 million (95.2%) of its total revenues for the three months ended March 31, 2005, and €128.5 million
(94.6%) of its total revenues for the year ended December 31, 2004;
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