iesy Repository GmbH - Irish Stock Exchange

Cash flow from investing activities
iesy’s cash flow from investing activities decreased by €2.4 million from a cash outflow of €0.4 million in the three
months ended March 31, 2004 to a cash outflow of €2.8 million in the three months ended March 31, 2005. This change was
due to the upgrade of iesy’s network in Frankfurt and Marburg in the three months ended March 31, 2005.
Cash flow from financing activities
iesy’s cash flow from financing activities increased by €123.1 million from a cash outflow of €1.9 million in the three
months ended March 31, 2004 to a cash inflow of €121.2 million in the three months ended March 31, 2005. This increase
was primarily due to the Refinancing, the proceeds of which were partially offset by the repayment of €93.8 million of iesy’s
previous senior credit facilities.
As a result of the factors described above, iesy’s cash balance increased from €76.7 million as at March 31, 2004 to
€180.7 million as at March 31, 2005.
Capital resources
We will maintain cash and cash equivalents to fund the day-to-day requirements of our business. We expect to hold
cash primarily in euros. Historically, we have relied primarily upon bank borrowings and cash flow from operations to
provide funds required for acquisitions and operations.
Our principal source of liquidity on an on-going basis will be our operating cash flows. Our ability to generate cash
from our operations will depend on our future operating performance, which is in turn dependent, to some extent, on general
economic, financial, competitive, market, regulatory and other factors, many of which are beyond our control. Our high
number of subscribers who pre-pay their annual bill in the months between November and February leads to higher cash
inflows in these months as compared to the rest of the year. We believe that our bank borrowings and cash flow from
operations will be sufficient to fund our currently anticipated working capital needs, capital expenditures, and debt service
requirements, although we cannot assure you that this will be the case. To the extent that we are not able to fund any
principal payment at maturity with respect to the Notes or any interest payment when due with cash flow from operations, we
will be required to refinance this indebtedness with additional credit facilities or the issue of new debt or equity securities in
the capital markets. Any failure to raise additional necessary funds would result in a default under the Senior Credit Facilities
and a default under the Notes. We anticipate that we will have to refinance in part the payment of the Notes at maturity.
Neither Apollo nor any of our other shareholders has guaranteed our obligations under the Notes.
In addition, under the Senior Credit Facilities, we have access to a revolving credit facility to service our working
capital and general corporate needs. The availability of this facility is dependent upon certain conditions described under
“Description of Other Indebtedness—Senior Credit Facilities.”
The terms of the Senior Credit Facilities and the Indenture contain a number of significant covenants that restrict our
ability, and the ability of our subsidiaries, to, among other things, pay dividends or make other distributions, make capital
expenditures, and incur additional debt and grant guarantees. Furthermore, the ability of the Company’s subsidiaries to pay
dividends and make other payments to the Company may be restricted by, among other things, other agreements and legal
prohibitions on such payments or otherwise distributing funds, including for the purpose of servicing debt. In addition, the
net equity of our consolidated group is low, which may restrict our ability to pay dividends or otherwise distribute funds,
including for the purpose of servicing debt. Losses or other events could further reduce our net equity.
We anticipate that we will be highly leveraged in the foreseeable future. Our high level of debt may have important
negative consequences for you. For more information, see “Risk Factors—Risks Relating to our Indebtedness and
Structure—Our high leverage and debt service obligations could materially adversely affect our business, financial condition
or results of operations.” In addition, additional indebtedness incurred could reduce the amount of our cash flow available to
make payments on the Notes and increase our leverage. See “Risk Factors—Risks Relating to our Indebtedness and Our
Structure.”
Senior Credit Facilities
The Senior Credit Facilities require us to comply with certain covenants, including certain financial ratios. For a
description of the Senior Credit Facilities, see the description included in “Description of Other Indebtedness.”
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