REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

20. FINANCIAL INFORMATION CONCERNING THE COMPANY’S ASSETS AND LIABILITIES,
FINANCIAL POSITION AND PROFITS AND LOSSES
20.1 CONSOLIDATED FINANCIAL STATEMENTS FOR 2007, 2006 AND 2005
2-2. CHANGES IN SCOPE OF CONSOLIDATION IN 2006
The changes in 2006 correspond to:
• The purchase of minority interests in Free and Freebox.
• The incorporation of a wholly-owned subsidiary, IRE, on April 20, 2006. The main corporate purpose of
IRE – which was fully consolidated in the 2006 financial statements – is to acquire assets and rights to be
used by the Broadband segment.
• The takeover of PN, acquired for €40,000. Set up in 2006, PN is specialized in telecommunications –
particularly developing and building optical fiber networks – and holds a license to lay an optical fiber
network within Paris. PN was fully consolidated in the 2006 financial statements.
• The purchase of Citéfibre on October 19, 2006, which is now 99.78% owned by Iliad. Citéfibre was fully
consolidated in the 2006 financial statements.
• Citéfibre is an independent multimedia service provider and is listed on Euronext’s “Free Market”. It has
created a fiber-to-the-home (FTTH) infrastructure for individuals and SMEs in Paris (mainly in the 15 th
arrondissement). This acquisition will enable the Iliad Group to gain a firmer foothold in the optical fiber
sector.
The key figures relating to the acquisition are summarized in the table below:
(in € thousands) Citéfibre
Acquisition price of shares (1) ......................................................................... 2,935
% acquired (2) ........................................................................................ 99.78%
Net assets (3) 30 ........................................................................................ (212)
Adjusted net assets (4) 30 ............................................................................... (911)
Equity in adjusted net assets (5) = (2) x (4) ............................................................ (909)
Goodwill (6) = (1) – (5) ............................................................................... 3,844
The impact of the acquisition on the Group’s cash position was as follows:
• Cash outflow on purchase of Citéfibre ............................................................. (2,935)
• Cash outflow related to the Group taking over the financial advances granted to Citéfibre by its
former shareholders ............................................................................... (1,991)
• Cash held by Citéfibre at acquisition date .......................................................... 325
Net cash outflow ....................................................................................... (4,601)
During the period ended December 31, 2006 (representing an exceptional three-month accounting period in order
to align the company’s reporting date with that of the Group’s other companies), Citéfibre recorded revenues of
€67,000 and an operating loss of €1,020,000.
During the previous period (i.e. the 12 months ended September 30, 2006), Citéfibre recorded revenues of
€102,000 and an operating loss of €2,925,000.
• The disposal of the Group’s stake in Société.com
On August 2, 2006 Iliad sold its entire interest in Société SA (Société.com).
The divestment of the company had no significant impact on the financial information provided in the 2006
report as it accounted for less than 0.25% of total consolidated revenues and operating profit for the period.
Out of the total €7,840,000 sale price, €6,840,000 was paid on completion of the sale, with the balance of
€1,000,000 payable in two equal installments on December 15, 2006 and June 15, 2007.
30 Based on the company's financial statements for the year ended September 30, 2006.
Iliad – Registration Document 2007 - 123