332553670000 ANNUAL ACCOUNTS MTV Networks B.V., AMSTERDAM 2007 c- www.comPAnVoinFO
Nov 18, 2014
332553670000
ANNUAL ACCOUNTS
MTV Networks B.V., AMSTERDAM
2007
c- www.comPAnVoinFO
MTV Networks B.V. AMSTERDAM
Contents
Directors report
Financial statements
Balance sheet as at 31 December 2007
Income statement 2007
Notes to the balance sheet and income statement
General
2 Principles of valuation of assets and liabilities
3 Principles of determination of result
4 Notes to the balance sheet
5 Notes to the income statement
6 Supplementary information
Other information
Appropriation of net result
Auditors' report
(in ·000)
3
6
7
9
10
10
11
14
17
24
26
31
31
32
2
MTV Networks B.V. AMSTERDAM (in '000)
Directors report
The Directors present their report and audited financial statements of MTV Nelworks SV. for the year ended december 31,2007.
1.1 General
The Directors herewith submit the financial statements for the year ended december 31, 2007. The immediate parent company is Viacom Global (Netherlands) SV .. lI's ultimate parent company is Viacom Inc., New Vork, United States of America.
1.2 Principal activity
The company is incorporated in the Netherlands with its statutory seat in Amsterdam. The company's main activities are establishing and operating television stations and all retating activities that support or promote that activity.
1.3 Result tor the year
The result for the year amounted to a net profit of € 3.888.000 (2006 net profil: € 26.901.000) was derived from continuing operations. The Directors recommend the profit be added to retained earnings and carried forward pending a decision of the shareholders in the General Meeting regarding any distribution. The Directors do not recommend the payment of a dividend.
1.4 Future developments
No major changes are envisaged in the company's activities during the coming year. There are no plans for significant investments in the future and no changes in the financing structure or the number of employees are foreseen.
1.5 Subsequent events
In 2008 Ihe Company paid EUR 16.267.259 cash 10 Viacom Aqcuisilion KK in Tokyo, Japan. The Company established also a loan receivable from VAKK for the amount of EUR 62.114.002 and recorded a capital contribution from Viacom Global (Netherlands) SV. The cashpayment was capitalized and the investment in VAKK increased with 16.267.259. The loan receivable from VAKK was also capitalised by the Company and the investment in VAKK increased wilh EUR 62.114.002.
3
MTV Networks B.V. AMSTERDAM (in '000)
1.6 Business risks
The management of the Company and execution of the Company"s strategy are subject to a number of risks. The Directors have identified the need to manage the Company's material financial risks, including foreign exchange, liquidity, credit and interest rate risks. These risks are monitored through a Group Treasury management function which invests surplus funds, mitigates foreign exchange exposure and manages borrowings for Viacom Inc. group companies (the 'Group').
Group Treasury also seeks to limit counter-party risk by conducting all of its banking and dealing activities with a limited number of major international banks, whose status is kept under review.
Liquidity Risk
The Company finances its operations through a combination of retained earnings and intercompany loans.
Interest Rate Risk
To the extent th at the Company enters into banking arrangements, the Company's exposure to interest risk arises on the surplus cash bank accounts on which the interest income is based on LlBOR -O.25bp. For the deficit bank accounts the interest expenses are based on LlBOR +O.25bp. The Company does not participate in interest rate hedging.
Credit Risk
The Company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to any individual counterparty is subject to a limit, which is reassessed annually by the managing directors.
Foreign Exchange Risk
To the extent th at the Company enters into banking arrangements and inter company agreements in currencies different to that of the Company's functional currency, there is an exposure to movements in exchange rates. The Company does not participate in cross-currency hedging.
4
MTV Networks B.V. AMSTERDAM
1.7 Directors
The persons who serve as Directors of the Company are:
Mr. R. Affourtit (appointed August 18th, 2000)
Mr. M.D. Ligtvoet (appointed September 3"',2004)
Mr. M. de Ruiter (appointed of December 21 th, 2004)
Mrs. l.I. Kirby (appointed of September 24'h, 2007)
Mr. J.R. Currell (appointed of November 5th, 2007)
Amsterdam, March 26, 2009
Currell, J.R. (Director)
(in '000)
5
MTV Networks B.V. AMSTERDAM
Financial statements
(in '000)
6
MTV Networks B.V. AMSTERDAM
Balance sheet as at 31 December 2007 (after proposed appropriation of result)
31 December 2007
Assefs
Non-CIJrrent assets
Intangible assets 4.1 Property. plant and equipment 4.2 Financial assets 4.3
Current assets Receiv$bles Cash and cash equivalents
4.4
4.5
31.435 7.374
31.615
49.210 14.961
(in '000)
31 December 2006
32.404 8.500
31.615 70.424 72.519
23.507 28.506
64.171 52.013
134.595 124.532
7
MTV Networks B.V. AMSTERDAM
Liabilities
Shareholders' equity Share capital Share premium Retained eamings Result for the year
Provisions
Non-current liabilities
Current liabilities
31 December 2007
4.6
19 5.793
37.275 3.888
4.7
4.8
4.9
(in '000)
31 December 2006
19 5.793
10.374 26.901
46.975 43.087
4.924 5.795
52.042 46.303
30.654 29.347
134.595 124.532
8
MTV Networks B.V. AMSTERDAM (in ·000)
Income statement 2007
2007 2006
Revenue 5.1 34.137 34.993
Cast of sales -1.345 -1.611
Gross profit 32.792 33.382
Selling expenses 3.938 6.519 General and administrative expenses 24.196 21.123 Other aperating expenses 8.254 8.499 Total expenses 36.388 36.141
Operating result -3.596 -2.759
Other aperating incame 5.4 7.603 34.933
Finance casts 5.5 370 4.333
Operating income before taxation 4.377 36.507
Income tax expenses 489 9.606
Profitl(lass) for the year 3.888 26.901
9
MTV Networks B.V. AMSTERDAM (in '000)
Notes to the balance sheet and income statement 1 General
1. 1 Activities The activities of the company and its subsidiaries mainly comprise:
- running television stations which wiJl produce, provide and broadcast commercial television programmes nationwide via cabie, satellite or other distribution methods;
- operating and distributing associated websites; - maintaining telecommunication nelworks and television studios necessary to the production of television programmes and/or websites. - holding of investments
1.2 Group structure MTV Nelworks BV. is a subsidiary of Viacom Global (Netherlands) B.V. The ultimate parent company of th is company is Viacom Inc., a company incorporated in the United States.
1.3 Conso/idation In accordance with artiele 408, 800k 2 of the Dutch Civil Code no consolidated financial data relating to the subsidiary companies have been disclosed in these financial statements. The financial data of the company and its subsidiaries are included in the consolidated group accounts of Viacom Inc. These accounts have been prepared in accordance with generally accepted accounting principles in the United States. The group accounts of Viacom Inc. are filed at the Chamber of Commerce in Amsterdam.
1.4 Re/ated parties All group companies mentioned in Note 4.3 above and the associates mentioned in Note 6.3 below are considered to be related parties. The ultimate parent company Viacom Inc. also qualifies as a related party.
1.6 Cash flow statement The financial statements of the Company are included in the consolidated financial statements of Viacom Inc., United States, which are filed separately at the Chamber of Commerce in Amsterdam. Consequently, the Company has taken advantage of the exemption from preparing a cash flow statement as described by the Dutch Accounting Standards Board Guideline 360, paragraph 104.
1.6 Estimates In applying the accounting policies and guidelines for preparing the financial statements, the Management Board of the Company makes a range of estimates and judgments that mighl be essential for the amounts disclosed in the financial statements. If necessary for the purposes of providing the view required under Section 362(1), Book 2, of the Netherlands Civil Code, the nature of these estimates and judgments, including the related assumptions, is disclosed in the noles to the financial statement items in question.
10
MTV Networks B.V. AMSTERDAM (in '000)
2 Principles of valuation of assets and liabilities
2.1 General The financial statements have been prepared in accordance with the statutory provisions of Part 9, Book 2, of the Netherlands Civil Code and the firm pronouncements in the Guidelines for Annual Reporting in the Netherlands as issued by the Dutch Accounting Standards Board. The financial statements are denominated in euros.
In general, assets and Iiabilities are stated at the amounts at which they were acquired or incurred, or fair value. If not specifically stated otherwise, they are recognised at the amounts at which they were acquired or incurred. The balance sheet, income statement and cash flow statement include references to the notes.
2.2 Comparison with prior year The principles of valuation and determination of result remained unchanged compared to the prior year.
2.3 Foreign currencies
Functional currency The financial statements are denominated in euros, i.e. the functional and reporting currency of MTV Networks B.v.
Transactions, receivables and debts Transactions denominated in foreign currencies in the reporting period are recognised in the financial statements at the exchange rate ruling at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailing at the balance sheet date. Exchange differences resulting from settlement and translation are recognised through profit or 1055.
Where the currency risk on monetary assets and liabilities has been hedged, translation gains and losses are not yet taken to the income statement, but included under accruals and deferrals if unrealised gains on these hedges should neutralise these gains or losses at the balance sheet date.
Exchange differences on foreign-currency loans conlracled 10 finance a nel inveslmenl in a foreign operation are recognised in the statulory reserve for translation differences if and wh en such loans effeclively hedge the exchange rale exposure on Ihal nel inveslmenl in a foreign operalion.
11
MTV Networks B.V. AMSTERDAM (in '000)
2.4 Intangible assets
Goodwill Goodwill arising from acquisitions is capitalised and amortised on a straight-line basis over the estimated economie life with a maximum of 20 years.
Other Other intangible assets are valued at acquisition cost and amortised on a straight-line basis over the remaining economie Iife based on the underlying license.
For determining whether an impairment charge in respect of an intangible fixed asset applies, reference is made to note 2.7.
2.5 Property, plant and equipment Property, plant and equipment is valued either at cost plus additional direct expenses, less straight-Iine depreciation over the estimated economie life.
Any impairment as at the balance sheet date is taken into account. For determining whether an impairment charge in respect of an intangible fixed asset applies, reference is made to note 2.7.
2.6 Financial assets
Group companies As a consequence of applying artiele 408, Book 2 of Ihe Dulch Civil Code, group companies in which Ihe Company exercises less than 20% and more Ihan 50% are carried at cost the or lower markei value. A provision against subsidiaries whose net equity value is below their carrying value is made only when management believes that the diminution is of permanent nature. Investments between 20% and 50% are accounted for at net equity value.
Associated companies Participating interests in which no significant influence can be exercised are stated at acquisition price. If an asset qualifies as impaired, it is measured at its impaired value; any write-offs are disclosed in the income statement.
Other receivables Olher receivables disclosed under financial assels are slaled al Ihe fair value of Ihe amounl owed, which normally consists of its face value net of any provisions considered necessary.
2.7 Impairment of non-current assets On the balance sheel date, the Company tesis whelher there are any indicalions of an asset which could be subjecl to impairment. If Ihere are such indications, Ihe recoverable amount of the assel concerned is estimated. If Ihis is not possible, the recoverable amount of the cash-generating unit to which Ihe asset belongs, is identified. An asset is subject to impairmenl if its book value is higher than its recoverable value; the recoverable value is Ihe higher of Ihe realisable value and the value to the business.
12
MTV Networks B.V. AMSTERDAM
2.8 Receivables
(in '000)
Trade receivables are carried at the fair value of the consideration, usually its face value. If payment of the receivable is postponed under an extended payment deadline, fair value is measured on the basis of the discounted value of the expected revenues. The difference between fair value and face value is accounted for as interest income during the period up to the expected receipt of payment. A provision is made for expected bad debts.
2.9 Cash and cash equivalents Cash and cash equivalents consists of cash in hand, cash at banks and deposits with a maturity of less than twelve months. Current account liabilities at banks are recognised under bank overdrafts forming part of curren! liabilities.
2.10 Deferred tax assets and liabilities Deferred income tax assets and liabilities are recognised to provide for temporary differences between the tax bases ol assets and liabilities, and their carrying amounts in the financial statements. Delerred income tax is determined using tax rates prevailing at the balance sheet date or the rates that will apply in the luture, in$ofar as these have been enacted.
Deferred income taxes are recognised lor temporary differences concerning group companies, associates and joint ventures, unless MTV Networks B.v. is ab Ie to determine the moment ol expiry ol the temporary difference and it is not likely that the temporary difference will expire in the loreseeable future. Delerred income taxes are recognised at lace value.
2.11 Non-cuffent Iiabilities Non-current liabilities are carried at amortised cost, being the amount received taking account ol any premium or discount, less transaction costs. The difference between the carrying amount determined and the ultimate repayment value, together with the interest due, is determined such that the effective interest is taken to the income statement during the term ol the liabilities.
2.12 Leasing
Financiallease The Company leases part of the equipment and has, to a large extent, the risks and rewards incidental to ownership of these assets. When the lease contract is entered into, the assets are capitalised on the balance sheel allheir lair value, or Ihe cash value ollhe minimum lease lerms, il lower. The lease. amounts payable are split on a linear basis between aredemption and interest part, based on a fixed interesl rale. The relating lease obligations, excluding the interest element, are taken up under non-current liabilities. The interest component ol the lease term is recognised in the income statement. The relating assets are depreciated over the remaining economie lile or lease term, if shorter.
Operationallease Lease contracts lor which a large part ol the risks and rewards incidental to ownership ol the assets does not lie with Ihe Company, are recognised as operationalleases. Obligations under operationalleases are recognised on a straight-line basis in the income statement over Ihe term ol the contract, taking into account reimbursements received from the lessor.
13
MTV Networks B.V. AMSTERDAM (in '000)
3 Principles of determination of result
3.1 General The result represents the difference between the value of the services rendered and the costs and other charges for the year. The results on transactions are recognised in the year they are realised; losses are taken as soon as they are foreseeable.
3.2 Revenue recognition Revenue from advertising is recognised when all significant risks and rewards incidental to the ownership of the advertising are transferred to the buyer. Revenue from the provision of services is recognised under the percentage-of-completion method based on the services performed to the balance sheet date as a percentage of the total services to be performed.
Revenue related to projects in progress for third parties comprises contractually agreed considerations, upward/downward contract variations, and claims and allowances where it is likely that that income will be realised and can reliably be measured.
Royalty income is allocated to the reporting period in accordance with the substance of the relevant agreements.
3.3 Revenue Revenue is determined as income from the supply of goods and services, less discounts and such like, exclusive of revenue taxes.
Revenue is determined as income from the supply of goods and services, less discounts and such like, exclusive of revenue taxes.
Revenue includes:
- advertising sales consisting of airtime revenue and sponsorships on analogue television stations',
- online and digital media sales including banner sales and online sponsorships and revenue from consumers through SMS and 0900 phone numbers; - syndication sales resulting from the exploitation of the brands of MTV Networks;
- barter sales representing agreements with third parties, which wilt invoice an equal amount in barter cost;
- affiliate sales consisting of sales of digital channels to distributors throughout Scandinavia and emerging markets (Eastern Europe, Israel and South Africa);
- other sales including ticket sales, distribution services and other incidental revenues.
3.4 Costs Costs are recognised at the historical cost convention and are allocated to the reporting year to which they relate.
14
MTV Networks B.V. AMSTERDAM (in ·000)
3.5 Cost of sales Cost of sales represents the direct and indirect expenses atlributable to revenue, including uplink and transmission costs, studio costs and license fees.
3. 6 Selling expenses Selling expenses concern the direct expenses of the sales activities. Selling expenses also include the costs for sponsorships and events.
3.7 General and administrative expenses General and administrative expenses include the expense of the directors and the administration departmerlt.
3.8 Personnel remuneration
Regular payments Salaries, wages and soeial security costs are charged to the income statement when due, and in accordance with employment contracts and obligations.
Pensions The Company runs a defined benefit scheme. This career average-pay pension plan is accommodated by the industry sector pension fund, PNO Media. The Group has accounted for the defined benefit scheme as if it was a defined contribution scheme.
Share option plan The Company operates a share option plan for directors and personnel.
No cost is allocated to the share options, except where the market value at the time of the options being granted is higher than the exercise price. In such a case, the difference between the market price and exereise price is recorded in the income statement. If a change in exercise price takes place during the course of Ihe option period, th en subsequent changes in market prices are recorded in the income statement, insofar that the intrinsic value is positive.
3.9 Depreciation Intangible assets, including goodwill, are amortised and property, plant and equipment depreciated over their expected usefullives as from the inception of their use. Land and investment property are not depreciated. Future depreciation and amortisation is adjusted if there is a change in estimated usefullife.
Gains and losses on the sale of property, plant and equipment are included in depreciation.
3. 10 Other operating income
Other operating income includes recharges to other Viacom entities and income which does not fall within the regular operations.
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MTV Networks B.V. AMSTERDAM (in '000)
3. 11 Finance costs
Interest income and expenses Interest income and expense are time apportioned, taking into account the effective interest rate for the relaling assels and liabilities.
Oividends Dividends receivable from participations are recognised as soon as the Company acquired the right to the dividends.
3.12 Taxation Tax on result is calculated on the profiUloss before taxation in the income statement, taking into account any losses carried forward from previous financial years, tax-exempt items and non-deductible expenses, and using current tax rates. Account is also taken of changes in deferred tax assets and deferred tax liabilities owing 10 changes in the applicable tax rates.
3.13 Financial instruments
Market risk The Company mainly operales in Ihe European Union. The currency risk for the Company largely concerns positions and future transactions in US dollars and pounds Sterling. The denominated currency is euros, 50 the currency risk is minimal and there is no hedging.
Interest rate risk The company incurs interest rate risk on interest-bearing receivables (in particular those included under finallcial assets, securities and cash) and on interest-bearing non-current and current liabilities (inciuding borrowings).
Where variable-interest loans are concerned, MTV Networks B.V. incurs risk regarding future cash flows.
Credit risk MTV Networks B.v. does not have any significant concentrations of credit risk. Sales are made to cuslomers that meet the company's credit rating. Goods are sold/services provided subject to payment deadlines for 30 days. A different payment period may apply to major supplies, in which case additional securities are demanded, inciuding guarantees.
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MTV Networks B.V. AMSTERDAM
4 Notes to the ba la nee sheet
4. 1 Intangible assets
01 January 2007 Acquisition costs Accumulated amortisation
Book value
Movemenls 2007 Additions
Disposals
Amortisation Amortisation disposals
31 December 2007 Acquisition casts Accumulated amortisation
Book value
Amortisation rates
Goodwill
40.942 -11.430
29.512
0 0
-2.047 0
-2.047
40.942 -13.477
27.465
5,0%
Other
6.936 -4.044
2.892
2.391 -1.441 -1.313 1.441
1.078
7.886 -3.916
3.970
20-33,3%
(in '000)
Total
47.878 -15.474
32.404
2.391 -1.441
-3.360 1.441
-969
48.828 -17.393
31.435
The goodwill resulted from the acquisition of TMF B.V. in 2001. Subsequent to the acquisition date, the assets, liabilities and activities of TMF were included in MTV Networks B.v. and the company TMF B.V. was liquidated.
Other intangible assets comprise the Nickelodeon library for Scandinavia and emerging markets acquired per 1 January 200:3 from Nickelodeon International Ltd. and the cost of subsequent additions to the library. Amortisation is calculated based on the estimated economie life of the individual titles.
17
MTV Networks B.V. AMSTERDAM (in '000)
4.2 Property, plant and equipment
Leasahold Machlnery and Other non· Improve-
equlpment current aSBets ments Transponder Total
01 January 2007 At cost 1.874 701 3.300 4.214 10.089 Accumulated decreases in value and depreciation ·285 ·59 ·1.037 ·208 ·1.589
Book value 1.589 642 2.263 4.006 8.500
Movements 2007 Acquisi/ions: Additions 1.413 172 0 0 1.585 Disposals 0 0 -484 0 ·484 Revaluations 0 0 19 19 Decreases in value: Depreciation ·820 ·43 ·738 ·847 -2.448 Depreciation disposals 0 0 202 0 202
593 129 -1.020 -828 -1.126
31 December 2007 At cost 3.287 873 2.816 4.233 11.209 Accumulated decreases in value and depreciation -1.105 -102 -1.573 -1.055 -3.835
Book value 2.182 771 1.243 3.178 7.374
Depreciation rates 10-25% 20,0% 10-25% 20,0%
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MTV Networks B.V. AMSTERDAM
4.3 Financiaf assets
(in '000)
Invastments In group Associated Other
companies companias Joint ventures raceivables Total
01 January 2007 Baak value
Movemenls 2007 Additions Impairment charge
31 December 2007 Book value
18.446
o o
18.446
12.021
200 -200
12.021
o
o o
o
1.148
o o
1.148
31.615
200 -200
31.615
In 2007 the Company acquired a 100% share in MTV Nelworks Africa (pty) Ltd, South Africa, from Viacom Global (Netherlands) B.V. tor an inmaterial amount.
The Company acquired 50% in TMF Radio V.O.F. in December 27,2006 tor EUR 20ok. For business reasons it was decided to stop with TMF Radio V.O.F. at October 1, 2008. Theretore the investment has been impaired.
Participations Participations directly held by MTV Nelworks B.v. are:
Inveslmenls in group companies and statutory seat MTV Nelworks Productions BV, Amsterdam, The Netherlands Preview Investments B.v., Amsterdam, The Netherlands MTV Nelworks Japan B.V., Amsterdam, The Netherlands MTV Nelworks Belgium BVBA, Lint, Belgium MTV Nelworks SARL, Paris, France MTV Nelworks LDA, Lisbon, Portugal Viacom Holdings Brasil L TOA, Sao Paulo, Brasil 'Game One SAS, Paris, France Viacom Acquisition K.K., Tokyo, Japan MTV Nelworks Polska VOF, Amsterdam, The Netherlands MTV Nelworks Africa (pty) Ltd
Joint ventures and associated companies MTV Group Japan K.K., Tokyo, Japan MTV Channel Espana SL, Madrid, Spain MTV Nelworks de Mexico S de RL de CV, Mexico City, Mexico Servicios para Empresas de Entretenimiento S de RL de CV, Mexico City,
Share in equity
100,00% 100,00% 100,00% 93,00%
100,00% 95,00% 93,00% 62,00%
100,00% 50.00%
100,00%
19,53% 5,00% 1,00% 1,00%
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MTV Networks B.V. AMSTERDAM (in '000)
Other receivables Other receivables include an interest-bearing loan to group company Game One SAS. This loan bears interest at EONIA +2.5% per year. No repayment schedule is in place.
4.4 Receivables 2007 2006
Trade debtors 8.763 4.401 Amounts due trom affiliated companies 35.889 14.781 Accrued income 4.001 3.338 Other receivables and prepayments 557 987
49.210 23.507
4.5 Cash and cash equivalents All cash and bank balances are available on demand. The Company participates in a JP Morgan Chase cash pool that has a gross overdraft limit of $ 75 million.
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MTV Networks B.V. AMSTERDAM
4.6 Shareholders' equity
Share capital
(in '000)
The authorised share capitalof the company amounts to EUR 90.000 and consists of 180 ordinary shares of EUR 500 each.
Issued share capital amounts to €18.500 and consists of 37 ordinary shares with a nominal value of EUR 500 each (2006: 37).
On 23 December 2005, 37 shares in the capitalof the Company, jointly representing the entire issued share capitalof the Company, were transferred from Viacom International (Netherlands) B.v. to Viacom Global (Netherlands) B.v.
The movements in shareholders' equity are as follows:
Issued share Share Rotalnod Result for ths capitai premium earnlngs yoa, Totat
01 January 2006 19 2.167 18.701 -8.327 12.560
Movements 2006 Share issue 0 3.626 0 0 3.626 Appropria!ion of resul! prior year 0 0 -8.327 8.327 0 Result current year 0 0 26.901 26.902
0 3.626 -8.327 35.228 30.527
31 December 2006 19 5.793 10.374 26.901 43.087
Issued share Share Retained Result for tha capitai premium earnlngs year Total
01 January 2007 19 5.793 10.374 26.901 43.087 .
Movements 2007 Appropriation of result prior year 0 0 26.901 -26.901 0 Result current year 0 0 0 3.888 3.888
0 0 26.901 -23.013 3.866
31 December 2007 19 5.793 37.275 3.888 46.975
In 2005 the Company issued one share with a nominal value of €500 to Viacom Global (Netherlands) B.v. The contribution on the share issued consisted of shares in Viacom Holdings Brasil representing 93% of the issued share capitalof Viacom Holdings BrasiI.
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MTV Networks B.V. AMSTERDAM (in '000)
4.7 Provisions
Movemenls in provisions are specified as follows:
01 January 2007
Move income statement Movement trom entities in fiscal unity
31 December 2007
4.8 Non-current liabilities
Financial lease obligations Loan !rom parent company
Financia//ease obligations
Deferred tax liablUli.. Total
5.795
-339 -532
4.924
5.795 o
-339 -532
4.924
2007 2006
3.012 49.030
52.042
3.093 43.210
46.303
Repayment liabililies within 12 months of Ihe end of Ihe linancial year amounting la EUR 974.000. are ineluded under Ihe eurrent liabilities. The remaining leaseperiod is less than live years.
Laan (rom affiliate company Durin9 2005 Ihe laan from farmer parent eompany. Viacom Global (Nelherlands) B.V. was transferred la Viaeom Overseas Holding C.v. in Curacao. Netherlands Anlilles. The loan is denominated in US Dollars and bears na interest. No repayment sehedule is in plaee.
4.9 Curren! liabi/ities 2007 2006
Trade creditors 471 2.402 Amounts due to affiliated companies 12.893 4.292 Corporate income tax 6.015 3.945 Taxation 64 0 Accruals and deterred income 9.978 16.527 Other Iiabilities 1.233 2.181
30.654 29.347
22
MTV Networks B.V. AMSTERDAM (in ·000)
4.10 Commitments not ine/uded in the ba/anee sheet Third-party fiability The Company is a partner in MTV Nelworks Pols ka VOF in Amsterdam. As such, it is jointly and severally liable for all debts incurred by MTV Nelworks Pols ka VOF.
Pension obligations The Company has made use of the option to account for a defined benefit scheme as a defined contribution scheme. Therefore, the risks relating to this pension scheme are not reflected in the balance sheet.
Fiseaf unity The Company forms a fiscal unity for corporate income tax with MTV Nelworks Productions S.v., MTV Nelworks Japan S.v., Invisions Holding S.v., and MTV Nelworks Pols ka v.o.f. retrospectively since January 1, 2006. Head of the fiscal unity is MTV Nelworks S.v.
Lease commitments The lease commitments as at 31 December 2007 can be specified as follows:
Term < 1 year Term 1~5 Vaars Term> 5 vaars Total
€OOO €'OOO €'OOO €OOO
Rent agreements buildings 930 5.088 3.534 9.552 Equipment 476 1.291 2 1.769 Other 939 1.122 0 2.061
31 December 2007 2.345 7.501 3.536 13.382
23
MTV Networks B.V. AMSTERDAM
5 Notes to the income statement
5.1 Revenue ,he revenue increased by -2,4% compared to last year.
Revenue split by region:
Netherlands Europe Rest of the world
Revenue split by order type:
Advertising Syndication Barters Online Affiliates Others Mobile Other
5.2 Wages, salaries and social security costs
Wages and salaries pension costs Other soeial seeurity costs Other personnel eosts
(in '000)
2007 2006
32.507 30,062 1.668 4.443
-38 488
34.137 34.993
2007 2006
25.292 25.566 0 3.048
2.906 3.315 -1 13
4.339 2.212 1.501 436
100 403
34.137 34.993
2007 2006
6.330 7.928 379 469 550 758 978 1.150
8.237 10.305
5.3 Amortisation of intangible assets and depreciation of property, plant and equipment and other changes in value Amortisation and depreciation
Intangible assets (note 4.1) Property, plant and equipment (note 4.2)
5.4 Other operating income
2007
3.360 2.448
5.808
2006
3.180 1.426
4.606
The other operating income conlains the income of intercompany recharges. In 2006 an incidental receipt of EUR 22,7 million was included related to the termination of a sales contract.
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MTV Nelworks B.V. AMSTERDAM
Other operating income
5.5 Finance casts
Result on participations carried at net asset value Interest income Interest expense Foreign exchange gains/(Iosses)
The income tax expense of € 489k can be broken down as follows:
Operating income Income tax expense
Effective tax rate Applicable tax rate
Operating income before taxation in the financial statements
Current year taxation Deferred tax liability
2007
7.603 7.603
2007
3.439 701
-2.858 -912 370
2007
4.377 489
11% 25,50%
Taxation prior years due to corrected estimates and final tax assessments
The applicable tax rate is based on !he Dutch tax rate.
2006
34.933 34.933
2006
2.650 255
-277 1.705 4.333
2006
36.507 9.606
26% 29,60%
2007
4.377
1.051 -339 -223 489
(in '000)
The effeclive tax rate differs from the applicable lax rate due to the amortisation of goodwill. which is not tax-facilitated. The effective tax rate differs from last year's rate due to the relatively higher amortisation of goodwill in the income statement.
25
MTV Networks B.V. AMSTERDAM
6 Supplementary information
6.1 Employees
(in '000)
During th is linancial year an average of 111 employees (2006: 158) were employed by the company.
6.2 Equity incentive plan Financial instruments are used to reduce interest rate and foreign currency risks. Financial instrumenls are nol used for speculative purposes. Foreign currency inslrumenls are used 10 reduce the foreign currency risk arising on operating activities and financing in foreign currencies. Forward exchange contracts with a lerm of up 10 one year are used 10 hedge the foreign currency risks from operating activities. The valuation of these contracts at year-end rates, equals the valuation of the respective business transactions.
The exercise price of options granted shall not be less than the fair market value ot the common stock on the date of grant. Oplions generally vest equally over a four-year period trom Ihe date of grant and have a maximum term of up 10 10 years after the date of grant. Restricted share units vest equally over a liveyear period trom the date of grant.
Share options The movements in share options outstanding can be specilied as follows:
Weighted Number of average
share options exerclsa price
Outstanding as at 1 January 2007 34.592 $ 50,09
Granted 6.794 $ 43,86 Exercised 350- $ 36,78 Forfeited or cancelled 18.657- $ 53,24
Outstanding as at 31 December 2007 22.379 $ 45,78
Options exercisable at 31 December 2006 24.499 $ 54,26 Options exercisable at 31 December 2007 9.799 $ 50,75
26
MTV Networks B.V. AMSTERDAM (in '000)
As at 31 December 2007 the share options outstanding can be specified as follows:
Exercise price
$30.00 to $39.99 $40.00 to $49.99 $50.00 to $59.99 $60.00 to $69.99
Outstanding as at 31 December 2007
Res/rie/ed share units
Wolghtod average
remalnlng Number of contractual
share optlons IIfo (yoars)
5.600 6,40 13.609 4.88
1.585 0,02 1.585 0,02
22.379
The parenl company delermined in 2005 10 granl reslricted share units to participating managers who previously received non-qualilied share options in previous years. The grant-date fair value of the restricted share units was $ 52.37 and the restricted units vest rateably over a live-year period.
The movements in restricted share units outstanding can be specified as follows:
Number of Wolghtod restrlcted avorago grant·
share units date fair valuo
Outstanding as at 1 January 2007 1.448 $ 38,20
Granted 2.657 $ 43,86 Veoted -377 $ 38,60 Forfeited -1.081 $ 43,03
Outstanding as at 31 December 2007 2.647 $ 41,85
27
MTV Networks B.V. AMSTERDAM (in '000)
6.3 Relaled parties All Viacom group companies and Ihe participalions menlioned in nole 6 are considered 10 be relaled parties. Relaled party transactions are made at arm's length.
Balance sheel posilions wilh affiliated companies are as follows:
2007 2006 Amounls due trom affilialed companies
MTV Nelworks Polska VOF 5.902 6.522 MTV Nelworks Belgium BVBA 5.237 0 Kindernet CV. 0 4.201 MTV Nelworks Productions B.V. 20.941 1.175 MTV Nelworks Europe 1.124 1.783 Nickelodeon International Ltd. 2.351 1.045 MTV Nelworks NY 195 0 Other 139 55
35.889 14.781
2007 2006 Amounls due 10 affilialed companies
The Box Holland BV. 5.609 2.997 MTV Nelworks AB 158 55 MTV Nelworks Europe 4.488 0 MTV Nelworks Polska VOF 670 0 MTV Nelworks Belgium BVBA 0 1,222 Viacom Global (Netherlands) BV. 1.950 18 Other 18 0
12.893 4.292
28
MTV Networks B.V. AMSTERDAM
Sales to affiliated companies and costs charged by affiliated companies are as follows:
Sales to affiliated companies
M1V Networks Polska VOF M1V Networks Productions B.v. Kindernet C.v. M1V Networks Belgium BVBA Nickelodeon International Ltd. The Box Holland BV. M1V Networks Europe M1V Networks International
Cests charged by affiliated cempanies
M1V Networks Productions B.V. M1V Networks Europe Nickelodeon Intemational Ltd. M1V Networks Belgium BVBA The Box Holland B.V. M1V Networks International
2007
o o
774 6.119 1.177
367 5.392 5.945
19.774
2007
3.687 7.195
o 577
2.684 916
15.059
2006
3.048 2.641 1.667 1.137
705 1.066 5.634
o
15.898
2006
14.076 o
315 2.324 2.459
o
19.174
(in '000)
29
MTV Networks B.V. AMSTERDAM
Amsterdam. 26 maart 2009
Affourtit,
Currell, J.R.
MTV Networks B.v. ti. Neveritaweg 6 1033 WC AMSTERDAM
30
MTV Networks B.V. AMSTERDAM (in '000)
Other information
Appropriation of net result
In accordance with the company's articles of association, the result for the year is at the disposition of the shareholders at the Annual General Meeting.
Proposed profit appropriation
The Directors pro pose is to add the profit of € 3.888.000 to retained earnings. This proposal has already been reflected in the financial statements.
Auditors' report
The auditor's report is included on page 32.
Amsterdam, March 26, 2009
31
To the General Meeting of Shareholders of MTV Networks B.V.
Auditor's report
Report on the financial statements
PrlcewaterhouseCoopers Accountants N.V. Newtonlaan 205 3584 BH Ulrecht P.O. Box 65096 3508 AB Utrecht The Nelherlands Telephone +31 (30) 21915 00 Facsimile +31 (30) 2191555
We have audited the accompanying financial statements 2007 of MTV Networks B.v. ("the Company"), as set out on pages 6 to 30 which comprise the balance sheet as at 31 December 2007, the profil and loss account for the year then ended and the notes.
The direclars' respansibilily The directars of the Company are responsible for the preparation and fair presentation of the financial statements and for the preparation of the directors' report, both in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Audilar's respansibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are tree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selecled depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, wh ether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the financial statements in order to design audit procedures th at are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal contro!. An audit also includes evaluating the apprapriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as weil as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.
Basis far qualified apinian The notes to the financial statements do not disclose the remuneration of directors and former directors which constitutes a departure from 2:383 sub 1 of the Netherlands Civil Code.
PricewalerhouseCoopers Is Ihe !rade name of among etherS the following companies: PficewaterhouseCoopers Accountants N.V. (Chamber of Commerce 34180285), PricewaterhouseCoopers Belastingadviseurs N,V. (Chamber of Commerce 34180284), PricewalerhouseCoopers Advlsory N.V. (Chambor of Commerce 34180287) and PricewaterhouseCoopers B.V. (Chamber of Commerce 34180289). Tho services randerad by these companies are govemed by General Terms & Conditions. which include provisions regarding our liability. These General Terms & Conditions are filed with the Amsterdam Chamber of Commerce and can also ba viewed at www.pwc.comlnl
Qualified opinion In our opinion, except for the effect of the matter described in the 'Basis for qualified opinion' paragraph, the financial statements give a true and fair view of the financial position of MTV Networks S.v. as at 31 December 2007, and of its results for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.
Report on other legal and regulatory requirements
Pursuant to Ihe legal requiremenl under 2:393 sub 5f of Ihe Nelherlands Civil Code, we report, to the exlenl of our compelence, thai the directors' report is consistent wilh the financial statements as required by 2:391 sub 4 of the Nelherlands Civil Code.
Utrecht, 26 March 2009 PricewaterhouseCoopers Accountants N.v.
Original has been signed by drs. J. W Middelweerd RA
Auditor's report MTV Networks B.v. 2/2
BET NE}.WORKS MHNETWORKS PARAMOUNT PICTURES
VIACOM GLOBAL INETHERLANDSI B.V. P.O. BOX 59228,1040 KE AMSTERDAM NARITAWEG 207, 1043 CB AMSTERDAM THE NETHERLANDS T +31 101204873870 F +31 101206866500
Amsterdam, 7 mei 2009
Kamer van Koophandel Amsterdam Handelsregister De Ruyterkade 5 1013 AA AMSTERDAM
Geachte heer, mevrouw,
11 MEI 2009
3?> '25':)--z,b't KOOPHANDEL EN FABRIEKEN
KAMER VAN VOO,? AMSTERDAM: GEDEPONEERD ):\11
3 OMVANG: I-I
1 D05SIERNR,: 1 ') t'J.~ , SOORT:
BOEKJAAR: ",VU /
E,B, A 1. AVA: () '1 f D ') / 'i2oD ')
Hierbij stuur ik u de jaarrekening van het jaar eindigend op 31 december 2007 van de hieronder genoemde vennootschap:
• MTV Networks BV
De stukken zijn vastgesteld op maandag 4 mei 2009.
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Secretaresse van Linda Kirby Tel.: 020-4873873 Fax: 020-6866500 SvE / V 3408
CHAMBER OF COMMERCE REGISTRATION NUMBER 34235952 VAT REGISTRATION NUMBER NLB15Q28507BOl