s3-eu-west-1.amazonaws.com · IMPORTANT NOTICE IMPORTANT: You must read the following disclaimer before continuing.The following disclaimer applies to the attached offering memorandum,

IMPORTANT NOTICE

IMPORTANT: You must read the following disclaimer before continuing. The followingdisclaimer applies to the attached offering memorandum, and you are therefore advised to read thisdisclaimer page carefully before reading, accessing or making any other use of the attached offeringmemorandum. In accessing the attached offering memorandum, you agree to be bound by the followingterms and conditions, including any modifications to them from time to time, each time you receive anyinformation from us as a result of such access.

Confirmation of Your Representation: In order to be eligible to view this offering memorandumor make an investment decision with respect to the securities, you must: (i) not be a U.S. person (asdefined in Regulation S under the U.S. Securities Act of 1933, as amended (the ‘‘Securities Act’’)), andbe outside the United States; or (ii) be a qualified institutional buyer (as defined in Rule 144A underthe Securities Act). You have been sent the attached offering memorandum on the basis that you haveconfirmed to each of the initial purchasers set forth in the attached offering memorandum (collectively,the ‘‘Initial Purchasers’’), being the sender or senders of the attached, that either: (A)(i) you and anycustomers you represent are not U.S. persons; and (ii) the e-mail address to which this offeringmemorandum has been delivered is not located in the United States, its territories and possessions, anystate of the United States or the District of Columbia; ‘‘possessions’’ include Puerto Rico, the U.S.Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands; or (B) youand any customers you represent are qualified institutional buyers and, in either case, that you consentto delivery by electronic transmission.

This offering memorandum has been sent to you in an electronic form. You are reminded thatdocuments transmitted via this medium may be altered or changed during the process of transmissionand, consequently, none of the Initial Purchasers, any person who controls any Initial Purchaser,Odeon & UCI Finco plc, Odeon & UCI Bond Midco Limited or any of its subsidiaries, nor anydirector, officer, employer, employee or agent of theirs, or affiliate of any such person, accepts anyliability or responsibility whatsoever in respect of any difference between the offering memorandumdistributed to you in electronic format and the hard copy version available to you on request from theInitial Purchasers.

You are reminded that the attached offering memorandum has been delivered to you on the basisthat you are a person into whose possession this offering memorandum may be lawfully delivered inaccordance with the laws of the jurisdiction in which you are located and you may not nor are youauthorized to deliver this offering memorandum to any other person. You will not transmit theattached offering memorandum (or any copy of it or part thereof) or disclose, whether orally or inwriting, any of its contents to any other person except with the consent of the Initial Purchasers.

Restrictions: Any securities to be issued will not be registered under the Securities Act or thesecurities laws of any other jurisdiction and may not be offered or sold within the United States or to,or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in atransaction not subject to, the registration requirements of the Securities Act. Notwithstanding theforegoing, prior to the expiration of a 40-day distribution compliance period (as defined underRegulation S under the Securities Act) commencing on the issue date, the securities may not be offeredor sold in the United States or to, or for the account or benefit of, U.S. persons, except pursuant toanother exemption from the registration requirements of the Securities Act.

This communication is directed solely at persons who (i) are outside the United Kingdom or(ii) are investment professionals, as such term is defined in Article 19(1) of the Financial PromotionOrder (iii) are persons falling within Article 49(2)(a) to (d) of The Financial Services and Markets Act2000 (Financial Promotion) Order 2005 (all such persons together being referred to as ‘‘relevantpersons’’). This offering memorandum must not be acted on or relied on by persons who are notrelevant persons. Any investment or investment activity to which this offering memorandum relates isavailable only to relevant persons and will be engaged in only with relevant persons. Any person who isnot a relevant person should not act or rely on this offering memorandum or any of its contents.

6MAY201110401952

OFFERING MEMORANDUM STRICTLY CONFIDENTIAL

NOT FOR GENERAL CIRCULATIONIN THE UNITED STATES

Odeon & UCI Finco plc£300,000,000 9.0% Senior Secured Notes due 2018

E200,000,000 Senior Secured Floating Rate Notes due 2018The Company:• We are the largest cinema operator in Europe with 207 cinemas and 1,884 screens across seven countries (United Kingdom, Spain,

Italy, Germany, Austria, Portugal and Ireland) as of December 31, 2010 and the largest cinema operator in the world outside theAmericas.

The Issuer:• The Notes will be issued by Odeon & UCI Finco plc (‘‘Odeon Finco’’), a wholly owned subsidiary of Odeon & UCI Bond Midco

Limited (‘‘Odeon Midco’’).The Offering:• Use of Proceeds: We intend to use the proceeds from this offering to refinance all of our outstanding indebtedness under our

existing credit facilities, to fund acquisitions, to pay related fees and expenses and for general corporate purposes.The Senior Secured Notes:• Maturity: The sterling-denominated 9.0% senior secured notes due 2018 (the ‘‘Sterling Notes’’) will mature on August 1, 2018, and

the euro-denominated senior secured floating rate notes due 2018 (the ‘‘Euro Notes’’ and together with the Sterling Notes, the‘‘Notes’’) will mature on August 1, 2018.

• Interest Payments: The Sterling Notes will bear interest at a rate of 9.0% per annum. The Euro Notes will bear interest at a rate ofthree month EURIBOR plus 5.0% per annum, and will be reset two days before the beginning of each quarterly interest period.Interest on the Sterling Notes will be payable semi-annually, in cash in arrears, on February 1 and August 1 of each year,commencing February 1, 2012. Interest on the Euro Notes will be payable quarterly, in cash in arrears, February 1, May 1, August 1and November 1 of each year, commencing August 1, 2011.

• Guarantees: The Notes will be jointly and severally, and fully and unconditionally guaranteed by Odeon & UCI Midco and certain ofits subsidiaries (together, the ‘‘Guarantors’’).

• Ranking: The Notes and the guarantees by the Guarantors (the ‘‘Guarantees’’) will be the Issuer’s and the Guarantors’ seniorobligations. The Notes and the Guarantees will rank equally in right of payment with all of the Issuer’s and the Guarantors’ existingand future senior debt and senior in right of payment to all of the Issuer’s and the Guarantors future subordinated debt. The Notesand the Guarantees will rank effectively junior to obligations of Odeon Midco’s subsidiaries that do not guarantee the Notes.

• Security: The Notes will be secured by a first-ranking lien over shares of the Issuer and the Guarantors, and charges over the loan toOdeon Midco with the gross proceeds from the offering of the Notes (the ‘‘funding loan’’), certain bank accounts, intercompanyreceivables and (for those companies incorporated in England) certain other assets of the Issuer and the Guarantors; provided thatlenders under our new revolving credit facility and certain hedging obligations will receive priority to the proceeds from anenforcement. See ‘‘Description of the Notes—Security’’ and ‘‘Description of Other Indebtedness—Intercreditor Agreement’’.

• Optional Redemption and Repurchase: The Sterling Notes will be redeemable, in whole or in part, at any time on or after August 1,2014 on the redemption dates and at the redemption prices specified under ‘‘Description of the Notes—Optional Redemption’’. TheEuro Notes will be redeemable, in whole or in part, at any time after August 1, 2012 on the redemption dates and at the redemptionprices specified under ‘‘Description of the Notes—Optional Redemption’’. Prior to August 1, 2014, we may redeem some or all of theSterling Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemptiondate, plus a ‘‘make whole’’ premium. We may redeem up to 40% of the Sterling Notes before August 1, 2014 with the net cashproceeds from certain equity offerings. In the event of certain developments affecting taxation, we may redeem all, but not less thanall, of the Notes.

• Change of Control: Upon certain events defined as constituting a change of control, we may be required to make an offer topurchase the Notes. We are not required to make a change of control offer in respect of any transaction consummated within183 days of the date of closing of the offering if certain conditions are met.

• There is currently no public market for the Notes. Application will be made to list the Notes on the Official List of the LuxembourgStock Exchange and to admit the Notes to trading on the Euro MTF Market. There are no assurances that the Notes will beadmitted to the Official List of the Luxembourg Stock Exchange.

This investment involves risks. See ‘‘Risk Factors’’ beginning on page 15.

Offering Price for the Sterling Notes: 100.0% plus accrued interest, if any, from May 24, 2011.Offering Price for the Euro Notes: 100.0% plus accrued interest, if any, from May 24, 2011.

The Notes have not been registered under the U.S. Securities Act of 1933, as amended (the ‘‘Securities Act’’), and may not beoffered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, orin a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Notes are being offered and soldonly (a) to ‘‘qualified institutional buyers’’ (as defined in Rule 144A under the Securities Act) and (b) outside the United States tonon-U.S. persons in compliance with Regulation S under the Securities Act. For details about eligible offers, deemed representationsand agreements by investors and transfer restrictions, see ‘‘Notice to Investors’’.

The initial purchasers expect to deliver the Notes to investors through the facilities of Euroclear Bank S.A./N.V. and ClearstreamBanking, societe anonyme, on or about May 24, 2011 (the ‘‘Issue Date’’).

Joint Global Coordinators and Joint Physical Book-Runners

BofA Merrill Lynch Goldman Sachs InternationalLead Managers

Lloyds Bank Corporate Markets Mizuho International plc

The date of this offering memorandum is May 13, 2011

You should rely only on the information contained in this offering memorandum. We have notauthorised any person to provide you with any information or represent anything about us or thisoffering that is not contained in this offering memorandum. If given or made, any such otherinformation or representation should not be relied upon as having been authorised by us or the initialpurchasers. We take no responsibility for, and can provide no assurance as to the accuracy of, anyother information that others may give you. We are not, and the initial purchasers are not, making anoffer to sell these Notes in any jurisdiction where an offer or sale is not permitted.

Table of Contents

Page

USE OF TERMS AND CONVENTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vFORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vPRESENTATION OF FINANCIAL AND OTHER DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . viSUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7SUMMARY CONSOLIDATED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40CAPITALISATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41SELECTED CONSOLIDATED FINANCIAL AND OTHER INFORMATION . . . . . . . . . . . . 42OPERATING AND FINANCIAL REVIEW AND PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . 44BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62SHAREHOLDERS AND CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63DESCRIPTION OF OTHER INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64DESCRIPTION OF THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70BOOK-ENTRY, DELIVERY AND FORM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150NOTICE TO INVESTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157ENFORCEABILITY OF CIVIL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158LISTING AND GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

We are making this offering in reliance on an exemption from registration under the Securities Actfor offers and sales of securities that do not involve a public offering. The Notes may not be offered orsold except pursuant to an exemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act and any applicable state securities laws. The laws of certainjurisdictions may restrict the distribution of this offering memorandum and the offer and sale of theNotes. Persons into whose possession this offering memorandum or any of the Notes must informthemselves about, and observe, any such restrictions. None of the Issuer, the initial purchasers or theirrespective representatives are making any representation to any offeree or any purchaser of the Notesregarding the legality of any investment in the Notes by such offeree or purchaser under applicableinvestment or similar laws or regulations. For a further description of certain restrictions on theoffering and sale of the Notes and the distribution of this offering memorandum, see ‘‘Notice toInvestors’’.

The laws of certain jurisdictions may restrict the distribution of this offering memorandum and theoffer and sale of the Notes. Persons into whose possession this offering memorandum or any of theNotes must inform themselves about, and observe, any such restrictions. None of the Issuer, the initialpurchasers or their respective representatives are making any representation to any offeree or anypurchaser of the Notes regarding the legality of any investment in the Notes by such offeree orpurchaser under applicable investment or similar laws or regulations. For a further description ofcertain restrictions on the offering and sale of the Notes and the distribution of this offeringmemorandum, see ‘‘Notice to Investors’’.

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By purchasing the Notes, you will be deemed to have made acknowledgments, representations,warranties and agreements as set forth under ‘‘Notice to Investors’’ in this offering memorandum. Weare not, and the initial purchasers are not, making an offer to sell the Notes in any jurisdiction exceptwhere an offer or sale is permitted. You should understand that you will be required to bear thefinancial risks of your investment for an indefinite period of time.

This offering memorandum summarises documents and other information in a manner we believeto be accurate, but we refer you to the actual documents for a more complete understanding of theinformation we discuss in this offering memorandum. In making an investment decision, you must relyon your own examination of such documents, our business and the terms of the offering and the Notes,including the merits and risks involved.

By accepting delivery of this offering memorandum, you acknowledge that (1) you have beenafforded an opportunity to request and to review all additional information considered by you to benecessary to verify the accuracy of, or to supplement, the information contained in this offeringmemorandum, (2) you have not relied on the initial purchasers or any person affiliated with the initialpurchasers in connection with the investigation of the accuracy of such information or your investmentdecision, (3) this offering memorandum relates to an offering that is exempt from registration underthe Securities Act, and (4) no person has been authorised to give information or to make anyrepresentations concerning us, this offering or the Notes described in this offering memorandum, otherthan as contained in this offering memorandum and information given by our duly authorised officersand employees in connection with an investor’s examination of us and the terms of the offering of theNotes.

This offering memorandum may not be copied or reproduced in whole or in part, and it may onlybe distributed and disclosed to the prospective investors to whom it is provided.

We make no representation to you that the Notes are a legal investment for you. You should notconsider any information in this offering memorandum to be legal, business or tax advice. You shouldconsult your own attorney, business advisor and tax advisor for legal, business and tax advice regardingan investment in the Notes. Neither the delivery of the offering memorandum nor any sale madepursuant to this offering memorandum implies that any information set forth in this offeringmemorandum is correct as of any date after the date of this offering memorandum.

You should contact the initial purchasers with any questions about this offering or if you requireadditional information to verify the information contained in this offering memorandum.

The Issuer intends to list the Notes on the Official List of the Luxembourg Stock Exchange fortrading on the Euro MTF Market and will submit this offering memorandum to the competentauthority in connection with the listing application. In the course of any review by the competentauthority, the Issuer may be requested to make changes to the financial and other information includedin this offering memorandum. Comments by the competent authority may require significantmodification or reformation of information contained in this offering memorandum or may require theinclusion of additional information, including financial information in respect of the Guarantors.

We reserve the right to withdraw this offering of the Notes at any time. We and the initialpurchasers also reserve the right to reject any offer to purchase the Notes in whole or in part for anyreason and to allot to any prospective investor less than the full amount of notes sought by suchinvestor.

In connection with this offering, the initial purchasers may effect transactions that stabilise ormaintain the market price of the Notes at a higher level than the Notes might otherwise achieve in theopen market. Such stabilising, if commenced, may be discontinued at any time but must end no laterthan the earlier of 30 days after the Issue Date and 60 days after the date of the allotment of theNotes. For a description of these activities, see the ‘‘Plan of Distribution’’ section in this offeringmemorandum.

The initial purchasers make no representation or warranty, express or implied, as to the accuracyor completeness of the information set forth in this offering memorandum, and nothing contained inthis offering memorandum is, nor should you rely upon it as, a promise or representation, whether asto the past or the future.

The Notes provide for The Bank of New York Mellon (the ‘‘Trustee’’) to take action in certaincircumstances on behalf of the holders of the Notes, but only if the Trustee is indemnified and/or

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secured to its satisfaction in connection with the taking of such action. It may not be possible for theTrustee to take certain actions in relation to the Notes and accordingly in such circumstances, theTrustee will be unable to take action, notwithstanding the provision of an indemnity and/or security toit, and it be for the holders of the Notes to take action directly.

This offering memorandum is strictly confidential and has been prepared by us solely for use inconnection with the proposed offering of the Notes described in this offering memorandum. Thisoffering memorandum is personal to each offeree and does not constitute an offer to any other personor the public generally to subscribe for or otherwise acquire the Notes. Distribution of this offeringmemorandum to any person other than the offeree and those persons, if any, retained to advise suchofferee with respect to this offering memorandum is unauthorised and any disclosure of any of itscontents without our prior written consent is prohibited. By accepting delivery of this offeringmemorandum, you agree to the foregoing and not to make any photocopies, in whole or in part, of thisoffering memorandum or any documents delivered in connection with this offering memorandum.If you do not purchase the Notes, or this offering of the Notes is terminated, you agree to return thisoffering memorandum to: Merrill Lynch International, Attention: High Yield Syndicate Desk, 2 KingEdward Street, London EC1A 1HQ, United Kingdom.

Neither the Securities and Exchange Commission (‘‘SEC’’) nor any state securities commissionhas approved or disapproved of these securities or determined if this offering memorandum is truthfulor complete. Any representation to the contrary is a criminal offence.

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR ANAPPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OFTHE NEW HAMPSHIRE REVISED STATUTES, 1955, AS AMENDED, WITH THESTATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY ISEFFECTIVELY REGISTERED OR A PERSON IS LICENCED IN THE STATE OFNEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATETHAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE ANDNOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT ANEXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR ATRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED INANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDEDOR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT ISUNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVEPURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATIONINCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

NOTICE TO CERTAIN EUROPEAN INVESTORS

European Economic Area

This offering memorandum has been prepared on the basis that any offer of Notes in any MemberState of the European Economic Area which has implemented the Prospectus Directive, defined below(each, a ‘‘Relevant Member State’’) will be made pursuant to an exemption under the ProspectusDirective from the requirement to publish a prospectus for offers of Notes. Accordingly, any personmaking or intending to make an offer in that Relevant Member State of the Notes which are thesubject of the offering contemplated in this offering memorandum may only do so in circumstances inwhich no obligation arises for the Issuer or any Guarantor or any of the initial purchasers to publish aprospectus pursuant to Article 3 of the Prospectus Directive, in each case, in relation to such offer.None of the Issuer, the Guarantors and the initial purchasers has authorised, nor do they authorise, themaking of any offer of Notes in circumstances in which an obligation arises for the Issuer, anyGuarantor or the initial purchasers to publish a prospectus for such offer.

In relation to each Relevant Member State, each initial purchasers has represented and agreedthat with effect from and including the date on which the Prospectus Directive is implemented in thatRelevant Member State it has not made and will not make an offer of the Notes which are the subject

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of the offering contemplated by this offering memorandum to the public in that Relevant MemberState other than:

(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision ofthe 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investorsas defined in the Prospectus Directive), as permitted under the Prospectus Directive, subjectto obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer forany such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer of the Notes shall require the Issuer, any Guarantor or any initial purchaserto publish a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an ‘‘offer of Notes to the public’’ in relation toany Notes in any Relevant Member State means the communication in any form and by any means ofsufficient information on the terms of the offer and the Notes to be offered so as to enable an investorto decide to purchase or subscribe the Notes, as the same may be varied in that Member State by anymeasure implementing the Prospectus Directive in that Member State, the expression ‘‘ProspectusDirective’’ means Directive 2003/71/EC (and amendments thereto, including the 2010 PD AmendingDirective, to the extent implemented in the Relevant Member State), and includes any relevantimplementing measure in the Relevant Member State and the expression ‘‘2010 PD AmendingDirective’’ means Directive 2010/73/EU.

United Kingdom

This offering memorandum is for distribution only to, and is directed solely at, persons who (i) areoutside the United Kingdom, (ii) are investment professionals, as such term is defined in Article 19(5)of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the‘‘Financial Promotion Order’’), (iii) are persons falling within Article 49(2)(a) to (d) of the FinancialPromotion Order, or (iv) are persons to whom an invitation or inducement to engage in investmentactivity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the‘‘FSMA’’)) in connection with the issue or sale of any Notes may otherwise be lawfully communicatedor caused to be communicated (all such persons together being referred to as ‘‘relevant persons’’). Thisoffering memorandum is directed only at relevant persons and must not be acted on or relied on bypersons who are not relevant persons. Any investment or investment activity to which this offeringmemorandum relates is available only to relevant persons and will be engaged in only with relevantpersons. Any person who is not a relevant person should not act or rely on this offering memorandumor any of its contents.

Switzerland

This offering memorandum, as well as any other material relating to the Notes which are thesubject of the offering contemplated by this offering memorandum, does not constitute an issueprospectus pursuant to article 652a and/or article 1156 of the Swiss Code of Obligations and may notcomply with the Directive for Notes of Foreign Borrowers of the Swiss Bankers Association. The Noteswill not be listed on the SIX Swiss Exchange Ltd., and, therefore, the documents relating to the Notes,including, but not limited to, this offering memorandum, do not claim to comply with the disclosurestandards of the Swiss Code of Obligations and the listing rules of SIX Swiss Exchange Ltd andcorresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange Ltd. TheNotes are being offered in Switzerland by way of a private placement (i.e., to a limited number ofselected investors only), without any public advertisement and only to investors who do not purchasethe Notes with the intention to distribute them to the public. The investors will be individuallyapproached directly from time to time. This offering memorandum, as well as any other materialrelating to the Notes, is personal and confidential and does not constitute an offer to any other person.This offering memorandum, as well as any other material relating to the Notes, may only be used bythose investors to whom it has been handed out in connection with the offering described herein andmay neither directly nor indirectly be distributed or made available to other persons without thecompany’s express consent. This offering memorandum, as well as any other material relating to the

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Notes, may not be used in connection with any other offer and shall in particular not be copied and/ordistributed to the public in (or from) Switzerland.

USE OF TERMS AND CONVENTIONS

Unless otherwise specified or the context requires otherwise in this offering memorandum:

• references to the ‘‘company’’, ‘‘group’’, ‘‘we’’, ‘‘us’’ and ‘‘our’’ refer to Odeon Midco and itsconsolidated subsidiaries, except where the context otherwise requires;

• references to the ‘‘Issuer’’ refers to Odeon Finco;

• references to the ‘‘Notes’’ are to the sterling-denominated 9.0% Senior Secured Notes due 2018offered hereunder and the euro-denominated Senior Secured Floating Rate Notes due 2018offered hereunder;

• references to ‘‘initial purchasers’’ are to Merrill Lynch International, Goldman SachsInternational, Lloyds TSB Bank plc and Mizuho International plc;

• references to ‘‘PropCo’’ are to Odeon Property Group LLP and its subsidiaries;

• references to the ‘‘EU’’ are to the European Union;

• references to ‘‘US’’ and ‘‘United States’’ are to the United States of America;

• references to ‘‘UK GAAP’’ are to the UK Generally Accepted Accounting Practice;

• references to ‘‘Super Senior Revolving Credit Facility’’ are to the revolving facility agreementbetween, among others, Odeon Midco as borrower, Odeon Midco and certain subsidiaries ofOdeon Midco as guarantors, Merrill Lynch International, Goldman Sachs International, LloydsTSB Bank plc and Mizuho International plc as mandated lead arrangers, the initial lenders, TheBank of New York Mellon as senior facility agent and the Security Agent, as entered into inconnection with the offering;

• references to ‘‘EUR’’, ‘‘euro(s)’’ and ‘‘A’’ are to the single currency of the participating MemberStates in the Third Stage of European Economic Union pursuant to the Treaty establishing theEuropean Community as amended from time to time;

• references to ‘‘GBP’’, ‘‘pound(s)’’, ‘‘sterling’’ and ‘‘£’’ are to the currency of the UnitedKingdom; and

• references to ‘‘USD’’, ‘‘dollar(s)’’ and ‘‘$’’ are to the currency of the United States of America.

FORWARD-LOOKING STATEMENTS

Except for historical information contained herein, statements contained in this offeringmemorandum may constitute ‘‘forward looking statements’’ within the meaning of the US PrivateSecurities Litigation Reform Act of 1995.

The words ‘‘believe’’, ‘‘anticipate’’, ‘‘expect’’, ‘‘predict’’, ‘‘continue’’, ‘‘intend’’, ‘‘estimate’’, ‘‘plan’’,‘‘aim’’, ‘‘assume’’, ‘‘positioned’’, ‘‘will’’, ‘‘may’’, ‘‘should’’, ‘‘shall’’, ‘‘risk’’, ‘‘probable’’ and other similarexpressions, which are predictions or indications of future events and future trends, which do not relateto historical matters, identify forward-looking statements. In addition, this offering memorandumincludes forward-looking statements relating to our potential exposure to various types of market risks,such as interest rate risk, credit risk, liquidity risk, foreign exchange rate risk and commodity price risk.You should not rely on forward-looking statements because they involve known and unknown risks,uncertainties and other factors which are in some cases beyond our control and may cause our actualresults, performance or achievements to differ materially from anticipated future results, performanceor achievements expressed or implied by such forward-looking statements (and from past results,performance or achievements). Certain factors that may cause such differences include but are notlimited to:

• the availability of film produced by major studios and the performance of such films in ourmarkets;

• costs associated with the industry-wide conversion to digital-based media;

• unexpected seasonal fluctuations;

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• competition with other cinema operators, alternative film delivery methods and other forms ofentertainment;

• the inability to realise the benefits of current or potential future acquisitions, cinema expansionsor new cinema builds;

• shrinking film release windows;

• the inability to generate ancillary revenue;

• changes to the terms of our leases;

• work stoppages and other labour problems;

• a failure or breach of our information technology;

• our significant leverage and debt service obligations;

• fraudulent conveyance laws and other limitations on the enforceability and amount of theGuarantees; and

• other risk factors listed in this offering memorandum.

For a more detailed discussion of these factors, see ‘‘Risk Factors’’, ‘‘Business’’ and ‘‘Operating andFinancial Review and Prospects’’ included elsewhere in this offering memorandum. You are cautionednot to place undue reliance on these forward-looking statements. These forward-looking statements aremade as of the date of this offering memorandum and are not intended to give any assurance as tofuture results. We undertake no obligation to, and do not intend to, publicly update or revise any ofthese forward-looking statements, whether to reflect new information or future events or circumstancesor otherwise.

PRESENTATION OF FINANCIAL AND OTHER DATA

Financial information and operational data

In this offering memorandum, the term ‘‘financial statements’’ refers to the audited consolidatedannual accounts of Odeon & UCI Cinemas Group Limited and its subsidiaries as of and for the yearsended December 31, 2008, 2009 and 2010 included elsewhere herein. Odeon & UCI Cinemas GroupLimited is the indirect parent company of Odeon Midco and is not part of the credit group for theNotes. The financial data for Odeon & UCI Cinemas Group Limited differs from the financial data ofthe Issuer in that the financial statements for Odeon & UCI Cinemas Group Limited reflectshareholder notes issued by Odeon & UCI Cinemas Group Limited to our indirect parent companieswith an aggregate principal amount plus accrued interest as of December 31, 2010 of £346.8 million.See ‘‘Shareholders and Certain Transactions—Terms and conditions of transactions with relatedparties—Shareholder debt’’.

We have prepared the financial statements contained in this offering memorandum on the basis ofgenerally accepted accounting principles in the UK, or ‘‘UK GAAP’’. UK GAAP differs in significantrespects from international financial reporting standards (‘‘IFRS’’) and generally accepted accountingprinciples in the United States, or ‘‘U.S. GAAP’’. You should consult your own professional advisers foran understanding of the differences between UK GAAP, IFRS and U.S. GAAP. You should read thefinancial statements and the notes to the financial statements included elsewhere in this offeringmemorandum, together with ‘‘Operating and Financial Review and Prospects’’.

See ‘‘Independent Auditors’’ for a description of the independent auditors’ report dated April 1,2011 on Odeon & UCI Cinemas Group Limited’s consolidated financial statements. In accordance withguidance issued by The Institute of Chartered Accountants in England and Wales, the independentauditors’ report states that: it was made solely to Odeon & UCI Cinemas Group Limited’s members, asa body, in accordance with Section 235 of the UK Companies Act 1985; the independent auditors’ workwas undertaken so that the independent auditors might state to Odeon & UCI Cinemas GroupLimited’s members those matters that were required to be stated to them in an auditors’ report and forno other purpose; and, to the fullest extent permitted by law, the independent auditors do not acceptor assume responsibility to anyone other than Odeon & UCI Group Limited and its members as abody, for their audit work or the opinions they have formed. The independent auditors’ reports for theaccounting periods for the years ended December 31, 2008, December 31, 2009 and December 31, 2010

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were unqualified. KPMG LLP was Odeon & UCI Cinemas Group Limited’s auditors for theseaccounting periods.

The above-mentioned financial statements contain cross-references to other parts of such statutoryannual reports and financial statements; however, such cross-referenced material is not part of, and isnot incorporated by reference into, this offering memorandum and should be disregarded for thepurpose of this offering memorandum.

Prospective investors in the Notes should understand that in making these statements theindependent auditors confirmed that they do not accept or assume any liability to parties (such as thepurchasers of the Notes) other than Odeon & UCI Cinemas Group Limited and its members as a bodywith respect to the report and to the independent auditors’ audit work and opinions. The SEC wouldnot permit such limiting language to be included in a registration statement or a prospectus used inconnection with an offering of securities registered under the Securities Act or in a report filed underthe US Securities Exchange Act of 1934, as amended (the ‘‘US Exchange Act’’). If a US court (or anyother court) were to give effect to such limiting language, the recourse that investors in the Notes mayhave against the independent auditors based on their report or the consolidated financial statements towhich it relates could be limited.

We have presented certain information in this offering memorandum that are non-GAAPmeasures. As used in this offering memorandum, this information includes ‘‘EBITDA’’, ‘‘EBITDAR’’,‘‘pro-forma EBITDA’’ and ‘‘pro-forma EBITDAR’’. We calculate EBITDA as earnings before interest,tax, depreciation, amortisation, exceptional items and strategic costs. We calculate EBITDAR asEBITDA plus all rental expenses, including rent paid to PropCo. Our management believes thatEBITDA and EBITDAR are meaningful for investors because they provide an analysis of ouroperating results, profitability and ability to service debt and because EBITDA and EBITDAR are usedby our chief operating decision makers to track our business evolution, establish operational andstrategic targets and make important business decisions. In addition, we believe that EBITDA,EBITDAR, pro-forma EBITDA and pro-forma EBITDAR are measures commonly used by investorsand other interested parties in our industry. Although we are presenting these measures to enhance theunderstanding of our historical operating performance, EBITDA, EBITDAR, pro-forma EBITDA andpro-forma EBITDAR should not be considered alternatives to operating profit as an indicator of ouroperating performance, or alternatives to cash flows from operating activities as measures of ourliquidity.

You should not consider EBITDA, EBITDAR, pro-forma EBITDA and pro-forma EBITDAR orany other non-GAAP financial measures presented herein as alternatives to measures of financialperformance determined in accordance with generally accepted accounting principles, such as operatingprofit, as a measure of operating results or cash flow as a measure of liquidity. EBITDA, EBITDAR,pro-forma EBITDA and pro-forma EBITDAR are not measures of financial performance underUK GAAP. Our computation of EBITDA, EBITDAR, pro-forma EBITDA and pro-forma EBITDARand other non-GAAP financial measures may not be comparable to similarly titled measures of othercompanies.

EBITDA and EBITDAR, as used in this offering memorandum, are not calculated in the samemanner as ‘‘Consolidated EBITDA’’ is calculated pursuant to the indenture governing the Notes (the‘‘Indenture’’) as described under ‘‘Description of the Notes’’ or for purposes of any of our otherindebtedness.

The information presented by EBITDA, EBITDAR, pro-forma EBITDA and pro-formaEBITDAR is unaudited and has not necessarily been prepared in accordance with UK GAAP or anyother accounting standards. In addition, the presentation of these measures is not intended to and doesnot comply with the reporting requirements of the SEC; compliance with its requirements wouldrequire us to make changes to the presentation of this information.

Rounding adjustments have been made in calculating some of the financial information included inthis offering memorandum. Figures shown as totals in some tables and elsewhere may not be exactarithmetic aggregations of the figures that precede them.

Industry data

In this offering memorandum, we rely on and refer to information regarding our business and themarket in which we operate and compete. We have obtained this information from various third party

vii

sources, including providers of industry data, discussions with our customers and our own internalestimates. While we believe that industry publications, surveys and forecasts are reliable, they have notbeen independently verified, and neither we nor the initial purchasers make any representation orwarranty as to the accuracy or completeness of such information set forth in this offeringmemorandum.

Additionally, industry publications, surveys and forecasts generally state that the informationcontained therein has been obtained from sources believed to be reliable, but that the accuracy andcompleteness of such information is not guaranteed and in some instances state that they do notassume liability for such information. We cannot assure you of the accuracy and completeness of suchinformation as we have not independently verified such information.

In addition, in many cases, we have made statements in this offering memorandum regarding ourindustry and our position in the industry based solely on our experience, management estimates, andour own investigation of market conditions. We cannot assure you that any of these assumptions areaccurate or correctly reflect our position in the industry, and none of our internal surveys orinformation has been verified by any independent sources. Neither we nor the initial purchasers makeany representation or warranty as to the accuracy or completeness of this information.

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SUMMARY

This summary highlights selected information contained in this offering memorandum. This summaryshould be read as an introduction to this offering memorandum. It does not purport to be complete and isqualified in its entirety by, and should be read in conjunction with, the remainder of this offeringmemorandum. Any decision by an investor to invest in the Notes should be based on a thoroughconsideration of this offering memorandum in its entirety, including ‘‘Risk Factors’’, ‘‘Operating andFinancial Review and Prospects’’ and our financial statements and related notes and information containedelsewhere in this offering memorandum as well as the information referred to under ‘‘Where You Can FindMore Information’’. Certain terms used in this summary are defined elsewhere in this offeringmemorandum.

Overview

We are the largest cinema operator in Europe with 207 cinemas and 1,884 screens across sevencountries as of December 31, 2010 and the largest cinema operator in the world outside the Americas.We are 100% owned by funds managed by Terra Firma, a leading private equity company, whichacquired Odeon in September 2004 and subsequently acquired United Cinemas International inOctober 2004 and combined the two companies to form the current group. For the year endedDecember 31, 2010 we generated £649.6 million of turnover and £97.5 million of pro-forma EBITDA.

Our business

We operate cinemas in the United Kingdom, Spain, Italy, Germany, Austria, Portugal and Ireland.We operate under the name of ‘‘Odeon’’ in the United Kingdom, ‘‘Cinesa’’ in Spain, ‘‘UCI Kinowelt’’in Germany and Austria and ‘‘UCI’’ in Italy and Portugal. In Ireland, we manage a chain of cinemas onbehalf of a third party. Our business is focused on our belief that the cinema-going experience shouldbe an enjoyable yet affordable and convenient treat, and we believe we offer our customers anappealing out-of-home entertainment experience by featuring a range of popular films at a range ofconvenient showtimes and at different price points.

Admission tickets represent our largest source of revenue and are directly linked with attendance,which we drive in part through the location and design of our multiplex cinemas, our customer service,retail options and marketing. Our multiplex cinemas typically contain 8 to 20 screens with auditoriatypically ranging from 100 to 500 seats each, providing movie goers with a wide variety of films atconvenient times with a range of comfortable seating options.

We predominantly licence first-run films from distributors owned by major film productioncompanies and from independent distributors. We exhibit a range of films that are intended to appealto a broad and diverse audience. Our exhibitions include ‘‘tentpole’’ films, such as Avatar, Harry Potterand the Bond franchises, as well as locally produced films which appeal to the local market. In order tosecure our slate of film offerings, our national film departments negotiate with national offices of majorfilm distributors as well as national film distributors to hire films for our cinemas at agreeablecommercial rates. Films are usually played simultaneously by competing cinemas. In addition, some ofour cinemas feature recent technological innovations such as 3D, digital, IMAX, digital stereosurround-sound and online ticketing systems, as well as improvements to the range and quality of ourseating and retail offerings.

We offer a range of food and beverage options that is continuously being reviewed, designed toincrease both enjoyment and time spent in the cinema. Retail sales are our second largest source ofrevenue after box office admissions.

Additionally, we generate revenue from screen advertising sales and other revenue streams, such asscreen letting, sales of merchandise, including 3D glasses, sub-letting retail space, booking fees andgames located in some of our cinemas. We are able to use cinemas during non-peak hours for non-filmevents, such as corporate conferences.

We believe we are an industry leader in the digital transformation of the cinema industry inEurope. During 2009, we began converting our cinemas from analogue to digital projection technology.Digital projection technology offers significant cost savings for film distributors and gives us greaterflexibility in film programming, the ability to screen 3D product, improved advertising and greaterpossibilities for screening live and pre-recorded alternative entertainment. Distributors will contributesignificantly to the cost of conversion over time, and we have secured independent funding to support

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the initial investment in several territories and are pursuing funding in the remaining territories. As ofMarch 31, 2011, we had 992 digital screens, representing approximately 53% of the screens in ourestate. We currently anticipate converting substantially all of our entire cinema estate to digitaltechnology by the middle of 2012.

Odeon has been at the forefront of cinema market consolidation in Europe, with a proven track-record of successfully acquiring and integrating smaller operators. We completed six acquisitionsbetween 2005 and 2010 and have a pipeline of acquisitions in existing markets that are expected to becompleted in the near future.

Our market

According to industry sources, box office revenue in our core markets of the United Kingdom,Spain, Italy, Germany and Ireland grew at a 3.1% CAGR from 2000 to 2010, while attendance figuresin these core markets when taken as a whole remained mostly stable from 2000 to 2010 with a 0.1%CAGR. We believe that this is a resilient business sector where improved quality and range of filmslate, investments in cinema infrastructure and technological advances will support and stimulate pricingand attendance levels.

Cinematic exhibition has demonstrated resilient long term revenue growth despite numerousconsumer-driven economic downturns and the emergence of competitive technologies such as VHS,DVD, home wide screen and video on demand. According to industry sources, total European grossbox office is forecast to grow at a CAGR of 4.0% from 2009 to 2014, driven by increases in both ticketprices and attendance.

Digital projection technology has significant advantages over analogue, as digital films are notsusceptible to scratching and fading and remain clear and sharp irrespective of the number of showings.A digitally produced or digitally converted film print can be distributed to cinemas via satellite, physicalmedia, or fibre optic networks. The digitised film print is stored on a central computer/server whichdelivers it to a digital projector for each screening of the movie and, due to its format, enables cinemaoperators to move films more efficiently between auditoria within a cinema as demand increases ordecreases for each film.

Digital projection also allows the presentation of 3D content and alternative entertainment such aslive and pre-recorded concert events, operas, sporting events and special documentaries. Twenty-eightcommercial films released in the United Kingdom during 2010 were available in 3D format and thenumber is expected to increase in 2011. 3D technology offers a premium experience with crisp, brightimages that immerse the customer into a film. A premium is generally paid by customers for a 3Dpresentation.

Our strengths

Leading Market Position and Economies of Scale

We are the largest multi-territory cinema operator in Europe with 1,884 screens as ofDecember 31, 2010, nearly twice the number of screens of the second largest European operator.Based on management estimates and by number of screens operated, we believe we have the numberone market share in the United Kingdom/Ireland and Spain with 887 screens and 393 screens,respectively, as of December 31, 2010. We are one of the top two operators in Italy, based on numberof screens operated, with 303 screens as of December 31, 2010, and we are a significant cinemaoperator in Germany with 212 screens as of December 31, 2010.

We believe our leading market positions in our core markets provides us with economies of scalewith distributors and advertisers, as well as our technology and retail partners and landlords, which helpus optimise our cost structure and increase our operating margins. Our size improves our position tonegotiate long-term retail contracts with leading suppliers such as Coca-Cola and Pepsi, as well asmajor brand retail franchises. For example, we are one of the largest franchisees of the premium coffeeshop chain Costa Coffee, and IMAX selected us as one of their preferred partners for theimplementation of their proprietary large screen format. We are now the largest operator in Europe ofthis premium format. Film studio partners also see us as an attractive partner for distribution of films,which, for example, enabled us to negotiate preferential digital roll-out agreements directly with thelarge Hollywood film distributors.

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We entertain more customers than any other cinema operator in Europe, which we believeenhances brand recognition and supports initiatives such as our customer loyalty schemes and onlinemarketing initiatives. We operate cinema loyalty programmes in each of our core national markets andhave a valuable, growing online database of customer information. This database allows us to targetpromotions and programmes to better meet our customers’ needs. In addition, as a result of theexcellent contributions of our staff teams, we consistently achieve some of the highest cinema customersatisfaction scores in our core markets.

Diversified Estate Portfolio and Solid Platform for Innovation

We believe we have assembled, through organic new site developments and strategic acquisitions,one of the most attractive cinema estates in Europe. Certain of our urban locations are some of theoldest, most established cinemas in Europe, which reinforces brand recognition and often attractspremium box office prices. We have particular strength in many of the key cities in Europe such asLondon, Manchester, Madrid, Barcelona, Rome, Milan, Vienna and Hamburg. For example, ourflagship cinema in Leicester Square in London is an iconic location for world premieres such as Avatar,Harry Potter and Quantum of Solace. At the same time, larger multiplex cinemas in our diversifiedportfolio offer a wider variety of films and showtimes to a broad customer base. Our cinema estate isbroadly distributed across seven countries, establishing a diverse geographic footprint that helpsmitigate year on year volatility from regional economic, weather and film performance risk and enablesus to diversify our film offering through local content.

We also believe that our diversified cinema portfolio, combined with our size, results in anexcellent platform for innovation. For example, the broad range of our cinema portfolio has allowed usto test, adjust and successfully implement new initiatives such as premium seating, IMAX, 3D andsuccessful retail layouts, which has resulted in additional revenue generating opportunities.

Experienced In-Territory Consolidator in Fragmented Markets

Since our acquisition by funds managed by Terra Firma in 2004, we have overseen the integrationof the Odeon and UCI cinema businesses and have completed and successfully integrated sixacquisitions between 2005 and 2010 in Continental Europe. We believe that we have significantexperience in identifying, evaluating and integrating cinema assets to enhance performance as part ofour portfolio. We believe that we have a track record of improving the operating and financialperformance of acquired cinemas, as our strong supplier relationships, economies of scale andexperienced local integration teams are able to add value to the cinemas we acquire.

Attractive Business Model with Resilient Revenues and Cash Flows

We benefit from the film industry’s resilience through economic cycles, including the most recentdownturn. We believe that cinemas offer an excellent value ‘‘going out’’ proposition, which enableconsumers to participate in high-quality out-of-home entertainment at affordable prices, which isespecially attractive in challenging macroeconomic environments. The attendance levels across ourportfolio as a whole have been relatively stable over time which, based on our diversified cinemaportfolio, broad geographic footprint and large customer base, giving us a stable revenue platform. Inaddition, we have identified a number of specific initiatives which we believe can further support thegrowth and stability of our revenue largely independently of the overall economic environment. Theseinitiatives include our continued focus on increasing penetration of 3D and digital formats to growaverage ticket prices and to reduce costs. A significant portion of our operating costs are linked to ourrevenue. For example, film hire is directly related to our box office revenue and we have a flexiblework scheme that allows us to adjust our staffing levels in response to varying cinema attendance,which helps to stabilise earnings relative to attendance. The business generates a high proportion offree cash flow. A large portion of our capital expenditures are discretionary investment to grow revenueand earnings. This provides financial flexibility to undertake value-accretive acquisitions and disciplinedinvestments or to divert cash generation to the reduction of net debt.

Experienced Management Team

We benefit from our senior management team’s extensive industry experience, which we believe isa key component of our success. The current senior management team has been working together since2006 and has demonstrated the ability to generate growth and successfully integrate the acquisition of

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additional cinemas while maintaining effective cost controls. We believe that the depth of experience ofour operational management team, across different countries in Europe, provides us with an advantageover our competitors, allowing us to leverage knowledge of best practices across different areas of ouroperations.

Our strategies

We believe our disciplined operating strategy and experienced management team will enable us tocontinue to enhance our leading position in our core markets. The key elements of our businessstrategy are:

Expanding our Leadership Position in our Core Markets

Our target is to continue to grow leading market positions in all of the major cinema markets inwhich we operate, in order to present our customers with a high quality cinema experience and benefitfrom economies of scale. We intend to establish these leadership positions through a combination ofdisciplined organic growth through new site developments and strategic in-territory acquisitions thatallow us to leverage our existing platform. Our acquisition strategy generally targets in-territorycompetitors with multiplex facilities in locations that complement our existing cinemas, but we will alsoconsider potential acquisitions outside of our existing markets, where we can deliver value with ourexperienced management team, with a focus on value maximising opportunities that meet both ourinvestment return criteria and our strategic objectives.

Continuing Focus on Innovative Customer Offering and Application of Technology

We will continue to implement new technologies to enhance the cinema experience and broadenour customer offering. By the middle of 2012, we expect to substantially complete the roll-out of digitalprojection systems in all of our cinemas. We believe operating fully digital cinemas will provide us withsignificant ongoing staff cost saving opportunities and greater flexibility in exhibiting our content, whichwe expect will enhance our capacity utilisation, enable us to achieve higher ticket prices fordifferentiated content formats such as 3D, and provide incremental revenue from exhibition ofalternative content such as live concerts, sporting events, musical theatre and opera. We are Europe’slargest IMAX operator and, based on management’s estimates, we believe that we are the largest 3Doperator in Europe. We aim to continue to benefit from higher pricing for premium products withinthese formats. We also expect that digitalisation provides an opportunity to accelerate growth in ourscreen advertising services by offering lower costs and increased flexibility to advertisers.

Maximising Customer Satisfaction and Loyalty

Customer satisfaction is one of our highest priorities. Our customer strategy focuses upon theentire cinema experience and we are committed to best in class customer experience by continuallytraining our employees, improving our ticket booking process, refurbishing and re-developing ourcinemas, expanding our retail offerings and upgrading our cinema technology. We will continue toprovide special offers and promotions to reward customer loyalty and increase retail spending percustomer through our leading cinema loyalty programmes. We plan to take advantage of new mediatools and technology to enhance engagement with our customers and have invested in initiatives suchas customer relationship management database analytics, Facebook marketing and iPhone/Android-based mobile booking applications. We believe these investments will further increase our leading brandrecognition and customer loyalty.

Continuing Focus on Operational Efficiency

We will continue to focus on achieving operational excellence by utilising our economies of scale,and controlling cinema operating costs, while continuing to focus on customer service. We believe thatour commitment to improving the overall performance of our cinema estate will enable us to maximisethe revenue generating opportunities within each site and, consequently, improve our cash flowgeneration. Our operational strategies are focused in the following areas:

• Continue to improve the terms we negotiate with our film distribution partners for theexhibition of films, as well as those with our retail and technology partners.

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• Continue to grow the retail spend per head in our cinemas by addressing consumer trendsthrough the introduction and evolution of varied retail options.

• Continue to implement targeted marketing and promotional efforts to maintain closerelationships with our customers.

• Continue to roll-out best practices throughout other parts of our cinema estate, such as theroll-out of the pick-and-mix snack wall started in our Italian cinemas.

Recent developments

Acquisitions

On April 28, 2011, we entered into an agreement for the acquisition of nine cinemas in one of ourexisting territories (‘‘Project Dana’’). We currently expect to complete this acquisition during the secondquarter of 2011.

On May 2, 2011, we entered into an agreement for the acquisition of seven cinemas in Italy(‘‘Project Jupiter’’). We currently expect to complete this acquisition during the second quarter of 2011.

On May 3, 2011, we completed the acquisition of five cinemas in Spain and four cinemas in Italyfrom UGC Spain and UGC Italy (‘‘the UGC Acquisitions’’).

We are currently negotiating the acquisition of two cinemas in Spain (‘‘Project Neptune’’) andexpect to enter into an agreement for such acquisition before the end of May 2011. We currentlyexpect to complete this acquisition during the second quarter of 2011.

First Quarter Results

Although our results for the three months ended March 31, 2011 are not currently available, basedon our management accounts for the three months ended March 31, 2011, we expect to report for thefirst quarter of 2011 group turnover of £169.0 million and EBITDA of £23.7 million. These resultsincluded the successful films The King’s Speech in the UK and Che Bella Giornata in Italy, but did notinclude major international blockbusters. Group turnover as shown in our management accounts for thefirst quarter of each of 2010, 2009 and 2008 was £187.2 million, £152.9 million and £125.1 million,respectively, and our EBITDA was £31.6 million, £18.3 million and £12.9 million, respectively. Theresults of the first quarter of 2010 are higher than our historical results for first-quarter periods ofother years largely due to the very successful international blockbusters Avatar and Alice in Wonderland.In other years, international blockbusters were scheduled later in the year.

Strategic Developments

Our shareholders have been reviewing strategic alternatives with respect to our group and havebeen evaluating the possible sale of the business. Discussions have been progressing with a number ofinterested parties, the result of which may or may not lead to the sale of our business to anothershareholder.

The Issuer

Odeon Finco is a newly incorporated public limited company registered in England and Walesunder number 7623457 and is a financing subsidiary of Odeon Midco, which is itself a subsidiary ofOdeon & UCI Bond Holdco Limited (‘‘Odeon Holdco’’). Both Odeon Holdco and Odeon Midco havebeen incorporated under Odeon & UCI Cinemas Holdings Limited, but following a corporaterestructuring upon the closing of this offering, Odeon Holdco and Odeon Midco will becomesubsidiaries of Odeon & UCI Cinemas Group Limited. Odeon Finco has its registered office at54 Whitcomb Street, London, WC2H 7DN and its telephone number is +44 20 7321 0404. OdeonFinco was incorporated under the laws of England and Wales on May 5, 2011.

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6MAY201105510122

SUMMARY CORPORATE AND FINANCING STRUCTURE

The following diagram summarises certain aspects of our corporate structure and financing afterthe closing of this offering. All holdings are 100%. For more information as to the terms of the Notes,see ‘‘Description of the Notes’’.

Guarantees

Parent Guarantee

Funding Loan(2)

Shareholders(1)

Odeon & UCICinemas Holdings

Limited(1)

Odeon & UCICinemas Group

Limited(1)

SubsidiaryGuarantors(5)Sterling Notes(3)

Super SeniorRevolving Credit

Facility(3)(4)

Euro Notes(3)

Odeon & UCIFinco plc(1)

Odeon & UCIBond Midco

Limited(1)

Odeon & UCIBond Holdco

Limited(1)

OtherSubsidiaries

Guarantee

(1) We are indirectly controlled by a group of investment funds managed by Terra Firma Investments (GP) 2 Limited. OdeonMidco is our parent company and it is, in turn, controlled by Odeon Holdco which is, in turn, controlled by Odeon & UCICinemas Group Limited which is, in turn, controlled by Odeon & UCI Cinemas Holdings Limited (‘‘Odeon Holdings’’),which is, in turn, controlled by these investment funds. See ‘‘Shareholders and Certain Transactions’’.

(2) One or more funding loans in respect of the offered Notes will be made by Odeon Finco to Odeon Midco. The fundingloan will have the same aggregate principal amount and repayment terms as the offered Notes.

(3) The Notes and the Super Senior Revolving Credit Facility will be secured by a first-ranking lien over shares of the Issuerand the Guarantors, and first-priority charges over the funding loan, certain bank accounts, intercompany receivables and(for those companies incorporated in England) certain other assets of the Issuer and the Guarantors; provided that lendersunder our new Super Senior Revolving Credit Facility and certain hedging obligations will receive priority to the proceedsfrom an enforcement. See ‘‘Description of the Notes—Security’’ and ‘‘Description of Other Indebtedness—IntercreditorAgreement’’.

(4) The Super Senior Revolving Credit Facility will consist of up to £90.0 million available to Odeon Midco and certain of itssubsidiaries to finance working capital, provide letters of credit for cinema lease rental guarantees and other generalcorporate purposes. See ‘‘Description of Other Indebtedness—Super Senior Revolving Credit Facility’’.

(5) The Issuer and the Subsidiary Guarantors have unconditionally guaranteed (subject to certain limitations relating toapplicable local law) the Super Senior Revolving Credit Facility on a senior secured basis. Odeon Midco and the SubsidiaryGuarantors have unconditionally guaranteed (subject to certain limitations relating to applicable local law) the Notes on asenior secured basis. See ‘‘Risk Factors—Risk related to the Notes and the Guarantees—Fraudulent conveyance laws andother limitations on the enforceability and the amount of the Guarantees may adversely affect the validity andenforceability of the Guarantees,’’ ‘‘Description of Other Indebtedness—Super Senior Revolving Credit Facility’’ and‘‘Description of Other Indebtedness—Intercreditor Agreement’’. On an aggregate basis and without consideringconsolidation adjustments, as of and for the December 31, 2010, the Issuer and the Guarantors accounted for 77.5% of ourconsolidated EBITDA. On an aggregate basis and without considering consolidation adjustments, as of December 31, 2010,the Issuer and the Guarantors accounted for 81.4% of our aggregate total assets. For the purposes of these assessments, wehave excluded from assets intercompany balances, receivables due from the PropCo group, investments in subsidiaries andjoint ventures and intangible assets, which consist primarily of goodwill.

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THE OFFERING

The summary below describes the principal terms of the Notes. Certain of the terms andconditions described below are subject to important limitations and exceptions. The ‘‘Description of theNotes’’ section of this offering memorandum contains a more detailed description of the terms andconditions of the Notes.

Issuer . . . . . . . . . . . . . . . . . . . . . . . Odeon & UCI Finco plc.

Notes Offered . . . . . . . . . . . . . . . . . . £300,000,000 aggregate principal amount of sterling-denominated 9.0% senior secured notes due 2018 (the‘‘Sterling Notes’’); and

A200,000,000 aggregate principal amount of euro-denominatedsenior secured floating rate notes due 2018 (the ‘‘Euro Notes’’and, together with the Sterling Notes, the ‘‘Notes’’).

Issue Price . . . . . . . . . . . . . . . . . . . . Sterling Notes: 100.0%

Euro Notes: 100.0%

Maturity . . . . . . . . . . . . . . . . . . . . . The Notes will mature on August 1, 2018.

Interest Rates and Payment Dates . . . Interest on the Sterling Notes will accrue at a rate of 9.0%per annum. Interest on the Sterling Notes will be payablesemi-annually in cash in arrears on February 1 and August 1of each year, commencing February 1, 2012.

Interest on the Euro Notes will accrue at a rate of threemonth EURIBOR plus 5.0% per annum, and will be reset twodays before the beginning of each quarterly interest period.Interest on the Euro Notes will be payable quarterly, in cashin arrears, on February 1, May 1, August 1 and November 1 ofeach year, commencing August 1, 2011.

Form and Denominations . . . . . . . . . The Sterling Notes will be issued on the Issue Date in globalform in minimum denominations of £100,000 and integralmultiples of £1,000 in excess thereof.

The Euro Notes will be issued on the Issue Date in globalform in minimum denominations of A100,000 and integralmultiples of A1,000 in excess thereof.

Security . . . . . . . . . . . . . . . . . . . . . . The Notes will be secured by a first-ranking lien over sharesof the Issuer and the Guarantors, and charges over thefunding loan, certain bank accounts, intercompany receivablesand (for those companies incorporated in England) certainother assets of the Issuer and the Guarantors; provided thatlenders under our new Super Senior Revolving Credit Facilityand certain hedging obligations will receive priority to theproceeds from an enforcement. See ‘‘Description of theNotes—Security’’ and ‘‘Description of Other Indebtedness—Intercreditor Agreement’’.

Intercreditor Agreement . . . . . . . . . . The security granted to secure the Notes will also be grantedto secure indebtedness under the new Super Senior RevolvingCredit Facility. In addition, the Indenture will permit us tosecure additional indebtedness with liens on the collateralunder certain circumstances. The lenders under our new SuperSenior Revolving Credit Facility and the holders of certainhedging obligations will receive priority with respect to theproceeds of an enforcement of the security. Theseintercreditor relationships will be governed by an intercreditoragreement as described in more detail under the caption

7

‘‘Description of Other Indebtedness—IntercreditorAgreement’’.

Guarantees . . . . . . . . . . . . . . . . . . . The Notes will be fully and unconditionally guaranteed on asenior basis by Odeon Midco and the subsidiaries of OdeonMidco that guarantee the Super Senior Revolving CreditFacility. The obligations of the Guarantors will be subject tolegal and contractual limitations and may be released incertain circumstances. See ‘‘Description of the Notes—Guarantees’’.

Ranking . . . . . . . . . . . . . . . . . . . . . . The Notes and the Guarantees will be the Issuer’s and theGuarantors’ general senior obligations and will:

• rank equally in right of payment to all of the Issuer’s andthe Guarantors’ existing and future senior debt;

• rank senior in right of payment to any of the Issuer’s andthe Guarantors’ future debt that is expressly subordinated inright of payment to the Notes and the Guarantees; and

• be structurally subordinated to all of the existing and futureliabilities, including trade payables, of our subsidiaries thatdo not guarantee the Notes.

On an as adjusted basis to give effect to this offering and theapplication of the proceeds of this offering, as atDecember 31, 2010, the Issuer together with the consolidatedsubsidiaries of Odeon Midco would have had £509.1 million oftotal third-party indebtedness of which £475.0 million wouldhave been secured indebtedness, all of which would berepresented by the Notes.

On the same basis, our non-Guarantor subsidiaries would havehad approximately £0.4 million of total third-partyindebtedness.

Additional Amounts . . . . . . . . . . . . . Any payments made by the Issuer or any Guarantor withrespect to the Notes will be made without withholding ordeduction for taxes in any relevant taxing jurisdiction unlessrequired by law. If we are required by law to withhold ordeduct for such taxes with respect to a payment to the holdersof Notes, subject to certain exceptions, we will pay theadditional amounts necessary so that the net amount receivedby the holders of Notes after the withholding or deductions isnot less than the amount that they would have received in theabsence of such withholding or deductions. See ‘‘Descriptionof the Notes—Additional Amounts’’.

Tax Redemption . . . . . . . . . . . . . . . . In the event of certain changes in tax laws that would result inthe payment of Additional Amounts, the Issuer may redeemthe Notes in whole, but not in part, at any time, at aredemption price of 100% of the principal amount, plusaccrued and unpaid interest, if any, and additional amounts, ifany, to the date of redemption. See ‘‘Description of theNotes—Redemption for Taxation Reasons’’.

Optional Redemption . . . . . . . . . . . . On or after August 1, 2014, we may redeem some or all of theSterling Notes at any time at the redemption prices describedin the section ‘‘Description of the Notes—OptionalRedemption’’. On or after August 1, 2012, we may redeemsome or all of the Euro Notes at any time at the redemptionprices described in the section ‘‘Description of the Notes—Optional Redemption’’. Prior to August 1, 2014, we may

8

redeem some or all of the Sterling Notes at a redemptionprice of 100% of the principal amount plus accrued andunpaid interest, if any, to the redemption date, plus a‘‘make-whole’’ premium. We may redeem up to 40% of theaggregate principal amount of the Sterling Notes beforeAugust 1, 2014 with the proceeds of certain equity offerings ata redemption price of 109.0% of the principal amount plusaccrued and unpaid interest, if any, to the redemption date.

Change of Control . . . . . . . . . . . . . . Upon certain events defined as constituting a change ofcontrol, the Issuer may be required to make an offer topurchase the Notes at 101% of their principal amount, plusaccrued and unpaid interest. The Issuer is not required tomake a change of control offer in respect of any transactionconsummated within 183 days of the Issue Date if certainconditions are met. See ‘‘Description of the Notes—Change ofControl’’.

Mandatory Offer to RepurchaseFollowing Certain Asset Sales . . . . . . If we sell certain assets and do not repay certain debt or

reinvest the proceeds of such sales within certain time periods,we must offer to repurchase the Notes at the prices listedunder ‘‘Description of the Notes—Limitation on Sales ofAssets and Subsidiary Stock’’.

Certain Covenants . . . . . . . . . . . . . . The Indenture contains covenants that limit, among otherthings, our ability and the ability of some of our subsidiariesto:

• incur or guarantee additional indebtedness;

• pay dividends on, redeem or repurchase our capital stock;

• make certain restricted payments and investments;

• create, permit to exist or incur certain liens;

• impose restrictions on the ability of subsidiaries to paydividends or other payments to the Issuer;

• transfer or sell certain assets;

• merge or consolidate with other entities;

• enter into certain transactions with affiliates; and

• impair security interests for the benefit of the holders of theNotes.

These covenants are subject to a number of importantqualifications and limitations. See ‘‘Description of the Notes—Certain Covenants’’.

Listing . . . . . . . . . . . . . . . . . . . . . . . Application will be made to list the Notes on the Official Listof the Luxembourg Stock Exchange and to admit the Notes totrading on the Euro MTF Market. There are no assurancesthat the Notes will be admitted to the Official List of theLuxembourg Stock Exchange.

Transfer Restrictions . . . . . . . . . . . . The Notes and the Guarantees have not been and will not beregistered under the Securities Act or the securities laws ofany other jurisdiction. The Notes are subject to restrictions ontransferability and resale. See ‘‘Notice to Certain EuropeanInvestors’’, ‘‘Notice to Investors’’ and ‘‘Plan of Distribution’’.Holders of the Notes will not have the benefit of anyexchange or registration rights.

9

Absence of an Established Market forthe Notes . . . . . . . . . . . . . . . . . . . . . The Notes will be a new class of securities for which there is

currently no market. Although the initial purchasers haveinformed us that they intend to make a market in the Notes,the initial purchasers are not obligated to do so, and maydiscontinue market-making activities at any time withoutnotice. Accordingly, we cannot assure you that a liquid marketfor the Notes will develop or be maintained.

Use of Proceeds . . . . . . . . . . . . . . . . We intend to use the proceeds from this offering together with£31.0 million drawn down in April 2011 from our existingfacilities to refinance indebtedness outstanding under ourexisting credit debt (other than certain capital leases), to fundacquisitions, to pay related fees and expenses and for generalcorporate purposes. See ‘‘Use of Proceeds’’.

Governing Law of the Notes, theGuarantees and the Indenture . . . . . . New York

Trustee . . . . . . . . . . . . . . . . . . . . . . The Bank of New York Mellon, London Branch

Transfer Agent and Principal PayingAgent . . . . . . . . . . . . . . . . . . . . . . . . The Bank of New York Mellon

Registrar . . . . . . . . . . . . . . . . . . . . . The Bank of New York Mellon (Luxembourg) S.A.

Luxembourg Listing Agent . . . . . . . . The Bank of New York Mellon (Luxembourg) S.A.

Luxembourg Paying Agent . . . . . . . . . The Bank of New York Mellon (Luxembourg) S.A.

Security Agent . . . . . . . . . . . . . . . . . The Bank of New York Mellon

Sterling Note Common Codes . . . . . . Regulation S 062714638; Rule 144A 062714689

Sterling Note ISINs . . . . . . . . . . . . . Regulation S XS0627146383; Rule 144A XS0627146896

Euro Note Common Codes . . . . . . . . Regulation S 062713577; Rule 144A 062714077

Euro Note ISINs . . . . . . . . . . . . . . . Regulation S XS0627135774; Rule 144A XS0627140774

RISK FACTORS

Investing in the Notes involves substantial risks. You should consider carefully all the informationin this offering memorandum. In particular, you should carefully consider the factors set forth under‘‘Risk Factors’’ before making a decision whether to invest in the Notes.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following summarises the consolidated financial and operating data derived from the auditedconsolidated financial statements of Odeon & UCI Cinemas Group Limited prepared in accordancewith UK GAAP as of and for the years ended December 31, 2008, 2009 and 2010. See ‘‘Presentation ofFinancial and Other Data’’. At closing of this offering, Odeon & UCI Cinemas Group Limited will bethe indirect parent company of Odeon Midco but will not be part of the credit group for the Notes.

Also presented below is pro-forma financial data which has been prepared to give pro-forma effectto this offering, the application of the proceeds thereof, the related transactions as described under‘‘Use of Proceeds’’, the acquisition of three multiplexes in Italy which we completed in December 2010(the ‘‘Pathe Italy Acquisition’’), the anticipated acquisition of certain cinemas from Project Jupiter,Project Dana and Project Neptune, and the anticipated staff cost savings associated with the completionof the digitalisation of our cinemas as if these transactions had occurred at the beginning of the period.The pro-forma and adjusted financial data is for information purposes only, and does not purport topresent what our results of operations and financial condition would have been had these transactionsactually occurred on these dates, nor does it project our results of operations for any future period orour financial condition at any future date. While the pro-forma and adjusted financial data has beenderived from historical financial information prepared in accordance with UK GAAP, such financialdata contains financial measures other than those in accordance with UK GAAP and should not beconsidered in isolation from or as a substitute for our historical financial information.

Our summary consolidated financial data is presented in pounds and has been prepared inaccordance with UK GAAP. You should read this summary consolidated financial data in conjunctionwith ‘‘Capitalisation’’, ‘‘Selected Consolidated Financial and Other Information’’, ‘‘Operating andFinancial Review and Prospects’’, and the historical consolidated financial statements and the relatednotes, included elsewhere in this offering memorandum.

Year ended December 31,

2008 2009 2010

(£ in thousands)Consolidated Profit and Loss Account:

Turnover : Group and share of joint ventures . . . . . . . . . . . . . 563,087 662,614 671,643Less: share of joint ventures turnover . . . . . . . . . . . . . . . . . (14,986) (21,687) (21,998)

Group turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 548,101 640,927 649,645Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (181,726) (224,793) (235,641)

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366,375 416,134 414,004Net operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . (367,126) (431,574) (387,999)

Operating profit/(loss), analysed as:Before exceptional items . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,582 8,080 27,461

Net operating expenses—exceptional costs . . . . . . . . . . . . . (6,333) (23,520) (1,456)

(751) (15,440) 26,005

Operating profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (751) (15,440) 26,005Share of operating profit/(loss) of joint ventures . . . . . . . . . 253 (267) (3)

Operating profit/(loss) including joint ventures . . . . . . . . . . . . (498) (15,707) 26,002Loss on disposal of properties . . . . . . . . . . . . . . . . . . . . . . (2,021) (3,388) (525)

Profit/(loss) on ordinary activities before interest and taxation (2,519) (19,095) 25,477Interest receivable from related parties . . . . . . . . . . . . . . . . 3,842 2,962 1,222Interest payable and similar charges, excluding shareholder

debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,460) (28,786) (31,852)Interest payable on shareholder debt(1) . . . . . . . . . . . . . . . . (26,992) (31,683) (34,310)Other finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (454) (720) (234)

Loss on ordinary activities before taxation . . . . . . . . . . . . . . . (55,583) (77,322) (39,697)Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,180 (2,128) (4,495)

Loss on ordinary activities after taxation and for the financialyear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,403) (79,450) (44,192)

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2008 2009 2010

(£ in thousands)Consolidated Balance Sheet:

Cash at bank and in hand . . . . . . . . . . . . . . . . . . . . . . . . . 58,541 60,170 36,362Total assets less current liabilities . . . . . . . . . . . . . . . . . . . . 572,826 505,934 478,814

Creditors:Amounts falling due after more than one year net of

shareholder debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (320,923) (319,192) (309,940)Shareholder debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (301,986) (321,847) (346,829)


2008 2009 2010

Operating Data:

Attendance (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.0 74.9 73.1Average ticket price(3) (£) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.38 5.87 6.19Retail revenue per head(4) (£) . . . . . . . . . . . . . . . . . . . . . . . . 1.84 1.92 1.99


2008 2009 2010

(£ in thousands)Other Financial Data:

EBITDA(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,365 71,311 82,401EBITDAR(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,976 178,641 188,034Net financial debt(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275,059 272,170 279,091Net financial costs(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,179 24,861 25,881Capital expenditures(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,244) (35,201) (32,771)Acquisition expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,966) (449) (16,280)

Year endedDecember 31,

2010

(£ in thousands,except ratios)

Pro-forma, Adjusted and Other Financial Data:

Pro-forma EBITDA(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,499Pro-forma EBITDAR(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212,892Pro-forma net financial debt(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397,722Pro-forma net financial costs(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,758Ratio of pro-forma net financial debt to pro-forma EBITDA(12) . . . . . . . . . . . . . . . . . 4.08xRatio of adjusted pro-forma EBITDA to pro-forma net financial costs(13) . . . . . . . . . . 2.18x

(1) Interest on shareholder debt is payable only by Odeon & UCI Cinemas Group Limited and would not appear in thefinancial statements of Odeon Midco. See ‘‘Presentation of Financial and Other Data’’.

(2) Shareholder debt is attributable to Odeon & UCI Cinemas Group Limited. Odeon Midco, our parent company afterclosing of the offering, does not owe any amounts under such shareholder debt.

(3) Average ticket price represents box office revenue per attendee, excluding Portugal and Austria. For comparability acrossperiods average ticket price has been stated here at a constant spot rate of A1.15 to £1.00 and constant territory weighting.

(4) Retail revenue per head represents retail revenue per attendee, excluding Portugal and Austria. For comparability acrossperiods retail revenue per head has been stated here at a constant spot rate of A1.15 to £1.00 and constant territoryweighting.

(5) We calculate EBITDA as earnings before interest, tax, depreciation, amortisation, exceptional items and strategic costs. Wecalculate EBITDAR as EBITDA plus all rental expenses. Our management believes that EBITDA and EBITDAR aremeaningful for investors because they provide an analysis of our operating results, profitability and ability to service debtand because EBITDA and EBITDAR are used by our chief operating decision makers to track our business evolution,establish operational and strategic targets and make important business decisions. EBITDA and EBITDAR are alsomeasures commonly reported and widely used by analysts, investors and other interested parties in our industry. Althoughwe are presenting these measures to enhance the understanding of our historical operating performance, EBITDA andEBITDAR should not be considered alternatives to operating profit as an indicator of our operating performance, or

12

alternatives to cash flows from operating activities as measures of our liquidity.

EBITDA and EBITDAR are not measures of financial performance under UK GAAP and may not be comparable to othersimilarly titled measures for other companies. The following tables present the calculation of these measures:


2008 2009 2010

(£ in thousands)Operating profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (751) (15,440) 26,005

Adjusted for:Depreciation and Amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,951 59,752 53,642Exceptional items(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,333 23,520 1,456Strategic costs(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,832 3,479 1,298

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,365 71,311 82,401PropCo rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,618 8,875 9,142Other rental expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,993 98,455 96,491

EBITDAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,976 178,641 188,034

(a) Exceptional items primarily consist of one-off integration and restructuring costs, property related costs and non-cashprovisions against amounts receivable from the PropCo group.

(b) Strategic costs consist primarily of costs associated with the move to digital-based media and new cinema pre-openingcosts and are excluded from EBITDA because they are not costs required to deliver ongoing earnings, but are relatedto the development of new business.

(6) Net financial debt consists of bank loans and overdrafts and finance leases less cash at bank and in hand, and excludestrade creditors, shareholder debt and other non-financial debt. Net financial debt is stated gross of capitalised loan issuecosts.

(7) Net financial costs consist of interest payable and similar charges less non-cash pay interest accrued on shareholder debtand other non-cash pay financial costs.

(8) Capital expenditures represent purchases of fixed assets, primarily consisting of acquisition of assets used in cinemas,cinema refurbishment and other related costs, net of any external funding.

(9) Pro-forma EBITDA represents EBITDA pro-forma as if certain acquisitions and cost savings had occurred at the beginningof the period.

The following tables present the calculations of pro-forma EBITDA and pro-forma EBITDAR:


2010

(£ inthousands)

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,401Pathe Italy Acquisition(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,738Project Jupiter(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,998Project Dana(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,142Project Neptune(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 823Digitalisation cost savings(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,397

Pro-forma EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,499


2010

(£ inthousands)

EBITDAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,034Pathe Italy Acquisition(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,504Project Jupiter(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,172Project Dana(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,145Project Neptune(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,640Digitalisation cost savings(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,397

Pro-forma EBITDAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212,892

(a) We acquired three multiplexes in Italy in the Pathe Italy Acquisition in December 2010 and have consolidated thefinancial results of the acquired multiplexes from December 1, 2010. £1.7 million represents management’s estimate of£2.7 million of EBITDA generated by the acquired multiplexes for fiscal year 2010, less the £0.3 million EBITDAcontribution of the acquired multiplexes to our group EBITDA from the date of its consolidation in our financial

13

statements, less an estimated £0.6 million increase in rental expense agreed as part of the transaction. These estimatesare based on our acquisition due diligence utilising unaudited management reports of the sellers of the acquiredmultiplexes for the period from January 1, 2010 to November 30, 2010, which were prepared by the management ofthe acquired multiplexes prior to their acquisition by us. Those management reports have not been audited, either byus or by the previous owners or subjected to a quarterly or other review or other adjustment process.

(b) On May 2, 2011, we have entered into an agreement for the acquisition of seven cinemas in Italy. We expect tocomplete this acquisition during the second quarter of 2011. £3.0 million represents our management’s estimate of£7.2 million of EBITDA generated by these seven cinemas for fiscal year 2010 less an estimated £4.2 million increasein rental expense agreed as part of the transaction. These estimates are based on our acquisition due diligence utilisingindividual cinema management account profit and loss statements prepared by the management of these sevencinemas. These individual cinema management account profit and loss statements have not been audited, either by usor by the current owners or been subject to a quarterly, year-end or other review or other adjustment process.

(c) On April 28, 2011, we have entered into an agreement for the acquisition of nine cinemas in one of our existingterritories. We expect to complete this acquisition during the second quarter of 2011. £5.1 million represents ourmanagement’s estimate of £6.1 million of EBITDA generated by these nine cinemas for fiscal year 2010 less anestimated £1.0 million increase in rental expense. These estimates are based on our acquisition due diligence utilisingmanagement accounts prepared by the management of these nine cinemas prior to its acquisition, which have not beenaudited, either by us or the previous owners or been subject to a quarterly or year-end review or other adjustmentprocess.

(d) We are currently negotiating the acquisition of two cinemas in Spain and expect to enter into an agreement for suchacquisition before the end of May 2011. £0.8 million represents our management’s estimate of £0.6 million of EBITDAgenerated by these two cinemas for fiscal year 2010 plus an estimated £0.2 million added back to EBITDA for headoffice costs related to these two cinemas. These estimates are based on our acquisition due diligence utilising individualcinema management account profit and loss statements prepared by the management of these two cinemas prior to itsacquisition, which have not been audited, either by us or the previous owners or been subject to a quarterly oryear-end review or other adjustment process.

(e) We have estimated £4.4 million as the fully annualised staff cost savings associated with the digitalisation of ourcinemas by calculating the full time employee equivalents expected to be made redundant in connection with thedigitalisation roll-out and the average wages of our technical staff at 2010 levels, annualised to assume full-year savingsafter the completion of the digitalisation roll-out. These redundancies have received formal union acceptance in theUnited Kingdom and labour council support in Germany and Austria. Labour council approval has not been requiredin Spain, Portugal or Italy. The digitalisation roll-out is currently ongoing, and as of the end of April 2011 we haveagreed staff reductions of 77 employees, a saving equivalent to £1.8 million per annum. We expect that 171 cinemaswill have been digitalised by the end of 2011 and by the middle of 2012 our digitalisation roll-out will be substantiallycompleted. The £4.4 million of annual savings will be fully achieved over the next two and one half years by the end of2013. Staff cost savings expected in Continental Europe have been translated into sterling at a spot rate of A1.15 to£1.00.

(10) Pro-forma net financial debt represents net financial debt pro-forma as if the offering and the application of the proceedsthereof had occurred at the beginning of the period. Pro-forma net financial debt is stated gross of £20.0 million ofcapitalised debt issue costs.

(11) Pro-forma net financial costs consists of the net financial costs, as defined in footnote 7, incurred on the pro-forma netfinancial debt. Pro-forma net financial costs have been calculated including commitment fees in an amount of £1.6 millionwith respect to our new Super Senior Revolving Credit Facility, recognising interest income at 0.5% on the cash balance asof December 31, 2010 for the period and calculating the interest payable on the Euro Notes assuming a 7-year EURIBORswap rate of 3.156% with respect to the full principal amount of the Euro Notes. Pro-forma net financial costs have beenpresented for illustrative purposes only and do not purport to represent what our net financial costs would have actuallybeen had this offering occurred at the beginning of the period, nor do they purport to project our net financial costs forany future period or our financial condition at any future date.

(12) Ratio of pro-forma net financial debt to pro-forma EBITDA is calculated by dividing pro-forma net financial debt bypro-forma EBITDA.

(13) Ratio of adjusted pro-forma EBITDA to pro-forma net financial costs is calculated by dividing adjusted pro-forma EBITDAby pro-forma net financial costs.

14

RISK FACTORS

The following summarises certain risks involved in an investment in the Notes that may materiallyaffect our ability to pay the interest, principal and premium, if any, on the Notes. There may beadditional risks that we do not currently know of or that we currently deem immaterial based oninformation available to us. Our business, financial condition or results of operations could bematerially adversely affected by any of these risks.

Risks Related to our Business

We depend on film production and performance.

Our ability to operate successfully depends upon the availability, diversity and appeal of films, ourability to licence films and the performance of such films in our markets. We mostly licence first-runfilms, the success of which depends on the marketing efforts of the major studios. Poor performance of,or any disruption in the production of (including by reason of a strike) these films, or a reduction inthe marketing efforts of the major studios, could hurt our business and results of operations. Inaddition, a change in the type and breadth of films offered by studios may adversely affect cinemaattendance. A material portion of our revenues are generated from 3D films and premium ticket sales.We cannot guarantee that 3D films will continue in popularity or that we will be able to maintain apremium pricing strategy.

We have no control over distributors of the films and our business may be adversely affected if our access tofilms is limited or delayed.

We rely on distributors of films, over whom we have no control, for the films that we exhibit.Major film distributors offer and licence film to exhibitors, including us, on a film-by-film basis.Consequently, we cannot assure ourselves of a supply of films by entering into long-term arrangementswith major distributors, but must discuss and agree terms on a film-by-film basis. The cost of each filmand the date we can debut each film at our cinemas is subject to the agreement we are able tonegotiate with the film distributors. We may not be able to negotiate favourable terms or reach anagreement on terms for the exhibition of films, including films that are expected to be popular across awide range of audiences. Our business also depends on maintaining good relations with thesedistributors, as this affects our ability to negotiate commercially favourable terms for first-run films.Our business may be adversely affected if our access to films is limited or delayed because ofdeterioration in our relationships with one or more distributors or for some other reason. To the extentthat we are unable to licence a popular film for exhibition in our cinemas, our operating results may beadversely affected.

Industry-wide conversion to digital-based media may increase our costs and risks of litigation.

The industry is in the early stages of conversion from analogue-based media to digital-basedmedia. There are a variety of constituencies associated with this change that may significantly impactindustry participants, including content providers, distributors, equipment providers and venueoperators. Content providers have agreed to pay the majority of all of the costs of the change todigital-based media over time. Our digital projector contracts with content providers are subject tocomplex contractual obligations, such as maintaining projectors to technical specifications, training ourstaff to operate the projectors, taking action to protect digital content from piracy and theft and variousaccounting and reporting requirements. If we fail to comply with our contractual obligations, thecontent providers may withdraw their support. Additionally, if we fail to adequately protect film contentfrom piracy, we may be subject to litigation from film content providers. There can be no assurancethat technology providers will continue to supply digital projectors or that the content providers willcontinue to provide financial support for digital conversion in the future and we may not have access toadequate capital to finance the technology purchases and conversion costs to continue the roll-out ofdigital-based media.

Additionally, digital-based media is a relatively new technology. Our digital projectors or thetheatre management systems associated with the digital projectors may break down and lead to adisruption in film exhibition. Isolated incidents of film disruption may lead to customer dissatisfaction.Larger scale technology problems may affect either a particular cinema or a particular piece ofequipment common at many of our cinemas. A large scale breakdown in technology could have amaterial adverse impact on our attendance, on the continuing financial support for digital

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transformation by the content providers, on the results of operations and on our industry reputation.We rely on external suppliers for maintenance and repair of our digital projectors. We cannotguarantee that maintenance will be performed in a timely or effective manner.

Our results of operations fluctuate on a seasonal basis.

Our revenues have historically been seasonal, coinciding with the timing of releases of films by themajor distributors. Generally, the most successful films have been released during holiday periods,especially summer and the period from late-November to year-end. The unexpected emergence of asuccessful film during other periods or the failure of an expected success at a key time could alter thisseasonality trend. The timing of film releases can have a significant effect on the results of ouroperations, and the results of one quarter are not necessarily indicative of results for the next quarteror for the same period in the following year.

• We anticipate seasonality, but unexpected events can have a significant impact on our cash flow,as we are subject to events beyond our control, such as distribution release schedules, weatherconditions and competing events.

• Title by title success of films at the box office can be highly unpredictable. Unexpected resultsmay disrupt our projected cash flow significantly.

In addition, certain weather conditions or forecasts thereof can reduce the number of people whogo to the cinema. During times of extreme weather conditions, such as winter snow storms, summerheat waves or road closures or reduced public transit availability, the number of people who decide togo to the cinema could reduce significantly.

We are subject to intense competition.

Our cinemas are subject to varying degrees of competition in the geographic areas in which weoperate. Competitors may be national, regional or independent cinema operators. Competition amongcinema companies is often intense depending on certain factors including the following:

Attracting customers. The competition for customers is dependent upon factors such as thepopularity of films screened, the location and number of cinemas and screens in a market, the comfortand quality of the cinemas and pricing. Our competitors may seek to increase the number of screensthat they operate, programme films differently or use pricing and/or promotion to attract customersaway from our cinemas.

Competitive openings. We compete with other cinema operators and others in our efforts to locateand acquire attractive sites for our cinemas. Competitors have built or may be planning to buildcinemas in certain areas where we operate, which could result in excess capacity and increasedcompetition for customers. Competition for new and desirable sites is intense and we cannot preventcompeting cinema operators from opening cinemas that may reduce our attendance levels.

An increase in other forms of entertainment, the use of alternative film delivery methods or piracy of filmsmay drive down our attendance and limit our ticket prices.

We compete for the public’s leisure time and disposable income with other forms of entertainment,including sporting events, live and pre-recorded music concerts, theatres, restaurants and family leisureattractions. If these activities improve in value, frequency or attractiveness, the share of the public’sleisure time spent at the cinema may decrease.

We compete with other film delivery methods, including network, rental, cable and satellitetelevision, in-home television (2D and 3D), DVDs, video-on-demand, pay-per-view services, streamingand downloads via the Internet. Competition from internet downloads may increase as broadbandtechnology improves and downloading speeds increase.

An increase in the popularity of these alternative film delivery methods and other forms ofentertainment could reduce attendance at our cinemas, limit the prices we can charge for admissionand materially adversely affect our business and results of operations. In addition, an increase in theavailability and/or popularity of pirated films may also have an impact on our attendance.

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Our operations are subject to extensive regulations which may increase our costs and adversely affect us.

The cinema industry is regulated by various laws and regulations in the jurisdictions in which weoperate. The scope of such regulation includes infrastructure, employment and operational issuesrelating to cinemas, as well as safety and security requirements. We cannot fully anticipate all changesthat might be made to laws and regulations to which we are subject in the future, nor the possibleimpact of all such changes. Our ability to conduct our business is dependent on our ability to maintainauthorizations, licenses and certificates. We are routinely audited to ensure compliance with all cinemaand retail operation requirements. There can be no assurances that our licences will be renewed or thatwe will pass all audits in the future. Our failure to pass such audits or to be found in breach ofregulations applicable to us could result in fines, adverse publicity or closing of our cinemas, all ofwhich could have a material adverse effect on our business, results of operations and financialcondition. In addition, we rely on local language films, in addition to Hollywood films. Such local filmsmay depend upon government support, and we cannot guarantee this support will continue in thefuture. Consequently, changes in laws or regulations or licencing or government support could have amaterial adverse impact on our cost of operations or revenues from operations.

We may not realise all of the anticipated benefits of current or potential future acquisitions.

We have been an active consolidator in the cinema sector in recent years and have acquiredcinemas in the United Kingdom, Spain, Portugal, Italy and Germany. We are actively seeking toacquire cinemas. As we grow our portfolio of cinemas, competition regulators may place conditions orconstraints on potential acquisitions which would result in a lost opportunity or a significantly lessadvantageous opportunity. Additionally, the integration of a new multiplex cinema is a complex andtime consuming process. Approximately 18-24 months are necessary to achieve efficiencies afteracquiring a cinema. We may not be able to integrate effectively any cinemas we acquire or successfullyimplement appropriate operational, financial and management systems and controls to achieve thebenefits expected to result from such acquisitions. Our relationship with current employees oremployees of the acquired business may become impaired. We may also be subject to unexpectedclaims and liabilities arising from such acquisitions. These claims and liabilities could be costly todefend, could be material to our financial position and might exceed either the limitations of anyapplicable indemnification provisions or the financial resources of the indemnifying parties. Thediversion of management’s attention and any delays or difficulties encountered in connection with theintegration of the businesses we acquire could negatively impact our business and results of operations.Further, the benefits that we anticipate from these acquisitions may not be realised.

Acquiring or expanding existing cinemas may require additional financing, and we cannot be certain that wewill be able to obtain new financing on favourable terms, or at all.

Actual capital expenditures may differ materially from our estimates. We may have to seekadditional financing or issue additional securities to fully implement our growth strategy. We cannot becertain that we will be able to obtain new financing on favourable terms, or at all. In addition,covenants under our existing indebtedness may limit our ability to incur additional indebtedness, andthe performance of any additional cinemas may not be sufficient to service the related indebtednessthat we are permitted to incur.

We may not realise all of the anticipated benefits of new cinema builds.

We are actively seeking to grow our portfolio of cinema operations through new cinemaconstructions. The availability of attractive site locations for our cinemas is subject to various factorsthat are beyond our control. These factors include:

• local conditions, such as scarcity of space or increase in demand for real estate, demographicchanges and changes in planning and tax laws; and

• competition for site locations from both cinema companies and other businesses.

In addition, we typically require several years from the time we identify a site to the opening ofthe cinema. We may experience delays to the timetable and we may also experience cost overruns fromdelays or other unanticipated costs. Furthermore, these new sites may not perform to our expectations.

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Our results of operations may be impacted by shrinking film release windows.

The film release window represents the time that elapses from the date of a film’s release incinemas to the date a film is available on downstream markets, such as DVD and video on demand.Whilst the average film release window has not declined significantly, on average, across Europe inrecent years, we are subject to continuing and increasing demands by film distributors to shorten thefilm release window. Further, new developments in downstream media technology could reduce oreliminate the film release window in its entirety. If customers choose to wait for an alternative filmviewing activity, rather than attend a cinema for viewing, it may adversely impact our business andresults of operations, financial condition and cash flows. We cannot assure you that this release window,which is determined by the film distributors, will not shrink further or be eliminated altogether.

We may not be able to generate additional ancillary revenues.

We intend to continue to pursue ancillary revenue opportunities such as screen advertising sales.We also continue to invest in non-traditional retail offerings, such as our cinema bars and lounges.Additionally, we show alternative content, such as sporting events and provide alternative uses of ourcinemas during non-peak hours for meetings or other corporate events. Our ability to achieve ourbusiness objectives may depend in part on our success in increasing these revenue streams. We cannotassure you that we will be able to effectively generate additional ancillary revenue and our inability todo so could have an adverse effect on our business and results of operations.

We may not realise expected benefits from our cost reduction initiatives.

In order to improve the efficiency of our operations, we have implemented and continue toimplement certain cost reduction initiatives, including headcount reductions and strict control of wageincreases. We cannot assure you that we will realise the full level of expected cost savings or improveour operating performance as a result of our past, current and future cost reduction activities. We alsocannot assure you that our cost reduction activities will not adversely affect our ability to retain keyemployees, the significant loss of whom could adversely affect our operating results. Further, as a resultof our cost reduction activities, we may not have the appropriate level of resources and personnel tooperate the business effectively in varying market conditions.

We may be subject to significant cost increases beyond our control, such as increases resultingfrom statutory minimum wage requirements, film rental costs, energy prices or the cost of our goodssold.

Instances of illness, epidemics or terrorist attacks, as well as negative publicity relating thereto, could result inreduced visitor attendance and materially and adversely impact our business.

Instances of illness, whether or not traced to our cinemas, could reduce visitor attendance at ourcinemas materially. Claims of illness, whether or not traced to our cinemas, relating to food quality orhandling at the retail stands could also cause us to lose attendance materially. In addition, any negativepublicity relating to these and other health related matters might affect consumers’ perceptions of ourcinemas, or cinemas in general, and reduce visitor visits to our cinemas materially.

The outbreak of a prolonged pandemic or epidemic disease or the occurrence of any other publichealth concern could negatively impact the public’s willingness to gather in public spaces which couldreduce visitor volumes or revenues at our cinemas. In addition, any such public health concerns mayseverely restrict the level of economic activity in affected areas. Any of these events could have amaterial adverse effect on our business, financial condition and results of operations.

In addition, an actual or threatened terrorist attack could cause people to avoid our cinemas orother public places where large crowds are in attendance.

Product recalls and associated costs could adversely affect our reputation and financial condition.

We sell food and beverages, the sale of which involves legal and other risks. We may need to recallfood products if they become contaminated. Even though we are resellers of food, we may be liable ifthe consumption of any of the products we sell causes illness or injury. A recall could result in lossesdue to the cost of the recall, the destruction of product and lost sales due to the unavailability ofproduct for a period of time. A significant food recall could result in adverse publicity, damage to our

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reputation and loss of consumer confidence in our cinemas, which could have a material adverse effecton our results.

We may suffer future impairment losses and lease termination charges.

The opening of large multiplexes by us and certain of our competitors has drawn audiences awayfrom some of our older, multiplex cinemas. In addition, demographic changes and competitivepressures have caused some of our cinemas to become unprofitable. As a result, we may choose toclose certain cinemas, pay lease termination charges or recognise impairment losses related to thedecrease in value of particular cinemas. We review long-lived assets, including intangibles, forimpairment as part of our annual budgeting process and whenever events or changes in circumstancesindicate that the carrying amount of the assets may not be fully recoverable. Deterioration in theperformance of our cinemas could require us to recognise additional impairment losses and we maychose to close cinemas in the future, which could have an adverse effect on the results of ouroperations.

We are subject to risk related to our leases (including those with PropCo).

Periodically, our leases are subject to rent review and our rent may be increased according toprevailing market rates, inflation or other contractual conditions. Rent increases may adversely affectour earnings. Certain of our leases permit the landlord to terminate the lease if there is a defaultunder the lease, including, for example, our failure to pay rent, utilities and applicable taxes in a timelyfashion or to maintain certain insurance. If a landlord were to terminate its lease, it would halt ouroperations at that cinema and could have a negative impact on our financial condition and results ofoperations. In addition, any disputes that may result from such a termination may be expensive topursue and may divert money and management’s attention from our other operations and adverselyaffect our financial condition and results of operations.

If we decide to close certain facilities, we would still be obligated to perform our obligations underthe lease for those facilities. The land for the majority of our cinemas is under long-term leases thatare not cancellable except in limited circumstances. In most of these leases, we are not permitted tocancel the lease if we close our operations at the cinema because it is not profitable. We expectadditional cinemas that we may acquire in the future to be subject to similar long-term, non-cancellableleases. If we decide to close an existing or future cinema, we may nonetheless be committed to performour obligations under the applicable lease which would include, among other things, payment of thebase rent for the balance of the lease term, which would reduce our profitability and limit our ability toexpand in other locations.

We lease the land for certain of our cinemas pursuant to operating leases with third parties. At theend of the lease term and any renewal period for a cinema, we may be unable to renew the leasewithout substantial additional cost, if at all. If we are unable to renew our leases, we may be forced toclose or relocate a cinema, which could subject us to construction and other costs and risks, and couldhave a material adverse effect on our business and results of operations. For example, closing a cinema,including during the time of relocation, will reduce the sales that the cinema would have contributed toour revenues. Additionally, the revenues and profit, if any, generated at a relocated cinema may notequal the revenues and profit generated at the existing cinema. We also face competition for suitablesites for new cinema. As a result, we may not be able to secure or renew leases for adequate sites atacceptable rent levels.

Our business could be harmed if we lose the services of our key management personnel or are unable toattract and retain qualified employees.

Our business depends upon the efforts and dedication of our senior management team.Competition for highly qualified personnel is intense, and the loss of the services of any of these keypersonnel without adequate replacement or the inability to attract new qualified personnel could have amaterial adverse effect on our business, financial condition and results of operations. In addition, ourfuture business success depends in part on our ability to continue to recruit, train, motivate and retainemployees. We schedule our cinema employees on a flexible basis according to demand and any changein our ability to use a flexible work schedule could impact our operating efficiency. The loss of serviceof any key personnel, or an inability to attract and retain qualified employees, could have a materialadverse impact on our business, financial condition and results of operations.

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Work stoppages and other labour problems could negatively impact our future profits.

Some of our employees are represented by labour unions and labour councils and more may be inthe future. A lengthy strike or collective bargaining negotiation at one or more cinemas or one or moreterritory or other work stoppage at one or more of our cinemas could have an adverse effect on ourbusiness and results of operations. The impact of this potential union and collective bargaining activityis undetermined and could negatively impact our profits.

We rely on information technology in our operations and administration. Any material failure, inadequacy,interruption or breach of security of that technology could harm our ability to effectively operate our businessand subject us to data loss, litigation, liability, including liability for theft of film content, and reputationalharm.

We rely on computer systems for our customer offer, such as ticket sales, sales of retail goods,promotional activity and our customer loyalty programme. Disruption of our information technologysystems could result in difficulty collecting revenue from our customers, as well as disruption in ourmarketing and promotional activities, impacting our results.

We rely on information systems across our operations. Our ability to effectively operate andmanage our business depends significantly on the reliability and capacity of these systems. We rely oncomputer systems for the exhibition of our films and may in the future rely on our computer networksand servers to project films. Any breakdown in these systems could result in a disruption orcancellation of the showing of a particular film, or the closure of a screen until the technology can berepaired. In addition, failure of the information technology related to our digitalisation could negativelyimpact our estimated cost savings from our digitalisation roll-out.

Despite our efforts and technology to secure our computer network, security could becompromised. For instance, in connection with credit card sales, we transmit confidential credit cardinformation securely over public networks and store it in our data warehouse. Third parties may havethe technology or know-how to breach the security of this customer information, and our securitymeasures may not effectively prohibit others from obtaining improper access to this information. If aperson is able to circumvent our security measures, he or she could destroy or steal valuableinformation or disrupt our operations.

We also require collection and retention of large volumes of internal and customer data that areentered into, processed by, summarised by and reported by our various information systems. If thatdata is not accurate or complete we could make faulty decisions. We also maintain personallyidentifiable information about our employees.

Any virus, security breach, loss, or theft of company, customer or employee data could expose usto adverse publicity, loss of sales and profits, or cause us to incur significant costs to reimburse thirdparties for damages, which could impact our results of operations.

Potential liabilities arising from theft, misuse or loss of film reels, digital hard drives or other deliverymethods could adversely affect our results of operations.

We do not own the intellectual property rights for the films which are stored on the film reels,digital hard drives or other delivery methods which we use in our cinemas. As a result, a breach ofsecurity, employee fraud or technical failure which results in the theft, misuse or loss of a film reel,digital hard drive or other delivery method, as well as the contents therein, could make us vulnerable toliability for theft of film content, and consequently, to claims for damages by film distributors for suchtheft, misuse or loss.

Changes in privacy laws could adversely affect our ability to market our products effectively.

Our cinemas rely on a variety of direct marketing techniques, including email marketing. Anyexpansion on existing and/or new laws and regulations regarding marketing, solicitation or dataprotection could adversely affect the continuing effectiveness of our email and other marketingtechniques and could result in changes to our marketing strategy. If this occurs, we may not be able todevelop adequate alternative marketing strategies, which could adversely impact our attendance levelsand revenues.

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Potential liabilities and costs from litigation could adversely affect our business.

We are involved in litigation and regulatory actions as part of our ordinary course of business.There is no guarantee that we will be successful in defending against civil suits. Even if a civil litigationclaim is meritless, does not prevail or is not pursued, any negative publicity surrounding assertionsagainst our cinemas could adversely affect our reputation. Regardless of its outcome, litigation mayresult in substantial costs and expenses and divert the attention of our management. In addition topending matters, future litigation could lead to increased costs or interruption of our normal businessoperations. In addition, there may be health risks of which we are not yet aware related to newtechnologies such as 3D which we use in our cinemas, which could lead to potential litigation in thefuture.

General political, social and economic conditions can reduce attendance, profitability and results of operationsat our cinemas.

Our success depends on general political, social and economic conditions and the willingness ofconsumers to spend money at the cinema. If going to the cinema becomes less popular or consumersspend less on retail, our operations could be adversely affected. Our operations could be adverselyaffected if consumers’ discretionary income falls as a result of an economic downturn. Additionally, asour customers generally live within a convenient travelling distance to our cinemas, an economicdownturn that is particular to a region in which our cinemas are located may have a disproportionatelynegative impact on our cinemas in the affected market.

Fluctuations in exchange rates may adversely affect our results of operations.

Our reporting currency is in pounds, but the results of operations and the financial position of ourContinental Europe operations are reported in euros and then translated into pounds at the applicableexchange rates for inclusion in our consolidated financial statements. Our financial results are impactedby currency fluctuations between the pound and the euro. Moreover, a change in the concentration ofour business activities could result in an increased effect of exchange rates on our financial positionand results of operations. As our Continental European business continues to grow, it exacerbates thisrisk. We do not currently hedge against foreign currency exchange rate risk on our earnings. Instead,we currently hedge against currency risk, generally, by keeping our debt and earnings in proportion totheir respective currencies. There is no assurance that we will, in the future, be successful in hedgingour foreign exchange risk.

We may be subject to liability under laws and regulations in the jurisdictions in which we operate, includingenvironmental laws and regulations.

We own and operate facilities throughout the United Kingdom, Spain, Italy, Germany, Austria,Portugal and Ireland and are subject to the laws and regulations of these jurisdictions, includingenvironmental laws and laws governing the cleanup of hazardous materials and the management ofproperties. In the future we may operate in additional territories and be subject to additional laws andregulations. We might in the future be required to participate in the cleanup of a property that we ownor lease, or at which we have been alleged to have disposed of hazardous materials from one of ourfacilities. In certain circumstances, we might be solely responsible for any such liability underenvironmental laws, and such claims could be material.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report ourfinancial results.

Effective internal controls are necessary for us to provide reliable financial reports and effectivelyprevent fraud. Because of inherent limitations, internal control over financial reporting may not preventor detect misstatements. Also, we cannot guarantee the effectiveness of our internal controls in thefuture, nor can we assure you that the degree of compliance with the policies or procedures will notdeteriorate. We may in the future discover areas of our internal controls that need improvement or thatconstitute material weaknesses. A material weakness is a control deficiency or combination of controldeficiencies that results in more than a remote likelihood that a material misstatement of annual orinterim financial statements will not be prevented or detected. Any failure to remediate any futurematerial weaknesses in our internal control over financial reporting or to implement and maintaineffective internal controls, or difficulties encountered in their implementation, could cause us to fail to

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timely meet our reporting obligations, result in material misstatements in our financial statements orcould result in defaults under our Super Senior Revolving Credit Facility, the Indenture or under anyother debt instruments we may enter into in the future. Deficiencies in our internal controls could alsocause investors to lose confidence in our reported financial information.

Volatility in the credit markets may adversely affect our ability to raise capital.

Any increase in market volatility and liquidity disruptions in the credit markets could materiallyimpact our ability to obtain debt financing on reasonable terms. As a result, we are unable toguarantee that adequate capital sources will be available when needed or will be available onacceptable terms. Additionally, a prolonged economic downturn or recession could materially impactour operations to the extent it results in reduced demand for going to the cinema. If current marketand economic conditions persist or deteriorate, we may experience adverse impacts on our business,results of operations and financial condition.

Even if economic conditions are actually improving, a negative economic outlook, including thefear of another recession, may have an adverse effect on our business because, for example, a negativeeconomic outlook may lead to an increased savings rate and reduced discretionary spending by ourtarget demographic, which could have a material adverse effect on our attendance levels.

In addition, a significant or sustained decline in economic conditions or rates of high inflationcould adversely affect our ability to obtain goods and services from suppliers or credit from financingsources, and could impact the ability of third parties, including our insurance carriers and creditproviders, to meet their obligations to us.

We are subject to taxation which is complex and often requires us to make subjective determinations.

We are subject to many different forms of taxation including but not limited to income tax,withholding tax, value added tax, stamp duty and social security and other payroll related taxes. Tax lawand administration is complex and often requires us to make subjective determinations. The taxauthorities may not agree with the determinations that are made by us with respect to the applicationof tax law. Such disagreements could result in lengthy legal disputes and, ultimately, in the payment ofsubstantial amounts for tax, interest and penalties, which could have a material effect on our results.

Risks Related to Our Financing Structure

We have significant leverage.

We have consolidated indebtedness that is substantial in relation to our shareholders’ equity. As ofDecember 31, 2010, our total debt, including capital leases and shareholder debt, amounted to£662.3 million. After giving pro-forma effect to the offering and the application of the proceedsthereof, our total debt, including capital leases and shareholder debt, as of December 31, 2010 wouldhave amounted to £780.9 million. Our relatively high level of debt could:

• increase our vulnerability to general adverse economic and industry conditions;

• subject us to the risk of increased sensitivity to interest rate increases on any variable rate debt;

• restrict us from making strategic acquisitions or exploiting business opportunities;

• along with the financial and other restrictive covenants under our indebtedness, limit our abilityto obtain additional financing, dispose of assets or pay cash dividends;

• require us to dedicate a substantial portion of our cash flow from operations to service ourindebtedness, thereby reducing the availability of our cash flow to fund future working capital,capital expenditures, other general corporate requirements and dividends;

• require us to sell or otherwise transfer assets used in our business in order to fund our debtservice obligations;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry inwhich we operate; and

• place us at a competitive disadvantage compared to our competitors that have less debt.

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In addition, our ability to make scheduled payments on or to refinance our debt obligationsdepends on our financial condition and operating performance, which are both subject to prevailingeconomic and competitive conditions and certain financial, business and other factors, some of whichare beyond our control. For instance, the creditworthiness of many financial institutions may be closelyinterrelated as a result of credit, derivative, trading, clearing or other relationships among theinstitutions. As a result, concerns about, or a default or threatened default by one institution could leadto significant market-wide liquidity and credit problems, losses or defaults by other institutions. Thismay adversely affect the financial institutions, such as banks and insurance providers, with which weinteract on a regular basis, and therefore could adversely affect our ability to raise needed funds oraccess liquidity. Accordingly, we can provide no assurance that we will maintain a level of cash flowsfrom operating activities sufficient to permit us to pay the principal and interest on our indebtedness.See ‘‘Forward-Looking Statements’’ and ‘‘Operating and Financial Review and Prospects—Liquidity andCapital Resources’’. Additionally, a substantial portion of our indebtedness bears interest at floatingrates, and therefore if interest rates increase, our debt service requirements will increase.

Any failure to pay amounts due and payable under our credit agreements, including the SuperSenior Revolving Credit Facility, could give rise to an event of default and the lenders may, in suchcircumstances, elect to declare all amounts outstanding under those agreements to be immediately dueand payable and to proceed against the collateral provided by us to secure our obligations under suchagreements. This could have a material adverse effect on our business, financial condition and resultsof operations. See ‘‘Description of Other Indebtedness’’.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations toincrease significantly.

Certain of our borrowings are at variable interest rates and expose us to interest rate risk. Inaddition, we may incur additional indebtedness in the future that bears interest at a variable interestrate. If interest rates increase, our debt service obligations on the variable rate indebtedness wouldincrease even though the amount borrowed remained the same, and our net income would decrease.We cannot assure you that we will be able to enter into interest rate swaps in order to exchangefloating for fixed rate interest payments.

Despite current indebtedness levels, we may still be able to incur substantially more debt. This could furtherexacerbate the risks we face.

We may be able to incur substantial additional indebtedness in the future. Neither the terms of theIndenture nor the Super Senior Revolving Credit Facility prohibit us or our subsidiaries from doing so.If we incur any additional indebtedness that ranks equally with our obligations under the Super SeniorRevolving Credit Facility, the holders of that debt will be entitled to share ratably with you in anyproceeds distributed in connection with any insolvency, liquidation, reorganisation, dissolution or otherwinding-up of us. If new debt is added to our current debt levels, the related risks that we now facecould intensify. See ‘‘Description of the Notes’’ and ‘‘Description of Other Indebtedness’’.

Restrictive covenants may adversely affect our operations.

The Super Senior Revolving Credit Facility and the Indenture will contain various covenants thatlimit our ability to, among other things:

• incur, assume or guarantee additional indebtedness;

• pay dividends or distributions or redeem or repurchase capital stock;

• make investments and certain other restricted payments;

• create, permit to exist or incur liens;

• restrict dividends, loans or asset transfers from our subsidiaries;

• transfer or sell or otherwise dispose of assets, including capital stock of subsidiaries;

• consolidate or merge with or into, or sell substantially all of our assets to, another person; and

• enter into transactions with affiliates.

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The Indenture and the Super Senior Revolving Credit Facility will permit us to incur future debtthat may have substantially the same or more restrictive covenants. Our ability to comply with thesecovenants may be affected by events beyond our control and, as a result, we may not be able to meetthese covenants. In the event of a default under the Super Senior Revolving Credit Facility, the lenderscould terminate their commitments and declare all amounts owed to them to be due and payable.Borrowings under other debt instruments that contain cross-acceleration or cross-default provisions,may, as a result, also be accelerated and become due and payable. If that occurs, we may not be ableto make all of the required payments or borrow sufficient funds to refinance such debt. Even if newfinancing were available at that time, it may not be on terms that are acceptable to us. If our debt is indefault for any reason, our business, financial condition and results of operations could be materiallyand adversely affected. See ‘‘Description of Other Indebtedness’’.

In addition, the restrictions in the Indenture and the Super Senior Revolving Credit Facility affectour ability to obtain future financings to withstand a future downturn in our business or the economyin general, or to otherwise conduct necessary corporate activities. We may also be prevented fromtaking advantage of business opportunities that arise because of the limitations that the restrictivecovenants under the Indenture and our Super Senior Revolving Credit Facility impose on us. Inaddition, complying with these covenants may also cause us to take actions that are not favourable toholders of the Notes and may make it more difficult for us to successfully execute our business strategyand compete against companies that are not subject to such restrictions.

Certain of our assets may be subject to sale in relation to certain lease agreements we have with Propco.

The chattels, equipment, fittings and moveable contents in, at or used in connection with ourcinemas are critical to our business and without them we would not be able to operate our cinemas.Certain of those assets are the subject of a call option with, and security in favour of, the PropCogroup companies and if that option became exercisable in respect of one or more of our cinemas, wecould be made to sell the relevant assets to the PropCo group. The option in respect of our fixturesand fittings at a particular cinema will become exercisable if we fail to pay the required rent under therelevant PropCo lease, we use the cinema other than for the use permitted by the PropCo lease, we orany guarantor of the PropCo lease becomes insolvent or if the relevant PropCo lease comes to an end.We cannot assure you that we will be able to continue to pay the rent to PropCo. Furthermore, if thePropCo group is sold by Terra Firma to an unrelated party and the call option remains in place, or ifthe security granted by the PropCo group in favour of their financing banks in respect of the benefit ofthe call option is enforced, the rights under the call option could pass to a party unrelated to us. Theinterests of that unrelated party may not be aligned with ours and they may therefore look to exercisethe option and cause us to have to sell those assets at a time or in a manner which could bedetrimental to our business, although, in the absence of an agreed sale price, the exerciser of theoption would still be obliged to pay us the depreciated book value for the assets save where the assetsrelate to a traditional cinema and were in place when the PropCo lease was originally granted. The calloption arrangements also incorporate a liquidated damages’ trigger. In the event that a PropCo lease isforfeited or otherwise terminated for breach by us, we are obliged to pay to the relevant Propcolandlord as liquidated damages the balance of the rent due under the PropCo lease until the end of thelease term, excluding rent reviews. Such damages are, however, limited to an amount equal to theaggregate value of the call option assets, primarily our fixtures and fittings, at the relevant cinema. Theliquidated damages provision is designed to protect the PropCo landlord’s position in the event that thecall option is not exercisable because the PropCo lease has been terminated.

The Issuer is a finance subsidiary that has no revenue generating operations of its own and depends on cashreceived under its funding loans in order to be able to make payments on the Notes.

The Issuer is a finance subsidiary that was formed by Odeon Midco in order to offer and issuedebt securities. The Issuer conducts no business operations of its own, and has not engaged in, and willnot be permitted to engage in, any activities other than the issuances to Odeon Midco, which is theborrower under the funding loans, and the servicing of its obligations under the Notes and any suchother indebtedness. The Issuer has no subsidiaries, and its only material asset and only source ofrevenue is its right to receive payments from Odeon Midco. The ability of the Issuer to make paymentson the Notes is therefore entirely dependent on the cash flows received under its funding loans. If thepayments under such funding loans are not made by Odeon Midco, for whatever reason, the Issuerdoes not expect to have any other sources of funds available to it that would permit it to make

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payments on the Notes. In addition, because the funding loan constitutes a part of the collateral, in anenforcement the Issuer’s right to payment under an insolvency, such funding loan could be transferredto a third party. In such circumstances, holders of the Notes would have to rely upon claims forpayment under the Guarantees, and payment under the Guarantees is subject to the risks andlimitations described in ‘‘—Risks related to the Notes and the Guarantees—You might have difficultyenforcing your rights under the Notes or the Guarantees or enforcing civil liabilities against us in theUnited States’’.

Risks related to the Notes and the Guarantees

Creditors under certain super priority debt, including the Super Senior Revolving Credit Facility, are entitledto be repaid with the proceeds of collateral sold in any enforcement sale in priority to the noteholders, and thevalue of the collateral may not be sufficient to satisfy our obligations under the Notes.

Our Super Senior Revolving Credit Facility will be a senior obligation and will be unconditionallyguaranteed on a senior secured basis by the Issuer and the Guarantors. Once the security is in place,the lenders under the Super Senior Revolving Credit Facility (acting through the security agent) willbenefit from a first-ranking lien over the shares of the Issuer and the Guarantors and charges over thefunding loan, certain bank accounts, intercompany receivables and (for those companies incorporated inEngland) certain other assets of the Issuer and the Guarantors. The collateral securing the SuperSenior Revolving Credit Facility and the Guarantees will secure the Notes and may also secure certainhedging obligations and other priority indebtedness permitted by the Indenture, in each case, on asuper priority basis. In addition, the collateral may also be pledged in favour of additional obligationsin the future on a pari passu basis. Pursuant to the Intercreditor Agreement, the proceeds from anyenforcement of security will be applied to discharge our super priority debt, including the Super SeniorRevolving Credit Facility and certain hedging obligations, before they are applied to discharge anyobligations under the Notes or the Guarantees. Any proceeds remaining after discharging our superpriority debt will be applied to discharge the Notes and any other pari passu debt on a pro rata basis.

The claims of the holders of the Notes will be effectively subordinated to the claims of our secured creditorswhich are secured on assets securing their indebtedness that do not also secure the Notes to the extent of thevalue of the assets securing such indebtedness.

Claims of our secured creditors which are secured on assets securing their indebtedness that donot also secure the Notes will have priority with respect to such assets over the claims of holders of theNotes. As such, the claims of the holders of the Notes will be effectively subordinated to the rights ofour existing and future first priority secured creditors to the extent of the value of the assets securingsuch indebtedness on a priority basis. The Indenture will allow us and our restricted subsidiaries toincur additional secured indebtedness which will be effectively senior to the Notes and each Guaranteethereof. In the event we are subject to any foreclosure, dissolution, winding-up, liquidation,reorganisation, administration or other bankruptcy or insolvency proceeding, holders of securedindebtedness will have prior claims to the assets of the relevant guarantor that constitute theircollateral (other than to the extent such assets also secure the Notes on either an equal and ratablebasis or priority basis). As such, the Notes and each Guarantee thereof will be effectively subordinatedto any existing and future indebtedness and other obligations of the relevant obligor secured on assetsthat either do not secure the Notes or secure the Notes on a junior priority basis (including obligationswith respect to other existing and future debt obligations) to the extent of the value of the assetssecuring on a priority basis such indebtedness or other obligations.

After giving effect to this offering and the use of proceeds thereof, we expect to have£475.0 million of secured indebtedness outstanding. See ‘‘Capitalisation’’. We will be permitted toborrow substantial additional indebtedness in the future under the terms of the Indenture and cansecure such indebtedness.

There may not be sufficient collateral to pay all or any of the Notes.

No appraisal of the value of the collateral has been made in connection with this offering and thevalue of the collateral in the event of liquidation will depend on market and economic conditions, theavailability of buyers and other factors. Consequently, liquidating the collateral securing the Notes maynot result in proceeds in an amount sufficient to pay any amounts due on indebtedness secured by thecollateral, including the Notes.

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Under the terms of the security documents, the proceeds of any collection, sale, disposition orother realization of collateral received in connection with the exercise of remedies (includingdistributions of cash, securities or other property on account of the value of the collateral in abankruptcy, insolvency, reorganisation or similar proceedings) will be applied first to repay amountsdue, including interest, under our Super Senior Revolving Credit Facility (including any post-petitioninterest with respect thereto, whether or not allowed or allowable in such bankruptcy proceeding), andto repay certain hedging and cash management obligations before the holders of Notes receive anyproceeds. As a result, the claims of holders of Notes to such proceeds will rank behind the claims,including interest, of the lenders and the letter of credit issuers under our Super Senior RevolvingCredit Facility, including claims for certain hedging and cash management obligations. In addition, theterms of the Indenture will permit the incurrence of additional debt that may be secured on a first-priority basis with the Notes.

The fair market value of the collateral securing the Notes is subject to fluctuations based onfactors that include, among others, the condition of the markets for the collateral, the ability to sell thecollateral in an orderly sale, general economic conditions, the availability of buyers and similar factors.The amount to be received upon a sale of the collateral would be dependent on numerous factors,including but not limited to the actual fair market value of the collateral at such time and the timingand the manner of the sale. By its nature, portions of the collateral may be illiquid and may have noreadily ascertainable market value. As a result, we can make no assurance that our historical bookvalues will approximate fair value or that such fair value will be sufficient to fully collateralise theNotes offered hereby. In the event of a foreclosure, liquidation, bankruptcy or similar proceeding, wecannot assure you that the proceeds from any sale or liquidation of this collateral will be sufficient topay our obligations under the Notes.

In addition, certain assets are excluded from the collateral securing the Notes as described in‘‘Description of the Notes—Security—The Collateral’’.

The collateral securing the Notes may be diluted under certain circumstances.

The collateral that will secure the Notes will also secure our obligations under our Super SeniorRevolving Credit Facility. This collateral may also secure additional senior indebtedness, includingadditional notes that we incur in the future, subject to restrictions on our ability to incur debt and liensunder the Super Senior Revolving Credit Facility and the Indenture. Your rights to the collateral wouldbe diluted by any increase in the indebtedness secured by this collateral.

The Trustee may be unable to foreclose on the collateral, or exercise associated rights and pay holders of theNotes any amount due on the Notes.

Under the Indenture, if any event of default occurs, including defaults in payment of interest orprincipal on the Notes when due at maturity or otherwise, the Trustee may accelerate the Notes, andamong other things, the collateral agent appointed under the Indenture may initiate proceedings toforeclose on the collateral securing the Guarantees and exercise associated rights. The right of thecollateral agent to possess and dispose of the collateral after the occurrence of an event of default islikely to be significantly impaired or, at a minimum, delayed by applicable bankruptcy laws if abankruptcy proceedings were to commenced involving us or any Guarantor prior to the Trustee’sdisposition of the collateral. Under these circumstances, you may not be fully compensated for yourinvestment in the Notes in the event of a default by us.

There are circumstances other than repayment or discharge of the Notes under which the collateral securingthe Notes and Guarantees will be released automatically, without your consent or the consent of the Trustee.

Under various circumstances, the collateral securing the Notes will be released automatically,including: in whole or in part, as applicable, with respect to the collateral which has been taken byeminent domain, condemnation or other similar circumstances; in part, upon a sale, transfer or otherdisposal of such collateral in a transaction that complies with the covenant in the Indenture regardingasset sales; in part, with respect to the collateral held by a Guarantor, upon the release of suchGuarantor from its Guarantee; and in part, in accordance with the applicable provisions of theIndenture, security documents and Intercreditor Agreement; or in whole upon satisfaction anddischarge of the Indenture as described in ‘‘Description of the Notes—Satisfaction and Discharge’’; in

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whole upon a legal defeasance or covenant defeasance of the Indenture as described in ‘‘Description ofthe Notes—Defeasance’’; or in whole or in part with the consent of holders with 75% of the Notes.

In addition, the Guarantee of a Guarantor will be automatically released in connection with a saleof such Guarantor in a transaction permitted under the Indenture.

The Indenture will also permit us to designate one or more of our restricted subsidiaries that is aGuarantor of the Notes as an unrestricted subsidiary. If we designate a Guarantor as an unrestrictedsubsidiary for purposes of the Indenture, all of the liens on any collateral owned by such subsidiary orany of its subsidiaries and any Guarantees by such subsidiary or any of its subsidiaries will be releasedunder such indenture. Designation of an unrestricted subsidiary will reduce the aggregate value of thecollateral securing the Notes to the extent that liens on the assets of the unrestricted subsidiary and itssubsidiaries are released. In addition, the creditors of the unrestricted subsidiary and its subsidiaries willhave a senior claim relative to the Notes on the assets of such unrestricted subsidiary and itssubsidiaries.

The value of the collateral securing the Notes may not be sufficient to secure post-petition interest.

In the event of a bankruptcy, liquidation, dissolution, reorganisation or similar proceeding againstus, holders of Notes will only be entitled to post-petition interest under the United States bankruptcycode to the extent that the value of their security interest in the collateral is greater than theirpre-bankruptcy claim. Holders of Notes that have a security interest in the collateral with a value equalor less than their pre-bankruptcy claim will not be entitled to post-petition interest under the UnitedStates bankruptcy code. No appraisal of the fair market value of the collateral has been prepared inconnection with this offering and we therefore cannot assure you that the value of the holders’ interestin the collateral equals or exceeds the principal amount of the Notes.

The Guarantees and security may be subject to release in certain circumstances even if you would make no orlimited recovery under the Guarantees and security.

The Notes, Guarantees and security are subject to release under certain circumstances, including,but not limited to, the sale of a Guarantor as permitted by the Indenture or pursuant to anenforcement action that complies with the terms of the Intercreditor Agreement, provided that certainrequirements are satisfied. These requirements may in some circumstances be fulfilled even if youwould make no recovery or a partial recovery under the Notes and the Guarantees. For example, theIntercreditor Agreement is expected to provide that the creditors under the Super Senior RevolvingCredit Facility certain other creditors designated as priority debt creditors, may control the enforcementof security in certain circumstances. Such creditors may pursue an enforcement strategy which is notthe preferred enforcement strategy of the noteholders. In an insolvency or, if such priority debtcreditors have not been paid in full within four months, instructions to the security agent may be givenby the creditors under the Super Senior Revolving Credit Facility and if the Super Senior RevolvingCredit Facility is no longer outstanding, by other priority debt creditors, without regard to enforcementprinciples which were otherwise applicable to recoveries in respect of shared security. See ‘‘Descriptionof Other Indebtedness—Intercreditor Agreement’’ and ‘‘Description of the Notes—Guarantees’’.

As a result of these provisions and other limitations we anticipate being in the IntercreditorAgreement, the Indenture, the Guarantees and security documents, you may not be able to recover thefull value of the collateral or any amounts from the Guarantors under the Guarantees in the event of adefault on the Notes, and the Guarantees and security may be released without any recovery beingavailable. In addition, in connection with any incremental indebtedness that can be incurred andsecured on the collateral and intercompany disposals, the security may be released and retaken whichmay lead to renewed hardening periods in various jurisdictions and may limit your recovery in anenforcement proceeding.

Security over certain collateral will not be in place on the Issue Date or will not be perfected on the IssueDate, and we will not be required to perfect security interests in some instances.

Certain security will not be in place on the issue date of the Notes or will not be perfected on theIssue Date. We have a period of 30 days from the Issue Date in order to provide certain securityand/or take certain perfection steps, provided that security in the UK will be perfected by thesettlement date. In addition, although as of the Issue Date beneficial ownership in Bond Midco will beheld by Bond Holdco and beneficial ownership in Odeon Finco will be held by Bond Midco, it may

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take up to 30 days after the Issue for the transfer of legal title to be registered. If we or any Guarantorwere to become subject to a bankruptcy proceeding after the Issue Date, any such creation orperfection steps taken after the Issue Date would face a greater risk of being invalidated than if we hadtaken such steps at the Issue Date. If any such security interest is created or perfected after the IssueDate, it will be treated under bankruptcy law as if it were delivered to secure previously existing debt,which is materially more likely to be avoided as a preference by the bankruptcy court than if the stepswere taken at the time of the Issue Date. To the extent that the grant or perfection of any such securityinterest is avoided as a preference, you would lose the benefit of such security interest.

The granting of the security interests in the Collateral may create hardening periods for such security Interestsin accordance with the law applicable in certain jurisdictions.

The granting of new security interests in connection with the issuance of the Notes and the SuperSenior Revolving Credit Facility may create hardening periods for such security interests in certainjurisdictions. The applicable hardening period for these new security interests will run as from themoment each new security interest has been granted, perfected or recreated. At each time, if thesecurity interest granted, perfected or recreated were to be enforced before the end of the respectivehardening period applicable in such jurisdiction, it may be declared void and/or it may not be possibleto enforce it.

Your rights in the collateral may be adversely affected by the failure to perfect security interests in certaincollateral acquired in the future.

Applicable law requires that certain property and rights acquired after the grant of a generalsecurity interest can only be perfected at the time such property and rights are acquired and identified.There can be no assurance that the Trustee or the collateral agent will monitor, or that we will informthe Trustee or the collateral agent of, the future acquisition of property and rights that constitutecollateral, and that the necessary action will be taken to properly perfect the security interest in suchafter-acquired collateral. The collateral agent for the Notes has no obligation to monitor the acquisitionof additional property or rights that constitute collateral or the perfection of any security interest infavour of the Notes against third parties.

You might have difficulty enforcing your rights under the Notes or the Guarantees or enforcing civil liabilitiesagainst us in the United States.

The Issuer is organised in the United Kingdom and the Guarantors are incorporated andorganised in the United Kingdom, Spain and Germany. In the event of bankruptcy, insolvency or asimilar event, proceedings could be initiated in any of these jurisdictions. Your rights under the Notescould therefore be subject to the laws of multiple jurisdictions, and you may not be able to enforceeffectively your rights in such bankruptcy, insolvency and other similar proceedings. Moreover, such aproceeding may be complex and costly for creditors and may result in substantial uncertainty and delayin the enforcement of creditors’ rights. In addition, the bankruptcy, insolvency, foreign exchange,administration and other laws of these countries may be materially different from or in conflict with,and not as favourable to creditors as, those of the United States, including in respect of creditors’rights, priority of creditors and the duration of the insolvency proceeding. For example, an issuer’sliability may, in the event of insolvency or similar proceedings, rank junior to certain of the issuer’sobligations that are entitled to priority under the laws of such jurisdiction. Obligations entitled topriority may include amounts owed in respect of employee pension schemes, amounts owed toemployees, amounts owed to governmental agencies, including tax authorities, and expenses associatedwith insolvency proceedings. For additional information regarding United Kingdom laws andproceedings, see ‘‘Enforceability of Civil Liabilities’’.

In addition, in the event that the Issuer experiences financial difficulty, it is not possible to predictwith certainty in which jurisdiction or jurisdictions insolvency or similar proceedings would becommenced or the outcome of such proceedings. Pursuant to Council Regulation (EC) no. 1346/2000on insolvency proceedings (the ‘‘E.U. Insolvency Regulation’’), the court which has jurisdiction to openinsolvency proceedings in relation to any issuer located in the European Union is the court of themember state where such issuer has its ‘‘centre of main interests’’ (as that term is used in Article 3(1)of the E.U. Insolvency Regulation). The determination of where any such issuer has its ‘‘centre of maininterests’’ is a question of fact on which the courts of the different member states may have differingand even conflicting views. The term ‘‘centre of main interests’’ is not a static concept and may change

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from time to time. Although there is a rebuttable presumption under Article 3(1) of the E.U.Insolvency Regulation that issuer has its ‘‘centre of main interests’’ in the member state in which it hasits registered office, preamble 13 of the E.U. Insolvency Regulation states that the ‘‘centre of maininterests’’ of a debtor should correspond to the place where the debtor conducts the administration ofits interests on a regular basis and ‘‘is therefore ascertainable by the parties’’. In that respect, factorssuch as where board meetings are held, the location where the Issuer conducts the majority of itsbusiness and the location where the large majority of the Issuer’s creditors understand it to beestablished may all be relevant in the determination of the place where the Issuer has its ‘‘centre ofmain interests’’. Disputes over which jurisdiction’s law should apply could adversely affect your abilityto enforce your rights and to collect payment in full under the Notes.

Furthermore, certain of our directors and officers reside principally outside of the United States.As a result, it may not be possible for you to effect service of process within the United States on suchpersons. It also may not be possible for you to enforce judgements obtained in United States courtsagainst them within the United States because a substantial portion of the assets of these persons arelocated outside the United States. In addition, judgements of U.S. courts will not necessarily berecognised by courts in non-U.S. jurisdictions. Accordingly, even if you obtain a favourable judgementin a U.S. court, you may be required to re-litigate your claim in other jurisdictions. In addition, incertain jurisdictions in which our directors and officers reside, it is questionable whether a court wouldaccept jurisdiction and impose civil liability if proceedings were commenced in an original actionpredicated only upon U.S. federal securities laws.

In the event of our bankruptcy, the ability of the holders of Notes to realise upon the collateral will be subjectto certain bankruptcy law limitations.

The Issuer is incorporated in England and Wales and certain of the Guarantors are incorporatedand organised in England and Wales, Spain and Germany. The ability of holders of Notes to realiseupon the collateral will be subject to certain bankruptcy law limitations in these jurisdictions in theevent of our bankruptcy. The insolvency laws that apply may be less favourable to you than theinsolvency laws of the U.S. or another jurisdiction with which you may be familiar. The following is abrief description of certain aspects of insolvency laws in these jurisdictions:

England and Wales. The Issuer and certain Guarantors are incorporated under the laws ofEngland and Wales. Accordingly, insolvency proceedings with respect to the Issuer or a Guarantor mayproceed under, and be governed by, English insolvency law. The following is a brief description ofcertain aspects of insolvency law in England. In the event that any one or more of the Issuer or anyother subsidiary of the Issuer or a Guarantor experiences financial difficulty, it is not possible to predictwith certainty the outcome of insolvency or similar proceedings.

Under English insolvency law, English courts are empowered to order the appointment of anadministrator in respect of a company in certain circumstances. An administrator can also be appointedout of court by the company, its directors or the holder of a ‘‘qualifying floating charge’’ and differentprocedures apply according to the identity of the appointor. During the administration, in general noproceedings or other legal process may be commenced or continued against the company, or securityenforced over the company’s property, except with leave of the court or the consent of theadministrator. The moratorium does not, however, apply to a ‘‘security financial collateral agreement’’(such as a fixed charge over cash or financial instruments such as shares, bonds or tradable capitalmarket debt instruments) under the Financial Collateral Agreements (No. 2) Regulations 2003. Duringthe administration of a company, a creditor would not be able to enforce any security interest (otherthan security financial collateral arrangements) without the consent of the administrator or the court.In addition, a secured creditor cannot appoint an administrative receiver. The Trustee of the Notes canappoint its choice of administrator by the out-of-court route if it holds a qualifying floating charge andsuch floating charge security, together with fixed charge security charges to the whole or substantiallythe whole of the relevant company’s property. In order to constitute a qualifying floating charge, thefloating charge must be created by an instrument which (i) states that the relevant statutory provisionapplies to it; (ii) purports to empower the chargeholder to appoint an administrator of the company or(iii) purports to empower the chargeholder to appoint an administrative receiver.

Under English insolvency law, the liabilities of the Issuer or Guarantor in respect of the Notesmay, in the event of the insolvency or similar proceedings, rank junior in right of payment to some ofthe other debts of the Issuer that are entitled to priority under English law. In the event of a winding

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up, assets are distributed in accordance with the statutory order of priority. Other than realisationsfrom the disposal of assets subject to fixed charge security (including mortgages over real estate), whichare paid to the holders of such security, the administration or liquidation expenses are paid first.Preferential creditors which are entitled to priority under English law, including but not limited tooccupational pension scheme contributions and salaries owed to employees up to the statutorymaximum, would then be paid. Thereafter, (except in certain exceptional circumstances), a certainproportion of the assets covered by any floating charge would be ‘‘ring-fenced’’ and made available prorata to unsecured creditors. The exact amount will depend on the total value of the company’sproperty—currently the total ring-fenced amount cannot exceed £600,000 but this may be increased bysubsequent legislation. Floating charge holders would then be paid any surplus from the realisation ofthe assets subject to the floating charge. Unsecured debts which are not preferential debts and securedcreditors if not repaid in full from the realisation of assets subject to their security and/or in relation toany other unsecured portion of their debt would be paid after those prior liabilities on a pari passubasis (and, in respect of unsecured creditors only, after the deduction of the ‘‘ring-fenced’’ amount).Any interest accruing under or in respect of the Notes in respect of any period after thecommencement of administration or liquidation proceedings would only be recoverable by holders ofthe Notes from any surplus remaining after payment of all other debts proved in such administration orliquidation as well as accrued and unpaid interest up to the date of the commencement of theproceedings. Finally, shareholders would receive any remaining funds.

Under English insolvency law there is a possibility that a court could recharacterize as floatingcharges any security interests expressed to be created by a security document as fixed charges wherethe chargee does not have the requisite degree of control over the relevant chargor’s ability to dealwith the relevant assets and the proceeds thereof or does not exercise such control in practice as thedescription given to the charges in the relevant security document as fixed charges is not determinative.Where the chargor is free to deal with the secured assets without the consent of the chargee, the courtis likely to hold that the security interest in question constitutes a floating charge, notwithstanding thatit may be described as a fixed charge.

Under English insolvency law if a company enters into liquidation or administration, then, aliquidator or administrator of the company could apply to the court to rescind a transaction, includingissuance of a guarantee, if the liquidator or administrator believes that it constituted a transaction at anundervalue. A transaction is at an undervalue if a company makes a gift to a person or enters into atransaction on terms where the company receives no consideration or one which has a value which, inmoney or money’s worth, is significantly less than the value, in money or money’s worth, of theconsideration provided by the company. The court can set aside a transaction at an undervalue if (i) itwas entered into within the period of two years ending with the onset of insolvency (i.e. two yearsbefore the date of commencement of the winding up or, depending on how the company entersadministration, two years before: (a) the date on which the administration application is made, or(b) the date of filing at court of a notice of intention to appoint an administrator, or (c) the date theappointment of an administrator takes effect), and (ii) the company was ‘‘unable to pay its debts’’ atthe time it entered into the transaction or became ‘‘unable to pay its debts’’ as a result of entering intoit. A company will be ‘‘unable to pay its debts’’ if a statutory demand for over £750 is served on thecompany and remains unsatisfied for three weeks or an execution on or other process issued on ajudgment, decree or order of a court in favour of a creditor is returned unsatisfied in whole or in partor it is proved to the court’s satisfaction that the company is not able to pay its debts as they fall dueor that the value of the company’s assets is less than the amount of its liabilities (taking into accountcontingent and prospective liabilities). Under English insolvency law, there is a presumption ofinsolvency if the parties to the transaction are connected (including but not limited to intra-grouptransactions or transactions with a director of the company) unless it can be shown otherwise. Howeverthe court shall not make an order restoring the position if it is satisfied that the company whichentered into the transaction did so in good faith for the purposes of carrying on its business and that atthe time it did so there were reasonable grounds for believing that the transaction would benefit thecompany.

Additionally, if the liquidator or administrator can show that a ‘‘preference’’ was given by acompany within six months of the onset of insolvency (or within two years if the preference is to aconnected person) and, at the time of the preference, the transferor of an asset was ‘‘unable to pay itsdebts’’ or became ‘‘unable to pay its debts’’ as a result of the preferential transaction, a court has thepower, among other things, to set aside the preferential transaction. For these purposes, a company

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gives a preference to a person if that person is one of the company’s creditors (or a surety or guarantorfor any of the company’s debts or liabilities) and the company does anything or suffers anything to bedone that has the effect of putting that person into a position which, in the event of the company goinginto insolvent liquidation, would be better than the position that person would have been in if thatthing had not been done. The court may not make an order setting aside a preference transactionunless it is satisfied that the company was influenced by a desire to put that person in such a betterposition. If a court were to find that the grant of a security interest or the guarantees were preferences,the court would have the power to restore the position to what it would have been if that preferencehad not been given. There is protection for a third party who enters into a transaction in good faithand without notice. In either administration or liquidation, it is for the administrator or liquidator todemonstrate that a company was ‘‘unable to pay its debts’’ or became so as a result of the preferentialtransaction and that the company was influenced by such a desire to prefer unless a beneficiary of thetransaction was a connected person, in which case it will be presumed that the company was influencedby a desire to prefer that person.

Under English insolvency law, a liquidator or an administrator of a company, or a person who is a‘‘victim’’ of the relevant transaction could apply to the court for an order to set aside a transaction onthe grounds that it is a transaction defrauding creditors. A transaction will constitute a transactiondefrauding creditors if it is a transaction at an undervalue and the court is satisfied the purpose of aparty to the transaction was to put assets beyond the reach of actual or potential claimants against it orto prejudice the interest of such persons. If the court determines the transaction was a transactiondefrauding creditors it may make such order as it may think fit to restore the position to what it wasprior to the transaction or protect the victims of the transaction (including setting aside a securityinterest) but there is protection for a third party acting in good faith, for value without notice of therelevant circumstances. There is no time limit in the English insolvency legislation within which thecompany must enter insolvency proceedings and the relevant company does not need to be unable topay its debts at the time of the transaction.

Under English insolvency law, if a company is unable to pay its debts at the time of (or as a resultof) granting a floating charge then such floating charge can be avoided on the action of a liquidator oradministrator if it was granted in the period of one year ending with the onset of insolvency. Thefloating charge will, however, be valid to the extent of the value of the consideration provided for thecreation of the charge in the form of money paid to, or goods or services supplied to, or any dischargeor reduction of any debt of, the relevant company at the same time as or after the creation of thefloating charge plus interest payable on such amounts. Where the floating charge is granted to a‘‘connected person,’’ the charge can be challenged if given within two years of the onset of insolvencyand the prerequisite to challenge that the company is unable to pay its debt does not apply. However,if the floating charge qualifies as a ‘‘security financial collateral agreement’’ under the FinancialCollateral Arrangements (No. 2) Regulations 2003, the floating charge will not be subject to challengeas described in this paragraph.

A liquidator or administrator could apply to court to set aside obligations and vary the terms oftransactions or security under English insolvency law if the transaction (a) was entered into during thethree years ending with the day on which the company went into liquidation or entered administrationand (b) is held to be extortionate. Whether a transaction is ‘‘extortionate’’ is determined by havingregard to the risk accepted by the person providing the credit: (i) the terms of it are or were such as torequire grossly exorbitant payments to be made (whether unconditionally or in certain contingencies) inrespect of the provision of the credit, or (ii) it otherwise grossly contravened ordinary principles of fairdealing. To the extent that a court were to find that the issuance of the Notes, a Guarantee, securityinterest or any related transaction constituted an extortionate credit transaction, the court may makesuch orders as it thinks fit to restore the position to what it would have been if such Notes, Guarantee,or other transaction had not been issued, granted or entered into.

Pursuant to the principles of public policy relating to insolvency laws, the English courts will strikedown transactions aimed at circumventing basic insolvency principles (for example those of mandatoryset-off and pari passu distribution) or aimed at excluding the jurisdiction of the English court or theinsolvency laws of the United Kingdom.

A liquidator may disclaim any onerous property which includes any unprofitable contract and anyother property of a company which is unsaleable or not readily saleable or is such that it may give riseto a liability to pay money or perform any other onerous act. A person sustaining loss or damage in

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consequence of the operation of such a disclaimer is deemed an unsecured creditor of the relevantcompany to the extent of such loss or damage.

In addition, in a liquidation or administration under English insolvency law any debt payable in acurrency other than pounds sterling (such as euros in the case of the Notes) must be converted intopounds sterling at the ‘‘official exchange rate’’ prevailing at the date when the debtor went intoliquidation or entered administration or, if the liquidation or administration (as the case may be) wasimmediately preceded by the respective other proceeding, the date the debtor entered theadministration or went into liquidation (respectively). This provision overrides any agreement betweenthe parties. The ‘‘official exchange rate’’ for these purposes is the middle market rate on the LondonForeign Exchange Market at the close of business as published for the date in question or, if no suchrate is published, such rate as the court determines. Accordingly, in the event that we go or aGuarantor goes into liquidation or enters administration, holders of the Notes may be subject toexchange rate risk between the date that we or such Guarantor (as the case may be) went intoliquidation or entered administration (as the case may be) and receipt of any amounts to which holdersof Notes may become entitled.

There can be no assurance that the issue of the Notes or any related Guarantee or securityinterest will not be challenged by a liquidator or administrator or that a court would support ouranalysis.

Spain. The Spanish insolvency law (Law 22/2003), as further amended, regulates court insolvencyproceedings, as opposed to out-of-court liquidation, which is only available when the debtor hassufficient assets to meet its liabilities.

In Spain, insolvency proceedings are only triggered in the event of a debtor’s insolvency. UnderSpanish insolvency law, a debtor is insolvent when it becomes unable to regularly meet its obligationsas they become due or when it expects that it will shortly be unable to do so.

Such insolvency proceedings, which are called ‘‘concurso’’, are applicable to all persons or entities.These proceedings may lead either to the restructuring arrangement entered into between the creditorsand the debtor or to the liquidation of the debtor.

A petition for insolvency may be initiated by the debtor, by any creditor or by certain otherinterested third parties.

Insolvency is considered voluntary (‘‘concurso voluntario’’) if filed by the debtor. The debtor isobliged to file a petition for insolvency within two months after it becomes aware, or should havebecome aware, of its state of insolvency. It is presumed that the debtor becomes aware of itsinsolvency, unless otherwise proved, if any of the circumstances that qualify as the basis for a petitionfor compulsory insolvency occur.

Insolvency is considered mandatory (‘‘concurso necesario’’) if filed by a third party creditor. UnderSpanish insolvency law, a creditor can apply for a declaration of insolvency if, inter alia, (i) there is ageneralized default on payments by the debtor, (ii) there is a seizure of assets affecting or comprisingthe generality of the debtor’s assets, (iii) there is a misplacement, ‘‘fire’’ sale or ruinous liquidation ofthe debtor’s assets, or (iv) there is a generalized default on certain tax, social security and employmentobligations during the applicable statutory period (three months).

The insolvency order contains an express request for the creditors to declare debts owed to them,within a one-month period, providing original documentation to justify such debts. Based on thedocumentation provided by the creditors and documentation held by the debtor, the court receiversdraw up a list of acknowledged creditors and classify them according to the categories establishedunder law:

• Debts benefiting from special privileges, representing security on certain assets (basically in remsureties). These privileges may entail separate enforcement proceedings, though subject tocertain restrictions derived from a waiting period that may last up to one year. Privilegedcreditors are not subject to the restructuring arrangement, except if they give their expresssupport by voting in favour of the restructuring arrangement or waive their security (hencebecoming ordinary creditors). In the event of liquidation, they are the first to collect paymentagainst the assets on which they are secured.

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• Debts benefiting from general privileges, including among others labor and public debts. Publicdebts, other than those corresponding to tax withholdings and certain social security obligations,are recognized for half their amount, and debts held by the creditor taking the first initiative toapply for the corresponding insolvency proceedings, up to a fourth of the amount of such debt.The holders of general privileges are not to be affected by the restructuring arrangement if theydo not agree to the restructuring arrangement and, in the event of liquidation, they are the firstto collect payment, in the order established under Spanish insolvency law.

• Ordinary debts (non-subordinated and non-privileged creditors). They will be paid on a pro ratabasis.

• Subordinated debts (thus classified by virtue of an agreement or pursuant to law). Subordinateddebts include, among others, those credits communicated late (outside the specific one monthperiod mentioned above) or those credits held by parties deemed specially related to the debtor.In the case of a legal entity, the following shall be deemed specially related parties:(i) shareholders with unlimited liability, (ii) limited liability shareholders holding 10% or more ofthe insolvent company’s share capital (or 5% if the company is listed), or (iii) directors andthose holding general powers of attorney from the insolvent company, and (iv) companiespertaining to the same group as the debtor and their respective shareholders provided suchshareholders meet the minimum shareholding requirements set out in (ii) above . Subordinatedcreditors are second level creditors; they may not vote on a restructuring arrangement and havevery limited chances of collection, according to the ranking established by Spanish insolvencylaw. Moreover, any ‘‘waiting’’ period agreed in the restructuring arrangement will start to applyto the subordinated debts one it has lapsed for the rest debts. Under Spanish insolvency law, thefunding loan between Odeon Midco and the Issuer will be treated as subordinated debt sinceOdeon Midco qualifies as a specially related person to the Issuer at the time the loan is granted.

As a general rule, insolvency proceedings are not compatible with other enforcement proceedings.

When compatible, in order to protect the interests of the debtor and creditors, the law extends thejurisdiction of the court dealing with insolvency proceedings, which is, then, legally authorised to handleany enforcement proceedings or interim measures affecting the debtor’s assets (whether based uponcivil, labor or administrative law).

There is no automatic claw-back date. Therefore, there are no prior transactions that automaticallybecome void as a result of initiation of the insolvency proceedings. The court receivers may onlychallenge those transactions that could be deemed as having ‘‘damaged’’ the insolvency estate, providedthat they have taken place within two years prior to the declaration of insolvency (transactions takingplace earlier than two years before insolvency has been declared may be rescinded subject to ordinarycivil code based actions). Those transactions that are classified as ‘‘ordinary’’ transactions, according tothe business of the debtor, are not subject to challenge, provided that they are carried out at arm’slength. Spanish insolvency law does not define the meaning of ‘‘damage’’. Damage does not refer to theintention of the parties, but to the consequences of the transaction on the debtor’s interests. In anycase, the Spanish insolvency law refers to transactions that are somehow exceptional: damage exists (asa non-rebuttable presumption) in case of donations and early payment of obligations maturing after theinsolvency declaration and damage is deemed to exist (as a rebuttable presumption) in case oftransactions entered into with special related persons and when rights in rem have been created inorder to protect already existing obligations or new obligations replacing existing ones; in the remainingcases, damage would have to be proved.

Germany. In the event of insolvency of a German Guarantor, insolvency proceedings may beinitiated in Germany if such German Guarantor was held to have its centre of main interest within theterritory of the Federal Republic of Germany at such time. Such proceedings would then be governedby German law. Under certain circumstances, insolvency proceedings may also be opened in Germanyin accordance with German law over the assets of companies that are not established under Germanlaw (for example, if the centre of the business operations of such company is within Germany).

Under German law, insolvency proceedings can be initiated either by the debtor or by a creditor inthe event of over-indebtedness (Uberschuldung) of the debtor (i.e. where the debtor’s liabilities exceedthe value of its assets, unless—for the period until December 31, 2013—the continuation of theenterprise is predominantly probable under the circumstances) or in the event that the debtor is unableto pay its debts as and when they fall due (Zahlungsunfahigkeit). In addition, the debtor can file for

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insolvency proceedings if it is imminently at risk of being unable to pay its debts as and when they falldue (drohende Zahlungsunfahigkeit). A petition on these grounds cannot be filed by creditors.

The insolvency proceedings are court supervised. If the insolvency court (Insolvenzgericht) hasreasonable grounds to believe that there is a reason for the opening of insolvency proceedings (i.e. thedebtor is either over-indebted, or unable to pay its debts as they fall due or—if the debtor itself appliedfor the opening of insolvency proceedings—imminently at risk of being unable to pay its debt as theyfall due) it will appoint a preliminary insolvency administrator (vorlaufiger Insolvenzverwalter). Normally,the preliminary administrator advises and monitors the insolvent company’s representatives who remainfully in charge, though the court can still order that certain transactions require the preliminaryadministrator’s consent (so-called weak administrator). In some cases, the preliminary administrator isauthorized by the court to ‘‘run the business’’ of the insolvent company (so-called strong administrator).The administrator the has the sole right of disposal over the assets of thze insolvent company. Thestrong administrator is in charge of the handling of the company’s affairs until the insolvency courtdecides on the opening of insolvency proceedings. The insolvency court can also order a stay of allenforcement measures against the debtor.

If the preliminary insolvency administrator has verified that there is a ground for the opening ofinsolvency proceedings and that the debtor has sufficient assets to cover the costs of the insolvencyproceedings then the insolvency court will open the (definite) insolvency proceedings by appointing aninsolvency administrator (Insolvenzverwalter). Otherwise the opening of insolvency proceedings will berejected due to insufficient assets. The insolvency administrator has full power to dispose of thedebtor’s assets, whereas the debtor is no longer entitled to dispose of its assets. Any individualenforcement action brought against the debtor by any of its creditors is subject to an automatic stayonce insolvency proceedings have been opened.

All creditors, whether secured or unsecured, wishing to assert claims against the debtor need toparticipate in the insolvency proceedings and have to file their claims against the debtor and the rightsthey claim in the assets of the debtor with the insolvency administrator. Creditors secured by a right inrem in the debtor’s assets or any part thereof (for example, by a pledge over bank accounts or shares, asecurity assignment of receivables or a security transfers of moveable assets) have certain preferentialrights. Creditors may be entitled to separation (Aussonderung) or segregation (Absonderung). Thesesecurity rights entitle the creditor to preferential treatment in the distribution of the proceeds resultingfrom the realization of the charged asset; they are entitled to separate satisfaction (abgesonderteBefriedigung). A creditor having a right to separate satisfaction may enforce its right if and to the extentthe insolvency administrator is not itself authorized to do so (the latter generally being the case inrelation to moveable assets in the possession of the insolvency administrator and receivables assigned toa creditor for security purposes). In case of an enforcement by the insolvency administrator, theenforcement proceeds minus certain contributory charges for (i) assessing the secured assets and therights thereto in the amount of 4% of the proceeds, and (ii) realizing the secured assets in the amountof 5% of the proceeds (or any actual costs of realization that are significantly lower or higher) plusvalue added tax incurred in the realization, are paid to the creditor holding a security interest in therelevant asset up to an amount equal to its secured claims. Whether the secured creditor itself or theinsolvency administrator realizes the charged asset, to the extent the net realization proceeds exceedthe amount of the secured claim, the proceeds have to be surrendered to the liquidation fund(Insolvenzmasse) and will be distributed among the unsecured creditors which will be satisfied on a prorata basis only. Creditors who have a right to preferential treatment may participate in the pro ratadistribution of the liquidation fund only to the extent that the proceeds from the realization of theassets charged to them did not cover their claims or if they have waived their right to preferentialtreatment. To the extent the security was not sufficient to cover the total amount of debt, theremainder of the claim will be treated as unsecured debt. A different distribution of enforcementproceeds can be proposed in an insolvency plan (Insolvenzplan) that can be submitted by the debtor orthe insolvency administrator and which requires, among others, the consent of the debtor and theconsent of each class of creditors in accordance with specific majority rules. If the court approves theinsolvency plan, it is binding on all creditors, including any dissenting creditors.

Under the German Insolvency Code (Insolvenzordnung), an insolvency administrator could possiblyavoid payments under any guarantee or security interest or, if payment has already been made underthe relevant security interest or guarantee, require that the recipients return the payment to therelevant payor.

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In particular, a transaction (which term includes the provision of security and the payment of debt)may be avoided according to the German Insolvency Code in the following cases:

• a transaction granting a creditor security or satisfaction for a debt (Befriedigung) can be avoidedif the transaction was effected in the three months immediately prior to the filing of a petitionfor the commencement of insolvency proceedings or thereafter, if at the time of the transaction(i) the debtor was insolvent (zahlungsunfahig, i.e. unable to pay its debt when due) and thecreditor had knowledge thereof, or (ii) a petition for the commencement of insolvencyproceedings had been filed and the creditor had knowledge thereof or of the inability to makepayments;

• a transaction granting a creditor security or satisfaction for a debt to which such creditor had noright, no right at the respective time or no right as to the respective manner, can be avoided ifthe transaction was effected in the month prior to the filing of a petition for the commencementof insolvency proceedings or thereafter, if the transaction was effected during the second and/orthird month prior to the filing, it can be avoided if at the time of the transaction (i) the debtorwas insolvent, or (ii) the creditor knew that the transaction would be detrimental to otherinsolvency creditors of the debtor. In the case of collateral over future claims, a recent courtdecision has held that the granting of security can be challenged if the pledged claim ariseswithin the respective time period, even if the actual security agreement was concluded outsidethese periods;

• a legal transaction (Rechtsgeschaft) effected by the debtor which is directly detrimental to thecreditors of the debtor can be avoided, if the transaction was effected in the three monthsimmediately prior to the filing of a petition for the commencement of insolvency proceedingsagainst the debtor or thereafter, if at the time of the legal transaction (i) the debtor wasinsolvent and the other party to the legal transaction had knowledge thereof or (ii) a petition forthe commencement of insolvency proceedings had been filed against the debtor and the otherparty to the legal transaction had knowledge thereof or of the inability to make payments;

• a transaction whereby a debtor grants security for a third party debt might be regarded as havingbeen granted gratuitously (unentgeltlich); a gratuitous transaction can be avoided if it waseffected in the four immediately years prior to the filing of a petition for the commencement ofinsolvency proceedings against the debtor;

• a transaction entered into by the grantor of the guarantee or security in the ten yearsimmediately prior to the filing of a petition for commencement of insolvency proceedings orthereafter with the intent of harming its creditors can be avoided if the beneficiary of thetransaction had knowledge of such intent at the time of the transaction; or

• a transaction with respect to the claim of a shareholder for repayment of a shareholder loan oran equivalent claim can be avoided if the transaction (i) was secured and was effected in the tenyears immediately prior to the filing of a petition for commencement of insolvency proceedingsor thereafter or (ii) resulted in satisfaction and was effected in the year immediately prior to thepetition for commencement of insolvency proceedings or thereafter.

Apart from the above-described examples of an insolvency administrator (Insolvenzverwalter)avoiding transactions according to the German Insolvency Code, another creditor who has obtained anenforcement order (Vollstreckungstitel) could possibly also avoid any security interest or paymentperformed under the relevant security interest according to the German Act of Avoidance(Anfechtungsgesetz) outside formal insolvency proceedings. The conditions vary to a certain extent fromthe above described rules and the avoidance periods are calculated from the date when such othercreditor exercises its rights of avoidance in the courts.

In addition, future Guarantors that may provide Guarantees for the Notes may be incorporated inother jurisdictions that may have insolvency laws similar to or less favourable to you than the onesdescribed herein.

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In the event of a bankruptcy of us or any of the Guarantors, holders of Notes may be deemed to have anunsecured claim to the extent that our obligations in respect of the Notes exceed the fair market value of thecollateral securing the Notes.

In any bankruptcy proceeding with respect to us or any of the Guarantors, it is possible that thebankruptcy trustee, the debtor-in-possession or competing creditors will assert that the fair marketvalue of the collateral with respect to the Notes on the date of the bankruptcy filing was less than thethen-current principal amount of the Notes. Upon a finding by the bankruptcy court that the Notes areunder-secured, the claims in the bankruptcy proceeding with respect to the Notes would be bifurcatedbetween a secured claim and an unsecured claim, and the unsecured claim would not be entitled to thebenefits of security in the collateral. In such event, the secured claims of the holders of Notes would belimited to the value of the collateral.

No appraisal of the value of the collateral has been made in connection with this offering and thevalue of the collateral in the event of liquidation will depend on market and economic conditions, theavailability of buyers and other factors. Consequently, liquidating the collateral securing the Notes maynot result in proceeds in an amount sufficient to pay any amounts due on the Notes.

In the event of a default, we may have insufficient funds to make any payments due on the Notes.

A default under the Indenture could lead to a default under existing and future agreementsgoverning our indebtedness. If, due to a default, the repayment of related indebtedness were to beaccelerated after any applicable notice or grace periods, we may not have sufficient funds to repay suchindebtedness on the Notes.

We face risks related to rating agency downgrades.

We expect one or more rating agencies to rate the Notes. If such rating agencies either assign theNotes a rating lower than the rating expected by the investors, or reduce the rating in the future, themarket price of the Notes would be adversely affected and raising capital will become more difficultand borrowing costs under our credit facilities and other future borrowings may increase. In addition, ifany of our other outstanding debt is rated and subsequently downgraded, the same negativeconsequences may occur.

The Notes will be structurally subordinated to the creditors of non-Guarantor subsidiaries.

Some, but not all of our subsidiaries will guarantee the Notes. Generally, holders of indebtednessof, and trade and other creditors of, non-Guarantor subsidiaries, including lenders under bankfinancing agreements, and preference shareholders of such non-Guarantor subsidiaries are entitled topayments of their claims from the assets and earnings of such subsidiaries before they are madeavailable for distribution to any Guarantor, as direct or indirect shareholder.

Accordingly, in the event that any of the non-Guarantor subsidiaries becomes insolvent, liquidates,dissolves or otherwise reorganises:

• the creditors of the Guarantors (including the noteholders) and preference shareholders willhave no right to proceed against such subsidiary’s assets and earnings; and

• creditors of such non-Guarantor subsidiary, including trade creditors and preferenceshareholders, will generally be entitled to payment in full from the sale or other disposal of theassets of such subsidiary or joint venture before any Guarantor, as direct or indirect shareholder,will be entitled to receive any distributions from such subsidiary.

Fraudulent conveyance laws and other limitations on the enforceability and the amount of the Guaranteesmay adversely affect the validity and enforceability of the Guarantees.

The Indenture will provide that the Guarantees will be limited to the maximum amount that canbe guaranteed by the Guarantors without rendering the Guarantee voidable or otherwise ineffectiveunder applicable law. Recent case law has called into doubt whether such limitations are valid topermit apportion of a Guarantee that would otherwise be a fraudulent conveyance to survive.Moreover, enforcement of the Guarantee would be subject to certain generally available defences.These laws and defences include those that relate to corporate benefit, fraudulent conveyance or

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transfer, voidable preference, financial assistance, corporate purpose, capital maintenance or similarlaws, regulations or defences affecting the rights of creditors generally.

Although laws differ among various jurisdictions, in general, under fraudulent conveyance laws, acourt could subordinate or void the Guarantees and, if a payment had already been made under theGuarantee, require that the recipient return the payment to the Guarantors if it found that:

• the Guarantee was incurred with actual intent to hinder, delay or defraud current or prospectivecreditors or shareholders of the Guarantors or, in certain jurisdictions, even when the recipientwas simply aware that the Guarantors were insolvent when they granted the Guarantee;

• the Guarantors did not receive fair consideration or reasonably equivalent value for incurringthe debt represented by the Guarantee;

• the Guarantors were insolvent or was rendered insolvent because of the Guarantee;

• the Guarantors were undercapitalised or became undercapitalised because of the Guarantee;

• the Guarantors intended to incur, or believed that it would incur, debts beyond its ability to payat maturity;

• the Guarantee was held to exceed the corporate objects of the Guarantors or not to be in thebest interests or for the corporate benefit of the Guarantors; or

• the amount paid or payable under the guarantee was in excess of the maximum amountpermitted under applicable law.

The measure of insolvency for purposes of fraudulent conveyance laws varies depending on the lawapplied which may impose different requirements in order for those actions to be successful. Generally,however, a Guarantor would be considered insolvent if it could not pay its debts as they became due orit is demonstrated that it could no longer be able to regularly meet its obligations as they became due.If a court decided that the guarantee was a fraudulent conveyance and voided the Guarantee, or held itunenforceable for any other reason, you would cease to have any claim in respect of the Guarantor andwould be a creditor solely of the Issuer.

The Issuer may not have the ability to raise the funds necessary to finance an offer to repurchase Notes uponthe occurrence of certain events constituting a change of control as required by the Indenture, and the changeof control provisions may not protect you against certain events or transactions.

The Indenture will contain provisions relating to certain events constituting a change of control ofthe Issuer. Upon the occurrence of certain kinds of change of control, the Issuer will be required tooffer to repurchase all outstanding Notes at a price equal to 101% of their principal amount, plusaccrued and unpaid interest and additional amounts, if any, to the date of repurchase.

The Issuer’s ability to repurchase your Notes upon such a change of control event would belimited by its access to funds at the time of the repurchase and the terms of our debt agreements,which agreements could restrict or prohibit such a repurchase. Upon a change of control event, we maybe required immediately to repay the outstanding principal, any accrued interest on and any otheramounts owed by us under one or more of our current or future bank facilities or other financings. Thesource of funds for these repayments would be our available cash or cash generated from othersources. However, we cannot assure you that we will have sufficient funds available upon a change ofcontrol to make these repayments and any required repurchases of tendered Notes. Our failure to offerto repurchase the Notes, or to repurchase the Notes tendered, following a change of control will resultin a default under the Indenture, which could lead to a cross-default under the terms of other existingor future debt.

In addition, the change of control provisions in the Indenture may not protect you from certainimportant corporate events, such as a leveraged recapitalization (which would increase the level of ourindebtedness), reorganisation, restructuring, merger or other similar transaction. Such a transaction maynot involve a change in voting power or beneficial ownership or, even if it does, may not involve achange that constitutes a ‘‘Change of Control’’ as defined in the Indenture that would trigger ourobligation to repurchase the Notes. For example, the definition of ‘‘Change of Control’’ includes adisposition of all or substantially all of our and our Restricted Subsidiaries’ (as defined in theIndenture) property and assets taken as a whole to another person unless certain conditions aresatisfied. There is a limited body of case law interpreting the phrase ‘‘substantially all’’, and there is no

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precise established definition of the phrase under applicable law. Accordingly, in certain circumstancesthere may be a degree of uncertainty as to whether a particular transaction would involve a dispositionof ‘‘all or substantially all’’ of the property or assets of a person. Case law also suggests that, in theevent that incumbent directors are replaced as a result of a contested election, issuers may neverthelessavoid triggering a change of control under a clause if the outgoing directors were to approve the newdirectors for the purpose of such change of control clause.

If an event occurs that does not constitute a ‘‘Change of Control’’ as defined in the Indenture, theIssuer will not be required to make an offer to repurchase the Notes and you may be required tocontinue to hold your Notes despite the event. See ‘‘Description of Other Indebtedness’’ and‘‘Description of the Notes—Change of Control’’.

The interests of our shareholders may conflict with your interests as a holder of the Notes.

Private equity investment funds indirectly own the majority of the shares of the indirect parententity of the Issuer. As a result, our shareholders have and will continue to have, directly or indirectly,the power to affect our legal and capital structure as well as the ability to elect and change ourmanagement and to approve other changes to our operations and to control the outcome of mattersrequiring action by shareholders. Our shareholders’ interests in certain circumstances may conflict withyour interests as noteholders, particularly if we encounter financial difficulties or are unable to pay ourdebts when due. For example, the shareholders could vote to cause us to incur additional indebtedness.Our shareholders and their affiliates could also have an interest in pursuing acquisitions, divestitures,financings or other transactions that, in their judgement, could enhance their equity investments,although such transactions might involve risks to you as a holder of Notes.

Additionally, our shareholders own PropCo, a separate entity from us. PropCo holds 31 of ourleaseholds and is owned and controlled by our shareholders, which could lead to a conflict of interest.If our shareholders decide to sell or otherwise dispose of their interests in PropCo, the terms of ourleases and rental payments may be adversely and materially affected. In addition, our shareholders andtheir affiliates may own other businesses that directly compete with ours or may own other businesseswith interests that conflict with ours. See ‘‘Shareholders and Certain Transactions’’.

There are significant restrictions on your ability to transfer or resell your Notes.

The Notes are being offered and sold pursuant to an exemption from registration under UnitedStates federal and applicable state securities laws. Therefore, you may transfer or resell the Notes inthe United States only in a transaction exempt from the registration requirements of federal andapplicable state securities laws, and you may be required to bear the risk of your investment for anindefinite period of time. We have not undertaken to effect any exchange offer for the Notes and haveno intention to do so.

Your ability to transfer the Notes may be limited by the absence of an active trading market, and there is noassurance that any active trading market will develop for the Notes.

The Notes are a new issue of securities for which there is currently no market. The initialpurchasers have advised us that they intend to make a market in the Notes, as permitted by applicablelaws and regulations; however, the initial purchasers are not obligated to make a market in the Notesand they may discontinue their market-making activities at any time without notice. Therefore, wecannot assure you as to the development or liquidity of any trading market for the Notes. The liquidityof any market for the Notes will depend on a number of factors, including:

• the number of holders of Notes;

• our operating performance and financial condition;

• the market for similar securities;

• the interest of securities dealers in making a market in the Notes; and

• prevailing interest rates.

Historically, the market for non-investment grade debt has been subject to disruptions that havecaused substantial volatility in the prices of securities similar to the Notes. We cannot assure you thatthe market, if any, for the Notes will be free from similar disruptions or that any such disruptions may

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not adversely affect the prices at which you may sell your Notes. Therefore, we cannot assure you thatyou will be able to sell your Notes at a particular time or the price that you receive when you sell willbe favourable.

Investors in the Notes may have limited recourse against the independent auditors.

See ‘‘Independent Auditors’’ for a description of the independent auditors’ reports. In particular,in respect of the audit reports relating to the annual financial statements reproduced herein, KPMGLLP in accordance with guidance issued by The Institute of Chartered Accountants in England andWales, provides, ‘‘This report is made solely to the Company’s members, as a body, in accordance withChapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that wemight state to the Company’s members those matters we are required to state to them in an auditor’sreport and for no other purpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the Company and the Company’s members, as a body, for our auditwork, for this report, or for the opinions we have formed’’. The SEC would not permit such limitinglanguage to be included in a registration statement or a prospectus used in connection with an offeringof securities registered under the Securities Act or in a report filed under the U.S. Exchange Act. If aU.S. court (or any other court) were to give effect to the language quoted above, the recourse thatinvestors in the Notes may have against the independent auditors based on their reports or theconsolidated financial statements to which they relate could be limited.

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USE OF PROCEEDS

We will use the net proceeds of this offering together with £31.0 million drawn down in April 2011from our existing facilities to repay our existing debt (other than certain capital leases), to fundacquisitions, to pay commissions, fees and expenses and for general corporate purposes, the SuperSenior Revolving Credit Facility and the repayment of our existing debt.

The following table sets forth the estimated sources and uses of the proceeds:

(£ in (£ inSources(1) thousands) Uses thousands)

Notes(2) . . . . . . . . . . . . . . . . . . . . . . . . 475,000 Repayment of existing debt(5) . . . . 315,400Super Senior Revolving Credit Facility(3) . — Acquisition funding . . . . . . . . . . . 86,300Funds drawn from existing facilities(4) . . 31,000 General corporate purposes . . . . . 75,000

Estimated fees and expenses(6) . . . 29,300

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 506,000 Total . . . . . . . . . . . . . . . . . . . . . . 506,000

(1) Sources do not include any cash generated by our business during 2011.

(2) For purposes of this presentation, the aggregate principal amount of the Euro Notes has been converted to sterling at arate A1.14 to £1.00.

(3) We do not currently intend to draw on our new Super Senior Revolving Credit Facility at the closing of the offering of theNotes, except for approximately £40.0 million of letters of credit which are expected to be issued (or deemed issued) oralternatively cash drawn in order to backstop, to replace or roll-over existing letters of credit under facilities being repaid infull on the closing date. Alternatively, we may use cash on hand to cash collateralize such existing letters of credit to theextent we do not issue letters of credit or draw down on the new Super Senior Revolving Credit Facility to backstop,replace or roll-over such existing letters of credit.

(4) Acquisition funding of £31.0 million was drawn down in April 2011 under our existing facilities to fund acquisitions.

(5) We intend to repay in full our existing debt other than capital leases in an aggregate amount of £34.1 million from theproceeds of this offering. The total amount being repaid consists of £281.4 million of aggregate principal amountoutstanding as of December 31, 2010, less a £1.2 million principal repayment made in April 2011, plus a £31.0 millionprincipal borrowing incurred in April 2011, plus £4.2 million of accrued but unpaid interest to May 9, 2011. Our existingdebt consists of several term loan facilities, a capex facility and acquisition facilities with variable interest rates andmaturities ranging from April 2014 to April 2016. Affiliates of certain of the initial purchasers are lenders under thefacilities being repaid with the proceeds of the Notes. For more detailed information on our existing debt, see ‘‘Descriptionof Other Indebtedness’’.

(6) In connection with the offering of the Notes and the repayment of our existing credit facilities, we may choose to terminatecertain interest hedging arrangements and, to the extent we choose to do so, we would be required to settle the relatedinterest rate hedging arrangements. The mark-to-market value of these hedging arrangements as at the most recentavailable date, April 28, 2011, was a liability of approximately £9.3 million. The amount of such liability and payments toour hedging counterparties will depend on changes in the mark-to-market value between April 28, 2011 and the Issue Date.

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CAPITALISATION

The following table sets forth our consolidated cash and capitalisation as of December 31, 2010 onan actual basis and as adjusted to give effect to this offering and the application of the proceedstherefrom. This information has been derived from the consolidated balance sheet of Odeon & UCICinemas Group Limited as of December 31, 2010 included elsewhere in this offering memorandum.You should read this table in conjunction with ‘‘Operating and Financial Review and Prospects’’ andour consolidated financial statements and the Notes thereto included elsewhere in this offeringmemorandum.

As of December 31, 2010

(£ in thousands) Actual As adjusted

Cash at bank and in hand(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,362 111,362

Existing credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Super Senior Revolving Credit Facility(2) . . . . . . . . . . . . . . . . . . . . . . . . . . — —Other credit facilities(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281,369 —Notes offered hereby(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 475,000Capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,084 34,084

Total third-party debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315,453 509,084Shareholder debt(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346,829 346,829

Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 662,282 855,913Total shareholders’ deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (243,813) (243,813)

Total capitalisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418,469 612,100

(1) As adjusted cash at bank and in hand does not reflect the £86.3 million from the proceeds of the offering of the Notes andthe draw down in April 2011 under our existing facilities that have been earmarked to fund acquisitions, and any cashgenerated by our business during 2011.

(2) We have entered into our new Super Senior Revolving Credit Facility in connection with this offering, and we do notcurrently intend to draw on the Super Senior Revolving Credit Facility at the closing of the offering of the Notes, except forapproximately £40.0 million of letters of credit which are expected to be issued (or deemed issued) or alternatively cashdrawn in order to backstop, replace or roll-over existing letters of credit under facilities being repaid in full on the closingdate. Total availability under the Super Senior Revolving Credit Facility is approximately £50.0 million after the letters ofcredit issued thereunder. Alternatively, we may use cash on hand to cash collateralize such existing letters of credit to theextent we do not issue letters of credit or draw down on the new Super Senior Revolving Credit Facility to backstop,replace or roll-over such existing letters of credit.

(3) Other credit facilities includes our existing capex facility, the acquisition facilities, guarantee facility, term loan A, term loanB and term loan C. In connection with this offering, all existing short-term and long-term debt other than certain capitalleases will be repaid and/or cancelled. Other credit facilities is stated gross of £7.8 million of capitalised loan issue costs.

(4) The Notes are stated gross of £20.0 million of estimated capitalised issue costs. For purposes of this presentation, theaggregate principal amount of the Euro Notes has been converted to sterling at a rate A1.14 to £1.00.

(5) Shareholder debt is attributable to Odeon & UCI Cinemas Group Limited. Odeon Midco, our parent company afterclosing of the offering, does not owe any amounts under such shareholder debt.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER INFORMATION

The following summarises the consolidated financial and operating data, derived from the auditedconsolidated financial statements of Odeon & UCI Cinemas Group Limited prepared in accordancewith UK GAAP as of and for the years ended December 31, 2008, 2009 and 2010. See ‘‘Presentation ofFinancial and Other Data’’. At closing of this offering, Odeon & UCI Cinemas Group Limited will bethe indirect parent company of Odeon Midco but will not be part of the credit group for the Notes.

Our summary consolidated financial data is presented in pounds and has been prepared inaccordance with UK GAAP. You should read this summary consolidated financial data in conjunctionwith ‘‘Capitalisation’’, ‘‘Selected Consolidated Financial and Other Information’’, ‘‘Operating andFinancial Review and Prospects’’, and the historical consolidated financial statements and the relatednotes, included elsewhere in this offering memorandum.


2008 2009 2010

(£ in thousands)Consolidated Profit and Loss Account:Turnover : Group and share of joint ventures . . . . . . . . . . . . . 563,087 662,614 671,643

Less: share of joint ventures turnover . . . . . . . . . . . . . . . . . (14,986) (21,687) (21,998)

Group turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 548,101 640,927 649,645Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (181,726) (224,793) (235,641)

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366,375 416,134 414,004Net operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . (367,126) (431,574) (387,999)

Operating profit/(loss), analysed as:Before exceptional items . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,582 8,080 27,461

Net operating profit—exceptional costs . . . . . . . . . . . . . . . . (6,333) (23,520) (1,456)

(751) (15,440) 26,005

Operating profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (751) (15,440) 26,005Share of operating profit/(loss) of joint ventures . . . . . . . . . 253 (267) (3)

Operating profit/(loss) including joint ventures . . . . . . . . . . . . (498) (15,707) 26,002Loss on disposal of properties . . . . . . . . . . . . . . . . . . . . . . (2,021) (3,388) (525)

Profit/(loss) on ordinary activities before interest and taxation (2,519) (19,095) 25,477Interest receivable from related parties . . . . . . . . . . . . . . . . 3,842 2,962 1,222Interest payable and similar charges, excluding shareholder

debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,460) (28,786) (31,852)Interest payable on shareholder debt(1) . . . . . . . . . . . . . . . . (26,992) (31,683) (34,310)Other finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (454) (720) (234)

Loss on ordinary activities before taxation . . . . . . . . . . . . . . . (55,583) (77,322) (39,697)Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,180 (2,128) (4,495)

Loss on ordinary activities after taxation and for the financialyear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,403) (79,450) (44,192)


2008 2009 2010

(£ in thousands)Consolidated Balance Sheet:

Cash at bank and in hand . . . . . . . . . . . . . . . . . . . . . . . . . 58,541 60,170 36,362Total assets less current liabilities . . . . . . . . . . . . . . . . . . . . 572,826 505,934 478,814

Creditors:Amounts falling due after more than one year net of

shareholder debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (320,923) (319,192) (309,940)Shareholder debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (301,986) (321,847) (346,829)

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2008 2009 2010

Operating Data:Attendance (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.0 74.9 73.1Average ticket price(3) (£) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.38 5.87 6.19Retail revenue per head(4) (£) . . . . . . . . . . . . . . . . . . . . . . . . 1.84 1.92 1.99

(1) Interest on shareholder debt is payable only by Odeon & UCI Cinemas Group Limited and would not appear in thefinancial statements of Odeon Midco. See ‘‘Presentation of Financial and Other Data’’.

(2) Shareholder debt is attributable to Odeon & UCI Cinemas Group Limited. Odeon Midco, our parent company afterclosing of this offering, does not owe any amounts under such shareholder debt.

(3) Average ticket price represents box office revenue per attendee, excluding Portugal and Austria. For comparability acrossperiods average ticket price has been stated here at a constant spot rate of A1.15 to £1.00 and constant territory weighting.

(4) Retail revenue per head represents retail revenue per attendee, excluding Portugal and Austria. For comparability acrossperiods retail revenue per head has been stated here at a constant spot rate of A1.15 to £1.00 and constant territoryweighting.

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OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following is a discussion of our results of operations in the periods set forth below. You should readthis discussion together with the sections entitled ‘‘Selected Consolidated Financial and Other Information’’and ‘‘Capitalisation’’, as well as the consolidated financial statements and the related notes and informationincluded elsewhere in this offering memorandum. The consolidated financial data in this discussion of ourresults of operations and financial condition as of and for the years ended December 31, 2008,December 31, 2009 and December 31, 2010 have been derived from the audited consolidated financialstatements of Odeon & UCI Cinemas Group Limited included elsewhere in this offering memorandum.Odeon & UCI Cinemas Group Limited is the indirect parent company of Odeon Midco and is not part ofthe credit group for the Notes.

This discussion contains forward-looking statements and involves numerous risks and uncertainties,including but not limited to, those described in the ‘‘Risk Factors’’ section of this offering memorandum.Our actual results may differ materially from those contained in any forward-looking statements.

Overview

Our Company

We are the largest cinema operator in Europe with 207 cinemas and 1,884 screens across sevencountries as of December 31, 2010 and the largest cinema operator in the world outside the Americas.We are 100% owned by funds managed by Terra Firma, a leading private equity company, whichacquired Odeon in September 2004 and subsequently acquired United Cinemas International inOctober 2004 and combined the two companies to form the current group. For the year endedDecember 31, 2010 we generated £649.6 million of turnover and £97.5 million of pro-forma EBITDA.

Factors Affecting our Results of Operations

We believe that the factors discussed below are principal factors materially affecting our results ofoperations.

Seasonality

Our revenues have historically been seasonal, coinciding with the timing of releases of films by themajor distributors. Generally, the most successful films have been released during holiday periods,especially the summer and the period from mid-November to year-end. The unexpected emergence of asuccessful film during other periods, or the failure of an expected success, can alter this seasonalitytrend. The timing of such film releases can have a significant effect on our results of operations, andthe results of one quarter are not necessarily indicative of results for the next quarter or for the sameperiod in the following year.

• We anticipate seasonality, but unexpected events can have a significant impact on our cash flow,as we are subject to events beyond our control, such as distribution release schedules, weatherand competing events.

• Title by title success of films at the box office is highly unpredictable and may disrupt ourprojected cash flow.

Additionally, weather and weather forecasts can influence cinema attendance and hence revenues.Rainy or dull weather tends to positively impact volumes. Sunny weather can reduce attendance,leading some potential customers to pursue outdoor leisure activities instead. Less frequently, extremepoor weather conditions, such as winter snow storms, road closures or reduced public transport optionsmay also reduce the number of people who decide to go to the cinema. For example, exceptionallypoor weather in December 2010 in the United Kingdom, Germany and Italy affected our attendanceduring our peak holiday season.

Profitable Attendance

We generate revenue primarily from box office receipts and retail sales. Additional revenue isgenerated from screen advertising sales and other revenue streams such as screen letting, sales ofmerchandise, including 3D glasses, sub-letting retail space, booking fees and games located in some ofour cinemas. In addition, we are able to use cinemas during non-peak hours for non-film events, suchas corporate conferences.

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There is some volatility year on year for revenues derived from box office receipts, depending onthe film slate and popularity of the films released, which in turn depends on production from the movieindustry and local content in each country. This risk to financial performance from attendance can bemitigated by cost savings in film hire and staff, which reduce at lower attendance levels, and bycontrolling discretionary costs (such as marketing, non-essential repairs and supplies) and capitalexpenditures. In any given year, performance can vary territory by territory, and as such, operating inmultiple territories helps us to mitigate individual market performance risk.

Our revenues are also dependent on the price of tickets at our cinemas. Increasingly, our cinemasscreen films in 3D and IMAX formats, for which we are able to charge a higher ticket price, whichpositively impacts our revenue. Additionally, the film slate also affects our revenue from ticket salesthrough variations in the mix of different ticket types. Certain films will tend to attract full priced adultprices, whereas others will tend to attract a greater mix of lower priced child and senior citizen tickets.

Retail

Retail sales, primarily food and drink sales, are our second largest source of revenue after boxoffice admissions. Retail revenue is also impacted by the types of films which we play and the length ofthe films. For example, in some territories, longer films are played with intermissions, which generallyhave a positive effect on retail sales. Also, certain types of films attract customers more likely thanothers to spend on retail goods. Although the cinema sector has generally been resilient to theeconomic downturn, retail is one area of the business that has been affected.

The direct cost associated with retail varies by product type, but overall leads to a strong margin.We are able to minimise the cost by negotiating prices for our products directly with suppliers on anational basis to obtain volume discounts, bulk rates and marketing incentives.

Screen Advertising

A significant portion of our revenue is derived from screen advertising, which generally variesdepending on the minutes and value of advertising sold by the agencies we deal with and the numberof attendees who view the advertisements on screen. Although screen advertising revenues are morestrongly affected by economic conditions, they have a minimal amount of cost of sales associated withthem, resulting in a pronounced impact on profitability.

Principal profit and loss account items

The following is a brief description of the most significant line items that are included in ourconsolidated profit and loss accounts. For more information, see the notes to our financial statementsincluded elsewhere in this offering memorandum.

Group turnover

Group turnover primarily consists of box office, retail, screen advertising and other revenue.

Cost of sales

Our main cost of sales is film hire, which fluctuates with box office revenue. Film hire costs arepaid as a percentage of revenue, are generally higher for successful films and can vary according to thelength and value of a film’s run. Film hire rates vary by country and can vary on a film-by-film,cinema-by-cinema basis. The second largest cost of sales is the cost of purchasing products for retailsales. Other elements of cost of sales include royalties for playing 3D films and authors’ rights costs.

Net operating expenses

Our net operating expenses include indirect costs such as staff costs, utilities, repairs, supplies, dataprocessing, marketing, support office, property taxes and rent. Also included are non-cash items such asdepreciation of tangible fixed assets and amortisation of goodwill.

Net financial costs

Net financial costs consist of interest payable, financing fees and similar financing charges, net ofinterest income.

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Taxation

The charge for taxation is based on trading results and takes account of taxation deferred oraccelerated because of timing differences between the treatment of certain items for taxation andaccounting purposes, principally the treatment of capital expenditure, for which depreciation allowablefor taxation purposes (called capital allowances in the United Kingdom) differs from depreciation foraccounting purposes.

Loss on ordinary activities after taxation

Loss on ordinary activities after taxation represents the result of the profit and loss account afterprovision for taxation.

EBITDA

We define EBITDA as earnings before interest, taxation, depreciation, amortisation, exceptionalitems and strategic one-off costs.

Results of Operations

Year ended December 31, 2010 compared to year ended December 31, 2009

Group turnover

The following table sets forth our group attendance and turnover for the year ended December 31,2009 and 2010:


2009 2010 % change

Attendance (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.9 73.1 (2.4)Group turnover (£ in thousands) . . . . . . . . . . . . . . . . . . . . . . 640,927 649,645 1.4

Attendance at our cinemas decreased by 1.8 million people, or 2.4%, to 73.1 million in 2010 from74.9 million in 2009. The decrease in our attendance primarily reflected lower attendance in the cinemasector as a whole in the territories in which we operated. This was partially offset by our opening oracquiring six additional cinemas during 2009 and five additional cinemas during 2010.

A good deal of successful film product played during 2010, including Toy Story 3 (3D), Harry Potter,Alice in Wonderland (3D) and Avatar (3D), which was released late 2009 in most of our territories butcontinued to play strongly into 2010. However, markets in late 2010 saw an impact from heavy snowand freezing conditions in December across most of our trading territories. On a weighted averagebasis, the market volumes in our major territories were down 3% overall compared to 2009. Excludingthe impact of the December weather, based on expectations of trading prior to the poor weather, weestimated the markets would potentially have been down 1% overall.

Despite the weather impact, the Italian market was 11% up year-on-year, benefiting from the fullrun of Avatar (3D), released in January 2010 in this territory, along with other internationalblockbusters and strong local film product. Market volumes in the other main territories (UnitedKingdom, Spain and Germany) were down year-on-year, although we estimate that the UnitedKingdom would have been potentially flat without the exceptional weather impact in December 2010.

Group turnover increased by £8.7 million, or 1.4%, to £649.6 million in 2010 from £640.9 millionin 2009. At constant foreign exchange rates, group turnover was up 4.2%. The increase in turnover waslargely attributable to a higher average ticket price, which benefited from the premium associated with3D attendances and initiatives such as increased premium seating availability and IMAX screens.Average ticket price increased by 5.5% to £6.19 in 2010 from £5.87 in 2009. Retail revenue per headalso saw healthy growth and increased by 4.1% to £1.99 in 2010 from £1.92 in 2009. Followingreductions during the economic downturn, screen advertising revenue started to show signs of recoveryin 2010, increasing by 11.6% at constant foreign exchange rates or 9.5% at actual foreign exchangerates.

Cost of sales

Cost of sales increased by £10.8 million, or 4.8%, to £235.6 million in 2010 from £224.8 million in2009. The increase in cost of sales reflected increased revenues, slight changes in margins and differentprevailing foreign exchange rates in the two years.

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Net operating expenses decreased by £43.6 million, or 10.1%, to £388.0 million in 2010 from£431.6 million in 2009. The decrease was primarily due to savings in staff costs reflecting efficiencyimprovement and lower trading volumes, decreased depreciation and amortisation, foreign exchangedifferences and the decreased exceptional cost of £1.5 million in 2010, which were £23.5 million in2009. The exceptional cost in 2009 was a non-cash provision against long-term receivables from relatedparties in the PropCo group.

Net financial costs

Net financial costs increased by £7.0 million, or 11.9%, to £65.2 million in 2010 from £58.2 millionin 2009. The increase in net financial costs was primarily due to higher non-cash interest accrued onsubordinated loan notes and non-cash discount unwinds on discounted provisions. Interest payable onbank loans decreased by £1.0 million to £17.9 million in 2010 from £18.9 million in 2009. Other netfinancial costs, excluding interest on shareholder debt, which will not be obligations of the bond group,increased by £5.4 million to £13.0 million in 2010 from £7.6 million in 2009. The movement includedincreases in non-cash unwinding of discounts on provisions and foreign exchange movements.

Taxation

Taxation increased by £2.4 million, or 111%, to a charge of £4.5 million in 2010 from a charge of£2.1 million in 2009. The increase in taxation charge was due to an improved current taxation charge,largely resulting from an improved corporation taxation filing position in the United Kingdom,following favourable work on capital allowances and interest deductions, net of the impact of therelease of a deferred taxation asset in 2010.


As a result of the foregoing, loss on ordinary activities after taxation decreased by £35.3 million, or44.4%, to £44.2 million in 2010 from £79.5 million in 2009. The decrease was primarily due toimproved trading profitability and lower exceptional costs in 2010 compared to 2009.

EBITDA

EBITDA increased by £11.1 million, or 15.6%, to £82.4 million in 2010 from £71.3 million in 2009.This increase was primarily due to improved average ticket price and retail revenue per head, strongcontrol over costs, particularly staff costs, and the contribution from cinemas new to the estate.

Year ended December 31, 2009 compared to Year ended December 31, 2008

Group turnover

The following table sets forth our group attendance and turnover for the year ended December 31,2008 and 2009:


2008 2009 % change

Attendance (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.0 74.9 5.5Group turnover (£ in thousands) . . . . . . . . . . . . . . . . . . . . . . 548,101 640,927 16.9

Attendance at our cinemas increased by 3.9 million people, or 5.5%, to 74.9 million in 2009 from71.0 million in 2008. The increase in attendance primarily reflected higher attendance in the cinemasector as a whole in the territories in which we operated. This was augmented by our opening oracquiring six additional cinemas during 2008 and six additional cinemas during 2009.

Global economic recession continued to be a concern for many businesses in 2009, but the cinemasector as a whole was largely resistant to its effects. Three of the four major markets in which thegroup operates (United Kingdom, Spain and Germany) saw year-on-year increases in attendancevolume as a result of successful film releases, some of which were in the 3D format. The strongestreleases included the surprise hit Slumdog Millionaire, the latest Harry Potter installment, Ice Age (3D),Up (3D) and the December release Avatar (3D), which went on to become the highest worldwidegrossing film in history.

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Group turnover increased by £92.8 million, or 16.9%, to £640.9 million in 2009 from £548.1 millionin 2008. At constant foreign exchange rates, group turnover was up 11.3%. The increase in groupturnover was achieved despite a fall in screen advertising in the year arising from the challengingeconomic conditions. The increase in turnover was partly attributable to the market volume increasesdescribed above, but was also due to higher average ticket price, which benefited from the premiumassociated with 3D attendances. Average ticket price increased by 9.0% to £5.87 in 2009 from £5.38 in2008. Retail revenue per head also saw healthy growth as it increased by 4.1% to £1.92 in 2009 from£1.84 in 2008.

Cost of sales

Cost of sales increased by £43.1 million, or 23.7%, to £224.8 million in 2009 from £181.7 million in2008. The increase in cost of sales reflected increased revenues, slight changes in margins and differentprevailing foreign exchange rates in the two years.


Net operating expenses increased by £64.5 million, or 17.6%, to £431.6 million in 2009 from£367.1 million in 2008. The increase was primarily due to inflation, increased volumes, which causedincreases in staff costs, the effect of different foreign exchange rates in the two periods, which causedan increase in costs expressed in sterling, and a non-cash exceptional provision in 2009 againstlong-term receivables from related parties in the PropCo group. Excluding exceptional items, netoperating expenses increased £47.3 million, or 13.1%, to £408.1 million in 2009 from £360.8 million in2008.

Net financial costs

Net financial costs increased by £5.1 million, or 9.7%, to £58.2 million in 2009 from £53.1 millionin 2008. The increase in net financial costs was primarily due to higher non-cash interest accrued onsubordinated loan notes. Interest payable on bank loans decreased by £2.6 million, from £21.5 millionin 2008 to £18.9 million in 2009. Other net financial costs, excluding interest on shareholder debt,which will not be obligations of the bond group, increased by £3.0 million to £7.6 million in 2009 from£4.6 million in 2008. The movement included a decrease in interest income from related partiesfollowing decreases in market interest rates.

Taxation

Taxation increased by £4.3 million to a charge of £2.1 million in 2009 from a credit of £2.2 millionin 2008. The increase in taxation was due to an increase in the current taxation charge, largely arisingfrom the corporation taxation position in the United Kingdom, net of an increased deferred taxationcredit.


As a result of the foregoing, loss on ordinary activities after taxation increased by £26.1 million, or48.8%, to £79.5 million in 2009 from £53.4 million in 2008. The increase was primarily due to thenon-cash exceptional charge in 2009, the increased interest on subordinated loan notes and the taxationcharge, net of the effect of improved trading profitability.

EBITDA

EBITDA increased by £7.9 million, or 12.5%, to £71.3 million in 2009 from £63.4 million in 2008.This increase was primarily due to improved attendance, average ticket price and retail revenue perhead and the contribution from cinemas new to the estate.

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Liquidity and Capital Resources

Historical Cash Flows

The following table sets forth our historical cash flow items for the periods indicated.


2008 2009 2010

(£ in thousands)Cash flows from operating activities . . . . . . . . . . . . . . . . . . . 56,462 57,967 65,572

Cash flows from investing activities:Net cash flows from capital expenditure and sale of fixed

assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,244) (35,201) (32,771)Acquisitions and disposals . . . . . . . . . . . . . . . . . . . . . . . . . (1,966) (449) (16,280)

Net cash flows from investing activities . . . . . . . . . . . . . . . (39,210) (35,650) (49,051)

Cash flows from financing activities:Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,877) (25,278) (22,647)Bank loan drawdowns, repayments and other financing

activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,986 6,569 (14,359)

Net cash flows from financing activities . . . . . . . . . . . . . . . (10,891) (18,709) (37,006)

Taxation paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (112) (71) (576)

Net increase (decrease) in cash at bank and in hand . . . . . . . 6,249 3,537 (21,061)Cash at bank and in hand, beginning of period . . . . . . . . . . . . 46,735 58,541 60,170Foreign exchange movements . . . . . . . . . . . . . . . . . . . . . . . . 5,557 (1,908) (2,747)

Cash at bank and in hand, end of period . . . . . . . . . . . . . . . . 58,541 60,170 36,362

Cash flows from operating activities

Our net cash flows from operating activities increased by £7.6 million, or 13.1%, to £65.6 million in2010 from £58.0 million in 2009. This increase was primarily attributable to the increase in EBITDA of£11.1 million, net of working capital and other movements. Our net cash flows from operating activitiesincreased by £1.5 million, or 2.7%, from £56.5 million in 2008 to £58.0 million in 2009. This increase inoperating cash flows is largely due to the increase in EBITDA of £7.9 million, net of working capitaland other movements.

Cash flows from investing activities

Our net cash flows used in investing activities were outflows of £49.1 million in 2010 and wereused to make payments of £16.3 million on acquisitions and payments, net of disposal proceeds, of£32.8 million on fixed assets, including both development and maintenance expenditure. The acquisitionexpenditure in 2010 related to the Pathe Italy Acquisition.

Our net cash flows used in investing activities were outflows of £35.7 million in 2009 and wereprimarily payments, net of disposal proceeds, of £35.2 million on fixed assets, including bothdevelopment and maintenance expenditure.

Our net cash flows used in investing activities were outflows of £39.2 million in 2008 and wereprimarily payments, net of disposal proceeds, of £37.2 million on fixed assets, including bothdevelopment and maintenance expenditure.

Cash flows from financing activities

Our cash flows from financing activities were net outflows of £37.0 million in 2010 and were bankinterest payments of £22.6 million and net outflows from other financing activities, including bank loanrepayments, of £14.4 million. Our cash flows from financing activities in 2009 were net outflows of£18.7 million and were primarily bank interest payments of £25.3 million and net inflows from otherfinancing activities, including bank loan drawdowns, of £6.6 million. Our cash flows from financingactivities in 2008 were net outflows of £10.9 million and were primarily bank interest payments of£25.9 million and net inflows from other financing activities, including bank loan drawdowns, of£15.0 million.

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Liquidity

Historically, our principal source of liquidity was our operating cash flows, which are analysedabove. Our ability to generate cash from our operations depends 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, as well as other factors discussedin the section entitled ‘‘Risk Factors’’.

Following the completion of this offering, our principal source of liquidity will continue to beoperating cash flows and will be supplemented by the Super Senior Revolving Credit Facility of£90.0 million, which we expect to be undrawn at completion of this offering, except for approximately£40.0 million of letters of credit which are expected to be issued (or deemed issued) or alternativelycash drawn in order to backstop, replace or roll-over existing letters of credit under facilities beingrepaid in full on the closing date. Alternatively, we may use cash on hand to cash collateralize suchexisting letters of credit to the extent we do not issue letters of credit or draw down on the new SuperSenior Revolving Credit Facility to backstop, replace or roll-over such existing letters of credit. Weexpect to draw on the Super Senior Revolving Credit Facility to service our working capital needs andfor other corporate purposes. See ‘‘Description of Other Indebtedness—Super Senior Revolving CreditFacility’’.

Although we believe that our expected cash flows from operations, together with availableborrowings and cash on hand, will be adequate to meet our anticipated liquidity and debt serviceneeds, we cannot assure you that our business will generate sufficient cash flows from operations orthat future debt and equity financing will be available to us in an amount sufficient to enable us to payour debts when due, including the Notes, or to fund our other liquidity needs.

We believe that the potential risks to our liquidity include:

• a reduction in operating cash flows due to a lowering of operating profit from our operations,which could be caused by an unexpected increase in our operating costs, a downturn in ourperformance or in the sector as a whole;

• a failure to attract an adequate number of customers to our cinemas;

• a failure to attract customers at our cinemas to purchase retail goods;

• the need to fund refurbishment of our existing and acquired cinemas and development of newcinemas; and

• the need to fund maintenance capital expenditures.

If our future cash flows from operations and other capital resources (including borrowings underour Super Senior Revolving Credit Facility or any future revolving credit facility) are insufficient to payour obligations as they mature or to fund our liquidity needs, we may be forced to:

• reduce or delay our business activities and capital expenditures;

• sell equipment and other assets;

• close certain cinema locations;

• obtain additional debt or equity financing; and/or

• restructure or refinance all or a portion of our debt, including the Notes, on or before maturity.

We cannot assure you that we would be able to accomplish any of these alternatives on a timelybasis or on satisfactory terms, if at all. In addition, the terms of the Notes or the Super SeniorRevolving Credit Facility and any future debt may limit our ability to pursue any of these alternatives.

Working capital

Our working capital requirements largely arise from the seasonality of our business. The majorityof our customers are members of the public visiting cinema sites, from whom cash is generally collectedeither on the day of their visit, or shortly thereafter via credit card settlements. Our working capital istherefore generally a net creditor position. Our short term payables primarily relate to deferredpayments to film distributors, suppliers of retail goods, fixed asset suppliers and VAT. Our short termreceivables are generally lower than our creditors, and include sales of bulk tickets made to businesses,theatre rentals and VAT.

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We have historically funded our peak working capital requirements through funds generated fromour operations, sometimes supplemented by use of borrowings under the bank facilities, including arevolving credit facility. During our high volume periods, our business is highly cash generative as ourgroup turnover is primarily driven by customer visits to our cinemas.

The following table sets forth our working capital balances, including cash, as of the datesindicated.


2008 2009 2010

(£ in thousands)Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,769 4,462 6,121Debtors due within one year . . . . . . . . . . . . . . . . . . . . . . . . . 39,474 34,734 39,386Creditors due within one year . . . . . . . . . . . . . . . . . . . . . . . . (124,114) (133,247) (138,203)

Net working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (80,871) (94,051) (92,696)

Change in working capital . . . . . . . . . . . . . . . . . . . . . . . . . . (23,759) (13,180) 1,355

Net working capital increased by £1.4 million to £(92.7) million in 2010 from £(94.1) million in2009. This increase resulted primarily from the larger size of the business at the end of 2010 and theconsequently larger trading balances of stocks and debtors due within one year, net of foreign exchangemovements, which made the sterling equivalent of euro balances smaller at the end of 2010 comparedto 2009. Net working capital decreased by £13.2 million to £(94.1) million in 2009 from £(80.9) millionin 2008. This decrease resulted primarily from the larger trading balances of creditors due within oneyear, net of foreign exchange movements, which made the sterling equivalent of euro balances smallerat the end of 2009 compared to 2008.

Working capital requirements can fluctuate for a variety of reasons. See ‘‘Risk Factors’’.

Capital expenditures

The following table sets forth our capital expenditures for the periods indicated:


2008 2009 2010

(£ in thousands)Capital expenditure and sale of fixed assets . . . . . . . . . . . . . . (37,244) (35,201) (32,771)Acquisitions and disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,966) (449) (16,280)

Net cash flows from investing activities . . . . . . . . . . . . . . . . . (39,210) (35,650) (49,051)

Our net cash flows from investing activities primarily consisted of investments in individual newcinemas and improving existing cinemas, net of disposals of assets, as well as acquisitions of cinemachains. We also incurred other maintenance capital expenditure, to a lesser extent, to maintain ourexisting cinemas. Net cash outflow from investing activities during 2008 and 2009 amounted to£39.2 million and £35.7 million, respectively, and was primarily attributable to capital expenditure. Netcash outflow from investing activities in 2010 increased to £49.1 million. This increase was primarilyattributable to the Pathe Italy Acquistion. Maintenance capital expenditure is mostly incurred onscheduled works and hence tends to be fairly predictable.

Contractual obligations

We have contractual commitments providing for payments primarily pursuant to property leasesand our outstanding financial debt.

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Our consolidated contractual obligations as of December 31, 2010, after giving pro-forma effect tothis offering, the Pathe Italy Acquisition and the UGC Acquisitions, were as follows:

Payments due by period

Less than More thanContractual Obligations (£ in thousands) Total 1 year 1-3 years 3-5 years 5 years

Notes . . . . . . . . . . . . . . . . . . . . . . . . . 475,000 — — — 475,000Super Senior Revolving Credit Facility . — — — — —Finance leases . . . . . . . . . . . . . . . . . . . 72,778 2,625 4,716 5,005 60,432Rent . . . . . . . . . . . . . . . . . . . . . . . . . . 1,823,835 130,376 263,843 250,561 1,179,055

Total contractual obligations . . . . . . . . 2,371,613 133,001 268,559 255,566 1,714,487

Off-balance sheet arrangements

As of the year ended December 31, 2010, we had no off-balance sheet arrangements.

Critical accounting policies

This discussion and analysis of our financial position and results of operations should be readtogether with our consolidated financial statements and the accompanying notes contained elsewhere inthis offering memorandum. The preparation of financial statements in conformity with UK GAAPrequires our management to make estimates and assumptions that affect the reported amount of assets,liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities.Estimates are evaluated based on available information and experience. Actual results could differ fromthese estimates under different assumptions or conditions. For a detailed description of our criticalaccounting policies, see note 1 to our consolidated annual accounts as of and for the year endedDecember 31, 2010 included elsewhere in this offering memorandum.

Market risks

The principal risk to our business is lower attendance. There is some volatility year on year,depending on the film slate, which in turn depends on production from Hollywood and local content ineach country. The risk to financial performance is mitigated by cost savings in film hire and staff, whichreduce at lower attendances, and by controlling discretionary costs and capital expenditure.

The economic recession caused a reduction in screen advertising during 2009 and slower growth inretail revenue, but cinema attendance was relatively stable. The group’s earnings have increasedsignificantly through the recession.

The impact of the increasing penetration of home cinema equipment and online film downloads oncinema attendance is considered by some to be another risk to the business. Similar concerns wereexpressed with the introduction of TV, video cassettes and DVDs. We believe that cinema continues tooffer excellent value in the ‘‘going out’’ market and that there will be ongoing demand for the cinemaexperience for the foreseeable future. The value to the customer of the cinema experience has beenfurther demonstrated and reinforced by the growth of high quality 3D product.

Financial risks

Our principal financial risk is the movement of interest rates. To manage this risk, as at December2010, interest rates were swapped to fixed rate on approximately 77% of our borrowings. See‘‘Description of Other Indebtedness’’.

Foreign currency risks

The group does not currently enter into foreign exchange rate swaps, hedges or other formalagreements. Instead, the group hedges against currency risk by keeping debt and earningsapproximately in proportion to their respective currencies. See ‘‘Risk Factors—Fluctuations in exchangerates may adversely affect our results of operations’’.

Credit risk

We are also subject to credit risk from cash deposits with banks and other credit institutions. Weseek to minimise credit risk by maintaining cash and cash equivalents with financial institutions withhigh credit standards and ensuring cash balances are split between a number of institutions to reducecounterparty risk.

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BUSINESS

Our Company

Overview

We are the largest cinema operator in Europe with 207 cinemas and 1,884 screens across sevencountries as of December 31, 2010 and the largest cinema operator in the world outside the Americas.We are 100% owned by funds managed by Terra Firma, a leading private equity company, whichacquired Odeon in September 2004 and subsequently acquired United Cinemas International inOctober 2004, and combined the two companies to form the current group. For the year endedDecember 31, 2010 we generated £649.6 million of turnover and £97.5 million of pro-forma EBITDA.

Our strengths

Leading Market Position and Economies of Scale

We are the largest multi-territory cinema operator in Europe, with 1,884 screens as ofDecember 31, 2010, nearly twice the number of screens of the second largest European operator.Based on management’s estimates and by number of screens operated, we believe we have the numberone market share in the United Kingdom/Ireland and Spain with 887 screens and 393 screens,respectively, as of December 31, 2010. We are are one of the top two operators in Italy, based onnumber of screens operated, with 303 screens as of December 31, 2010, and we are a significant cinemaoperator in Germany with 212 screens as of December 31, 2010.

We believe our leading market positions in our core markets provides us with economies of scalewith distributors and advertisers, as well as our technology and retail partners and landlords, which helpus optimise our cost structure and increase our operating margins. Our size improves our position tonegotiate long-term retail contracts with leading suppliers such as Coca-Cola and Pepsi, as well asmajor brand retail franchises. For example, we are one of the largest franchisees of the premium coffeeshop chain Costa Coffee, and IMAX selected us as one of their preferred partners for theimplementation of their proprietary large screen format. We are now the largest operator in Europe ofthis premium format. Film studio partners also see us as an attractive partner for distribution of films,which, for example, enabled us to negotiate preferential digital roll-out agreements directly with thelarge Hollywood film distributors.

We entertain more customers than any other cinema operator in Europe, which we believeenhances brand recognition and supports initiatives such as our customer loyalty schemes and onlinemarketing initiatives. We operate cinema loyalty programmes in each of our core national markets andhave a valuable, growing online database of customer information. This database allows us to targetpromotions and programmes to better meet our customers’ needs. In addition, as a result of theexcellent contributions of our staff teams, we consistently achieve some of the highest cinema customersatisfaction scores in our core markets.

Diversified Estate Portfolio and Solid Platform for Innovation

We believe we have assembled, through organic new site developments and strategic acquisitions,one of the most attractive cinema estates in Europe. Certain of our urban locations are some of theoldest, most established cinemas in Europe, which reinforces brand recognition and often attractspremium box office prices. We have particular strength in many of the key cities in Europe such asLondon, Manchester, Madrid, Barcelona, Rome, Milan, Vienna and Hamburg. For example, ourflagship cinema in Leicester Square in London is an iconic location for world premieres such as Avatar,Harry Potter and Quantum of Solace. At the same time, larger multiplex cinemas in our diversifiedportfolio offer a wider variety of films and showtimes to a broad customer base. Our cinema estate isbroadly distributed across seven countries, establishing a diverse geographic footprint that helpsmitigate year on year volatility from regional economic, weather and film performance risk and enablesus to diversify our film offering through local content.

We also believe that our diversified cinema portfolio, combined with our size, results in anexcellent platform for innovation. For example, the broad range of our cinema portfolio has allowed usto test, adjust and successfully implement new initiatives such as premium seating, IMAX, 3D andsuccessful retail layouts, which has resulted in additional revenue generating opportunities.

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Experienced In-Territory Consolidator in Fragmented Markets

Since our acquisition by funds managed by Terra Firma in 2004, we have overseen the integrationof the Odeon and UCI cinema businesses and have completed and successfully integrated sixacquisitions between 2005 and 2010 in Continental Europe. We believe that we have significantexperience in identifying, evaluating and integrating cinema assets to enhance performance as part ofour portfolio. We believe that we have a track record of improving the operating and financialperformance of acquired cinemas, as our strong supplier relationships, economies of scale andexperienced local integration teams are able to add value to the cinemas we acquire.

Attractive Business Model with Resilient Revenues and Cash Flows

We benefit from the film industry’s resilience through economic cycles, including the most recentdownturn. We believe that cinemas offer an excellent value ‘‘going out’’ proposition, which enableconsumers to participate in high-quality out-of-home entertainment at affordable prices, which isespecially attractive in challenging macroeconomic environments. The attendance levels across ourportfolio as a whole have been relatively stable over time which, based on our diversified cinemaportfolio, broad geographic footprint and large customer base, giving us a stable revenue platform. Inaddition, we have identified a number of specific initiatives which we believe can further support thegrowth and stability of our revenue largely independently of the overall economic environment. Theseinitiatives include our continued focus on increasing penetration of 3D and digital formats to growaverage ticket prices and to reduce costs. A significant portion of our operating costs are linked to ourrevenue. For example, film hire is directly related to our box office revenue and we have a flexiblework scheme that allows us to adjust our staffing levels in response to varying cinema attendance,which helps to stabilise earnings relative to attendance. The business generates a high proportion offree cash flow. A large portion of our capital expenditures are discretionary investment to grow revenueand earnings. This provides financial flexibility to undertake value-accretive acquisitions and disciplinedinvestments or to divert cash generation to the reduction of net debt.

Experienced Management Team

We benefit from our senior management team’s extensive industry experience, which we believe isa key component of our success. The current senior management team has been working together since2006 and has demonstrated the ability to generate growth and successfully integrate the acquisition ofadditional cinemas while maintaining effective cost controls. We believe that the depth of experience ofour operational management team, across different countries in Europe, provides us with an advantageover our competitors, allowing us to leverage knowledge of best practices across different areas of ouroperations.

Our strategies

We believe our disciplined operating strategy and experienced management team will enable us tocontinue to enhance our leading position in our core markets. The key elements of our businessstrategy are:

Expanding our Leadership Position in our Core Markets

Our target is to continue to grow leading market positions in all of the major cinema markets inwhich we operate, in order to present our customers with a high quality cinema experience and benefitfrom economies of scale. We intend to establish these leadership positions through a combination ofdisciplined organic growth through new site developments and strategic in-territory acquisitions thatallow us to leverage our existing platform. Our acquisition strategy generally targets in-territorycompetitors with multiplex facilities in locations that complement our existing cinemas, but we will alsoconsider potential acquisitions outside of our existing markets, where we can deliver value with ourexperienced management team, with a focus on value maximising opportunities that meet both ourinvestment return criteria and our strategic objectives.

Continuing Focus on Innovative Customer Offering and Application of Technology

We will continue to implement new technologies to enhance the cinema experience and broadenour customer offering. By the middle of 2012, we expect to substantially complete the roll-out of digitalprojection systems in all of our cinemas. We believe operating fully digital cinemas will provide us withsignificant ongoing staff cost saving opportunities and greater flexibility in exhibiting our content, whichwe expect will enhance our capacity utilisation, enable us to achieve higher ticket prices for

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differentiated content formats such as 3D, and provide incremental revenue from exhibition ofalternative content such as live concerts, sporting events, musical theatre and opera. We are Europe’slargest IMAX operator and, based on management’s estimates, we believe that we are the largest 3Doperator in Europe. We aim to continue to benefit from higher pricing for premium products withinthese formats. We also expect that digitalisation provides an opportunity to accelerate growth in ourscreen advertising services by offering lower costs and increased flexibility to advertisers.

Maximising Customer Satisfaction and Loyalty

Customer satisfaction is one of our highest priorities. Our customer strategy focuses upon theentire cinema experience and we are committed to best in class customer experience by continuallytraining our employees, improving our ticket booking process, refurbishing and re-developing ourcinemas, expanding our retail offerings and upgrading our cinema technology. We will continue toprovide special offers and promotions to reward customer loyalty and increase retail spending percustomer through our leading cinema loyalty programmes. We plan to take advantage of new mediatools and technology to enhance engagement with our customers and have invested in initiatives suchas customer relationship management database analytics, Facebook marketing and iPhone/Android-based mobile booking applications. We believe these investments will further increase our leading brandrecognition and customer loyalty.

Continuing Focus on Operational Efficiency

We will continue to focus on achieving operational excellence by utilising our economies of scale,and controlling cinema operating costs, while continuing to focus on customer service. We believe thatour commitment to improving the overall performance of our cinema estate will enable us to maximisethe revenue generating opportunities within each site and, consequently, improve our cash flowgeneration. Our operational strategies are focused in the following areas:

• Continue to improve the terms we negotiate with our film distribution partners for theexhibition of films, as well as those with our retail and technology partners.

• Continue to grow the retail spend per head in our cinemas by addressing consumer trendsthrough the introduction and evolution of varied retail options.

• Continue to implement targeted marketing and promotional efforts to maintain closerelationships with our customers.

• Continue to roll-out best practices throughout other parts of our cinema estate, such as theroll-out of the pick-and-mix snack wall started in our Italian cinemas.

Our Cinemas

We operate cinemas in the United Kingdom, Spain, Italy, Germany, Austria, Portugal and Ireland.We operate under the name of ‘‘Odeon’’ in the United Kingdom, ‘‘Cinesa’’ in Spain, ‘‘UCI Kinowelt’’in Germany and Austria and ‘‘UCI Cinemas’’ in Italy and Portugal. In Ireland, we manage a chain ofcinemas on behalf of a third party.

Our operations are divided into two business divisions: United Kingdom & Ireland andContinental Europe. Our total attendance for 2010 was 73.1 million. Below is a brief description of ourbusiness operations in each of our divisions as of December 31, 2010.

Paidattendance

in fiscal % of our2010 total 2010

Division Cinemas Screens (millions) revenues

United Kingdom & Ireland . . . . . . . . . . . . . . . . 112 887 33.2 48%Continental Europe

Spain & Portugal . . . . . . . . . . . . . . . . . . . . . . 40 445 17.5 20%Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 303 12.0 16%Germany & Austria . . . . . . . . . . . . . . . . . . . . 27 249 10.4 16%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 1,884 73.1 100%

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We selectively build or acquire new cinemas in markets where we believe we can establish andmaintain a strong market position. We believe our portfolio of modern cinemas provides a preferreddestination for movie goers and contributes to our cash flows from operating activities.

Technology

We believe we are an industry leader in the digital transformation of the cinema industry inEurope. In 2006, we converted our first multiplex to have digital projection capability in every screen.In 2008 we signed 3D agreements with three leading Hollywood studios for payments from the studiosfor digital bookings. The first Digital Cinema Deployment Agreement was signed with the Walt DisneyCompany in 2009. During 2009, we began converting our cinemas from film based to digital projectiontechnology. We believe digital projection technology allows for projection of 3D films and gives usgreater flexibility in programming, opportunity for advertising and facilitates the exhibition of live andpre-recorded alternative entertainment. In 2010, we secured external funding for the roll-out of digitalprojectors in the United Kingdom, following the completion of agreements with large film distributors.As of March 31, 2011, we had 992 digital screens, representing approximately 53% of the screens inour estate. We currently anticipate converting our entire cinema estate to digital technology by themiddle of 2012.

Throughout 2010, we continued to increase our investment in 3D technology in order to takeadvantage of the growth in the number and popularity of 3D films. In the United Kingdom the numberof commercial 3D films released increased from six in 2008 to 28 in 2010. Our increased investment in3D screens allowed us to benefit from this growth by charging a 3D premium for the films shown in3D and charging separately for 3D glasses. Approximately 25% of our total paid attendance in 2010was generated from 3D movies.

We are the largest IMAX operator outside the U.S. with 11 screens in the United Kingdom. Theconversion of IMAX from analogue only to digital has transformed the availability of films, the abilityto programme more than one film at a time and has reduced operating costs. We are also planning totest IMAX and our own big screen format in Continental Europe. Technical improvements in 2010allowed for end-to-end delivery and live 3D broadcast of alternative content to be screened in cinemas.2010 saw increased supply in opera, dance, theatre, sport and music events.

With respect to our cinemas in the United Kingdom, as of December 31, 2010, we had 410 digital3D screens in the United Kingdom, representing 46% of our total screens in the territory. Of our totalUnited Kingdom box office revenue of £213 million, 39%, or £82 million resulted from 3D ticket salesand we achieved a 28% share of the 3D market. In Continental Europe substantially all of our digitalscreens are 3D-enabled.

Our Customer Offer

In a market where we and our competitors generally present the same film product, we believethat offering an attractive customer experience is a fundamental part of our competitive edge, whichbegins with the ticket booking. We strive to offer a comfortable and informative booking process thatsuits a customer’s requirement, whether it be a staffed box office counter, telephone, online, mobileapplication or automated teller machine. In the cinemas where it is available, customers can pre-selecttheir seats and choose from a variety of seating options from standard to premium to meet thecustomers’ spending appetite. Once at the cinema we strive to offer cinemas that are inviting and cleanwith a contemporary feel. We also offer a range of food and beverage options designed to increaseboth enjoyment and time spent in the cinema. We focus on customer service by investing in employeetraining to provide an informed and helpful staff for our customers. Our employees’ training includesguest service, film knowledge, alternative content options and facilities for disabled guests. We alsooffer a variety of attractive rewards for loyalty and repeat purchase.

Our refurbishment and re-investment strategy is designed to improve our customer offer. Wecontinue to either replace older cinemas with new, modern multiplex cinemas or upgrade our existingcinemas to meet comparable standards set by the modern multiplex cinemas, and we continue to focuson improving the variety of retail offers and upgrading existing retail facilities. For example theGateshead cinema was relocated in 2009 now offers 2,762 seats across twelve fully digital screens,including a digital IMAX screen and six 3D screens. Additionally, the refurbished cinema currentlybenefits from premium seats in all auditoria, a VIP bar, traditional retail products as well as a Ben &Jerry’s Ice Cream counter, Costa Coffee operation and an Ambar.

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We encourage repeat customers and drive attendance to our cinemas through our loyalty cardprogramme and cinema websites. We believe our loyalty card programmes are the largest loyaltyprogrammes in Europe, with 1.0 million members in the United Kingdom and 1.2 million members inContinental Europe as of December 31, 2010. Our websites in each country have become an importantpoint of contact between us and our customers and provide us with large and growing databases ofcustomers. Our websites allow us to communicate the full breadth of the movie going experience weoffer, as well as a single click method for customers to choose seats and buy tickets.

Box Office Admissions

Admission tickets represent our largest source of revenue, accounting for 68% of 2010 revenue.Gross box office revenue in our core markets has grown by a compound average growth rate(‘‘CAGR’’) of 3.1% between 2000 and 2009 which has demonstrated the resilience of the industry evenduring periods of economic recession. In addition, we have seen average ticket price increase by aCAGR of 6% between 2005 and 2010 driven by site refurbishments, premium seating and the appeal oftechnological advances such as digital, 3D and IMAX.

Our multiplex cinemas typically contain 8 to 20 screens with auditoria ranging from 100 to 500seats each, providing movie goers with a wide variety of films at convenient times with ample seatingavailability. In addition, many of our cinemas feature the latest technological innovations in 3D anddigital IMAX, wall-to-wall screens, digital stereo surround-sound, online ticketing systems, plushstadium seating with cup holders and retractable arm rests, and a variety of non-traditional retailofferings.

Our multiplex cinemas are designed to increase the profitability of the cinemas by optimisingrevenues and reducing the cost of operating the cinemas. Varied auditorium seating capacities withinthe same cinemas allow us to exhibit films on a more cost effective basis for a longer period of time byshifting films to smaller auditoria to meet changing attendance levels. Staggered film show times allowsus to reduce both staffing requirements and lobby congestion and contribute to more desirable trafficflow patterns.

Retail

Retail sales are our second largest source of revenue after box office admissions. Retail sales ofitems including popcorn, soft drinks, sweets, hot dogs and other products typically have a higher grossmargin than admission sales. Different varieties of retail items are offered at our cinemas based onpreferences in that particular geographic region.

Our strategy emphasises prominent and appealing retail counters designed for good customerservice and efficiency. We design our multiplex cinemas to have more retail capacity to make it easierto serve larger numbers of customers. Strategic placement of large retail stands within cinemasheightens their visibility, aids in reducing queues, allows flexibility to introduce new concepts andimproves traffic flow around the retail stands. In addition, in many locations we offer a variety ofimpulse film foods such as Pic n’ Mix sweets walls and healthy alternatives such as nuts, dried fruitsand juices. We also partner with recognisable brands such as Costa Coffee and Ben & Jerry’s, with theaim of capturing more of the whole spend for an out-of-home entertainment experience.

We negotiate prices for our retail products and supplies directly with retail vendors on a nationalbasis to obtain high volume discounts or bulk rates and marketing incentives.

Our entertainment and dining experience at certain cinemas features casual and premium upscalein-cinema dining options as well as bar and lounge areas.

Screen Advertising, Alternative Content and Ancillary Activities

While 91% of our 2010 revenue was generated from box office admissions and retail sales, theremaining 9% was generated from ancillary sources, including on-screen advertising. In the UnitedKingdom, we are part of a joint-venture in Digital Cinema Media (‘‘DCM’’). DCM is the market leaderin United Kingdom for cinema advertising. DCM sells screen time and other advertising media andcapabilities to advertisers on behalf of contracted exhibitors including its shareholders. In addition toscreen advertising DCM also offers sponsorship, promotion and in-foyer poster advertising services.DCM’s market share of screen advertising in the United Kingdom was approximately 80% as ofMarch 31, 2011. We believe that the reach, scope and digital delivery capability of DCM’s network

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provides an effective platform for national, regional and local advertisers to reach an engaged audience.As of December 31, 2010, we had a 50% ownership interest in DCM.

Our conversion to digital technology also allows us to offer our customers the ability to viewalternative content to films in a cinema setting. In certain of our cinemas we have started rolling outalternative content programming during weekday evenings. We exhibit various types of events andshows, such as opera, ballet, theatre and music events. The content provider incurs the production anddelivery costs, we conduct the marketing and communication surrounding the offering and we share ourbox office revenue with the content provider.

We also generate revenue from the rental of cinema auditoria and fees and other revenuesgenerated from the sale of gift cards and packaged tickets and arcade games located in our cinemalobbies. We have also successfully offered our customers a diverse range of digital programmingincluding opera, rugby, live Formula One racing, live 3D performances, international football andcontemporary music.

Film Exhibition

We predominantly licence first-run films from distributors owned by major film productioncompanies and from independent distributors. We exhibit a range of films that are designed to appealto a broad and diverse audience. Our exhibitions include ‘‘tentpole’’ films, such as Avatar, Harry Potterand the Bond franchises which are designed to attract a world-wide audience as well as locallyproduced films that are designed to appeal to the local market. Locally produced films are animportant component to our customer offer. For example, the growth in our Italian cinemas is partiallydue to the strength of the local film industry and the success of locally produced films.

In order to secure our slate of film offerings, our national film personnel negotiate with nationaloffices of major film distributors as well as local film distributors to procure films for our cinemas.Films are not allocated to a single cinema in a geographic film zone, but played simultaneously bycompeting cinemas. Our film rental fees are primarily based on mutually agreed upon terms that arebased upon a specified percentage of gross box office receipts.

There are several distributors which provide a substantial portion of quality first-run films to thecinema exhibition industry. These include Paramount Pictures, Twentieth Century Fox, Warner Bros.Distribution, Buena Vista Pictures (Disney), SONY Pictures Releasing and Universal Pictures. Ourrevenues attributable to individual distributors may vary significantly from year to year depending uponthe commercial success of each distributor’s films in any given year.

Our Market

Overview

According to industry sources, European box office revenue in our core markets of the UnitedKingdom, Ireland, Spain, Italy and Germany when taken as a whole has achieved a 3.1% CAGR from2000 to 2009, while attendance figures in our core markets when taken as a whole remained relativelystable overall from 2000 to 2009 with a 0.1% CAGR.

Long-term Stability

Cinematic exhibition has demonstrated resilient long term revenue growth despite numerousconsumer-driven economic downturns and the emergence of competitive technologies such as VHS,DVD, home wide screen and video on demand. According to industry sources, total European grossbox office is forecast to grow at a CAGR of 4.0% from 2009 to 2014, driven by increases in both ticketprices and attendance.

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The following table represents information about the global cinema exhibition industry obtainedfrom industry sources:

Gross Box AverageOffice Revenue Attendance Ticket Price Number of

Year ($ in millions) (in millions) ($) Screens

2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,389 6,809 4.02 113,3682009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,965 6,350 4.56 114,5622010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,899 6,794 4.70 116,564

Digital Technology

Digital projection technology has significant advantages over analogue, as digital films are notsusceptible to scratching and fading and remain clear and sharp after many showings. A digitallyproduced or digitally converted film print can be distributed to cinemas via satellite, physical media, orfibre optic networks. The digitised film print is stored on a central computer/server and enables cinemaoperators to move films more efficiently between auditoria within a cinema as demand increases ordecreases for each film.

Digital projection also allows the presentation of 3D content and alternative entertainment such aslive and pre-recorded concert events, the opera, sporting events and special documentaries. Twenty-eight commercial films released in the United Kingdom during 2010 were available in 3D format andthe number is expected to increase in 2011. Three-dimensional technology offers a premium experiencewith crisp, bright images that immerse the customer into a film. A premium is generally paid bycustomers for a 3D presentation.

Competition

Cinemas are subject to varying degrees of competition in the geographic areas in which theyoperate. Competition is often intense with respect to attracting customers, licensing films and findingnew cinema sites. We believe there are three major national exhibition companies competing in theUnited Kingdom, accounting for approximately 71% of gross box office receipts and a variety ofsmaller national, regional and local operators. Based on our estimates in 2010 the top five operators inSpain accounted for 49% of attendance in that market. Industry participants vary substantially in size,from small independent operators to large international chains.

The cinematic exhibition industry faces competition from other forms of out-of-homeentertainment, such as concerts, amusement parks and sporting events, and from other distributionchannels for filmed entertainment, such as cable television, pay per view and home video systems, aswell as from all other forms of entertainment.

Regulatory Matters

The distribution of films is, in large part, regulated by local country government regulators.Regulations require the films of certain distributors to be offered and licenced to exhibitors, includingus, on a film-by-film and cinema-by-cinema basis. Consequently, we cannot assure ourselves of a supplyof films by entering into long-term arrangements with major distributors, but must compete for ourlicences on a film-by-film and cinema-by-cinema basis.

Our operations also are subject to laws regulating such matters as construction, refurbishment andoperation of cinemas as well as wages and working conditions, citizenship, health and sanitationrequirements and licensing.

We also own and operate cinemas which may be subject to laws and regulations relating toenvironmental protection. Certain of these laws and regulations may impose joint and several liabilityon certain statutory classes of persons for the costs of investigation or remediation of contamination,regardless of fault or the legality of original disposal.

Employees

As of December 31, 2010, we employed approximately 9,162 employees. Our cinema levelpersonnel complete formal training programmes to maximise both customer service and the efficiencyof our operations. Cinema managers receive market-based training within their first 18 months with us

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which focuses on operations administration, marketing and information systems interpretation. Cinemastaffing varies depending on the size and configuration of the cinema and levels of attendance. We arecommitted to developing the strongest possible management teams and seek university graduates forcareer management positions.

Shareholder debt

Monterey Capital III Sarl (‘‘Monterey’’), a company registered in Luxembourg, is the direct parentof Odeon and UCI Cinemas Holdings Limited and we therefore consider it to be a related party.Monterey held unsecured loan notes issued by Odeon & UCI Cinemas Group Limited with anaggregate principal amount plus accrued interest of £66,163,000 as of December 31, 2010. Interest of£6,532,000 in relation to these notes was charged during 2010.

Odeon and UCI Cinemas Holdings Limited is the immediate parent company of Odeon & UCICinemas Group Limited and we therefore consider it to be a related party. Odeon & UCI CinemasHoldings Limited held unsecured loan notes issued by Odeon & UCI Cinemas Group Limited with anaggregate principal amount plus accrued interest of £280,666,000 as of December 31, 2010. Interest of£27,778,000 in relation to these notes was charged during the 2010.

Properties

Although there are a number of freehold properties in the estate portfolio we lease most of ourcinemas. Our leases generally have initial terms ranging from 15 to 25 years, some with the option toextend the lease thereafter. The leases typically include rent escalation clauses linked to inflation orproperty markets. A small number of leases include rent payments based on a percentage of the leasedcinema’s revenue above a base amount. As part of the lease we usually pay for property taxes,maintenance, insurance and certain other property-related expenses. In some cases, our rights as tenantare subject and subordinate to the mortgage loans of lenders to our lessors, so that if a mortgage wereto be foreclosed, we could lose our lease. Historically, this has never occurred.

PropCo

During April 2007, certain of our group companies entered into sale and leaseback arrangementswith PropCo and certain of its subsidiaries. Our shareholders have the ability to exercise a controllinginfluence over PropCo and the subsidiaries of PropCo, with which the sale and leaseback transactionstook place, through the holding of shares. The companies to which the freehold and leaseholdproperties were sold (the ‘‘Property Companies’’) are listed below:

Odeon Banbury Ltd Odeon Esher Ltd Odeon Richmond Hill Street LtdOdeon Barnet Ltd Odeon Gerrards Cross Ltd Odeon Richmond Red LionOdeon Beckenham Ltd Odeon Harrogate Ltd Street LtdOdeon Birmingham Ltd Odeon Hastings Ltd Odeon Streatham LtdOdeon Bournemouth (ABC) Ltd Odeon Holloway Ltd Odeon Swiss Cottage LtdOdeon Bournemouth Odeon Huddersfield Ltd Odeon Tamworth Ltd

(Odeon) Ltd Odeon Lee Valley Ltd Odeon Taunton LtdOdeon Canterbury Ltd Odeon Leicester Square Ltd Odeon Telford LtdOdeon Chelmsford Ltd Odeon Muswell Hill Ltd Odeon Warrington LtdOdeon Derby Ltd Odeon Preston Ltd Odeon Weston-super-Mare LtdOdeon Dudley Ltd Odeon Putney Ltd Odeon Worcester Ltd

The relevant UK trading companies within the group entered into lease contracts with theProperty Companies. The amount payable from the group to the Property Companies during 2010 was£11,189,000. The terms of the leases are between 25 and 30 years.

Also in connection with the sale and leaseback of the properties, certain of our subsidiariesgranted options to each of the Property Companies to purchase their rights, title and interest inchattels, equipment, fittings and moveable contents in, at or used in connection with the relevantproperty company’s premises subject of a lease to one of such certain subsidiaries. See ‘‘Description ofOther Indebtedness—Call Option Arrangements’’.

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As a result of the above mentioned transactions, PropCo, a separate entity from us, holds 31 ofour leaseholds and, because PropCo is owned and controlled by our shareholders, this could potentiallylead to a conflict of interest. See ‘‘Shareholders and Certain Transactions’’.

PropCo, an affiliate of ours that is owned by Terra Firma, owns the freehold or long leaseholdinterests in 31 of our cinema properties in the U.K and leases those properties to us. See‘‘Shareholders and Certain Transactions’’.

We lease our corporate headquarters in three locations namely London, Manchester andBarcelona.

The majority of the retail, seating and other equipment required for each of our cinemas is owned.

Litigation

We are, from time to time, subject to litigation involving our leases, property disputes and slip andfall injuries that arise in the normal course of our business operations. We are currently involved in alegal action against a previous landlord in Chemnitz, Germany related to our termination of a lease inOctober 2000 as a result of the landlord’s breach in providing fire certificates and failures in thebuilding’s fire safety. We have a claim against the landlord for A1,821,000 for damages for expenses inconnection with having to terminate the lease and reopen the cinema in a different location. Thelandlord has counterclaimed for A2,015,000 arguing we were not entitled to terminate the lease. If theclaim against us is upheld, it could be extended to later years and cost a total of A16.0 million. Thecourt has not yet entered a decision and an outcome is not expected during 2011. We are currentlyinvolved in a contract termination dispute raised by Whittle Movers Limited (‘‘Whittle’’). Whittle hascontended that a services contract with them, which we terminated in 2007, was a fixed term contractand was not terminable. Their claim, if successful, could cost approximately £1.0 million. We are alsoinvolved in a lease termination dispute with a former landlord, Italiana Alimenti S.p.A. The formerlandlord has claimed that the early termination of the lease by one of our subsidiaries in 2008 wasunlawful, and if successful in such claim, could cost approximately A2.4 million. We believe none ofthese claims have merit, and our auditors have advised us that we do not need to make any provisionfor them in our financial accounts except in the case of the claim by Whittle, for which we have madea £0.2 million provision.

In addition, from time to time, we pursue litigation as claimants in respect of matters such as ourleases or the payment of certain fees and/or taxes. For example, one of our subsidiaries in Germanyfiled a claim against a VAT increase in retail sales at our cinemas imposed by the German taxauthorities in 2007. The Federal Fiscal Court ultimately decided in our favour in 2009, and the taxauthorities paid back approximately A5.0 million. The European Court has since decided that sales incinemas are subject to lower tax rates, and we are now in a position to make an additional claim forapproximately A0.5 million.

We are not presently a party to any litigation which could reasonably be expected to have amaterial adverse effect on our business or operations.

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MANAGEMENT

Board of Directors of Odeon & UCI Cinemas Group Limited

The Board of Directors of Odeon & UCI Cinemas Group Limited consists of four members:Rupert Gavin, Jonny Mason, Roger Harris and Jose Batlle. The Board of Directors operates within thedelegated authority set by the Odeon & UCI Cinemas Holdings Limited board and will conduct anynecessary activities of the Issuer.

Name Age Position

Rupert Gavin . . . . . . 56 Chief Executive Officer and Member of the BoardJonny Mason . . . . . . 47 Chief Financial Officer and Member of the BoardRoger Harris . . . . . . 53 Chief Operating Officer (U.K. and Ireland) and Member of the BoardJose Batlle . . . . . . . . 62 Chief Operating Officer (Continental Europe) and Member of the Board

Rupert Gavin. Mr. Gavin was appointed as Chief Executive Officer of Odeon & UCI CinemasGroup Limited in June 2005. Prior to joining the business, he was Chief Executive of BBC Worldwide,and a member of the BBC’s Executive Committee. Mr. Gavin’s earlier roles included ManagingDirector of the Consumer Division of British Telecom and Deputy Managing Director at Dixons StoreGroup. Mr. Gavin holds an MA from Magdelene College, Cambridge.

Jonny Mason. Mr. Mason was appointed as Chief Financial Officer of Odeon & UCI CinemasGroup Limited in March 2006. Previously, he was a member of the Operating Board and FinanceDirector of Sainsbury’s. Prior to that, Mr. Mason’s roles included the Chief Financial Officer of aprivate equity-backed fitness chain and financial management positions in Hanson PLC and ShellInternational Petroleum Co. Ltd. Mr. Mason holds a BSc in Engineering from Manchester Universityand an MBA from INSEAD. Mr Mason is also a qualified ACCA.

Roger Harris. Mr. Harris is the Chief Operating Officer (U.K. and Ireland) of Odeon & UCICinemas Group Limited. He joined UCI in 2002, prior to Terra Firma’s investment. Mr. Harris hasbeen in the cinema business since 1988. He held a number of positions at Famous Players in Canada,including Senior Executive Vice President and General Manager. Mr. Harris holds a BSc (Hons) inEconomics and an MBA from the University of Bath.

Jose Batlle. Mr. Batlle is the Chief Operating Officer (Continental Europe) of Odeon & UCICinemas Group Limited. Mr. Batlle was appointed Vice President of UCI in 1991, began UCI’soperations in Italy and Portugal, and continued the expansion of Cinesa in Spain. In 1995 he wasappointed Senior Vice-President for South Europe and Brazil, opening 111 screens in Brazil. In 2003he was appointed Senior Vice President of Continental Europe and led UCI’s additional acquisitions inGermany and Austria. Mr Batlle was appointed European Exhibitor of the Year in 2004. Mr. Batlleholds an MBA in Business Administration from ESADE Barcelona and an MBA from FordhamUniversity New York.

Board Committees

We have not separately established any audit, remuneration and other board committees; theBoard of Directors as a whole, or its delegated members, fulfil these functions as and when required.

Compensation

For 2010, 2009 and 2008, the aggregate compensation paid to the Board of Directors of Odeon &UCI Cinemas Group Limited was £2.5 million, £2.3 million and £2.1 million, respectively (in each caseincluding cash compensation for salary and bonuses).

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SHAREHOLDERS AND CERTAIN TRANSACTIONS

As of the date of this offering memorandum, the Issuer’s authorised share capital consisted of50,000 ordinary shares with a par value of £1, all of which were held by Odeon Midco.

The authorised share capital of Odeon & UCI Cinemas Group Limited consisted of 200,000,000ordinary shares with a par value of £1 each. The issued share capital of Odeon & UCI Cinemas GroupLimited consisted of 120,644,970 ordinary shares with a par value of £1 each and was held by Odeon &UCI Cinemas Holdings Limited. Each ordinary share carries the right to receive dividends and toreceive notice of and vote at any general meeting of our shareholders.

We regard TFCP Holdings Limited, a company registered in Guernsey, as our ultimate controllingparty and our ultimate parent entity.

Terms and conditions of transactions with related parties

Terra Firma Investments (GP) 2 Limited, acting as general partner of the six limited partnershipswhich constitute the Terra Firma Capital Partners II Fund, Terra Firma Capital Partners II LP-H, TFCPII Co-Investment 2 LP and TFCP II Co-Investment 2A LP (‘‘Terra Firma’’), has the ability to exercisea controlling influence over us through the holding of shares in our indirect parent. We thereforeconsider it to be a related party.

Shareholder debt

Monterey Capital III Sarl is the direct parent of Odeon and UCI Cinemas Holdings Limited andwe therefore consider it to be a related party. Monterey held unsecured loan notes issued by Odeon &UCI Cinemas Group Limited with an aggregate principal amount plus accrued interest of £66,163,000as of December 31, 2010. Interest of £6,532,000 in relation to these notes was charged during 2010.

Odeon and UCI Cinemas Holdings Limited is the immediate parent company of Odeon & UCICinemas Group Limited and we therefore consider it to be a related party. Odeon & UCI CinemasHoldings Limited held unsecured loan notes issued by Odeon & UCI Cinemas Group Limited with anaggregate principal amount plus accrued interest of £280,666,000 as of December 31, 2010. Interest of£27,778,000 in relation to these notes was charged during the 2010.

PropCo

During April 2007, certain group companies entered into sale and leaseback arrangements inrelation to freehold and leasehold properties. Terra Firma has the ability to exercise a controllinginfluence over the companies with which the sale and leaseback transactions took place through theholding of shares. The directors therefore consider them to be related parties.

The companies to which the freehold and leasehold properties were sold, the Property Companies,are listed below:

Odeon Banbury Ltd Odeon Esher Ltd Odeon Richmond Hill Street LtdOdeon Barnet Ltd Odeon Gerrards Cross Ltd Odeon Richmond Red LionOdeon Beckenham Ltd Odeon Harrogate Ltd Street LtdOdeon Birmingham Ltd Odeon Hastings Ltd Odeon Streatham LtdOdeon Bournemouth (ABC) Ltd Odeon Holloway Ltd Odeon Swiss Cottage LtdOdeon Bournemouth Odeon Huddersfield Ltd Odeon Tamworth Ltd

(Odeon) Ltd Odeon Lee Valley Ltd Odeon Taunton LtdOdeon Canterbury Ltd Odeon Leicester Square Ltd Odeon Telford LtdOdeon Chelmsford Ltd Odeon Muswell Hill Ltd Odeon Warrington LtdOdeon Derby Ltd Odeon Preston Ltd Odeon Weston-super-Mare LtdOdeon Dudley Ltd Odeon Putney Ltd Odeon Worcester Ltd

The total consideration for the properties sold, excluding VAT, was £178,750,000. The considerationwas partly settled during May 2007. As of December 31, 2011, the aggregate remaining balance duefrom the Property Companies was £31,220,000, including interest and the effect of a provision of£23,520,000 made against the balance due as of December 31, 2010. The balance accrues interest atLIBOR plus a margin of 2.375%. Interest accrued during 2010 was £1,222,000.

The relevant UK trading companies within the group entered into lease contracts with theProperty Companies. The amount payable from the group to the Property Companies during 2010 was£11,189,000. The terms of the leases are between 25 and 30 years.

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DESCRIPTION OF OTHER INDEBTEDNESS

The following contains a summary of the expected terms of the Super Senior Revolving Credit Facilityand the Intercreditor Agreement and certain other instruments or facilities. The Super Senior RevolvingCredit Facility and the Intercreditor Agreement will not be executed until the Issue Date. There can be noassurance that the terms of the Super Senior Revolving Credit Facility and the Intercreditor Agreement willnot differ from the terms described below. Terms not otherwise defined in this section shall, unless thecontext otherwise requires, have the same meanings set out in the Super Senior Revolving Credit FacilityAgreement or the Intercreditor Agreement, as applicable.

Super Senior Revolving Credit Facility

We expect that Odeon Midco, as borrower (the ‘‘Borrower’’), will enter into the Super SeniorRevolving Credit Facility with The Bank of New York Mellon, as administrative agent, and the lendersparty thereto from time to time, jointly arranged by Merrill Lynch International, Goldman SachsInternational, Lloyds TSB Bank plc and Mizuho International plc. The following is a summarydescription of certain terms of the Super Senior Revolving Credit Facility Agreement.

The Super Senior Revolving Credit Facility Agreement is expected to provide for up to £90 millionof revolving extensions of credit outstanding at any time (including revolving loans and letters ofcredit).

We do not currently intend to draw on the Super Senior Revolving Credit Facility at the closing ofthe offering of the Notes, except for approximately £40.0 million of letters of credit which are expectedto be issued (or deemed issued) or alternatively cash drawn or the drawing of cash in order tobackstop, replace or roll-over existing letters of credit under facilities being repaid in full on the closingdate. Alternatively, we may use cash on hand to cash collateralize such existing letters of credit to theextent we do not issue letters of credit or draw down on the new Super Senior Revolving Credit Facilityto backstop, replace or roll-over such existing letters of credit. However, to the extent we need to makeadditional drawings on our existing revolving facility prior to the closing to fund our working capitalneeds, we will draw on the Super Senior Revolving Credit Facility at the closing to refinance any suchdrawings. The Super Senior Revolving Credit Facility will be available on a revolving basis for a periodof six years to finance the working capital needs and other general corporate purposes of the Borrowerand its restricted subsidiaries. The Super Senior Revolving Credit Facility Agreement will includeincurrence-based negative covenants substantially similar to those in the Indenture. The Super SeniorRevolving Credit Facility Agreement will also include customary representations, affirmative covenants,including certain information covenants and events of default, some of which may be more restrictivethan those in the Notes. The Super Senior Revolving Credit Facility will rank pari passu in right ofpayment with the Notes; provided, however, that proceeds of any collection or other realization ofcollateral received in connection with the enforcement of rights or exercise of remedies in respect ofany shared collateral, including any distributions in any insolvency or liquidation proceeding of theBorrower or any Guarantor, will be applied to obligations pursuant to the Super Senior RevolvingCredit Facility and certain hedging obligations, before the holders of the Notes receive any proceeds.

The following further outlines the structure and terms of the Super Senior Revolving CreditFacility.

Interest Rates

The interest rate per annum applicable to the loans under the Super Senior Revolving CreditFacility will be based on a fluctuating rate of interest determined by reference to EURIBOR orLIBOR, as applicable.

Fees

The Borrower will pay certain recurring fees with respect to the Super Senior Revolving CreditFacility, including agency fees and commitment commissions.

Guarantees and security for the Super Senior Revolving Credit Facility

The obligations of the Borrower under the Super Senior Revolving Credit Facility are guaranteedby the Issuer and the Subsidiary Guarantors which are guaranteeing the Notes.

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The Super Senior Revolving Credit Facility is secured on a first priority basis by a perfectedsecurity interest in the same collateral as the Notes and with equal priority to the perfected securityinterest of the Notes, provided that under the Intercreditor Agreement, the Notes will not receive anypayment or other distribution from the proceeds of any sale, disposition, liquidation or other realizationwith respect to the collateral in connection with (a) the enforcement of rights or remedies upon acontinuing event of default or (b) in any foreclosure, bankruptcy, insolvency or liquidation proceeding,until all obligations under the Super Senior Revolving Credit Facility Agreement and certain hedgingobligations have been paid in full.

Prepayments and cancellations

Subject to certain exceptions, the Super Senior Revolving Credit Facility is expected to be subjectto customary mandatory prepayments and cancellations of commitments, including change of control.

Voluntary prepayments and commitment reductions will be permitted with customary notice andsubject to minimum amounts.

Maturity

The Super Senior Revolving Credit Facility will have a term of six years.

Undertakings and Covenants

The Super Senior Revolving Credit Facility Agreement will contain a number of (1) customaryaffirmative covenants, including certain information covenants, and (2) negative covenants that aresubstantially similar to those in the Indenture.

Events of Default

The Super Senior Revolving Credit Facility Agreement will contain customary events of default fora facility of this nature.

Intercreditor Agreement

In connection with entering into the Revolving Credit Facility and the Indenture, the Issuer, theGuarantors and certain other subsidiaries of the Issuer and the Security Agent will enter into theIntercreditor Agreement to govern the relationships and relative priorities among: (i) the lenders underthe Super Senior Revolving Credit Facility (the ‘‘RCF Lenders’’); (ii) any persons that accede to theIntercreditor Agreement as counterparties to certain hedging agreements (collectively, the ‘‘HedgingAgreements’’ and any persons that accede to the Intercreditor Agreement as counterparties to theHedging Agreements are referred to in such capacity as the ‘‘Hedge Counterparties’’); (iii) the Trusteefor itself and on behalf of the holders of the Notes (the ‘‘Senior Secured Noteholders’’); (iv) intragroupcreditors and debtors; and (v) the direct shareholder of Odeon Midco in respect of certain structuraldebt that Odeon Midco has or may incur in the future (including any subordinated shareholder loans).By accepting a Note, holders of the Notes shall be deemed to have agreed to, and accepted the termsand conditions of, the Intercreditor Agreement.

Odeon Midco and each of its Restricted Subsidiaries that incurs any liability or provides anyguarantee under the Super Senior Revolving Credit Facility or the Indenture are each referred to inthis description as a ‘‘Debtor’’ and are referred to collectively as the ‘‘Debtors.’’ In this description:‘‘Group’’ refers to Odeon Midco and its Restricted Subsidiaries; ‘‘Collateral’’ refers to any assetssubject to transaction security; ‘‘RCF Lender’’ refers to each lender under the Super Senior RevolvingCredit Facility and the liabilities of the Debtors to the RCF Lenders are referred to as the ‘‘RCFLender Liabilities.’’

The Intercreditor Agreement will set forth:

• the relative ranking of certain indebtedness of the Debtors;

• the relative ranking of certain security granted by the Debtors;

• when payments can be made in respect of certain indebtedness of the Debtors;

• when enforcement actions can be taken in respect of that indebtedness;

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• the terms pursuant to which that indebtedness will be subordinated upon the occurrence ofcertain insolvency events;

• turnover provisions; and

• when security and guarantees will be released to permit a sale of any Collateral.

The Intercreditor Agreement will allow for a refinancing of the Revolving Credit Facility.

The Intercreditor Agreement will provide that the principal amount of the Super Senior RevolvingCredit Facility (or any refinancing thereof) that can be secured on a super senior basis cannot exceed£100.0 million.

The Intercreditor Agreement will also provide that the Super Senior Hedging Liabilities, definedbelow, will be subject to a limit of £15.0 million.

Ranking and Priority

The Intercreditor Agreement will provide, subject to the provisions in respect of permittedpayments described below, that the RCF Lender Liabilities and the liabilities of the Debtors withrespect to the Super Senior Revolving Credit Facility and the Hedging Agreements that are designatedas having super senior priority (the ‘‘Super Senior Hedging Liabilities’’; together with the RCF LenderLiabilities, the ‘‘Super Senior Liabilities’’), the liabilities of the Debtors in respect of the Notes (the‘‘Senior Secured Notes Liabilities’’), the liabilities of the Debtors with respect to the HedgingAgreements to the extent such hedging liabilities are not Super Senior Hedging Liabilities (the‘‘Hedging Liabilities’’), and certain other unsecured liabilities will rank in right and priority of paymentin the following order:

• first, the Super Senior Liabilities, the Senior Secured Notes Liabilities and the Trustee Liabilitiespari passu and without any preference between them;

• second, certain intercompany obligations of the Issuer and the Guarantors (the ‘‘Obligors’’) tothe Issuer and its Restricted Subsidiaries (the ‘‘Intra-Group Liabilities’’); and

• third, investor debt (which consists of certain liabilities owed by any Obligor to any shareholder,direct or indirect, of Odeon Midco) (the ‘‘Shareholder Liabilities’’ and together with the Intra-Group Liabilities, the ‘‘Subordinated Liabilities’’).

The parties to the Intercreditor Agreement will agree in the Intercreditor Agreement that thesecurity provided by the Debtors and the other parties for the Super Senior Liabilities, the HedgingLiabilities, the Senior Secured Notes Liabilities and the Trustee Liabilities (together the ‘‘SecuredLiabilities’’) will rank and secure the Super Senior Liabilities, the Hedging Liabilities, the SeniorSecured Notes Liabilities and the Trustee Liabilities pari passu and without any preference betweenthem (but only to the extent the security is expressed to secure those Secured Liabilities) except asprovided below; provided that all proceeds from enforcement of the Collateral and certain otherrecoveries will be applied as provided below under ‘‘—Application of Proceeds’’.

Permitted Payments of Subordinated Debt

The Intercreditor Agreement will permit, inter alia, payments to be made by the Debtors under theSuper Senior Revolving Credit Facility and the Indenture, and does not in any way limit or restrict anypayment by any Debtor of them in the ordinary course of business, subject to compliance with the‘‘Notes Purchase Condition’’ in the Super Senior Revolving Credit Facility, which places certain limitson our ability to repurchase the Notes. The Intercreditor Agreement will also permit payments fromtime to time when due to lenders owed any Intra-Group Liabilities (‘‘Intra-Group LiabilitiesPayments’’), subject to certain exceptions.

Payments may be made on shareholder debt from time to time when due if: (i) the payment is notprohibited by the Senior Revolving Credit Facility and the Indenture; (ii) prior to the date on which allSuper Senior Liabilities are discharged (the ‘‘Super Senior Discharge Date’’), the creditors who arepermitted to instruct the Security Agent gives written consent to such payment being made; or (iii) onor after the Super Senior Discharge Date, the holders of the principal amount of Notes required tovote in favour of the relevant direction, approval, consent or waiver under the terms of the Indentureor, if the required amount is not specified, the holders holding at least the majority of the principal

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amount of the then outstanding Notes (the ‘‘Senior Secured Notes Creditors’’) give written consent tosuch payment being made.

Creditor Representative

Under the Intercreditor Agreement, the parties will appoint various creditor representatives.‘‘Creditor Representative’’ means:

(a) in relation to the RCF Lenders, the Super Senior Revolving Credit Facility agent (the ‘‘RCFAgent’’);

(b) in relation to the holders of the Notes, the Trustee; and

(c) in relation to any Hedge Counterparty, such Hedge Counterparty which shall be its ownCreditor Representative.

Enforcement by Super Senior Creditors and Senior Secured Noteholders

If in respect of the Collateral an acceleration notice has been served, the Creditor Representativesof the Super Senior Liabilities and the Notes shall consult in good faith for a period of up to 10 dayswith regard to the taking of enforcement action (provided that no such consultation will be required ifthere has been an insolvency event in respect of an Obligor).

If after the Security has become enforceable following service of an acceleration notice, and thecreditors in respect of the Super Senior Liabilities and the Senior Secured Notes Liabilities and theHedging Liabilities give instructions to enforce the security that are consistent with ‘‘—SecurityEnforcement Principles’’, the Security Agent will give effect to those instructions. In the event ofinconsistent instructions, there will be a further consultation period of up to 30 days to seek to resolvethe conflict (the ‘‘30 Day Period’’). If at the end of such further consultation period the Security Agenthas not received consistent enforcement instructions, the Security Agent will enforce (or refrain fromenforcing) the security in accordance with the instructions of the Senior Secured Notes Liabilities andthe Hedging Liabilities or, if the Super Senior Liabilities has not been discharged within four monthsfrom the date of expiry of the 30 Day Period, the instructions of the majority of the holders of theSuper Senior Liabilities. In the event no material enforcement action has commenced within twomonths of original enforcement instructions being received, the Security Agent will enforce the securityin accordance with the instructions of the majority of the holders of the Super Senior Liabilities.

Security Enforcement Principles

The ‘‘Security Enforcement Principles’’ will include as follows:

• It shall be the aim of any enforcement of the security to maximise, so far as is consistent with aprompt and expeditious enforcement of the security, the recovery of the Senior Secured NotesLiabilities, the Hedging Liabilities and the Super Senior Liabilities (the ‘‘Security EnforcementObjective’’).

• The Security Enforcement Principles may be amended, varied or waived with the prior writtenconsent of the holders of 662⁄3% of the Super Senior Liabilities and holders of a majority of theSenior Secured Notes Liabilities.

• On:

a proposed enforcement of any of the Security over assets other than shares in a member of theGroup, where the aggregate book value of such assets exceeds a specified threshold; or

a proposed enforcement of any of the Security over some or all of the shares in a member ofthe Group over which Security exists,

the Security Agent shall, if so requested by the representative of the Super Senior Liabilities or ofthe Senior Secured Notes Liabilities, and at the expense of such creditors, obtain an opinion froma reputable internationally-recognised investment bank or international accounting firm (a‘‘Financial Advisor’’) that the sale is made pursuant the optimal method of enforcing the securityso as to achieve the Security Enforcement Principles and maximise recoveries, and the price of thesale is fair from a financial point of view after taking into account all relevant circumstances andthat such sale is in accordance with the Security Enforcement Objective.

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The Security Agent shall be under no obligation to appoint a Financial Advisor or to seek theadvice of a Financial Advisor, unless expressly required to do so by these Security EnforcementPrinciples or any other provision of the Intercreditor Agreement.

Application of Proceeds

The Intercreditor Agreement will provide that amounts received from the realization orenforcement of all or any part of the Collateral will be applied in the following order of priority(subject to certain country specific limitations):

• first, in payment of the Super Senior Revolving Credit Facility and the Super Senior HedgingLiabilities;

• second, in payment of the Senior Secured Notes Liabilities and the Hedging Liabilities;

• third, in payment of the Intra Group Liabilities; and

• fourth, in payment of the Shareholder Liabilities.

Option to Purchase

After an acceleration event or the enforcement of any of the Collateral, by giving not less than10 days’ notice to the RCF Agent and the Trustee, at their direction and expense, the Senior SecuredNoteholders, will have the right to acquire or procure that a nominee acquires all (but not part only) ofthe Super Senior Liabilities.

Any such purchase will be on terms which will include, without limitation, payment in full in cashof an amount equal to the Super Senior Liabilities then outstanding, including in respect of any brokenfunding costs, as well as certain costs and expenses of the Super Senior Creditors; after the transfer, noSuper Senior Creditor will be under any actual or contingent liability to any Debtor; the purchasingholders of Senior Secured Notes and Pari Passu Creditors indemnify each Super Senior Creditor forany actual or alleged obligation to repay or claw back any amount received by such Super SeniorCreditor; and the relevant transfer shall be without recourse to, or warranty from, any Super SeniorCreditor.

Governing Law

The Intercreditor Agreement will be governed by English law.

Other Indebtedness to be Repaid in Connection with the Offering

In April 2007, we entered into a senior facilities agreement to refinance certain of our thenexisting debt, to finance capital expenditure, to finance (subject to satisfaction of certain specificconditions) the purchase price and associated costs and expenses relating to acquisitions of companies,undertakings and/or businesses, to meet the general corporate and working capital needs of Odeon& UCI Cinemas Group Limited and its subsidiaries (the ‘‘Odeon Group’’) and under which guaranteesof rental payment obligations and other letters of credit in respect of certain of the Odeon Group’sproperties could be issued. As of the date of the closing of the offering, we estimate that the aggregateprincipal amount outstanding under these senior facilities syndicated to credit institutions in differenttranches will be an aggregate principal amount of £311.2 million. These facilities bear an interest rateequal to EURIBOR or LIBOR (as appropriate) plus a margin ranging from 3.00% to 4.125% and theirmaturity dates are in April 2014, April 2015 and April 2016. In connection with these facilities, wegranted security over certain assets of particular companies in the Group (including pledges over theshares of the Guarantors) to secure the obligations under such facilities. The Guarantors also guaranteethe senior facilities.

We expect to use a portion of the offering to repay amounts outstanding under the senior facilities(for a breakdown of which, see ‘‘Use of Proceeds’’). Upon repayment of the indebtedness outstandingunder these facilities, we expect all security granted in connection with the facilities to be fully andunconditionally discharged and released.

The senior facilities require that notice be given 5 business days prior to prepayment. We intend todeposit the required repayment amounts with the agent for these facilities on the Issue Date, and toseek to shorten the prepayment notice period, in order to avoid or reduce the likelihood of thesecreditors exercising their rights to demand early payment resulting from the continued existence of

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these facilities following the issuance of the Notes and to facilitate the release of the security granted infavour of these existing facilities and the granting of the security in favour of the Notes and the SuperSenior Revolving Credit Facility.

Subordination Deed

In May 2007, in connection with the sale of the properties by the Odeon Group and the resultingintercompany loans between members of the Odeon Group and the Property Companies, OdeonHoldings entered into a subordination deed with the Property Companies, each of their immediateholding companies (the ‘‘Property Holding Companies’’, and together with the Property Companies, the‘‘PropCo Group’’) and Barclays Bank as facility agent and security agent (the ‘‘Subordination Deed’’).Under the Subordination Deed, Odeon Holdings subordinated its rights in respect of liabilities owingto it by PropCo Group members to the liabilities owed by them to the lenders under the principalfinancing of the PropCo Group. The subordination deed includes restrictions on payments by thePropCo Group to Odeon Holdings, turnover provisions and a requirement for affiliates of OdeonHoldings to whom a Property Company has incurred liabilities to accede to the subordination deed as ajunior creditor.

Call Option Arrangements

In May 2007, in connection with the sale and leaseback of the properties, ABC Cinemas Limited,Odeon Cinemas Limited and United Cinemas International (UK) Limited (together, the ‘‘MajorTenants’’) granted options (under the ‘‘Call Option Agreement’’) to each of the Property Companies topurchase their rights, title and interest in chattels, equipment, fittings and moveable contents in, at orused in connection with the relevant property company’s premises subject of a lease to one of theMajor Tenants (the ‘‘Call Option Assets’’). The Call Option Agreement may be exercised in connectionwith a relevant property by written notice within three months of a Property Company exercising rightsof re-entry to that property following a lease termination event or at the end (or sooner) determinationof the relevant lease (subject to any renewal of same). The Call Option Agreement places obligationson the Major Tenants to deliver lists of the Call Option Assets to the Property Companies, containsmechanisms to calculate the value of the Call Option Assets and (subject to certain exceptions) restrictsthe Major Tenants from granting security over, transferring or otherwise disposing of the Call OptionAssets. The Call Option Agreement will terminate in respect of the relevant Call Option Assets ondischarge of the security in favour of the Property Company over the Call Option Assets at the relevantproperty or on the release of security relating to the Propco Group principal financing being dischargedfollowing repayment of those facilities.

As security for discharge of their obligations and liabilities under the Call Option Agreement, theleases between the Major Tenants and the Property Companies and the Fixed Charge itself, the MajorTenants granted a fixed charge over the Call Option Assets in favour of the Property Companies (the‘‘Fixed Charge’’). The Fixed Charge is enforceable at the request of the relevant Major Tenant andfollowing the relevant Major Tenant’s breach of the Call Option Agreement (post-exercise), insolvencyof a Major Tenant or if notice of enforcement is served in respect of the security granted in connectionwith the Odeon Group’s current principal financing. The Fixed Charge contains further assurance andclawback provisions.

The Major Tenants, the agent to the Property Companies and the security agent under the currentOdeon Group facilities agreement entered into an intercreditor agreement (the ‘‘Call OptionIntercreditor Agreement’’), by which they agreed that the security created by the Fixed Charge would(a) rank ahead of the security granted over the Call Option Assets by the Odeon Group in favour ofthe lenders under the existing Odeon Group senior facilities agreement and (b) secure all obligationsand liabilities under the Call Option Agreement, the leases between the Major Tenants and theProperty Companies and the Fixed Charge in priority of the obligations and liabilities of the OdeonGroup under the existing Odeon Group senior facilities agreement. The Call Option Agreement carriesstandstill provisions which restrict the security agent under the existing Odeon Group financedocuments from enforcing the security in respect of that financing for a certain period in respect of theCall Option Assets.

The Propco Group members have granted security over their rights, title and interest in the CallOption Agreement, the Fixed Charge and the Call Option Intercreditor Agreement and all relatedrights in favour of the lenders under its principal financing.

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DESCRIPTION OF THE NOTES

The Issuer will issue and the Guarantors will guarantee £300.0 million aggregate principal amountof senior secured notes due 2018 denominated in pounds sterling (the ‘‘Sterling Notes’’) andA200.0 million aggregate principal amount of senior secured notes due 2018 denominated in euro (the‘‘Euro Notes’’ and together with the Sterling Notes, the ‘‘Notes’’) in this offering. The Notes will beissued by Odeon & UCI Finco plc (the ‘‘Issuer’’), a public limited company which has been organizedas a special purpose finance subsidiary to facilitate the offering of debt securities, and which has nooperations and no assets other than its rights under the on-loan of proceeds to Odeon & UCI BondMidco Limited (the ‘‘Company’’).

In this Description of the Notes, the ‘‘Company’’ refers only to Odeon & UCI Bond MidcoLimited, and any successor obligor to Odeon & UCI Bond Midco Limited on the Notes, and not toany of its subsidiaries, including the Issuer. As of the Issue Date, the Issuer will be a wholly ownedsubsidiary of the Company. ‘‘Odeon Parent’’ refers to Odeon & UCI Cinemas Group Limited, whichindirectly owns all of the share capital of the Company, and any successor thereto, and not to any of itssubsidiaries.

The Issuer will issue the Notes under an Indenture to be dated as of the Issue Date among theIssuer, the Guarantors and The Bank of New York Mellon, as Trustee, Registrar and Principal PayingAgent (the ‘‘Indenture’’). The Notes will be issued in private transactions that are not subject to theregistration requirements of the Securities Act. See ‘‘Transfer Restrictions.’’ The terms of the Notesinclude those stated in the Indenture but will not incorporate any terms by reference to the TrustIndenture Act of 1939, as amended.

The Indenture, the Notes and the Guarantees will be subject to the terms of the IntercreditorAgreement and any additional intercreditor agreements entered into in the future. The terms of theIntercreditor Agreement are important to understanding the terms and ranking of the Liens on theCollateral securing the Notes and the Guarantees. Please see ‘‘Description of Other Indebtedness—Intercreditor Agreement’’ for a description of the material terms of the Intercreditor Agreement.

This ‘‘Description of the Notes’’ is intended to be an overview of the material provisions of theNotes and the Indenture. Since this description of the terms of the Notes is only a summary, youshould refer to the Indenture for complete descriptions of the obligations of the Issuer and theGuarantors and your rights. Copies of the Indenture, the form of Notes, the Guarantees and theIntercreditor Agreement are available as set forth under ‘‘Where You Can Find More Information.’’

The Indenture is unlimited in aggregate principal amount, but this issuance of Notes is limited to£300.0 million aggregate principal amount of Sterling Notes and A200.0 million aggregate principalamount of Euro Notes. We may issue an unlimited principal amount of additional Notes under theIndenture subject to the procedures described therein (the ‘‘Additional Notes’’); provided that we willonly be permitted to issue Additional Notes in compliance with the covenants contained in theIndenture, including the covenant restricting the Incurrence of Indebtedness (as described below under‘‘—Certain Covenants—Limitation on Indebtedness’’). The Notes issued in this offering and, if issued,any Additional Notes will be treated as a single class for all purposes under the Indenture, includingwith respect to waivers, amendments, redemptions and offers to purchase, except as otherwise specifiedwith respect to each series of Notes. Unless the context otherwise requires, in this ‘‘Description of theNotes’’, references to the ‘‘Notes’’ include the Notes and the Additional Notes that are actually issued.

Description of the Notes and the Note Guarantees

The Notes

• are senior obligations of the Issuer and rank equal in right of payment with any existing orfuture Indebtedness of the Issuer that is not expressly subordinated to the Notes;

• are secured by the Collateral described below along with obligations under the Senior FacilitiesAgreement (although the holders of the Notes will receive proceeds of the Collateral after theSenior Facilities Agreement lenders and any Hedging Agreements provided by such lenders ortheir Affiliates or other permitted super priority debt obligations in the event of foreclosure orin any bankruptcy, insolvency or other similar event);

• are senior in right of payment to any future Subordinated Indebtedness of the Issuer;

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• are effectively senior in right of payment to any existing or future unsecured obligations of theIssuer to the extent of the value of the Collateral that is available to satisfy the obligationsunder the Notes; and

• are unconditionally guaranteed on a senior secured basis by the Guarantors.

Principal, Maturity and Interest

The Issuer will issue £300.0 million in aggregate principal amount of Sterling Notes on the IssueDate and A200.0 million aggregate principal amount of Euro Notes on the Issue Date. The Notes willmature on August 1, 2018.

The Sterling Notes will be issued in minimum denominations of £100,000 and in integral multiplesof £1,000 in excess thereof. The Euro Notes will be issued in minimum denominations of A100,000 andin integral multiples of A1,000 in excess thereof. The rights of holders of beneficial interests in theNotes to receive the payments on such Notes are subject to applicable procedures of Euroclear and/orClearstream. If the due date for any payment in respect of any Notes is not a Business Day at theplace at which such payment is due to be paid, the Holder thereof will not be entitled to payment ofthe amount due until the next succeeding Business Day at such place, and will not be entitled to anyfurther interest or other payment as a result of any such delay.

Interest on the Sterling Notes will accrue at the rate of 9.0% per annum. Interest on the SterlingNotes will be payable, in cash, semi-annually in arrears on February 1 and August 1 of each year,commencing on February 1, 2012 to holders of record on the immediately preceding January 15 andJuly 15, respectively. Interest on the Sterling Notes will accrue from the most recent date to whichinterest has been paid or, if no interest has been paid, from the date of original issuance. Interest willbe computed on the basis of a 360-day year comprised of twelve 30-day months. Each interest periodshall end on (but not include) the relevant interest payment date.

The Euro Notes will bear interest at a rate per annum (the ‘‘Applicable Rate’’), reset quarterly,equal to three-month EURIBOR plus 5.00%, as determined by the calculation agent (the ‘‘CalculationAgent’’), which shall initially be The Bank of New York Mellon, London Branch.

Interest on the Euro Notes will be payable quarterly in arrears on February 1, May 1, August 1and November 1, commencing on August 1, 2011, to the holders of Euro Notes of record on theimmediately preceding January 15, April 15, July 15 and October 15. Interest on the Euro Notes willaccrue from the most recent date to which interest has been paid or, if no interest has been paid, fromand including the Issue Date.

Set forth below is a summary of certain of the defined terms used in the Indenture relating solelyto the Euro Notes.

‘‘EURIBOR,’’ with respect to an Interest Period, will be the rate (expressed as a percentage perannum) for deposits in euros for a three-month period beginning on the day that is two TARGETSettlement Days after the Determination Date that appears on Reuters Screen EURIBOR 01 as of11:00 a.m. Luxembourg time, on the Determination Date. If Reuters Screen EURIBOR 01 does notinclude such a rate or is unavailable on a Determination Date, the Calculation Agent will request theprincipal London office of each of four major banks in the Euro-zone interbank market, as selected bythe Calculation Agent to provide such bank’s offered quotation (expressed as a percentage per annum)as of approximately 11:00 a.m., Luxembourg time, on such Determination Date, to prime banks in theEuro-zone interbank market for deposits in a Representative Amount in euro for a three-month periodbeginning on the day that is two TARGET Settlement Days after the Determination Date. If at leasttwo such offered quotations are so provided, the rate for the Interest Period will be the arithmeticmean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent willrequest each of three major banks in London, as selected by the Calculation Agent, to provide suchbank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., Luxembourg time,on such Determination Date, for loans in a Representative Amount in euros to leading Europeanbanks for a three-month period beginning on the day that is two TARGET Settlement Days after theDetermination Date. If at least two such rates are so provided, the rate for the Interest Period will bethe arithmetic mean of such rates. If fewer than two such rates are so provided, then the rate for theInterest Period will be the rate in effect with respect to the immediately preceding Interest Period.

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‘‘Determination Date,’’ with respect to an Interest Period, will be the day that is two TARGETSettlement Days preceding the first day of such Interest Period.

‘‘Euro-zone’’ means the region composed of member states of the European Union that at therelevant time have adopted the euro.

‘‘Interest Period’’ means the period commencing on and including an interest payment date andending on and including the day immediately preceding the next succeeding interest payment date, withthe exception that the first Interest Period shall commence on and include the Issue Date and end onand include August 1, 2011.

‘‘Representative Amount’’ means the greater of (a) A1.0 million and (b) an amount that isrepresentative for a single transaction in the relevant market at the relevant time.

‘‘TARGET Settlement Day’’ means any day on which the Trans-European Automated Real-TimeGross Settlement Express Transfer (TARGET) System is open.

The Calculation Agent will, as soon as practicable after 11:00 a.m., Luxembourg time, on eachDetermination Date, determine the Applicable Rate, and calculate the aggregate amount of interestpayable on the Euro Notes in respect of the following Interest Period (the ‘‘Interest Amount’’). TheInterest Amount will be calculated by applying the Applicable Rate to the principal amount of theEuro Notes outstanding at the commencement of the Interest Period, multiplying each such amount bythe actual number of days in the Interest Period concerned divided by 360.

All percentages resulting from any of the above calculations will be rounded, if necessary, to thenearest one hundred thousandth of a percentage point, with five one-millionths of a percentage pointbeing rounded upwards (e.g., 4.876545% (or 0.04876545) being rounded to 4.87655% (or 0.487655)).All euro amounts used in or resulting from such calculations will be rounded to the nearest euro cent(with one-half euro cent being rounded upwards). The determination of the Applicable Rate and theInterest Rate Amount by the Calculation Agent shall, in the absence of willful default, bad faith ormanifest error, be binding on all parties.

The Applicable Rate on the Euro Notes will in no event be higher than the maximum ratepermitted by New York law as the same may be modified by United States law of general application.

Methods of Receiving Payments on the Notes

Principal, premium, if any, interest and Additional Amounts, if any, on the Global Notes will bepayable at the specified office or agency of one or more Paying Agents; provided that all such paymentswith respect to Notes represented by one or more Global Notes registered in the name of or held by anominee of Euroclear and/or Clearstream will be made by wire transfer of immediately available fundsto the account specified by the Holder or Holders thereof.

Principal, premium, if any, interest and Additional Amounts, if any, on any certificated securities(‘‘Definitive Registered Notes’’) will be payable at the specified office or agency of one or more PayingAgents in the City of London and Luxembourg, in each case, maintained for such purposes. Inaddition, interest on the Definitive Registered Notes may be paid by check mailed to the personentitled thereto as shown on the register for the Definitive Registered Notes. See ‘‘—Principal PayingAgent, Paying Agent and Registrar for the Notes.’’

Principal Paying Agent, Paying Agent and Registrar for the Notes

The Issuer will maintain one or more Paying Agents (each, a ‘‘Paying Agent’’) for the Notes in(i) the City of London (the ‘‘Principal Paying Agent’’) and (ii) Luxembourg for so long as the Notes arelisted on the Euro MTF and its rules and regulations so require. The Issuer will also undertake tomaintain a paying agent in a European Union member state that will not be obliged to withhold ordeduct tax pursuant to the European Union Directive 2003/48/EC regarding the taxation of savingsincome or any other directive implementing the conclusions of the ECOFIN Council meeting of 26 and27 November 2000 on the taxation of savings income, or any law implementing, or complying with orintroduced in order to conform to, such directive (the ‘‘Directive’’). The initial Principal Paying Agentfor the Notes will be The Bank of New York Mellon with the Initial Paying agent being The Bank ofNew York Mellon (Luxembourg) S.A.

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The Issuer will also maintain one or more registrars (each, a ‘‘Registrar’’) with offices inLuxembourg and a transfer agent in the each of London and, for so long as the Notes are listed on theEuro MTF and its rules so require, Luxembourg. The initial Registrar and transfer agent will beThe Bank of New York Mellon. The Registrar and the transfer agent in London and Luxembourg willmaintain a register reflecting ownership of Definitive Registered Notes outstanding from time to time,if any, and will make payments on and facilitate transfers of Definitive Registered Notes on behalf ofthe Issuer. Each transfer agent shall perform the functions of a transfer agent.

The Issuer may change any Paying Agent, Registrar or transfer agent for the Notes without priornotice to the Holders of the Notes. However, for so long as Notes are listed on the Euro MTF and therules of the Luxembourg Stock Exchange so require, the Issuer will publish notice of the change in aPaying Agent, Registrar or transfer agent in a daily newspaper with general circulation in Luxembourg(which is expected to be the Luxembourger Wort) or, to the extent and in the manner permitted bysuch rules, posted on the official website of the Luxembourg Stock Exchange. The Issuer or any of itsSubsidiaries may act as Paying Agent or Registrar in respect of the Notes.

Transfer and Exchange

The Notes will initially be issued in the form of registered notes in global form without interestcoupons, as follows:

• Each series of Notes sold within the United States to qualified institutional buyers pursuant toRule 144A under the Securities Act will initially be represented by one or more global notes inregistered form without interest coupons attached (the ‘‘144A Global Notes’’).

• The 144A Global Notes will, upon issuance, be deposited with and registered in the name ofthe common depositary for the accounts of Euroclear Bank S.A./N.V. (‘‘Euroclear’’) andClearstream Banking, societe anonyme (‘‘Clearstream’’).

• Each series of Notes sold outside the United States pursuant to Regulation S under theSecurities Act will initially be represented by one or more global notes in registered formwithout interest coupons attached (the ‘‘Regulation S Global Notes’’ and, together with the144A Global Notes, the ‘‘Global Notes’’).

• The Regulation S Global Notes will, upon issuance, be deposited with and registered in thename of the common depositary for the accounts of Euroclear and Clearstream.

Ownership of interests in the Global Notes (‘‘Book-Entry Interests’’) will be limited to persons thathave accounts with Euroclear and/or Clearstream or persons that may hold interests through suchparticipants. Ownership of interests in the Book-Entry Interests and transfers thereof will be subject tothe restrictions on transfer and certification requirements summarized below and described more fullyunder ‘‘Notice to Investors.’’ In addition, transfers of Book-Entry Interests between participants inEuroclear and/or Clearstream will be effected by Euroclear and/or Clearstream pursuant to customaryprocedures and subject to the applicable rules and procedures established by Euroclear and/orClearstream and its respective participants.

Book-Entry Interests in the 144A Global Notes may be transferred to a person who takes deliveryin the form of Book-Entry Interests in the Regulation S Global Notes denominated in the samecurrency only upon delivery by the transferor of a written certification (in the form provided in theIndenture) to the effect that such transfer is being made in accordance with Regulation S under theSecurities Act.

Prior to 40 days after the date of initial issuance of the Notes, ownership of Book-Entry Interestsin Regulation S Global Notes will be limited to persons that have accounts with Euroclear and/orClearstream or persons who hold interests through Euroclear and/or Clearstream, and any sale ortransfer of such interest to U.S. persons shall not be permitted during such period unless such resale ortransfer is made pursuant to Rule 144A under the Securities Act Subject to the foregoing, Regulation SBook-Entry Interests may be transferred to a person who takes delivery in the form of 144ABook-Entry Interests only upon delivery by the transferor of a written certification (in the formprovided in the Indenture) to the effect that such transfer is being made to a person who the transferorreasonably believes is a ‘‘qualified institutional buyer’’ within the meaning of Rule 144A in atransaction meeting the requirements of Rule 144A or otherwise in accordance with the transfer

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restrictions described under ‘‘Notice to Investors’’ and in accordance with any applicable securities lawof any other jurisdiction.

Any Book-Entry Interest that is transferred as described in the immediately preceding paragraphswill, upon transfer, cease to be a Book-Entry Interest in the Global Note from which it was transferredand will become a Book-Entry Interest in the Global Note to which it was transferred. Accordingly,from and after such transfer, it will become subject to all transfer restrictions, if any, and otherprocedures applicable to Book-Entry Interests in the Global Note to which it was transferred.

If Definitive Registered Notes are issued, they will be issued only in minimum denominations of£100,000 principal amount and integral multiples of £1,000 in excess thereof with respect to the SterlingNotes or A100,000 principal amount and integral multiples of A1,000 in excess thereof with respect tothe Euro Notes, upon receipt by the Registrar of instructions relating thereto and any certificates,opinions and other documentation required by the Indenture. It is expected that such instructions willbe based upon directions received by Euroclear and/or Clearstream from the participant that owns therelevant Book-Entry Interests. Definitive Registered Notes issued in exchange for a Book-Entry Interestwill, except as set forth in the Indenture or as otherwise determined by the Issuer to be in compliancewith applicable law, be subject to, and will have a legend with respect to, the restrictions on transfersummarized below and described more fully under ‘‘Notice to Investors.’’

Subject to the restrictions on transfer referred to above, Notes issued as Definitive RegisteredNotes may be transferred or exchanged in whole or in part, in minimum denominations of £100,000 inprincipal amount and integral multiples of £1,000 in excess thereof with respect to the Sterling Notes orA100,000 principal amount and integral multiples of A1,000 in excess thereof with respect to the EuroNotes. In connection with any such transfer or exchange, the Indenture will require the transferring orexchanging holder to, among other things, furnish appropriate endorsements and transfer documents, tofurnish information regarding the account of the transferee at Euroclear and/or Clearstream, whereappropriate, to furnish certain certificates and opinions, and to pay any taxes, duties and governmentalcharges in connection with such transfer or exchange. Any such transfer or exchange will be madewithout charge to the Holder, other than any taxes, duties and governmental charges payable inconnection with such transfer.

Notwithstanding the foregoing, the Issuer is not required to register the transfer or exchange ofany Notes:

(1) for a period of 15 days prior to any date fixed for the redemption of such Notes;

(2) for a period of 15 days immediately prior to the date fixed for selection of such Notes to beredeemed in part;

(3) for a period of 15 days prior to the record date with respect to any interest payment dateapplicable to such Notes; or

(4) which the Holder has tendered (and not withdrawn) for repurchase in connection with aChange of Control Offer or an Asset Disposition Offer.

The Issuer, the Trustee and the Paying Agents will be entitled to treat the Holder of a Note asthe owner of it for all purposes.

Restricted Subsidiaries and Unrestricted Subsidiaries

Immediately after the issuance of the Notes, all of the Company’s Subsidiaries will be RestrictedSubsidiaries. In the circumstances described below under ‘‘—Certain Definitions—UnrestrictedSubsidiary,’’ the Issuer will be permitted to designate Restricted Subsidiaries as UnrestrictedSubsidiaries. Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in theIndenture.

Guarantees

The obligations of the Issuer pursuant to the Notes, including any payment obligation resultingfrom a Change of Control, will be unconditionally guaranteed, jointly and severally, by the Companyand by each existing material Wholly Owned Restricted Subsidiary of the Company, subject to certainexceptions. Each Restricted Subsidiary that provides a guarantee of the Notes (a ‘‘Subsidiary Note

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Guarantee’’) is referred to herein as a ‘‘Subsidiary Guarantor’’, and together with the Company are the‘‘Guarantors.’’

The initial Subsidiary Guarantors will include each of our Restricted Subsidiaries that accounts for5% or more of our consolidated EBITDA or consolidated total assets (as calculated in good faith onthe basis of management accounts and excluding intercompany balances, investments in subsidiaries andjoint ventures and intangible assets) and will include each entity that has guaranteed the SeniorFacilities Agreement at the Issue Date. The initial Guarantors accounted on an aggregate basis for77.5% of our consolidated EBITDA and 81.4% of our consolidated assets as of December 31, 2010.For purposes of these assessments, management accounts information has been used, which adds backthe effects of Propco rent to EBITDA and excludes intercompany balances, receivables due from thePropco group, investments in subsidiaries and joint ventures and intangible assets, which consistprimarily of goodwill.

Each of the initial Guarantors will guarantee the Notes as of the Issue Date. In addition, subjectto the Agreed Security Principles, if the Company or any of its Restricted Subsidiaries acquires orcreates a Wholly Owned Restricted Subsidiary (other than an Immaterial Subsidiary) after the IssueDate, the Company will cause such new Subsidiary to provide a Subsidiary Note Guarantee. The newGuarantor will also, subject to the Agreed Security Principles, be required to pledge assets in favor ofthe Subsidiary Note Guarantee as described under ‘‘—Security.’’

The Agreed Security Principles apply to the granting of guarantees and security in favor ofobligations under the Senior Facilities Agreement and the Notes. The Agreed Security Principlesinclude restrictions on the granting of guarantees where, among other things, such grant would berestricted by general statutory limitations, financial assistance, corporate benefit, fraudulent preference,‘‘thin capitalization’’ rules, retention of title claims and similar matters.

Each Note Guarantee will be limited to the maximum amount that would not render theGuarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of theUnited States Bankruptcy Code or any comparable provision of foreign or state law, or as otherwiserequired under the Agreed Security Principles to comply with corporate benefit, financial assistance andother laws. By virtue of this limitation, a Guarantor’s obligation under its Note Guarantee could besignificantly less than amounts payable with respect to the Notes, or a Guarantor may have effectivelyno obligation under its Note Guarantee. See ‘‘Risk Factors—Risks related to the Notes and theGuarantees—Fraudulent conveyance laws and other limitations on the enforceability and the amount ofthe Guarantees may adversely affect the validity and enforceability of the Guarantees.’’

The Guarantee provided by the Company (the ‘‘Parent Guarantee’’ and together with theSubsidiary Note Guarantees, the ‘‘Note Guarantees’’) and the Subsidiary Note Guarantee of aSubsidiary Guarantor will terminate upon:

(1) in the case of a Subsidiary Note Guarantee only, a sale or other disposition (including byway of consolidation or merger) of the relevant Guarantor or the sale or disposition of all orsubstantially all the assets of the relevant Guarantor (other than to the Company or aRestricted Subsidiary) in a transaction otherwise permitted by the Indenture;

(2) in the case of a Subsidiary Note Guarantee only, the designation in accordance with theIndenture of the relevant Guarantor as an Unrestricted Subsidiary;

(3) defeasance or discharge of the Notes, as provided in ‘‘—Defeasance’’ and ‘‘—Satisfactionand Discharge’’;

(4) in the case of a Subsidiary Note Guarantee only, to the extent that the relevant Guarantor isnot an Immaterial Subsidiary solely due to the operation of clause (i) of the definitions of‘‘Immaterial Subsidiary’’; upon the release of the guarantee referred to in such clause;

(5) upon full payment of all obligations of the Issuer and the Guarantors under the Indentureand the Notes; or

(6) in connection with certain enforcement actions taken by the creditors under certain of oursecured Indebtedness as provided under the Intercreditor Agreement;

Substantially all the operations of the Company are conducted through its Subsidiaries and jointventures. Certain Subsidiaries and all joint ventures have not guaranteed the Notes. Claims of creditorsof non-guarantor Subsidiaries, including trade creditors, secured creditors and creditors holding debt

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and guarantees issued by those Subsidiaries, and claims of preferred and minority stockholders (if any)of those Subsidiaries and claims against joint ventures generally will have priority with respect to theassets and earnings of those Subsidiaries and joint ventures over the claims of creditors of theCompany, including holders of the Notes. The Notes and each Note Guarantee therefore will beeffectively subordinated to creditors (including trade creditors) and preferred and minority stockholders(if any) of Subsidiaries of the Company (other than the Guarantors) and joint ventures. As ofDecember 31, 2010, the total liabilities of the Company’s non-guarantor Subsidiaries would have beenapproximately £0.4 million of total third-party indebtedness and finance leases. Although the Indenturelimits the incurrence of Indebtedness, Disqualified Stock and Preferred Stock of Restricted Subsidiaries,the limitation is subject to a number of significant exceptions. Moreover, the Indenture does notimpose any limitation on the incurrence by Restricted Subsidiaries of liabilities that are not consideredIndebtedness, Disqualified Stock or Preferred Stock under the Indenture. See ‘‘—Certain Covenants—Limitation on Indebtedness.’’

Security

The Collateral

Pursuant to various Security Documents, the Issuer and each Guarantor has granted or will grantto The Bank of New York Mellon, as Security Agent, liens and security interests in all of the following(collectively, the ‘‘Collateral’’), subject to the operation of the Agreed Security Principles and the grantof further Permitted Collateral Liens:

(a) all of the shares of capital stock of the Issuer and each Guarantor;

(b) all material bank accounts of each Guarantor and the Issuer;

(c) in the United Kingdom, all material assets of the Issuer and the Guarantors other thanthose which are subject to the ‘‘call option’’ under the Propco Financing;

(d) the rights of the Issuer and Guarantors under intercompany receivables, including thefunding loan;

(e) all proceeds and products of the property and assets described in clauses (a), (b), (c) and(d) above.

Notwithstanding the foregoing, certain assets may not be pledged (or the Liens not perfected) inaccordance with the Agreed Security Principles, including:

• if the cost of providing security is not proportionate to the benefit accruing to the holders;

• if providing such security requires consent of a third party and such consent cannot be obtainedafter the use of commercially reasonable efforts; and

• if providing such security would be prohibited by applicable law, general statutory limitations,financial assistance, corporate benefit, fraudulent preference, ‘‘thin capitalization’’ rules orsimilar matters or providing security would be outside the applicable pledgor’s capacity orconflict with fiduciary duties of directors or cause material risk of personal or criminal liabilityafter using commercially reasonable efforts to overcome such obstacles;

• if providing such security would have a material adverse effect (as reasonably determined ingood faith by such Subsidiary) on the ability of such Subsidiary to conduct its operations andbusiness in the ordinary course as otherwise permitted by the Indenture; and

• if providing such security or perfecting liens thereon would require giving notice in the case ofbank accounts, to the banks with whom the accounts are maintained. Such notice will only beprovided after the Notes are accelerated.

Certain of the Liens on the Collateral may not be in place and/or may not be perfected on theIssue Date. See ‘‘Risk Factors—Risks related to the Notes and the Guarantees—Security over certaincollateral will not be in place on the Issue Date or will not be perfected on the Issue Date, and we willnot be required to perfect security interests in some instances.’’ Subject to the Agreed SecurityPrinciples, if material property is acquired by the Issuer or a Guarantor that is not automaticallysubject to a perfected security interest under the Security Documents and is of the same category asthat referred to above, then the Issuer or the relevant Guarantor will within 30 days provide security

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over this property in favor of the Security Agent and deliver certain certificates and opinions in respectthereof as specified in the Indenture.

Administration of Security and Enforcement of Liens

The Security Documents and the Collateral will be administered by a Security Agent (or incertain circumstances a sub-agent) pursuant to Intercreditor Agreement for the benefit of all holders ofsecured obligations. For a description of the Intercreditor Agreement, see ‘‘Description of OtherIndebtedness—Intercreditor Agreement.’’

The ability of holders of the Notes to realize upon the Collateral will be subject to variousbankruptcy law limitations in the event of the Company’s bankruptcy and various limitations onenforcement contained in the Intercreditor Agreement. See ‘‘Risk Factors—Risks related to the Notesand the Guarantees—In the event of our bankruptcy, the ability of the holders of Notes to realize uponthe collateral will be subject to certain bankruptcy law limitations,’’ and ‘‘Risk Factors—Risks related tothe Notes and the Guarantees—Fraudulent conveyance laws and other limitations on the enforceabilityand the amount of the Guarantees may adversely affect the validity and enforceability of theGuarantees.’’

The Security Documents will provide that the rights of the holders of the Notes with respect tothe Collateral must be exercised by the Security Agent. Since the holders of the Notes are not a partyto the Security Documents, holders may not, individually or collectively, take any direct action toenforce any rights in their favor under the Security Documents. The holders may only act through theTrustee or the Security Agent, as applicable. The Security Agent will agree to any release of thesecurity interest created by the Security Documents as directed by the Trustee that is in accordancewith the Indenture without requiring any consent of the holders of the Notes. Subject to the terms ofthe Intercreditor Agreement, the holders of the Notes will, in certain circumstances, share in the abilityto direct the Trustee to direct Security Agent to commence enforcement action under the SecurityDocuments. However, in enforcing the Liens provided for under the Security Documents, the SecurityAgent will take direction from the Trustee. Please see ‘‘Description of Other Indebtedness—Intercreditor Agreement.’’

Subject to the terms of the Security Documents, the Issuer and the Guarantors will have the rightto remain in possession and retain exclusive control of the Collateral securing the Notes (other than asset forth in the Security Documents), to freely operate the Collateral and to collect, invest and disposeof any income therefrom.

No appraisals of any of the Collateral have been prepared by or on behalf of the Company inconnection with the issuance of the Notes. There can be no assurance that the proceeds from the saleof the Collateral remaining after the payment of obligations under the Senior Facilities Agreement orother super priority debt would be sufficient to satisfy the obligations owed to the holders of the Notesas well as any other obligations secured on a pari passu basis. By its nature, some or all of theCollateral will be illiquid and may have no readily ascertainable market value. Accordingly, there canbe no assurance that the Collateral can be sold in a short period of time or at all.

The creditors under the Senior Facilities Agreement and the Trustee for the Notes have, and byaccepting a Note, each Holder will be deemed to have:

• irrevocably appointed The Bank of New York Mellon, as Security Agent, in each case to act asits agent under the Intercreditor Agreement and the other relevant documents to which it is aparty (including, without limitation, the Security Documents); and

• irrevocably authorized the Security Agent to (i) perform the duties and exercise the rights,powers and discretions that are specifically given to it under the Intercreditor Agreement orother documents to which it is a party, together with any other incidental rights, power anddiscretions; and (ii) execute each document expressed to be executed by the Security Agent onits behalf.

Release of Liens

The Liens on the Collateral securing the Notes will be released:

(1) upon payment in full of principal, interest and all other Obligations on the Notes issuedunder the Indenture or discharge or defeasance thereof;

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(2) upon release of a Note Guarantee (with respect to the Liens securing such Note Guaranteegranted by such Guarantor); and

(3) in connection with any disposition of Collateral to any Person other than the Company orany of its Restricted Subsidiaries, or to a Guarantor; provided that if the Collateral isdisposed to a Guarantor, the relevant Collateral becomes immediately subject to asubstantially equivalent Lien in favor of the Security Agent securing the Notes (butexcluding any transaction subject to ‘‘—Certain Covenants—Merger and Consolidation—TheCompany and the Issuer’’); provided, further, that, in each case, such disposition is permittedby the Indenture (with respect to the Lien on such Collateral);

(4) if the Company designates any Subsidiary Guarantor to be an Unrestricted Subsidiary inaccordance with the applicable provisions of the Indenture, the release of the property,assets and Capital Stock of such Unrestricted Subsidiary; and

(5) in connection with certain enforcement actions taken by the creditors under certain of oursecured Indebtedness as provided under the Intercreditor Agreement.

Each of these releases shall be effected by the Security Agent without the consent of the Holdersor any action on the part of the Trustee.

Amendments to the Intercreditor Agreement and Additional Intercreditor Agreements

The Indenture will provide that, at the request of the Issuer, in connection with the Incurrence orrefinancing by the Company or its Restricted Subsidiaries of any Indebtedness secured or permitted tobe secured on the Collateral, the Issuer, the relevant Restricted Subsidiaries, the Trustee and theSecurity Agent shall enter into an intercreditor or similar agreement or a restatement, amendment orother modification of the existing Intercreditor Agreement (an ‘‘Additional Intercreditor Agreement’’)with the holders of such Indebtedness (or their duly authorized representatives) on substantially thesame terms as the Intercreditor Agreement (or on terms not materially less favorable to the Holders),including containing substantially the same terms with respect to the application of the proceeds of thecollateral held thereunder and the means of enforcement; provided that such Additional IntercreditorAgreement will not impose any personal obligations on the Trustee or, in the opinion of the Trustee,adversely affect the rights, duties, liabilities or immunities of the Trustee under the Indenture or theIntercreditor Agreement. As used herein, the term ‘‘Intercreditor Agreement’’ shall include references toany Additional Intercreditor Agreement that supplements or replaces the Intercreditor Agreemententered into on or prior to the Issue Date.

The Indenture will provide that, at the written direction of the Issuer and without the consent ofHolders, the Trustee shall from time to time enter into one or more amendments to any IntercreditorAgreement to: (i) cure any ambiguity, omission, defect or inconsistency of any such agreement,(ii) increase the amount or types of Indebtedness covered by any such agreement that may be Incurredby the Issuer that is subject to any such agreement (provided that such Indebtedness is Incurred incompliance with the Indenture), (iii) add Restricted Subsidiaries to the Intercreditor Agreement,(iv) further secure the Notes (including Additional Notes incurred in compliance with the Indenture),(v) make provision for equal and ratable pledges of the Collateral to secure Additional Notes incurredin compliance with the Indenture or to implement any Permitted Collateral Liens or (vi) make anyother change to any such agreement that does not adversely affect the Holders of Notes in any materialrespect. The Issuer shall not otherwise direct the Trustee to enter into any amendment to anyIntercreditor Agreement without the consent of the Holders of a majority in aggregate principalamount of the Notes then outstanding, except as otherwise permitted below under ‘‘—Amendmentsand Waivers’’ or as permitted by the terms of such Intercreditor Agreement, and the Issuer may onlydirect the Trustee to enter into any amendment to the extent such amendment does not impose anypersonal obligations on the Trustee or, in the opinion of the Trustee, adversely affect the rights, duties,liabilities or immunities of the Trustee under the Indenture relating to the Notes or any IntercreditorAgreement.

The Indenture will provide that each Holder, by accepting a Note, shall be deemed to haveagreed to and accepted the terms and conditions of any Intercreditor Agreement (whether then enteredinto or entered into in the future pursuant to the provisions described herein).

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Optional Redemption

Except as set forth in the next three paragraphs and under ‘‘—Redemption for Taxation Reasons,’’the Notes are not redeemable at the option of the Issuer.

At any time and from time to time on or after August 1, 2014 the Issuer may redeem the SterlingNotes, in whole or in part, at its option, upon not less than 10 nor more than 60 days’ prior notice at aredemption price equal to the applicable percentage of principal amount set forth below plus accruedand unpaid interest to the redemption date (subject to the right of Holders of record on the relevantrecord date to receive interest due on the relevant interest payment date).

Period commencing Percentage

August 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.750%August 1, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.500%August 1, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.250%August 1, 2017 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.000%

At any time and from time to time on or after August 1, 2012 the Issuer may redeem the EuroNotes, in whole or in part, at its option, upon not less than 10 nor more than 60 days’ prior notice at aredemption price equal to the applicable percentage of principal amount set forth below plus accruedand unpaid interest to the redemption date (subject to the right of Holders of record on the relevantrecord date to receive interest due on the relevant interest payment date).

Period commencing Percentage

August 1, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.000%August 1, 2013 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.000%

At any time and from time to time prior to August 1, 2014 the Issuer may redeem Sterling Noteswith the net cash proceeds received by the Company from any Equity Offering, upon not less than 10nor more than 60 days’ prior notice at a redemption price equal to 109.0% plus accrued and unpaidinterest to the redemption date (subject to the right of Holders of record on the relevant record dateto receive interest due on the relevant interest payment date), in an aggregate principal amount for allsuch redemptions not to exceed 40% of the original aggregate principal amount of the Sterling Notes(including Additional Notes); provided that:

(1) in each case the redemption takes place not later than 120 days after the closing of therelated Equity Offering, and

(2) not less than 60% of the original aggregate principal amount of the Sterling Notes initiallyissued remains outstanding immediately thereafter.

At any time prior to August 1, 2014 the Issuer may redeem the Sterling Notes in whole or in part,at its option, upon not less than 10 nor more than 60 days’ prior notice at a redemption price equal to100% of the principal amount of such Sterling Notes plus the relevant Applicable Premium as of, andaccrued and unpaid interest and Additional Amounts, if any, to the redemption date (subject to theright of Holders of record on the relevant record date to receive interest due on the relevant interestpayment date).

Notice of redemption will be provided as set forth under ‘‘—Selection and Notice’’ below. If theIssuer effects an optional redemption of Notes of a series, it will, for so long as the Notes are listed onthe Euro MTF, inform the Euro MTF of such optional redemption and confirm the aggregate principalamount of the Notes of that series that will remain outstanding immediately after such redemption.

Any redemption and notice of redemption may, at the Issuer’s discretion, be subject to thesatisfaction of one or more conditions precedent (including, in the case of a redemption related to anEquity Offering, the consummation of such Equity Offering).

If the optional redemption date is on or after an interest record date and on or before the relatedinterest payment date, the accrued and unpaid interest will be paid to the Person in whose name theNote is registered at the close of business on such record date, and no additional interest will bepayable to Holders whose Notes will be subject to redemption by the Issuer.

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Sinking Fund

The Issuer is not required to make mandatory redemption payments or sinking fund paymentswith respect to the Notes.

Selection and Notice

If less than all of the Notes are to be redeemed at any time, the Trustee will select the Notes forredemption in compliance with the requirements of the principal securities exchange, if any, on whichthe Notes are listed, as certified to the Trustee by the Issuer, and in compliance with the requirementsof Euroclear and/or Clearstream, or if the Notes are not so listed or such exchange prescribes nomethod of selection and the Notes are not held through Euroclear and/or Clearstream or Euroclearand/or Clearstream prescribes no method of selection, on a pro rata basis; provided, however, that (i) noSterling Note of £100,000 in aggregate principal amount or less shall be redeemed in part and (ii) noEuro Note of A100,000 in aggregate principal amount or less shall be redeemed in part.

For so long as the Notes are listed on the Euro MTF and the rules of the Euro MTF so require,the Issuer shall publish notice of redemption on the official website of the Luxembourg Stock Exchangeor in a daily newspaper with general circulation in Luxembourg (which is expected to be theLuxembourger Wort) and in addition to such publication, not less than 30 nor more than 60 days priorto the redemption date, mail such notice to Holders by first-class mail, postage prepaid, at theirrespective addresses as they appear on the registration books of the Registrar. The Trustee shall not beliable for selections made by it under this paragraph.

If any Note is to be redeemed in part only, the notice of redemption that relates to that Noteshall state the portion of the principal amount thereof to be redeemed, in which case a portion of theoriginal Note will be issued in the name of the Holder thereof upon cancellation of the original Note.In the case of a Global Note, an appropriate notation will be made on such Note to decrease theprincipal amount thereof to an amount equal to the unredeemed portion thereof. Subject to the termsof the applicable redemption notice (including any conditions contained therein), Notes called forredemption become due on the date fixed for redemption. On and after the redemption date, interestceases to accrue on Notes or portions of them called for redemption.

Redemption for Taxation Reasons

The Issuer or Successor Company, as defined below, may redeem the Notes in whole, but not inpart, at any time upon giving not less than 30 nor more than 60 days’ notice to the Holders of theNotes (which notice will be irrevocable) at a redemption price equal to 100% of the principal amountthereof, together with accrued and unpaid interest, if any, to the date fixed for redemption (a ‘‘TaxRedemption Date’’) (subject to the right of Holders of record on the relevant record date to receiveinterest due on the relevant interest payment date) and all Additional Amounts (see ‘‘—WithholdingTaxes’’), if any, then due and which will become due on the Tax Redemption Date as a result of theredemption or otherwise, if any, if as a result of:

(1) any change in, or amendment to, the law (or any regulations or rulings promulgatedthereunder) of a Relevant Taxing Jurisdiction (as defined below under ‘‘—AdditionalAmounts’’) affecting taxation; or

(2) any change in, or amendment to, an official position regarding the application,administration or interpretation of such laws, regulations or rulings (including pursuant to aholding, judgment or order by a court of competent jurisdiction) of a Relevant TaxingJurisdiction (each of the foregoing in clauses (1) and (2), a ‘‘Change in Tax Law’’);

the Issuer, Successor Company or Guarantor are, or on the next interest payment date in respect of theNotes would be, required to pay any Additional Amounts, and such obligation cannot be avoided bytaking reasonable measures available to the Issuer, Successor Company or Guarantor (including, for theavoidance of doubt, the appointment of a new Paying Agent where this would be reasonable and, inthe case of a payment by a Guarantor, having the Issuer or another Guarantor make the payment, butnot including assignment of the obligation to make payment with respect to the Notes). In the case ofredemption due to withholding as a result of a Change in Tax Law in a jurisdiction that is a RelevantTaxing Jurisdiction at the date of this offering memorandum, such Change in Tax Law must becomeeffective on or after the date of this offering memorandum. In the case of redemption due towithholding as a result of a Change in Tax Law in a jurisdiction that becomes a Relevant Taxing

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Jurisdiction after the date of this offering memorandum, such Change in Tax Law must becomeeffective on or after the date the jurisdiction becomes a Relevant Taxing Jurisdiction. Notice ofredemption for taxation reasons will be published in accordance with the procedures described under‘‘—Selection and Notice.’’ Notwithstanding the foregoing, no such notice of redemption will be given(a) earlier than 90 days prior to the earliest date on which the Payor would be obliged to make suchpayment of Additional Amounts and (b) unless at the time such notice is given, such obligation to paysuch Additional Amounts remains in effect. Prior to the publication or mailing of any notice ofredemption of the Notes pursuant to the foregoing, the Issuer or Successor Company will deliver to theTrustee (a) an Officer’s Certificate stating that it is entitled to effect such redemption and setting fortha statement of facts showing that the conditions precedent to its right so to redeem have been satisfiedand that it would not be able to avoid the obligation to pay Additional Amounts by taking reasonablemeasures available to it and (b) an opinion of an independent tax counsel of recognized standing to theeffect that the Issuer, Successor Company or Guarantor has or have been or will become obligated topay Additional Amounts as a result of a Change in Tax Law. The Trustee will accept such Officer’sCertificate and opinion as sufficient evidence of the satisfaction of the conditions precedent describedabove, without further inquiry, in which event it will be conclusive and binding on the Holders.

Additional Amounts

All payments made by the Issuer, a Successor Company or Guarantor (a ‘‘Payor’’) on the Notes orthe Note Guarantees, as defined below, will be made free and clear of and without withholding ordeduction for, or on account of, any Taxes unless the withholding or deduction of such Taxes is thenrequired by law. If any deduction or withholding for, or on account of, any Taxes imposed or levied byor on behalf of:

(1) the United Kingdom or any political subdivision or Governmental Authority thereof ortherein having power to tax;

(2) any jurisdiction from or through which payment on any such Note or Note Guarantee ismade by the Issuer, Successor Company, Guarantor or their agents, or any politicalsubdivision or Governmental Authority thereof or therein having the power to tax; or

(3) any other jurisdiction in which the Payor is incorporated or organized, engaged in businessfor tax purposes, resident for tax purposes, or any political subdivision or GovernmentalAuthority thereof or therein having the power to tax (each of clause (1), (2) and (3), a‘‘Relevant Taxing Jurisdiction’’),

will at any time be required from any payments made with respect to any Note or Note Guarantee,including payments of principal, redemption price, premium, if any, or interest, the Payor will pay(together with such payments) such additional amounts (the ‘‘Additional Amounts’’) as may benecessary in order that the net amounts received in respect of such payments by the Holders or theTrustee, as the case may be, after such withholding or deduction (including any such deduction orwithholding from such Additional Amounts), will not be less than the amounts which would have beenreceived in respect of such payments on any such Note or Guarantee in the absence of suchwithholding or deduction; provided, however, that no such Additional Amounts will be payable for or onaccount of:

(1) any Taxes that would not have been so imposed but for the existence of any present orformer connection between the relevant Holder (or between a fiduciary, settlor, beneficiary,member or shareholder of, or possessor of power over the relevant Holder, if the relevantHolder is an estate, nominee, trust, partnership, limited liability company or corporation)and the Relevant Taxing Jurisdiction (including being a citizen or resident or national of, orcarrying on a business or maintaining a permanent establishment in, the Relevant TaxingJurisdiction) but excluding, in each case, any connection arising solely from the acquisition,ownership or holding of such Note or enforcement of rights hereunder or under a NoteGuarantee or the receipt of any payment in respect thereof;

(2) any Taxes that are imposed or withheld by reason of the failure by the Holder or thebeneficial owner of the Note to comply with a written request of the Payor addressed to theHolder, after reasonable notice, to provide certification, information, documents or otherevidence concerning the nationality, residence or identity of the Holder or such beneficialowners or to make any declaration or similar claim or satisfy any other reporting

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requirement relating to such matters, required by a statute, regulation, treaty oradministrative practice of the Relevant Taxing Jurisdiction as a precondition to exemptionfrom all or part of such Tax provided in each case the holder or beneficial owner is legallyeligible to do so;

(3) any Taxes that are payable otherwise than by deduction or withholding from a payment withrespect to the Notes or any Note Guarantee;

(4) any estate, inheritance, gift, sales, transfer, personal property or similar Tax;

(5) any Taxes that are required to be deducted or withheld on a payment to an individual andthat are required to be made pursuant to the European Council Directive 2003/48/EC or anyother directive implementing the conclusions of the ECOFIN Council meeting of26-27 November 2000 or any law implementing or complying with, or introduced in order toconform to such directive;

(6) except in the case of the liquidation, dissolution or winding-up of the Payor, any Taxesimposed in connection with a Note presented for payment (where presentation is permittedor required for payment) by or on behalf of a Holder or beneficial owner who would havebeen able to avoid such Tax by presenting the relevant Note to, or otherwise acceptingpayment from, another Paying Agent in a member state of the European Union; or

(7) any combination of the above.

Such Additional Amounts will also not be payable (x) to the extent the payment could have beenmade without such deduction or withholding if the beneficiary of the payment had presented the Notefor payment (where presentation is permitted or required for payment) within 30 days after therelevant payment was first made available for payment to the Holder, except for Additional Amountswith respect to Taxes that would have been imposed had the Holder presented the Note for paymentwithin such 30-day period or (y) where, had the beneficial owner of the Note been the Holder, exceptfor Additional Amounts with respect to Taxes that would have been imposed had the Holder presentedthe Note for payment within such 30-day period, such beneficial owner would not have been entitled topayment of Additional Amounts by reason of any of clauses (1) to (7) inclusive above but only if thereis no material cost or legal restriction associated with transferring the Note to such beneficial owner.

The Payor will (i) make any required withholding or deduction and (ii) remit the full amountdeducted or withheld to the Relevant Taxing Jurisdiction in accordance with applicable law. The Payorwill use all reasonable efforts to obtain certified copies of tax receipts evidencing the payment of anyTaxes so deducted or withheld from each Relevant Taxing Jurisdiction imposing such Taxes, in suchform as provided in the ordinary course by the Relevant Taxing Jurisdiction and as is reasonablyavailable to the Company, and will provide such certified copies to the Trustee. Such copies shall bemade available to the Holders upon request and will be made available at the offices of theLuxembourg Paying Agent if the Notes are then listed on the Euro MTF. The Payor will attach to eachcertified copy a certificate stating (x) that the amount of withholding Taxes evidenced by the certifiedcopy was paid in connection with payments in respect of the principal amount of Notes thenoutstanding and (y) the amount of such withholding Taxes paid per £1,000 principal amount of theSterling Notes or per A1,000 principal amount of the Euro Notes.

If any Payor will be obligated to pay Additional Amounts under or with respect to any paymentmade on any Note or Guarantee, at least 30 days prior to the date of such payment, the Payor willdeliver to the Trustee an Officer’s Certificate stating the fact that Additional Amounts will be payableand the amount so payable and such other information necessary to enable the Paying Agent to payAdditional Amounts to Holders on the relevant payment date (unless such obligation to pay AdditionalAmounts arises less than 45 days prior to the relevant payment date, in which case the Payor maydeliver such Officer’s Certificate as promptly as practicable after the date that is 30 days prior to thepayment date).

Wherever in the Indenture, the Note Guarantees or this ‘‘Description of the Notes’’ there arementioned, in any context:

(1) the payment of principal;

(2) purchase or redemption prices in connection with a purchase or redemption of Notes;

(3) interest; or

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(4) any other amount payable on or with respect to any of the Notes,

such reference shall be deemed to include payment of Additional Amounts as described under thisheading to the extent that, in such context, Additional Amounts are, were or would be payable inrespect thereof.

The Payor will pay any present or future stamp, court or documentary Taxes, or any other excise,property or similar Taxes that arise in any jurisdiction from the execution, delivery, registration orenforcement of any Notes, the Indenture, the Security Documents or any other document orinstrument in relation thereto (other than a transfer of the Notes) excluding any such taxes, charges orsimilar levies imposed by any jurisdiction that is not a Relevant Taxing Jurisdiction, and the Payoragrees to indemnify the Holders for any such taxes paid by such Holders.

The foregoing obligations of this ‘‘Additional Amounts’’ section will survive any termination,defeasance or discharge of the Indenture and will apply mutatis mutandis to any jurisdiction in whichany successor to the Issuer or any Guarantor is organized or any political subdivision or taxingauthority or agency thereof or therein.

Change of Control

If a Change of Control occurs, subject to the terms hereof, each Holder will have the right torequire the Issuer to repurchase all or part (equal to £100,000 or an integral multiple of £1,000 inexcess thereof with respect to the Sterling Notes or A100,000 principal amount and integral multiples ofA1,000 in excess thereof with respect to the Euro Notes) of such Holder’s Notes at a purchase price incash equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the dateof purchase (subject to the right of Holders of record on the relevant record date to receive interestdue on the relevant interest payment date); provided, however, that the Issuer shall not be obliged torepurchase Notes as described under this ‘‘—Change of Control’’ section in the event and to the extentthat it has unconditionally exercised its right to redeem all of the Notes as described under ‘‘—OptionalRedemption’’ or all conditions to such redemption have been satisfied or waived.

Unless the Issuer has unconditionally exercised its right to redeem all the Notes as describedunder ‘‘—Optional Redemption’’ or all conditions to such redemption have been satisfied or waived, nolater than the date that is 60 days after any Change of Control, the Issuer will mail a notice (the‘‘Change of Control Offer’’) to each Holder of any such Notes, with a copy to the Trustee:

(1) stating that a Change of Control has occurred or may occur and that such Holder has theright to require the Issuer to purchase such Holder’s Notes at a purchase price in cash equalto 101% of the principal amount of such Notes plus accrued and unpaid interest to, but notincluding, the date of purchase (subject to the right of Holders of record on a record date toreceive interest on the relevant interest payment date) (the ‘‘Change of Control Payment’’);

(2) stating the repurchase date (which shall be no earlier than 30 days nor later than 60 daysfrom the date such notice is mailed) (the ‘‘Change of Control Payment Date’’) and recorddate;

(3) describing the circumstances and relevant facts regarding the transaction or transactions thatconstitute the Change of Control;

(4) stating that any Note accepted for payment pursuant to the Change of Control Offer willcease to accrue interest after the Change of Control Payment Date unless the Change ofControl Payment is not paid, and that any Note or part thereof not tendered will continueto accrue interest;

(4) describing the procedures determined by the Issuer, consistent with the Indenture, that aHolder must follow in order to have its Notes repurchased; and

(5) if such notice is mailed prior to the occurrence of a Change of Control, stating that theChange of Control Offer is conditional on the occurrence of such Change of Control.

On the Change of Control Payment Date, if the Change of Control shall have occurred, theIssuer will, to the extent lawful:

(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Changeof Control Offer;

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(2) deposit with the Paying Agent an amount equal to the Change of Control Payment inrespect of all Notes so tendered; and

(3) deliver or cause to be delivered to the Trustee an Officer’s Certificate stating the Notes orportions thereof being purchased by the Issuer in the Change of Control Offer;

(4) in the case of Global Notes, deliver, or cause to be delivered, to the principal Paying Agentthe Global Notes in order to reflect thereon the portion of such Notes or portions thereofthat have been tendered to and purchased by the Issuer; and

(5) in the case of Definitive Registered Notes, deliver, or cause to be delivered, to the relevantRegistrar for cancellation all Definitive Registered Notes accepted for purchase by theIssuer.

If any Definitive Registered Notes have been issued, the Paying Agent will promptly mail to eachHolder of Definitive Registered Notes so tendered the Change of Control Payment for such Notes, andthe Trustee or an authentication agent appointed by the Trustee will promptly authenticate and mail (orcause to be transferred by book entry) to each Holder of Definitive Registered Notes a new Note equalin principal amount to the unpurchased portion of the Notes surrendered, if any; provided that (i) eachsuch new Sterling Note will be in a principal amount that is at least £100,000 or an integral multiple of£1,000 in excess thereof and (ii) each such new Euro Note will be in a principal amount that is at leastA100,000 or an integral multiple of A1,000 in excess thereof.

Notwithstanding anything to the contrary herein, a Change of Control Offer may be made inadvance of a Change of Control, conditional upon such Change of Control; provided that the purchasedate will be no earlier than 30 days from the date a notice of such Change of Control Offer is mailed.

The Change of Control provisions described above will be applicable whether or not any otherprovisions of the Indenture are applicable. Except as described above with respect to a Change ofControl, the Indenture does not contain provisions that permit the Holders to require that the Issuerrepurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction. Theexistence of a Holder’s right to require the Issuer to repurchase such Holder’s Notes upon theoccurrence of a Change of Control may deter a third party from seeking to acquire the Company or itsSubsidiaries in a transaction that would constitute a Change of Control. In addition, the definitions of‘‘Change of Control’’ and ‘‘Permitted Transferee’’ expressly permit a third party to obtain control of theCompany in a transaction consummated within 183 days of the Issue Date; provided certain conditionsare met.

The Issuer will not be required to make a Change of Control Offer upon a Change of Control ifa third party makes the Change of Control Offer in the manner, at the times and otherwise incompliance with the requirements set forth in the Indenture applicable to a Change of Control Offermade by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change ofControl Offer.

The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of theExchange Act and any other securities laws or regulations (or rules of any exchange on which theNotes are then listed) in connection with the repurchase of Notes pursuant to this covenant. To theextent that the provisions of any securities laws or regulations (or exchange rules) conflict withprovisions of the Indenture, the Issuer will comply with the applicable securities laws and regulations(or exchange rules) and will not be deemed to have breached its obligations under the Change ofControl provisions of the Indenture by virtue of the conflict.

The Senior Facilities Agreement provides that the occurrence of a Change of Control wouldrequire an offer for the repayment of such debt. Future debt of the Company or of the Issuer mayprohibit the issuer from purchasing Notes in the event of a Change of Control or provide that aChange of Control is a default or requires repurchase upon a Change of Control. Moreover, theexercise by the Holders of their right to require the Issuer to purchase the Notes could cause a defaultunder other debt, even if the Change of Control itself does not, due to the financial effect of thepurchase on the Company or the Issuer.

Finally, the Issuer’s ability to pay cash to the Holders following the occurrence of a Change ofControl may be limited by the Issuer’s and the Company’s then existing financial resources. There canbe no assurance that sufficient funds will be available when necessary to make the required purchase ofthe Notes. See ‘‘Risk Factors—Risks related to the Notes and the Guarantees—The Issuer may not

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have the ability to raise the funds necessary to finance an offer to repurchase Notes upon theoccurrence of certain events constituting a change of control as required by the Indenture, and thechange of control provisions may not protect you against certain events or transactions.’’

Holders of the Notes may not be entitled to require the Issuer to purchase their Notes in certaincircumstances involving a significant change in the composition of the Company’s board of directors,including in connection with a proxy contest, where the Company’s board of directors initially publiclyopposes the election of a dissident slate of directors, but subsequently approves such directors for thepurposes of the Indenture governing the Notes. This may result in a change in the composition of theboard of directors that, but for such subsequent approval, would have otherwise constituted a Changeof Control requiring a repurchase offer under the terms of the Indenture governing the Notes.

The definition of ‘‘Change of Control’’ includes a disposition of all or substantially all of theproperty and assets of the Company and its Restricted Subsidiaries taken as a whole to specified otherPersons. There is no precise established definition of the phrase ‘‘substantially all’’ under applicablelaw. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether aparticular transaction would involve a disposition of ‘‘all or substantially all’’ of the property or assetsof a Person. As a result, it may be unclear as to whether a Change of Control has occurred andwhether a Holder may require the Company to make an offer to repurchase the Notes as describedabove. In addition, the definitions of ‘‘Change of Control’’ and ‘‘Permitted Transferee’’ expressly permita third party to obtain control of the Company in a transaction consummated within 183 days of theIssue Date (provided certain conditions are met) without any obligation to make a Change of ControlOffer.

The provisions of the Indenture relating to the Company’s obligation to make an offer torepurchase the Notes as a result of a Change of Control may be waived or modified with the writtenconsent of holders of a majority in outstanding principal amount of the Notes.

Certain Covenants

Limitation on Indebtedness

The Company will not, and will not permit any of its Restricted Subsidiaries to, Incur anyIndebtedness (including Acquired Indebtedness); provided, however, that the Company and any of theGuarantors may Incur Indebtedness if on the date of such Incurrence and after giving pro forma effectthereto (including pro forma application of the proceeds thereof), the Fixed Charge Coverage Ratio forthe Company and its Restricted Subsidiaries is greater than 2.00 to 1.0.

The first paragraph of this covenant will not prohibit the Incurrence of the followingIndebtedness:

(1) Indebtedness Incurred pursuant to any Credit Facility (including letters of credit or bankers’acceptances issued or created under any Credit Facility), and any Refinancing Indebtednessin respect thereof and Guarantees in respect of such Indebtedness in a maximum aggregateprincipal amount at any time outstanding not exceeding (i) the greater of (x) £90 millionand (y) 100% of Consolidated EBITDA determined on a pro forma basis (including proforma application of the proceeds thereof) the most recently ended four quarter period forwhich financial statements are available, plus (ii) in the case of any refinancing of anyIndebtedness permitted under this clause (1) or any portion thereof, the aggregate amountof fees, underwriting discounts, premiums and other costs and expenses Incurred inconnection with such refinancing;

(2) (a) Guarantees by the Company or any Restricted Subsidiary of Indebtedness of theCompany or any Restricted Subsidiary in each case so long as the Incurrence of suchIndebtedness is permitted under the terms of the Indenture; or

(b) without limiting the covenant described under ‘‘—Certain Covenants—Limitation onLiens,’’ Indebtedness arising by reason of any Lien granted by or applicable to suchPerson securing Indebtedness of the Company or any Restricted Subsidiary so long asthe Incurrence of such Indebtedness is permitted under the terms of the Indenture;

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(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary orIndebtedness of a Restricted Subsidiary owing to and held by the Company or anyRestricted Subsidiary; provided, however, that:

(a) if the Issuer or any Guarantor is the obligor on any such Indebtedness and the obligeeis not a Guarantor or the Issuer, it is either a Working Capital Intercompany Loan orunsecured and expressly subordinated in right of payment to the Notes; and

(b) any subsequent issuance or transfer of Capital Stock or any other event which resultsin any such Indebtedness being beneficially held by a Person other than the Companyor a Restricted Subsidiary of the Company, and any sale or other transfer of any suchIndebtedness to a Person other than the Company or a Restricted Subsidiary of theCompany, shall be deemed, in each case, to constitute an Incurrence of suchIndebtedness not permitted by this clause (3) by the Company or such RestrictedSubsidiary, as the case may be;

(4) Indebtedness represented by (a) the Notes (other than any Additional Notes), (b) anyIndebtedness (other than Indebtedness described in clauses (1), (3), (7) or (13)) outstandingon the Issue Date, (c) Refinancing Indebtedness Incurred in respect of any Indebtednessdescribed in this clause (4) or clauses (5), (7), or (11) of this paragraph or Incurredpursuant to the first paragraph of this covenant, (d) Management Advances and (e) any loanof the proceeds of the Notes to the Company;

(5) Indebtedness of any Person Incurred and outstanding on the date on which such Personbecomes a Restricted Subsidiary of the Company or another Restricted Subsidiary of theCompany or is merged, consolidated, amalgamated or otherwise combined with (includingpursuant to any acquisition of assets and assumption of related liabilities) the Company orany Restricted Subsidiary or Indebtedness Incurred in connection with any acquisition of aPerson that becomes a Restricted Subsidiary; provided, however, with respect to thisclause (5), that at the time of such acquisition or other transaction (x) the Company wouldhave been able to Incur £1.00 of additional Indebtedness pursuant to the first paragraph ofthis covenant after giving pro forma effect to the relevant acquisition and Incurrence of suchIndebtedness pursuant to this clause (5) or (y) the Fixed Charge Coverage Ratio for theCompany and its Restricted Subsidiaries would not be lower than it was immediately priorto giving effect to such acquisition or other transaction;

(6) Indebtedness under Currency Agreements, Interest Rate Agreements and CommodityHedging Agreements entered into for bona fide hedging purposes of the Company or itsRestricted Subsidiaries and not for speculative purposes (as determined in good faith by theBoard of Directors or senior management of the Company);

(7) Indebtedness represented by Capitalized Lease Obligations or Purchase Money Obligations,in each case, incurred for the purpose of financing all or any part of the purchase price,lease expense, rental payments or cost of design, construction, installation or improvementof property, plant or equipment or other assets (including Capital Stock) used in thebusiness of the Company or any of its Restricted Subsidiaries, and in each case anyRefinancing Indebtedness in respect thereof, in an aggregate outstanding principal amountwhich, when taken together with the principal amount of all other Indebtedness Incurredpursuant to this sub-clause (7) and then outstanding, will not exceed at any time outstanding£50 million, excluding any amounts incurred under Permitted Premises Leases;

(8) Indebtedness in respect of (a) workers’ compensation claims, self-insurance obligations,performance, indemnity, surety, judgment, appeal, advance payment, customs, VAT or othertax or other guarantees or other similar bonds, instruments or obligations and completionguarantees and warranties provided by the Company or a Restricted Subsidiary or relating toliabilities, obligations, indemnities or guarantees Incurred in the ordinary course of businessor for governmental or regulatory requirements, in each case not in connection with theborrowing of money, (b) letters of credit, bankers’ acceptances, guarantees or other similarinstruments or obligations issued or relating to liabilities or obligations Incurred in theordinary course of business, (c) the financing of insurance premiums in the ordinary courseof business and (d) any customary cash management, cash pooling or netting or setting offarrangements in the ordinary course of business;

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(9) Indebtedness arising from agreements providing for customary guarantees, indemnification,obligations in respect of earn-outs or other adjustments of purchase price or, in each case,similar obligations, in each case, Incurred or assumed in connection with the acquisition ordisposition of any business or assets or Person or any Capital Stock of a Subsidiary (otherthan Guarantees of Indebtedness Incurred by any Person acquiring or disposing of suchbusiness or assets or such Subsidiary for the purpose of financing such acquisition ordisposition); provided that the maximum liability of the Company and its RestrictedSubsidiaries in respect of all such Indebtedness (other than in respect of environmentalmatters) shall at no time exceed the gross proceeds, including the fair market value ofnon-cash proceeds (measured at the time received and without giving effect to anysubsequent changes in value), actually received by the Company and its RestrictedSubsidiaries in connection with such disposition;

(10) (A) Indebtedness arising from the honoring by a bank or other financial institution of acheck, draft or similar instrument drawn against insufficient funds in the ordinarycourse of business; provided, however, that such Indebtedness is extinguished within fiveBusiness Days of Incurrence;

(B) Customer deposits and advance payments received in the ordinary course of businessfrom customers for goods purchased in the ordinary course of business; and

(C) Indebtedness Incurred by a Restricted Subsidiary in connection with bankersacceptances, discounted bills of exchange or the discounting or factoring of receivablesfor credit management purposes, in each case, not in connection with the borrowing ofmoney and Incurred or undertaken in the ordinary course of business on arm’s lengthcommercial terms;

(11) Indebtedness in an aggregate outstanding principal amount which, when taken together withany Refinancing Indebtedness in respect thereof and the principal amount of all otherIndebtedness Incurred pursuant to this clause (11) and then outstanding, will not exceed£25 million;

(12) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing or aPermitted Digital Asset Financing; and

(13) Indebtedness in an aggregate outstanding principal amount which, when taken together withany Refinancing Indebtedness in respect thereof and the principal amount of all otherIndebtedness Incurred pursuant to this clause (13) and then outstanding, will not exceed100% of the Net Cash Proceeds received by the Company from the issuance or sale (otherthan to a Restricted Subsidiary) of its Subordinated Shareholder Funding or Capital Stock(other than Disqualified Stock, Designated Preference Shares or an Excluded Contribution)or otherwise contributed to the equity (other than through the issuance of DisqualifiedStock, Designated Preference Shares or an Excluded Contribution) of the Company, in eachcase, subsequent to the Issue Date; provided, however, that (i) any such Net Cash Proceedsthat are so received or contributed shall be excluded for purposes of making RestrictedPayments under the first paragraph and clauses (1), (6), (10) and (14) of the third paragraphof the covenant described below under ‘‘—Certain Covenants—Limitation on RestrictedPayments’’ to the extent the Company and its Restricted Subsidiaries incur Indebtedness inreliance thereon and (ii) any Net Cash Proceeds that are so received or contributed shall beexcluded for purposes of Incurring Indebtedness pursuant to this clause (13) to the extentthe Company or any of its Restricted Subsidiaries makes a Restricted Payment under thefirst paragraph and/or clauses (1), (6), (10) or (14) of the third paragraph of the covenantdescribed below under ‘‘—Certain Covenants—Limitation on Restricted Payments’’ inreliance thereon.

For purposes of determining compliance with, and the outstanding principal amount of anyparticular Indebtedness Incurred pursuant to and in compliance with, this covenant:

(1) in the event that Indebtedness meets the criteria of more than one of the types ofIndebtedness described in the first and second paragraphs of this covenant, the Company, inits sole discretion, will classify, and may from time to time reclassify, such item ofIndebtedness and only be required to include the amount and type of such Indebtedness inone of the clauses of the second paragraph or the first paragraph of this covenant;

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(2) Guarantees of, or obligations in respect of letters of credit, bankers’ acceptances or othersimilar instruments relating to, or Liens securing, Indebtedness that is otherwise included inthe determination of a particular amount of Indebtedness shall not be included;

(3) if obligations in respect of letters of credit, bankers’ acceptances or other similar instrumentsare Incurred pursuant to any Credit Facility and are being treated as Incurred pursuant toclause (1), (7) or (11) of the second paragraph above or the first paragraph above and theletters of credit, bankers’ acceptances or other similar instruments relate to otherIndebtedness, then such other Indebtedness shall not be included;

(4) the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary,or Preferred Stock of a Restricted Subsidiary, will be equal to the greater of the maximummandatory redemption or repurchase price (not including, in either case, any redemption orrepurchase premium) or the liquidation preference thereof;

(5) for the purposes of determining ‘‘Consolidated EBITDA’’ under clause (1)(i)(y) of the firstparagraph of this covenant, (i) pro forma effect shall be given to Consolidated EBITDA onthe same basis as for calculating the Fixed Charge Coverage Ratio and (ii) ConsolidatedEBITDA shall be measured as at the time that the Company obtains new commitments (inthe case of revolving facilities) or incurs new Indebtedness (in the case of term facilities);

(6) Indebtedness permitted by this covenant need not be permitted solely by reference to oneprovision permitting such Indebtedness but may be permitted in part by one such provisionand in part by one or more other provisions of this covenant permitting such Indebtedness;and

(7) the amount of Indebtedness issued at a price that is less than the principal amount thereofwill be equal to the amount of the liability in respect thereof determined on the basis ofGAAP.

Accrual of interest, accrual of dividends, the accretion of accreted value, the accretion oramortization of original issue discount, the payment of interest in the form of additional Indebtedness,the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock orthe reclassification of commitments or obligations not treated as Indebtedness due to a change inGAAP, including a change in GAAP to IFRS, will not be deemed to be an Incurrence of Indebtednessfor purposes of the covenant described under this ‘‘—Certain Covenants—Limitation on Indebtedness.’’The amount of any Indebtedness outstanding as of any date shall be (a) the accreted value thereof inthe case of any Indebtedness issued with original issue discount and (b) the principal amount, orliquidation preference thereof, in the case of any other Indebtedness.

If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness ofsuch Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary of the Company as of suchdate (and, if such Indebtedness is not permitted to be Incurred as of such date under the covenantdescribed under this ‘‘—Certain Covenants—Limitation on Indebtedness,’’ the Company shall be indefault of this covenant).

For purposes of determining compliance with any sterling-denominated restriction on theIncurrence of Indebtedness, the Sterling Equivalent of the principal amount of Indebtednessdenominated in another currency shall be calculated based on the relevant currency exchange rate ineffect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or, at the optionof the Company, first committed, in the case of Indebtedness Incurred under a revolving credit facility;provided that (a) if such Indebtedness is Incurred to refinance other Indebtedness denominated in acurrency other than sterling, and such refinancing would cause the applicable sterling-denominatedrestriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date ofsuch refinancing, such sterling-denominated restriction shall be deemed not to have been exceeded solong as the principal amount of such Refinancing Indebtedness does not exceed the principal amountof such Indebtedness being refinanced; (b) the Sterling Equivalent of the principal amount of any suchIndebtedness outstanding on the Issue Date shall be calculated based on the relevant currencyexchange rate in effect on the Issue Date; and (c) if and for so long as any such Indebtedness is subjectto a Currency Agreement with respect to the currency in which such Indebtedness is denominatedcovering principal and interest on such Indebtedness, the amount of such Indebtedness, if denominatedin sterling, will be the amount of the principal payment required to be made under such CurrencyAgreement and, otherwise, the Sterling Equivalent of such amount plus the Sterling Equivalent of any

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premium which is at such time due and payable but is not covered by such Currency Agreement. Forpurposes of calculating compliance with clause (1) of the second paragraph of this covenant or forcalculating the amount of Indebtedness outstanding under the Senior Facilities Agreement, to theextent a Credit Facility is utilized for the purpose of guaranteeing or cash collateralizing any letter ofcredit or guarantee, such guarantee or collateralization and issuance of such letter of credit orguarantee shall be deemed to be a utilization of such Credit Facility permitted under clause (1) of thesecond paragraph of this covenant without double counting.

Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness thatthe Company or a Restricted Subsidiary may Incur pursuant to this covenant shall not be deemed to beexceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount ofany Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from theIndebtedness being refinanced, shall be calculated based on the currency exchange rate applicable tothe currencies in which such Refinancing Indebtedness is denominated that is in effect on the date ofsuch refinancing.

Limitation on Restricted Payments

The Company will not, and will not permit any of its Restricted Subsidiaries, directly orindirectly, to:

(1) declare or pay any dividend or make any distribution on or in respect of the Company’s orany Restricted Subsidiary’s Capital Stock (including any payment in connection with anymerger or consolidation involving the Company or any of its Restricted Subsidiaries) except:

(a) dividends or distributions payable in Capital Stock of the Company (other thanDisqualified Stock) or in options, warrants or other rights to purchase such CapitalStock of the Company or in Subordinated Shareholder Funding; and

(b) dividends or distributions payable to the Company or a Restricted Subsidiary (and, inthe case of any such Restricted Subsidiary making such dividend or distribution, toholders of its Capital Stock other than the Company or another Restricted Subsidiaryon no more than a pro rata basis, measured by value);

(2) purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Companyor any direct or indirect Parent of the Company held by Persons other than the Company ora Restricted Subsidiary of the Company (other than in exchange for Capital Stock of theCompany (other than Disqualified Stock));

(3) make any principal payment on, or purchase, repurchase, redeem, defease or otherwiseacquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduledsinking fund payment, any (x) Subordinated Indebtedness (other than, in each case, anycapitalization of Subordinated Indebtedness or (a) any such purchase, repurchase,redemption, defeasance or other acquisition or retirement or in anticipation of satisfying asinking fund obligation, principal installment or final maturity, in each case, due within oneyear of the date of purchase, repurchase, redemption, defeasance or other acquisition orretirement and (b) any Indebtedness Incurred pursuant to clause (3) of the secondparagraph of the covenant described under ‘‘—Certain Covenants—Limitation onIndebtedness’’) or (y) any Subordinated Shareholder Funding; or

(4) make any Restricted Investment in any Person;

(any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition,retirement or Restricted Investment referred to in clauses (1) through (4) are referred to herein as a‘‘Restricted Payment’’), if at the time the Company or such Restricted Subsidiary makes such RestrictedPayment:

(a) a Default shall have occurred and be continuing (or would result immediately thereaftertherefrom);

(b) the Company is not able to Incur an additional £1.00 of Indebtedness pursuant to the firstparagraph under the ‘‘—Certain Covenants—Limitation on Indebtedness’’ covenant aftergiving effect, on a pro forma basis, to such Restricted Payment; or

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(c) the aggregate amount of such Restricted Payment and all other Restricted Payments madesubsequent to the Issue Date (and not returned or rescinded) (including Permitted Paymentspermitted below by clauses (5) (without duplication of amounts paid pursuant to any otherclause of the second succeeding paragraph), (6), (10), (11) and (12) of the secondsucceeding paragraph, but excluding all other Restricted Payments permitted by the secondsucceeding paragraph) would exceed the sum of (without duplication):

(i) 50% of Consolidated Net Income for the period (treated as one accounting period)from the first day of the first fiscal quarter commencing after the Issue Date to theend of the most recent fiscal quarter ending prior to the date of such RestrictedPayment for which internal consolidated financial statements of the Company areavailable (or, in the case such Consolidated Net Income is a deficit, minus 100% ofsuch deficit);

(ii) 100% of the aggregate Net Cash Proceeds, and the fair market value (as determined inaccordance with the next succeeding paragraph) of property or assets or marketablesecurities, received by the Company from the issue or sale of its Capital Stock (otherthan Disqualified Stock or Designated Preference Shares) or Subordinated ShareholderFunding subsequent to the Issue Date or otherwise contributed to the equity (otherthan through the issuance of Disqualified Stock or Designated Preference Shares) ofthe Company subsequent to the Issue Date (other than (x) Net Cash Proceeds orproperty or assets or marketable securities received from an issuance or sale of suchCapital Stock to a Restricted Subsidiary or an employee stock ownership plan or trustestablished by the Company or any Subsidiary of the Company for the benefit of itsemployees to the extent funded by the Company or any Restricted Subsidiary, (y) NetCash Proceeds or property or assets or marketable securities to the extent that anyRestricted Payment has been made from such proceeds in reliance on clause (6) of thesecond succeeding paragraph and (z) Excluded Contributions);

(iii) 100% of the aggregate Net Cash Proceeds, and the fair market value (as determined inaccordance with the next succeeding paragraph) of property or assets or marketablesecurities, received by the Company or any Restricted Subsidiary from the issuance orsale (other than to the Company or a Restricted Subsidiary of the Company or anemployee stock ownership plan or trust established by the Company or any Subsidiaryof the Company for the benefit of its employees to the extent funded by the Companyor any Restricted Subsidiary) by the Company or any Restricted Subsidiary subsequentto the Issue Date of any Indebtedness that has been converted into or exchanged forCapital Stock of the Company (other than Disqualified Stock or Designated PreferenceShares) or Subordinated Shareholder Funding (plus the amount of any cash, and thefair market value (as determined in accordance with the next succeeding paragraph) ofproperty or assets or marketable securities, received by the Company or any RestrictedSubsidiary upon such conversion or exchange) but excluding (x) Net Cash Proceeds tothe extent that any Restricted Payment has been made from such proceeds in relianceon clause (6) of the second succeeding paragraph and (y) Excluded Contributions);

(iv) the amount equal to the net reduction in Restricted Investments made by theCompany or any of its Restricted Subsidiaries resulting from:

(A) repurchases, redemptions or other acquisitions or retirements of any suchRestricted Investment, proceeds realized upon the sale or other disposition to aPerson other than the Company or a Restricted Subsidiary of any such RestrictedInvestment, repayments of loans or advances or other transfers of assets(including by way of dividend, distribution, interest payments or returns ofcapital) to the Company or any Restricted Subsidiary; or

(B) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued,in each case, as provided in the definition of ‘‘Investment’’) not to exceed, in thecase of any Unrestricted Subsidiary, the amount of Investments previously madeby the Company or any Restricted Subsidiary in such Unrestricted Subsidiary,which amount, in each case under this clause (iv), was included in the calculationof the amount of Restricted Payments referred to in the first sentence of thisclause (c); provided, however, that no amount will be included in Consolidated

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Net Income for purposes of the preceding clause (i) to the extent that it is (atthe Company’s option) included under this clause (iv); and

(v) the amount of the cash and fair market value (as determined in accordance with thenext succeeding paragraph) of property or assets or of marketable securities receivedby the Company or any of its Restricted Subsidiaries in connection with:

(A) the sale or other disposition (other than to the Company or a RestrictedSubsidiary or an employee stock ownership plan or trust established by theCompany or any Subsidiary of the Company for the benefit of its employees tothe extent funded by the Company or any Restricted Subsidiary) of Capital Stockof an Unrestricted Subsidiary of the Company; and

(B) any dividend or distribution made by an Unrestricted Subsidiary to the Companyor a Restricted Subsidiary;

provided, however, that no amount will be included in Consolidated Net Income for purposesof the preceding clause (i) to the extent that it is (at the Company’s option) included underthis clause (v); provided further, however, that such amount shall not exceed the amountincluded in the calculation of the amount of Restricted Payments referred to in the firstsentence of this clause (c).

The fair market value of property or assets other than cash covered by the preceding sentenceshall be the fair market value thereof as determined in good faith by the Board of Directors.

The foregoing provisions will not prohibit any of the following (collectively, ‘‘Permitted Payments’’):

(1) any purchase, repurchase, redemption, defeasance or other acquisition or retirement ofCapital Stock, Disqualified Stock, Designated Preference Shares, Subordinated ShareholderFunding or Subordinated Indebtedness made by exchange (including any such exchangepursuant to the exercise of a conversion right or privilege in connection with which cash ispaid in lieu of the issuance of fractional shares) for, or out of the proceeds of thesubstantially concurrent sale of, Capital Stock of the Company (other than DisqualifiedStock or Designated Preference Shares), Subordinated Shareholder Funding or asubstantially concurrent contribution to the equity (other than through the issuance ofDisqualified Stock or Designated Preference Shares or through an Excluded Contribution)of the Company; provided, however, that to the extent so applied, the Net Cash Proceeds, orfair market value (as determined in accordance with the preceding sentence) of property orassets or of marketable securities, from such sale of Capital Stock, SubordinatedShareholder Funding or such contribution will be excluded from clause (c)(ii) of thepreceding paragraph;

(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement ofSubordinated Indebtedness made by exchange for, or out of the proceeds of the substantiallyconcurrent sale of, Refinancing Indebtedness permitted to be Incurred pursuant to thecovenant described under ‘‘—Certain Covenants—Limitation on Indebtedness’’ above;

(3) any purchase, repurchase, redemption, defeasance or other acquisition or retirement ofPreferred Stock of the Company or a Restricted Subsidiary made by exchange for or out ofthe proceeds of the substantially concurrent sale of Preferred Stock of the Company or aRestricted Subsidiary, as the case may be, that, in each case, is permitted to be Incurredpursuant to the covenant described under ‘‘—Certain Covenants—Limitation onIndebtedness’’ above, and that in each case, constitutes Refinancing Indebtedness;

(4) any purchase, repurchase, redemption, defeasance or other acquisition or retirement ofSubordinated Indebtedness:

(a) (i) from Net Available Cash to the extent permitted under ‘‘—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock’’ below, but only if the Companyshall have first complied with the terms described under ‘‘—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock’’ and purchased all Notes tenderedpursuant to any offer to repurchase all the Notes required thereby, prior to purchasing,repurchasing, redeeming, defeasing or otherwise acquiring or retiring such

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Subordinated Indebtedness and (ii) at a purchase price not greater than 100% of theprincipal amount of such Subordinated Indebtedness plus accrued and unpaid interest;

(b) to the extent required by the agreement governing such Subordinated Indebtedness,following the occurrence of a Change of Control (or other similar event describedtherein as a ‘‘change of control’’), but only (i) if the Company shall have first compliedwith the terms described under ‘‘—Change of Control’’ and purchased all Notestendered pursuant to the offer to repurchase all the Notes required thereby, prior topurchasing, repurchasing, redeeming, defeasing or otherwise acquiring or retiring suchSubordinated Indebtedness and (ii) at a purchase price not greater than 101% of theprincipal amount of such Subordinated Indebtedness plus accrued and unpaid interest;or

(c) (i) consisting of Acquired Indebtedness (other than Indebtedness Incurred (A) toprovide all or any portion of the funds utilized to consummate the transaction or seriesof related transactions pursuant to which such Person became a Restricted Subsidiaryor was otherwise acquired by the Company or a Restricted Subsidiary or (B) otherwisein connection with or contemplation of such acquisition) and (ii) at a purchase pricenot greater than 100% of the principal amount of such Subordinated Indebtedness plusaccrued and unpaid interest and any premium required by the terms of any AcquiredIndebtedness;

(5) any dividends paid within 60 days after the date of declaration if at such date of declarationsuch dividend would have complied with this covenant;

(6) the purchase, repurchase, redemption, defeasance or other acquisition, cancellation orretirement for value of Capital Stock of the Company or any Parent (including any options,warrants or other rights in respect thereof) and loans, advances, dividends or distributions bythe Company to any Parent to permit any Parent to purchase, repurchase, redeem, defeaseor otherwise acquire, cancel or retire for value Capital Stock of any Parent (including anyoptions, warrants or other rights in respect thereof), or payments to purchase, repurchase,redeem, defease or otherwise acquire, cancel or retire for value Capital Stock of any Parent(including any options, warrants or other rights in respect thereof), in each case fromManagement Investors; provided that such payments, loans, advances, dividends ordistributions do not exceed an amount (net of repayments of any such loans or advances)equal to (A) £5.0 million plus (B) £2.5 million multiplied by the number of calendar yearsthat have commenced since the Issue Date plus (C) the Net Cash Proceeds received by theCompany or its Restricted Subsidiaries since the Issue Date (including through receipt ofproceeds from the issuance or sale of its Capital Stock or Subordinated Shareholder Fundingto a Parent) from, or as a contribution to the equity (in each case under this clause (C),other than through the issuance of Disqualified Stock or Designated Preference Shares) ofthe Company from, the issuance or sale to Management Investors of Capital Stock(including any options, warrants or other rights in respect thereof), to the extent such NetCash Proceeds are not included in any calculation under clause (c)(ii) of the first paragraphdescribing this covenant;

(7) the declaration and payment of dividends to holders of any class or series of DisqualifiedStock, or of any Preferred Stock of a Restricted Subsidiary, Incurred in accordance with theterms of the covenant described under ‘‘—Certain Covenants—Limitation on Indebtedness’’above;

(8) purchases, repurchases, redemptions, defeasances or other acquisitions or retirements ofCapital Stock deemed to occur upon the exercise of stock options, warrants or other rightsin respect thereof if such Capital Stock represents a portion of the exercise price thereof;

(9) dividends, loans, advances or distributions to any Parent or other payments by the Companyor any Restricted Subsidiary in amounts equal to (without duplication):

(a) the amounts required for any Parent to pay any Parent Expenses or any Related Taxes;or

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(b) amounts constituting or to be used for purposes of making payments to the extentspecified in clauses (2), (3), (5), (7) and (12) of the second paragraph under‘‘—Certain Covenants—Limitation on Affiliate Transactions’’;

(10) so long as no Default or Event of Default has occurred and is continuing (or would resulttherefrom), the declaration and payment by the Company of, or loans, advances, dividendsor distributions to any Parent to pay, dividends on the common stock or common equityinterests of the Issuer or any Parent following a Public Offering of such common stock orcommon equity interests, in an amount not to exceed in any fiscal year the greater of(a) 6% of the Net Cash Proceeds received by the Company from such Public Offering orcontributed to the equity (other than through the issuance of Disqualified Stock orDesignated Preference Shares or through an Excluded Contribution) of the Company orcontributed as Subordinated Shareholder Funding to the Company and (b) following theInitial Public Offering, an amount equal to the greater of (i) 5% of the MarketCapitalization and (ii) 5% of the IPO Market Capitalization; provided that after giving proforma effect to such loans, advances, dividends or distributions, the Consolidated LeverageRatio for the Company and its Restricted Subsidiaries shall be equal to or less than 4.00to 1.0;

(11) so long as no Default or Event of Default has occurred and is continuing (or would resultfrom), Restricted Payments (including loans or advances) in an aggregate amountoutstanding at any time not to exceed £25 million;

(12) payments by the Company, or loans, advances, dividends or distributions to any Parent tomake payments, to holders of Capital Stock of the Company or any Parent in lieu of theissuance of fractional shares of such Capital Stock, provided, however, that any such payment,loan, advance, dividend or distribution shall not be for the purpose of evading any limitationof this covenant or otherwise to facilitate any dividend or other return of capital to theholders of such Capital Stock (as determined in good faith by the Board of Directors);

(13) Investments in an aggregate amount outstanding at any time not to exceed the aggregatecash amount of Excluded Contributions, or consisting of non-cash Excluded Contributions,or Investments to the extent made in exchange for or using as consideration Investmentspreviously made under this clause (13);

(14) (i) the declaration and payment of dividends to holders of any class or series of DesignatedPreference Shares of the Company issued after the Issue Date; and (ii) the declaration andpayment of dividends to any Parent or any Affiliate thereof, the proceeds of which will beused to fund the payment of dividends to holders of any class or series of DesignatedPreference Shares of such Parent issued after the Issue Date; provided, however, that, in thecase of clauses (i) and (ii), the amount of all dividends declared or paid pursuant toclause (14) shall not exceed the Net Cash Proceeds received by the Company or theaggregate amount contributed in cash to the equity (other than through the issuance ofDisqualified Stock or an Excluded Contribution or, in the case of Designated PreferenceShares by Parent or an Affiliate the issuance of Designated Preference Shares) of theCompany, from the issuance or sale of such Designated Preference Shares; and

(15) dividends or other distributions of Capital Stock of Unrestricted Subsidiaries.

The amount of all Restricted Payments (other than cash) shall be the fair market value on thedate of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issuedby the Company or such Restricted Subsidiary, as the case may be, pursuant to such RestrictedPayment. The fair market value of any cash Restricted Payment shall be its face amount, and the fairmarket value of any non-cash Restricted Payment shall be determined conclusively by the Board ofDirectors of the Company acting in good faith.

Limitation on Liens

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly,create, Incur or suffer to exist any Lien upon any of its property or assets (including Capital Stock of aRestricted Subsidiary of the Company), whether owned on the Issue Date or acquired after that date,or any interest therein or any income or profits therefrom, which Lien is securing any Indebtedness(such Lien, the ‘‘Initial Lien’’), except (a) in the case of any property or asset that does not constitute

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Collateral, (1) Permitted Liens or (2) Liens on property or assets that are not Permitted Liens if theNotes and the Indenture (or a Guarantee in the case of Liens of a Guarantor) are directly securedequally and ratably with, or prior to, in the case of Liens with respect to Subordinated Indebtedness,the Indebtedness secured by such Initial Lien for so long as such Indebtedness is so secured, and (b) inthe case of any property or asset that constitutes Collateral, Permitted Collateral Liens.

Limitation on Restrictions on Distributions from Restricted Subsidiaries

The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise causeor permit to exist or become effective any consensual encumbrance or consensual restriction on theability of any Restricted Subsidiary to:

(A) pay dividends or make any other distributions in cash or otherwise on its Capital Stock orpay any Indebtedness or other obligations owed to the Company or any RestrictedSubsidiary;

(B) make any loans or advances to the Company or any Restricted Subsidiary; or

(C) sell, lease or transfer any of its property or assets to the Company or any RestrictedSubsidiary;

provided that (x) the priority of any Preferred Stock in receiving dividends or liquidating distributionsprior to dividends or liquidating distributions being paid on common stock and (y) the subordination of(including the application of any standstill requirements to) loans or advances made to the Company orany Restricted Subsidiary to other Indebtedness Incurred by the Company or any Restricted Subsidiaryshall not be deemed to constitute such an encumbrance or restriction.

The provisions of the preceding paragraph will not prohibit:

(1) any encumbrance or restriction pursuant to (a) any Credit Facility or (b) any otheragreement or instrument, in each case, in effect at or entered into on the Issue Date;

(2) any encumbrance or restriction pursuant to an agreement or instrument of a Person orrelating to any Capital Stock or Indebtedness of a Person, entered into on or before thedate on which such Person was acquired by or merged, consolidated or otherwise combinedwith or into the Company or any Restricted Subsidiary, or on which such agreement orinstrument is assumed by the Company or any Restricted Subsidiary in connection with anacquisition of assets (other than Capital Stock or Indebtedness Incurred as consideration in,or to provide all or any portion of the funds utilized to consummate, the transaction orseries of related transactions pursuant to which such Person became a Restricted Subsidiaryor was acquired by the Company or was merged, consolidated or otherwise combined withor into the Company or any Restricted Subsidiary entered into or in connection with suchtransaction) and outstanding on such date; provided that, for the purposes of this clause (2),if another Person is the Successor Company, any Subsidiary thereof or agreement orinstrument of such Person or any such Subsidiary shall be deemed acquired or assumed bythe Company or any Restricted Subsidiary when such Person becomes the SuccessorCompany;

(3) any encumbrance or restriction pursuant to an agreement or instrument effecting arefinancing of Indebtedness Incurred pursuant to, or that otherwise refinances, an agreementor instrument referred to in clause (1) or (2) of this paragraph or this clause (3) (an ‘‘InitialAgreement’’) or contained in any amendment, supplement or other modification to anagreement referred to in clause (1) or (2) of this paragraph or this clause (3); provided,however, that the encumbrances and restrictions with respect to such Restricted Subsidiarycontained in any such agreement or instrument are no less favorable in any material respectto the Holders taken as a whole than the encumbrances and restrictions contained in theInitial Agreement or Initial Agreements to which such refinancing or amendment,supplement or other modification relates (as determined in good faith by the Company);

(4) any encumbrance or restriction:

(a) that restricts in a customary manner the subletting, assignment or transfer of anyproperty or asset that is subject to a lease, license or similar contract, or theassignment or transfer of any lease, license or other contract;

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(b) contained in mortgages, pledges, charges or other security agreements permitted underthe Indenture or securing Indebtedness of the Company or a Restricted Subsidiarypermitted under the Indenture to the extent such encumbrances or restrictions restrictthe transfer of the property or assets subject to such mortgages, pledges, charges orother security agreements; or

(c) pursuant to customary provisions restricting dispositions of real property interests setforth in any reciprocal easement agreements of the Company or any RestrictedSubsidiary;

(5) any encumbrance or restriction pursuant to Purchase Money Obligations and CapitalizedLease Obligations permitted under the Indenture, in each case, that impose encumbrancesor restrictions on the property so acquired or any encumbrance or restriction pursuant to ajoint venture agreement that imposes restrictions on the transfer of the assets of the jointventure;

(6) any encumbrance or restriction with respect to a Restricted Subsidiary (or any of itsproperty or assets) imposed pursuant to an agreement entered into for the direct or indirectsale or disposition to a Person of all or substantially all the Capital Stock or assets of suchRestricted Subsidiary (or the property or assets that are subject to such restriction) pendingthe closing of such sale or disposition;

(7) customary provisions in leases, licenses, joint venture agreements and other similaragreements and instruments entered into in the ordinary course of business;

(8) encumbrances or restrictions arising or existing by reason of applicable law or any applicablerule, regulation or order, or required by any regulatory authority;

(9) any encumbrance or restriction on cash or other deposits or net worth imposed by customersunder agreements entered into in the ordinary course of business;

(10) any encumbrance or restriction pursuant to Currency Agreements, Interest Rate Agreementsor Commodity Hedging Agreements;

(11) any encumbrance or restriction arising pursuant to an agreement or instrument relating toany Indebtedness permitted to be Incurred subsequent to the Issue Date pursuant to theprovisions of the covenant described under ‘‘—Certain Covenants—Limitation onIndebtedness’’ if the encumbrances and restrictions contained in any such agreement orinstrument taken as a whole are not materially less favorable to the Holders than (i) theencumbrances and restrictions contained in the Senior Facilities Agreement, together withthe security documents associated therewith as in effect on the Issue Date or (ii) incomparable financings (as determined in good faith by the Company) and where, in the caseof clause (ii), the Company determines at the time of issuance of such Indebtedness thatsuch encumbrances or restrictions will not adversely affect, in any material respect, theIssuer’s ability to make principal or interest payments on the Notes;

(12) restrictions effected in connection with a Qualified Receivables Financing that, in the goodfaith determination of the Board of Directors of the Issuer, are necessary or advisable toeffect such Qualified Receivables Financing; or

(13) any encumbrance or restriction existing by reason of any lien permitted under ‘‘—CertainCovenants—Limitation on Liens.’’

Limitation on Sales of Assets and Subsidiary Stock

The Company will not, and will not permit any of its Restricted Subsidiaries to, make any AssetDisposition unless:

(1) the Company or such Restricted Subsidiary, as the case may be, receives consideration(including by way of relief from, or by any other Person assuming responsibility for, anyliabilities, contingent or otherwise) at least equal to the fair market value (such fair marketvalue to be determined on the date of contractually agreeing to such Asset Disposition), asdetermined in good faith by the Board of Directors of the Company, of the shares andassets subject to such Asset Disposition (including, for the avoidance of doubt, if such AssetDisposition is a Permitted Asset Swap);

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(2) in any such Asset Disposition, or series of related Asset Dispositions (except to the extentthe Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration fromsuch Asset Disposition (excluding any consideration by way of relief from, or by any otherPerson assuming responsibility for, any liabilities, contingent or otherwise, other thanIndebtedness) received by the Company or such Restricted Subsidiary, as the case may be, isin the form of cash, Cash Equivalents or Temporary Cash Investments; and

(3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is appliedby the Company or such Restricted Subsidiary, as the case may be:

(a) to the extent the Company or any Restricted Subsidiary, as the case may be, elects (oris required by the terms of any Indebtedness of a Restricted Subsidiary), (i) to prepay,repay or purchase any Indebtedness of a non-Guarantor Restricted Subsidiary (in eachcase, other than Indebtedness owed to the Company or any Restricted Subsidiary) orIndebtedness under the Senior Facilities Agreement (or any Refinancing Indebtednessin respect thereof) within 365 days from the later of (A) the date of such AssetDisposition and (B) the receipt of such Net Available Cash; provided, however, that, inconnection with any prepayment, repayment or purchase of Indebtedness pursuant tothis clause (a), the Company or such Restricted Subsidiary will retire suchIndebtedness and will cause the related commitment (if any) (except in the case of theSenior Facilities Agreement) to be permanently reduced in an amount equal to theprincipal amount so prepaid, repaid or purchased; or (ii) to prepay, repay or purchasePari Passu Indebtedness at a price of no more than 100% of the principal amount ofsuch Pari Passu Indebtedness plus accrued and unpaid interest to the date of suchprepayment, repayment or purchase; provided that the Company shall redeem, repay orrepurchase Pari Passu Indebtedness pursuant to this clause (ii) only if the Companymakes (at such time or subsequently in compliance with this covenant) an offer to theHolders of the Notes to purchase their Notes in accordance with the provisions setforth below for an Asset Disposition Offer for an aggregate principal amount of Notesat least equal to the proportion that (x) the total aggregate principal amount of Notesoutstanding bears to (y) the sum of the total aggregate principal amount of Notesoutstanding plus the total aggregate principal amount outstanding of such Pari PassuIndebtedness; or

(b) to the extent the Company or such Restricted Subsidiary elects, to invest in or committo invest in Additional Assets (including by means of an investment in AdditionalAssets by a Restricted Subsidiary with Net Available Cash received by the Company oranother Restricted Subsidiary) within 365 days from the later of (i) the date of suchAsset Disposition and (ii) the receipt of such Net Available Cash; provided, however,that any such reinvestment in Additional Assets made pursuant to a definitive bindingagreement or a commitment approved by the Board of Directors of the Company thatis executed or approved within such time will satisfy this requirement, so long as suchinvestment is consummated within 180 days of such 365th day;

provided that, pending the final application of any such Net Available Cash in accordance withclause (a) or clause (b) above, the Company and its Restricted Subsidiaries may temporarilyreduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited bythe Indenture.

Any Net Available Cash from Asset Dispositions that is not applied or invested or committed tobe applied or invested as provided in the preceding paragraph, or offered to be applied in accordancewith clause (4)(a)(ii) above, will be deemed to constitute ‘‘Excess Proceeds’’ under the Indenture. Onthe 366th day after an Asset Disposition, if the aggregate amount of Excess Proceeds under theIndenture exceeds £15 million (or equivalent thereof), the Issuer will be required to make an offer(‘‘Asset Disposition Offer’’) to all holders of Notes and, to the extent the Issuer elects, to all holders ofother outstanding Pari Passu Indebtedness, to purchase the maximum principal amount of Notes andany such Pari Passu Indebtedness to which the Asset Disposition Offer applies that may be purchasedout of the Excess Proceeds, at an offer price in respect of the Notes in an amount equal to (and, in thecase of any Pari Passu Indebtedness, an offer price of no more than) 100% of the principal amount ofthe Notes and 100% of the principal amount of Pari Passu Indebtedness, in each case, plus accrued andunpaid interest, if any, to, but not including, the date of purchase, in accordance with the procedures

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set forth in the Indenture or the agreements governing the Pari Passu Indebtedness, as applicable, andin minimum denominations of £100,000 and in integral multiples of £1,000 in excess thereof withrespect to the Sterling Notes and in minimum denominations of A100,000 and in integral multiples ofA1,000 in excess thereof with respect to the Euro Notes.

To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so validly tenderedand not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds,the Company may use any remaining Excess Proceeds for general corporate purposes, subject to othercovenants contained in the Indenture. If the aggregate principal amount of the Notes surrendered inany Asset Disposition Offer by Holders and other Pari Passu Indebtedness surrendered by holders orlenders, collectively, exceeds the amount of Excess Proceeds, the Excess Proceeds shall be allocatedamong the Notes and Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of theaggregate principal amount of tendered Notes and Pari Passu Indebtedness. For the purposes ofcalculating the principal amount of any such Indebtedness not denominated in sterling, including theNotes, such Indebtedness shall be calculated by converting any such principal amounts into theirSterling Equivalent determined as of a date selected by the Issuer that is within the Asset DispositionOffer Period (as defined below). Upon completion of any Asset Disposition Offer, the amount ofExcess Proceeds shall be reset at zero.

To the extent that any portion of Net Available Cash payable in respect of the Notes isdenominated in a currency other than pound sterling, the amount thereof payable in respect of theNotes shall not exceed the net amount of funds in pound sterling that is actually received by the Issuerupon converting such portion into pound sterling.

The Asset Disposition Offer, in so far as it relates to the Notes, will remain open for a period ofnot less than 20 Business Days following its commencement (the ‘‘Asset Disposition Offer Period’’). Nolater than five Business Days after the termination of the Asset Disposition Offer Period (the ‘‘AssetDisposition Purchase Date’’), the Issuer will purchase the principal amount of Notes and, to the extentthey elect, Pari Passu Indebtedness required to be purchased pursuant to this covenant (the ‘‘AssetDisposition Offer Amount’’) or, if less than the Asset Disposition Offer Amount has been so validlytendered, all Notes and Pari Passu Indebtedness validly tendered in response to the Asset DispositionOffer.

On or before the Asset Disposition Purchase Date, the Issuer will, to the extent lawful, accept forpayment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes andPari Passu Indebtedness or portions of Notes and Pari Passu Indebtedness so validly tendered and notproperly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition OfferAmount has been validly tendered and not properly withdrawn, all Notes and Pari Passu Indebtednessso validly tendered and not properly withdrawn and in minimum denominations of £100,000 and inintegral multiples of £1,000 in excess thereof with respect to the Sterling Notes and in minimumdenominations of A100,000 and in integral multiples of A1,000 in excess thereof with respect to theEuro Notes. The Company will deliver to the Trustee an Officer’s Certificate stating that such Notes orportions thereof were accepted for payment by the Company in accordance with the terms of thiscovenant. The Company or the Paying Agent, as the case may be, will promptly (but in any case notlater than five Business Days after termination of the Asset Disposition Offer Period) mail or deliver toeach tendering Holder of Notes an amount equal to the purchase price of the Notes so validlytendered and not properly withdrawn by such Holder, and accepted by the Company for purchase, andthe Company will promptly issue a new Note (or amend the Global Note), and the Trustee, upondelivery of an Officer’s Certificate from the Company, will authenticate and mail or deliver (or cause tobe transferred by book entry) such new Note to such Holder, in a principal amount equal to anyunpurchased portion of the Note surrendered; provided that each such new Note will be in a principalamount with a minimum denomination of £100,000 or an integral multiples of £1,000 in excess thereofwith respect to the Sterling Notes or in a principal amount with a minimum denomination of A100,000or an integral multiples of A1,000 in excess thereof with respect to the Euro Notes. Any Note not soaccepted will be promptly mailed or delivered (or transferred by book entry) by the Company to theHolder thereof.

For the purposes of clause (2) of the first paragraph of this covenant, the following will bedeemed to be cash:

(1) the assumption by the transferee of Indebtedness of the Company or Indebtedness of aRestricted Subsidiary (other than Subordinated Indebtedness of the Company or a

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Guarantor) and the release of the Company or such Restricted Subsidiary from all liabilityon such Indebtedness in connection with such Asset Disposition;

(2) securities, notes or other obligations received by the Company or any Restricted Subsidiaryof the Company from the transferee that are converted by the Company or such RestrictedSubsidiary into cash or Cash Equivalents within 180 days following the closing of such AssetDisposition;

(3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as aresult of such Asset Disposition, to the extent that the Company and each other RestrictedSubsidiary are released from any Guarantee of payment of such Indebtedness in connectionwith such Asset Disposition;

(4) consideration consisting of Indebtedness of the Company (other than SubordinatedIndebtedness) received after the Issue Date from Persons who are not the Company or anyRestricted Subsidiary; and

(5) any Designated Non-Cash Consideration received by the Company or any RestrictedSubsidiary in such Asset Dispositions having an aggregate fair market value, taken togetherwith all other Designated Non-Cash Consideration received pursuant to this covenant that isat that time outstanding, not to exceed the greater of £30 million and 5% of Total Assets(with the fair market value of each item of Designated Non-Cash Consideration beingmeasured at the time received and without giving effect to subsequent changes in value).

The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of theExchange Act and any other securities laws or regulations (or rules of any exchange on which theNotes are then listed) in connection with the repurchase of Notes pursuant to the Indenture. To theextent that the provisions of any securities laws or regulations (or exchange rules) conflict withprovisions of this covenant, the Company will comply with the applicable securities laws and regulations(or exchange rules) and will not be deemed to have breached its obligations under the Indenture byvirtue of any conflict.

Additional Note Guarantees

The Company will cause each Restricted Subsidiary that, after the Issue Date, guarantees anyIndebtedness of the Company or any Guarantor to simultaneously or prior thereto execute and delivera supplemental Indenture or other appropriate agreement providing for such Restricted Subsidiary’sNote Guarantee of the Notes on the same terms and conditions as those set forth in the Indenture;and the Company shall cause each Restricted Subsidiary (other than an Immaterial Subsidiary or aReceivables Subsidiary) to execute and deliver a supplemental Indenture or other appropriateagreement providing for such Restricted Subsidiary’s Notes Guarantee of the Notes on the same termsand conditions as those set forth in the Indenture, within 30 days of delivery of the Company’s auditedannual reports to the Trustee pursuant to the Indenture that show that such Restricted Subsidiary is notan Immaterial Subsidiary or a Receivables Subsidiary (each such additional guarantee of the Notes, an‘‘Additional Note Guarantee’’).

Notwithstanding the foregoing, the Company shall not be obligated to cause any such RestrictedSubsidiary to guarantee the Notes to the extent that the grant of such Note Guarantee would beinconsistent with the Agreed Security Principles.

Notwithstanding the foregoing and the other provisions of the Indenture, any Additional NoteGuarantee by a Restricted Subsidiary of the Company of the Notes shall provide by its terms, and theIndenture shall provide, that it shall be automatically and unconditionally released and discharged inthe circumstances described under ‘‘—Guarantees.’’ Any Additional Note Guarantee shall beconsidered a ‘‘Note Guarantee’’ as described in ‘‘—Guarantees.’’

Maintenance of Listing

The Company will use its commercially reasonable efforts to maintain the listing of the Notes onthe Euro MTF Market for so long as such Notes are outstanding; provided that if at any time theCompany determines that it will not maintain such listing, it will obtain prior to the delisting of theNotes from the Euro MTF Market, and thereafter use its best efforts to maintain, a listing of such

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Notes on another ‘‘recognised stock exchange’’ as defined in Section 1005 of the Income Tax Act 2007of the United Kingdom.

Limitation on Affiliate Transactions

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly orindirectly, enter into or conduct any transaction or series of related transactions (including thepurchase, sale, lease or exchange of any property or the rendering of any service) with or for thebenefit of any Affiliate of the Company (an ‘‘Affiliate Transaction’’) involving aggregate value in excessof £5 million unless:

(1) the terms of such Affiliate Transaction taken as a whole are not materially less favorable tothe Company or such Restricted Subsidiary, as the case may be, than those that could beobtained in a comparable transaction at the time of such transaction or the execution of theagreement providing for such transaction in arm’s length dealings with a Person who is notsuch an Affiliate; and

(2) in the event such Affiliate Transaction involves an aggregate value in excess of £15 million,the terms of such transaction have been approved by a majority of the members of theBoard of Directors; and

(3) in the event such Affiliate Transaction involves an aggregate consideration in excess of£50 million, the Company has received a written opinion (a ‘‘Fairness Opinion’’) from anIndependent Financial Advisor that such Affiliate Transaction is fair, from a financialstandpoint, to the Issuer and its Restricted Subsidiaries or that the terms are not materiallyless favorable than those that could reasonably have been obtained in a comparabletransaction at such time on an arm’s-length basis from a Person that is not an Affiliate

Any Affiliate Transaction shall be deemed to have satisfied the requirements set forth inclause (2) of this paragraph if such Affiliate Transaction is approved by a majority of the DisinterestedDirectors. If there are no Disinterested Directors, any Affiliate Transaction shall be deemed to havesatisfied the requirements set forth in this covenant if the Company or any of its RestrictedSubsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisorstating that such transaction is fair to the Company or such Restricted Subsidiary from a financial pointof view or stating that the terms are not materially less favorable to the Company or its relevantRestricted Subsidiary than those that would have been obtained in a comparable transaction by theCompany or such Restricted Subsidiary with an unrelated Person on an arm’s length basis.

The provisions of the preceding paragraph will not apply to:

(1) any Restricted Payment permitted to be made pursuant to the covenant described under‘‘—Certain Covenants—Limitation on Restricted Payments,’’ any Permitted Payments (otherthan pursuant to clause (9)(b) of the third paragraph of the covenant described under‘‘—Certain Covenants—Limitation on Restricted Payments’’) or any Permitted Investment(other than Permitted Investments as defined in paragraphs (l)(b), (2), (11) and (15) of thedefinition thereof);

(2) any issuance or sale of Capital Stock, options, other equity-related interests or othersecurities, or other payments, awards or grants in cash, securities or otherwise pursuant to,or the funding of, or entering into, or maintenance of, any employment, consulting,collective bargaining or benefit plan, program, agreement or arrangement, related trust orother similar agreement and other compensation arrangements, options, warrants or otherrights to purchase Capital Stock of the Company, any Restricted Subsidiary or any Parent,restricted stock plans, long-term incentive plans, stock appreciation rights plans, participationplans or similar employee benefits or consultants’ plans (including valuation, health,insurance, deferred compensation, severance, retirement, savings or similar plans, programsor arrangements) or indemnities provided on behalf of officers, employees, directors orconsultants approved by the Board of Directors of the Company, in each case in theordinary course of business;

(3) any Management Advances;

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(4) any transaction between or among the Company and any Restricted Subsidiary (or entitythat becomes a Restricted Subsidiary as a result of such transaction), or between or amongRestricted Subsidiaries;

(5) the payment of reasonable fees and reimbursement of expenses to, and customaryindemnities (including under customary insurance policies) and employee benefit andpension expenses provided on behalf of, directors, officers, consultants or employees of theCompany, any Restricted Subsidiary of the Company or any Parent (whether directly orindirectly and including through any Person owned or controlled by any of such directors,officers or employees);

(6) the entry into and performance of obligations of the Company or any of its RestrictedSubsidiaries under the terms of any transaction arising out of, and any payments pursuant toor for purposes of funding, any agreement or instrument in effect as of or on the IssueDate, as these agreements and instruments may be amended, modified, supplemented,extended, renewed or refinanced from time to time in accordance with the other terms ofthis covenant or to the extent not more disadvantageous to the Holders in any materialrespect and the entry into and performance of any registration rights or other listingagreement in connection with any Public Offering;

(7) execution and delivery of any Tax Sharing Agreement and performance of any Tax SharingAgreement to the extent not prohibited by the definition of ‘‘Permitted Payments’’, or theformation and maintenance of any consolidated group for tax, accounting or cash pooling ormanagement purposes in the ordinary course of business;

(8) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, ineach case in the ordinary course of business, and transactions pursuant to arrangements inrelation to the Propco Financing or the properties from time to time subject to the PropcoFinancing, in each case, which are fair to the Company or the relevant Restricted Subsidiaryin the reasonable determination of the Board of Directors or the senior management of theCompany or the relevant Restricted Subsidiary, or are on terms no less favorable than thosethat could reasonably have been obtained at such time from an unaffiliated party;

(9) any transaction in the ordinary course of business between or among the Company or anyRestricted Subsidiary and any Affiliate of the Company or an Associate or similar entity thatwould constitute an Affiliate Transaction solely because the Company or a RestrictedSubsidiary or any Affiliate of the Company or a Restricted Subsidiary or any Affiliate of anyPermitted Holder owns an equity interest in or otherwise controls such Affiliate, Associateor similar entity;

(10) (a) issuances or sales of Capital Stock (other than Disqualified Stock or DesignatedPreference Shares) of the Company or options, warrants or other rights to acquire suchCapital Stock or Subordinated Shareholder Funding; provided that the interest rate andother financial terms of such Subordinated Shareholder Funding are approved by a majorityof the members of the Board of Directors in their reasonable determination and (b) anyamendment, waiver or other transaction with respect to any Subordinated ShareholderFunding in compliance with the other provisions of the Indenture;

(11) without duplication in respect of payments made pursuant to clause (12) hereof,(a) payments by the Company or any Restricted Subsidiary to any Permitted Holder(whether directly or indirectly, including through any Parent) of annual management,consulting, monitoring or advisory fees and related expenses and (b) customary payments bythe Company or any Restricted Subsidiary to any Permitted Holder (whether directly orindirectly, including through any Parent) for financial advisory, financing, underwriting orplacement services or in respect of other investment banking activities, including inconnection with acquisitions or divestitures, which payments in respect of this clause (b) areapproved by a majority of the Board of Directors in good faith;

(12) payment to any Permitted Holder of all reasonable out of pocket expenses Incurred by suchPermitted Holder in connection with its direct or indirect investment in the Company and itsSubsidiaries; and

(13) any transaction effected as part of a Qualified Receivables Financing.

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Reports

For so long as any Notes are outstanding, the Company will provide to the Trustee the followingreports:

(1) within 120 days after the end of the Company’s fiscal year beginning with the first fiscal yearending after the Issue Date, annual reports containing, to the extent applicable, and in alevel of detail that is comparable in all material respects to that included in this offeringmemorandum, the following information: (a) audited consolidated balance sheets of theCompany or its predecessor as of the end of the two most recent fiscal years and auditedconsolidated income statements and statements of cash flow of the Company or itspredecessor for the three most recent fiscal years, including complete footnotes to suchfinancial statements and the report of the independent auditors on the financial statements;(b) unaudited pro forma income statement information and balance sheet information of theCompany (which, for the avoidance of doubt, shall not include the provision of a full incomestatement or balance sheet to the extent not reasonably available), together with explanatoryfootnotes, for any material acquisitions, dispositions or recapitalizations that have occurredsince the beginning of the most recently completed fiscal year; (c) an operating and financialreview of the audited financial statements, including a discussion of the results of operations,financial condition, and liquidity and capital resources of the Company, and a discussion ofmaterial commitments and contingencies and critical accounting policies; (d) description ofthe business, management and shareholders of the Company, all material affiliatetransactions and a description of all material contractual arrangements, including materialdebt instruments; and (e) a description of material risk factors and material recentdevelopments;

(2) within 60 days (or in the case of the quarter ending March 31, 2011, 90 days) following theend of the first three fiscal quarters in each fiscal year of the Company beginning with thequarter ending March 31, 2011, all quarterly reports of the Company containing thefollowing information: (a) an unaudited condensed consolidated balance sheet as of the endof such quarter and unaudited condensed statements of income and cash flow for the mostrecent quarter year-to-date period ending on the unaudited condensed balance sheet date,and the comparable prior year periods, together with condensed footnote disclosure;(b) unaudited pro forma income statement information and balance sheet information of theCompany (which, for the avoidance of doubt, shall not include the provision of a full incomestatement or balance sheet to the extent not reasonably available), together with explanatoryfootnotes, for any material acquisitions, dispositions or recapitalizations that have occurredsince the beginning of the relevant quarter; (c) an operating and financial review of theunaudited financial statements, including a discussion of the results of operations, financialcondition, EBITDA and material changes in liquidity and capital resources of the Company,and a discussion of material changes not in the ordinary course of business in commitmentsand contingencies since the most recent report; and (d) material recent developments; and

(3) promptly after the occurrence of any material acquisition, disposition or restructuring or anysenior executive officer changes at the Company or change in auditors of the Company orany other material event that the Company or any of its Restricted Subsidiaries announcespublicly, a report containing a description of such event.

All financial statement and pro forma financial information shall be prepared in accordance withGAAP as in effect on the date of such report or financial statement (or otherwise on the basis ofGAAP as then in effect) and on a consistent basis for the periods presented; provided, however, that thereports set forth in clauses (1), (2) and (3) above may, (x) in the event of a change in applicableGAAP, present earlier periods on a basis that applied to such periods and (y) to the extent comparableprior period financial information of the Company does not exist, the comparable prior period financialinformation of Odeon Parent may be provided in lieu thereof. Except as provided for above, no reportneed include separate financial statements for any Subsidiaries of the Company. At the Company’selection it may also include financial statements of Odeon Parent in lieu of those for the Company;provided that if the financial statements of Odeon Parent are included in such report (includingpursuant to clause (y) of the immediately preceding sentence) a reasonably detailed description ofmaterial differences between the financial statements of Odeon Parent and the Company shall beincluded for any period after the Issue Date.

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At any time that any of the Company’s Subsidiaries are Unrestricted Subsidiaries and any suchUnrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary,constitutes a Significant Subsidiary of the Company, then the annual and quarterly financialinformation required by the first two clauses of this covenant shall include either (i) a reasonablydetailed presentation, either on the face of the financial statements or in the footnotes thereto, of thefinancial condition and results of operations of the Company and its Restricted Subsidiaries separatefrom the financial condition and results of operations of the Unrestricted Subsidiaries of the Companyor (ii) stand-alone audited or unaudited financial statements, as the case may be, of such UnrestrictedSubsidiary or Unrestricted Subsidiaries (as a group or otherwise) together with an unauditedreconciliation to the financial information of the Company and its Subsidiaries, which reconciliationshall include the following items: revenue, EBITDA, net income, cash, total assets, total debt,shareholders equity, capital expenditures and interest expense.

Substantially concurrently with the issuance to the Trustee of the reports specified in (1), (2) and(3) above, the Company shall also (a) use its commercially reasonable efforts (i) to post copies of suchreports on such password protected website as may be then maintained by the Company and itsSubsidiaries or (ii) otherwise to provide substantially comparable public availability of such reports (asdetermined by the Company in good faith) or (b) to the extent the Company determines in good faiththat it cannot make such reports available in the manner described in the preceding clause (a) owing toapplicable law or after the use of its commercially reasonable efforts, furnish such reports to theHolders and, upon their request, prospective purchasers of the Notes.

The Issuer will also make available copies of all reports required by clauses (1) through (3) of thefirst paragraph of this covenant, if and so long as the Notes are listed on the Official List of theLuxembourg Stock Exchange and admitted for trading on the Euro MTF and the rules of theLuxembourg Stock Exchange so require, at the offices of the Paying Agent in Luxembourg or, to theextent and in the manner permitted by such rules, post such reports on the official website of theLuxembourg Stock Exchange.

In addition, so long as the Notes remain outstanding and during any period during which theCompany is not subject to Section 13 or 15(d) of the Exchange Act nor exempt therefrom pursuant toRule 12g3-2(b), the Company shall furnish to the Holders and, upon their request, prospectivepurchasers of the Notes, the information required to be delivered pursuant to Rule 144A(d)(4) underthe Securities Act.

Merger and Consolidation

The Company and the Issuer

Neither the Company nor the Issuer will consolidate with or merge with or into, or convey,transfer or lease all or substantially all its assets to, any Person, unless:

(1) the resulting, surviving or transferee Person (the ‘‘Successor Company’’) will be a Personorganized and existing under the laws of any member state of the European Union onJanuary 1, 2004, or the United States of America, any State of the United States or theDistrict of Columbia, Canada or any province of Canada, Norway or Switzerland and theSuccessor Company (if not the Company or the Issuer, as applicable) will expressly assume,(a) by supplemental Indenture, executed and delivered to the Trustee, in form satisfactory tothe Trustee, all the obligations of the Company or the Issuer, as applicable, under the Notesand the Indenture and (b) all obligations of the Company or the Issuer, as applicable, underthe Security Documents;

(2) immediately after giving effect to such transaction (and treating any Indebtedness thatbecomes an obligation of the Successor Company or any Subsidiary of the SuccessorCompany as a result of such transaction as having been Incurred by the Successor Companyor such Subsidiary at the time of such transaction), no Default or Event of Default shallhave occurred and be continuing;

(3) immediately after giving effect to such transaction, either (a) the Successor Company wouldbe able to Incur at least an additional £1.00 of Indebtedness pursuant to the first paragraphof the covenant described under ‘‘—Certain Covenants—Limitation on Indebtedness’’ or(b) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries wouldnot be lower than it was immediately prior to giving effect to such transaction; and

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(4) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion ofCounsel, each to the effect that such consolidation, merger or transfer and suchsupplemental Indenture (if any) comply with the Indenture, and that all conditionsprecedent therein provided for relating to such transaction have been complied with and anOpinion of Counsel to the effect that such supplemental Indenture (if any) has been dulyauthorized, executed and delivered and is a legal, valid and binding agreement enforceableagainst the Successor Company and the Notes constitute legal, valid and binding obligationsof the Successor Company, enforceable in accordance with their terms (in each case, in formand substance satisfactory to the Trustee), provided that in giving an Opinion of Counsel,counsel may rely on an Officer’s Certificate as to any matters of fact, including as tosatisfaction of clauses (2) and (3) above.

Any Indebtedness that becomes an obligation of the Company or any Restricted Subsidiary (orthat is deemed to be Incurred by any Restricted Subsidiary that becomes a Restricted Subsidiary) as aresult of any such transaction undertaken in compliance with this covenant, and any RefinancingIndebtedness with respect thereto, shall be deemed to have been Incurred in compliance with thecovenant described under ‘‘—Certain Covenants—Limitation on Indebtedness.’’

For purposes of this covenant, the sale, lease, conveyance, assignment, transfer, or otherdisposition of all or substantially all of the properties and assets of one or more Subsidiaries of theCompany, which properties and assets, if held by the Company instead of such Subsidiaries, wouldconstitute all or substantially all of the properties and assets of the Company on a consolidated basis,shall be deemed to be the transfer of all or substantially all of the properties and assets of theCompany.

The Successor Company will succeed to, and be substituted for, and may exercise every right andpower of, the Company under the Indenture but in the case of a lease of all or substantially all itsassets, the predecessor company will not be released from its obligations under such Indenture or theNotes.

Notwithstanding the preceding clauses (2) and (3) (which do not apply to transactions referred toin this sentence) and, other than with respect to the second preceding paragraph, clause (4) of the firstparagraph of this covenant, (a) any Restricted Subsidiary of the Company may consolidate or otherwisecombine with, merge into or transfer all or part of its properties and assets to the Company and(b) any Restricted Subsidiary may consolidate or otherwise combine with, merge into or transfer all orpart of its properties and assets to any other Restricted Subsidiary. Notwithstanding the precedingclauses (2) and (3) (which does not apply to the transactions referred to in this sentence), the Companymay consolidate or otherwise combine with or merge into an Affiliate incorporated or organized for thepurpose of changing the legal domicile of the Company, reincorporating the Company in anotherjurisdiction, or changing the legal form of the Company.

There is no precise established definition of the phrase ‘‘substantially all’’ under applicable law.Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particulartransaction would involve ‘‘all or substantially all’’ of the property or assets of a Person.

The foregoing provisions (other than the requirements of clause (2) of the first paragraph of thiscovenant) shall not apply to the creation of a new subsidiary as a Restricted Subsidiary of theCompany.

Subsidiary Guarantors

No Subsidiary Guarantor may;

(1) consolidate with or merge with or into any Person, or

(2) sell, convey, transfer or dispose of, all or substantially all its assets as an entirety orsubstantially as an entirety, in one transaction or a series of related transactions, to anyPerson, or

(3) permit any Person to merge with or into the Subsidiary Guarantor,

unless

(A) the other Person is the Company or any Restricted Subsidiary that is Guarantor orbecomes a Guarantor concurrently with the transaction); or

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(B) (1) either (x) a Guarantor is the continuing Person or (y) the resulting, surviving ortransferee Person expressly assumes all of the obligations of the Guarantor underits Note Guarantee and the Security Documents; and

(2) immediately after giving effect to the transaction, no Default has occurred and iscontinuing; or

(C) the transaction constitutes a sale or other disposition (including by way ofconsolidation or merger) of the Guarantor or the sale or disposition of all orsubstantially all the assets of the Guarantor (in each case other than to the Companyor a Restricted Subsidiary) otherwise permitted by the Indenture.

There is no precise established definition of the phrase ‘‘substantially all’’ under applicable law.Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particulartransaction would involve ‘‘all or substantially all’’ of the property or assets of a Person.

Suspension of Covenants on Achievement of Investment Grade Status

If on any date following the Issue Date, the Notes have achieved Investment Grade Status and noDefault or Event of Default has occurred and is continuing (a ‘‘Suspension Event’’), then, beginning onthat day and continuing until the Reversion Date, the provisions of the Indenture summarized underthe following captions will not apply to such Notes: ‘‘—Certain Covenants—Limitation on RestrictedPayments,’’ ‘‘—Certain Covenants—Limitation on Indebtedness,’’ ‘‘—Certain Covenants—Limitation onRestrictions on Distributions from Restricted Subsidiaries,’’ ‘‘—Certain Covenants—Limitation onAffiliate Transactions,’’ and ‘‘—Certain Covenants—Limitation on Sales of Assets and SubsidiaryStock,’’ ‘‘—Certain Covenants—Impairment of Security Interest,’’ and the provisions of clause (3) ofthe first paragraph of the covenant described under ‘‘—Certain Covenants—Merger andConsolidation’’, and, in each case, any related default provision of such Indenture will cease to beeffective and will not be applicable to the Company and its Restricted Subsidiaries. Such covenants andany related default provisions will again apply according to their terms from the first day on which aSuspension Event ceases to be in effect. Such covenants will not, however, be of any effect with regardto actions of the Company properly taken during the continuance of the Suspension Event, and the‘‘—Certain Covenants—Limitation on Restricted Payments’’ covenant will be interpreted as if it hasbeen in effect since the date of such Indenture except that no default will be deemed to have occurredsolely by reason of a Restricted Payment made while that covenant was suspended. On the ReversionDate, all Indebtedness Incurred during the continuance of the Suspension Event will be classified, atthe Company’s option, as having been Incurred pursuant to the first paragraph of the covenantdescribed under ‘‘—Certain Covenants—Limitation on Indebtedness’’ or one of the clauses set forth inthe second paragraph of such covenant (to the extent such Indebtedness would be permitted to beIncurred thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred prior tothe Suspension Event and outstanding on the Reversion Date). To the extent such Indebtedness wouldnot be so permitted to be incurred under the first two paragraphs of the covenant described under‘‘—Certain Covenants—Limitation on Indebtedness,’’ such Indebtedness will be deemed to have beenoutstanding on the Issue Date, so that it is classified as permitted under clause (4)(b) of the secondparagraph of the covenant described under ‘‘—Certain Covenants—Limitation on Indebtedness’’.

Impairment of Security Interest

The Company shall not, and shall not permit any Restricted Subsidiary to, take or omit to takeany action that would have the result of materially impairing the security interest with respect to theCollateral (it being understood that the Incurrence of Permitted Collateral Liens shall under nocircumstances be deemed to materially impair the security interest with respect to the Collateral) forthe benefit of the Trustee and the Holders, and the Company shall not, and shall not permit anyRestricted Subsidiary to, grant to any Person other than the Security Agent, for the benefit of theTrustee and the Holders and the other beneficiaries described in the Security Documents, any interestwhatsoever in any of the Collateral, except that the Company and its Restricted Subsidiaries may IncurPermitted Collateral Liens and the Collateral may be discharged, transferred or released in accordancewith the Indenture or the applicable Security Documents.

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Events of Default

Each of the following is an Event of Default under the Indenture:

(1) default in any payment of interest or Additional Amounts, if any, on any Note when dueand payable, continued for 30 days;

(2) default in the payment of the principal amount of or premium, if any, on any Note issuedunder the Indenture when due at its Stated Maturity, upon optional redemption, uponrequired repurchase, upon declaration or otherwise;

(3) failure to comply for 30 days after written notice by the Trustee on behalf of the Holders orby the Holders of 25% in principal amount of the outstanding Notes with the Issuer’sobligations under the covenants described under ‘‘—Change of Control’’ above or under thecovenants described under ‘‘—Certain Covenants’’ above (in each case, other than a failureto purchase Notes which will constitute an Event of Default under clause (2) above);

(4) failure to comply for 60 days after written notice by the Trustee on behalf of the Holders orby the Holders of 25% in principal amount of the outstanding Notes with the Guarantors’ orIssuer’s other agreements contained in the Indenture;

(5) default under any mortgage, Indenture or instrument under which there may be issued or bywhich there may be secured or evidenced any Indebtedness for money borrowed by theCompany or any of its Restricted Subsidiaries (or the payment of which is Guaranteed bythe Company or any of its Restricted Subsidiaries) other than Indebtedness owed to theCompany or a Restricted Subsidiary whether such Indebtedness or Guarantee now exists, oris created after the date hereof, which default:

(a) is caused by a failure to pay principal of, or interest or premium, if any, on suchIndebtedness, immediately upon the expiration of the grace period provided in suchIndebtedness (‘‘payment default’’); or

(b) results in the acceleration of such Indebtedness prior to its maturity (the ‘‘crossacceleration provision’’);

and, in each case, the principal amount of any such Indebtedness, together with the principalamount of any other such Indebtedness under which there has been a payment default orthe maturity of which has been so accelerated, aggregates £20 million or more;

(6) certain events of bankruptcy, insolvency or court protection of the Issuer, the Company or aSignificant Subsidiary or group of Restricted Subsidiaries that, taken together (as of thelatest audited consolidated financial statements for the Company and its RestrictedSubsidiaries), would constitute a Significant Subsidiary (the ‘‘bankruptcy provisions’’);

(7) failure by the Issuer, the Company or any Significant Subsidiary or group of RestrictedSubsidiaries that, taken together (as of the latest audited consolidated financial statementsfor the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary topay final judgments aggregating in excess of £20 million (exclusive of any amounts that asolvent insurance company has acknowledged liability for), which judgments are not paid,discharged or stayed for a period of 60 days after the judgment becomes final (the‘‘judgment default provision’’);

(8) any security interest under the Security Documents on any material Collateral shall, at anytime, cease to be in full force and effect (other than in accordance with the terms of therelevant Security Document and the Indenture) for any reason other than the satisfaction infull of all obligations under the Indenture or the release or amendment of any such securityinterest in accordance with the terms of the Indenture or such Security Document or anysuch security interest created thereunder shall be declared invalid or unenforceable or theIssuer shall assert in writing that any such security interest is invalid or unenforceable andany such Default continues for 10 days (the ‘‘security default provisions’’); and

(9) any Guarantee ceases to be in full force and effect, other than in accordance with the termsof the Indenture or a Guarantor denies or disaffirms its obligations under its Guarantee,other than in accordance with the terms thereof or upon release of the Guarantee inaccordance with the Indenture.

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However, a default under clauses (3), (4), (5) or (7) of this paragraph will not constitute an Eventof Default until the Trustee or the Holders of 25% in principal amount of the outstanding Notes notifythe Issuer of the default and, with respect to clauses (3), (4), (5) and (7) the Issuer does not cure suchdefault within the time specified in clauses (3), (4), (5) or (7), as applicable, of this paragraph afterreceipt of such notice.

If an Event of Default (other than an Event of Default described in clause (6) above) occurs andis continuing, the Trustee by notice to the Issuer or the Holders of at least 25% in principal amount ofthe outstanding Notes by written notice to the Issuer and the Trustee, may, and the Trustee at therequest of such Holders shall, declare the principal of, premium, if any, and accrued and unpaidinterest, including Additional Amounts, if any, on all the Notes to be due and payable. Upon such adeclaration, such principal, premium and accrued and unpaid interest, including Additional Amounts ,if any, will be due and payable immediately. In the event of a declaration of acceleration of the Notesbecause an Event of Default described in clause (5) under ‘‘—Events of Default’’ has occurred and iscontinuing, the declaration of acceleration of the Notes shall be automatically annulled if the event ofdefault or payment default triggering such Event of Default pursuant to clause (5) shall be remedied orcured, or waived by the holders of the Indebtedness, or the Indebtedness that gave rise to such Eventof Default shall have been discharged in full, within 30 days after the declaration of acceleration withrespect thereto and if (1) the annulment of the acceleration of the Notes would not conflict with anyjudgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, exceptnonpayment of principal, premium or interest, including Additional Amounts, if any, on the Notes thatbecame due solely because of the acceleration of the Notes, have been cured or waived.

If an Event of Default described in clause (6) above occurs and is continuing, the principal of,premium, if any, and accrued and unpaid interest, including Additional Amounts, if any, on all theNotes will become and be immediately due and payable without any declaration or other act on thepart of the Trustee or any Holders.

The Holders of a majority in principal amount of the outstanding Notes under the Indenture maywaive all past or existing Defaults or Events of Default (except with respect to nonpayment ofprincipal, premium or interest, or Additional Amounts, if any,) and rescind any such acceleration withrespect to such Notes and its consequences if rescission would not conflict with any judgment or decreeof a court of competent jurisdiction.

Subject to the provisions of the Indenture relating to the duties of the Trustee, if an Event ofDefault occurs and is continuing, the Trustee will be under no obligation to exercise any of the rightsor powers under the Indenture at the request or direction of any of the Holders unless such Holdershave offered to the Trustee indemnity and/or security satisfactory to the Trustee against any loss,liability or expense. Except to enforce the right to receive payment of principal or interest when due,no Holder may pursue any remedy with respect to the Indenture or the Notes unless:

(1) such Holder has previously given the Trustee written notice that an Event of Default iscontinuing;

(2) Holders of at least 25% in principal amount of the outstanding Notes have requested inwriting the Trustee to pursue the remedy;

(3) such Holders have offered in writing the Trustee security and/or indemnity reasonablysatisfactory to the Trustee against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt of thewritten request and the offer of security or indemnity; and

(5) the Holders of a majority in principal amount of the outstanding Notes have not given theTrustee a written direction that, in the opinion of the Trustee, is inconsistent with suchrequest within such 60-day period.

Subject to certain restrictions, the Holders of a majority in principal amount of the outstandingNotes are given the right to direct the time, method and place of conducting any proceeding for anyremedy available to the Trustee or of exercising any trust or power conferred on the Trustee. TheIndenture provides that, in the event an Event of Default has occurred and is continuing, the Trusteewill be required in the exercise of its powers to use the degree of care that a prudent person would usein the conduct of its own affairs. The Trustee, however, may refuse to follow any direction that conflictswith law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other

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Holder or that would involve the Trustee in personal liability. Prior to taking any action under theIndenture, the Trustee will be entitled to indemnification satisfactory to it against all losses andexpenses caused by taking or not taking such action.

The Indenture provides that if a Default occurs and is continuing and the Trustee is informed ofsuch occurrence by the Issuer, the Trustee must give notice of the Default to the Holders within60 days after being notified by the Issuer. The Issuer is required to deliver to the Trustee, within120 days after the end of each fiscal year (and within 14 days upon request at any time after the120 days), an Officer’s Certificate indicating whether the signers thereof know of any Default thatoccurred during the previous year. The Issuer is required to deliver to the Trustee, within 30 days afterthe occurrence thereof, written notice of any events of which it is aware which would constitute certainDefaults, their status and what action the Issuer is taking or proposes to take in respect thereof.

The Notes provide for the Trustee to take action on behalf of the Holders in certaincircumstances, but only if the Trustee is indemnified and/or secured to its satisfaction. It may not bepossible for the Trustee to take certain actions in relation to the Notes and, accordingly, in suchcircumstances the Trustee will be unable to take action, notwithstanding the provision of an indemnityto it, and it will be for Holders to take action directly.

Amendments and Waivers

Subject to certain exceptions, the Note Documents may be amended, supplemented or otherwisemodified with the consent of the Holders of a majority in principal amount of the Notes thenoutstanding (including consents obtained in connection with a purchase of, or tender offer or exchangeoffer for, such Notes) and, subject to certain exceptions, any default or compliance with any provisionsthereof may be waived with the consent of the Holders of a majority in principal amount of the Notesthen outstanding (including consents obtained in connection with a purchase of, or tender offer orexchange offer for, such Notes). However, without the consent of Holders holding not less than 90%(or, in the case of clause (8) or (9), 75%) of the then outstanding principal amount of Notes, anamendment or waiver may not, with respect to any such Notes held by a non-consenting Holder:

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment;

(2) reduce the stated rate of or extend the stated time for payment of interest on any suchNote;

(3) reduce the principal of or extend the Stated Maturity of any such Note;

(4) reduce the premium payable upon the redemption of any such Note or change the time atwhich any such Note may be redeemed, in each case as described above under ‘‘—OptionalRedemption’’ or ‘‘—Redemption for Taxation Reasons’’;

(5) make any such Note payable in money other than that stated in such Note;

(6) impair the right of any Holder to receive payment of principal of and interest on suchHolder’s Notes on or after the due dates therefor or to institute suit for the enforcement ofany such payment on or with respect to such Holder’s Notes;

(7) make any change in the provision of the Indenture described under ‘‘—AdditionalAmounts’’ that adversely affects the right of any Holder of such Notes in any materialrespect;

(8) release all or substantially all of the Guarantors from their obligations under their respectiveNote Guarantees or the Indenture, except otherwise in accordance with the terms of theIndenture;

(9) release the security interest granted for the benefit of the Holders in the Collateral otherthan pursuant to the terms of the Security Document or as otherwise permitted by theIndenture;

(10) waive a Default or Event of Default with respect to the nonpayment of principal, premiumor interest (except pursuant to a rescission of acceleration of the Notes by the Holders of atleast a majority in aggregate principal amount of such Notes and a waiver of the paymentdefault that resulted from such acceleration); or

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(11) make any change in the amendment or waiver provisions which require the Holders’ consentdescribed in this sentence.

Notwithstanding the foregoing, without the consent of any Holder, the Issuer, the Guarantors, theTrustee and the other parties thereto, as applicable, may amend or supplement any Note Documentsto:

(1) cure any ambiguity, omission, defect, error or inconsistency, conform any provision of theNote Documents to this ‘‘Description of the Notes’’, or reduce the minimum denominationof the Notes;

(2) provide for the assumption by a successor Person of the obligations of the Issuer or theGuarantors under any Note Document;

(3) provide for uncertificated Notes in addition to or in place of certificated Notes (providedthat the uncertificated Notes are issued in registered form for purposes of Section 163(f) ofthe Code, or in a manner such that the uncertificated Notes are described inSection 163(f)(2)(B) of the Code);

(4) add to the covenants or provide for a Guarantee for the benefit of the Holders or surrenderany right or power conferred upon the Issuer, the Company or any Restricted Subsidiary;

(5) make any change that does not adversely affect the rights of any Holder in any materialrespect;

(6) make such provisions as necessary (as determined in good faith by the Issuer) for theissuance of Additional Notes;

(7) to provide for any Restricted Subsidiary to provide a Guarantee in accordance with thecovenant described under ‘‘—Certain Covenants—Limitation on Indebtedness,’’ to addGuarantees with respect to the Notes, to add security to or for the benefit of the Notes, orto confirm and evidence the release, termination, discharge or retaking of any Guarantee orLien (including the Collateral and the Security Documents) with respect to or securing theNotes when such release, termination, discharge or retaking is provided for under theIndenture or the Security Documents;

(8) to evidence and provide for the acceptance and appointment under the Indenture of asuccessor Trustee pursuant to the requirements thereof or to provide for the accession bythe Trustee to any Note Document; or

(9) in the case of the Security Documents, to mortgage, pledge, hypothecate or grant a securityinterest in favor of the Security Agent for the benefit of parties to the Senior FacilitiesAgreement, in any property which is required by the Senior Facilities Agreement (as ineffect on the Issue Date) to be mortgaged, pledged or hypothecated, or in which a securityinterest is required to be granted to the Security Agent, or to the extent necessary to grant asecurity interest for the benefit of any Person; provided that the granting of such securityinterest is not prohibited by the Indenture and the covenant described under ‘‘—CertainCovenants—Impairment of Security Interest’’ is complied with.

The Issuer will, for so long as the Notes are listed on the Euro MTF, to the extent required bythe rules of the Euro MTF, inform the Euro MTF of any of the foregoing amendments, supplementsand waivers and provide, if necessary, a supplement to this offering memorandum setting forthreasonable details in connection with any such amendments, supplements or waivers.

The consent of the Holders is not necessary under the Indenture to approve the particular formof any proposed amendment of any Note Document. It is sufficient if such consent approves thesubstance of the proposed amendment. A consent to any amendment or waiver under the Indenture byany Holder of Notes given in connection with a tender of such Holder’s Notes will not be renderedinvalid by such tender.

For so long as the Notes are listed on the Euro MTF and the rules of such exchange so require,the Issuer will publish notice of any amendment, supplement and waiver on the official website of theLuxembourg Stock Exchange or in a daily newspaper with general circulation in Luxembourg (which isexpected to be the Luxembourger Wort).

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Acts by Holders

In determining whether the Holders of the required principal amount of the Notes haveconcurred in any direction, waiver or consent, the Notes owned by the Issuer or by any Person directlyor indirectly controlled, or controlled by, or under direct or indirect common control with, the Issuerwill be disregarded and deemed not to be outstanding.

Defeasance

The Issuer at any time may terminate all obligations of the Issuer, the Company and theGuarantors under the Notes and the Indenture (‘‘legal defeasance’’) and cure all then existing Defaultsand Events of Default, except for certain obligations, including those respecting the defeasance trust,the rights, powers, trusts, duties, immunities and indemnities of the Trustee and the obligations of theIssuer in connection therewith and obligations concerning issuing temporary Notes, registrations ofNotes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency forpayment and money for security payments held in trust. Subject to the foregoing, if the Issuer exercisesits legal defeasance option, the Security Documents in effect at such time will terminate (other thanwith respect to the defeasance trust).

The Issuer at any time may terminate all obligations under the covenants described under‘‘—Certain Covenants’’ (other than clauses (1) and (2) of ‘‘—Certain Covenants—Merger andConsolidation’’) and ‘‘—Change of Control’’ and the default provisions relating to such covenantsdescribed under ‘‘—Events of Default’’ above, the operation of the cross-default upon a paymentdefault, the cross acceleration provisions, the bankruptcy provisions, the judgment default provision, theguarantee provision and the security default provision described under ‘‘—Events of Default’’ above(‘‘covenant defeasance’’).

The Issuer at its option at any time may exercise their legal defeasance option notwithstanding itsprior exercise of the covenant defeasance option. If the Issuer exercises its legal defeasance option,payment of the Notes may not be accelerated because of an Event of Default with respect to theNotes. If the Issuer exercises its covenant defeasance option with respect to the Notes, payment of theNotes may not be accelerated because of an Event of Default specified in clause (3) (other than withrespect to clauses (1) and (2) of the covenant described under ‘‘—Certain Covenants—Merger andConsolidation’’), (4), (5), (6) (with respect only to the Issuer and the Company and its SignificantSubsidiaries), (7), (8) or (9) under ‘‘—Events of Default’’ above.

In order to exercise either defeasance option, the Issuer must irrevocably deposit in trust (the‘‘defeasance trust’’) with the Trustee cash in pounds sterling , UK Government Securities, or acombination of cash in pounds sterling and UK Government Securities (in the case of the SterlingNotes) and cash in euro, European Government Obligations, or a combination of cash in euro andEuropean Government Obligations (in the case of the Euro Notes) in such amounts as will besufficient for the payment of principal, premium, if any, and interest on the Notes to redemption ormaturity, as the case may be, and must comply with certain other conditions, including delivery to theTrustee of:

(1) an Opinion of Counsel in the United States to the effect that holders of the Notes will notrecognize income, gain or loss for U.S. federal income tax purposes as a result of suchdeposit and defeasance and will be subject to U.S. federal income tax on the same amountand in the same manner and at the same times as would have been the case if such depositand defeasance had not occurred (and in the case of legal defeasance only, such Opinion ofCounsel in the United States must be based on a ruling of the U.S. Internal RevenueService or other change in applicable U.S. federal income tax law since the Issue Date);

(2) an Opinion of Counsel to the effect that, as of the date of such opinion and subject tocustomary assumptions and exclusions, following the deposit, the trust funds will not besubject to the effect of any applicable bankruptcy, liquidation, reorganization, administration,moratorium, receivership or similar laws affecting creditors’ rights generally under anyapplicable U.S. federal or state law and that the Trustee has a perfected security interest insuch trust funds for the ratable benefit of the Holders;

(3) an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent ofdefeating, hindering, delaying, defrauding or preferring any creditors of the Issuer;

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(4) an Officer’s Certificate and an Opinion of Counsel (which opinion of counsel may be subjectto customary assumptions and exclusions), each stating that that all conditions precedentprovided for or relating to legal defeasance or covenant defeasance, as the case may be,have been complied with;

(5) an Opinion of Counsel to the effect that the trust resulting from the deposit does notconstitute, or is qualified as, a regulated investment company under the U.S. InvestmentCompany Act of 1940; and

(6) all other documents or other information that the Trustee may reasonably require inconnection with either defeasance option.

Satisfaction and Discharge

The Indenture, and the rights of the Trustee and the Holders under the Security Document willbe discharged and cease to be of further effect (except as to surviving rights of conversion or transferor exchange of the Notes, as expressly provided for in the Indenture) as to all outstanding Notes when(1) either (a) all the Notes previously authenticated and delivered (other than certain lost, stolen ordestroyed Notes and certain Notes for which provision for payment was previously made and thereafterthe funds have been released to the Issuer) have been delivered to the Trustee for cancellation; or(b) all Notes not previously delivered to the Trustee for cancellation (i) have become due and payable,(ii) will become due and payable at their Stated Maturity within one year or (iii) are to be called forredemption within one year under arrangements satisfactory to the Trustee for the giving of notice ofredemption by the Trustee in the name, and at the expense, of the Issuer; (2) the Issuer has depositedor caused to be deposited with the Trustee, cash in pounds sterling, UK Government Securities, or acombination of cash in pounds sterling, and UK Government Securities (in the case of the SterlingNotes) and cash in euros, European Government Obligations or a combination of cash in euros andEuropean Government Obligations (in the case of the Euro Notes), in an amount sufficient to pay anddischarge the entire indebtedness on the Notes not previously delivered to the Trustee for cancellation,for principal, premium, if any, and interest to the date of deposit (in the case of Notes that havebecome due and payable), or to the Stated Maturity or redemption date, as the case may be; (3) theIssuer has paid or caused to be paid all other sums payable under the Indenture; and (4) the Issuer hasdelivered to the Trustee an Officer’s Certificate and an Opinion of Counsel each to the effect that allconditions precedent under the ‘‘—Satisfaction and Discharge’’ section of the Indenture relating to thesatisfaction and discharge of the Indenture have been complied with, provided that any such counselmay rely on any Officer’s Certificate as to matters of fact (including as to compliance with theforegoing clauses (1), (2) and (3)).

No Personal Liability of Directors, Officers, Employees and Shareholders

No director, officer, employee, incorporator or shareholder of the Issuer or the Company or anyof their respective Subsidiaries or Affiliates, as such, shall have any liability for any obligations of theIssuer, the Company or the Guarantors under the Note Documents or for any claim based on, inrespect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waivesand releases all such liability. The waiver and release are part of the consideration for issuance of theNotes. Such waiver may not be effective to waive liabilities under the U.S. federal securities laws and itis the view of the SEC that such a waiver is against public policy.

Concerning the Trustee and Certain Agents

The Bank of New York Mellon is to be appointed as Trustee under the Indenture. The Indentureprovides that, except during the continuance of an Event of Default, the Trustee will perform only suchduties as are set forth specifically in such Indenture. During the existence of an Event of Default, theTrustee will exercise such of the rights and powers vested in it under the Indenture and use the samedegree of care that a prudent Person would use in conducting its own affairs. The permissive rights ofthe Trustee to take or refrain from taking any action enumerated in the Indenture will not beconstrued as an obligation or duty.

The Indenture imposes certain limitations on the rights of the Trustee, should it become acreditor of the Issuer, to obtain payment of claims in certain cases, or to realize on certain propertyreceived in respect of any such claim as security or otherwise. The Trustee will be permitted to engagein other transactions with the Company, the Issuer and their respective Affiliates and Subsidiaries.

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The Indenture sets out the terms under which the Trustee may retire or be removed, andreplaced. Such terms will include, among others, (1) that the Trustee may be removed at any time bythe Holders of a majority in principal amount of the then outstanding Notes, or may resign at any timeby giving written notice to the Issuer and (2) that if the Trustee at any time (a) has or acquires aconflict of interest that is not eliminated, (b) fails to meet certain minimum limits regarding theaggregate of its capital and surplus or (c) becomes incapable of acting as Trustee or becomes insolventor bankrupt, then the Issuer may remove the Trustee, or any Holder who has been a bona fide Holderfor not less than 6 months may petition any court for removal of the Trustee and appointment of asuccessor Trustee.

Any removal or resignation of the Trustee shall not become effective until the acceptance ofappointment by the successor Trustee.

The Indenture contains provisions for the indemnification of the Trustee for any loss, liability,taxes and expenses incurred without negligence or willful misconduct on its part, arising out of or inconnection with the acceptance or administration of the Indenture.

Notices

All notices to Holders of Notes will be validly given if mailed to them at their respectiveaddresses in the register of the Holders of the Notes, if any, maintained by the Registrar. In addition,for so long as any of the Notes are listed on the Euro MTF and the rules of the Euro MTF so require,notices with respect to the Notes listed on the Euro MTF will be published on the official website ofthe Luxembourg Stock Exchange or in a leading newspaper having general circulation in Luxembourg(which is expected to be the Luxembourger Wort) or if, in the opinion of the Trustee such publicationis not practicable, in an English language newspaper having general circulation in Europe. For so longas any Notes are represented by Global Notes, all notices to Holders of the Notes will be delivered toEuroclear and Clearstream, delivery of which shall be deemed to satisfy the requirements of thisparagraph, each of which will give such notices to the holders of Book-Entry Interests.

Each such notice shall be deemed to have been given on the date of such publication or, ifpublished more than once on different dates, on the first date on which publication is made; providedthat, if notices are mailed, such notice shall be deemed to have been given on the later of suchpublication and the seventh day after being so mailed. Any notice or communication mailed to aHolder shall be mailed to such Person by first-class mail or other equivalent means and shall besufficiently given to him if so mailed within the time prescribed. Failure to mail a notice orcommunication to a Holder or any defect in it shall not affect its sufficiency with respect to otherHolders. If a notice or communication is mailed in the manner provided above, it is duly given,whether or not the addressee receives it.

Prescription

Claims against the Issuer or any Guarantor for the payment of principal, or premium, if any, onthe Notes or any Guarantee will be prescribed ten years after the applicable due date for paymentthereof. Claims against the Issuer or any Guarantor for the payment of interest on the Notes will beprescribed five years after the applicable due date for payment of interest.

Currency Indemnity

Pounds sterling is the sole currency of account and payment for all sums payable by the Issuerunder or in connection with the Sterling Notes including damages. Euro is the sole currency of accountand payment for all sums payable by the Issuer under or in connection with the Euro Notes includingdamages. Any amount received or recovered in a currency other than pounds sterling or euro, asapplicable, whether as a result of, or the enforcement of, a judgment or order of a court of anyjurisdiction, in the winding-up or dissolution of the Issuer or otherwise by any Holder or by theTrustee, in respect of any sum expressed to be due to it from the Issuer will only constitute a dischargeto the Issuer to the extent of the pounds sterling amount or euro amount, as applicable, which therecipient is able to purchase with the amount so received or recovered in that other currency on thedate of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on thefirst date on which it is practicable to do so).

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If that pounds sterling amount or euro amount, as applicable, is less than the pounds sterlingamount or euro amount, as applicable, expressed to be due to the recipient or the Trustee under anyNote, the Issuer will indemnify them against any loss sustained by such recipient or the Trustee as aresult. In any event, the Issuer will indemnify the recipient or the Trustee against the cost of makingany such purchase. For the purposes of this currency indemnity provision, it will be prima facie evidenceof the matter stated therein for the Holder of a Note or the Trustee to certify in a manner satisfactoryto the Issuer (indicating the sources of information used) the loss it incurred in making any suchpurchase. These indemnities constitute a separate and independent obligation from the Issuer’s otherobligations, will give rise to a separate and independent cause of action, will apply irrespective of anywaiver granted by any Holder of a Note or the Trustee (other than a waiver of the indemnities set outherein) and will continue in full force and effect despite any other judgment, order, claim or proof fora liquidated amount in respect of any sum due under any Note or to the Trustee.

Enforceability of Judgments

Since all the assets of the Company and the Issuer are held by Subsidiaries located outside theUnited States, any judgment obtained in the United States against either of them, including judgmentswith respect to the payment of principal, premium, if any, interest, Additional Amounts, if any, and anyredemption price and any purchase price with respect to the Notes, may not be collectable within theUnited States.

Consent to Jurisdiction and Service

In relation to any legal action or proceedings arising out of or in connection with the Indentureand the Notes, the Issuer will in the Indenture irrevocably submit to the jurisdiction of the federal andstate courts in the Borough of Manhattan in the City of New York, County and State of New York,United States.

Governing Law

The Indenture and the Notes, including any Note Guarantees, and the rights and duties of theparties thereunder shall be governed by and construed in accordance with the laws of the State ofNew York.

Certain Definitions

‘‘Acquired Indebtedness’’ means Indebtedness (1) of a Person or any of its Subsidiaries existing atthe time such Person becomes a Restricted Subsidiary, or (2) assumed in connection with theacquisition of assets from such Person, in each case whether or not Incurred by such Person inconnection with such Person becoming a Restricted Subsidiary of the Company or such acquisition or(3) of a Person at the time such Person merges with or into or consolidates or otherwise combines withthe Company or any Restricted Subsidiary. Acquired Indebtedness shall be deemed to have beenIncurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes aRestricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date ofconsummation of such acquisition of assets and, with respect to clause (3) of the preceding sentence,on the date of the relevant merger, consolidation or other combination.

‘‘Agreed Security Principles’’ means the Agreed Security Principles as set out in an annex to theIndenture as in effect on the Issue Date, as applied reasonably and in good faith by the Company.

‘‘Additional Assets’’ means:

(1) any property or assets (other than Indebtedness and Capital Stock) used or to be used bythe Company, a Restricted Subsidiary or otherwise useful in a Similar Business (it beingunderstood that capital expenditures on property or assets already used in Similar Businessor to replace any property or assets that are the subject of such Asset Disposition shall bedeemed an investment in Additional Assets);

(2) the Capital Stock of a Person that is engaged in a Similar Business and becomes aRestricted Subsidiary as a result of the acquisition of such Capital Stock by the Company ora Restricted Subsidiary of the Company; or

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(3) Capital Stock constituting a minority interest in any Person that at such time is a RestrictedSubsidiary of the Company.

‘‘Affiliate’’ of any specified Person means any other Person, directly or indirectly, controlling orcontrolled by or under direct or indirect common control with such specified Person. For the purposesof this definition, ‘‘control’’ when used with respect to any Person means the power to direct themanagement and policies of such Person, directly or indirectly, whether through the ownership ofvoting securities, by contract or otherwise; and the terms ‘‘controlling’’ and ‘‘controlled’’ have meaningscorrelative to the foregoing.

‘‘Applicable Premium’’ means with respect to any Sterling Note on any redemption date, thegreater of:

(1) 1.0% of the principal amount of the Sterling Notes; or

(2) the excess of:

(i) the present value at such redemption date of (x) the redemption price of suchSterling Note at August 1, 2014 (such redemption price being set forth in thetable appearing under the caption ‘‘—Optional Redemption’’), plus (y) allrequired interest payments due on such Sterling Note through August 1, 2014(excluding accrued but unpaid interest), computed using a discount rate equal tothe Gilt Rate as of such redemption date plus 50 basis points; over

(ii) the outstanding principal amount of such Sterling Note;

as calculated by the Issuer or on behalf of the Issuer by such Person as the Issuer shall designate.

‘‘Asset Disposition’’ means any direct or indirect sale, lease (other than an operating lease enteredinto in the ordinary course of business), transfer, issuance or other disposition, or a series of relatedsales, leases (other than operating leases entered into in the ordinary course of business), transfers,issuances or dispositions that are part of a common plan, of shares of Capital Stock of a Subsidiary(other than directors’ qualifying shares), property or other assets (each referred to for the purposes ofthis definition as a ‘‘disposition’’) by the Company or any of its Restricted Subsidiaries, including anydisposition by means of a merger, consolidation or similar transaction; provided that the sale,conveyance or other disposition of all or substantially all of the assets of the Company and itsRestricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture describedabove under the caption ‘‘—Change of Control’’ and/or the provisions described above under thecaption ‘‘—Certain Covenants—Merger and Consolidation’’ and not by the provisions of the AssetDisposition covenant. Notwithstanding the preceding provisions of this definition, the following itemsshall not be deemed to be Asset Dispositions:

(1) a disposition by a Restricted Subsidiary to the Company or by the Company or a RestrictedSubsidiary to a Restricted Subsidiary;

(2) a disposition of cash, Cash Equivalents, Temporary Cash Investments or Investment GradeSecurities;

(3) a disposition of inventory or other assets in the ordinary course of business;

(4) a disposition of obsolete, surplus or worn out equipment or other assets or equipment orother assets that are no longer useful in the conduct of the business of the Company and itsRestricted Subsidiaries;

(5) transactions permitted under ‘‘—Certain Covenants—Merger and Consolidation—TheCompany and the Issuer’’ or a transaction that constitutes a Change of Control;

(6) an issuance of Capital Stock by a Restricted Subsidiary to the Company or to anotherRestricted Subsidiary or as part of or pursuant to an equity incentive or compensation planapproved by the Board of Directors;

(7) any dispositions of Capital Stock, properties or assets in a single transaction or series ofrelated transactions with a fair market value (as determined in good faith by the Company)of less than the greater of 2% of Total Assets and £15 million;

(8) any Restricted Payment that is permitted to be made, and is made, under the covenantdescribed above under ‘‘—Certain Covenants—Limitation on Restricted Payments’’ and the

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making of any Permitted Payment or Permitted Investment or, solely for purposes ofclause (3) of the first paragraph under ‘‘—Certain Covenants—Limitation on Sales of Assetsand Subsidiary Stock’’, asset sales, the proceeds of which are used to make such RestrictedPayments or Permitted Investments;

(9) dispositions in connection with Permitted Liens;

(10) dispositions of receivables in connection with the compromise, settlement or collectionthereof in the ordinary course of business or in bankruptcy or similar proceedings andexclusive of factoring or similar arrangements;

(11) the licensing or sub-licensing of intellectual property or other general intangibles andlicenses, sub-licenses, leases or subleases of other property, in each case, in the ordinarycourse of business;

(12) foreclosure, condemnation or any similar action with respect to any property or other assets;

(13) the sale or discount (with or without recourse, and on customary or commercially reasonableterms of accounts receivable or notes receivable arising in the ordinary course of business,or the conversion or exchange of accounts receivable for notes receivable;

(14) sales or dispositions of receivables in connection with any Qualified Receivables Financing;

(15) any disposition of Capital Stock, Indebtedness or other securities of an UnrestrictedSubsidiary;

(16) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement orother obligation with or to a Person (other than the Company or a Restricted Subsidiary)from whom such Restricted Subsidiary was acquired, or from whom such RestrictedSubsidiary acquired its business and assets (having been newly formed in connection withsuch acquisition), made as part of such acquisition and in each case comprising all or aportion of the consideration in respect of such sale or acquisition;

(17) any surrender or waiver of contract rights or the settlement, release or surrender of contract,tort or other claims of any kind; and

(18) any disposition with respect to property built, owned or otherwise acquired by the Companyor any Restricted Subsidiary pursuant to customary sale and lease-back transactions, financeleases, asset securitizations and other similar financings permitted by the Indenture.

‘‘Associate’’ means (i) any Person engaged in a Similar Business of which the Company or itsRestricted Subsidiaries are the legal and beneficial owners of between 20% and 50% of all outstandingVoting Stock and (ii) any joint venture entered into by the Company or any Restricted Subsidiary ofthe Company.

‘‘Board of Directors’’ means (1) with respect to the Company or any corporation, the board ofdirectors or managers, as applicable, of the corporation, or any duly authorized committee thereof;(2) with respect to any partnership, the board of directors or other governing body of the generalpartner of the partnership or any duly authorized committee thereof; and (3) with respect to any otherPerson, the board or any duly authorized committee of such Person serving a similar function.Whenever any provision requires any action or determination to be made by, or any approval of, aBoard of Directors, such action, determination or approval shall be deemed to have been taken ormade if approved by a majority of the directors (excluding employee representatives, if any) on anysuch Board of Directors (whether or not such action or approval is taken as part of a formal boardmeeting or as a formal board approval).

‘‘Business Day’’ means each day that is not a Saturday, Sunday or other day on which bankinginstitutions in London, United Kingdom, or Luxembourg are authorized or required by law to close;provided, however, that for any payments to be made under the Indenture, such day shall also be a dayon which the Trans-European Automated Real-time Gross Settlement Express Transfer (‘‘TARGET’’)payment system is open for the settlement of payments.

‘‘Capital Stock’’ of any Person means any and all shares of, rights to purchase, warrants or optionsfor, or other equivalents of or partnership or other interests in (however designated), equity of suchPerson, including any Preferred Stock, but excluding any debt securities convertible into such equity.

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‘‘Capitalized Lease Obligations’’ means an obligation that is required to be classified and accountedfor as a capitalized lease for financial reporting purposes on the basis of GAAP, as in effect on theIssue Date and not giving effect to changes after the Issue Date. The amount of Indebtednessrepresented by such obligation will be the capitalized amount of such obligation at the time anydetermination thereof is to be made as determined on the basis of GAAP, and the Stated Maturitythereof will be the date of the last payment of rent or any other amount due under such lease prior tothe first date such lease may be terminated without penalty.

‘‘Cash Equivalents’’ means:

(1) securities issued or directly and fully Guaranteed or insured by the United States orCanadian governments, a member state of the European Union, Switzerland or Norway or,in each case, any agency or instrumentality of thereof (provided that the full faith and creditof such country or such member state is pledged in support thereof), having maturities ofnot more than two years from the date of acquisition;

(2) certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits orbankers’ acceptances having maturities of not more than one year from the date ofacquisition thereof issued by any lender party to a Credit Facility or by any bank or trustcompany (a) whose commercial paper is rated at least ‘‘A-1’’ or the equivalent thereof byS&P or at least ‘‘P-1’’ or the equivalent thereof by Moody’s (or if at the time neither isissuing comparable ratings, then a comparable rating of another Nationally RecognizedStatistical Rating Organization) or (b) (in the event that the bank or trust company does nothave commercial paper which is rated) having combined capital and surplus in excess of£500 million;

(3) repurchase obligations with a term of not more than 30 days for underlying securities of thetypes described in clauses (1) and (2) entered into with any bank meeting the qualificationsspecified in clause (2) above;

(4) commercial paper rated at the time of acquisition thereof at least ‘‘A-2’’ or the equivalentthereof by S&P or ‘‘P-2’’ or the equivalent thereof by Moody’s or carrying an equivalentrating by a Nationally Recognized Statistical Rating Organization, if both of the two namedrating agencies cease publishing ratings of investments or, if no rating is available in respectof the commercial paper, the issuer of which has an equivalent rating in respect of itslong-term debt, and in any case maturing within one year after the date of acquisitionthereof;

(5) readily marketable direct obligations issued by any state of the United States of America,any province of Canada, any member of the European Union, Switzerland or Norway or anypolitical subdivision thereof, in each case, having one of the two highest rating categoriesobtainable from either Moody’s or S&P (or, if at the time, neither is issuing comparableratings, then a comparable rating of another Nationally Recognized Statistical RatingOrganization) with maturities of not more than two years from the date of acquisition;

(6) Indebtedness or preferred stock issued by Persons with a rating of ‘‘BBB�’’ or higher fromS&P or ‘‘Baa3’’ or higher from Moody’s (or, if at the time, neither is issuing comparableratings, then a comparable rating of another Nationally Recognized Statistical RatingOrganization) with maturities of 12 months or less from the date of acquisition;

(7) bills of exchange issued in the United States, Canada, a member state of the EuropeanUnion, Switzerland, Norway or Japan eligible for rediscount at the relevant central bank andaccepted by a bank (or any dematerialized equivalent); and

(8) interests in any investment company, money market or enhanced high yield fund whichinvests 95% or more of its assets in instruments of the type specified in clauses (1) through(7) above.

‘‘Change of Control’’ means:

(1) the Company becomes aware of (by way of a report or any other filing pursuant toSection 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) any ‘‘person’’ or‘‘group’’ of related persons (as such terms are used in Sections 13(d) and 14(d) of theExchange Act as in effect on the Issue Date), other than one or more Permitted Holders, is

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or becomes the ‘‘beneficial owner’’ (as defined in Rules 13d-3 and 13d-5 under theExchange Act as in effect on the Issue Date), directly or indirectly, of more than 50% of thetotal voting power of the Voting Stock of the Company, provided that for the purposes ofthis clause, (x) no Change of Control shall be deemed to occur by reason of the Companybecoming a Subsidiary of a Successor Parent and (y) any Voting Stock of which anyPermitted Holder is the ‘‘beneficial owner’’ (as so defined) shall not be included in anyVoting Stock of which any such person or group is the ‘‘beneficial owner’’ (as so defined),unless that person or group is not an affiliate of a Permitted Holder and has greater votingpower with respect to that Voting Stock;

(2) following the Initial Public Offering of the Company or any Parent, during any period of twoconsecutive years, individuals who at the beginning of such period constituted the majorityof the directors (excluding any employee representatives, if any) on the Board of Directorsof the Company or any Parent (together with any new directors whose election by themajority of such directors on such Board of Directors of the Company or any Parent orwhose nomination for election by shareholders of the Company or any Parent, as applicable,was approved by a vote of the majority of such directors on the Board of Directors of theCompany or any Parent then still in office who were either directors at the beginning ofsuch period or whose election or nomination for election was previously so approved) ceasedfor any reason to constitute the majority of the directors (excluding any employeerepresentatives, if any) on the Board of Directors of the Company or any Parent, then inoffice; or

(3) the sale, lease, transfer, conveyance or other disposition (other than by way of merger,consolidation or other business combination transaction), in one or a series of relatedtransactions, of all or substantially all of the assets of the Company and its RestrictedSubsidiaries taken as a whole to a Person, other than a Restricted Subsidiary or one or morePermitted Holders.

‘‘Clearstream’’ means Clearstream Banking, a societe anonyme as currently in effect or anysuccessor securities clearing agency.

‘‘Code’’ means the United States Internal Revenue Code of 1986, as amended.

‘‘Commodity Hedging Agreements’’ means in respect of a Person any commodity purchase contract,commodity futures or forward contract, commodities option contract or other similar contract(including commodities derivative agreements or arrangements), to which such Person is a party or abeneficiary.

‘‘Consolidated EBITDA’’ for any period means, without duplication, the Consolidated Net Incomefor such period, plus the following to the extent deducted in calculating such Consolidated Net Income:

(1) Fixed Charges;

(2) Consolidated Income Taxes;

(3) consolidated depreciation expense;

(4) consolidated amortization expense;

(5) any expenses, charges or other costs related to any Equity Offering, Investment, acquisition(including amounts paid in connection with the acquisition or retention of one or moreindividuals comprising part of a management team retained to manage the acquiredbusiness; provided that such payments are made in connection with such acquisition and areconsistent with the customary practice in the industry at the time of such acquisition),disposition, recapitalization or the Incurrence of any Indebtedness permitted by theIndenture (in each case whether or not successful) (including any such fees, expenses orcharges related to the Transactions (including any expenses in connection with related duediligence activities)), in each case, as determined in good faith by an Officer of theCompany;

(6) any minority interest expense (whether paid or not) consisting of income attributable tominority equity interests of third parties in such period or any prior period or any netearnings, income or share of profit of any Associates, associated company or undertaking;

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(7) the amount of management, monitoring, consulting and advisory fees and related expensespaid in such period to the Permitted Holders to the extent permitted by the covenantdescribed under ‘‘—Certain Covenants—Limitation on Affiliate Transactions’’; and

(8) other non-cash charges, write-downs or items reducing Consolidated Net Income (excludingany such non-cash charge, write-down or item to the extent it represents an accrual of orreserve for cash charges in any future period) less other non-cash items of income increasingConsolidated Net Income (excluding any such non-cash item of income to the extent itrepresents a receipt of cash in any future period).

Notwithstanding the foregoing, the provision for taxes and the depreciation, amortization,non-cash items, charges and write-downs of a Restricted Subsidiary shall be added to Consolidated NetIncome to compute Consolidated EBITDA only to the extent (and in the same proportion, including byreason of minority interests) that the net income (loss) of such Restricted Subsidiary was included incalculating Consolidated Net Income for the purposes of this definition.

‘‘Consolidated Income Taxes’’ means taxes or other payments, including deferred Taxes, based onincome, profits or capital (including without limitation withholding taxes) and franchise taxes of any ofthe Company and its Restricted Subsidiaries whether or not paid, estimated, accrued or required to beremitted to any Governmental Authority.

‘‘Consolidated Interest Expense’’ means, with respect to any Person for any period, withoutduplication, (1) interest payable (whether in cash or capitalized) on Financial Indebtedness of suchPerson and its Restricted Subsidiaries for such period, excluding any expense associated withSubordinated Shareholder Funding less (2) interest income for such period.

‘‘Consolidated Leverage’’ means the sum of the aggregate outstanding Financial Indebtedness ofthe Company and its Restricted Subsidiaries (excluding Hedging Obligations except to the extentprovided in clause (c) of the penultimate paragraph of the covenant described under ‘‘—CertainCovenants—Limitation on Indebtedness’’) as of the relevant date of calculation on a consolidated basisin accordance with GAAP.

‘‘Consolidated Leverage Ratio’’ means, as of any date of determination, the ratio of(x) Consolidated Leverage at such date to (y) the aggregate amount of Consolidated EBITDA for theperiod of the most recent four consecutive fiscal quarters ending prior to the date of suchdetermination for which internal consolidated financial statements of the Company are available;provided, however, that for the purposes of calculating Consolidated EBITDA for such period, if, as ofsuch date of determination:

(1) since the beginning of such period the Company or any Restricted Subsidiary has disposedof any company, any business, or any group of assets constituting an operating unit of abusiness (any such disposition, a ‘‘Sale’’) or if the transaction giving rise to the need tocalculate the Consolidated Leverage Ratio is such a Sale, Consolidated EBITDA for suchperiod will be reduced by an amount equal to the Consolidated EBITDA (if positive)attributable to the assets which are the subject of such Sale for such period or increased byan amount equal to the Consolidated EBITDA (if negative) attributable thereto for suchperiod; provided that if any such sale constitutes ‘‘discontinued operations’’ in accordancewith the then applicable GAAP, Consolidated Net Income shall be reduced by an amountequal to the Consolidated Net Income (if positive) attributable to such operations for suchperiod or increased by an amount equal to the Consolidated Net Income (if negative)attributable thereto for such period;

(2) since the beginning of such period, the Company or any Restricted Subsidiary (by merger orotherwise) has made an Investment in any Person that thereby becomes a RestrictedSubsidiary, or otherwise has acquired any company, any business, or any group of assetsconstituting an operating unit of a business (any such Investment or acquisition, a‘‘Purchase’’), including any such Purchase occurring in connection with a transaction causinga calculation to be made hereunder, Consolidated EBITDA for such period will becalculated after giving pro forma effect thereto as if such Purchase occurred on the first dayof such period; and

(3) since the beginning of such period, any Person (that became a Restricted Subsidiary or wasmerged or otherwise combined with or into the Company or any Restricted Subsidiary since

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the beginning of such period) will have made any Sale or any Purchase that would haverequired an adjustment pursuant to clause (1) or (2) above if made by the Company or aRestricted Subsidiary since the beginning of such period, Consolidated EBITDA for suchperiod will be calculated after giving pro forma effect thereto as if such Sale or Purchaseoccurred on the first day of such period.

For the purposes of this definition and the definitions of Consolidated EBITDA, ConsolidatedIncome Taxes, Consolidated Interest Expense, Consolidated Net Income and Fixed Charge CoverageRatio, (a) calculations will be as determined in good faith by a responsible financial or accountingofficer of the Company (including in respect of synergies and cost savings) and (b) in determining theamount of Indebtedness outstanding on any date of determination, pro forma effect shall be given toany Incurrence, repayment, repurchase, defeasance or other acquisition, retirement or discharge ofIndebtedness as if such transaction had occurred on the first day of the relevant period.

‘‘Consolidated Net Income’’ means, for any period, the net income (loss) of the Company and itsRestricted Subsidiaries determined on a consolidated basis on the basis of GAAP; provided, however,that there will not be included in such Consolidated Net Income:

(1) subject to the limitations contained in clause (3) below, any net income (loss) of any Personif such Person is not a Restricted Subsidiary, except that the Company’s equity in the netincome of any such Person for such period will be included in such Consolidated NetIncome up to the aggregate amount of cash or Cash Equivalents (x) actually distributed bysuch Person during such period to the Company or a Restricted Subsidiary as a dividend orother distribution or return on investment or Restricted Subsidiary or (y) but only for thepurpose of determining the amount available for Restricted Payments under clause (c)(i) ofthe first paragraph of the covenant described under ‘‘—Certain Covenants—Limitation onRestricted Payments’’ that could have been distributed, as reasonably determined by anOfficer of the Company (subject, in the case of a dividend or other distribution or return oninvestment to a Restricted Subsidiary, to the limitations contained in clause (2) below);

(2) solely for the purpose of determining the amount available for Restricted Payments underclause (c)(i) of the first paragraph of the covenant described under ‘‘—Certain Covenants—Limitation on Restricted Payments,’’ any net income (loss) of any Restricted Subsidiary(other than Guarantors) if such Subsidiary is subject to restrictions, directly or indirectly, onthe payment of dividends or the making of distributions by such Restricted Subsidiary,directly or indirectly, to the Company or a Guarantor by operation of the terms of suchRestricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order,statute or governmental rule or regulation applicable to such Restricted Subsidiary or itsshareholders (other than (a) restrictions that have been waived or otherwise released,(b) restrictions pursuant to or permitted under the Senior Facilities Agreement, the Notes orthe Indenture, and (c) restrictions specified in clause (11)(i) of the second paragraph of thecovenant described under ‘‘—Certain Covenants—Limitation on Restrictions onDistributions from Restricted Subsidiaries,’’ except that the Company’s equity in the netincome of any such Restricted Subsidiary for such period will be included in suchConsolidated Net Income up to the aggregate amount of cash or Cash Equivalents actuallydistributed or that could have been distributed by such Restricted Subsidiary during suchperiod to the Company or another Restricted Subsidiary as a dividend or other distribution(subject, in the case of a dividend to another Restricted Subsidiary, to the limitationcontained in this clause);

(3) any net gain (or loss) realized upon the sale or other disposition of any asset or disposedoperations of the Company or any Restricted Subsidiaries (including pursuant to any sale/leaseback transaction) which is not sold or otherwise disposed of in the ordinary course ofbusiness (as determined in good faith by an Officer or the Board of Directors of theCompany);

(4) any extraordinary, exceptional, unusual or nonrecurring gain, loss or charge (as determinedin good faith by the Company), or any charges or reserves in respect of any restructuring,redundancy or severance expense;

(5) the cumulative effect of a change in accounting principles;

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(6) any non-cash compensation charge or expense arising from any grant of stock, stock optionsor other equity based awards and any non-cash deemed finance charges in respect of anypension liabilities or other provisions;

(7) all deferred financing costs written off and premiums paid or other expenses incurreddirectly in connection with any early extinguishment of Indebtedness and any net gain (loss)from any write-off or forgiveness of Indebtedness;

(8) any unrealized gains or losses in respect of Hedging Obligations or any ineffectivenessrecognized in earnings related to qualifying hedge transactions or the fair value of changestherein recognized in earnings for derivatives that do not qualify as hedge transactions, ineach case, in respect of Hedging Obligations;

(9) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of anyPerson denominated in a currency other than the functional currency of such Person andany unrealized foreign exchange gains or losses relating to translation of assets and liabilitiesdenominated in foreign currencies;

(10) any unrealized foreign currency translation or transaction gains or losses in respect ofIndebtedness or other obligations of the Company or any Restricted Subsidiary owing to theCompany or any Restricted Subsidiary;

(11) any purchase accounting effects including, but not limited to, adjustments to inventory,property and equipment, software and other intangible assets and deferred revenue incomponent amounts required or permitted by GAAP and related authoritativepronouncements (including the effects of such adjustments pushed down to the Companyand the Restricted Subsidiaries), as a result of any consummated acquisition, or theamortization or write-off of any amounts thereof (including any write-off of in processresearch and development);

(12) any goodwill or other intangible asset impairment charge or write-off; and

(13) the impact of capitalized, accrued or accreting or pay-in-kind interest or principal onSubordinated Shareholder Funding.

‘‘Consolidated Secured Leverage Ratio’’ means the Consolidated Leverage Ratio, but calculated byexcluding all Indebtedness other than Secured Indebtedness.

‘‘Contingent Obligations’’ means, with respect to any Person, any obligation of such Personguaranteeing in any manner, whether directly or indirectly, any operating lease, dividend or otherobligation that does not constitute Indebtedness (‘‘primary obligations’’) of any other Person (the‘‘primary obligor’’), including any obligation of such Person, whether or not contingent:

(1) to purchase any such primary obligation or any property constituting direct or indirectsecurity therefor;

(2) to advance or supply funds:

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain the working capital or equity capital of the primary obligor or otherwise tomaintain the net worth or solvency of the primary obligor; or

(3) to purchase property, securities or services primarily for the purpose of assuring the ownerof any such primary obligation of the ability of the primary obligor to make payment of suchprimary obligation against loss in respect thereof.

‘‘Credit Facility’’ means, with respect to the Company or any of its Subsidiaries, one or more debtfacilities, indentures or other arrangements (including the Senior Facilities Agreement or commercialpaper facilities and overdraft facilities) with banks, other financial institutions or investors providing forrevolving credit loans, term loans, notes, receivables financing (including through the sale of receivablesto such institutions or to special purpose entities formed to borrow from such institutions against suchreceivables), letters of credit or other Indebtedness, in each case, as amended, restated, modified,renewed, refunded, replaced, restructured, refinanced, repaid, increased or extended in whole or in partfrom time to time (and whether in whole or in part and whether or not with the original administrativeagent and lenders or another administrative agent or agents or other banks or institutions and whether

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provided under the original Senior Facilities Agreement or one or more other credit or otheragreements, indentures, financing agreements or otherwise) and in each case including all agreements,instruments and documents executed and delivered pursuant to or in connection with the foregoing(including any notes and letters of credit issued pursuant thereto and any Guarantee and collateralagreement, patent and trademark security agreement, mortgages or letter of credit applications andother Guarantees, pledges, agreements, security agreements and collateral documents). Without limitingthe generality of the foregoing, the term ‘‘Credit Facility’’ shall include any agreement or instrument (1)changing the maturity of any Indebtedness Incurred thereunder or contemplated thereby, (2) addingSubsidiaries of the Company as additional borrowers or guarantors thereunder, (3) increasing theamount of Indebtedness Incurred thereunder or available to be borrowed thereunder or (4) otherwisealtering the terms and conditions thereof.

‘‘Currency Agreement’’ means in respect of a Person any foreign exchange contract, currency swapagreement, currency futures contract, currency option contract, currency derivative or other similaragreement to which such Person is a party or beneficiary.

‘‘Default’’ means any event which is, or after notice or passage of time or both would be, an Eventof Default.

‘‘Designated Non-Cash Consideration’’ means the fair market value (as determined in good faith bythe Company) of non-cash consideration received by the Company or one of its Restricted Subsidiariesin connection with an Asset Disposition that is so designated as Designated Non-Cash Considerationpursuant to an Officer’s Certificate, setting forth the basis of such valuation, less the amount of cash,Cash Equivalents or Temporary Cash Investments received in connection with a subsequent payment,redemption, retirement, sale or other disposition of such Designated Non-Cash Consideration. Aparticular item of Designated Non-Cash Consideration will no longer be considered to be outstandingwhen and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposedof in compliance with the covenant described under ‘‘—Certain Covenants—Limitation on Sales ofAssets and Subsidiary Stock.’’

‘‘Designated Preference Shares’’ means, with respect to the Company or any Parent, PreferredStock (other than Disqualified Stock) (a) that is issued for cash (other than to the Company or aSubsidiary of the Company or an employee stock ownership plan or trust established by the Companyor any such Subsidiary for the benefit of their employees to the extent funded by the Company or suchSubsidiary) and (b) that is designated as ‘‘Designated Preference Shares’’ pursuant to an Officer’sCertificate of the Company at or prior to the issuance thereof, the Net Cash Proceeds of which areexcluded from the calculation set forth in clause (c)(ii) of the second paragraph of the covenantdescribed under ‘‘—Certain Covenants—Limitation on Restricted Payments.’’

‘‘Disinterested Director’’ means, with respect to any Affiliate Transaction, a member of the Boardof Directors of the Company having no material direct or indirect financial interest in or with respectto such Affiliate Transaction. A member of the Board of Directors of the Company shall be deemednot to have such a financial interest by reason of such member’s holding Capital Stock of the Companyor any Parent or any options, warrants or other rights in respect of such Capital Stock.

‘‘Disqualified Stock’’ means, with respect to any Person, any Capital Stock of such Person which byits terms (or by the terms of any security into which it is convertible or for which it is exchangeable) orupon the happening of any event:

(1) matures or is mandatorily redeemable for cash or in exchange for Indebtedness pursuant toa sinking fund obligation or otherwise;

(2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding CapitalStock which is convertible or exchangeable solely at the option of the Company or aRestricted Subsidiary); or

(3) is or may become (in accordance with its terms) upon the occurrence of certain events orotherwise redeemable or repurchasable for cash or in exchange for Indebtedness at theoption of the holder of the Capital Stock in whole or in part,

in each case on or prior to the earlier of (a) the Stated Maturity of the Notes or (b) the date on whichthere are no Notes outstanding; provided, however, that (i) only the portion of Capital Stock which somatures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at theoption of the holder thereof prior to such date will be deemed to be Disqualified Stock and (ii) any

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Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the rightto require the Company to repurchase such Capital Stock upon the occurrence of a change of controlor asset sale (howsoever defined or referred to) shall not constitute Disqualified Stock if any suchredemption or repurchase obligation is subject to compliance by the relevant Person with the covenantdescribed under ‘‘—Certain Covenants—Limitation on Restricted Payments.’’

‘‘Equity Investors’’ means (i) Terra Firma, funds managed by Terra Firma of any of its Affiliates,co-investors whose co-investment is managed by Terra Firma or any of its Affiliates or anyco-investment vehicle managed by Terra Firma or any of its Affiliates and (ii) any Permitted Transferee.

‘‘Equity Offering’’ means (x) a sale of Capital Stock of the Company (other than DisqualifiedStock) other than offerings registered on Form S-8 (or any successor form) under the Securities Act orany similar offering in other jurisdictions, or (y) the sale of Capital Stock or other securities, theproceeds of which are contributed to the equity (other than through the issuance of Disqualified Stockor Designated Preference Shares or through an Excluded Contribution) of the Company or any of itsRestricted Subsidiaries.

‘‘Escrowed Proceeds’’ means the proceeds from the offering of any debt securities or otherIndebtedness paid into an escrow account with an independent escrow agent on the date of theapplicable offering or Incurrence pursuant to escrow arrangements that permit the release of amountson deposit in such escrow account upon satisfaction of certain conditions or the occurrence of certainevents. The term ‘‘Escrowed Proceeds’’ shall include any interest earned on the amounts held inescrow.

‘‘Euroclear’’ means Euroclear Bank S.A./N.V. or any successor securities clearing agency.

‘‘European Government Obligations’’ means direct obligations (or certificates representing anownership interest in such obligations) of a member state of the European Union as of January 1, 2007(including any agency or instrumentality thereof) for the payment of which the full faith and credit ofsuch government is pledged.

‘‘Exchange Act’’ means the U.S. Securities Exchange Act of 1934, as amended, and the rules andregulations of the SEC promulgated thereunder, as amended.

‘‘Excluded Contribution’’ means Net Cash Proceeds or property or assets received by the Companyas capital contributions to the equity (other than through the issuance of Disqualified Stock orDesignated Preference Shares) of the Company after the Issue Date or from the issuance or sale (otherthan to a Restricted Subsidiary or an employee stock ownership plan or trust established by theCompany or any Subsidiary of the Company for the benefit of its employees to the extent funded bythe Company or any Restricted Subsidiary) of Capital Stock (other than Disqualified Stock orDesignated Preference Shares) of the Company, in each case, to the extent designated as an ExcludedContribution pursuant to an Officer’s Certificate of the Company.

‘‘fair market value’’ may be conclusively established by means of an Officer’s Certificate or aresolution of the Board of Directors of the Company setting out such fair market value as determinedby such Officer or such Board of Directors in good faith.

‘‘Financial Indebtedness’’ means any Indebtedness described under clauses (1), (2), (5), (6) and(7) of the definition of ‘‘Indebtedness’’.

‘‘Fixed Charge Coverage Ratio’’ means, with respect to any Person on any determination date, theratio of Consolidated EBITDA of such Person for the most recent four consecutive fiscal quartersending immediately prior to such determination date for which internal consolidated financialstatements are available to the Fixed Charges of such Person and its Restricted Subsidiaries for fourconsecutive fiscal quarters. In the event that the Company or any Restricted Subsidiary incurs, assumes,guarantees, redeems, defeases, retires or extinguishes any Indebtedness (other than Indebtednessincurred under any revolving credit facility unless such Indebtedness has been permanently repaid andhas not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to thecommencement of the period for which the Fixed Charge Coverage Ratio is being calculated but priorto or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio ismade (the ‘‘Fixed Charge Coverage Ratio Calculation Date’’), then the Fixed Charge Coverage Ratioshall be calculated giving pro forma effect to such Incurrence, assumption, guarantee, redemption,defeasance, retirement or extinguishment of Indebtedness, or such issuance or redemption of

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Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicablefour-quarter period.

For purposes of making the computation referred to above, any Investment, acquisitions,dispositions, mergers, consolidations and disposed operations that have been made by the Company orany of its Restricted Subsidiaries, during the four-quarter reference period or subsequent to suchreference period and on or prior to or simultaneously with the Fixed Charge Coverage RatioCalculation Date shall be calculated on a pro forma basis assuming that all such Investments,acquisitions, dispositions, mergers, consolidations and disposed or discontinued operations (and thechange in any associated fixed charge obligations and the change in Consolidated EBITDA resultingtherefrom) had occurred on the first day of the four-quarter reference period. If since the beginning ofsuch period any Person that subsequently became a Restricted Subsidiary or was merged with or intothe Company or any of its Restricted subsidiaries since the beginning of such period shall have madeany Investment, acquisition, disposition, merger, consolidation or disposed or discontinued operationthat would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratioshall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition,disposition, merger, consolidation or disposed operation had occurred at the beginning of theapplicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to a transaction, the proforma calculations shall be made in good faith by a responsible financial or chief accounting officer ofthe Company (including synergies and cost savings). If any Indebtedness bears a floating rate of interestand is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the ratein effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for theentire period (taking into account any Hedging Obligations applicable to such Indebtedness). Intereston a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determinedby a responsible financial or accounting officer of the Company to be the rate of interest implicit insuch Capitalized Lease Operation in accordance with GAAP. For purposes of making the computationreferred to above, interest on any Indebtedness under a revolving credit facility computed with a proforma basis shall be computed based upon the average daily balance of such Indebtedness during theapplicable period except as set forth in the first paragraph of this definition. Interest on Indebtednessthat may optionally be determined at an interest rate based upon a factor of a prime or similar rate, aeurocurrency interbank offered rate, or other rate, shall be determined to have been based upon therate actually chosen, or if none, then based upon such optional rate chosen as the Company maydesignate.

‘‘Fixed Charges’’ means, with respect to any Person for any period, the sum of:

(1) Consolidated Interest Expense of such Person for such Period;

(2) all cash and non-cash dividends or other distributions payable (excluding items eliminated inconsolidation) on any series of Preferred Stock during such period; and

(3) all cash and non-cash dividends or other distributions payable (excluding items eliminated inconsolidation) on any series of Disqualified Stock during this period;

determined on a consolidated basis in accordance with GAAP.

‘‘GAAP’’ means generally accepted accounting principles in the United Kingdom as in effect onthe date of any calculation or determination required hereunder. Except as otherwise set forth in theIndenture, all ratios and calculations based on GAAP contained in the Indenture shall be computed inaccordance with GAAP. At any time after the Issue Date, the Company may elect to establish thatGAAP shall mean GAAP as in effect on or prior to the date of such election, provided that any suchelection, once made, shall be irrevocable. At any time after the Issue Date, the Company may elect toapply IFRS accounting principles in lieu of GAAP and, upon any such election, references herein toGAAP shall thereafter be construed to mean IFRS (except as otherwise provided in the Indenture),including as to the ability of the Company to make an election pursuant to the previous sentence;provided that any such election, once made, shall be irrevocable; provided, further, that any calculationor determination in the Indenture that require the application of GAAP for periods that include fiscalquarters ended prior to the Company’s election to apply IFRS shall remain as previously calculated ordetermined in accordance with GAAP; provided, further again, that the Company may only make suchelection if it also elects to report any subsequent financial reports required to be made by theCompany, including pursuant to Section 13 or Section 15(d) of the Exchange Act and the covenants set

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forth under ‘‘Reports,’’ in IFRS. The Company shall give notice of any such election made inaccordance with this definition to the Trustee and the Holders.

‘‘Gilt Rate’’ means, as of any redemption date, the yield to maturity as of such redemption date ofUnited Kingdom government securities with a fixed maturity (as compiled by the Debt ManagementOffice statistics that have become publicly available at least two Business Days in London prior to suchredemption date (or, if such statistics are no longer published, any publicly available source of similarmarket data)) most nearly equal to the period from such redemption date to August 1, 2014; provided,however, that if the period from such redemption date to August 1, 2014 is less than one year, theweekly average yield on actually traded United Kingdom government securities denominated in sterlingadjusted to a fixed maturity of one year shall be used.

‘‘Governmental Authority’’ means any nation, sovereign or government, any state, province,territory or other political subdivision thereof, and any entity or authority exercising executive,legislative, judicial, regulatory, self-regulatory or administrative functions of or pertaining togovernment, including a central bank or stock exchange.

‘‘Guarantee’’ means any obligation, contingent or otherwise, of any Person directly or indirectlyguaranteeing any Indebtedness of any other Person, including any such obligation, direct or indirect,contingent or otherwise, of such Person:

(1) to purchase or pay (or advance or supply funds for the purchase or payment of) suchIndebtedness of such other Person (whether arising by virtue of partnership arrangements,or by agreements to keep-well, to purchase assets, goods, securities or services, totake-or-pay or to maintain financial statement conditions or otherwise); or

(2) entered into primarily for purposes of assuring in any other manner the obligee of suchIndebtedness of the payment thereof or to protect such obligee against loss in respectthereof (in whole or in part);

provided, however, that the term ‘‘Guarantee’’ will not include endorsements for collection or deposit inthe ordinary course of business. The term ‘‘Guarantee’’ used as a verb has a corresponding meaning.

‘‘Guarantor’’ means any Restricted Subsidiary that Guarantees the Notes.

‘‘Hedging Obligations’’ of any Person means the obligations of such Person pursuant to anyInterest Rate Agreement, Currency Agreement or Commodity Hedging Agreement (each, a ‘‘HedgingAgreement’’).

‘‘Holder’’ means each Person in whose name the Notes are registered on the Registrar’s books,which shall initially be the nominee of Euroclear and Clearstream.

‘‘Immaterial Subsidiary’’ means any Restricted Subsidiary that (i) has not guaranteed any otherIndebtedness of the Issuer or any Guarantor and (ii) (A) has Total Assets (as determined in accordancewith GAAP) of less than 5% of the Company’s consolidated Total Assets and (B) has ConsolidatedEBITDA of less than 5% of the Company’s Consolidated EBITDA (in each case, measured (i) for thefour quarters ended most recently for which internal financial statements are available, (ii) on a proforma basis giving effect to any acquisitions or depositions of companies, division or lines of businesssince such balance sheet date or the start of such four quarter period, as applicable and (iii) on thebasis of management accounts and excluding intercompany balances, investments in subsidiaries andjoint ventures and intangible assets).

‘‘Incur’’ means issue, create, assume, enter into any Guarantee of, incur, extend or otherwisebecome liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at thetime such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition orotherwise) will be deemed to be Incurred by such Restricted Subsidiary at the time it becomes aRestricted Subsidiary and the terms ‘‘Incurred’’ and ‘‘Incurrence’’ have meanings correlative to theforegoing and any Indebtedness pursuant to any revolving credit or similar facility shall only be‘‘Incurred’’ at the time any funds are borrowed thereunder.

‘‘Indebtedness’’ means, with respect to any Person on any date of determination (withoutduplication):

(1) the principal of indebtedness of such Person for borrowed money;

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(2) the principal of obligations of such Person evidenced by bonds, debentures, notes or othersimilar instruments;

(3) all reimbursement obligations of such Person in respect of letters of credit, bankers’acceptances or other similar instruments (the amount of such obligations being equal at anytime to the aggregate then undrawn and unexpired amount of such letters of credit or otherinstruments plus the aggregate amount of drawings thereunder that have been reimbursed)(except to the extent such reimbursement obligations relate to trade payables and suchobligations are satisfied within 30 days of Incurrence);

(4) Capitalized Lease Obligations of such Person;

(5) the principal component of all obligations, or liquidation preference, of such Person withrespect to any Disqualified Stock or, with respect to any Restricted Subsidiary, any PreferredStock (but excluding, in each case, any accrued dividends);

(6) the principal component of all Indebtedness of other Persons secured by a Lien on any assetof such Person, whether or not such Indebtedness is assumed by such Person; provided,however, that the amount of such Indebtedness will be the lesser of (a) the fair market valueof such asset at such date of determination (as determined in good faith by the Company)and (b) the amount of such Indebtedness of such other Persons;

(7) Guarantees by such Person of the principal component of Indebtedness of other Persons tothe extent Guaranteed by such Person; and

(8) to the extent not otherwise included in this definition, net obligations of such Person underCurrency Agreements and Interest Rate Agreements (the amount of any such obligations tobe equal at any time to the termination value of such agreement or arrangement giving riseto such obligation that would be payable by such Person at such time).

The term ‘‘Indebtedness’’ shall not include Subordinated Shareholder Funding or any lease,concession or license of property (or Guarantee thereof) which would be considered an operating leaseunder GAAP as in effect on the Issue Date, any prepayments or deposits received from clients orcustomers, or any obligations in relation to advance ticket sales, in each case, in the ordinary course ofbusiness, or obligations under any license, permit or other approval (or Guarantees given in respect ofsuch obligations) Incurred prior to the Issue Date or in the ordinary course of business.

The amount of Indebtedness of any Person at any time in the case of a revolving credit or similarfacility shall be the total amounts of funds borrowed and then outstanding. The amount ofIndebtedness of any Person at any date shall be determined as set forth above or otherwise provided inthe Indenture, and (other than with respect to letters of credit or Guarantees or Indebtedness specifiedin clause (5), (7) or (8) above) shall equal the amount thereof that would appear on a balance sheet ofsuch Person (excluding any notes thereto) prepared on the basis of GAAP.

Notwithstanding the above provisions, in no event shall the following constitute Indebtedness:

(i) Contingent Obligations Incurred in the ordinary course of business and obligations that areStandard Securitization Undertakings;

(ii) in connection with the purchase by the Company or any Restricted Subsidiary of anybusiness, any post-closing payment adjustments to which the seller may become entitled tothe extent such payment is determined by a final closing balance sheet or such paymentdepends on the performance of such business after the closing; provided, however, that, atthe time of closing, the amount of any such payment is not determinable and, to the extentsuch payment thereafter becomes fixed and determined, the amount is paid within 30 daysthereafter; or

(iii) for the avoidance of doubt, any obligations in respect of workers’ compensation claims, earlyretirement or termination obligations, pension fund obligations or contributions or similarclaims, obligations or contributions or social security or wage Taxes.

‘‘Independent Financial Advisor’’ means an investment banking or accounting firm of internationalstanding or any third party appraiser of international standing; provided, however, that such firm orappraiser is not an Affiliate of the Company.

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‘‘Initial Public Offering’’ means an Equity Offering of common stock or other common equityinterests of the Company or any Parent or any successor of the Company or any Parent (the ‘‘IPOEntity’’) following which there is a Public Market and, as a result of which, the shares of common stockor other common equity interests of the IPO Entity in such offering are listed on an internationallyrecognized exchange or traded on an internationally recognized market.

‘‘Interest Rate Agreement’’ means with respect to any Person any interest rate protectionagreement, interest rate future agreement, interest rate option agreement, interest rate swapagreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreementor other similar agreement or arrangement to which such Person is party or a beneficiary.

‘‘Investment’’ means, with respect to any Person, all investments by such Person in other Persons(including Affiliates) in the form of any direct or indirect advance, loan or other extensions of credit(other than advances or extensions of credit to customers, suppliers, directors, officers or employees ofany Person in the ordinary course of business, and excluding any debt or extension of creditrepresented by a bank deposit other than a time deposit) or capital contribution to (by means of anytransfer of cash or other property to others or any payment for property or services for the account oruse of others), or the Incurrence of a Guarantee of any obligation of, or any purchase or acquisition ofCapital Stock, Indebtedness or other similar instruments issued by, such other Persons and all otheritems that are or would be classified as investments on a balance sheet prepared on the basis of GAAP;provided, however, that endorsements of negotiable instruments and documents in the ordinary courseof business will not be deemed to be an Investment. If the Company or any Restricted Subsidiaryissues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary suchthat, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by theCompany or any Restricted Subsidiary in such Person remaining after giving effect thereto will bedeemed to be a new Investment at such time equal to the fair market value of the Capital Stock ofsuch Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph ofthe covenant described above under the caption ‘‘—Certain Covenants—Limitation on RestrictedPayments’’.

For purposes of ‘‘—Certain Covenants—Limitation on Restricted Payments’’:

(1) ‘‘Investment’’ will include the portion (proportionate to the Company’s equity interest in aRestricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair marketvalue of the net assets of such Restricted Subsidiary of the Company at the time that suchRestricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upona redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be deemedto continue to have a permanent ‘‘Investment’’ in an Unrestricted Subsidiary in an amount(if positive) equal to (a) the Company’s ‘‘Investment’’ in such Subsidiary at the time of suchredesignation less (b) the portion (proportionate to the Company’s equity interest in suchSubsidiary) of the fair market value of the net assets (as conclusively determined by theBoard of Directors of the Company in good faith) of such Subsidiary at the time that suchSubsidiary is so re-designated a Restricted Subsidiary; and

(2) any property transferred to or from an Unrestricted Subsidiary will be valued at its fairmarket value at the time of such transfer, in each case as determined in good faith by theBoard of Directors of the Company.

The amount of any Investment outstanding at any time shall be the original cost of suchInvestment, reduced (at the Company’s option) by any dividend, distribution, interest payment, returnof capital, repayment or other amount or value received in respect of such Investment.

‘‘Investment Grade Securities’’ means:

(1) securities issued or directly and fully Guaranteed or insured by the United States orCanadian government or any agency or instrumentality thereof (other than CashEquivalents);

(2) securities issued or directly and fully guaranteed or insured by a member of the EuropeanUnion, or any agency or instrumentality thereof (other than Cash Equivalents);

(3) debt securities or debt instruments with a rating of ‘‘A�’’ or higher from S&P or ‘‘A3’’ orhigher by Moody’s or the equivalent of such rating by such rating organization or, if norating of Moody’s or S&P then exists, the equivalent of such rating by any other Nationally

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Recognized Statistical Ratings Organization, but excluding any debt securities or instrumentsconstituting loans or advances among the Company and its Subsidiaries; and

(4) investments in any fund that invests exclusively in investments of the type described inclauses (1), (2) and (3) above which fund may also hold cash and Cash Equivalents pendinginvestment or distribution.

‘‘Investment Grade Status’’ shall occur when the Notes receive both of the following:

(1) a rating of ‘‘BBB�’’ or higher from S&P; and

(2) a rating of ‘‘Baa3’’ or higher from Moody’s;

or the equivalent of such rating by either such rating organization or, if no rating of Moody’s or S&Pthen exists, the equivalent of such rating by any other Nationally Recognized Statistical RatingsOrganization.

‘‘IPO Entity’’ has the meaning given to it in the definition of ‘‘Initial Public Offering’’.

‘‘IPO Market Capitalization’’ means an amount equal to (i) the total number of issued andoutstanding shares of common stock or common equity interests of the IPO Entity at the time ofclosing of the Initial Public Offering multiplied by (ii) the price per share at which such shares ofcommon stock or common equity interests are sold in such Initial Public Offering.

‘‘Issue Date’’ means May 24, 2011.

‘‘Lien’’ means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind(including any conditional sale or other title retention agreement or lease in the nature thereof).

‘‘Management Advances’’ means loans or advances made to, or Guarantees with respect to loansor advances made to, directors, officers, employees or consultants of any Parent, the Company or anyRestricted Subsidiary:

(1) (a) in respect of travel, entertainment or moving related expenses Incurred in the ordinarycourse of business or (b) for purposes of funding any such person’s purchase of CapitalStock or Subordinated Shareholder Funding (or similar obligations) of the Company, itsSubsidiaries or any Parent with (in the case of this sub-clause (b)) the approval of the Boardof Directors;

(2) in respect of moving related expenses Incurred in connection with any closing orconsolidation of any facility or office; or

(3) not exceeding £5.0 million in the aggregate outstanding at any time.

‘‘Management Investors’’ means the officers, directors, employees and other members of themanagement of or consultants to any Parent, the Company or any of their respective Subsidiaries, orspouses, family members or relatives thereof, or any trust, partnership or other entity for the benefit ofor the beneficial owner of which (directly or indirectly) is any of the foregoing, or any of their heirs,executors, successors and legal representatives, who at any date beneficially own or have the right toacquire, directly or indirectly, Capital Stock of the Company, any Restricted Subsidiary or any Parent.

‘‘Market Capitalization’’ means an amount equal to (i) the total number of issued and outstandingshares of common stock or common equity interests of the IPO Entity on the date of the declaration ofthe relevant dividend multiplied by (ii) the arithmetic mean of the closing prices per share of suchcommon stock or common equity interests for the 30 consecutive trading days immediately precedingthe date of declaration of such dividend.

‘‘Moody’s’’ means Moody’s Investors Service, Inc. or any of its successors or assigns that is aNationally Recognized Statistical Rating Organization.

‘‘Nationally Recognized Statistical Rating Organization’’ means a nationally recognized statisticalrating organization within the meaning of Rule 436 under the Securities Act.

‘‘Net Available Cash’’ from an Asset Disposition means cash payments received (including anycash payments received by way of deferred payment of principal pursuant to a note or installmentreceivable or otherwise and net proceeds from the sale or other disposition of any securities received asconsideration, but only as and when received, but excluding any other consideration received in theform of assumption by the acquiring person of Indebtedness or other obligations relating to the

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properties or assets that are the subject of such Asset Disposition or received in any other non-cashform) therefrom, in each case net of:

(1) all legal, accounting, investment banking, title and recording tax expenses, commissions andother fees and expenses Incurred, and all Taxes paid or required to be paid or accrued as aliability under GAAP (after taking into account any available tax credits or deductions andany tax sharing agreements), as a consequence of such Asset Disposition;

(2) all payments made on any Indebtedness which is secured by any assets subject to such AssetDisposition, in accordance with the terms of any Lien upon such assets, or which byapplicable law be repaid out of the proceeds from such Asset Disposition;

(3) all distributions and other payments required to be made to minority interest holders (otherthan any Parent, the Company or any of their respective Subsidiaries) in Subsidiaries or jointventures as a result of such Asset Disposition; and

(4) the deduction of appropriate amounts required to be provided by the seller as a reserve, onthe basis of GAAP, against any liabilities associated with the assets disposed of in such AssetDisposition and retained by the Company or any Restricted Subsidiary after such AssetDisposition.

‘‘Net Cash Proceeds,’’ with respect to any issuance or sale of Capital Stock or SubordinatedShareholder Funding, means the cash proceeds of such issuance or sale net of attorneys’ fees,accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions andbrokerage, consultant and other fees and charges actually Incurred in connection with such issuance orsale and net of taxes paid or payable as a result of such issuance or sale (after taking into account anyavailable tax credit or deductions and any tax sharing arrangements).

‘‘Note Documents’’ means the Notes (including Additional Notes), the Indenture and the SecurityDocuments.

‘‘Odeon Parent’’ means Odeon & UCI Cinemas Group Limited.

‘‘Officer’’ means, with respect to any Person, (1) the Chairman of the Board of Directors, theChief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer,any Managing Director, or the Secretary (a) of such Person or (b) if such Person is owned or managedby a single entity, of such entity, or (2) any other individual designated as an ‘‘Officer’’ for the purposesof the Indenture by the Board of Directors of such Person.

‘‘Officer’s Certificate’’ means, with respect to any Person, a certificate signed by one Officer ofsuch Person.

‘‘Opinion of Counsel’’ means a written opinion from legal counsel reasonably satisfactory to theTrustee. The counsel may be an employee of or counsel to the Company or its Subsidiaries.

‘‘Parent’’ means any Person of which the Company at any time is or becomes a Subsidiary afterthe Issue Date and any holding companies established by any Permitted Holder for purposes of holdingits investment in any Parent.

‘‘Parent Expenses’’ means:

(1) costs (including all professional fees and expenses) Incurred by any Parent in connectionwith reporting obligations under or otherwise Incurred in connection with compliance withapplicable laws, rules or regulations of any governmental, regulatory or self-regulatory bodyor stock exchange, the Indenture or any other agreement or instrument relating toIndebtedness of the Company or any Restricted Subsidiary, including in respect of anyreports filed with respect to the Securities Act, Exchange Act or the respective rules andregulations promulgated thereunder;

(2) customary indemnification obligations of any Parent owing to directors, officers, employeesor other Persons under its charter or by-laws or pursuant to written agreements with anysuch Person to the extent relating to the Company and its Subsidiaries;

(3) obligations of any Parent in respect of director and officer insurance (including premiumstherefor) to the extent relating to the Company and its Subsidiaries;

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(4) general corporate overhead expenses, including professional fees and expenses and otheroperational expenses of any Parent or any Equity Investor or any of its Affiliates related tothe ownership or operation of the business of the Company or any of its RestrictedSubsidiaries and Equity Investor or any of its Affiliates (including, without limitation,accounting legal, corporate reporting, and administrative expenses as well as payments madepursuant to secondment agreements entered into between the Company and/or any of itsRestricted Subsidiaries and any Equity Investor or any of its Affiliates) or (b) costs andexpenses with respect to any litigation or other dispute relating to the Transactions or theownership, directly or indirectly, of the Issuer by any Parent; or

(5) other fees, expenses and costs relating directly or indirectly to activities of the Company andits Subsidiaries in an amount not to exceed £1 million in any fiscal year; and

(6) expenses Incurred by any Parent in connection with any public offering or other sale ofCapital Stock or Indebtedness:

(x) where the net proceeds of such offering or sale are intended to be received by orcontributed to the Company or a Restricted Subsidiary,

(y) in a pro-rated amount of such expenses in proportion to the amount of such netproceeds intended to be so received or contributed, or

(z) otherwise on an interim basis prior to completion of such offering so long as anyParent shall cause the amount of such expenses to be repaid to the Company or therelevant Restricted Subsidiary out of the proceeds of such offering promptly ifcompleted.

‘‘Pari Passu Indebtedness’’ means Indebtedness of the Company (other than Indebtedness of theCompany pursuant to the Senior Facilities Agreement) or any Guarantor if such Guarantee ranksequally in right of payment to the Guarantees of the Notes which, in each case, is secured by Liens onassets of the Company.

‘‘Paying Agent’’ means any Person authorized by the Issuer to pay the principal of (and premium,if any) or interest on any Note on behalf of the Issuer.

‘‘Permitted Asset Swap’’ means the concurrent purchase and sale or exchange of assets used oruseful in a Similar Business or a combination of such assets and cash, Cash Equivalents or TemporaryCash Investments between the Company or any of its Restricted Subsidiaries and another Person;provided that any cash or Cash Equivalents received in excess of the value of any cash or CashEquivalents sold or exchanged must be applied in accordance with the covenant described under‘‘—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock.’’

‘‘Permitted Collateral Liens’’ means (A) Liens on the Collateral described in one or more ofclauses (2), (3), (4), (5), (6), (8), (9), (11), (12), (13), (15), (18), (19), (20), (23), (24), (25) and (27) ofthe definition of ‘‘Permitted Liens’’, (B) Liens on the Collateral to secure Indebtedness of theCompany or a Restricted Subsidiary that is permitted to be Incurred under clauses (1), (2) (in the caseof (2), to the extent such Guarantee is in respect of Indebtedness otherwise permitted to be securedand specified in this definition of Permitted Collateral Liens), (4)(a) and (c) (if the originalIndebtedness was so secured), (5), (6), (11) or (13) of the second paragraph of the covenant describedunder ‘‘—Certain Covenants—Limitation on Indebtedness’’ and any Refinancing Indebtedness inrespect of such Indebtedness; provided, however, that such Lien ranks equal to all other Liens on suchCollateral securing Indebtedness of the Company or such Restricted Subsidiary, as applicable (exceptthat a Lien in favor of Indebtedness incurred under clause (1) of the second paragraph of ‘‘—CertainCovenants—Limitation on Indebtedness’’ and obligations under Hedging Agreements provided by thelenders under the Senior Facilities Agreement or their affiliates may have super priority not materiallyless favorable to the Holders than that accorded to the Senior Facilities Agreement on the Issue Dateas provided in the Intercreditor Agreement), (C) Liens on the Collateral securing Indebtednessincurred under the first paragraph of ‘‘—Certain Covenants—Limitation on Indebtedness’’; providedthat, in the case of this clause (C), after giving effect to such incurrence on that date, the ConsolidatedSecured Leverage Ratio is less than (x) if such date is on or prior to the date that is six months afterthe Issue Date, 5.0 to 1.0, or (y) 4.5:1.0, (D) Liens on Collateral securing Refinancing Indebtedness inrespect of any Indebtedness secured pursuant to the foregoing clause (A), (B), (C), (D) or (E) Lienson Collateral that secure Indebtedness on a basis junior to the Notes. To the extent that a Lien on the

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Collateral consists of a mortgage over any real estate located in the United Kingdom, it shall constitutea Permitted Collateral Lien only to the extent that a mortgage ranking at least pari passu is granted infavor of the Security Agent for the benefit of the Trustee and the Holders.

‘‘Permitted Digital Asset Financing’’ means any recourse leasing or asset financing where therelevant financier only has recourse against the asset being financed (without having recourse againstany other Restricted Subsidiary) undertaken by the Company or a Restricted Subsidiary for theacquisition of digital cinema equipment with a financier selected by and in the sole discretion of theCompany pursuant to or under which: (a) capital expenditure on digital cinema equipment is fullyfunded from either such leasing or financing, or from cash on the balance sheet of the Company;(b) such leasing or financing does not have a maturity date prior to the Stated Maturity of the Notes oris fully amortized from the cash flows of the business or of a special purpose vehicle companyincorporated for the purposes of implementing the digital asset financing; (c) the principal amount ofsuch financing does not in the aggregate exceed £10,000,000 (or its equivalent) and (d) the ratio ofprojected cashflow to projected debt service in respect of such leasing or financing (as determined bythe Company acting in good faith at the time of incurrence) is not less than 1.10:1.

‘‘Permitted Holders’’ means, collectively, (1) the Equity Investors and any Affiliate or RelatedPerson of any of them; (2) any one or more Persons whose beneficial ownership constitutes or resultsin a Change of Control in respect of which a Change of Control Offer is made in accordance with therequirements of the Indenture, (3) Senior Management and (4) any Person who is acting as anunderwriter in connection with a public or private offering of Capital Stock of any Parent or theCompany, acting in such capacity.

‘‘Permitted Investment’’ means (in each case, by the Company or any of its Restricted Subsidiaries):

(1) Investments in (a) a Restricted Subsidiary (including the Capital Stock of a RestrictedSubsidiary) or the Company or (b) a Person (including the Capital Stock of any suchPerson) that is engaged in any Similar Business and such Person will, upon the making ofsuch Investment, become a Restricted Subsidiary;

(2) Investments in another Person if such Person is engaged in any Similar Business and as aresult of such Investment such other Person is merged, consolidated or otherwise combinedwith or into, or transfers or conveys all or substantially all its assets to, the Company or aRestricted Subsidiary;

(3) Investments in cash, Cash Equivalents, Temporary Cash Investments or Investment GradeSecurities;

(4) Investments in receivables owing to the Company or any Restricted Subsidiary created oracquired in the ordinary course of business;

(5) Investments in payroll, travel and similar advances to cover matters that are expected at thetime of such advances ultimately to be treated as expenses for accounting purposes and thatare made in the ordinary course of business;

(6) Management Advances;

(7) Investments in Capital Stock, obligations or securities received in settlement of debts createdin the ordinary course of business and owing to the Company or any Restricted Subsidiary,or as a result of foreclosure, perfection or enforcement of any Lien, or in satisfaction ofjudgments or pursuant to any plan of reorganization or similar arrangement including uponthe bankruptcy or insolvency of a debtor;

(8) Investments made as a result of the receipt of non-cash consideration from a sale or otherdisposition of property or assets, including an Asset Disposition, in each case, that was madein compliance with ‘‘—Certain Covenants—Limitation on Sales of Assets and SubsidiaryStock’’;

(9) Investments in existence on, or made pursuant to legally binding commitments in existenceon, the Issue Date;

(10) Currency Agreements, Interest Rate Agreements, Commodity Hedging Agreements andrelated Hedging Obligations, which transactions or obligations are Incurred in compliancewith ‘‘—Certain Covenants—Limitation on Indebtedness’’;

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(11) Investments, taken together with all other Investments made pursuant to this clause (11) andat any time outstanding, in an aggregate amount at the time of such Investment not toexceed the greater of 3.5% of Total Assets and £20 million; provided that, if an Investment ismade pursuant to this clause in a Person that is not a Restricted Subsidiary and such Personsubsequently becomes a Restricted Subsidiary or is subsequently designated a RestrictedSubsidiary pursuant to the covenant described under ‘‘—Certain Covenants—Limitation onRestricted Payments,’’ such Investment shall thereafter be deemed to have been madepursuant to clause (1) or (2) of the definition of ‘‘Permitted Investments’’ and not thisclause;

(12) pledges or deposits with respect to leases or utilities provided to third parties in the ordinarycourse of business or Liens otherwise described in the definition of ‘‘Permitted Liens’’ ormade in connection with Liens permitted under the covenant described under ‘‘—CertainCovenants—Limitation on Liens’’;

(13) any Investment to the extent made using Capital Stock of the Company (other thanDisqualified Stock) or Capital Stock of any Parent as consideration;

(14) any transaction to the extent constituting an Investment that is permitted and made inaccordance with the provisions of the second paragraph of the covenant described under‘‘—Certain Covenants—Limitation on Affiliate Transactions’’ (except those described inclauses (1), (3), (6), (8), (9) and (12) of that paragraph);

(15) Investments consisting of purchases and acquisitions of inventory, supplies, materials andequipment or licenses or leases of intellectual property, in any case, in the ordinary courseof business and in accordance with the Indenture;

(16) Guarantees not prohibited by the covenant described under ‘‘—Certain Covenants—Limitation on Indebtedness’’ and (other than with respect to Indebtedness) guarantees,keepwells and similar arrangements in the ordinary course of business;

(17) Investments in Associates in an aggregate amount when taken together with all otherInvestments made pursuant to this clause (17) that are at the time outstanding not to exceedthe greater of 3% of Total Assets and £20 million; and

(18) Investments in the Notes and any Additional Notes.

‘‘Permitted Liens’’ means, with respect to any Person:

(1) Liens on assets or property of a Restricted Subsidiary that is not a Guarantor securingIndebtedness of any Restricted Subsidiary that is not a Guarantor;

(2) pledges, deposits or Liens under workmen’s compensation laws, unemployment insurancelaws, social security laws or similar legislation, or insurance related obligations (includingpledges or deposits securing liability to insurance carriers under insurance or self-insurancearrangements), or in connection with bids, tenders, completion guarantees, contracts (otherthan for borrowed money) or leases, or to secure utilities, licenses, public or statutoryobligations, or to secure surety, indemnity, judgment, appeal or performance bonds,guarantees of government contracts (or other similar bonds, instruments or obligations), oras security for contested Taxes or import or customs duties or for the payment of rent, orother obligations of like nature, in each case Incurred in the ordinary course of business;

(3) Liens imposed by law, including carriers’, warehousemen’s, mechanics’, landlords’,materialmen’s and repairmen’s or other like Liens, in each case for sums not yet overdue fora period of more than 60 days or that are bonded or being contested in good faith byappropriate proceedings;

(4) Liens for Taxes not yet delinquent or which are being contested in good faith by appropriateproceedings; provided that appropriate reserves required pursuant to GAAP have been madein respect thereof;

(5) Liens in favor of issuers of surety, performance or other bonds, guarantees or letters ofcredit or bankers’ acceptances (not issued to support Indebtedness for borrowed money)issued pursuant to the request of and for the account of the Company or any RestrictedSubsidiary in the ordinary course of its business;

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(6) encumbrances, ground leases, easements (including reciprocal easement agreements), surveyexceptions, or reservations of, or rights of others for, licenses, rights of way, sewers, electriclines, telegraph and telephone lines and other similar purposes, or zoning, building codes orother restrictions (including minor defects or irregularities in title and similar encumbrances)as to the use of real properties or Liens incidental to the conduct of the business of theCompany and its Restricted Subsidiaries or to the ownership of its properties which do notin the aggregate materially adversely affect the value of said properties or materially impairtheir use in the operation of the business of the Company and its Restricted Subsidiaries;

(7) Liens on assets or property of the Company or any Restricted Subsidiary securing HedgingObligations permitted under the Indenture;

(8) leases, licenses, subleases and sublicenses of assets (including real property and intellectualproperty rights), in each case entered into in the ordinary course of business;

(9) Liens arising out of judgments, decrees, orders or awards not giving rise to an Event ofDefault so long as any appropriate legal proceedings which may have been duly initiated forthe review of such judgment, decree, order or award have not been finally terminated or theperiod within which such proceedings may be initiated has not expired;

(10) Liens on assets or property of the Company or any Restricted Subsidiary for the purpose ofsecuring Capitalized Lease Obligations or Purchase Money Obligations, or securing thepayment of all or a part of the purchase price of, or securing other Indebtedness Incurred tofinance or refinance the acquisition, improvement or construction of, assets or property;provided that (a) the aggregate principal amount of Indebtedness secured by such Liens isotherwise permitted to be Incurred under the Indenture and (b) any such Lien may notextend to any assets or property of the Company or any Restricted Subsidiary other thanassets or property acquired, improved, constructed or leased with the proceeds of suchIndebtedness and any improvements or accessions to such assets and property;

(11) Liens arising by virtue of any statutory or common law provisions relating to banker’s Liens,rights of set-off or similar rights and remedies as to deposit accounts or other fundsmaintained with a depositary or financial institution;

(12) Liens arising from Uniform Commercial Code financing statement filings (or similar filingsin other applicable jurisdictions) regarding operating leases entered into by the Companyand its Restricted Subsidiaries in the ordinary course of business;

(13) Liens existing on, or provided for or required to be granted under written agreementsexisting on, the Issue Date, including any Liens in favor of call rights or other obligationsunder the Propco Financing;

(14) Liens on property, other assets or shares of stock of a Person at the time such Personbecomes a Restricted Subsidiary (or at the time the Company or a Restricted Subsidiaryacquires such property, other assets or shares of stock, including any acquisition by means ofa merger, consolidation or other business combination transaction with or into the Companyor any Restricted Subsidiary); provided, however, that such Liens are not created, Incurred orassumed in anticipation of or in connection with such other Person becoming a RestrictedSubsidiary (or such acquisition of such property, other assets or stock); provided, further, thatsuch Liens are limited to all or part of the same property, other assets or stock (plusimprovements, accession, proceeds or dividends or distributions in connection with theoriginal property, other assets or stock) that secured (or, under the written arrangementsunder which such Liens arose, could secure) the obligations to which such Liens relate;

(15) Liens on assets or property of the Company or any Restricted Subsidiary securingIndebtedness or other obligations of the Company or such Restricted Subsidiary owing tothe Company or another Restricted Subsidiary, or Liens in favor of the Company or anyRestricted Subsidiary;

(16) Liens (other than Permitted Collateral Liens) securing Refinancing Indebtedness Incurred torefinance Indebtedness that was previously so secured, and permitted to be secured underthe Indenture; provided that any such Lien is limited to all or part of the same property orassets (plus improvements, accessions, proceeds or dividends or distributions in respectthereof) that secured (or, under the written arrangements under which the original Lien

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arose, could secure) the Indebtedness being refinanced or is in respect of property that is orcould be the security for or subject to a Permitted Lien hereunder;

(17) any interest or title of a lessor under any Capitalized Lease Obligation or operating lease;

(18) (a) mortgages, liens, security interests, restrictions, encumbrances or any other matters ofrecord that have been placed by any government, statutory or regulatory authority,developer, landlord or other third party on property over which the Company or anyRestricted Subsidiary of the Company has easement rights or on any leased property andsubordination or similar arrangements relating thereto and (b) any condemnation oreminent domain proceedings affecting any real property;

(19) any encumbrance or restriction (including put and call arrangements) with respect to CapitalStock of any joint venture or similar arrangement pursuant to any joint venture or similaragreement;

(20) Liens on property or assets under construction (and related rights) in favor of a contractoror developer or arising from progress or partial payments by a third party relating to suchproperty or assets;

(21) Liens on receivables Incurred in connection with a receivables financing;

(22) Liens securing Indebtedness incurred under clause (13) of the second paragraph of thecovenant described under ‘‘—Certain Covenants—Limitation on Indebtedness’’ with localfinancial institutions;

(23) Liens on Escrowed Proceeds for the benefit of the related holders of debt securities or otherIndebtedness (or the underwriters or arrangers thereof) or on cash set aside at the time ofthe Incurrence of any Indebtedness or government securities purchased with such cash, ineither case to the extent such cash or government securities prefund the payment of intereston such Indebtedness and are held in an escrow account or similar arrangement to beapplied for such purpose;

(24) Liens securing or arising by reason of any netting or set-off arrangement entered into in theordinary course of banking or other trading activities, or liens over cash accounts securingcash pooling arrangements;

(25) Liens arising out of conditional sale, title retention, hire purchase, consignment or similararrangements for the sale of goods entered into in the ordinary course of business;

(26) Liens which do not exceed £25 million at any one time outstanding; and

(27) Liens on Capital Stock or other securities or assets of any Unrestricted Subsidiary thatsecure Indebtedness of such Unrestricted Subsidiary.

‘‘Permitted Premises Lease’’ means any real property lease that is entered into on arms lengthterms and is has a tenor of five years or more.

‘‘Permitted Transfer’’ means any transaction pursuant to which any Person or Persons acquiresBeneficial Ownership of Voting Stock of the Company; provided that (i) such transaction is entered intoon or prior to the date that is 183 days after the Issue Date and (ii) at the time such transaction isentered into the Indebtedness of the Company and its Restricted Subsidiaries, disregarding anyutilization of the Senior Facilities Agreement on such date and any Indebtedness outstanding on theIssue Date (except for the Notes) does not exceed the sum of (i) £300 million plus (ii) A200 million.

‘‘Permitted Transferee’’ means any Person or Persons that acquire Beneficial Ownership of VotingStock of the Company in a Permitted Transfer; provided that each such Person has certified to theTrustee in good faith that it is (i) an internationally recognized financial sponsor that directly orthrough its affiliates in the business of investing private equity capital and has had, for the one yearperiod prior to such Permitted Transfer, an average of at least $1.0 billion of invested or investablecapital under management during such period, or that it is a fund or other entity managed or advisedby such a sponsor, or (ii) a Person engaged in the cinema, media, programming or content distributionor production industries.

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‘‘Person’’ means any individual, corporation, partnership, joint venture, association, joint-stockcompany, trust, unincorporated organization, limited liability company, government or any agency orpolitical subdivision thereof or any other entity.

‘‘Preferred Stock,’’ as applied to the Capital Stock of any Person, means Capital Stock of any classor classes (however designated) which is preferred as to the payment of dividends or as to thedistribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, overshares of Capital Stock of any other class of such Person.

‘‘Propco Facility’’ means the £141,700,000 Propco Facility Agreement relating to the Acquisition ofa Portfolio of Properties, dated 2 April 2007, Among Barclays Bank Plc, Acting as Agent and the otherparties thereto, as amended, supplemented, refinanced or otherwise modified from time to time.

‘‘Propco Financing’’ means all arrangements relating to the Propco Facility.

‘‘Public Market’’ means any time after:

(1) an Equity Offering has been consummated; and

(2) shares of common stock or other common equity interests of the IPO Entity having amarket value in excess of £50 million on the date of such Equity Offering have beendistributed pursuant to such Equity Offering.

‘‘Public Offering’’ means any offering, including an Initial Public Offering, of shares of commonstock or other common equity interests that are listed on an exchange or publicly offered (which shallinclude an offering pursuant to Rule 144A and/or Regulation S under the Securities Act to professionalmarket investors or similar persons).

‘‘Purchase Money Obligations’’ means any Indebtedness Incurred to finance or refinance theacquisition, leasing, construction or improvement of property (real or personal) or assets (includingCapital Stock), and whether acquired through the direct acquisition of such property or assets or theacquisition of the Capital Stock of any Person owning such property or assets, or otherwise.

‘‘Qualified Receivables Financing’’ means any Receivables Financing of a Receivables Subsidiarythat meets the following conditions: (1) the Board of Directors of the Company shall have determinedin good faith that such Qualified Receivables Financing (including financing terms, covenants,termination events and other provisions) is in the aggregate economically fair and reasonable to theCompany and the Receivables Subsidiary, (2) all sales of accounts receivable and related assets to theReceivables Subsidiary are made at fair market value (as determined in good faith by the Issuer),(3) the financing terms, covenants, termination events and other provisions thereof shall be on marketterms (as determined in good faith by the Company) and may include Standard SecuritizationUndertakings and (4) the outstanding aggregate principal amount of such Qualified ReceivablesFinancing when taken together with any Refinancing Indebtedness in respect thereof and the principalamount of all other Qualified Receivables Financing Incurred pursuant to clause (12) of the secondparagraph of ‘‘—Certain Covenants—Limitation on Indebtedness’’ does not exceed the greater of£20 million or 2.0% of Total Assets of the Company.

The grant of a security interest in any accounts receivable of the Company or any of its RestrictedSubsidiaries (other than a Receivables Subsidiary) to secure Indebtedness under a Credit Facility shallnot be deemed a Qualified Receivables Financing.

‘‘Receivable’’ means a right to receive payment arising from a sale or lease of goods or services bya Person pursuant to an arrangement with another Person pursuant to which such other Person isobligated to pay for goods or services under terms that permit the purchase of such goods and serviceson credit, as determined on the basis of GAAP.

‘‘Receivables Assets’’ means any assets that are or will be the subject of a Qualified ReceivablesFinancing.

‘‘Receivables Fees’’ means distributions or payments made directly or by means of discounts withrespect to any participation interest issued or sold in connection with, and other fees paid to a Personthat is not a Restricted Subsidiary in connection with, any Receivables Financing.

‘‘Receivables Financing’’ means any transaction or series of transactions that may be entered intoby the Company or any of its Subsidiaries pursuant to which the Company or any of its Subsidiariesmay sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by the

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Company or any of its Subsidiaries), or (b) any other Person (in the case of a transfer by a ReceivablesSubsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arisingin the future) of the Company or any of its Subsidiaries, and any assets related thereto, including allcollateral securing such accounts receivable, all contracts and all guarantees or other obligations inrespect of such accounts receivable, proceeds of such accounts receivable and other assets which arecustomarily transferred or in respect of which security interests are customarily granted in connectionwith asset securitization transactions involving accounts receivable and any Hedging Obligations enteredinto by the Company or any such Subsidiary in connection with such accounts receivable.

‘‘Receivables Repurchase Obligation’’ means any obligation of a seller of receivables in a QualifiedReceivables Financing to repurchase receivables arising as a result of a breach of a representation,warranty or covenant or otherwise, including as a result of a receivable or portion thereof becomingsubject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any actiontaken by, any failure to take action by or any other event relating to the seller.

‘‘Receivables Subsidiary’’ means a Wholly Owned Subsidiary of the Company (or another Personformed for the purposes of engaging in a Qualified Receivables Financing with the Company in whichthe Issuer or any Subsidiary of the Company makes an Investment and to which the Company or anySubsidiary of the Company transfers accounts receivable and related assets) which engages in noactivities other than in connection with the financing of accounts receivable of the Company and itsSubsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assetsrelating thereto, and any business or activities incidental or related to such business, and which isdesignated by the Board of Directors of the Company (as provided below) as a Receivables Subsidiaryand:

(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which(i) is guaranteed by the Company or any other Restricted Subsidiary of the Company(excluding guarantees of obligations (other than the principal of, and interest on,Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is subject to terms thatare substantially equivalent in effect to a guarantee of any losses on securitized or soldreceivables by the Issuer or any other Restricted Subsidiary of the Issuer, (iii) is recourse toor obligates the Issuer or any other Restricted Subsidiary of the Company in any way otherthan pursuant to Standard Securitization Undertakings, or (iv) subjects any property or assetof the Company or any other Restricted Subsidiary of the Company, directly or indirectly,contingently or otherwise, to the satisfaction thereof, other than pursuant to StandardSecuritization Undertakings,

(2) with which neither the Company nor any other Restricted Subsidiary of the Company hasany contract, agreement, arrangement or understanding other than on terms which theCompany reasonably believes to be no less favorable to the Company or such RestrictedSubsidiary than those that might be obtained at the time from Persons that are not Affiliatesof the Company, and

(3) to which neither the Company nor any other Restricted Subsidiary of the Company has anyobligation to maintain or preserve such entity’s financial condition or cause such entity toachieve certain levels of operating results.

Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee byfiling with the Trustee a copy of the resolution of the Board of Directors of the Company giving effectto such designation and an Officer’s Certificate certifying that such designation complied with theforegoing conditions.

‘‘Refinance’’ means refinance, refund, replace, renew, repay, modify, restate, defer, substitute,supplement, reissue, resell, extend or increase (including pursuant to any defeasance or dischargemechanism) and the terms ‘‘refinances,’’ ‘‘refinanced’’ and ‘‘refinancing’’ as used for any purpose in theIndenture shall have a correlative meaning.

‘‘Refinancing Indebtedness’’ means Indebtedness that is Incurred to refund, refinance, replace,exchange, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) anyIndebtedness existing on the date of the Indenture or Incurred in compliance with the Indenture(including Indebtedness of the Company that refinances Indebtedness of any Restricted Subsidiary andIndebtedness of any Restricted Subsidiary that refinances Indebtedness of the Company or another

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Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness; provided,however, that:

(1) if the Indebtedness being refinanced constitutes Subordinated Indebtedness, the RefinancingIndebtedness has a final Stated Maturity at the time such Refinancing Indebtedness isIncurred that is the same as or later than the final Stated Maturity of the Indebtednessbeing refinanced or, if shorter, the Notes;

(2) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issuedwith original issue discount, an aggregate issue price) that is equal to or less than the sum ofthe aggregate principal amount (or if issued with original issue discount, the aggregateaccreted value) then outstanding of the Indebtedness being refinanced (plus, withoutduplication, any additional Indebtedness Incurred to pay interest or premiums required bythe instruments governing such existing Indebtedness and costs, expenses and fees Incurredin connection therewith);

(3) if the Indebtedness being refinanced is expressly subordinated to the Notes, suchRefinancing Indebtedness is subordinated to the Notes on terms at least as favorable to theHolders as those contained in the documentation governing the Indebtedness beingrefinanced;

provided, however, that Refinancing Indebtedness shall not include Indebtedness of the Company or aRestricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.

Refinancing Indebtedness in respect of any Credit Facility or any other Indebtedness may beIncurred from time to time after the termination, discharge or repayment of any such Credit Facility orother Indebtedness.

‘‘Related Person’’ with respect to any Equity Investor means:

(1) any controlling equityholder or Subsidiary of such Person; or

(2) in the case of an individual, any spouse, family member or relative of such individual, anytrust or partnership for the benefit of one or more of such individual and any such spouse,family member or relative, or the estate, executor, administrator, committee or beneficiariesof any thereof; or

(3) any trust, corporation, partnership or other Person for which one or more of the PermittedHolders and other Related Persons of any thereof constitute the beneficiaries, stockholders,partners or owners thereof, or Persons beneficially holding in the aggregate a majority (ormore) controlling interest therein; or

(4) in the case of the Equity Investors any investment fund or vehicle managed, sponsored oradvised by such Person or any successor thereto, or by any Affiliate of such Person or anysuch successor.

‘‘Related Taxes’’ means

(1) any Taxes (other than (x) Taxes measured by gross or net income, receipts or profits and(y) withholding Taxes), required to be paid (provided such Taxes are in fact paid) by anyParent by virtue of its:

(a) being organized or having Capital Stock outstanding (but not by virtue of owning stockor other equity interests of any corporation or other entity other than, directly orindirectly, the Company or any of the Company’s Subsidiaries);

(b) issuing or holding Subordinated Shareholder Funding; or

(c) being a holding company parent, directly or indirectly, of the Company or any of theCompany’s Subsidiaries;

(2) if and for so long as the Company is a member of a group filing a consolidated or combinedtax return with any Parent, any consolidated or combined Taxes measured by income forwhich such Parent is liable up to an amount not to exceed the amount of any such Taxesthat the Company and its Subsidiaries would have been required to pay on a separatecompany basis or on a consolidated basis if the Company and its Subsidiaries had paid taxon a consolidated, combined, group, affiliated or unitary basis on behalf of an affiliated

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group consisting only of the Company and its Subsidiaries; provided that distributions shallbe permitted in respect of the income of an Unrestricted Subsidiary only to the extent suchUnrestricted Subsidiary distributed cash for such purpose to the Company or its RestrictedSubsidiaries.

‘‘Restricted Investment’’ means any Investment other than a Permitted Investment.

‘‘Restricted Subsidiary’’ means any Subsidiary of the Company other than an UnrestrictedSubsidiary.

‘‘Reversion Date’’ means, after the Notes have achieved Investment Grade Status, the date, if any,that such Notes shall cease to have such Investment Grade Status.

‘‘S&P’’ means Standard & Poor’s Investors Ratings Services or any of its successors or assigns thatis a Nationally Recognized Statistical Rating Organization.

‘‘Secured Indebtedness’’ means any Indebtedness secured by a Lien.

‘‘Securities Act’’ means the U.S. Securities Act of 1933, as amended, and the rules and regulationsof the SEC promulgated thereunder, as amended.

‘‘Security Documents’’ means the Intercreditor Agreement and each collateral pledge agreement,security assignment agreement or other document under which collateral is pledged to secure theNotes.

‘‘Senior Facilities Agreement’’ means the £90.0 million senior secured revolving credit facilityagreement dated on or around the Issue Date among the Company, certain of the Company’sSubsidiaries, as borrowers and guarantors, the senior lenders (as named therein), and Lloyds TSB Bankplc as facility agent and The Bank of New York Mellon as security agent, as amended, supplemented,refinanced or otherwise modified from time to time.

‘‘Senior Finance Documents’’ means the Senior Facilities Agreement and such other documentsidentified as ‘‘Senior Finance Documents’’ pursuant to the Senior Facilities Agreement.

‘‘Senior Management’’ means the officers, directors, and other members of senior management ofthe Company or any of its Subsidiaries, who at any date beneficially own or have the right to acquire,directly or indirectly, Capital Stock of the Company or any Parent.

‘‘Significant Subsidiary’’ means any Restricted Subsidiary that meets any of the followingconditions:

(1) the Company’s and its Restricted Subsidiaries’ investments in and advances to the RestrictedSubsidiary exceed 10% of the total assets of the Company and its Restricted Subsidiaries ona consolidated basis as of the end of the most recently completed fiscal year;

(2) the Company’s and its Restricted Subsidiaries’ proportionate share of the total assets (afterintercompany eliminations) of the Restricted Subsidiary exceeds 10% of the total assets ofthe Company and its Restricted Subsidiaries on a consolidated basis as of the end of themost recently completed fiscal year; or

(3) the Company’s and its Restricted Subsidiaries’ equity in the income from continuingoperations before income taxes, extraordinary items and cumulative effect of a change inaccounting principle of the Restricted Subsidiary exceeds 10% of such income of theCompany and its Restricted Subsidiaries on a consolidated basis for the most recentlycompleted fiscal year.

‘‘Similar Business’’ means (a) any businesses, services or activities engaged in by the Company orany of its Subsidiaries or any Associates on the Issue Date and (b) any businesses, services andactivities engaged in by the Company or any of its Subsidiaries or any Associates that are related,complementary, incidental, ancillary or similar to any of the foregoing or are extensions ordevelopments of any thereof.

‘‘Standard Securitization Undertakings’’ means representations, warranties, covenants, indemnitiesand guarantees of performance entered into by the Issuer or any Subsidiary of the Company which theCompany has determined in good faith to be customary in a Receivables Financing, including thoserelating to the servicing of the assets of a Receivables Subsidiary, it being understood that anyReceivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

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‘‘Sterling Equivalent’’ means, with respect to any monetary amount in a currency other thansterling, at any time of determination thereof by the Company or the Trustee, the amount of sterlingobtained by converting such currency other than sterling involved in such computation into sterling atthe spot rate for the purchase of sterling with the applicable currency other than sterling as publishedin The Financial Times in the ‘‘Currency Rates’’ section (or, if The Financial Times is no longerpublished, or if such information is no longer available in The Financial Times, such source as may beselected in good faith by the Company) on the date of such determination.

‘‘Stated Maturity’’ means, with respect to any security, the date specified in such security as thefixed date on which the payment of principal of such security is due and payable, including pursuant toany mandatory redemption provision, but shall not include any contingent obligations to repay, redeemor repurchase any such principal prior to the date originally scheduled for the payment thereof.

‘‘Subordinated Indebtedness’’ means, with respect to any person, any Indebtedness (whetheroutstanding on the Issue Date or thereafter Incurred) which is expressly subordinated in right ofpayment to the Notes pursuant to a written agreement.

‘‘Subordinated Shareholder Funding’’ means, collectively, any funds provided to the Company byany Parent, any Affiliate of any Parent or any Permitted Holder or any Affiliate thereof, in exchangefor or pursuant to any security, instrument or agreement other than Capital Stock, in each case issuedto and held by Holdings, together with any such security, instrument or agreement and any othersecurity or instrument other than Capital Stock issued in payment of any obligation under anySubordinated Shareholder Funding; provided, however, that such Subordinated Shareholder Funding:

(1) does not mature or require any amortization, redemption or other repayment of principal orany sinking fund payment prior to the first anniversary of the Stated Maturity of the Notes(other than through conversion or exchange of such funding into Capital Stock (other thanDisqualified Stock) of the Company or any funding meeting the requirements of thisdefinition) or the making of any such payment prior to the first anniversary of the StatedMaturity of the Notes is restricted by the provisions of the Indenture as a ‘‘RestrictedPayment’’;

(2) does not require, prior to the first anniversary of the Stated Maturity of the Notes, paymentof cash interest, cash withholding amounts or other cash gross-ups, or any similar cashamounts;

(3) contains no change of control or similar provisions and does not accelerate and has no rightto declare a default or event of default or take any enforcement action or otherwise requireany cash payment, in each case, prior to the first anniversary of the Stated Maturity of theNotes;

(4) does not provide for or require any security interest or encumbrance over any asset of theCompany or any of its Subsidiaries; and

(5) pursuant to its terms is fully subordinated and junior in right of payment to the Notespursuant to subordination, payment blockage and enforcement limitation terms which arecustomary in all material respects for similar funding.

‘‘Subsidiary’’ means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a partnership, jointventure, limited liability company or similar entity) of which more than 50% of the totalvoting power of shares of Capital Stock entitled (without regard to the occurrence of anycontingency) to vote in the election of directors, managers or trustees thereof is at the timeof determination owned or controlled, directly or indirectly, by such Person or one or moreof the other Subsidiaries of that Person or a combination thereof; or

(2) any partnership, joint venture, limited liability company or similar entity of which:

(a) more than 50% of the capital accounts, distribution rights, total equity and votinginterests or general or limited partnership interests, as applicable, are owned orcontrolled, directly or indirectly, by such Person or one or more of the otherSubsidiaries of that Person or a combination thereof whether in the form ofmembership, general, special or limited partnership interests or otherwise; and

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(b) such Person or any Subsidiary of such Person is a controlling general partner orotherwise controls such entity.

‘‘Successor Parent’’ with respect to any Person means any other Person with more than 50% of thetotal voting power of the Voting Stock of which is, at the time the first Person becomes a Subsidiary ofsuch other Person, ‘‘beneficially owned’’ (as defined below) by one or more Persons that ‘‘beneficiallyowned’’ (as defined below) more than 50% of the total voting power of the Voting Stock of the firstPerson immediately prior to the first Person becoming a Subsidiary of such other Person. For purposeshereof, ‘‘beneficially own’’ has the meaning correlative to the term ‘‘beneficial owner,’’ as such term isdefined in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date).

‘‘Taxes’’ means all present and future taxes, levies, imposts, deductions, charges, duties andwithholdings and any charges of a similar nature (including interest, penalties and other liabilities withrespect thereto) that are imposed by any government or other taxing authority.

‘‘Tax Sharing Agreement’’ means any tax sharing or profit and loss pooling or similar agreement oran agreement to buy or sell tax losses or profits, in each case with customary or arm’s-length termsentered into with any Parent or Unrestricted Subsidiary, as the same may be amended, supplemented,waived or otherwise modified from time to time in accordance with the terms thereof and of theIndenture.

‘‘Temporary Cash Investments’’ means any of the following:

(1) any investment in

(a) direct obligations of, or obligations Guaranteed by, (i) the United States of America orCanada, (ii) any European Union member state, (iii) Switzerland or Norway, (iv) anycountry in whose currency funds are being held specifically pending application in themaking of an investment or capital expenditure by the Company or a RestrictedSubsidiary in that country with such funds or (v) any agency or instrumentality of anysuch country or member state, or

(b) direct obligations of any country recognized by the United States of America rated atleast ‘‘A’’ by S&P or ‘‘A-1’’ by Moody’s (or, in either case, the equivalent of such ratingby such organization or, if no rating of S&P or Moody’s then exists, the equivalent ofsuch rating by any Nationally Recognized Statistical Rating Organization);

(2) overnight bank deposits, and investments in time deposit accounts, certificates of deposit,bankers’ acceptances and money market deposits (or, with respect to foreign banks, similarinstruments) maturing not more than one year after the date of acquisition thereof issuedby:

(a) any lender under the Senior Facilities Agreement,

(b) any institution authorized to operate as a bank in any of the countries or memberstates referred to in subclause (1)(a) above, or

(c) any bank or trust company organized under the laws of any such country or memberstate or any political subdivision thereof,

in each case, having capital and surplus aggregating in excess of £250 million (or the foreigncurrency equivalent thereof) and whose long-term debt is rated at least ‘‘A’’ by S&P or ‘‘A-2’’by Moody’s (or, in either case, the equivalent of such rating by such organization or, if norating of S&P or Moody’s then exists, the equivalent of such rating by any NationallyRecognized Statistical Rating Organization) at the time such Investment is made;

(3) repurchase obligations with a term of not more than 30 days for underlying securities of thetypes described in clause (1) or (2) above entered into with a Person meeting thequalifications described in clause (2) above;

(4) Investments in commercial paper, maturing not more than 270 days after the date ofacquisition, issued by a Person (other than the Company or any of its Subsidiaries), with arating at the time as of which any Investment therein is made of ‘‘P-2’’ (or higher) accordingto Moody’s or ‘‘A-2’’ (or higher) according to S&P (or, in either case, the equivalent of suchrating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent ofsuch rating by any Nationally Recognized Statistical Rating Organization);

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(5) Investments in securities maturing not more than one year after the date of acquisitionissued or fully Guaranteed by any state, commonwealth or territory of the United States ofAmerica, Canada, any European Union member state or Switzerland, Norway or by anypolitical subdivision or taxing authority of any such state, commonwealth, territory, countryor member state, and rated at least ‘‘BBB’’ by S&P or ‘‘Baa3’’ by Moody’s (or, in eithercase, the equivalent of such rating by such organization or, if no rating of S&P or Moody’sthen exists, the equivalent of such rating by any Nationally Recognized Statistical RatingOrganization);

(6) bills of exchange issued in the United States, Canada, a member state of the EuropeanUnion, Switzerland, Norway or Japan eligible for rediscount at the relevant central bank andaccepted by a bank (or any dematerialized equivalent);

(7) any money market deposit accounts issued or offered by a commercial bank organized underthe laws of a country that is a member of the Organization for Economic Co-operation andDevelopment, in each case, having capital and surplus in excess of £250 million (or theforeign currency equivalent thereof) or whose long term debt is rated at least ‘‘A’’ by S&P or‘‘A2’’ by Moody’s (or, in either case, the equivalent of such rating by such organization or, ifno rating of S&P or Moody’s then exists, the equivalent of such rating by any NationallyRecognized Statistical Rating Organization) at the time such Investment is made;

(8) investment funds investing 95% of their assets in securities of the type described inclauses (1) through (7) above (which funds may also hold reasonable amounts of cashpending investment and/or distribution); and

(9) investments in money market funds complying with the risk limiting conditions of Rule 2a-7(or any successor rule) of the SEC under the U.S. Investment Company Act of 1940, asamended.

‘‘Terra Firma’’ means Terra Firma Investments (GP) 2 Limited, a company incorporated inGuernsey (registered number 39257) whose registered office is at PO Box 543, 1st Floor, Dorey Court,Admiral Park, St Peter Port, Guernsey GY1 6HJ, any Affiliate of Terra Firma or any successor to TerraFirma.

‘‘Total Assets’’ means the consolidated total assets of the Company and its Restricted Subsidiariesin accordance with GAAP as shown on the most recent balance sheet of such Person.

‘‘Transactions’’ means the issuance of the Notes and the use of proceeds thereof, the repayment ofexisting indebtedness, the closing out of Hedging Obligations, the transactions related thereto asdescribed in this offering memorandum and the payment of fees and expenses related thereto.

‘‘UK Government Obligations’’ means direct obligations of, or obligations guaranteed by, theUnited Kingdom, and the payment for which the United Kingdom pledges its full faith and credit.

‘‘Unrestricted Subsidiary’’ means:

(1) any Subsidiary of the Company (other than the Issuer) that at the time of determination isan Unrestricted Subsidiary (as designated by the Board of Directors of the Company in themanner provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Company may designate any Subsidiary of the Company (includingany newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger,consolidation or other business combination transaction, or Investment therein) to be an UnrestrictedSubsidiary only if:

(1) such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtednessof, or own or hold any Lien on any property of, the Company or any other Subsidiary of theCompany which is not a Subsidiary of the Subsidiary to be so designated or otherwise anUnrestricted Subsidiary; and

(2) such designation and the Investment of the Company in such Subsidiary complies with‘‘—Certain Covenants—Limitation on Restricted Payments.’’

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Any such designation by the Board of Directors of the Company shall be evidenced to the Trusteeby filing with the Trustee a resolution of the Board of Directors of the Company giving effect to suchdesignation and an Officer’s Certificate certifying that such designation complies with the foregoingconditions.

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be aRestricted Subsidiary; provided, that immediately after giving effect to such designation (1) no Defaultor Event of Default would result therefrom and (2)(x) the Company could Incur at least £1.00 ofadditional Indebtedness under paragraph (a) of ‘‘—Certain Covenants—Limitation on Indebtedness’’ or(y) the Fixed Charge Coverage Ratio would not be worse than it was immediately prior to giving effectto such designation, in each case, on a pro forma basis taking into account such designation. Any suchdesignation by the Board of Directors shall be evidenced to the Trustee by promptly filing with theTrustee a copy of the resolution of the Board of Directors giving effect to such designation or anOfficer’s Certificate certifying that such designation complied with the foregoing provisions.

‘‘Uniform Commercial Code’’ means the New York Uniform Commercial Code.

‘‘Voting Stock’’ of a Person means all classes of Capital Stock of such Person then outstanding andnormally entitled to vote in the election of directors.

‘‘Wholly Owned Subsidiary’’ means a Restricted Subsidiary of the Company, all of the CapitalStock of which (other than directors’ qualifying shares or shares required by any applicable law orregulation to be held by a Person other than the Company or another Wholly Owned Subsidiary) isowned by the Company or another Wholly Owned Subsidiary.

‘‘Working Capital Intercompany Loan’’ means any loan to or by the Company or any of itsRestricted Subsidiaries to or from the Issuer or any of its Restricted Subsidiaries from time to time(i) for purposes of consolidated cash and tax management and working capital management and (ii) fora duration of less than one year.

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BOOK-ENTRY, DELIVERY AND FORM

General

Sterling Notes sold to qualified institutional buyers in reliance on Rule 144A under the SecuritiesAct will initially be represented by a global note in registered form without interest coupons attached(the ‘‘Rule 144A Sterling Global Note’’). Sterling Notes sold to non-U.S. persons outside the UnitedStates in reliance on Regulation S under the Securities Act will initially be represented by a global notein registered form without interest coupons attached (the ‘‘Regulation S Sterling Global Note’’ and,together with the Rule 144A Sterling Global Note, the ‘‘Sterling Global Notes’’). Euro Notes sold toqualified institutional buyers in reliance on Rule 144A under the Securities Act will initially berepresented by a global note in registered form without interest coupons attached (the ‘‘Rule 144AEuro Global Note’’ and together with the Rule 144A Sterling Global Note, the ‘‘Rule 144A GlobalNotes’’). Euro Notes sold to non-U.S. persons outside the United States in reliance on Regulation Sunder the Securities Act will initially be represented by a global note in registered form without interestcoupons attached (the ‘‘Regulation S Euro Global Note’’ and together with the Regulation S SterlingGlobal Note, the ‘‘Regulation S Global Notes’’; the Regulation S Euro Global Note together with theRule 144A Euro Global Note, the ‘‘Euro Global Notes’’; and the Sterling Global Notes and the EuroGlobal Notes together, the ‘‘Global Notes’’).The Global Notes will be deposited, on the closing date,with a common depositary and registered in the name of the nominee of the common depositary forthe account of Euroclear and Clearstream.

Ownership of interests in the Rule 144A Global Notes (‘‘Rule 144A Book-Entry Interests’’) andownership of interests in the Regulation S Global Notes (the ‘‘Regulation S Book-Entry Interests’’ and,together with the Rule 144A Book-Entry Interests, the ‘‘Book-Entry Interests’’) will be limited topersons that have accounts with Euroclear and/or Clearstream or persons that hold interests throughsuch participants. Euroclear and Clearstream will hold interests in the Global Notes on behalf of theirparticipants through customers’ securities accounts in their respective names on the books of theirrespective depositories. Except under the limited circumstances described below, Book-Entry Interestswill not be issued in definitive form.

Book-Entry Interests will be shown on, and transfers thereof will be effected only through, recordsmaintained by Euroclear and Clearstream and their participants. The laws of some jurisdictions,including certain states of the United States, may require that certain purchasers of securities takephysical delivery of those securities in definitive form. The foregoing limitations may impair your abilityto own, transfer or pledge Book-Entry Interests. In addition, while the Notes are in global form,holders of Book-Entry Interests will not be considered the owners or ‘‘holders’’ of Notes for anypurpose.

So long as the Notes are held in global form, Euroclear and/or Clearstream (or their respectivenominees), as applicable, will be considered the sole holders of the Global Notes for all purposes underthe Indenture. In addition, participants must rely on the procedures of Euroclear and Clearstream, andindirect participants must rely on the procedures of Euroclear and Clearstream and the participantsthrough which they own Book-Entry Interests, to transfer their interests or to exercise any rights ofholders of Notes under the Indenture.

Neither we, nor the Guarantors, nor the Trustee will have any responsibility, or be liable, for anyaspect of the records relating to the Book-Entry Interests.

Redemption of the Global Notes

In the event that any Global Note (or any portion thereof) is redeemed, Euroclear and/orClearstream, as applicable, will redeem an equal amount of the Book-Entry Interests in such GlobalNote from the amount received by them in respect of the redemption of such Global Note. Theredemption price payable in connection with the redemption of such Book-Entry Interests will be equalto the amount received by Euroclear and Clearstream, as applicable, in connection with the redemptionof such Global Note (or any portion thereof). We understand that, under the existing practices ofEuroclear and Clearstream, if fewer than all of the Notes are to be redeemed at any time, Euroclearand Clearstream will credit their participants’ accounts on a proportionate basis (with adjustments toprevent fractions), by lot or on such other basis as they deem fair and appropriate, provided, however,that no Book-Entry Interest of less than £100,000 principal amount (with respect to the Sterling GlobalNotes) or A100,000 (with respect to the Euro Global Notes) may be redeemed in part.

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Payments on Global Notes

We will make payments of any amounts owing in respect of the Global Notes (including principal,premium, if any, interest and Additional Amounts, if any) to the common depositary or its nominee forEuroclear and Clearstream. The common depositary will distribute such payments to participants inaccordance with their customary procedures. We will make payments of all such amounts withoutdeduction or withholding for, or on account of, any present or future taxes, duties, assessments orgovernmental charges of whatever nature, except as may be required by law and as described under thecaption ‘‘Description of the Notes—Withholding Taxes’’. If any such deduction or withholding isrequired to be made, then, to the extent described under ‘‘Description of the Notes—AdditionalAmounts’’ above, we will pay additional amounts as may be necessary in order for the net amountsreceived by any holder of the Global Notes or owner of Book-Entry Interests after such deduction orwithholding will equal the net amounts that such holder or owner would have otherwise received inrespect of such Global Note or Book-Entry Interest, as the case may be, absent such withholding ordeduction. We expect that standing customer instructions and customary practices will govern paymentsby participants to owners of Book-Entry Interests held through such participants.

Under the terms of the Indenture, we, the Guarantors and the Trustee will treat the registeredholders of the Global Notes (e.g., Euroclear or Clearstream (or their respective nominees)) as theowner thereof for the purpose of receiving payments and for all other purposes. Consequently, none ofthe Issuer, the Guarantors, the Trustee or any of our agents has or will have any responsibility orliability for:

• any aspect of the records of Euroclear, Clearstream or any participant or indirect participantrelating to, or payments made on account of, a Book-Entry Interest or for maintaining,supervising or reviewing the records of Euroclear or Clearstream or any participant or indirectparticipant relating to, or payments made on account of, a Book-Entry Interest;

• Euroclear, Clearstream or any participant or indirect participant; or

• the records of the common depositary.

Currency of Payment for the Global Notes

The principal of, premium, if any, and interest on, and all other amounts payable in respect of, theSterling Global Notes will be paid to holders of interests to such Sterling Notes through Euroclear orClearstream in sterling. The principal of, premium, if any, and interest on, and all other amountspayable in respect of, the Euro Global Notes will be paid to holders of interests to such Euro Notesthrough Euroclear or Clearstream in euro.

Action by Owners of Book-Entry Interests

Euroclear and Clearstream have advised us that they will take any action permitted to be taken bya holder of Notes (including the presentation of Notes for exchange as described above) only at thedirection of one or more participants to whose account the Book-Entry Interests in the Global Notesare credited and only in respect of such portion of the aggregate principal amount of Notes as to whichsuch participant or participants has or have given such direction. Euroclear and Clearstream will notexercise any discretion in the granting of consents, waivers or the taking of any other action in respectof the Global Notes. However, if there is an Event of Default under the Notes, Euroclear andClearstream, at the request of the holders of the Notes, reserve the right to exchange the Global Notesfor definitive registered Notes in certificated form (the ‘‘Definitive Registered Notes’’), and todistribute such Definitive Registered Notes to their participants.

Transfers

Transfers between participants in Euroclear or Clearstream will be effected in accordance withEuroclear and Clearstream’s rules and will be settled in immediately available funds. If a holder ofNotes requires physical delivery of Definitive Registered Notes for any reason, including to sell Notesto persons in states which require physical delivery of such securities or to pledge such securities, suchholder of Notes must transfer its interests in the Global Notes in accordance with the normalprocedures of Euroclear and Clearstream and in accordance with the procedures set forth in theIndenture.

The Global Notes will bear a legend to the effect set forth under ‘‘Notice to Investors’’.

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Book-Entry Interests in the Global Notes will be subject to the restrictions on transfers andcertification requirements discussed under ‘‘Notice to Investors’’. Rule 144A Book-Entry Interests maybe transferred to a person who takes delivery in the form of a Regulation S Book-Entry Interest onlyupon delivery by the transferor of a written certification (in the form provided in the Indenture) to theeffect that such transfer is being made in accordance with Regulation S or Rule 144 under theSecurities Act or any other exemption (if available under the Securities Act).

Regulation S Book-Entry Interests may be transferred to a person who takes delivery in the formof a Rule 144A Book-Entry Interest only upon delivery by the transferor of a written certification (inthe form provided in the Indenture) to the effect that such transfer is being made to a person who thetransferor reasonably believes is a ‘‘qualified institutional buyer’’ within the meaning of Rule 144A in atransaction meeting the requirements of Rule 144A or otherwise in accordance with the transferrestrictions described under ‘‘Notice to Investors’’ and in accordance with any applicable securities lawsof any other jurisdiction.

In connection with transfers involving an exchange of a Regulation S Book-Entry Interest for aRule 144A Book-Entry Interest, appropriate adjustments will be made to reflect a decrease in theprincipal amount of the applicable Regulation S Global Note and a corresponding increase in theprincipal amount of the applicable Rule 144A Global Note.

Definitive Registered Notes may be transferred and exchanged for Book-Entry Interests in aGlobal Note only as described under ‘‘Description of the Notes—Transfer and Exchange’’ and, ifrequired, only if the transferor first delivers to the Trustee a written certificate (in the form provided inthe Indenture) to the effect that such transfer will comply with the appropriate transfer restrictionsapplicable to such Notes. See ‘‘Notice to Investors’’.

Any Book-Entry Interest in one of the Global Notes that is transferred to a person who takesdelivery in the form of a Book-Entry Interest in any other Global Note will, upon transfer, cease to bea Book-Entry Interest in the first-mentioned Global Note and become a Book-Entry Interest in suchother Global Note, and accordingly will thereafter be subject to all transfer restrictions, if any, andother procedures applicable to Book-Entry Interests in such other Global Note for as long as it remainssuch a Book-Entry Interest.

Definitive Registered Notes

Under the terms of the Indenture, owners of the Book-Entry Interests will receive DefinitiveRegistered Notes:

(1) if Euroclear or Clearstream notify us that it is unwilling or unable to continue to act asdepositary and a successor depositary is not appointed by the Issuer within 120 days; or

(2) if the owner of a Book-Entry Interest requests such exchange in writing delivered throughEuroclear or Clearstream following an Event of Default under the Indenture.

Euroclear and Clearstream have advised us that upon request by an owner of a Book-EntryInterest described in the immediately preceding clause (2), their current procedure is to request that weissue or cause to be issued Notes in definitive registered form to all owners of Book-Entry Interests.

In such an event, the Registrar will issue Definitive Registered Notes, registered in the name ornames and issued in any approved denominations, requested by or on behalf of Euroclear, Clearstreamor us, as applicable (in accordance with their respective customary procedures and based upondirections received from participants reflecting the beneficial ownership of Book-Entry Interests), andsuch Definitive Registered Notes will bear the restrictive legend as provided in the relevant indenture,unless that legend is not required by the Indenture or applicable law.

To the extent permitted by law, we, the Trustee, the Paying Agent and the Registrar shall beentitled to treat the registered holder of any Global Note as the absolute owner thereof and no personwill be liable for treating the registered holder as such. Ownership of the Global Notes will beevidenced through registration from time to time at the registered office of the Issuer, and suchregistration is a means of evidencing title to the Notes.

We will not impose any fees or other charges in respect of the Notes; however, owners of theBook-Entry Interests may incur fees normally payable in respect of the maintenance and operation ofaccounts in Euroclear and Clearstream.

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Information Concerning Euroclear and Clearstream

All Book-Entry Interests will be subject to the operations and procedures of Euroclear andClearstream, as applicable. We provide the following summaries of those operations and proceduressolely for the convenience of investors. The operations and procedures of the settlement system arecontrolled by the settlement system and may be changed at any time.

Neither we nor the initial purchasers are responsible for those operations or procedures.

We understand as follows with respect to Euroclear and Clearstream: Euroclear and Clearstreamhold securities for participating organisations. They facilitate the clearance and settlement of securitiestransactions between their participants through electronic book-entry changes in accounts of suchparticipants. Euroclear and Clearstream provide various services to their participants, including thesafekeeping, administration, clearance, settlement, lending and borrowing of internationally tradedsecurities. Euroclear and Clearstream interface with domestic securities markets. Euroclear andClearstream participants are financial institutions such as underwriters, securities brokers and dealers,banks, trust companies and certain other organisations. Indirect access to Euroclear and Clearstream isalso available to others such as banks, brokers, dealers and trust companies that clear through ormaintain a custodial relationship with a Euroclear and Clearstream participant, either directly orindirectly.

Because Euroclear and Clearstream can only act on behalf of participants, who in turn act onbehalf of indirect participants and certain banks, the ability of an owner of a beneficial interest topledge such interest to persons or entities that do not participate in the Euroclear and/or Clearstreamsystems, or otherwise take actions in respect of such interest, may be limited by the lack of a definitivecertificate for that interest. The laws of some jurisdictions require that certain persons take physicaldelivery of securities in definitive form. Consequently, the ability to transfer beneficial interests to suchpersons may be limited. In addition, owners of beneficial interests through the Euroclear orClearstream systems will receive distributions attributable to the Global Notes only through Euroclearor Clearstream participants.

Global Clearance and Settlement Under the Book-Entry System

The Notes represented by the Global Notes are expected to be listed on the Official List of theLuxembourg Stock Exchange. Transfers of interests in the Global Notes between participants inEuroclear or Clearstream will be effected in the ordinary way in accordance with their respectivesystem’s rules and operating procedures.

Although Euroclear and Clearstream currently follow the foregoing procedures in order tofacilitate transfers of interests in the Global Notes among participants in Euroclear or Clearstream,they are under no obligation to perform or continue to perform such procedures, and such proceduresmay be discontinued or modified at any time. None of us, any Guarantor, the Trustee or the payingagent will have any responsibility for the performance by Euroclear, Clearstream or their participantsor indirect participants of their respective obligations under the rules and procedures governing theiroperations.

Initial Settlement

Initial settlement for the Notes will be made in sterling. Book-Entry Interests owned throughEuroclear or Clearstream accounts will follow the settlement procedures applicable to conventionalbonds in registered form. Book-Entry Interests will be credited to the securities custody accounts ofEuroclear and Clearstream holders on the business day following the settlement date against paymentfor value of the settlement date.

Secondary Market Trading

The Book-Entry Interests will trade through participants of Euroclear and Clearstream and willsettle in same-day funds. Since the purchase determines the place of delivery, it is important toestablish at the time of trading of any Book-Entry Interests where both the purchaser’s and the seller’saccounts are located to ensure that settlement can be made on the desired value date.

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TAXATION

If you are a prospective investor, you should consult your tax advisor on the possible tax consequencesof buying, holding or selling any Notes under the laws of your country of citizenship, residence or domicile,including the effect of any local taxes applicable to you. The discussions that follow do not purport to be acomprehensive description of all tax considerations which may be relevant to a decision to purchase, hold orsell notes. In particular, these discussions do not consider any specific facts or circumstances that may applyto you. The discussions that follow for each jurisdiction are based upon the applicable laws andinterpretations thereof as in effect as of the date of this offering memorandum. These tax laws andinterpretations are subject to change, possibly with retroactive or retrospective effect.

Certain U.S. Federal Income Tax Consequences

To ensure compliance with Internal Revenue Service Circular 230, you are hereby notified that anydiscussion of tax matters set forth in this offering memorandum was written in connection with thepromotion or marketing of the transactions or matters addressed herein and was not intended orwritten to be used, and cannot be used by any prospective investor, for the purpose of avoidingtax-related penalties under federal, state or local tax law. Each prospective investor should seek advicebased on its particular circumstances from an independent tax advisor.

The following is a summary of certain U.S. federal income tax consequences of the purchase,ownership and disposition of Notes as of the date hereof. Except where noted, this summary deals onlywith Notes that are held as capital assets by a U.S. holder (as defined below) who acquired Notes uponoriginal issue at their initial offering price.

A ‘‘U.S. holder’’ means a beneficial owner of Notes that is for U.S. federal income tax purposesany of the following:

• an individual citizen or resident of the United States;

• a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes)created or organised in or under the laws of the United States, any state thereof or the Districtof Columbia;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source;or

• a trust if it (1) is subject to the primary supervision of a court within the United States and oneor more United States persons have the authority to control all substantial decisions of the trustor (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as aUnited States person.

This summary is based upon provisions of the Internal Revenue Code of 1986, as amended (the‘‘Code’’), and applicable regulations, rulings and judicial decisions as of the date hereof. Thoseauthorities may be changed, perhaps retroactively, so as to result in U.S. federal income taxconsequences different from those summarised below. This summary does not address all aspects ofU.S. federal income taxes and does not deal with other U.S. federal taxes (such as estate and gifttaxes), state, local, non-U.S. or other tax considerations that may be relevant to U.S. holders in light oftheir particular circumstances. In addition, it does not represent a detailed description of the U.S.federal income tax consequences applicable to you if you are subject to special treatment under theU.S. federal income tax laws. For example, this summary does not address:

• tax consequences to holders who may be subject to special tax treatment, such as dealers insecurities or currencies, traders in securities that elect to use the mark-to-market method ofaccounting for their securities, financial institutions, regulated investment companies, real estateinvestment trusts, partnerships or other pass-through entities for U.S. federal income taxpurposes (or investors therein), tax-exempt entities, insurance companies, ‘‘controlled foreigncorporations’’, ‘‘passive foreign investment companies’’, or U.S. expatriates;

• tax consequences to persons holding the Notes as part of a hedging, integrated, constructive saleor conversion transaction or a straddle;

• tax consequences to holders of the Notes whose ‘‘functional currency’’ is not the U.S. dollar; or

• alternative minimum tax consequences, if any.

If an entity treated as a partnership for U.S. federal income tax purposes holds our Notes, the taxtreatment of a partner will generally depend upon the status of the partner and the activities of the

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entity. If you are a partner of such an entity considering an investment in Notes, you should consultyour tax advisors.

It is currently expected, and the following discussion assumes, that the Notes will not be issuedwith original issue discount that is equal to or greater than a statutory de minimis amount for U.S.federal income tax purposes.

If you are considering the purchase of Notes, you should consult your own tax advisors concerningthe particular U.S. federal income tax consequences to you of the ownership of Notes, as well as theconsequences to you arising under any other tax laws.

Payments of Interest

If you receive interest payments in pounds or euros and you use the cash basis method ofaccounting, you will be required to include in income the U.S. dollar value of the amount received,determined by translating the pounds or euros received at the ‘‘spot rate’’ in effect on the date ofreceipt regardless of whether the payment is in fact converted into U.S. dollars. Your tax basis in thepounds or euros received as interest on a Note will be the U.S. dollar value thereof at the spot rate ineffect on the date of receipt.

If you use the accrual method of accounting, you may determine the amount of income recognisedwith respect to such interest in accordance with either of two methods. Under the first method, you willbe required to include in income for each taxable year the U.S. dollar value of the interest that hasaccrued during such year, determined by translating such interest at the average rate of exchange forthe period or periods during which such interest accrued. Under the second method, you may elect totranslate interest income at the spot rate on (i) the last day of the accrual period, (ii) if the accrualperiod straddles your taxable year, for the portion of the accrual period up to the last day of suchtaxable year, the last day of such taxable year, or (iii) the date the interest payment is received if suchdate is within five days of the end of the accrual period. The above election will apply to otherobligations you hold and may not be changed without the consent of the IRS. Upon receipt of aninterest payment (including amounts received upon the sale, exchange, retirement or other taxabledisposition of a Note attributable to accrued but unpaid interest), you will recognise exchange gain orloss, generally treated as ordinary income or loss, in an amount equal to the difference, if any, betweenthe U.S. dollar value of such payment (determined by translating the pounds or euros received at thespot rate in effect on the date of receipt) and the U.S. dollar value of the interest income that youhave previously included in income with respect to such payment.

Interest income will generally be taxable to you as ordinary income. If any UK tax were to bewithheld from interest payments (such as upon a change in law) (See ‘‘—Certain UK TaxationConsiderations’’), you will be required to include in income (as interest) any such tax and anyadditional amounts paid to you in respect thereof. You may be entitled to deduct or credit this tax,subject to certain limitations (including that the election to deduct or credit foreign taxes applies to allof your foreign taxes for a particular tax year). Interest income (including any UK taxes withheld andany additional amounts in respect thereof) on a Note generally will be considered foreign sourceincome and, for purposes of the U.S. foreign tax credit, generally will be considered passive categoryincome. You will generally be denied a foreign tax credit for foreign taxes imposed with respect to theNotes where you do not meet a minimum holding period requirement during which you are notprotected from risk of loss. The rules governing the foreign tax credit are complex. You are urged toconsult your tax advisors regarding the availability of the foreign tax credit under your particularcircumstances.

Sale, Exchange, Retirement or Disposition of Notes

Upon the sale, exchange, retirement or other taxable disposition of a Note, you generally willrecognise gain or loss equal to the difference between the amount you realise upon the sale, exchange,retirement or other taxable disposition (less an amount equal to any accrued but unpaid interest, whichwill be taxable as interest income to the extent not previously included in income) and your adjustedtax basis in the Note. Your initial tax basis in a Note will, in general, be your U.S. dollar cost for suchNote. If you purchased a Note with pounds or euros, your cost generally will be the U.S. dollar valueof the pounds or euros paid for such Note determined at the spot rate on the date of such purchase(or, in the case of a cash basis or electing accrual basis taxpayer, the settlement date of the purchase, ifthe Note is treated as traded on an established securities market for U.S. federal income tax purposes).If your Note is sold, exchanged, retired or otherwise disposed of in a taxable transaction for pounds or

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euros, then your amount realised generally will be based on the spot rate in effect on the date of suchsale, exchange, retirement or other taxable disposition (or, in the case of a cash basis or electingaccrual basis taxpayer, the settlement date of the sale, exchange, retirement or disposition, if the Noteis treated as traded on an established securities market for U.S. federal income tax purposes). Non-electing accrual basis taxpayers should consult their tax advisors as to the possibility of exchange gainor loss to the extent of currency fluctuations between the sale date and the settlement date.

Subject to the discussion below, such gain or loss (other than any exchange gain or loss) will becapital gain or loss and will generally be treated as U.S. source gain or loss. Capital gains of individualsderived in respect of capital assets held for more than one year are eligible for reduced rates oftaxation. The deductibility of capital losses is subject to limitations.

A portion of your gain or loss with respect to the principal amount of a Note may be treated asexchange gain or loss. Such exchange gain or loss will be treated as ordinary income or loss andgenerally will be U.S. source gain or loss. For these purposes, the principal amount of a Note is yourpurchase price for the Note calculated in pounds or euros on the date of purchase, and the amount ofexchange gain or loss is equal to the difference between (i) the U.S. dollar value of the principalamount determined on the date of the sale, exchange, retirement or other taxable disposition of theNote and (ii) the U.S. dollar value of the principal amount on the date you purchased the Note. Theaggregate amount of exchange gain or loss with respect to principal amount and accrued interest willbe limited to the amount of overall gain or loss realised on the disposition of the Note.

Exchange Gain or Loss with Respect to Foreign Currency

Your tax basis in the foreign currency received as interest on a Note will be the U.S. dollar valuethereof at the spot rate in effect on the date the foreign currency is received. Your tax basis in foreigncurrency received on the sale, exchange or retirement of a Note will be equal to the U.S. dollar valueof the foreign currency determined at the time of the sale, exchange or retirement if the Notes are nottraded on an established securities market. As discussed above, if the Notes are traded on anestablished securities market, a cash basis U.S. holder (or, upon election, an accrual basis U.S. holder)will determine the U.S. dollar value of the foreign currency by translating the foreign currency receivedat the spot rate of exchange on the settlement date of the sale, exchange or retirement. Accordingly,your basis in the foreign currency received would be equal to the spot rate of exchange on thesettlement date. Non-electing accrual basis U.S. holders should consult their tax advisors about theirbasis in foreign currency received on the sale, exchange or retirement of a Note.

Any gain or loss recognised by you on a sale, exchange or other disposition of the foreign currencywill be ordinary income or loss and generally will be United States source gain or loss.

Reportable Transactions

U.S. Treasury regulations issued under the Code meant to require the reporting of certain taxshelter transactions could be interpreted to cover transactions generally not regarded as tax shelters,including certain foreign currency transactions. Under the U.S. Treasury regulations, certaintransactions are required to be reported to the IRS, including, in certain circumstances, a sale,exchange, retirement or other taxable disposition of a foreign currency note or foreign currencyreceived in respect of a foreign currency note to the extent that such sale, exchange, retirement orother taxable disposition results in a tax loss in excess of a threshold amount. If you are considering thepurchase of a Note, you should consult your own tax advisors to determine the tax return obligations, ifany, with respect to an investment in the Notes, including any requirement to file IRS Form 8886(Reportable Transaction Disclosure Statement).

Backup Withholding and Information Reporting

Generally, information reporting requirements will apply to all interest payments we make to youand the proceeds from a sale or other disposition (including a retirement or redemption) of a Notepaid to you, unless you are an exempt recipient. Additionally, if you fail to provide your taxpayeridentification number or to certify that you are not subject to backup withholding, you may be subjectto backup withholding.

Any amounts withheld under the backup withholding rules generally will be allowed as a refund ora credit against your U.S. federal income tax liability provided the required information is timelyfurnished to the IRS.

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Information with Respect to Foreign Financial Assets

Individuals who own ‘‘specified foreign financial assets’’ with an aggregate value in excess ofUS$50,000 generally are required to file an information report with respect to such assets with their taxreturns. ‘‘Specified foreign financial assets’’ include any financial accounts maintained by foreignfinancial institutions, as well as any of the following, but only if they are not held in accountsmaintained by financial institutions: (i) stocks and securities issued by non-U.S. persons, (ii) financialinstruments and contracts held for investment that have non-U.S. issuers or counterparties, and(iii) interests in foreign entities. The Notes may be subject to these rules. Persons required to fileU.S. tax returns who are individuals are urged to consult their tax advisors regarding the application ofthis legislation to their ownership of the Notes.

Certain UK Taxation Considerations

The following is a general description of the UK withholding tax treatment of payments of interestin respect of the Notes and certain related and ancillary matters. They do not deal with any other UKtaxation implications of acquiring, holding or disposing of notes, and do not necessarily apply where theincome is deemed for tax purposes to be the income of any other person. They relate only to personswho are the absolute beneficial owners of notes and may not apply to certain classes of persons (suchas persons connected with the Issuer, dealers in securities and those who are treated for tax purposesas having received their notes by reason of their employment).

This summary is based upon the Issuer’s understanding of UK tax law and HM Revenue &Customs (‘‘HMRC’’) practice as in effect on the date of this offering memorandum and is subject toany change in such law or practice that may take effect after such date (possibly with retrospectiveeffect).

Prospective purchasers of notes who may be subject to tax in any jurisdiction other than the UK,or who have any doubt whatsoever as to their tax position, should consult an appropriate professionaladvisor without delay.

Withholding Tax and Interest on the Notes

The Notes will constitute ‘‘quoted Eurobonds’’ so long as they are and continue to be listed on arecognised stock exchange, within the meaning of section 1005 of the UK Income Tax Act 2007. TheLuxembourg Stock Exchange is a recognised stock exchange for these purposes, and notes willtherefore fulfil this requirement if they are admitted to trading on that exchange and are officiallylisted in Luxembourg in accordance with provisions corresponding to those generally applicable in EEAstates. While the Notes are and continue to be quoted Eurobonds, payments of interest by the Issueron the Notes may be made without withholding or deduction for or on account of UK income tax.

Interest on the Notes may also be paid without withholding or deduction on account of UnitedKingdom tax where interest on the Notes is paid by a company and, at the time the payment is made,the Issuer reasonably believes (and any person by or through whom interest on the Notes is paidreasonably believes) that the beneficial owner is within the charge to United Kingdom corporation taxas regards the payment of interest, provided that HMRC has not given a direction (in circumstanceswhere it has reasonable grounds to believe that it is likely that the above exemption is not available inrespect of such payment of interest at the time the payment is made) that the interest should be paidunder deduction of tax.

In all other cases, interest will generally be paid under deduction of income tax at the basic rate(currently 20 percent) subject to any direction to the contrary from HMRC in respect of such relief asmay be available pursuant to the provisions of any applicable double taxation treaty.

If interest is paid under deduction of UK income tax (for example, if the Notes cease to be listedon a recognised stock exchange), holders of notes who are not resident in the UK may be able torecover all or part of the tax deducted if there is an appropriate provision in an applicable doubletaxation treaty.

The interest paid on the Notes will have a UK source and accordingly may be chargeable to UKtax by direct assessment. In this event, where the interest is paid without withholding or deduction, theinterest will not be assessed to UK tax in the hands of holders of the Notes (other than certaintrustees) who are not resident for tax purposes in the UK, except where such persons carry on a trade,profession or vocation in the UK through a UK branch or agency or, in the case of corporate holders,carry on a trade through a permanent establishment in the UK, in each case being a trade, profession,

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vocation or permanent establishment in connection with which the interest is received which holds oruses the Notes or to which the Notes are otherwise attributable; in such a case tax may be levied onthe UK branch, agency or permanent establishment. There are exemptions for interest received bycertain categories of agents (such as some brokers and investment managers).

The above description of the UK withholding tax position assumes that there will be nosubstitution of the Issuer and does not consider the tax consequences of any such substitution.

Provision of Information

Holders of Notes may wish to note that, in certain circumstances, HMRC has power to obtaininformation and documents (including the name and address of the beneficial owner of the interest)from any person in the United Kingdom (including any person who either pays or credits interest to orreceives interest for the benefit of a note holder or who either pays amounts payable on theredemption of notes to or receives such amounts for the benefit of another person). Information soobtained may, in certain circumstances, be exchanged by HMRC with the tax authorities of otherjurisdictions.

EU Savings Directive

Under EC Council Directive 2003/48/EC on the taxation of savings income (the ‘‘SavingsDirective’’), a Member State is required to provide to the tax authorities of another Member Statedetails of payments of interest (or similar income) paid by a person within its jurisdiction to anindividual resident in that other Member State or to certain limited types of entities established in thatother Member State. However, for a transitional period, Luxembourg and Austria are instead required(unless during that period they elect otherwise) to operate a withholding system in relation to suchpayments (the ending of such transitional period being dependent upon the conclusion of certain otheragreements relating to information exchange with certain other countries). A number of non-EUcountries and territories including Switzerland have adopted similar measures (a withholding system inthe case of Switzerland).

On September 15, 2008 the European Commission issued a report to the council of the EuropeanUnion on the operation of the Savings Directive, which included the Commission’s advice on the needfor changes to the Savings Directive. On November 13, 2008 the European Commission published amore detailed proposal for amendments to the Savings Directive, which included a number ofsuggested changes. The European Parliament approved an amended version of this proposal onApril 24, 2009, with the European Economic and Social Committee adopting its opinion on May 13,2009. Discussions are ongoing at the European Council level. If any of the proposed changes are madein relation to the Savings Directive, they may amend or broaden the scope of the requirementsdescribed above. Holders of notes are advised to consult their independent professional advisers inrelation to the implications of the proposed changes, once finally made.

Interpretation

References to ‘‘interest’’ above are to ‘‘interest’’ as understood in UK tax law. The statementsabove do not take any account of any different definitions of ‘‘interest’’ which may prevail under anyother law.

Stamp Duty and Stamp Duty Reserve Tax

No United Kingdom stamp duty or stamp duty reserve tax will be payable on the issue of theNotes or on a transfer of any Notes.

Tax on Capital Gain

There will be no withholding for or on account of UK tax in respect of any capital gain realisedupon a disposal of any Notes.

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PLAN OF DISTRIBUTION

Merrill Lynch International and Goldman Sachs International are acting as representatives of eachof the initial purchasers named below. Subject to the terms and conditions set forth in a purchaseagreement among the Issuer, the Guarantors and the initial purchasers, we have agreed to sell to theinitial purchasers, and each of the initial purchasers has agreed, severally and not jointly, to purchasefrom us, the principal amount of Notes, as applicable, set forth opposite its name below.

Principal PrincipalAmount of Amount of

Initial purchaser Sterling Notes Euro Notes

Merrill Lynch International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £105,000,000 A70,000,000Goldman Sachs International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £105,000,000 A70,000,000Lloyds TSB Bank plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £45,000,000 A30,000,000Mizuho International plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £45,000,000 A30,000,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £300,000,000 E200,000,000

Subject to the terms and conditions set forth in the purchase agreement, the initial purchasershave agreed, severally and not jointly, to purchase all of the Notes sold under the purchase agreementif any of these Notes are purchased. If an initial purchaser defaults, the purchase agreement providesthat the purchase commitments of the non-defaulting initial purchasers may be increased or thepurchase agreement may be terminated.

Each initial purchaser has represented and agreed that it:

• has only communicated or caused to be communicated and will only communicate or cause tobe communicated any invitation or inducement to engage in investment activity (within themeaning of Section 21 of the FSMA) received by it in connection with the issue or sale of anyNotes in circumstances in which section 21(1) of the FSMA does not apply to us or theGuarantors; and

• has complied and will comply with all applicable provisions of the FSMA with respect toanything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.

No action has been taken in any jurisdiction, including the United States and the United Kingdom,by the Issuer, the Guarantors or the initial purchasers that would permit a public offering of the Notesor the possession, circulation or distribution of this offering memorandum or any other materialrelating to the Issuer, the Guarantors or the Notes in any jurisdiction where action for this purpose isrequired. Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither thisoffering memorandum nor any other offering material or advertisements in connection with the Notesmay be distributed or published, in or from any country or jurisdiction, except in compliance with anyapplicable rules and regulations of any such country or jurisdiction. This offering memorandum doesnot constitute an offer to sell or a solicitation of an offer to purchase in any jurisdiction where suchoffer or solicitation would be unlawful. Persons into whose possession this offering memorandum comesare advised to inform themselves about and to observe any restrictions relating to the offering of theNotes, the distribution of this offering memorandum and resale of the Notes.

We have also agreed that we will not at any time offer, sell, contract to sell, pledge or otherwisedispose of, directly or indirectly, any securities under circumstances in which such offer, sale, pledge,contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act or thesafe harbor of Rule 144A and Regulation S under the Securities Act to cease to be applicable to theoffer and sale of the Notes.

We have agreed to indemnify the initial purchasers against certain liabilities, including liabilitiesunder the Securities Act, or to contribute to payments the initial purchasers may be required to makein respect of those liabilities.

Commissions and Discounts

The representatives have advised us that the initial purchasers propose initially to offer the notesat the offering price set forth on the cover page of this offering memorandum. After the initialoffering, the offering price or any other term of the offering may be changed.

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Notes Are Not Being Registered

The Notes have not been registered under the Securities Act or any state securities laws. Theinitial purchasers propose to offer the Notes for resale in transactions not requiring registration underthe Securities Act or applicable state securities laws, including sales pursuant to Rule 144A andRegulation S. The initial purchasers will not offer or sell the Notes except to persons they reasonablybelieve to be qualified institutional buyers or pursuant to offers and sales to non-U.S. persons thatoccur outside of the United States within the meaning of Regulation S. In addition, until 40 daysfollowing the commencement of this offering, an offer or sale of Notes within the United States by adealer (whether or not participating in the offering) may violate the registration requirements of theSecurities Act unless the dealer makes the offer or sale in compliance with Rule 144A or anotherexemption from registration under the Securities Act. Each purchaser of the Notes will be deemed tohave made acknowledgments, representations and agreements as described under ‘‘Notice to Investors’’.

The initial purchasers may make offers and sales in the United States through certain affiliates ofthe initial purchasers. One or more of the initial purchasers may sell through affiliates or otherappropriately licenced entities for sales of the Notes in jurisdictions in which they are otherwise notpermitted.

New Issue of Notes

The Notes are a new issue of securities with no established trading market. The Notes are a newissue of securities for which there currently is no market. Application will be made for the Notes to belisted on the Official List of the Luxembourg Stock Exchange and to be traded on the Euro MTF.However, we cannot assure you that the Notes will be approved for listing or that such listing will bemaintained. We have been advised by the initial purchasers that they presently intend to make a marketin the Notes after completion of the offering. However, they are under no obligation to do so and maydiscontinue any market-making activities at any time without any notice. We cannot assure the liquidityof the trading market for the Notes. If an active trading market for the Notes does not develop, themarket price and liquidity of the Notes may be adversely affected. If the Notes are traded, they maytrade at a discount from their initial offering price, depending on prevailing interest rates, the marketfor similar securities, our operating performance and financial condition, general economic conditionsand other factors.

Settlement

We expect that delivery of the Notes will be made to investors on or about May 24, 2011, whichwill be the seventh business day following the date of this offering memorandum (such settlement beingreferred to as ‘‘T+7’’). Under Rule 15c6-1 under the U.S. Exchange Act, trades in the secondarymarket are required to settle in three business days, unless the parties to any such trade expressly agreeotherwise. Accordingly, purchasers who wish to trade on the date of pricing or the next threesucceeding business days will be required, by virtue of the fact that the Notes initially settle in T+7, tospecify an alternate settlement arrangement at the time of any such trade to prevent a failedsettlement. Purchasers of the Notes who wish to trade the Notes prior to their date of deliveryhereunder should consult their advisors.

No Sales of Similar Securities

We have agreed that, for a period of 90 days after the date of this offering memorandum, we willnot without first obtaining the prior written consent of Merrill Lynch International and Goldman SachsInternational, directly or indirectly, issue, sell, offer to contract or grant any option to sell, pledge,transfer or otherwise dispose of, any debt securities or securities exchangeable for or convertible intodebt securities, except for the Notes sold to the initial purchasers pursuant to the purchase agreement.

Stabilizing Transactions

The initial purchasers have advised us that they intend to make a market in the Notes as permittedby applicable law. The initial purchasers are not obligated, however, to make a market in the Notes,and any market-making activity may be discontinued at any time at the sole discretion of the initialpurchasers without notice. In addition, any such market-making activity will be subject to the limitsimposed by the Securities Act and the U.S. Securities Exchange Act of 1934, as amended (the ‘‘U.S.Exchange Act’’). Accordingly, we cannot assure you that any market for the Notes will develop, that it

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will be liquid if it does develop, or that you will be able to sell any Notes at a particular time or at aprice which will be favourable to you. See ‘‘Risk Factors—Your ability to transfer the Notes may belimited by the absence of an active trading market, and there is no assurance that any active tradingmarket will develop for the Notes’’.

In connection with the issue of the Notes, the Stabilizing Manager or persons acting on its behalfmay over-allot Notes or effect transactions with a view to supporting the market price of the Notes at alevel higher than that which might otherwise prevail. However, there is no assurance that theStabilizing Manager or persons acting on its behalf will undertake stabilization action. Any stabilizationaction may begin on or after the date on which adequate public disclosure of the terms of the offer ofNotes is made and, if begun, may be ended at any time, but it must end no later than the earlier of30 days after the Issue Date and 60 days after the date of the allotment of the Notes.

European Economic Area

This offering memorandum has been prepared on the basis that any offer of Notes in any MemberState of the European Economic Area which has implemented the Prospectus Directive, defined below(each, a ‘‘Relevant Member State’’) will be made pursuant to an exemption under the ProspectusDirective from the requirement to publish a prospectus for offers of Notes. Accordingly, any personmaking or intending to make an offer in that Relevant Member State of the Notes which are thesubject of the offering contemplated in this offering memorandum may only do so in circumstances inwhich no obligation arises for the Issuer or any Guarantor or any of the initial purchasers to publish aprospectus pursuant to Article 3 of the Prospectus Directive, in each case, in relation to such offer.None of the Issuer, the Guarantors and the initial purchasers has authorised, nor do they authorise, themaking of any offer of Notes in circumstances in which an obligation arises for the Issuer, anyGuarantor or the initial purchasers to publish a prospectus for such offer.

In relation to each Relevant Member State, each initial purchasers has represented and agreedthat with effect from and including the date on which the Prospectus Directive is implemented in thatRelevant Member State it has not made and will not make an offer of the Notes which are the subjectof the offering contemplated by this offering memorandum to the public in that Relevant MemberState other than:

(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision ofthe 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investorsas defined in the Prospectus Directive), as permitted under the Prospectus Directive, subjectto obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer forany such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer of the Notes shall require the Issuer, any Guarantor or any initial purchaserto publish a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an ‘‘offer of Notes to the public’’ in relation toany Notes in any Relevant Member State means the communication in any form and by any means ofsufficient information on the terms of the offer and the Notes to be offered so as to enable an investorto decide to purchase or subscribe the Notes, as the same may be varied in that Member State by anymeasure implementing the Prospectus Directive in that Member State, the expression ‘‘ProspectusDirective’’ means Directive 2003/71/EC (and amendments thereto, including the 2010 PD AmendingDirective, to the extent implemented in the Relevant Member State), and includes any relevantimplementing measure in the Relevant Member State and the expression ‘‘2010 PD AmendingDirective’’ means Directive 2010/73/EU.

United Kingdom

This offering memorandum is for distribution only to, and is directed solely at, persons who (i) areoutside the United Kingdom, (ii) are investment professionals, as such term is defined in Article 19(5)of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the‘‘Financial Promotion Order’’), (iii) are persons falling within Article 49(2)(a) to (d) of the FinancialPromotion Order, or (iv) are persons to whom an invitation or inducement to engage in investment

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activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the‘‘FSMA’’)) in connection with the issue or sale of any Notes may otherwise be lawfully communicatedor caused to be communicated (all such persons together being referred to as ‘‘relevant persons’’). Thisoffering memorandum is directed only at relevant persons and must not be acted on or relied on bypersons who are not relevant persons. Any investment or investment activity to which this offeringmemorandum relates is available only to relevant persons and will be engaged in only with relevantpersons. Any person who is not a relevant person should not act or rely on this offering memorandumor any of its contents.

Switzerland

This offering memorandum, as well as any other material relating to the Notes which are thesubject of the offering contemplated by this offering memorandum, does not constitute an issueprospectus pursuant to article 652a and/or article 1156 of the Swiss Code of Obligations and may notcomply with the Directive for Notes of Foreign Borrowers of the Swiss Bankers Association. The Noteswill not be listed on the SIX Swiss Exchange Ltd., and, therefore, the documents relating to the Notes,including, but not limited to, this offering memorandum, do not claim to comply with the disclosurestandards of the Swiss Code of Obligations and the listing rules of SIX Swiss Exchange Ltd andcorresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange Ltd. TheNotes are being offered in Switzerland by way of a private placement (i.e., to a limited number ofselected investors only), without any public advertisement and only to investors who do not purchasethe Notes with the intention to distribute them to the public. The investors will be individuallyapproached directly from time to time. This offering memorandum, as well as any other materialrelating to the Notes, is personal and confidential and does not constitute an offer to any other person.This offering memorandum, as well as any other material relating to the Notes, may only be used bythose investors to whom it has been handed out in connection with the offering described herein andmay neither directly nor indirectly be distributed or made available to other persons without thecompany’s express consent. This offering memorandum, as well as any other material relating to theNotes, may not be used in connection with any other offer and shall in particular not be copied and/ordistributed to the public in (or from) Switzerland.

Other Relationships

The initial purchasers and their respective affiliates are full service financial institutions engaged invarious activities, which may include securities trading, commercial and investment banking, financialadvisory, investment management, principal investment, hedging, financing and brokerage activities.Certain of the initial purchasers and their respective affiliates have, from time to time, performed, andmay in future perform, various financial advisory and investment banking services for the Issuer and theGroup, for which they received or will receive customary fees and expenses. Certain of the initialpurchasers or their respective affiliates are lenders under the facilities being repaid with the proceedsof the Notes. The initial purchasers or their respective affiliates are lenders under the Super SeniorRevolving Credit Facility. Certain of the initial purchasers and their respective affiliates have engagedin, and may in the future engage in, investment banking and other commercial dealings in the ordinarycourse of business with us or our affiliates.

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NOTICE TO INVESTORS

You are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer ofany of the Notes offered hereby.

We have not registered and will not register the Notes and the related Guarantees under theSecurities Act or the securities laws of any other jurisdiction and, unless so registered, the Notes andthe related Guarantees may not be offered or sold within the United States or to, or for the account orbenefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, theregistration requirements of the Securities Act. Accordingly, we are offering and selling the Notes tothe initial purchasers for re-offer and resale only:

• in the United States to ‘‘qualified institutional buyers’’, commonly referred to as ‘‘QIBs’’, (asdefined in Rule 144A under the Securities Act) in reliance on Rule 144A under the SecuritiesAct; and

• outside the United States to non-U.S. persons in an offshore transaction in accordance withRegulation S under the Securities Act.

We use the terms ‘‘offshore transaction’’, ‘‘U.S. person’’ and ‘‘United States’’ with the meaningsgiven to them in Regulation S.

Each purchaser of Notes, by its acceptance thereof, will be deemed to have acknowledged,represented to and agreed with us and the initial purchasers as follows:

(1) You understand and acknowledge that the Notes have not been registered under the SecuritiesAct or any other applicable securities laws and that the Notes are being offered for resale intransactions not requiring registration under the Securities Act or any other securities laws,including sales pursuant to Rule 144A under the Securities Act, and, unless so registered, maynot be offered, sold or otherwise transferred except in compliance with the registrationrequirements of the Securities Act or any other applicable securities laws, pursuant to anexemption therefrom or in any transaction not subject thereto and in each case in compliancewith the conditions for transfer set forth in paragraphs (4) and (5) below.

(2) You are not our ‘‘affiliate’’ (as defined in Rule 144 under the Securities Act) or acting on ourbehalf and you are either: (a) a QIB, within the meaning of Rule 144A under the SecuritiesAct and are aware that any sale of these Notes to you will be made in reliance on Rule 144Aunder the Securities Act, and such acquisition will be for your own account or for the accountof another QIB; or (b) you are a non-U.S. person purchasing the Notes in an offshoretransaction in accordance with Regulation S under the Securities Act.

(3) You acknowledge that none of the Issuer, the Guarantors, or the initial purchasers, nor anyperson representing any of them, has made any representation to you with respect to us or theoffer or sale of any of the Notes, other than the information contained in this OfferingMemorandum, which offering memorandum has been delivered to you and upon which youare relying in making your investment decision with respect to the Notes. You acknowledgethat neither the initial purchasers nor any person representing the initial purchasers make anyrepresentation or warranty as to the accuracy or completeness of this offering memorandum.You have had access to such financial and other information concerning us and the Notes asyou have deemed necessary in connection with your decision to purchase any of the Notes,including an opportunity to ask questions of, and request information from, us and the initialpurchasers.

(4) You are purchasing the Notes for your own account, or for one or more investor accounts forwhich you are acting as a fiduciary or agent, in each case for investment, and not with a viewto, or for offer or sale in connection with, any distribution thereof in violation of theSecurities Act or any other securities laws, subject to any requirement of law that thedisposition of your property or the property of such investor account or accounts be at alltimes within its or their control and subject to your or their ability to resell such Notespursuant to Rule 144A, Regulation S or any other exemption from registration available underthe Securities Act.

(5) You agree on your own behalf and on behalf of any investor account for which you arepurchasing the Notes, and each subsequent holder of the Notes by its acceptance thereof will

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be deemed to agree, to offer, sell or otherwise transfer such Notes prior to the date (the‘‘Resale Restriction Termination Date’’) that is one year (in the case of Rule 144A Notes) or40 days (in the case of Regulation S Notes) after the later of the date of the original issue andthe last date on which we or any of our affiliates were the owner of such Notes (or anypredecessor thereto) only (i) to us, (ii) pursuant to a registration statement that has beendeclared effective under the Securities Act, (iii) for so long as the Notes are eligible pursuantto Rule 144A under the Securities Act, to a person you reasonably believe is a QIB thatpurchases for its own account or for the account of a QIB to whom notice is given that thetransfer is being made in reliance on Rule 144A under the Securities Act, (iv) pursuant tooffers and sales that occur outside the United States in compliance with Regulation S underthe Securities Act or (v) pursuant to any other available exemption from the registrationrequirements of the Securities Act, subject in each of the foregoing cases to any requirementof law that the disposition of its property or the property of such investor account or accountsbe at all times within its or their control and to compliance with any applicable securities laws,and any applicable local laws and regulations, and further subject to the our and the Trustee’srights prior to any such offer, sale or transfer (a) pursuant to clause (v) to require the deliveryof an opinion of counsel, certification and/or other information satisfactory to each of themand (b) in each of the foregoing cases, to require that a certificate of transfer in the formappearing on the reverse of the security is completed and delivered by the transferor to theTrustee. The foregoing restrictions on resale will not apply subsequent to the ResaleRestriction Termination Date.

Each purchaser acknowledges that each Note will contain a legend substantially to thefollowing effect:

THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THEU.S. SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’) OR THESECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THISSECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISEDISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCHTRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF(1) REPRESENTS THAT (A) IT IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ (ASDEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NON-U.S.PERSON ACQUIRING THIS NOTE IN AN ‘‘OFFSHORE TRANSACTION’’ PURSUANTTO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES ONITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR FOR WHICH IT HASPURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE TRANSFER SUCHSECURITY, PRIOR TO THE DATE (THE ‘‘RESALE RESTRICTION TERMINATIONDATE’’) WHICH IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THELATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ONWHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OFTHIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY)] [IN THE CASE OFREGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE DATE WHEN THESECURITIES WERE FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORSIN RELIANCE ON REGULATION S AND THE DATE OF THE COMPLETION OF THEDISTRIBUTION] ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATIONSTATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THESECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FORRESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (‘‘RULE 144A’’),TO A PERSON IT REASONABLY BELIEVES IS A ‘‘QUALIFIED INSTITUTIONALBUYER’’ AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNTOR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOMNOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ONRULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THEUNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THESECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION

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FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECTIN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF LAW THATTHE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTORACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROLAND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS ANDANY APPLICABLE LOCAL LAWS AND REGULATIONS AND FURTHER SUBJECTTO THE ISSUER’S AND THE TRUSTEE’S RIGHTS PRIOR TO ANY SUCH OFFER,SALE OR TRANSFER (I) PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERYOF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATIONSATISFACTORY TO EACH OF THEM AND (II) IN EACH OF THE FOREGOINGCASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORMAPPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED ANDDELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND (3) AGREES THAT ITWILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED ANOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

If you purchase Notes, you will also be deemed to acknowledge that the foregoing restrictionsapply to holders of beneficial interests in these Notes as well as to holders of these Notes.

(6) You agree that you will give to each person to whom you transfer the Notes notice of anyrestrictions on the transfer of such Notes.

(7) You acknowledge that until 40 days after the commencement of the offering, any offer or saleof the Notes within the United States by a dealer (whether or not participating in theoffering) may violate the registration requirements of the Securities Act if such offer or sale ismade otherwise than in accordance with Rule 144A under the Securities Act.

(8) You acknowledge that the Registrar will not be required to accept for registration or transferany Notes acquired by you except upon presentation of evidence satisfactory to us and theRegistrar that the restrictions set forth therein have been complied with.

(9) You acknowledge that the Issuer, the Guarantors, the initial purchasers and others will relyupon the truth and accuracy of your acknowledgements, representations, warranties andagreements and agrees that if any of the acknowledgements, representations, warranties andagreements deemed to have been made by your purchase of the Notes are no longer accurate,you shall promptly notify the initial purchasers. If you are acquiring any Notes as a fiduciaryor agent for one or more investor accounts, you represent that you have sole investmentdiscretion with respect to each such investor account and that you have full power to makethe foregoing acknowledgements, representations and agreements on behalf of each suchinvestor account.

(10) You understand that no action has been taken in any jurisdiction (including the United States)by the Issuer, the Guarantors or the initial purchasers that would result in a public offering ofthe Notes or the possession, circulation or distribution of this offering memorandum or anyother material relating to us or the Notes in any jurisdiction where action for such purpose isrequired. Consequently, any transfer of the Notes will be subject to the selling restrictions setforth under ‘‘Plan of Distribution’’.

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LEGAL MATTERS

Certain legal matters in connection with the offering of the Notes will be passed upon for theIssuer by Simpson Thacher & Bartlett LLP, as to matters of US Federal and New York State law.Certain legal matters in connection with the offering of the Notes will be passed upon for the initialpurchasers by Cahill Gordon & Reindel LLP, as to matters of US Federal and New York State law.

INDEPENDENT AUDITORS

The consolidated financial statements of Odeon & UCI Cinemas Group Limited, as of and for theyears ended December 31, 2008, December 31, 2009 and December 31, 2010 included in this offeringmemorandum, have been audited by KPMG LLP, independent auditors, as stated in their reportsappearing herein.

The auditors have given and not withdrawn their consent for their reports to be included in thelisting particulars in the form and context in which they are included for purposes of the listing of theNotes on the Official List of the Luxembourg Stock Exchange in accordance with its rules. A writtenconsent under the listing rules of the Official List of the Luxembourg Stock Exchange is different froma consent filed with the SEC under Section 7 of the US Securities Act, which is applicable only totransaction involving securities registered under the US Securities Act. As the Notes have not been andwill not be registered under the US Securities Act, KPMG LLP has not filed a consent under Section 7of the US Securities Act.

In accordance with guidance issued by The Institute of Chartered Accountants in England andWales, the independent auditors’ report states that: it was made solely to the company’s members, as abody, in accordance with Section 235 of the UK Companies Act 1985; the independent auditors’ workwas undertaken so that the independent auditors might state to the company’s members those mattersthat were required to state to them in an auditors’ report and for no other purpose; and, to the fullestextent permitted by law, the independent auditors do not accept or assume responsibility to anyoneother than the company and its members as a body, for their audit work or the opinions they haveformed. The independent auditors’ reports for the accounting periods for the years endedDecember 31, 2008, December 31, 2009 and December 31, 2010 were unqualified. The independentauditors’ report for the year ended December 31, 2010 is included on page F-1 of this offeringmemorandum.

Investors in the Notes should understand that in making these statements the independent auditorsconfirmed that they do not accept or assume any liability to parties (such as the purchasers of theNotes) other than the company and its members as a body with respect to the report and to theindependent auditors’ audit work and opinions. The SEC would not permit such limiting language to beincluded in a registration statement or a prospectus used in connection with an offering of securitiesregistered under the US Securities Act or in a report filed under the US Exchange Act. If a US court(or any other court) were to give effect to such limiting language, the recourse that investors in theNotes may have against the independent auditors based on their report or the consolidated financialstatements to which it relates could be limited.

WHERE YOU CAN FIND MORE INFORMATION

Each purchaser of the Notes from the initial purchasers will be furnished with a copy of thisoffering memorandum and, to the extent provided to the initial purchasers by us for such purpose, anyrelated amendments or supplements to this offering memorandum. Each person receiving this offeringmemorandum and any related amendments or supplements to the offering memorandum acknowledgesthat:

(a) such person has been afforded an opportunity to request from us, and to review and hasreceived, all additional information considered by it to be necessary to verify the accuracy andcompleteness of the information herein;

(b) such person has not relied on the initial purchasers or any person affiliated with the initialpurchasers in connection with its investigation of the accuracy of such information or itsinvestment decision; and

(c) except as provided pursuant to (a) above, no person has been authorised to give anyinformation or to make any representation concerning the Notes offered hereby other than

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those contained herein and, if given or made, such other information or representation shouldnot be relied upon as having been authorised by us or the initial purchasers.

We are not currently subject to the periodic reporting and other information requirements of theUS Exchange Act.

For so long as any of the Notes remain outstanding and are ‘‘restricted securities’’ within themeaning of Rule 144(a)(3) under the US Securities Act, we will, during any period in which we areneither subject to the reporting requirements of Section 13 or 15(d) of the US Exchange Act, asamended, nor exempt from the reporting requirements under Rule 12g3-2(b) of the US Exchange Act,as amended, make available to the holder or beneficial owner of such restricted securities or to anyprospective purchaser of such restricted securities designated by such holder or beneficial owner, ineach case upon the written request of such holder, beneficial owner or prospective purchaser, theinformation required to be provided by Rule 144A(d)(4) under the US Securities Act. Any such requestshould be directed to Odeon & UCI Cinemas Group Limited.

ENFORCEABILITY OF CIVIL LIABILITIES

The Issuer is organised under the laws of England and Wales and all its directors or executiveofficers are non-residents of the US. Furthermore, most of our assets and most of the assets of suchpersons are located outside the US. As a result, it may not be possible for investors to effect service ofprocess within the US upon those persons or us, or to enforce against them judgements of US courtspredicated upon the civil liability provisions of US Federal or state securities laws.

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LISTING AND GENERAL INFORMATION

1. Application will be made for the Notes to be listed on the Official List of the LuxembourgStock Exchange and to be traded on the Euro MTF.

2. So long as the Notes are listed on the Official List of the Luxembourg Stock Exchange andare traded on the Euro MTF and the rules of such exchange shall so require, copies of our Articles ofAssociation and the Indenture will be available free of charge at the specified office of the TransferAgent in Luxembourg referred to in paragraph 6 below. So long as the Notes are listed on the OfficialList of the Luxembourg Stock Exchange and are traded on the Euro MTF and the rules of suchexchange shall so require, copies of all of our Group annual financial statements and those for allsubsequent fiscal years will be available free of charge during normal business hours on any weekday atthe offices of such Transfer Agent in Luxembourg referred to in paragraph 6 below.

3. We accept responsibility for the information contained in this offering memorandum. To thebest of our knowledge, except as otherwise noted, the information contained in this offeringmemorandum is in accordance with the facts and does not omit anything likely to affect the import ofthis offering memorandum.

4. Save as disclosed herein, there has been no material adverse change in our consolidatedfinancial position since December 31, 2010.

5. Neither we nor any of our subsidiaries is a party to any litigation that, in our judgement, ismaterial in the context of the issue of the Notes, except as disclosed herein.

6. We have appointed The Bank of New York Mellon as our Transfer Agent in Luxembourg. Wereserve the right to vary such appointment and shall publish notice of such change of appointment in anewspaper having general circulation in Luxembourg (which is expected to be the Luxemburger Wort) oron the Luxembourg Stock Exchange’s website, www.bourse.lu. The Transfer Agent in Luxembourg willact as intermediary between the holders of the Notes and us and as long as the Notes are listed on theOfficial List of the Luxembourg Stock Exchange and are traded on the Euro MTF and the rules ofsuch exchange shall so require, we will maintain a transfer agent in Luxembourg.

7. The Notes have been accepted for clearance through the facilities of Euroclear andClearstream. The ISIN numbers for the Sterling Notes sold pursuant to Rule 144A and the SterlingNotes sold pursuant to Regulation S are XS0627146896 and XS0627146383, respectively. The CommonCode for the Sterling Notes sold pursuant to Rule 144A and the Sterling Notes sold pursuant toRegulation S are 062714689 and 062714638, respectively. The ISIN numbers for the Euro Notes soldpursuant to Rule 144A and the Euro Notes sold pursuant to Regulation S are XS0627140774 andXS0627135774, respectively. The Common Code for the Euro Notes sold pursuant to Rule 144A andthe Euro Notes sold pursuant to Regulation S are 062714077 and 062713577, respectively.

8. The Issuer: Odeon & UCI Finco plc (registered number 7623457), is a company registered inEngland and Wales with its registered office at 54 Whitcomb Street, London, WC2H 7DN. As of thedate of this offering memorandum, the authorised share capital of the Issuer consists of 50,000 ordinaryshares with a par value of £1 each.

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INDEX TO FINANCIAL STATEMENTS

Audited Consolidated Annual Accounts prepared in accordance with UK GAAP as of and forthe year ended December 31, 2010 of Odeon & UCI Cinemas Group Limited and itssubsidiaries

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2Consolidated Profit and Loss Account for the year ended December 31, 2010 . . . . . . . . . . . . . . F-4Consolidated of Total Recognised Gains and Losses for the year ended December 31, 2010 . . . . F-5Consolidated Balance Sheet as of December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6Consolidated Cash Flow Statement for the year ended December 31, 2010 . . . . . . . . . . . . . . . . F-8Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9





F-1

3MAY201116221953

INDEPENDENT AUDITOR’S REPORT

St James’ Square

Manchester

M2 6DS

United Kingdom

Independent auditor’s report to the members of Odeon & UCI Cinemas Group Limited

We have audited the financial statements of Odeon & UCI Cinemas Group Limited for the yearended 31 December 2010 set out on pages F-4 to F-37. The financial reporting framework that hasbeen applied in their preparation is applicable law and UK Accounting Standards (UK GenerallyAccepted Accounting Practice).

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 ofPart 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to theCompany’s members those matters we are required to state to them in an auditor’s report and for noother purpose. To the fullest extent permitted by law, we do not accept or assume responsibility toanyone other than the Company and the Company’s members, as a body, for our audit work, for thisreport, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors’ Responsibilities Statement, the directors are responsiblefor the preparation of the financial statements and for being satisfied that they give a true and fairview. Our responsibility is to audit, and express an opinion on, the financial statements in accordancewith applicable law and International Standards on Auditing (UK and Ireland). Those standardsrequire us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB’s website atwww.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the Group’s and the parent company’s affairs as at31 December 2010 and of the Group’s loss for the year then ended;

• have been properly prepared in accordance with UK Generally Accepted Accounting Practice;and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors’ Report for the financial year for which thefinancial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate forour audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records andreturns; or

F-2

INDEPENDENT AUDITOR’S REPORT (Continued)

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Jonathan Hurst (Senior Statutory Auditor)For and on behalf of KPMG LLP, Statutory AuditorChartered AccountantsSt James’ SquareManchesterM2 6DS

F-3

ODEON & UCI CINEMAS GROUP LIMITED

CONSOLIDATED PROFIT AND LOSS ACCOUNT

for the year ended 31 December 2010

Notes 2010 2009

£000 £000Turnover: Group and share of joint ventures . . . . . . . . . . . . . . . . . 671,643 662,614Less: share of joint ventures turnover . . . . . . . . . . . . . . . . . . . . . . (21,998) (21,687)

Group turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 3 649,645 640,927Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 (235,641) (224,793)

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 414,004 416,134Net operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (387,999) (431,574)

Operating profit/(loss), analysed as:Before exceptional items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,461 8,080Net operating expenses—exceptional costs . . . . . . . . . . . . . . . . . . . 3, 6 (1,456) (23,520)

3 26,005 (15,440)

Operating profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 26,005 (15,440)Share of operating loss of joint ventures . . . . . . . . . . . . . . . . . . . . (3) (267)

Operating profit/(loss) including joint ventures . . . . . . . . . . . . . . . . 26,002 (15,707)Loss on disposal of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 (525) (3,388)

Profit/(loss) on ordinary activities before interest and taxation . . . . 25,477 (19,095)Interest receivable from related parties . . . . . . . . . . . . . . . . . . . . . 30 1,222 2,962Interest payable and similar charges . . . . . . . . . . . . . . . . . . . . . . . . 8 (66,162) (60,469)Other finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 (234) (720)

Loss on ordinary activities before taxation . . . . . . . . . . . . . . . . . . . 3–9 (39,697) (77,322)Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (4,495) (2,128)

Loss on ordinary activities after taxation and for the financial year 24 (44,192) (79,450)

Analysis of continuing operations, including acquisitions, and discontinued operations is set out innote 3.

F-4


CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES


2010 2009

£000 £000Loss for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (44,192) (79,450)Actuarial pension scheme gain recognised (note 27) . . . . . . . . . . . . . . . . . . 3,085 1,410Effect of asset limit on above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,616) —Deferred tax on actuarial pension gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . (863) (395)Deferred tax on effect of asset limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732 —Deferred tax change in rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) —Foreign exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,672 14,266

Total recognised losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31,187) (64,169)

There is no difference between the loss on ordinary activities before taxation and the loss for theyear stated above and their historical cost equivalents.

F-5


CONSOLIDATED BALANCE SHEET

at 31 December 2010

Notes 2010 2009

£000 £000 £000 £000Fixed assetsIntangible assets . . . . . . . . . . . . . . . . . . 12 142,923 139,775Tangible assets . . . . . . . . . . . . . . . . . . . 13 354,608 354,483Investments in joint ventures:

Share of gross assets . . . . . . . . . . . . . 14 7,229 8,440Share of gross liabilities . . . . . . . . . . . 14 (6,694) (7,563)Other costs . . . . . . . . . . . . . . . . . . . . 14 700 700

1,235 1,577

498,766 495,835Current assetsStocks . . . . . . . . . . . . . . . . . . . . . . . . . 15 6,121 4,462Debtors within one year . . . . . . . . . . . . 16 39,386 34,734Debtors due after more than one year . . 17 36,382 43,980Cash at bank and in hand . . . . . . . . . . . 36,362 60,170

118,251 143,346Creditors: amounts falling due within

one year . . . . . . . . . . . . . . . . . . . . . . 18 (138,203) (133,247)

Net current (liabilities)/assets . . . . . . . . (19,952) 10,099

Total assets less current liabilities . . . . . 478,814 505,934Creditors: amounts falling due after

more than one year . . . . . . . . . . . . . . 19 (656,769) (641,039)Provisions for liabilities and charges . . . 21 (65,527) (72,063)

Net liabilities excluding pensionliabilities . . . . . . . . . . . . . . . . . . . . . (243,482) (207,168)

Pension liability . . . . . . . . . . . . . . . . . . 27 (331) (2,071)

Net liabilities including pensionliabilities . . . . . . . . . . . . . . . . . . . . . (243,813) (209,239)

Capital and reservesCalled up share capital . . . . . . . . . . . . . 23 96,394 99,781Profit and loss account . . . . . . . . . . . . . 24 (340,207) (309,020)

Total shareholders’ deficit . . . . . . . . . . . 32 (243,813) (209,239)

These financial statements were approved by the board of directors on andwere signed on its behalf by:

J P MasonDirector

F-6


COMPANY BALANCE SHEET

at 31 December 2010

Notes 2010 2009

£000 £000 £000 £000Fixed assetsInvestments . . . . . . . . . . . . . . . . . . . . . 14 106,909 110,941Current assetsDebtors within one year . . . . . . . . . . . . 16 2 2Debtors due after more than one year . . 17 643,242 577,283Cash at bank and in hand . . . . . . . . . . . 85 85


one year . . . . . . . . . . . . . . . . . . . . . . 18 (110) (100)

Net current assets . . . . . . . . . . . . . . . . 643,219 577,270


more than one year . . . . . . . . . . . . . . 19 (557,320) (524,704)

Net assets . . . . . . . . . . . . . . . . . . . . . . 192,808 163,507

Capital and reservesCalled up share capital . . . . . . . . . . . . . 23 96,394 99,781Profit and loss account . . . . . . . . . . . . . 24 96,414 63,726

Total shareholders’ funds . . . . . . . . . . . 32 192,808 163,507


J P MasonDirector

Company registered number: 05194610

F-7


CONSOLIDATED CASH FLOW STATEMENT


Notes 2010 2009

£000 £000Net cash inflow from operating activities . . . . . . . . . . . . . . . . . . . 25(a) 65,572 57,967

Returns on investments and servicing of financeInterest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22,647) (25,278)

Net cash outflow from returns on investments and servicing offinance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22,647) (25,278)

Taxation paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (576) (71)

Capital expenditure and financial investmentPurchase of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . (32,771) (35,201)Sale of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Net cash outflow from capital expenditure and financial

investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,771) (35,201)

Acquisitions and disposalsPurchase of subsidiaries and joint ventures . . . . . . . . . . . . . . . . . . 14, 31 (16,280) (449)Net cash acquired with subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 31 — —

Net cash outflow from acquisitions and disposals . . . . . . . . . . . . . (16,280) (449)

Equity dividends paid to shareholders . . . . . . . . . . . . . . . . . . . . . — —

Net cash outflow before financing . . . . . . . . . . . . . . . . . . . . . . . . (6,702) (3,032)

FinancingBank loans and overdrafts repaid . . . . . . . . . . . . . . . . . . . . . . . . . (10,999) (2,808)New bank loans drawn-down . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9,022Bank loan arrangement fees paid . . . . . . . . . . . . . . . . . . . . . . . . . (2,944) (21)Other finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (416) 376

Net cash (outflow)/inflow from financing . . . . . . . . . . . . . . . . . . . (14,359) 6,569

(Decrease)/increase in cash in the year . . . . . . . . . . . . . . . . . . . . 25(b) (21,061) 3,537

F-8


NOTES

(forming part of the financial statements)

1 Accounting policies

The following accounting policies have been applied consistently in dealing with items which areconsidered material in relation to the financial statements.

Basis of preparation

The financial statements have been prepared in accordance with applicable accounting standards,and under the historical cost accounting rules. Upon acquisition, assets are included at fair value.

Going concern and liquidity management

The financial statements are prepared on a going concern basis. The directors have formallyconsidered and concluded that this remains appropriate. The facts set out below were relevant inarriving at this conclusion.

The business activities of the Group, and its future prospects, are described within the Directors’Report.

The Group has a committed bank facility, which was entered into in April 2007 and provideslong-term funding that is contractually available to the Group provided the conditions of the facilityagreement are met, including compliance with covenanted ratios. Projected covenant ratios indicate thatno issues with compliance are anticipated in the next 12 months and beyond.

The term of the facility agreement is 7 years for the earliest debt tranche to be fully repaid, withother tranches having longer periods of availability. Mandatory part-repayments of the debt arescheduled and planned-for each year. The repayments due in the 12 months after the date of signatureof these accounts total approximately £6 million.

The Group also has shareholder funding in place that is subordinated and therefore longer-term innature than the bank debt.

The Group has a substantial cash balance available to meet working capital requirements, despiteinvestment in the estate having taken place. Furthermore, there are approximately £31 million ofcommitted unutilised bank facility funds available, comprising a revolving credit facility that wasundrawn at year-end and throughout the period up to signature of this report and financial statements.

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and itssubsidiary undertakings made up to 31 December 2010. The acquisition method of accounting has beenadopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the yearare included in the consolidated profit and loss account from the date of acquisition or up to the dateof disposal. A joint venture is an undertaking in which the Group has a long-term interest and overwhich it exercises joint control. The Group’s share of the profits less losses of joint ventures is includedin the consolidated profit and loss account and its interest in their net assets is included in investmentsin the consolidated balance sheet.

Under section 408 of the Companies Act 2006 the Company is exempt from the requirement topresent its own profit and loss account. The amount of the profit/(loss) dealt with in the Companyfinancial statements is disclosed in note 24 to these financial statements.

Turnover

Turnover represents amounts charged to customers for goods, services and property rental income,stated net of value added tax, which is recognised based on the date the goods and services arereceived and the period over which the rental income is earned.

F-9


NOTES (Continued)


1 Accounting policies (Continued)

Goodwill

Goodwill, being the difference between the costs of businesses acquired and the fair value of theirseparable net assets, is included in the balance sheet as an intangible asset in accordance with FRS 10‘‘Goodwill and Intangible Assets’’ and is amortised over its useful economic life which the directorsestimate to be 20 years.

Tangible fixed assets

Depreciation is provided on the cost or revaluation of tangible fixed assets on a straight-line basisover their estimated useful lives as follows:

Land is not depreciated

Freehold buildings . . . . . . . . . . — 2% per annum

Long leasehold property . . . . . . — over the period of the lease to a maximum of 50 years

Short leasehold property . . . . . . — over the period of the lease

Plant, fixtures and fittings . . . . . — 10–25% per annum

Assets under construction (the construction and redevelopment of cinemas) are not depreciated asthese assets are not available for use in the business.

Digital projection

Certain digital projectors and related assets located and operated in Group premises, which arefunded and legally owned by independent third parties, are recognised in the Group’s consolidatedbalance sheet and a corresponding deferred income creditor of the same carrying value is recognised.The fixed assets are depreciated over their estimated useful lives and the corresponding deferredincome balance is released against this depreciation over the same period.

Foreign currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of thetransaction. Assets and liabilities denominated in foreign currencies are translated using the contractedrate or the rate of exchange ruling at the balance sheet date. The foreign currency assets and liabilitiesof subsidiary undertakings are translated at the closing exchange rates. Profit and loss accounts of suchundertakings are consolidated at the monthly average rates of exchange during the year. Gains andlosses arising on these translations are generally taken to reserves: they are taken through the profitand loss account for the year only to the extent that translation gains or losses in relation to foreigncurrency assets are exceeded by those on foreign currency borrowings, excluding borrowings in place aslong term strategic funding which are not expected to be settled without replacement.

Classification of financial instruments issued by the Group and Company

Following the adoption of FRS 25, preference shares issued by the Company are treated as equity(i.e. forming part of shareholders’ funds) only to the extent that they meet the following twoconditions:

(a) they include no contractual obligations upon the Company to deliver cash or other financialassets or to exchange financial assets or financial liabilities with another party underconditions that are potentially unfavourable to the Company; and

(b) where the instrument will or may be settled in the Company’s own equity instruments, it iseither a non-derivative that includes no obligation to deliver a variable number of theCompany’s own equity instruments or is a derivative that will be settled by the Company’s

F-10


NOTES (Continued)



exchanging a fixed amount of cash or other financial assets for a fixed number of its ownequity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financialliability.

Investments

Investments held as fixed assets are stated at cost less provisions for any impairment.

Asset Impairment

The carrying amounts of the Group’s assets are reviewed for impairment when events or changesin circumstances indicate that the carrying amount of the fixed assets of income-generating units maynot be recoverable. If any such indication exists, the recoverable amount is estimated and anappropriate impairment loss is recognised.

Reversals of impairment

An impairment loss is reversed where the recoverable amount increases as a result of a change ineconomic conditions or in the expected use of the asset.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceedthe carrying amount that would have been determined, net of depreciation or amortisation, if noimpairment loss had been recognised.

Stocks

Stocks are stated at the lower of cost and net realisable value.

Leases

Rental costs under operating leases are charged to the profit and loss account over the period ofthe lease. Certain leases with related parties contain inflation-driven rental uplifts with pre-determinedminimums: the amount payable in respect of these uplifts is charged to the profit and loss account as itarises. Assets acquired under finance leases are capitalised and the outstanding future lease obligationsare shown in creditors. Provision is made for lease commitments on certain leasehold properties basedon the expected exposure. The amount provided is based either on the future rental obligations(discounted by 7.5%, based on property yields), net of anticipated operating profit from trading(discounted by 9.5%, based on cost of capital), or management’s best estimate of the expectedexposure. Provision is made for the remaining period of the leases identified, subject to a maximum of25 years, after which the directors consider the impact of discounting upon the rental and tradingprojections renders them immaterial.

Pre-opening costs

Operating costs incurred before a new cinema is opened are written off to the profit and lossaccount as incurred.

Taxation

The charge for taxation is based on the loss for the year and takes into account taxation deferredbecause of timing differences between the treatment of certain items for taxation and accountingpurposes.

F-11


NOTES (Continued)



Deferred tax is recognised, without discounting, in respect of all timing differences between thetreatment of certain items for taxation and accounting purposes which have arisen but not reversed bythe balance sheet date, except as otherwise required by FRS 19.

Cash and liquid resources

Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayableon demand, less overdrafts payable on demand. Liquid resources are current asset investments whichare disposable without curtailing or disrupting the business and are either readily convertible intoknown amounts of cash at or close to their carrying values or traded in an active market.

Loan notes

Loan notes are held in the balance sheet at their issued amount less directly attributable issuecosts plus the accrued finance charge which has arisen on them. The finance charge accrues at aconstant rate over the term of the notes.

Pensions

The Group operates a defined contribution pension scheme. The assets of the scheme are heldseparately from those of the Group in an independently administered fund. The amount charged to theprofit and loss account represents the contributions payable to the scheme in respect of the accountingperiod.

The Group also operates two pension schemes providing benefits based on final pensionable pay.The assets of the schemes are held separately from those of the Group.

Pension scheme assets are measured using market values. For quoted securities the current bidprice is taken as market value. Pension scheme liabilities are measured using a projected unit methodand discounted at the current rate of return on a high quality corporate bond of equivalent term andcurrency to the liability.

The pension scheme surplus (to the extent that it is recoverable) or deficit is recognised in full.The movement in the scheme surplus/deficit is split between operating charges, finance items and, inthe statement of total recognised gains and losses, actuarial gains and losses.

Derivatives

The Group’s financial instruments, other than derivatives, comprise borrowings, cash and liquidresources and other various items such as trade debtors, trade creditors etc. The main purpose of thesefinancial instruments is to raise finance for the Group’s operation.

The Group also enters into interest rate swaps to manage the interest rate risk arising from theGroup’s sources of finance. Amounts payable or receivable in respect of interest rate swap transactionsare recognised on an accruals basis until settlement date and are treated as an adjustment to theinterest expense over the period of the contract.

All derivatives are held for hedging purposes.

2 Turnover

All turnover derives wholly from the ownership and operation of cinemas.

F-12


NOTES (Continued)


2 Turnover (Continued)

An analysis of turnover by geographical market is set out below:

2010 2009

Continuing Discontinued Total Continuing Discontinued Total

£000 £000 £000 £000 £000 £000UK . . . . . . . . . . . . . . . . . . 313,890 — 313,890 314,224 — 314,224Continental Europe &

Ireland . . . . . . . . . . . . . . 335,755 — 335,755 326,703 — 326,703

Group turnover . . . . . . . . . 649,645 — 649,645 640,927 — 640,927

3 Analysis of continuing and discontinued operations

2010 2009


£000 £000 £000 £000 £000 £000Group turnover . . . . . . . . . 649,645 — 649,645 640,927 — 640,927Cost of sales . . . . . . . . . . . . (235,641) — (235,641) (224,793) — (224,793)

Gross profit . . . . . . . . . . . . 414,004 — 414,004 416,134 — 416,134Net operating expenses . . . . (387,999) — (387,999) (431,574) — (431,574)

Group operating profit/(loss) . . . . . . . . . . . . . . . 26,005 — 26,005 (15,440) — (15,440)

Share of joint ventures’operating loss . . . . . . . . . (3) — (3) (267) — (267)

26,002 — 26,002 (15,707) — (15,707)

The total figures for continuing operations in 2010 include the following amounts relating toacquisitions: turnover £1,727,000 (2009: £nil), cost of sales £691,000 (2009: £nil) and net operatingexpenses £825,000 (2009: £nil).

The directors have concluded that the acquisitions do not meet the criteria of ‘‘substantialacquisitions’’ as defined in FRS 6. Therefore, the disclosure of separate full profit and loss accounts forthe acquisitions has not been made.

Net operating expenses in 2010 include exceptional costs of £1,456,000 (2009: £23,520,000) whichare explained in note 6.

4 Remuneration of directors

2010 2009

£000 £000Directors’ emoluments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,466 2,281Company contributions to money purchase pension schemes . . . . . . . . . . . . 59 58

2,525 2,339

F-13


NOTES (Continued)


4 Remuneration of directors (Continued)

The aggregate of emoluments of the highest paid director was £998,000 (2009: £922,000).No contributions to a Group pension scheme were made in relation to the highest paid director(2009: £nil).

Number of directors

2010 2009

Retirement benefits are accruing to the following number of directorsunder:

Money purchase schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3

5 Loss on ordinary activities before taxation

2010 2009

£000 £000Loss on ordinary activities before taxation is stated after charging/(crediting)Depreciation—Finance lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,995 1,808—Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,095 47,638—Digital projection deferred income release . . . . . . . . . . . . . . . . . . . . . . . (1,127) —Amortisation of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7Amortisation of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,656 10,299Amounts receivable by the auditors:—Audit of Group financial statements pursuant to legislation . . . . . . . . . . . 20 19—Audit of the parent company financial statements pursuant to legislation . 55 54—Audit of financial statements of subsidiaries pursuant to legislation . . . . . 344 266—Other services relating to taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 253—All other services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 50Property rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,569) (2,598)Lease exit premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (1,500)Rentals under operating leases—property . . . . . . . . . . . . . . . . . . . . . . . . . . 105,633 107,330

Amounts paid to the Company’s auditor and their associates in respect of services to theCompany, other than the audit of the Company’s financial statements, have not been disclosed as theinformation is required instead to be disclosed on a consolidated basis.

6 Exceptional items and loss on disposal

Exceptional costs

The exceptional costs in the current year relate to restructuring of the UK businesses andproperty-related matters.

The tax effect of the exceptional costs in the current year was £nil.

The exceptional costs in the prior year represent provisions made against amounts receivable fromsubsidiaries of Odeon Property Group LLP (the ‘‘PropCos’’), which are related parties. The tax effectof the exceptional costs in the prior year was £nil.

Profit and loss on disposal

The profit on disposal of properties represents the difference between the proceeds due (net ofdisposal costs) and the net book value of the assets sold.

F-14


NOTES (Continued)


6 Exceptional items and loss on disposal (Continued)

In the current year, a number of freehold and leasehold property interests were disposed of. Theloss associated with these disposals was £525,000.

In the prior year, a number of freehold and leasehold property interests were disposed of. The lossassociated with these disposals was £3,388,000.

7 Staff numbers and costs

The average number of persons employed by the Group (including directors) during the periodwas as follows:

Number of employees

2010 2009

Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327 312Cinema and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,454 8,698

8,781 9,010

The aggregate payroll costs of these persons were as follows:

2010 2009

£000 £000Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,888 100,020Social security costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,685 13,021Pension costs—regular costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483 518

110,056 113,559

8 Interest payable and similar charges

2010 2009

£000 £000Interest payable on bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,864 18,902Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,310 31,683Amortisation of issue costs (on bank loans only) . . . . . . . . . . . . . . . . . . . . . 1,971 1,608Unwinding of discount on provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000 2,317Other financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,839 5,823Share of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 136

66,162 60,469

Other financing costs includes, inter alia, guarantee facility fees, commitment fees, bank charges,and loan note redemption fees, together with finance charges payable in respect of finance leases.

9 Other finance cost/(income)

2010 2009

£000 £000Expected return on pension scheme assets (note 27) . . . . . . . . . . . . . . . . . . (2,760) (2,233)Interest on pension scheme liabilities (note 27) . . . . . . . . . . . . . . . . . . . . . 2,474 2,415Other finance charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 538

234 720

F-15


NOTES (Continued)


10 Taxation

Analysis of charge in year

2010 2009

£000 £000 £000 £000UK corporation taxCurrent tax on income for the year . . . . . . . . . . (3,510) 3,694Overseas taxCurrent tax on income for the year . . . . . . . . . . 3,933 1,637

Current tax on income for the year . . . . . . . . . . 423 5,331Share of joint ventures’ current tax . . . . . . . . . . (40) (5)

Total current tax . . . . . . . . . . . . . . . . . . . . . . . . 383 5,326Deferred taxOrigination/reversal of timing differences . . . . . . 4,112 (3,198)

Deferred tax for the year . . . . . . . . . . . . . . . . . 4,112 (3,198)Share of joint ventures’ deferred tax . . . . . . . . . — —

Total deferred tax . . . . . . . . . . . . . . . . . . . . . . . 4,112 (3,198)

Tax on loss on ordinary activities . . . . . . . . . . . . 4,495 2,128

Factors affecting the tax charge/(credit) for the current year

The current tax charge for the year is higher (2009: higher) than the standard rate of corporationtax in the UK, 28.0% (2009: 28.0%). The differences are explained below.

2010 2009

£000 £000Current tax reconciliationLoss on ordinary activities before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (39,697) (77,322)

Current tax at 28.0% (2009: 28.0%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,115) (21,650)

Effects of:Expenses not deductible for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . 15,601 21,588Capital allowances for period less than/(in excess of) depreciation . . . . . . . . 1,752 (991)Other timing differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40) 4,246(Brought forward losses utilised)/losses not utilised . . . . . . . . . . . . . . . . . . . (604) 1,846Provision for local taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,465 753Overseas rate differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (594) (134)Capital gains greater than book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 260Group relief surrender for no consideration . . . . . . . . . . . . . . . . . . . . . . . . (3,004) (1,438)Adjustments in respect of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,078) 846

Total current tax charge (see above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 5,326

The Emergency Budget on 22 June 2010 announced that the UK corporation tax rate will reducefrom 28% to 24% over a period of 4 years from 2011. The first reduction in the UK corporation taxrate from 28% to 27% was substantively enacted on 20 July 2010, to be effective from 1 April 2011. Ithas been further announced in the Budget on 23 March 2011 that the UK corporation tax rate will nowbe reduced to 26% from 1 April 2011, and that the rate will then reduce to 23% over the next fouryears.

The UK deferred tax asset reflected in the Group’s balance sheet at 31 December 2010 has beencalculated at the rate of 27%, that being the rate that was substantively enacted at the balance sheet

F-16


NOTES (Continued)


10 Taxation (Continued)

date. It has not yet been possible to quantify the full anticipated effect of the announced further 4%rate reduction, although this will reduce the Group’s future UK current tax charge and reduce theGroup’s deferred tax liabilities/assets accordingly.

11 Dividends

The aggregate amount of dividends comprises:

2010 2009

£000 £000Dividends in respect of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

— —

The aggregate amount of dividends proposed and recognised as liabilities as at the year-end is £nil(2009: £nil). No dividends have been declared post year-end (2009: none).

12 Intangible assets

Goodwill Other Total

£000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,617 23 186,640Acquisitions (see note 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,142 — 15,142Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 114 114Fully amortised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (22) (22)Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,002) (1) (3,003)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198,757 114 198,871

AmortisationAt beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,858 7 46,865Charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,656 23 9,679Fully amortised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (22) (22)Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (574) — (574)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,940 8 55,948

Net book valueAt 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,817 106 142,923

At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139,759 16 139,775

Goodwill is held at amortised cost.

Impairment reviews have been performed in respect of the acquisitions made in prior years. Therecoverable amount has been assessed in accordance with FRS 10.

In accordance with FRS 11, a review was performed to establish whether or not there were anyindications of impairment to the carrying amount of goodwill. The review concluded that there were nosuch indications.

The directors consider each acquisition separately for the purpose of determining the amortisationperiod of any goodwill that arises. Goodwill is amortised over 20 years on all acquisitions in thesefinancial statements, representing the directors’ best estimate of the useful economic life of thegoodwill.

F-17


NOTES (Continued)


13 Tangible fixed assets

Plant,Land and fixtures and Assets under

Group buildings fittings construction Total

£000 £000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . 315,167 215,921 4,988 536,076Acquisition (see note 31) . . . . . . . . . . . . . . . . 11 3,203 — 3,214Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,489 44,695 2,943 49,127Reclassifications . . . . . . . . . . . . . . . . . . . . . . . 437 5,336 (5,773) —Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73) (588) — (661)Exchange differences . . . . . . . . . . . . . . . . . . . (4,784) (7,073) (36) (11,893)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . 312,247 261,494 2,122 575,863

DepreciationAt beginning of year . . . . . . . . . . . . . . . . . . . . 65,920 115,673 — 181,593Charge for the year . . . . . . . . . . . . . . . . . . . . 14,044 31,046 — 45,090On disposals . . . . . . . . . . . . . . . . . . . . . . . . . . (46) (521) — (567)Exchange differences . . . . . . . . . . . . . . . . . . . (1,371) (3,490) — (4,861)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . 78,547 142,708 — 221,255

Net book valueAt 31 December 2010 . . . . . . . . . . . . . . . . . . . 233,700 118,786 2,122 354,608

At 31 December 2009 . . . . . . . . . . . . . . . . . . . 249,247 100,248 4,988 354,483

The net book value of land and buildings costs comprises:

2010 2009

£000 £000Freehold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,974 19,376Long leasehold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,589 20,941Short leasehold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,137 208,930

233,700 249,247

Included in the total net book value of land and buildings is £16,469,000 (2009: £16,713,000) inrespect of assets held under finance leases. Depreciation for the year on these assets was £1,995,000(2009: £1,808,000).

Included in the total net book value of plant, fixtures and fittings is £13,155,000 (2009: £nil) inrespect of digital and related assets held under third party arrangements/agreements with an offsettingamount shown within deferred revenue. Depreciation for the year on these assets was £1,127,000(2009: £nil).

In accordance with FRS 11, a review was performed to establish whether or not there were anyindications of impairment to the carrying amount of tangible fixed assets. The review concluded thatthere were no such indications. The approach to asset impairment reviews is described in more detailin note 1.

Company

The Company did not hold any tangible fixed assets in the current or prior year.

F-18


NOTES (Continued)


14 Fixed asset investments

Group

Interests injoint

Joint ventures Goodwill ventures Loans Total

£000 £000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . . 700 735 701 2,136Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (201) (201)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . 700 735 500 1,935

Share of post acquisition reservesAt beginning of year . . . . . . . . . . . . . . . . . . . . . — (559) — (559)Retained loss . . . . . . . . . . . . . . . . . . . . . . . . . . — (141) — (141)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . — (700) — (700)

Net book valueAt 31 December 2010 . . . . . . . . . . . . . . . . . . . . 700 35 500 1,235

At 31 December 2009 . . . . . . . . . . . . . . . . . . . . 700 176 701 1,577

The total of the Group’s loss before taxation from interests in joint ventures was £181,000(2009: £403,000 loss).

Investmentsin group

Company undertakings

£000At beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,941Additions in the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,032)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,909

The only two direct subsidiaries of the Company are Cicero Holdings Limited and Lucius HoldingsLimited.

The principal undertakings in which the Company had a direct or indirect interest at the year-endare shown below.

F-19


NOTES (Continued)


14 Fixed asset investments (Continued)

The investments include both ordinary and preference shares.

Country ofName incorporation % interest Nature of business

Cicero Holdings Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyCicero Investments Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyCicero Acquisitions Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyOdeon Cinemas Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Operation of cinemasABC Cinemas Limited . . . . . . . . . . . . . . . . . . . . Great Britain 100% owned Operation of cinemasBookit Limited . . . . . . . . . . . . . . . . . . . . . . . . . Great Britain 100% owned Credit and debit card

transaction processingLucius Holdings Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyLucius Investments Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyUnited Cinemas International Acquisitions Limited Great Britain 100% owned Holding companyUnited Cinemas International Multiplex BV . . . . . Netherlands 100% owned Holding companyUnited Cinemas International (UK) Limited . . . . . Great Britain 100% owned Operation of cinemasOdeon and Sky Filmworks Ltd . . . . . . . . . . . . . . Great Britain 50% owned Film distributionDigital Cinema Media Limited . . . . . . . . . . . . . . Great Britain 50% owned Screen advertisingCompania de Iniciativas y Espectaculos SA Spain 100% owned Operation of cinemas

(Cinesa) . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cineparque y Espectaculos SA . . . . . . . . . . . . . . Spain 100% owned Operation of cinemasMulticines y Espectaculos SA . . . . . . . . . . . . . . . Spain 100% owned Operation of cinemasCinema International Corporation Lda . . . . . . . . . Portugal 100% owned Operation of cinemasUnited Cinemas International Multiplex GmbH . . . Germany 100% owned Operation of cinemasKino Friedrichshain Betriebsgesellschaft mbH . . . . Germany 100% owned Operation of cinemasKino Gera Betriebsgesellschaft mbH . . . . . . . . . . Germany 100% owned Operation of cinemasKino Lausitzpark Betriebsgesellschaft mbH . . . . . . Germany 100% owned Operation of cinemasUCI Kinoplex GmbH . . . . . . . . . . . . . . . . . . . . Germany 100% owned Operation of cinemasUnited Cinemas International Multiplex Austria 100% owned Operation of cinemas

Gesellschaft mbH . . . . . . . . . . . . . . . . . . . . . .UCI Italia SpA . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Nord Ovest Srl . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Sud Srl . . . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Nord Srl . . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Centro Srl . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Nord Est Srl . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasCitoli Srl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasEurocine SpA . . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasVis Pathe Roma Est Srl . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemas

15 Stocks

Group Group Company Company2010 2009 2010 2009

£000 £000 £000 £000Goods for resale . . . . . . . . . . . . . . . . . . . . . . . . 6,121 4,462 — —

F-20


NOTES (Continued)


16 Debtors amounts falling due within one year


£000 £000 £000 £000Trade debtors . . . . . . . . . . . . . . . . . . . . . . . . . . 17,842 16,116 — —Other debtors . . . . . . . . . . . . . . . . . . . . . . . . . . 10,198 3,915 2 2Prepayments and accrued income . . . . . . . . . . . 11,346 14,703 — —

39,386 34,734 2 2

17 Debtors amounts falling due after one year


£000 £000 £000 £000Other debtors . . . . . . . . . . . . . . . . . . . . . . . . . . 5,162 10,416 — —Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 566,330 501,727Deferred tax (note 22) . . . . . . . . . . . . . . . . . . . — 3,566 — —Amounts owed by group undertaking . . . . . . . . . — — 45,692 45,558Amounts owed by related parties . . . . . . . . . . . . 31,220 29,998 31,220 29,998

36,382 43,980 643,242 577,283

The following unsecured discounted loan notes receivable from group undertakings were due at31 December 2010:

Par value £557.9mBook value at 31 December 2010 was £278.1mDiscount rate 16.125%. Final redemption date 26 August 2015

Par value E636.6mBook value at 31 December 2010 was A309.2mDiscount rate 16.125%. Final redemption date 28 October 2015

The following loan note, including accrued interest, receivable from a group undertaking was dueat 31 December 2010:

Par value E12.5mIssued for A12.5mInterest rate 16.23%Book value at 31 December 2010 was A28.9m

F-21


NOTES (Continued)


18 Creditors: amounts falling due within one year


£000 £000 £000 £000Bank loans and overdrafts . . . . . . . . . . . . . . . . . 6,200 4,000 — —Trade creditors . . . . . . . . . . . . . . . . . . . . . . . . . 37,865 34,266 — —Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . 2,738 3,220 — —Other creditors including taxation and social

security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,085 27,219 — —Corporation tax . . . . . . . . . . . . . . . . . . . . . . . . 5,413 6,165 — —Accruals and deferred income . . . . . . . . . . . . . . 58,902 58,377 110 100

138,203 133,247 110 100

Interest was payable on the bank loans at LIBOR or EURIBOR plus a margin of between 1.50%and 4.12% (2009: between 1.50% and 2.88%) plus costs of between nil and 0.01%. Bank loans andoverdrafts due within one year are stated net of £nil (2009: £nil) of unamortised issue costs.

19 Creditors: amounts falling due after more than one year


£000 £000 £000 £000Bank loans and overdrafts . . . . . . . . . . . . . . . . . 267,386 286,784 — —Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . 31,346 31,526 — —Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346,829 321,847 346,829 321,847Other creditors, accruals and deferred income . . 11,208 882 — —Amounts owed to group undertakings . . . . . . . . — — 210,491 202,857

656,769 641,039 557,320 524,704

Interest was payable on the bank loans at LIBOR or EURIBOR plus a margin of between 1.50%and 4.13% (2009: between 1.50% and 2.88%) plus costs of between nil and 0.01%. Bank loans andoverdrafts due after more than one year are stated net of £7,783,000 (2009: £6,810,000) of unamortisedissue costs.

The bank loans are secured by the assets of the business and its subsidiaries. The bank loans arerepayable in stages, with the first loan tranche due for full repayment by 2 April 2014 and the finalloan tranche due for full repayment by 2 April 2016.

The aggregate amount of loan notes issued to related parties included in creditors falling due aftermore than one year is £346,829,000 (2009: £321,847,000). This is the net book value based on theaggregate issued amounts of £230,221,000 (2009: £236,965,000) plus interest accrued of £116,608,000(2009: £84,882,000). Further details are set out below:

The following loan notes, including accrued interest, issued by the Company to a parent company,Monterey Capital III Sarl during 2005, remained outstanding at 31 December 2010:

Par value £11.2mIssued for £11.2mInterest rate 16.4%; amended to 11.0% in August 2007Book value at 31 December 2010 was £22.2m

F-22


NOTES (Continued)


19 Creditors: amounts falling due after more than one year (Continued)

Par value E26.2mIssued for A26.2mInterest rate 16.1%; amended to 11.0% in August 2007Book value at 31 December 2010 was A51.6m

The following loan notes, including accrued interest, issued by the Company to its immediateparent, Odeon and UCI Cinemas Holdings Limited during 2007, remained outstanding at 31 December2010. These loan notes replaced loan notes of equivalent value previously held by a related party(note 30).

Par value £98.2mIssued for £98.2mInterest rate 11.0%Book value at 31 December 2010 was £140.1m


The maturity profile of the Group’s bank and other borrowings (excluding preference shares) at31 December was as follows:

Group 2010 2009

£000 £000Within 1 year, or on demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,938 7,220Within one to two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,529 8,703Within two to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,440 73,157Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467,375 565,107

662,282 654,187Un-amortised issue costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,783) (6,810)

654,499 647,377

Finance leases

Future minimum payments under finance leases are as follows:

Group 2010 2009

£000 £000Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,738 3,220Within one to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,644 9,863Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,702 21,663

Total gross payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,084 34,746

20 Derivatives and other financial instruments

Short-term debtors and creditors are excluded from the disclosures relating to derivatives andother financial instruments. There is no material difference between the fair value of financial assetsand liabilities and the carrying value in the balance sheet.

F-23


NOTES (Continued)


20 Derivatives and other financial instruments (Continued)

Financial assets

Financial assets comprise cash at bank and in hand and are held in Sterling and Euro. Interest isearned on cash at bank at floating interest rates linked to short-term bank deposit rates.

Financial liabilities

The Group borrows in the desired currencies at both fixed and floating rates of interest. For bankborrowings interest rate hedging contracts (swaps) are used to generate the desired interest profile tomanage the Group’s exposure to interest rate fluctuations. The Group’s policy is to maintain fixedinterest rates, by means of hedging contracts, covering between 50% and 100% of the senior bank debtdrawn. At the year-end approximately 77% of the Group’s bank borrowings were at fixed rates aftertaking into account interest rate swaps. For Sterling denominated loans the fixed rate was 3.90% plus amargin ranging from 1.5% to 4.13% and for Euro denominated loans a fixed rate of 2.96% plus amargin of 1.75% to 4.13%.

The interest on loan notes is fixed at a rate of 11.0%.

As at 31 December 2010 the total bank facilities included a revolving credit facility. Of this facility,£31,400,000 remained available at the balance sheet date. The maturity date of the revolving creditfacility is April 2014.

There are no unrecognised gains or losses relating to interest rate swaps.

21 Provisions for liabilities and charges

Leaseprovisions

& other

£000At the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,063Arising on acquisitions (note 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Utilised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,699)Unwinding of discount on provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000(Credited)/Charged to the profit and loss account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,837)

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,527

Provision has been made for lease commitments on certain leasehold properties based on theexpected exposure. The amount provided is based either on the future rental obligations (discounted by7.5%, based on property yields), net of anticipated operating profit from trading (discounted by 9.5%,based on cost of capital), or management’s best estimate of the expected exposure. Provision has beenmade for the remaining period of the leases identified, subject to a maximum of 25 years, after whichthe directors consider the impact of discounting upon the rental and trading projections renders themimmaterial.

F-24


NOTES (Continued)


22 Deferred tax

The deferred tax asset recognised (note 17) is:


£000 £000 £000 £000Accelerated capital allowances . . . . . . . . . . . . . . — 3,566 — —Other timing differences . . . . . . . . . . . . . . . . . . — — — —Un-utilised losses . . . . . . . . . . . . . . . . . . . . . . . — — — —

— 3,566 — —

The potential amounts of deferred tax asset not recognised are:


£000 £000 £000 £000Accelerated capital allowances . . . . . . . . . . . . . . 9,799 7,899 — —Other timing differences . . . . . . . . . . . . . . . . . . 12,713 12,722 — —Un-utilised losses . . . . . . . . . . . . . . . . . . . . . . . 73,838 81,988 — —

96,350 102,609 — —

23 Called up share capital

2010 2009

£000 £000Authorised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9,947 (2009: 9,947) A Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 10 101,328 (2009: 1,328) B Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 1 110,000 (2009: 10,000) Ordinary shares of A1 each . . . . . . . . . . . . . . . . . . . . 9 940,012,500 (2009: 40,012,500) preference shares of £1 each . . . . . . . . . . . . . 40,013 40,01371,990,000 (2009: 71,990,000) preference shares of A1 each . . . . . . . . . . . . . 61,373 64,796

101,406 104,829

Allotted, called up and fully paid9,947 (2009: 9,947) A Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 10 101,328 (2009: 1,328) B Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 1 110,000 (2009: 10,000) Ordinary shares of A1 each . . . . . . . . . . . . . . . . . . . . 9 935,691,227 (2009: 35,691,227) preference shares of £1 each . . . . . . . . . . . . . 35,691 35,69171,180,747 (2009: 71,180,747) preference shares of A1 each . . . . . . . . . . . . . 60,683 64,070

96,394 99,781

With effect from the passing of a requisite resolution on 21 December 2006 to amend theCompany’s Articles of Association, the holders of the Company’s Preference Shares waived the rightsto the Preference dividend without prejudice to receive a preferred return in relation to the periodfrom the date of issue of the Preference Shares.

The preferred return in relation to any Preference Share in issue on the reference date, means11% per annum of the amount paid on the nominal value of that preference share calculated from(and including) the date of issue to (and excluding) the earlier of (i) the reference date and (ii) thedate on which the full preferred participation shall have been paid on the Preference Share andcompounded on each 30 June and 31 December in that period.

F-25


NOTES (Continued)


23 Called up share capital (Continued)

Income

Any profits which the Company may determine to distribute in respect of any financial year shallbelong to and be distributed amongst the holders of the Preference Shares and the holders of theOrdinary Shares as follows:

(a) firstly, to the extent that the holders of Preference Shares have not then received thepreferred participation of such shares, in paying to the holders of the Preference Shares theamount by which the aggregate amount previously paid by the Company to the holders of thePreference Shares (in that capacity) is less than the preferred participation of such shares. Tothe extent that the profits that the Company determines to distribute are less than theaggregate preferred participation of all of the Preference Shares, such profits shall be appliedamong the holders of the Preference Shares pro rata to the respective preferred participationof the Preference Shares held by them.

(b) after payment of the preferred participation to the holders of the Preference Shares, theaggregate amount of profits resolved to be distributed (or balance of them) shall be paid tothe holders of Ordinary Shares as nearly as is practicable pro rata to the amounts paid up ontheir Ordinary Shares.

No dividend or other distribution shall be declared or paid by the Ordinary Shares unless or untilthe Company shall have paid to the holders of the Preference Shares, the aggregate preferredparticipation of all of the Preference Shares. No dividend or distribution shall be declared or paid onany Preference Shares in excess of the preferred participation of that share.

Voting rights

The A Ordinary shares shall confer on each holder thereof the right to receive notice and toattend, speak and vote at all general meetings of the Company.

The B Ordinary Shares shall confer on each holder thereof the right to receive notice and toattend and speak at all general meetings of the Company but no B Ordinary Share shall confer anyright to vote thereat unless or until the Company is listed on a stock exchange or at least 90% of theassets and undertaking of the Company are sold to a proposed purchaser.

The holders of Preference Shares shall be entitled to receive notice of, attend and speak at allgeneral meetings, but shall not be entitled to vote.

Redemption

The Company shall have the right at any time to redeem any number of Preference Shares upon14 days written notice. Upon redemption, the Company shall make payments to the holder of eachPreference Share an amount of £1 or A1 per share together with a sum equal to all areas and accrualsof dividends on such shares.

Capital

On a return of capital on liquidation, dissolution or winding up of the Company either voluntaryor involuntary or other return of capital, the surplus assets of the Company remaining after thepayment of its liabilities (the ‘‘Surplus’’) shall be applied as follows:

(a) first, to the extent that the holders of the Preference Shares have not received the preferredparticipation of each Preference Share held by them, in paying to the holders of thePreference Shares the amount by which the aggregate amount previously paid by theCompany to the holders of the Preference Shares (in that capacity) is less than the preferredparticipation of each Preference Share held by them and if the surplus is less than theaggregate preferred participation of all of the Preference Shares, the surplus shall be applied

F-26


NOTES (Continued)



among the holders of the Preference Shares pro rata to the respective preferred participationsof the Preference Shares held by them; and

(b) the balance (if any) of the surplus remaining after the payments above shall belong to theholders of the Ordinary Shares according to the amounts paid on the nominal amount thereof.

24 Reserves

Profit andloss

Group account

£000At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (309,020)Loss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (44,192)Actuarial pension scheme gain recognised (note 27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,085Effect of pension asset limit on above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,616)Deferred tax on pension gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (863)Deferred tax on effect of pension asset limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732Deferred tax change in rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5)Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,672Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (340,207)

Profit andloss

Company account

£000At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,726Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,309Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,621)Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,414

25 Notes to cash flow statement

(a) Net cash flow from operating activities

2010 2009

£000 £000Operating profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,005 (15,440)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,090 49,446Amortisation of goodwill and intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . 9,679 10,306Increase in stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,496) (693)Decrease/(Increase) in debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,921 28,286Decrease in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,887) (15,507)(Decrease)/increase in creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,740) 1,569

Net cash inflow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . 65,572 57,967

F-27


NOTES (Continued)


25 Notes to cash flow statement (Continued)

(b) Net debt

Balance at Other Balance at31 December non-cash 31 December

2009 Cashflow movements Exchange 2010

£000 £000 £000 £000 £000Net cash:Cash at bank and in hand . . . . . 60,170 (21,061) — (2,747) 36,362Debt:Debt falling due within one year (4,000) (2,200) — — (6,200)Debt falling due after more than

one year . . . . . . . . . . . . . . . . (608,631) 16,143 (36,281) 14,554 (614,215)Finance leases . . . . . . . . . . . . . (34,746) 416 — 246 (34,084)

Net debt . . . . . . . . . . . . . . . . . (587,207) (6,702) (36,281) 12,053 (618,137)

Non-cash movements are primarily finance charges accrued on the loan notes and the amortisationof issue costs.

(c) Reconciliation of net cash flow to movement in net debt

2010 2009

£000 £000(Decrease)/increase in net cash in the period . . . . . . . . . . . . . . . . . . . . . . . (21,061) 3,537Cash outflow/(inflow) from decrease/(increase) in debt . . . . . . . . . . . . . . . . 14,359 (6,569)Non cash movement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36,281) (33,291)Translation difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,053 17,765

Movement in net debt in the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30,930) (18,558)Net debt at end of previous period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (587,207) (568,649)

Net debt at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (618,137) (587,207)

26 Financial commitments

Group 2010 2009

£000 £000Capital commitmentsContracted for but not provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,969 6,357

F-28


NOTES (Continued)


26 Financial commitments (Continued)

Operating commitments

At 31 December 2010 the Group was committed to making the following payments during the nextyear in respect of operating leases:

Land and buildings

Group 2010 2009

£000 £000Operating lease which expire:Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,886 2,288In two to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,030 8,100Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,519 108,212

129,435 118,600

The Company had no capital or operating lease commitments at 31 December 2010 or at thepreceding year-end.

27 Pension schemes

The Group operates or participates in two defined benefit schemes (the ABC Cinemas LimitedPension Scheme (the ‘‘ABC plan’’) and the Optima 2 Pension Scheme (the ‘‘Optima 2 plan’’)) and onedefined contribution scheme (the Odeon DC Stakeholder Pension Scheme). Assets of the schemes areheld separately from those of the Group in independently administered funds.

Defined benefit schemes

Both the ABC plan and the Optima 2 plan are closed to new members. The ABC plan is closed tofuture accrual from 1 November 2009. The Optima 2 plan is closed to future accrual from 1 January2009. The latest full actuarial valuation for the ABC plan was carried out at 30 April 2009 and wasupdated for FRS 17 purposes to 31 December 2010 by a qualified independent actuary. The latest fullactuarial valuation for the Optima 2 plan was carried out at 31 December 2006 and was updated forFRS 17 purposes to 31 December 2010 by a qualified independent actuary.

The major financial assumptions used by the actuaries were:

2010 2009 2008

ABC Optima 2 ABC Optima 2 ABC Optima 2Plan Plan Plan Plan Plan Plan

% % % % % %Rate of increase in salaries . . . . . . . 4.0 4.0 4.0 4.0 4.0 4.0Rate of increase in pensions in

payment and deferred pensioners:—pre 6.4.1997 accrual . . . . . . . . . . 2.4 2.1 2.4 2.1 2.3 2.0—post 6.4.1997 accrual . . . . . . . . . . 3.1 3.1 3.1 3.1 2.8 2.8Discount rate applied to scheme

liabilities . . . . . . . . . . . . . . . . . . 5.6 5.6 5.7 5.7 6.0 6.0Inflation assumption . . . . . . . . . . . 3.2 3.2 3.2 3.2 2.9 2.9

The mortality assumptions are based on standard mortality tables which allow for future mortalityimprovements. The assumptions are that a member currently aged 65 will live on average for a further21.2 years if they are male and for a further 22.7 years if they are female.

F-29


NOTES (Continued)


27 Pension schemes (Continued)

For a member aged 55 in 2010, the assumptions are that they will live on average for a further21.3 years after retirement at 65 if they are male and for a further 23.8 years after retirement if theyare female.

The pension cost relating to the defined benefit schemes is assessed in accordance with the adviceof independent qualified actuaries using the projected unit method. As both the Optima 2 plan andABC plan are closed to new members and future accrual, the current service cost is nil. The Groupmade special deficit reduction contributions of £740,000 (Optima 2 plan) and £928,000 (ABC plan).These rates are subject to review at future actuarial valuations.

Scheme assets/liabilities

The assets in the schemes and the expected rates of return were:

2010 2009 2008

Long- Long- Long-term rate term rate term rateof return Fair of return Fair of return Fairexpected Fair Value— expected Fair Value— expected Fair Value—

per Value— Optima 2 per Value— Optima 2 per Value— Optima 2annum ABC Plan Plan Total annum ABC Plan Plan Total annum ABC Plan Plan Total

% £000 £000 £000 % £000 £000 £000 % £000 £000 £000

Equities . . . . . . 7.5 7,127 13,171 20,298 8.25 6,300 15,964 22,264 7.75 6,022 14,614 20,636Bonds . . . . . . . 5.0 3,865 — 3,865 5.5 3,572 — 3572 5.5 3,018 — 3,018Gilts . . . . . . . . 4.0 11,669 8,637 20,306 4.5 10,654 5,136 15,790 4.0 9,250 2,371 11,621Property . . . . . 7.5 — 2,078 2,078 — — — — — — — —Other . . . . . . . 0.5 103 52 155 0.5 215 92 307 2.5 215 79 294

Total . . . . . . . . 22,764 23,938 46,702 20,741 21,192 41,933 18,505 17,064 35,569

The Group employs a building block approach in determining the long-term rate of return onpension plan assets. Historical markets are studied and assets with higher volatility are assumed togenerate higher returns consistent with widely accepted capital market principles. The assumedlong-term rate of return on each asset class is set out within this note. The overall expected rate ofreturn on assets is then derived by aggregating the expected return for each asset class over the actualasset allocation.

The fair value of the schemes’ assets, which are not intended to be realised in the short term andmay be subject to significant change before they are realised, and the present value of the schemes’liabilities, which are derived from cash flow projections over long periods and thus inherently uncertain,were:

2010 2009 2008

ABC Optima 2 ABC Optima 2 ABC Optima 2Plan Plan Total Plan Plan Total Plan Plan Total

£000 £000 £000 £000 £000 £000 £000 £000 £000

Total fair value of assets . . . . . . 22,764 23,938 46,702 20,741 21,192 41,933 18,505 17,064 35,569Present value of scheme

liabilities . . . . . . . . . . . . . . . (20,148) (24,391) (44,539) (20,350) (24,459) (44,809) (19,099) (22,087) (41,186)Effect of asset limit . . . . . . . . . (2,616) — (2,616) — — — — — —

Surplus/(deficit) in the scheme-pension liability . . . . . . . . . . — (453) (453) 391 (3,267) (2,876) (594) (5,023) (5,617)

Related deferred tax (liabilities)/assets . . . . . . . . . . . . . . . . . — 122 122 (110) 915 805 166 1,406 1,572

Net pension surplus/(liability) . . . — (331) (331) 281 (2,352) (2,071) (428) (3,617) (4,045)

F-30


NOTES (Continued)



Changes to the present value of the defined benefit obligation during the year

2010 2009

Optima 2 Optima 2ABC Plan Plan Total ABC Plan Plan Total

£000 £000 £000 £000 £000 £000Opening defined benefit

obligation . . . . . . . . . . . . . 20,350 24,459 44,809 19,099 22,087 41,186Current service cost . . . . . . . — — — 120 16 136Interest cost . . . . . . . . . . . . . 1,114 1,360 2,474 1,109 1,306 2,415Contributions by scheme

participants . . . . . . . . . . . . — — — 50 — 50Actuarial (gain)/loss on

scheme liabilities . . . . . . . . (503) (826) (1,329) 812 1,834 2,646Net benefits paid out . . . . . . (813) (602) (1,415) (840) (784) (1,624)

Closing defined benefitobligation . . . . . . . . . . . . . 20,148 24,391 44,539 20,350 24,459 44,809

Changes to the fair value of scheme assets during the year

2010 2009


£000 £000 £000 £000 £000 £000Opening fair value of scheme

assets . . . . . . . . . . . . . . . . 20,741 21,192 41,933 18,505 17,064 35,569Expected return on scheme

assets . . . . . . . . . . . . . . . . 1,203 1,557 2,760 1,000 1,233 2,233Actuarial gain on scheme

assets . . . . . . . . . . . . . . . . 705 1,051 1,756 1,118 2,938 4,056Contributions by the

employer . . . . . . . . . . . . . 928 740 1,668 908 741 1,649Contributions by scheme

participants . . . . . . . . . . . . — — — 50 — 50Net benefits paid out . . . . . . (813) (602) (1,415) (840) (784) (1,624)

Closing fair value of schemeassets . . . . . . . . . . . . . . . . 22,764 23,938 46,702 20,741 21,192 41,933

Upon recommendation from the actuaries, the Group has agreed to make additional annualcontributions to the ABC plan of £1,157,000 per annum until 30 April 2016, and additional annualcontributions of £1,000,000 per annum until 31 March 2016 to the Optima 2 plan.

A sensitivity analysis was performed to illustrate the impact on the surplus/deficit of a change inthe inflation rate assumed. If an inflation rate of 3.6% per annum had been used for the 2010calculations, the ABC plan would have shown a surplus of £1,885,000 and the Optima 2 plan a deficitof £1,753,000.

F-31


NOTES (Continued)



The movement in the deficit on the schemes is shown below:

Movement in deficit during the year

2010 2009


£000 £000 £000 £000 £000 £000Surplus/(deficit) in scheme at

the beginning of the year . . 281 (2,352) (2,071) (428) (3,617) (4,045)Current service cost . . . . . . . — — — (120) (16) (136)Contributions paid . . . . . . . . 928 740 1,668 908 741 1,649Other finance income/(cost) . 89 197 286 (109) (73) (182)Actuarial gain . . . . . . . . . . . . 1,208 1,877 3,085 306 1,104 1,410Effect of asset limit . . . . . . . (2,616) — (2,616)Deferred tax . . . . . . . . . . . . . 110 (793) (683) (276) (491) (767)

Surplus/(deficit) in thescheme at end of year . . . . — (331) (331) 281 (2,352) (2,071)

Analysis of amount charged to operating profit

2010 2009


£000 £000 £000 £000 £000 £000Current service cost and total

operating charge . . . . . . . . — — — 120 16 136

Analysis of amounts included in other finance income/(cost)

2010 2009


£000 £000 £000 £000 £000 £000Expected return on pension

scheme assets . . . . . . . . . . 1,203 1,557 2,760 1,000 1,233 2,233Interest on pension scheme

liabilities . . . . . . . . . . . . . . (1,114) (1,360) (2,474) (1,109) (1,306) (2,415)

89 197 286 (109) (73) (182)

F-32


NOTES (Continued)



Analysis of amount recognised in statement of total recognised gains and losses

2010 2009


£000 £000 £000 £000 £000 £000Actual return less expected

return on pension schemeassets . . . . . . . . . . . . . . . . 705 1,051 1,756 1,118 2,938 4,056

Experience (losses)/gainsarising on the schemeliabilities . . . . . . . . . . . . . . — (1,133) (1,133) 365 34 399

Change in actuarialassumptions . . . . . . . . . . . 503 1,959 2,462 (1,177) (1,868) (3,045)

Actuarial gain recognised instatement of totalrecognised gains and losses 1,208 1,877 3,085 306 1,104 1,410

History of experience gains and losses

ABC Plan

2010 2009 2008 2007 2006

£000 £000 £000 £000 £000Difference between the expected and

actual return on scheme assets:Amount (£000s) . . . . . . . . . . . . . . . . . . . (705) (1,118) (3,247) 56 (99)Percentage of year end scheme assets . . . (3.1%) (5.4%) (17.5%) 0.3% (0.6%)

Experience gains and losses on schemeliabilities:

Amount (£000s) . . . . . . . . . . . . . . . . . . . — 365 (9) 25 153Percentage of year end present value of

scheme liabilities . . . . . . . . . . . . . . . . . 0.0% 1.8% (0.1%) 0.1% 0.7%

Total amount recognised in statement oftotal recognised gains and losses:

Amount (£000s) . . . . . . . . . . . . . . . . . . . 1,208 306 (2,028) 1,662 1,225Percentage of year end present value of


F-33


NOTES (Continued)



Optima 2 Plan

2010 2009 2008 2007 2006


actual return on scheme assets:Amount (£000s) . . . . . . . . . . . . . . . . . . . (1,051) (2,938) (6,352) (1,373) 535Percentage of year end scheme assets . . . (4.4%) (13.9%) (37.2%) (6.4%) 3.0%


Amount (£000s) . . . . . . . . . . . . . . . . . . . (1,133) 34 7 (711) (16)Percentage of year end present value of

scheme liabilities . . . . . . . . . . . . . . . . . (4.6%) 0.1% 0.0% (3.2%) (0.1%)


Amount (£000s) . . . . . . . . . . . . . . . . . . . 1,877 1,104 (4,773) 1,319 2,142Percentage of year end present value of


Defined contribution schemes

The pension charge in respect of the Odeon DC Stakeholder Pension Scheme is equal to thecontributions payable during the year ended 31 December 2010 of £1,098,000 (2009: £1,132,000). As at31 December 2010 there were £84,000 (2009: £nil) outstanding contributions to be made to the OdeonDC Stakeholder Pension Scheme.

28 Contingent liabilities

At 31 December 2010 Odeon and UCI Cinemas Group Ltd and certain group companies acted asguarantors under the terms of a £355m (2009: £380m) facility made available by a syndicate of banksled by Barclays Capital and Mizuho Corporate Bank. Of the facility, £34m (2009: £40m) relates torental guarantees.

29 Ultimate parent undertaking and controlling party

The directors regard TFCP Holdings Limited, a company registered in Guernsey, as the ultimatecontrolling party and the ultimate parent entity.

The largest group to consolidate these financial statements is Odeon and UCI Cinemas HoldingsLimited.

Copies of the consolidated financial statements of Odeon and UCI Cinemas Holdings Limited canbe obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

30 Related parties

The Company has taken advantage of the exemption granted by FRS 8, Related Party Disclosures,not to disclose transactions with group entities where 100% of the voting rights are controlled withinthe group.

Terra Firma Investments (GP) 2 Limited, acting as general partner of the six limited partnershipswhich constitute the Terra Firma Capital Partners II Fund, Terra Firma Capital Partners II LP-H, TFCPII Co-Investment 2 LP and TFCP II Co-Investment 2A LP (‘‘Terra Firma’’), has the ability to exercise

F-34


NOTES (Continued)


30 Related parties (Continued)

a controlling influence over the Company through the holding of shares in a parent of the Company.The directors therefore consider it to be a related party.

Monterey Capital III Sarl (‘‘Monterey’’), a company registered in Luxembourg, was a parent of theCompany at 31 December 2010, and the directors therefore consider it to be a related party.Unsecured loan notes, including interest accrued, of £66,163,000 (2009: £61,853,000) were held byMonterey at 31 December 2010. Interest of £6,532,000 (2009: £6,081,000) in relation to these notes wascharged during the year.

Odeon and UCI Cinemas Holdings Ltd (‘‘Holdings’’) was the immediate parent of the Company at31 December 2010, and the directors therefore consider it to be a related party. Unsecured loan notes,including interest accrued, of £280,666,000 (2009: £259,994,000) were held by Holdings at 31 December2010. Interest of £27,778,000 (2009: £25,602,000) in relation to these notes was charged during the year.


The companies to which the freehold and leasehold properties were sold (the ‘‘PropCos’’) arelisted below:

Odeon Banbury Ltd Odeon Gerrards Cross Ltd Odeon Richmond Hill Street LtdOdeon Barnet Ltd Odeon Harrogate Ltd Odeon Richmond Red Lion Street LtdOdeon Beckenham Ltd Odeon Hastings Ltd Odeon Streatham LtdOdeon Birmingham Ltd Odeon Holloway Ltd Odeon Swiss Cottage LtdOdeon Bournemouth (ABC) Ltd Odeon Huddersfield Ltd Odeon Tamworth LtdOdeon Bournemouth (Odeon) Ltd Odeon Lee Valley Ltd Odeon Taunton LtdOdeon Canterbury Ltd Odeon Leicester Square Ltd Odeon Telford LtdOdeon Chelmsford Ltd Odeon Muswell Hill Ltd Odeon Warrington LtdOdeon Derby Ltd Odeon Preston Ltd Odeon Weston-super-Mare LtdOdeon Dudley Ltd Odeon Putney Ltd Odeon Worcester LtdOdeon Esher Ltd

The total consideration for the properties sold, excluding VAT, was £178,750,000. The considerationwas partly settled during May 2007. The aggregate remaining balance due from the PropCos at31 December 2010 was £31,220,000 (2009: £29,998,000) (note 17), including interest and the effect of aprovision of £23,520,000 made against the balance due as at 31 December 2010, as described in note 6.The balance attracts interest at LIBOR plus a margin of 2.375%. Interest accrued during the year was£1,222,000 (2009: £2,962,000).

The relevant trading companies within the Group entered into lease contracts with the PropCos.The amount payable from the Group to the PropCos during the year was £11,189,000 (2009:£10,862,000). The terms of the leases are between 25 and 30 years.

F-35


NOTES (Continued)


31 Acquisitions

Fair values on acquisition

In December 2010, the Group acquired 100% of the share capital of companies containing threecinemas previously operated by Pathe in Italy. The consideration and provisional fair value to Odeon &UCI Cinemas Group Limited is shown below:

Book value Accountingof assets Fair value policy Provisionalacquired adjustments adjustments fair value

£000 £000 £000 £000Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . 3,214 — — 3,214Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 — — 163Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,005 — — 2,005Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,966) — — (2,966)

Net assets acquired . . . . . . . . . . . . . . . . . . . . . 2,416 — — 2,416

Goodwill at cost (note 12) . . . . . . . . . . . . . . . . . 15,142

17,558

Satisfied by:Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,198Deferred consideration . . . . . . . . . . . . . . . . . . . 1,278Acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . 82

17,558

The fair values contain provisional amounts which will be finalised in the 2011 financial statementswhen the detailed acquisition investigation has been completed.

32 Reconciliation of movement in shareholders’ deficit

Ordinary Preference Profit andshare share loss

capital capital account Total

£000 £000 £000 £000GroupLoss for the year . . . . . . . . . . . . . . . . . . . . . . . — — (44,192) (44,192)Actuarial pension scheme gain . . . . . . . . . . . . . . — — 3,085 3,085Effect of pension asset limit on above . . . . . . . . — — (2,616) (2,616)Deferred tax on pension gain . . . . . . . . . . . . . . — — (863) (863)Deferred tax on effect of pension asset limit . . . — — 732 732Deferred tax change in rate . . . . . . . . . . . . . . . . — — (5) (5)Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Foreign exchange differences . . . . . . . . . . . . . . . — (3,387) 12,672 9,285

Net increase in shareholders’ deficit . . . . . . . . . . — (3,387) (31,187) (34,574)Shareholders’ deficit as at 31 December 2009 . . . 20 99,761 (309,020) (209,239)

Shareholders’ deficit as at 31 December 2010 . . . 20 96,374 (340,207) (243,813)

F-36


NOTES (Continued)


32 Reconciliation of movement in shareholders’ deficit (Continued)

£000

CompanyProfit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,309Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Foreign exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,008)

Net increase in shareholders’ funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,301Shareholders’ funds as at 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163,507Shareholders’ funds as at 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,808

33 Post balance sheet events

There were no disclosable post balance sheet events prior to the date of approval of these financialstatements.

F-37

3MAY201116221953

INDEPENDENT AUDITOR’S REPORT

St James’ Square

Manchester

M2 6DS

United Kingdom

Independent auditors’ report to the members of Odeon & UCI Cinemas Group Limited

We have audited the financial statements of Odeon & UCI Cinemas Group Limited for the yearended 31 December 2009 set out on pages F-40 to F-73. The financial reporting framework that hasbeen applied in their preparation is applicable law and UK Accounting Standards (UK GenerallyAccepted Accounting Practice).

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 ofPart 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to theCompany’s members those matters we are required to state to them in an auditors’ report and for noother purpose. To the fullest extent permitted by law, we do not accept or assume responsibility toanyone other than the Company and the Company’s members, as a body, for our audit work, for thisreport, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Directors’ Responsibilities Statement, the directors are responsiblefor the preparation of the financial statements and for being satisfied that they give a true and fairview. Our responsibility is to audit the financial statements in accordance with applicable law andInternational Standards on Auditing (UK and Ireland). Those standards require us to comply with theAuditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB’s web-site atwww.frc.org.uk/apb/scope/UKNP.

Opinion on financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the Group’s and the parent company’s affairs as at31 December 2009 and of the Group’s loss for the year then ended;

• have been properly prepared in accordance with UK Generally Accepted Accounting Practice;and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors’ Report for the financial year for which thefinancial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate forour audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records andreturns; or

F-38

INDEPENDENT AUDITOR’S REPORT (Continued)

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Jonathan Hurst (Senior Statutory Auditor)For and on behalf of KPMG LLP, Statutory AuditorChartered AccountantsSt James’ SquareManchesterM2 6DS

F-39




Notes 2009 2008

£000 £000Turnover: Group and share of joint ventures . . . . . . . . . . . . . . . . . 662,614 563,087Less: share of joint ventures turnover . . . . . . . . . . . . . . . . . . . . . . (21,687) (14,986)



Operating profit/(loss), analysed as:Before exceptional items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,080 5,582Net operating expenses—exceptional costs . . . . . . . . . . . . . . . . . . . 3, 6 (23,520) (6,333)

3 (15,440) (751)

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 (15,440) (751)Share of operating (loss)/profit of joint ventures . . . . . . . . . . . . . . . (267) 253

Operating loss including joint ventures . . . . . . . . . . . . . . . . . . . . . . (15,707) (498)Loss on disposal of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 (3,388) (2,021)

Loss on ordinary activities before interest and taxation . . . . . . . . . (19,095) (2,519)Interest receivable from related parties . . . . . . . . . . . . . . . . . . . . . 30 2,962 3,842Interest payable and similar charges . . . . . . . . . . . . . . . . . . . . . . . . 8 (60,469) (56,452)Other finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 (720) (454)

Loss on ordinary activities before taxation . . . . . . . . . . . . . . . . . . . 3–9 (77,322) (55,583)Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (2,128) 2,180



F-40




2009 2008

£000 £000Loss for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79,450) (53,403)Actuarial pension scheme gain/(loss) recognised (note 27) . . . . . . . . . . . . . . 1,410 (6,801)Deferred tax on actuarial pension gain/(loss) . . . . . . . . . . . . . . . . . . . . . . . (395) 1,904Foreign exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,266 (52,397)



F-41



at 31 December 2009

Notes 2009 2008


Share of gross assets . . . . . . . . . . . . . 14 8,440 9,172Share of gross liabilities . . . . . . . . . . . 14 (7,563) (8,344)Other costs . . . . . . . . . . . . . . . . . . . . 14 700 698

1,577 1,526



one year . . . . . . . . . . . . . . . . . . . . . . 18 (133,247) (124,114)





Pension liability . . . . . . . . . . . . . . . . . . 27 (2,071) (4,045)





J P MasonDirector

F-42



at 31 December 2009

Notes 2009 2008



one year . . . . . . . . . . . . . . . . . . . . . . 18 (100) (90)




Net assets . . . . . . . . . . . . . . . . . . . . . . 163,507 168,015




J P MasonDirector

Company registered number: 05194610

F-43




Note 2009 2008

£000 £000Net cash inflow from operating activities . . . . . . . . . . . . . . . . . . . . 25(a) 57,967 56,462

Returns on investments and servicing of financeInterest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,278) (25,877)

Net cash outflow from returns on investments and servicing offinance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,278) (25,877)

Taxation paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (71) (112)

Capital expenditure and financial investmentPurchase of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . (35,201) (42,650)Sale of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5,406Net cash outflow from capital expenditure and financial investment (35,201) (37,244)

Acquisitions and disposalsPurchase of subsidiaries and joint ventures . . . . . . . . . . . . . . . . . . . 14 (449) (1,994)Net cash acquired with subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 31 — 28

Net cash outflow from acquisitions and disposals . . . . . . . . . . . . . . (449) (1,966)

Equity dividends paid to shareholders . . . . . . . . . . . . . . . . . . . . . . — —Net cash outflow before financing . . . . . . . . . . . . . . . . . . . . . . . . . (3,032) (8,737)

FinancingBank loans and overdrafts repaid . . . . . . . . . . . . . . . . . . . . . . . . . . (2,808) (774)New bank loans drawn-down . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,022 16,625Bank loan arrangement fees paid . . . . . . . . . . . . . . . . . . . . . . . . . . (21) (164)Other finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 (701)

Net cash inflow from financing . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,569 14,986

Increase in cash in the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25(b) 3,537 6,249

F-44


NOTES



The following accounting policies have been applied consistently in dealing with items which areconsidered material in relation to the financial statements, except as noted below.

The following amendments to standards have been adopted in these financial statements for thefirst time:

The amendment to FRS 8 Related Parties Disclosures (mandatory for periods beginning on/after6 April 2008). The amendment has the effect that only wholly-owned subsidiaries are exempt fromdisclosure of intra-group transactions and there is no longer a disclosure exemption available in theparent company’s own financial statements.

The amendment to FRS 21 Events after the balance sheet date (mandatory for periods starting on/after 1 January 2009) to confirm no obligation exists at the balance sheet date for dividends declaredafter that date.

The following new and amendments to standards are not yet effective:

• Amendment to FRS 25 Financial Instruments: Presentation (mandatory for periods starting on/after 1 January 2010).







The term of the facility agreement is 7 years for the earliest debt tranche to be fully repaid, withother tranches having longer periods of availability. Mandatory part-repayments of the debt arescheduled and planned-for each year. The repayments due in the 12 months after the balance sheetdate total approximately £4 million.

The Group also has shareholder funding in place that is subordinated and therefore longer-term innature than the bank debt.

The Group has a substantial cash balance available to meet working capital requirements, despiteinvestment in the estate having taken place. Furthermore, there are approximately £45 million ofcommitted unutilised bank facility funds available, including a substantial revolving credit facility thatwas undrawn at year-end and throughout the period up to signature of this report and financialstatements.


The consolidated financial statements include the financial statements of the Company and itssubsidiary undertakings made up to 31 December 2009. The acquisition method of accounting has beenadopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the year

F-45


NOTES (Continued)



are included in the consolidated profit and loss account from the date of acquisition or up to the dateof disposal. A joint venture is an undertaking in which the Group has a long-term interest and overwhich it exercises joint control. The Group’s share of the profits less losses of joint ventures is includedin the consolidated profit and loss account and its interest in their net assets is included in investmentsin the consolidated balance sheet.

Under section 408 of the Companies Act 2006 the Company is exempt from the requirement topresent its own profit and loss account. The amount of the profit/(loss) dealt with in the Companyfinancial statements is disclosed in note 24 to these financial statements.

Turnover


Goodwill



Depreciation is provided on the cost or revaluation of tangible fixed assets on a straight-line basisover their estimated useful lives as follows:







Foreign currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of thetransaction. Assets and liabilities denominated in foreign currencies are translated using the contractedrate or the rate of exchange ruling at the balance sheet date. The foreign currency assets and liabilitiesof subsidiary undertakings are translated at the closing exchange rates. Profit and loss accounts of suchundertakings are consolidated at the monthly average rates of exchange during the year. Gains andlosses arising on these translations are generally taken to reserves: they are taken through the profitand loss account for the year only to the extent that translation gains or losses in relation to foreigncurrency assets are exceeded by those on foreign currency borrowings, excluding borrowings in place aslong term strategic funding which are not expected to be settled without replacement.

F-46


NOTES (Continued)






(b) where the instrument will or may be settled in the Company’s own equity instruments, it iseither a non-derivative that includes no obligation to deliver a variable number of theCompany’s own equity instruments or is a derivative that will be settled by the Company’sexchanging a fixed amount of cash or other financial assets for a fixed number of its ownequity instruments.


Investments


Asset Impairment

The carrying amounts of the Group’s assets are reviewed for impairment when events or changesin circumstances indicate that the carrying amount of the fixed asset may not be recoverable. If anysuch indication exists, the asset’s recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or its income-generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit and lossaccount unless it arises on a previously revalued fixed asset. An impairment loss on a revalued fixedasset is recognised in the profit and loss account if it is caused by a clear consumption of economicbenefits. Otherwise impairments are recognised in the statement of total recognised gains and lossesuntil the carrying amount reaches the asset’s depreciated historic cost.

Impairment losses recognised in respect of income-generating units are allocated first to reducethe carrying amount of any goodwill allocated to income-generating units, then to any capitalisedintangible asset and finally to the carrying amount of the tangible assets in the unit on a pro rata ormore appropriate basis. An income-generating unit is the smallest identifiable group of assets thatgenerates income that is largely independent of the income streams from other assets or groups ofassets.

Calculation of recoverable amount

The recoverable amount of fixed assets is the greater of their net realisable value and value in use.In assessing value in use, the expected future cash flows are discounted to their present value using apre-tax discount rate that reflects current market assessments of the rate of return expected on anequally risky investment. For an asset that does not generate largely independent income streams, therecoverable amount is determined for the income-generating unit to which the asset belongs.

Reversals of impairment

An impairment loss is reversed on intangible assets and goodwill only if subsequent external eventsreverse the effect of the original event which caused the recognition of the impairment or the lossarose on an intangible asset with a readily ascertainable market value and that market value hasincreased above the impaired carrying amount. For other fixed assets where the recoverable amount

F-47


NOTES (Continued)



increases as a result of a change in economic conditions or in the expected use of the asset then theresultant reversal of the impairment loss should be recognised in the current period.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceedthe carrying amount that would have been determined, net of depreciation or amortisation, if noimpairment loss had been recognised.

Stocks


Leases


Pre-opening costs


Taxation





Loan notes

Loan notes are held in the balance sheet at their issued amount less directly attributable issuecosts plus the accrued finance charge which has arisen on them. The finance charge accrues at aconstant rate over the term of the notes.

F-48


NOTES (Continued)



Pensions

The Group operates a defined contribution pension scheme. The assets of the scheme are heldseparately from those of the Group in an independently administered fund. The amount charged to theprofit and loss account represents the contributions payable to the scheme in respect of the accountingperiod.

The Group also operates two pension schemes providing benefits based on final pensionable pay.The assets of the schemes are held separately from those of the Group.

Pension scheme assets are measured using market values. For quoted securities the current bidprice is taken as market value. Pension scheme liabilities are measured using a projected unit methodand discounted at the current rate of return on a high quality corporate bond of equivalent term andcurrency to the liability.


Derivatives




2 Turnover



2009 2008


£000 £000 £000 £000 £000 £000UK . . . . . . . . . . . . . . . . . . 314,224 — 314,224 291,497 — 291,497Continental Europe &

Ireland . . . . . . . . . . . . . . 326,703 — 326,703 256,604 — 256,604

Group turnover . . . . . . . . . 640,927 — 640,927 548,101 — 548,101

F-49


NOTES (Continued)



2009 2008


£000 £000 £000 £000 £000 £000Group turnover . . . . . . . . . 640,927 — 640,927 548,101 — 548,101Cost of sales . . . . . . . . . . . . (224,793) — (224,793) (181,726) — (181,726)

Gross profit . . . . . . . . . . . . 416,134 — 416,134 366,375 — 366,375Net operating expenses . . . . (431,574) — (431,574) (367,126) — (367,126)

Group operating loss . . . . . (15,440) (15,440) (751) — (751)Share of joint ventures’

operating (loss)/profit . . . (267) — (267) 253 — 253

(15,707) — (15,707) (498) — (498)

The total figures for continuing operations in 2009 include the following amounts relating toacquisitions: turnover £nil (2008: £2,591,000), cost of sales £nil (2008: £997,000) and net operatingexpenses £nil (2008: £1,601,000).

The directors have concluded that the profit and loss accounts of the acquisitions are not materialto the Group as a whole. Therefore, the disclosure of separate full profit and loss accounts for theacquisitions (defined in FRS 6) has not been made.

Net operating expenses in 2009 include exceptional costs of £23,520,000 (2008: £6,333,000) whichare explained in note 6.


2009 2008


2,339 2,115


Number of directors

2009 2008



F-50


NOTES (Continued)



2009 2008

£000 £000Loss on ordinary activities before taxation is stated after charging/(crediting)Depreciation—Owned assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,638 43,018—Finance lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,808 1,472Amortisation of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 9Amortisation of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,299 10,452Amounts receivable by the auditors:—Audit of Group financial statements pursuant to legislation . . . . . . . . . . . 19 16—Audit of the parent company financial statements pursuant to legislation . 54 53—Audit of financial statements of subsidiaries pursuant to legislation . . . . . 266 233—Other services relating to taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 202—All other services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 —Property rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,598) (1,881)Lease exit premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,500) (1,018)Rentals under operating leases—property . . . . . . . . . . . . . . . . . . . . . . . . . . 107,330 93,611

Amounts paid to the Company’s auditor and their associates in respect of services to theCompany, other than the audit of the Company’s financial statements, have not been disclosed as theinformation is required instead to be disclosed on a consolidated basis.


Exceptional costs

The exceptional costs in the current year represent provisions made against amounts receivablefrom subsidiaries of Odeon Property Group LLP (the ‘‘Propcos’’), which are related parties.

As described in note 30, certain property interests were sold by Group companies in 2007 to thePropcos, the consideration was partly settled in cash during 2007 and the remaining balance was leftoutstanding on account, accruing interest at LIBOR plus 2.375%.

In view of current valuations in the property market, the directors have considered therecoverability of the amounts receivable from the Propcos and concluded that it is prudent to reducetheir carrying values whilst market property valuations remain below historic levels. The provisionagainst the receivables is shown as an exceptional item.

The tax effect of the exceptional costs in the current year was £nil.

The exceptional costs in the prior year primarily represent one-off property-related costs and alsoone-off costs associated with integrating acquired businesses and ceasing unprofitable operations. Thetax effect of the exceptional costs in aggregate was £nil.



In the current year, a number of freehold and leasehold property interests were disposed of. Theloss associated with these disposals was £3,388,000.

In the prior year, a number of freehold and leasehold property interests were disposed of. The lossassociated with these disposals was £2,021,000.

F-51


NOTES (Continued)



The average number of persons employed by the Group (including directors) during the periodwas as follows:

Number of employees

2009 2008


9,010 8,837


2009 2008

£000 £000Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,020 88,265Social security costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,021 10,261Pension costs—regular costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518 1,255

113,559 99,781


2009 2008

£000 £000Interest payable on bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,902 21,481Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,683 26,992Amortisation of issue costs (on bank loans only) . . . . . . . . . . . . . . . . . . . . . 1,608 1,616Unwinding of discount on provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,317 2,665Other financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,823 3,590Share of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 108

60,469 56,452



2009 2008

£000 £000Expected return on pension scheme assets (note 27) . . . . . . . . . . . . . . . . . . (2,233) (2,638)Interest on pension scheme liabilities (note 27) . . . . . . . . . . . . . . . . . . . . . 2,415 2,429Other finance charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 538 663

720 454

F-52


NOTES (Continued)


10 Taxation


2009 2008

£000 £000 £000 £000UK corporation taxCurrent tax on income for the year . . . . . . . . . . 3,694 101Overseas taxCurrent tax on income for the year . . . . . . . . . . 1,637 (506)

Current tax on income for the year . . . . . . . . . . 5,331 (405)Share of joint ventures’ current tax . . . . . . . . . . (5) 56

Total current tax . . . . . . . . . . . . . . . . . . . . . . . . 5,326 (349)Deferred taxOrigination/reversal of timing differences . . . . . . (3,198) (1,831)

Deferred tax for the year . . . . . . . . . . . . . . . . . (3,198) (1,831)Share of joint ventures’ deferred tax . . . . . . . . . — —

Total deferred tax . . . . . . . . . . . . . . . . . . . . . . . (3,198) (1,831)

Tax on loss on ordinary activities . . . . . . . . . . . . 2,128 (2,180)

Factors affecting the tax charge/(credit) for the current year

The current tax charge/(credit) for the year is higher (2008: lower) than the standard rate ofcorporation tax in the UK, 28.0% (2008: 28.5%). The differences are explained below.

2009 2008


Current tax at 28.0% (2008: 28.5%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,650) (15,841)

Effects of:Expenses not deductible for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . 21,588 13,346Non tax effected expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 620Capital allowances for period (in excess of)/less than depreciation . . . . . . . . (991) 582Other timing differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,246 (1,201)Losses not utilised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,846 4,155Provision for local taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753 391Overseas rate differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (134) (214)Capital gains greater than/(less than) book value . . . . . . . . . . . . . . . . . . . . 260 (207)Group relief surrender for no consideration . . . . . . . . . . . . . . . . . . . . . . . . (1,438) (930)Adjustments in respect of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 846 (1,050)

Total current tax charge/(credit) (see above) . . . . . . . . . . . . . . . . . . . . . . . . 5,326 (349)

F-53


NOTES (Continued)


11 Dividends


2009 2008

£000 £000Dividends in respect of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

— —

The aggregate amount of dividends proposed and recognised as liabilities as at the year-end is £nil(2008: £nil). No dividends have been declared post year-end (2008: none).



£000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,872 38 190,910Acquisitions in prior periods (see note 31) . . . . . . . . . . . . . . . — — —Fully amortised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (12) (12)Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,255) (3) (4,258)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,617 23 186,640

AmortisationAt beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,177 14 37,191Charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,299 7 10,306Fully amortised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (12) (12)Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (618) (2) (620)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,858 7 46,865


At 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,695 24 153,719


Impairment reviews have been performed in respect of the acquisitions made in prior years. Therecoverable amount has been assessed in accordance with FRS 10.


The directors consider each acquisition separately for the purpose of determining the amortisationperiod of any goodwill that arises. Goodwill is amortised over 20 years on all acquisitions in thesefinancial statements, representing the directors’ best estimate of the useful economic life of thegoodwill.

F-54


NOTES (Continued)





£000 £000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . 320,244 199,096 3,009 522,349Acquisition in the prior year (see note 31) . . . . — — — —Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,409 20,509 12,514 37,432Reclassifications . . . . . . . . . . . . . . . . . . . . . . . 5,086 5,390 (10,476) —Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,800) (2,576) — (9,376)Exchange differences . . . . . . . . . . . . . . . . . . . (7,772) (6,498) (59) (14,329)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . 315,167 215,921 4,988 536,076

DepreciationAt beginning of year . . . . . . . . . . . . . . . . . . . . 53,114 90,200 — 143,314Charge for the year . . . . . . . . . . . . . . . . . . . . 18,135 31,311 — 49,446On disposals . . . . . . . . . . . . . . . . . . . . . . . . . . (4,057) (2,307) — (6,364)Exchange differences . . . . . . . . . . . . . . . . . . . (1,272) (3,531) — (4,803)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . 65,920 115,673 — 181,593


At 31 December 2008 . . . . . . . . . . . . . . . . . . . 267,130 108,896 3,009 379,035


2009 2008


249,247 267,130

Included in the total net book value of land and buildings is £16,713,000 (2008: £17,289,000) inrespect of assets held under finance leases. Depreciation for the year on these assets was £1,808,000(2008: £1,472,000).

In accordance with FRS 11, a review was performed to establish whether or not there were anyindications of impairment to the carrying amount of tangible fixed assets. The review concluded thatthere were no such indications.

Company

The Company did not hold any tangible fixed assets in the current or prior year.

F-55


NOTES (Continued)



Group

Interests injoint


£000 £000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . . 698 460 529 1,687Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 275 172 449

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . 700 735 701 2,136

Share of post acquisition reservesAt beginning of year . . . . . . . . . . . . . . . . . . . . . — (161) — (161)Retained loss . . . . . . . . . . . . . . . . . . . . . . . . . . — (398) — (398)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . — (559) — (559)


At 31 December 2008 . . . . . . . . . . . . . . . . . . . . 698 299 529 1,526

The total of the Group’s loss before taxation from interests in joint ventures was £403,000 (2008:£145,000 profit).

Investmentsin group


£000At beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,700Additions in the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,759)

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,941


The principal undertakings in which the Company had a direct or indirect interest at the year-endare shown below.

F-56


NOTES (Continued)





Cicero Holdings Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyCicero Investments Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyCicero Acquisitions Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyOdeon Cinemas Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Operation of cinemasABC Cinemas Limited . . . . . . . . . . . . . . . . . . . . Great Britain 100% owned Operation of cinemasBookit Limited . . . . . . . . . . . . . . . . . . . . . . . . . Great Britain 100% owned Credit and debit card

transaction processingLucius Holdings Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyLucius Investments Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding companyUnited Cinemas International Acquisitions Limited Great Britain 100% owned Holding companyUnited Cinemas International Multiplex BV . . . . . Netherlands 100% owned Holding companyUnited Cinemas International (UK) Limited . . . . . Great Britain 100% owned Operation of cinemasOdeon and Sky Filmworks Ltd . . . . . . . . . . . . . . Great Britain 50% owned Film distributionDigital Cinema Media Limited . . . . . . . . . . . . . . Great Britain 50% owned Screen advertisingCompania de Iniciativas y Espectaculos SA Spain 100% owned Operation of cinemas

(Cinesa) . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cineparque y Espectaculos SA . . . . . . . . . . . . . . Spain 100% owned Operation of cinemasMulticines y Espectaculos SA . . . . . . . . . . . . . . . Spain 100% owned Operation of cinemasCinema International Corporation Lda . . . . . . . . . Portugal 100% owned Operation of cinemasUnited Cinemas International Multiplex GmbH . . . Germany 100% owned Operation of cinemasKino Friedrichshain Betriebsgesellschaft mbH . . . . Germany 100% owned Operation of cinemasKino Gera Betriebsgesellschaft mbH . . . . . . . . . . Germany 100% owned Operation of cinemasKino Lausitzpark Betriebsgesellschaft mbH . . . . . . Germany 100% owned Operation of cinemasUCI Kinoplex GmbH . . . . . . . . . . . . . . . . . . . . Germany 100% owned Operation of cinemasUnited Cinemas International Multiplex Austria 100% owned Operation of cinemas

Gesellschaft mbH . . . . . . . . . . . . . . . . . . . . . .UCI Italia SpA . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Nord Ovest Srl . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Sud Srl . . . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Nord Srl . . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Centro Srl . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Nord Est Srl . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemas

15 Stocks

Group Company Group Company2009 2008 2009 2008

£000 £000 £000 £000Goods for resale . . . . . . . . . . . . . . . . . . . . . . . . 4,462 3,769 — —




34,734 39,474 2 189

F-57


NOTES (Continued)




£000 £000 £000 £000Other debtors . . . . . . . . . . . . . . . . . . . . . . . . . . 10,416 10,320 — —Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 501,727 449,269Deferred tax (note 22) . . . . . . . . . . . . . . . . . . . 3,566 — — —Amounts owed by group undertaking . . . . . . . . . — — 45,558 45,670Amounts owed by related parties . . . . . . . . . . . . 29,998 50,556 29,998 50,556

43,980 60,876 577,283 545,495

The following unsecured discounted loan notes receivable from group undertakings were due at31 December 2009:

Par value £557.9mBook value at 31 December 2009 was £239.6mDiscount rate 16.125%. Final redemption date 26 August 2015

Par value E636.6mBook value at 31 December 2009 was A266.4mDiscount rate 16.125%. Final redemption date 28 October 2015

The following loan note, including accrued interest, receivable from a group undertaking was dueat 31 December 2009:




£000 £000 £000 £000Bank loans and overdrafts . . . . . . . . . . . . . . . . . 4,000 2,246 — —Trade creditors . . . . . . . . . . . . . . . . . . . . . . . . . 34,266 27,192 — —Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . 3,220 2,971 — —Other creditors including taxation and social


133,247 124,114 100 90

Interest was payable on the bank loans at LIBOR or EURIBOR plus a margin of between 1.50%and 2.88% (2008: between 1.75% and 2.88%) plus costs of between nil and 0.01%. Bank loans andoverdrafts due within one year are stated net of £nil (2008: £nil) of unamortised issue costs.

F-58


NOTES (Continued)




£000 £000 £000 £000Bank loans and overdrafts . . . . . . . . . . . . . . . . . 286,784 288,203 — —Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . 31,526 31,784 — —Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321,847 301,986 321,847 301,986Other creditors and accruals . . . . . . . . . . . . . . . 882 936 — —Amounts owed to group undertakings . . . . . . . . — — 202,857 192,378

641,039 622,909 524,704 494,364




The following loan notes, including accrued interest, issued by the Company to a parent company,Monterey Capital III Sarl during 2005, remained outstanding at 31 December 2009:


Par value E26.2mIssued for A26.2mInterest rate 16.1%; amended to 11.0% in August 2007Book value at 31 December 2009 was A46.5m

The following loan notes, including accrued interest, issued by the Company to its immediateparent, Odeon and UCI Cinemas Holdings Limited during 2007, remained outstanding at 31 December2009. These loan notes replaced loan notes of equivalent value previously held by a related party(note 30).



F-59


NOTES (Continued)




Group 2009 2008

£000 £000Within 1 year, or on demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,220 5,217Within one to two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,703 4,138Within two to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,157 18,838Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565,107 607,393


647,377 627,190

Finance leases


Group 2009 2008

£000 £000Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,220 2,971Within one to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,863 9,610Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,663 22,174



Short-term debtors and creditors are excluded from the disclosures relating to derivatives andother financial instruments. There is no material difference between the fair value of financial assetsand liabilities and the carrying value in the balance sheet.

Financial assets

Financial assets comprise cash at bank and in hand and are held in Sterling and Euro. Interest isearned on cash at bank at floating interest rates linked to short-term bank deposit rates.


The Group borrows in the desired currencies at both fixed and floating rates of interest. For bankborrowings interest rate hedging contracts (swaps) are used to generate the desired interest profile tomanage the Group’s exposure to interest rate fluctuations. The Group’s policy is to maintain fixedinterest rates, by means of hedging contracts, covering between 50% and 100% of the senior bank debtdrawn. At the year-end approximately 61% of the Group’s bank borrowings were at fixed rates aftertaking into account interest rate swaps. For Sterling denominated loans the fixed rate was 6.07% plus amargin ranging from 1.5% to 2.88% and for Euro denominated loans a fixed rate of 4.63% plus amargin of 1.75% to 2.88%.


As at 31 December 2009 the total bank facilities included a £45,000,000 revolving credit facilityand a £25,000,000 acquisition facility. Of these facilities, £45,200,000 remained available at the balancesheet date. The maturity date of the revolving credit facility is April 2014.


F-60


NOTES (Continued)



Leaseprovisions

& other

£000At the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,104Arising on acquisitions (note 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Utilised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,456)Unwinding of discount on provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,317(Credited)/Charged to the profit and loss account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,902)

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,063


22 Deferred tax

The deferred tax asset recognised (note 17) is:


£000 £000 £000 £000Accelerated capital allowances . . . . . . . . . . . . . . 3,566 — — —Other timing differences . . . . . . . . . . . . . . . . . . — — — —Un-utilised losses . . . . . . . . . . . . . . . . . . . . . . . — — — —

3,566 — — —

The potential amounts of deferred tax asset not recognised are:


£000 £000 £000 £000Accelerated capital allowances . . . . . . . . . . . . . . 7,899 5,352 — —Other timing differences . . . . . . . . . . . . . . . . . . 12,722 9,550 — —Un-utilised losses . . . . . . . . . . . . . . . . . . . . . . . 81,988 87,340 — —

102,609 102,242 — —

F-61


NOTES (Continued)



2009 2008

£000 £000Authorised9,947 (2008: 9,947) A Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 10 101,328 (2008: 1,328) B Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 1 110,000 (2008: 10,000) Ordinary shares of A1 each . . . . . . . . . . . . . . . . . . . . 9 1040,012,500 (2008: 40,012,500) preference shares of £1 each . . . . . . . . . . . . . 40,013 40,01371,990,000 (2008: 71,990,000) preference shares of A1 each . . . . . . . . . . . . . 64,796 69,690

104,829 109,724


99,781 104,619



Income





F-62


NOTES (Continued)



Voting rights




Redemption


Capital


(a) first, to the extent that the holders of the Preference Shares have not received the preferredparticipation of each Preference Share held by them, in paying to the holders of thePreference Shares the amount by which the aggregate amount previously paid by theCompany to the holders of the Preference Shares (in that capacity) is less than the preferredparticipation of each Preference Share held by them and if the surplus is less than theaggregate preferred participation of all of the Preference Shares, the surplus shall be appliedamong the holders of the Preference Shares pro rata to the respective preferred participationsof the Preference Shares held by them; and


24 Reserves

Profit andloss

Group account

£000At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (244,851)Loss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79,450)Actuarial pension scheme gain recognised (note 27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,410Deferred tax on pension gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (395)Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,266Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (309,020)

F-63


NOTES (Continued)


24 Reserves (Continued)

Profit andloss

Company account

£000At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,396Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,306Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,976)

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,726



2009 2008

£000 £000Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,440) (751)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,446 44,490Amortisation of goodwill and intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . 10,306 10,461Increase in stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (693) (1,042)Decrease/(Increase) in debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,286 (6,957)Decrease in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,507) (6,313)Increase in creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,569 16,574


(b) Net debt



£000 £000 £000 £000 £000Net cash:Cash at bank and in hand . . . . . 58,541 3,537 — (1,908) 60,170Debt:Debt falling due within one year (2,246) (1,754) — — (4,000)Debt falling due after more than

one year . . . . . . . . . . . . . . . . (590,189) (4,439) (33,291) 19,288 (608,631)Finance leases . . . . . . . . . . . . . (34,755) (376) — 385 (34,746)

Net debt . . . . . . . . . . . . . . . . . (568,649) (3,032) (33,291) 17,765 (587,207)

Non-cash movements are primarily finance charges accrued on the loan notes and the write-off ofunamortised issue costs.

F-64


NOTES (Continued)




2009 2008

£000 £000Increase in net cash in the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,537 6,249Cash inflow from increase in debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,569) (14,985)Non cash movement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,291) (30,152)Translation difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,765 (64,812)




Group 2009 2008




Land and buildings

Group 2009 2008

£000 £000Operating lease which expire:Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,288 1,002In two to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,100 7,713Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,212 104,137

118,600 112,852

The Company had no capital or operating lease commitments at 31 December 2009 or at thepreceding year-end.

27 Pension schemes

The Group operates or participates in two defined benefit schemes (the ABC Cinemas LimitedPension Scheme (the ‘‘ABC plan’’) and the Optima 2 Pension Scheme (the ‘‘Optima 2 plan’’)) and onedefined contribution scheme (the Odeon DC Stakeholder Pension Scheme). Assets of the schemes areheld separately from those of the Group in independently administered funds.


Both the ABC plan and the Optima 2 plan are closed to new members. The ABC plan is closed tofuture accrual from 1 November 2009. The Optima 2 plan is closed to future accrual from 1 January2009. The latest full actuarial valuation for the ABC plan was carried out at 30 April 2009 and wasupdated for FRS 17 purposes to 31 December 2009 by a qualified independent actuary. The latest full

F-65


NOTES (Continued)



actuarial valuation for the Optima 2 plan was carried out at 31 December 2006 and was updated forFRS 17 purposes to 31 December 2009 by a qualified independent actuary.


2009 2008 2007

ABC Optima 2 ABC Optima 2 ABC Optima 2Plan Plan Plan Plan Plan Plan


payment and deferred pensioners:—pre 6.4.1997 accrual . . . . . . . . . . 2.4 2.1 2.3 2.0 2.7 2.1—post 6.4.1997 accrual . . . . . . . . . . 3.1 3.1 2.8 2.8 3.2 3.2Discount rate applied to scheme



For a member aged 55 in 2009, the assumptions are that they will live on average for a further22.3 years after retirement at 65 if they are male and for a further 24.0 years after retirement if theyare female.

The pension cost relating to the defined benefit schemes is assessed in accordance with the adviceof independent qualified actuaries using the projected unit method. Under the project unit method thecurrent service cost will increase as members of this scheme approach retirement. As both the Optima2 plan and ABC plan are closed to new members, it is expected that the current service cost willincrease as a percentage of earnings for those employees who participate in the plans, provided thatthe assumptions underlying the valuation are borne out in practice. For the year, contributions weremade to the Optima 2 plan at a rate of 0.5% of pensionable salaries. For the period until 31 October2009, contributions were made to the ABC plan at a rate of 24.5% of pensionable salaries, thereafternil. In addition, the Group made special deficit reduction contributions of £728,000 (Optima 2 plan)and £702,000 (ABC plan). These rates are subject to review at future actuarial valuations.



2009 2008 2007



% £000 £000 £000 % £000 £000 £000 % £000 £000 £000

Equities . . . . . . 8.25 6,300 15,964 22,264 7.75 6,022 14,614 20,636 8 8,862 18,817 27,679Bonds . . . . . . . 5.5 3,572 — 3,572 5.5 3,018 — 3,018 4.5-5 3,111 2,371 5,482Gilts . . . . . . . . 4.5 10,654 5,136 15,790 4.0 9,250 2,371 11,621 4.5 8,292 — 8,292Other . . . . . . . 0.5 215 92 307 2.5 215 79 294 6 185 130 315

Total . . . . . . . . 20,741 21,192 41,933 18,505 17,064 35,569 20,450 21,318 41,768

The Group employs a building block approach in determining the long-term rate of return onpension plan assets. Historical markets are studied and assets with higher volatility are assumed to

F-66


NOTES (Continued)



generate higher returns consistent with widely accepted capital market principles. The assumedlong-term rate of return on each asset class is set out within this note. The overall expected rate ofreturn on assets is then derived by aggregating the expected return for each asset class over the actualasset allocation.


2009 2008 2007


£000 £000 £000 £000 £000 £000 £000 £000 £000


liabilities . . . . . . . . . . . . . . . (20,350) (24,459) (44,809) (19,099) (22,087) (41,186) (19,929) (22,391) (42,320)

Surplus/(deficit) in the scheme-pension liability . . . . . . . . . . 391 (3,267) (2,876) (594) (5,023) (5,617) 521 (1,073) (552)

Related deferred tax (liabilities)/assets . . . . . . . . . . . . . . . . . (110) 915 805 166 1,406 1,572 (145) 300 155

Net pension surplus/(liability) . . . 281 (2,352) (2,071) (428) (3,617) (4,045) 376 (773) (397)


2009 2008


£000 £000 £000 £000 £000 £000Opening defined benefit

obligation . . . . . . . . . . . . . 19,099 22,087 41,186 19,929 22,391 42,320Current service cost . . . . . . . 120 16 136 152 381 533Interest cost . . . . . . . . . . . . . 1,109 1,306 2,415 1,130 1,299 2,429Contributions by scheme

participants . . . . . . . . . . . . 50 — 50 59 235 294Actuarial loss/(gain) on

scheme liabilities . . . . . . . . 812 1,834 2,646 (1,218) (1,579) (2,797)Net benefits paid out . . . . . . (840) (784) (1,624) (953) (640) (1,593)Past service cost . . . . . . . . . . — — — — — —

Closing defined benefitobligation . . . . . . . . . . . . . 20,350 24,459 44,809 19,099 22,087 41,186

F-67


NOTES (Continued)




2009 2008


£000 £000 £000 £000 £000 £000Opening fair value of scheme

assets . . . . . . . . . . . . . . . . 18,505 17,064 35,569 20,450 21,318 41,768Expected return on scheme

assets . . . . . . . . . . . . . . . . 1,000 1,233 2,233 1,250 1,388 2,638Actuarial gain/(loss) on

scheme assets . . . . . . . . . . 1,118 2,938 4,056 (3,247) (6,352) (9,599)Contributions by the

employer . . . . . . . . . . . . . 908 741 1,649 945 1,115 2,060Contributions by scheme

participants . . . . . . . . . . . . 50 — 50 59 235 294Net benefits paid out . . . . . . (840) (784) (1,624) (952) (640) (1,592)

Closing fair value of schemeassets . . . . . . . . . . . . . . . . 20,741 21,192 41,933 18,505 17,064 35,569

Upon recommendation from the actuaries, the Group has agreed to make additional annualcontributions to the ABC plan of £702,000 until 1 May 2010, increasing to £1,000,000 from then until30 April 2016, and additional annual contributions of £728,000 until 30 April 2012 to the Optima 2plan to reduce the deficit on the scheme.

A sensitivity analysis was performed by the actuaries to illustrate the impact on the surplus/deficitof a change in the inflation rate assumed. If an inflation rate of 3.6% per annum had been used for the2009 calculations, the ABC plan would have shown a deficit of £86,000 and the Optima 2 plan a deficitof £4,424,000.



2009 2008


£000 £000 £000 £000 £000 £000(Deficit)/surplus in scheme at

the beginning of the year . . (428) (3,617) (4,045) 376 (773) (397)Current service cost . . . . . . . (120) (16) (136) (152) (381) (533)Contributions paid . . . . . . . . 908 741 1,649 945 1,115 2,060Other finance (cost)/income . (109) (73) (182) 120 89 209Actuarial gain/(loss) . . . . . . . 306 1,104 1,410 (2,028) (4,773) (6,801)Deferred tax . . . . . . . . . . . . . (276) (491) (767) 311 1,106 1,417

Surplus/(deficit) in thescheme at end of year . . . . 281 (2,352) (2,071) (428) (3,617) (4,045)

F-68


NOTES (Continued)




2009 2008


£000 £000 £000 £000 £000 £000Current service cost and total

operating charge . . . . . . . . 120 16 136 152 381 533

Analysis of amounts included in other finance (cost)/income

2009 2008


£000 £000 £000 £000 £000 £000Expected return on pension

scheme assets . . . . . . . . . . 1,000 1,233 2,233 1,250 1,388 2,638Interest on pension scheme

liabilities . . . . . . . . . . . . . . (1,109) (1,306) (2,415) (1,130) (1,299) (2,429)

(109) (73) (182) 120 89 209


2009 2008


£000 £000 £000 £000 £000 £000Actual return less expected

return on pension schemeassets . . . . . . . . . . . . . . . . 1,118 2,938 4,056 (3,247) (6,352) (9,599)

Experience gains/(losses)arising on the schemeliabilities . . . . . . . . . . . . . . 365 34 399 (9) 7 (2)

Change in actuarialassumptions . . . . . . . . . . . (1,177) (1,868) (3,045) 1,228 1,572 2,800

Actuarial gain/(loss)recognised in statement oftotal recognised gains andlosses . . . . . . . . . . . . . . . . 306 1,104 1,410 (2,028) (4,773) (6,801)

F-69


NOTES (Continued)




ABC Plan

2009 2008 2007 2006 2005


actual return on scheme assets:Amount (£000s) . . . . . . . . . . . . . . . . . . . (1,118) (3,247) 56 (99) 1,317Percentage of year end scheme assets . . . (5.4%) (17.5%) 0.3% (0.6%) 8.5%


Amount (£000s) . . . . . . . . . . . . . . . . . . . 365 (9) 25 153 260Percentage of year end present value of

scheme liabilities . . . . . . . . . . . . . . . . . 1.8% (0.1%) 0.1% 0.7% 1.2%


Amount (£000s) . . . . . . . . . . . . . . . . . . . 306 (2,028) 1,662 1,225 549Percentage of year end present value of

scheme liabilities . . . . . . . . . . . . . . . . . 1.5% (10.6%) 8.3% 5.8% 2.5%

Optima 2 Plan

2009 2008 2007 2006 2005


actual return on scheme assets:Amount (£000s) . . . . . . . . . . . . . . . . . . . (2,938) (6,352) (1,373) 535 1,797Percentage of year end scheme assets . . . (13.9%) (37.2%) (6.4%) 3.0% 11.9%


Amount (£000s) . . . . . . . . . . . . . . . . . . . 34 7 (711) (16) (137)Percentage of year end present value of

scheme liabilities . . . . . . . . . . . . . . . . . 0.1% 0.0% (3.2%) (0.1%) (0.6%)


Amount (£000s) . . . . . . . . . . . . . . . . . . . 1,104 (4,773) 1,319 2,142 (1,287)Percentage of year end present value of

scheme liabilities . . . . . . . . . . . . . . . . . 4.5% (21.6%) 5.9% 9.0% (5.4%)


The pension charge in respect of the Odeon DC Stakeholder Pension Scheme is equal to thecontributions payable during the year ended 31 December 2009 of £1,132,000 (2008: £318,000). As at31 December 2009 there were £nil (2008: £nil) outstanding contributions to be made to the Odeon DCStakeholder Pension Scheme.


At 31 December 2009 Odeon and UCI Cinemas Group Ltd and certain group companies acted asguarantors under the terms of a £380m (2008: £396m) facility made available by a syndicate of banks

F-70


NOTES (Continued)


28 Contingent liabilities (Continued)

led by Barclays Capital and Mizuho Corporate Bank. Of the facility, £40m (2008: £53m) relates torental guarantees.





30 Related parties

The Company has taken advantage of the exemption granted by FRS 8, Related Party Disclosures,not to disclose transactions with group entities where 100% of the voting rights are controlled withinthe group.

Terra Firma Investments (GP) 2 Limited, acting as general partner of the six limited partnershipswhich constitute the Terra Firma Capital Partners II Fund, Terra Firma Capital Partners II LP-H, TFCPII Co-Investment 2 LP and TFCP II Co-Investment 2A LP (‘‘Terra Firma’’), has the ability to exercisea controlling influence over the Company through the holding of shares in a parent of the Company.The directors therefore consider it to be a related party.

Monterey Capital III Sarl (‘‘Monterey’’), a company registered in Luxembourg, was a parent of theCompany at 31 December 2009, and the directors therefore consider it to be a related party.Unsecured loan notes, including interest accrued, of £61,853,000 (2008: £58,589,000) were held byMonterey at 31 December 2009. Interest of £6,081,000 (2008: £5,098,000) in relation to these notes wascharged during the year.

Odeon and UCI Cinemas Holdings Ltd (‘‘Holdings’’) was the immediate parent of the Company at31 December 2009, and the directors therefore consider it to be a related party. Unsecured loan notes,including interest accrued, of £259,994,000 (2008: £243,397,000) were held by Holdings at 31 December2009. Interest of £25,602,000 (2008: £21,894,000) in relation to these notes was charged during the year.


The companies to which the freehold and leasehold properties were sold (the ‘‘Propcos’’) are listedbelow:


F-71


NOTES (Continued)



The total consideration for the properties sold, excluding VAT, was £178,750,000. The considerationwas partly settled during May 2007. The aggregate remaining balance due from the Propcos at31 December 2009 was £29,998,000 (2008: £50,556,000) (note 17), including interest and the effect of aprovision of £23,520,000 made against the balance due as at 31 December 2009, as described in note 6.The balance attracts interest at LIBOR plus a margin of 2.375%. Interest accrued during the year was£2,962,000 (2008: £3,842,000).

The relevant trading companies within the Group entered into lease contracts with the Propcos.The amount payable from the Group to the Propcos during the year was £10,862,000 (2008:£10,548,000). The terms of the leases are between 25 and 30 years.

31 Acquisitions

Fair values on acquisition

In September 2008, the Group acquired four cinemas previously operating under the Kinoplexbrand in Germany.

Estimatedfair value at31 December Revised fair

2008 Adjustments value

£000 £000 £000Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997 — 997Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 — 55Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 — 56Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 — 28Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,042) — (1,042)

Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 — 94

Goodwill at cost (note 12) . . . . . . . . . . . . . . . . . . . . . . . . —

94

Satisfied by:Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94Acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

94

A review identified no adjustments necessary to the estimated fair values which had been identifiedat the prior year-end.

F-72


NOTES (Continued)


32 Reconciliation of movement in shareholders’ deficit



£000 £000 £000 £000GroupLoss for the year . . . . . . . . . . . . . . . . . . . . . . . — — (79,450) (79,450)Actuarial pension scheme gain . . . . . . . . . . . . . . — — 1,410 1,410Deferred tax on pension gain . . . . . . . . . . . . . . — — (395) (395)Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Foreign exchange differences . . . . . . . . . . . . . . . (1) (4,837) 14,266 9,428

Net increase in shareholders’ deficit . . . . . . . . . . (1) (4,837) (64,169) (69,007)Shareholders’ deficit as at 31 December 2008 . . . 21 104,598 (244,851) (140,232)


£000

CompanyProfit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,306Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Foreign exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,814)

Net decrease in shareholders’ funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,508)Shareholders’ funds as at 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,015

Shareholders’ funds as at 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163,507


There were no disclosable post balance sheet events prior to the date of approval of these financialstatements.

F-73

3MAY201116221953

INDEPENDENT AUDITORS’ REPORT

St James’ Square

Manchester

M2 6DS

United Kingdom

Independent auditors’ report to the members of Odeon & UCI Cinemas Group Limited

We have audited the group and the parent company financial statements (‘‘the financialstatements’’) of Odeon & UCI Cinemas Group Limited for the year ended 31 December 2008 whichcomprise the Consolidated Profit and Loss Account, the Consolidated and Company Balance Sheets,the Consolidated Cash Flow Statement, the Consolidated Statement of Total Recognised Gains andLosses and the related notes. These financial statements have been prepared under the accountingpolicies set out therein.

This report is made solely to the company’s members, as a body, in accordance with section 235 ofthe Companies Act 1985. Our audit work has been undertaken so that we might state to the company’smembers those matters we are required to state to them in an auditor’s report and for no otherpurpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyoneother than the company and the company’s members as a body, for our audit work, for this report, orfor the opinions we have formed.

Respective responsibilities of directors and auditors

The directors’ responsibilities for preparing the financial statements in accordance with applicablelaw and UK Accounting Standards (UK Generally Accepted Accounting Practice) are set out in theStatement of Directors’ Responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal andregulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view andare properly prepared in accordance with the Companies Act 1985. We also report to you whether inour opinion the information given in the Directors’ Report is consistent with the financial statements.

In addition we report to you if, in our opinion, the company has not kept proper accountingrecords, if we have not received all the information and explanations we require for our audit, or ifinformation specified by law regarding directors’ remuneration and other transactions is not disclosed.

We read the Directors’ Report and consider the implications for our report if we become aware ofany apparent misstatements within it.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland)issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidencerelevant to the amounts and disclosures in the financial statements. It also includes an assessment ofthe significant estimates and judgments made by the directors in the preparation of the financialstatements, and of whether the accounting policies are appropriate to the company’s circumstances,consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations whichwe considered necessary in order to provide us with sufficient evidence to give reasonable assurancethat the financial statements are free from material misstatement, whether caused by fraud or otherirregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentationof information in the financial statements.

F-74

INDEPENDENT AUDITORS’ REPORT (Continued)

Opinion

In our opinion:

• the financial statements give a true and fair view, in accordance with UK Generally AcceptedAccounting Practice, of the state of the group’s and the parent company’s affairs as at31 December 2008 and of the group’s loss for the year then ended;

• the financial statements have been properly prepared in accordance with the Companies Act1985; and

• the information given in the Directors’ Report is consistent with the financial statements.

KPMG LLPChartered AccountantsRegistered Auditors

F-75




Notes 2008 2007

£000 £000Turnover: Group and share of joint ventures . . . . . . . . . . . . . . . . . 563,087 517,272Less: share of joint ventures turnover . . . . . . . . . . . . . . . . . . . . . . (14,986) (206)



Operating profit/(loss), analysed as:Before exceptional items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,582 22,890Net operating expenses—exceptional costs . . . . . . . . . . . . . . . . . . . 3, 6 (6,333) (32,863)Net operating expenses—exceptional income . . . . . . . . . . . . . . . . . 3, 6 — 1,761

3 (751) (8,212)

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 (751) (8,212)Share of operating profit/(loss) of joint ventures . . . . . . . . . . . . . . . 253 (250)

Operating loss including joint ventures . . . . . . . . . . . . . . . . . . . . . . (498) (8,462)(Loss)/profit on disposal of properties . . . . . . . . . . . . . . . . . . . . . . 6 (2,021) 21,771

(Loss)/profit on ordinary activities before interest and taxation . . . . (2,519) 13,309Interest receivable from related parties . . . . . . . . . . . . . . . . . . . . . 30 3,842 2,583Interest payable and similar charges . . . . . . . . . . . . . . . . . . . . . . . . 8 (56,452) (70,728)Other finance (costs)/income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 (454) 137

Loss on ordinary activities before taxation . . . . . . . . . . . . . . . . . . . 3–9 (55,583) (54,699)Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2,180 13,405



F-76




2008 2007

£000 £000Loss for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,403) (41,294)Actuarial pension scheme (loss)/gain recognised (note 27) . . . . . . . . . . . . . . (6,801) 2,981Deferred tax on actuarial pension (loss)/gain . . . . . . . . . . . . . . . . . . . . . . . 1,904 (1,215)Foreign exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,397) (9,043)



F-77



at 31 December 2008

Notes 2008 2007


Share of gross assets . . . . . . . . . . . . . 14 9,172 692Share of gross liabilities . . . . . . . . . . . 14 (8,344) (692)Other costs . . . . . . . . . . . . . . . . . . . . 14 698 —

1,526 —



one year . . . . . . . . . . . . . . . . . . . . . . 18 (124,114) (94,598)





Pension liability . . . . . . . . . . . . . . . . . . 27 (4,045) (397)





J P MasonDirector

F-78



at 31 December 2008

Notes 2008 2007



one year . . . . . . . . . . . . . . . . . . . . . . 18 (90) (104)




Net assets . . . . . . . . . . . . . . . . . . . . . . 168,015 94,968




J P MasonDirector

F-79




Note 2008 2007

£000 £000Net cash inflow from operating activities . . . . . . . . . . . . . . . . . . . 25(a) 56,462 21,516

Returns on investments and servicing of financeInterest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,877) (21,303)

Net cash outflow from returns on investments and servicing offinance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,877) (21,303)

Taxation paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (112) (742)

Capital expenditure and financial investmentPurchase of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . (42,650) (30,690)Sale of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,406 115,813

Net cash (outflow)/inflow from capital expenditure and financialinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,244) 85,123

Acquisitions and disposalsPurchase of subsidiaries and joint ventures . . . . . . . . . . . . . . . . . . 31, 14 (1,994) (24,571)Net cash acquired with subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 31 28 14

Net cash outflow from acquisitions and disposals . . . . . . . . . . . . . (1,966) (24,557)

Equity dividends paid to shareholders . . . . . . . . . . . . . . . . . . . . . — (666)

Net cash (outflow)/inflow before financing . . . . . . . . . . . . . . . . . . (8,737) 59,371

FinancingBank loans and overdrafts repaid . . . . . . . . . . . . . . . . . . . . . . . . . (774) (199,420)Discounted loan notes repaid . . . . . . . . . . . . . . . . . . . . . . . . . . . — (110,246)New bank loans drawn-down . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,625 250,923Bank loan arrangement fees paid . . . . . . . . . . . . . . . . . . . . . . . . . (164) (11,031)Finance leases from related parties . . . . . . . . . . . . . . . . . . . . . . . — 21,464Other finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (701) (376)

Net cash inflow/(outflow) from financing . . . . . . . . . . . . . . . . . . . 14,986 (48,686)

Increase in cash in the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25(b) 6,249 10,685

F-80


NOTES



The following accounting policies have been applied consistently in dealing with items which areconsidered material in relation to the financial statements.







The term of the facility agreement is 7 years for the earliest debt tranche to be fully repaid, withother tranches having longer periods of availability. Mandatory part-repayments of the debt arescheduled and planned-for each year. The repayments due in the 12 months after the balance sheetdate total approximately £2.3 million.

The group also has shareholder funding in place that is subordinated and therefore longer-term innature than the bank debt.

The Group has a substantial cash balance available to meet working capital requirements, despiteinvestment in the estate having taken place. Furthermore, there are approximately £55 million ofcommitted unutilised bank facility funds available, including a substantial revolving credit facility thatwas undrawn at year-end and throughout the period up to signature of this report and financialstatements.


The consolidated financial statements include the financial statements of the Company and itssubsidiary undertakings made up to 31 December 2008. The acquisition method of accounting has beenadopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the yearare included in the consolidated profit and loss account from the date of acquisition or up to the dateof disposal. A joint venture is an undertaking in which the Group has a long-term interest and overwhich it exercises joint control. The Group’s share of the profits less losses of joint ventures is includedin the consolidated profit and loss account and its interest in their net assets is included in investmentsin the consolidated balance sheet.

Under section 230 (4) of the Companies Act 1985 the company is exempt from the requirement topresent its own profit and loss account. The amount of the profit/(loss) dealt with in the companyfinancial statements is disclosed in note 24 to these financial statements.

Turnover


F-81


NOTES (Continued)



Goodwill



Depreciation is provided on the cost or revaluation of tangible fixed assets on a straight line basisover their estimated useful lives as follows:







Foreign currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of thetransaction. Monetary assets and liabilities denominated in foreign currencies are translated using thecontracted rate or the rate of exchange ruling at the balance sheet date and the gains or losses ontranslation are included in the profit and loss account.

The assets and liabilities of overseas subsidiary undertakings are translated at the closing exchangerates. Profit and loss accounts of such undertakings are consolidated at the monthly average rates ofexchange during the year. Gains and losses arising on these translations are taken to reserves, net ofexchange differences arising on related foreign currency borrowings.




(b) where the instrument will or may be settled in the Company’s own equity instruments, it iseither a non-derivative that includes no obligation to deliver a variable number of theCompany’s own equity instruments or is a derivative that will be settled by the Company’sexchanging a fixed amount of cash or other financial assets for a fixed number of its ownequity instruments.


Investments


F-82


NOTES (Continued)



Asset Impairment

Intangible and tangible fixed assets are tested for impairment in accordance with FRS 11. Animpairment loss is recognised to the extent that the carrying amount exceeds its recoverable amount.

Stocks


Leases


Pre-opening costs


Taxation





Deep discounted bonds

Deep discounted bonds are held in the balance sheet at their issued amount less directlyattributable issue costs plus the accrued finance charge which has arisen on them. The finance chargeaccrues at a constant rate over the term of the bonds.

Pensions

The group operates defined contribution pension schemes. The assets of the schemes are heldseparately from those of the company in an independently administered fund. The amount charged to

F-83


NOTES (Continued)



the profit and loss account represents the contributions payable to the schemes in respect of theaccounting period.

The group also operates two pension schemes providing benefits based on final pensionable pay.The assets of the schemes are held separately from those of the group. The group has adopted FRS 17:Retirement Benefits.

Pension scheme assets are measured using market values. Pension scheme liabilities are measuredusing a projected unit method and discounted at the current rate of return on a high quality corporatebond of equivalent term and currency to the liability.


Derivatives




2 Turnover



2008 2007


£000 £000 £000 £000 £000 £000UK . . . . . . . . . . . . . . . . . . 291,497 — 291,497 300,840 1,500 302,340Continental Europe &

Ireland . . . . . . . . . . . . . . 256,604 — 256,604 214,726 — 214,726

Group turnover . . . . . . . . . 548,101 — 548,101 515,566 1,500 517,066

F-84


NOTES (Continued)



2008 2007


£000 £000 £000 £000 £000 £000Group turnover . . . . . . . . . 548,101 — 548,101 515,566 1,500 517,066Cost of sales . . . . . . . . . . . . (181,726) — (181,726) (175,592) (1,164) (176,756)

Gross profit . . . . . . . . . . . . 366,375 — 366,375 339,974 336 340,310Net operating expenses . . . . (367,126) — (367,126) (346,422) (2,100) (348,522)

Group operating loss . . . . . (751) — (751) (6,448) (1,764) (8,212)Share of joint ventures’

operating profit/(loss) . . . 253 — 253 (250) — (250)

(498) — (498) (6,698) (1,764) (8,462)

The total figures for continuing operations in 2008 include the following amounts relating toacquisitions: turnover £2,591,000 (2007: £11,144,000), cost of sales £997,000 (2007: £4,367,000) and netoperating expenses £1,601,000 (2007: £6,624,000).

The directors have concluded that the profit and loss accounts of the acquisitions are not materialto the group as a whole. Therefore, the disclosure of separate full profit and loss accounts for theacquisitions (defined in FRS 6) has not been made.

Net operating expenses in 2008 include exceptional costs of £6,333,000 (2007: £32,863,000) andexceptional income of £nil (2007: £1,761,000) which are explained in Note 6.


2008 2007


2,115 1,652


Number of directors

2008 2007



F-85


NOTES (Continued)



2008 2007

£000 £000Loss on ordinary activities before taxation is stated after charging/(crediting)Depreciation—Owned assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,018 36,361—Finance lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,472 583Amortisation of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 5Amortisation of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,452 8,577Amounts receivable by the auditors:—Audit of Group financial statements pursuant to legislation . . . . . . . . . . . 16 52—Audit of the parent company financial statements pursuant to legislation . 53 11—Audit of financial statements of subsidiaries pursuant to legislation . . . . . 233 295—Other services relating to taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 61—All other services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 132Property rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,881) (2,170)Lease exit premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,018) —Rentals under operating leases—property . . . . . . . . . . . . . . . . . . . . . . . . . . 85,003 78,178


Exceptional costs

The exceptional costs in the current year primarily represent one-off property-related costs andalso one-off costs associated with integrating acquired businesses and ceasing unprofitable operations.The tax effect of the exceptional costs in aggregate was £nil.

The exceptional costs in the prior year primarily represented a change in the provision for leasecommitments (£22,458,000) and other one-off property-related costs including exit from onerous leaseterms (£7,080,000). Also included were one-off costs associated with integrating acquired businesses andceasing unprofitable operations (£3,325,000). The tax effect of the exceptional costs in aggregate was acredit of £6,622,000.

Exceptional income

The exceptional income in the prior year represented the favourable outcome of a property-relatedlitigation claim, provision for which existed at the previous balance sheet date (£1,761,000). The taxeffect of the exceptional income was a charge of £nil.



In the current year, a number of freehold and leasehold property interests were sold to thirdparties. The loss on disposal associated with these sales was £2,021,000.

In the prior year, a number of freehold and leasehold property interests were sold to and leasedback from related parties (Note 30). The profit on disposal associated with these sales was £20,624,000.There were also a small number of other site disposals in the group in the prior year.

F-86


NOTES (Continued)



The average number of persons employed by the group (including directors) during the period wasas follows:

Number of employees

2008 2007


8,837 8,703


2008 2007

£000 £000Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,265 83,356Social security costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,261 10,130Pension costs—regular costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,255 1,199

99,781 94,685


2008 2007

£000 £000Interest payable on bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,481 18,423Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,992 34,796Amortisation of issue costs (on bank loans only) . . . . . . . . . . . . . . . . . . . . . 1,616 1,630Write-off of unamortised issue costs (previous facility) . . . . . . . . . . . . . . . . — 9,066Unwinding of discount on provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,665 1,665Other financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,590 5,148Share of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 —

56,452 70,728



2008 2007

£000 £000£000 £000Returns on pension scheme investments (Note 27) . . . . . . . . . . . . . . . . . . . (2,638) (2,437)Interest on pension scheme liabilities (Note 27) . . . . . . . . . . . . . . . . . . . . . 2,429 2,272Other finance charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 663 28

454 (137)

F-87


NOTES (Continued)


10 Taxation


2008 2007

£000 £000 £000 £000UK corporation taxCurrent tax on income for the year . . . . . . . . . . 101 54Overseas taxCurrent tax on income for the year . . . . . . . . . . (506) 1,533

Current tax on income for the year . . . . . . . . . . (405) 1,587Share of joint ventures’ current tax . . . . . . . . . . 56 —

Total current tax . . . . . . . . . . . . . . . . . . . . . . . . (349) 1,587Deferred tax (see note 21)Origination/reversal of timing differences . . . . . . (1,831) (14,992)

Share of joint ventures’ deferred tax . . . . . . . . . — —Total deferred tax . . . . . . . . . . . . . . . . . . . . . . . (1,831) (14,992)

Tax on loss on ordinary activities . . . . . . . . . . . . (2,180) (13,405)

Factors affecting the tax charge for the current year

The current tax credit for the year is lower (2007: higher) than the standard rate of corporation taxin the UK 28.5%, (2007: 30%). The differences are explained below.

2008 2007


Current tax at 28.5% (2007: 30%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,841) (16,410)

Effects of:Expenses not deductible for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . 13,346 13,580Non tax effected expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 3,562Capital allowances for period less than depreciation . . . . . . . . . . . . . . . . . . 582 1,976Other timing differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,201) 854Losses not utilised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,155 696Provision for local taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 364Overseas rate differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (214) (1)Capital gains (less than)/greater than book value . . . . . . . . . . . . . . . . . . . . (207) (3,098)Group relief surrender for no consideration . . . . . . . . . . . . . . . . . . . . . . . . (930) —Adjustments in respect of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,050) 64

Total current tax (credit)/charge (see above) . . . . . . . . . . . . . . . . . . . . . . . . (349) 1,587

11 Dividends


2008 2007

£000 £000Dividends in respect of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 666

— 666

F-88


NOTES (Continued)


11 Dividends (Continued)

The aggregate amount of dividends proposed and recognised as liabilities as at the year-end is £nil(2007: £nil).



£000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,536 43 175,579Acquisitions in the year (see Note 31) . . . . . . . . . . . . . . . . . . — — —Acquisitions in prior periods (see Note 31) . . . . . . . . . . . . . . (252) — (252)Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 23 23Fully amortised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (38) (38)Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,588 10 15,598

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,872 38 190,910

AmortisationAt beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,097 37 25,134Charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,452 9 10,461Fully amortised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (38) (38)Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,628 6 1,634

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,177 14 37,191


At 31 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,439 6 150,445


Impairment reviews have been performed in respect of the acquisitions made in the current andprior years. The recoverable amount has been assessed in accordance with FRS 10.


F-89


NOTES (Continued)





£000 £000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . 291,873 138,750 7,716 438,339Acquisition in the current year (see note 31a) . 733 264 — 997Acquisition in the prior year (see note 31b) . . . — 2,291 — 2,291Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,623 16,334 22,470 42,427Reclassifications . . . . . . . . . . . . . . . . . . . . . . . 6,482 20,988 (27,470) —Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,150) (4,632) — (14,782)Exchange differences . . . . . . . . . . . . . . . . . . . 27,683 25,101 293 53,077

At end of year . . . . . . . . . . . . . . . . . . . . . . . . 320,244 199,096 3,009 522,349

DepreciationAt beginning of year . . . . . . . . . . . . . . . . . . . . 38,295 51,976 — 90,271Charge for the year . . . . . . . . . . . . . . . . . . . . 13,734 30,756 — 44,490On disposals . . . . . . . . . . . . . . . . . . . . . . . . . . (3,414) (3,941) — (7,355)Exchange differences . . . . . . . . . . . . . . . . . . . 4,499 11,409 — 15,908

At end of year . . . . . . . . . . . . . . . . . . . . . . . . 53,114 90,200 — 143,314


At 31 December 2007 . . . . . . . . . . . . . . . . . . . 253,578 86,774 7,716 348,068


2008 2007


267,130 253,578

The net book value attributable to assets held under finance leases is £17,289,000 (2007:£15,869,000).

In accordance with FRS 11, a review was performed to establish whether or not there were anyindications of impairment to the carrying amount of tangible fixed assets. The review concluded thatthere were no such indications.

Company

The company did not hold any tangible fixed assets in the current or prior year.

F-90


NOTES (Continued)



Group

Interests injoint


£000 £000 £000 £000CostAt beginning of year . . . . . . . . . . . . . . . . . . . . . — 250 — 250Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 698 210 529 1,437

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . 698 460 529 1,687

Share of post acquisition reservesAt beginning of year . . . . . . . . . . . . . . . . . . . . . — (250) — (250)Retained profits . . . . . . . . . . . . . . . . . . . . . . . . — 89 — 89

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . — (161) — (161)


At 31 December 2007 . . . . . . . . . . . . . . . . . . . . — — — —

Investmentsin group


£000At beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,401Additions in the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,299

At end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,700


F-91


NOTES (Continued)



The principal undertakings in which the Company had a direct or indirect interest at the year endare shown below.



Cicero Holdings Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Holding CompanyCicero Investments Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding CompanyCicero Acquisitions Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding CompanyOdeon Cinemas Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Operation of cinemasABC Cinemas Limited . . . . . . . . . . . . . . . . . . . . Great Britain 100% owned Operation of cinemasBookit Limited . . . . . . . . . . . . . . . . . . . . . . . . . Great Britain 100% owned Credit and debit card

transaction processingLucius Holdings Limited . . . . . . . . . . . . . . . . . . Great Britain 100% owned Holding CompanyLucius Investments Limited . . . . . . . . . . . . . . . . Great Britain 100% owned Holding CompanyUnited Cinemas International Acquisitions Limited Great Britain 100% owned Holding CompanyUnited Cinemas International Multiplex BV . . . . . Netherlands 100% owned Holding CompanyUnited Cinemas International (UK) Limited . . . . . Great Britain 100% owned Operation of cinemasOdeon and Sky Filmworks Ltd . . . . . . . . . . . . . . Great Britain 50% owned Film distributionDigital Cinema Media Limited . . . . . . . . . . . . . . Great Britain 50% owned Screen advertisingCompania de Iniciatives y Espectaculas SA Spain 100% owned Operation of cinemas

(Cinesa) . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cineparque y Espectaculos SA . . . . . . . . . . . . . . Spain 100% owned Operation of cinemasMulticines y Espectaculos SAU . . . . . . . . . . . . . . Spain 100% owned Operation of cinemasCinema International Corporation Lda . . . . . . . . . Portugal 100% owned Operation of cinemasUnited Cinemas International Multiplex GmbH . . . Germany 100% owned Operation of cinemasKino Friedrichshain Betriebsgesellschaft GmbH . . . Germany 100% owned Operation of cinemasKino Gera Betriebsgesellschaft GmbH . . . . . . . . . Germany 100% owned Operation of cinemasKino Lausitzpark Betriebsgesellschaft GmbH . . . . Germany 100% owned Operation of cinemasUCI Kinoplex GmbH . . . . . . . . . . . . . . . . . . . . Germany 100% owned Operation of cinemasUnited Cinemas International Multiplex GesembH Austria 100% owned Operation of cinemasUCI Italia SPA . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Bicocca SRL . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasMultiplex Nord SRL . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Sud SRL . . . . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Centro SRL . . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemasUCI Nord Est SRL . . . . . . . . . . . . . . . . . . . . . . Italy 100% owned Operation of cinemas

15 Stocks


£000 £000 £000 £000Goods for resale . . . . . . . . . . . . . . . . . . . . . . . . 3,769 2,672 — —

F-92


NOTES (Continued)





39,474 34,814 189 185



£000 £000 £000 £000Other debtors . . . . . . . . . . . . . . . . . . . . . . . . . . 10,320 8,011 — —Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 449,269 333,702Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Amounts owed by group undertaking . . . . . . . . . — — 45,670 31,764Amounts owed by related parties . . . . . . . . . . . . 50,556 46,715 50,556 46,715

60,876 54,726 545,495 412,181

The loan notes are unsecured, and are receivable from group undertakings.



£000 £000 £000 £000Bank loans and overdrafts . . . . . . . . . . . . . . . . . 2,246 744 — —Trade creditors . . . . . . . . . . . . . . . . . . . . . . . . . 27,192 21,293 — —Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . 2,971 2,517 — —Other creditors including taxation and social


124,114 94,598 90 104

Interest was payable on the bank loans at LIBOR or EURIBOR plus a margin of between 1.75%and 2.88% (2007: between 1.75% and 3.25%) plus costs of between nil and 0.01%. Bank loans andoverdrafts due within one year are stated net of £nil (2007: £30,000) of unamortised issue costs.

F-93


NOTES (Continued)




£000 £000 £000 £000Bank loans and overdrafts . . . . . . . . . . . . . . . . . 288,203 245,301 — —Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . 31,784 30,060 — —Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301,986 233,062 301,986 233,062Other creditors and accruals . . . . . . . . . . . . . . . 936 2,053 — —Amounts owed to group undertakings . . . . . . . . — — 192,378 177,958

622,909 510,476 494,364 411,020




The following loan notes, including accrued interest, issued by the company to a parent company,Monterey Capital III Sarl during 2005, remained outstanding at 31 December 2008:


Par value E26.2mIssued for A26.2mInterest rate 16.1%; amended to 11.0% in August 2007Book value at 31 December 2008 was A41.9m.

The following loan notes, including accrued interest, issued by the company to its immediateparent, Odeon and UCI Cinemas Holdings Limited during 2007, remained outstanding at 31 December2008. These loan notes replaced loan notes of equivalent value previously held by a related party(Note 30).



F-94


NOTES (Continued)




2008 2007

£000 £000GroupWithin 1 year, or on demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,217 3,292Within one to two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,138 5,160Within two to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,838 25,217Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607,393 487,863


627,190 511,684

Finance leases


2008 2007

£000 £000GroupWithin 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,971 2,517Within one to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,610 10,635Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,174 19,425



Short term debtors and creditors are excluded from the disclosures relating to derivatives andother financial instruments. There is no material difference between the fair value of financial assetsand liabilities and the carrying value in the balance sheet.

Financial assets

Financial assets comprise cash at bank and in hand and are held in Sterling and Euro. Interest isearned on cash at bank at floating interest rates linked to short term bank deposit rates.


The Group borrows in the desired currencies at both fixed and floating rates of interest. For bankborrowings interest rate hedging contracts (swaps) are used to generate the desired interest profile tomanage the Group’s exposure to interest rate fluctuations. The Group’s policy is to maintain fixedinterest rates, by means of hedging contracts, covering between 50% and 100% of the senior bank debtdrawn. At the year end approximately 63% of the Group’s bank borrowings were at fixed rates aftertaking into account interest rate swaps. For Sterling denominated loans the fixed rate was 6.07% plus amargin ranging from 2.00% to 2.88% and for Euro denominated loans a fixed rate of 4.63% plus amargin of 2.25% to 2.88%.


F-95


NOTES (Continued)


20 Derivatives and other financial instruments (Continued)

As at 31 December 2008 the total bank facilities included a £45,000,000 revolving credit facility. Ofthis facility, £37,856,000 remained unutilised at the balance sheet date. The maturity date of therevolving credit facility is April 2014.



LeaseDeferred provisions

Tax & other Total

£000 £000 £000At the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . 2,111 76,978 79,089Arising on acquisitions (Note 31b) . . . . . . . . . . . . . . . . . . . . . 240 — 240Utilised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (8,873) (8,873)Unwinding of discount on provision . . . . . . . . . . . . . . . . . . . . — 2,665 2,665(Credited)/Charged to the profit and loss account . . . . . . . . . . (1,831) 4,750 2,919Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33) 10,584 10,551On pension (Note 27, 32) . . . . . . . . . . . . . . . . . . . . . . . . . . . (487) — (487)

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 86,104 86,104


22 Deferred tax

The amounts of deferred tax liability provided are:


£000 £000 £000 £000Accelerated capital allowances . . . . . . . . . . . . . . — 3,120 — —Other timing differences . . . . . . . . . . . . . . . . . . — (1,009) — —Un-utilised losses . . . . . . . . . . . . . . . . . . . . . . . — — — —

— 2,111 — —

The potential amounts of deferred tax asset not provided are:


£000 £000 £000 £000Accelerated capital allowances . . . . . . . . . . . . . . (5,352) 816 — —Other timing differences . . . . . . . . . . . . . . . . . . (9,550) (14,773) — —Un-utilised losses . . . . . . . . . . . . . . . . . . . . . . . (87,340) (62,933) — —

(102,242) (76,890) — —

F-96


NOTES (Continued)



2008 2007

£000 £000Authorised9,947 (2007: 9,947) A Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 10 101,328 (2007: 1,328) B Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 1 110,000 (2007: 10,000) Ordinary shares of A1 each . . . . . . . . . . . . . . . . . . . . 10 740,012,500 (2007: 40,012,500) preference shares of £1 each . . . . . . . . . . . . . 40,013 40,01371,990,000 (2007: 71,990,000) preference shares of A1 each . . . . . . . . . . . . . 69,690 51,928

109,724 91,959


104,619 87,054



Income





F-97


NOTES (Continued)



Voting rights




Redemption


Capital


(a) first, to the extent that the holders of the Preference Shares have not received the preferredparticipation of each Preference Share held by them, in paying to the holders of thePreference Shares the amount by which the aggregate amount previously paid by theCompany to the holders of the Preference Shares (in that capacity) is less than the preferredparticipation of each Preference Share held by them and if the surplus is less than theaggregate preferred participation of all of the Preference Shares, the surplus shall be appliedamong the holders of the Preference Shares pro rata to the respective preferred participationsof the Preference Shares held by them; and


24 Reserves

Profit andloss

Group account

£000At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (134,154)Loss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,403)Actuarial pension scheme gain recognised (Note 27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,801)Deferred tax on pension gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,904Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,397)Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (244,851)

F-98


NOTES (Continued)


24 Reserves (Continued)

Profit andloss

Company account

£000At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,914Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,615Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,867Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

At the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,396



2008 2007

£000 £000Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (751) (8,462)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,490 36,944Amortisation of goodwill and intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . 10,461 8,582(Increase)/Decrease in stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,042) 1,610Increase in debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,957) (13,426)Decrease in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,313) (6,745)Increase in creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,574 3,013


(b) Net debt



£000 £000 £000 £000 £000Net cash:Cash at bank and in hand . . . . . 46,735 6,249 — 5,557 58,541Debt:Debt falling due within one year (744) (1,502) — — (2,246)Debt falling due after more than

one year . . . . . . . . . . . . . . . . (478,363) (14,184) (28,608) (69,034) (590,189)Finance leases . . . . . . . . . . . . . (32,577) 701 (1,544) (1,335) (34,755)

Net debt . . . . . . . . . . . . . . . . . (464,949) (8,736) (30,152) (64,812) (568,649)

Non-cash movements are primarily discount accrued on the loan notes and the write-off ofunamortised issue costs.

F-99


NOTES (Continued)




2008 2007

£000 £000Increase in net cash in the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,249 10,685Cash inflow from increase in debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,985) 41,650Non cash movement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30,152) (45,870)Translation difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (64,812) (12,635)




Group 2008 2007




Land and Buildings

Group 2008 2007

£000 £000Operating lease which expire:Within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,002 107In two to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,713 4,822Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,137 92,212

112,852 97,141

The Company had no capital or operating lease commitments at 31 December 2008 or at thepreceding year end.

27 Pension schemes

The Group operates or participates in two defined benefit schemes (the ABC Cinemas LimitedPension Scheme (the ‘‘ABC plan’’) and the Optima 2 Pension Scheme (the ‘‘Optima 2 Plan’’)) and twodefined contribution schemes (the Optima 1 Pension Plan and the Odeon DC Stakeholder PensionScheme, formerly the UCI Stakeholder Pension Scheme). Assets of the schemes are held separatelyfrom those of the Group in independently administered funds.


Both the ABC plan and the Optima 2 plan are closed to new members. The Optima 2 plan isclosed to future accrual from 1 January 2009. The latest full actuarial valuation for the ABC plan wascarried out at 30 April 2006 and was updated for FRS 17 purposes to 31 December 2008 by a qualifiedindependent actuary. The latest full actuarial valuation for the Optima 2 plan was carried out at

F-100


NOTES (Continued)



31 December 2006 and was updated for FRS 17 purposes to 31 December 2008 by a qualifiedindependent actuary.


2008 2007 2006

ABC Optima 2 ABC Optima 2 ABC Optima 2Plan % Plan % Plan % Plan % Plan % Plan %


payment and deferred pensioners—pre 6.4.1997 accrual . . . . . . . . . . 2.3 2.0 2.7 2.1 2.5 1.9—post 6.4.1997 accrual . . . . . . . . . . 2.8 2.8 3.2 3.2 2.8 2.8Discount rate applied to scheme



For a member who retires in 2018 at age 65 the assumptions are that they will live on average fora further 22.3 years after retirement if they are male and for a further 24.0 years after retirement ifthey are female.

The pension cost relating to the defined benefit schemes is assessed in accordance with the adviceof independent qualified actuaries using the projected unit method. Under the project unit method thecurrent service cost will increase as members of this scheme approach retirement. As both the Optima2 Plan and ABC Plan are closed to new members, it is expected that the current service cost willincrease as a percentage of earnings for those employees who participate in the plans, provided thatthe assumptions underlying the valuation are borne out in practice. For the year, contributions weremade to the pension scheme at a rate of 12.7% (Optima 2 Plan) and 24.5% (ABC Plan) of pensionablesalaries. In addition, the Company made special deficit reduction contributions of £716,000 (Optima 2Plan) and £702,000 (ABC Plan). These rates are subject to review at future actuarial valuations.



2008 2007 2006



% £000 £000 £000 % £000 £000 £000 % £000 £000 £000

Equities . . . . . . 7.75 6,022 14,614 20,636 8 8,862 18,817 27,679 8.5 7,400 15,885 23,285Bonds . . . . . . . 5.5 3,018 — 3,018 4.5-5 3,111 2,371 5,482 4.5-5.0 2,415 1,682 4,097Gilts . . . . . . . . 4.0 9,250 2,371 11,621 4.5 8,292 — 8,292 4.5 6,446 — 6,446Other . . . . . . . 2.5 215 79 294 6 185 130 315 5.25 62 150 212

Total . . . . . . . . 18,505 17,064 35,569 20,450 21,318 41,768 16,323 17,717 34,040

The Group employs a building block approach in determining the long-term rate of return onpension plan assets. Historical markets are studied and assets with higher volatility are assumed togenerate higher returns consistent with widely accepted capital market principles. The assumed

F-101


NOTES (Continued)



long-term rate of return on each asset class is set out within this note. The overall expected rate ofreturn on assets is then derived by aggregating the expected return for each asset class over the actualasset allocation.


2008 2007 2006


£000 £000 £000 £000 £000 £000 £000 £000 £000


liabilities . . . . . . . . . . . . . . . (19,099) (22,087) (41,186) (19,929) (22,391) (42,320) (21,060) (23,827) (44,887)(Deficit)/surplus in the scheme-

pension liability . . . . . . . . . . (594) (5,023) (5,617) 521 (1,073) (552) (4,737) (6,110) (10,847)Related deferred tax assets . . . . 166 1,406 1,572 (145) 300 155 — — —

Net pension (liability)/surplus . . . (428) (3,617) (4,045) 376 (773) (397) (4,737) (6,110) (10,847)


2008 2007


£000 £000 £000 £000 £000 £000Opening defined

benefit obligation . 19,929 22,391 42,320 21,060 23,827 44,887Current service cost . 152 381 533 197 566 763Interest cost . . . . . . . 1,130 1,299 2,429 1,055 1,217 2,272Contributions by

scheme participants 59 235 294 75 254 329Actuarial gain on

scheme liabilities . . (1,218) (1,579) (2,797) (1,607) (2,691) (4,298)Net benefits paid out (953) (640) (1,593) (851) (782) (1,633)Past service cost . . . . — — — — — —

Closing definedbenefit obligation . 19,099 22,087 41,186 19,929 22,391 42,320

F-102


NOTES (Continued)




2008 2007


£000 £000 £000 £000 £000 £000Opening fair value of

scheme assets . . . . 20,450 21,318 41,768 16,323 17,717 34,040Expected return on

scheme assets . . . . 1,250 1,388 2,638 1,058 1,379 2,437Actuarial gain/(loss)

on scheme assets . . (3,247) (6,352) (9,599) 56 (1,373) (1,317)Contributions by the

employer . . . . . . . 945 1,115 2,060 3,790 4,122 7,912Contributions by

scheme participants 59 235 294 75 254 329Net benefits paid out (952) (640) (1,592) (852) (781) (1,633)

Closing fair value ofscheme assets . . . . 18,505 17,064 35,569 20,450 21,318 41,768

Upon recommendation from the actuaries, Odeon & UCI Cinemas Group Limited has agreed tomake additional annual contributions of £702,000 until 30 April 2016 to the ABC Plan, and additionalannual contributions of £728,000 until 30 April 2012 to the Optima 2 Plan to reduce the deficit on thescheme.



2008 2007


£000 £000 £000 £000 £000 £000Surplus/(deficit) in

scheme at thebeginning of theyear . . . . . . . . . . . 376 (773) (397) (4,737) (6,110) (10,847)

Current service cost . (152) (381) (533) (197) (566) (763)Contributions paid . . 945 1,115 2,060 3,790 4,122 7,912Other finance income 120 89 209 3 162 165Actuarial (loss)/gain . (2,028) (4,773) (6,801) 1,662 1,319 2,981Deferred tax . . . . . . . 311 1,106 1,417 (145) 300 155

(Deficit)/surplus inthe scheme at endof year . . . . . . . . . (428) (3,617) (4,045) 376 (773) (397)

F-103


NOTES (Continued)




2008 2007


£000 £000 £000 £000 £000 £000Current service cost

and total operatingcharge . . . . . . . . . 152 381 533 197 566 763

Analysis of amounts included in other finance income/costs

2008 2007


£000 £000 £000 £000 £000 £000Expected return on

pension schemeassets . . . . . . . . . . 1,250 1,388 2,638 1,058 1,379 2,437

Interest on pensionscheme liabilities . . (1,130) (1,299) (2,429) (1,055) (1,217) (2,272)

120 89 209 3 162 165


2008 2007


£000 £000 £000 £000 £000 £000Actual return less

expected return onpension schemeassets . . . . . . . . . . (3,247) (6,352) (9,599) 56 (1,373) (1,317)

Experience gains/(losses) arising onthe schemeliabilities . . . . . . . . (9) 7 (2) 25 (711) (686)

Change in actuarialassumptions . . . . . 1,228 1,572 2,800 1,581 3,403 4,984

Actuarial (loss)/gainrecognised instatement of totalrecognised gainsand losses . . . . . . . (2,028) (4,773) (6,801) 1,662 1,319 2,981

F-104


NOTES (Continued)




ABC Plan

2008 2007 2006 2005

£000 £000 £000 £000Difference between the expected and actual

return on scheme assets:Amount (£000s) . . . . . . . . . . . . . . . . . . . . . . . . (3,247) 56 (99) 1,317Percentage of year end scheme assets . . . . . . . . (17.5%) 0.3% (0.6%) 8.5%


Amount (£000s) . . . . . . . . . . . . . . . . . . . . . . . . (9) 25 153 260Percentage of year end present value of scheme

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1%) 0.1% 0.7% 1.2%

Total amount recognised in statement of totalrecognised gains and losses:

Amount (£000s) . . . . . . . . . . . . . . . . . . . . . . . . (2,028) 1,662 1,225 549Percentage of year end present value of scheme

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.6%) 8.3% 5.8% 2.5%

Optima 2 Plan

2008 2007 2006 2005

£000 £000 £000 £000Difference between the expected and actual

return on scheme assets:Amount (£000s) . . . . . . . . . . . . . . . . . . . . . . . . (6,352) (1,373) 535 1,797Percentage of year end scheme assets . . . . . . . . (37.2%) (6.4%) 3.0% 11.9%


Amount (£000s) . . . . . . . . . . . . . . . . . . . . . . . . 7 (711) (16) (137)Percentage of year end present value of scheme

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0% (3.2%) (0.1%) (0.6%)

Total amount recognised in statement of totalrecognised gains and losses:

Amount (£000s) . . . . . . . . . . . . . . . . . . . . . . . . (4,773) 1,319 2,142 (1,287)Percentage of year end present value of scheme

liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21.6%) 5.9% 9.0% (5.4%)


The pension charge in respect of the Optima 1 Pension Plan is equal to the contributions payableduring the year ended 31 December 2008 of £nil (2007: £55,000). As at 31 December 2008 there were£nil (2007: £nil) outstanding contributions to be made to the Optima 1 Pension Plan.

The pension charge in respect of the Odeon DC Stakeholder Pension Scheme is equal to thecontributions payable during the year ended 31 December 2008 of £318,000 (2007: £338,000). As at31 December 2008 there were £nil (2007: £32,000) outstanding contributions to be made to the OdeonDC Stakeholder Pension Scheme.

F-105


NOTES (Continued)



At 31 December 2008 Odeon and UCI Cinemas Group Ltd and certain group companies acted asguarantors under the terms of a £396m (2007: £386m) facility made available by a syndicate of banksled by Barclays Capital and Mizuho Corporate Bank. Of the facility, £53m (2007: £44m) relates torental guarantees.





30 Related parties

The Company has taken advantage of the exemption granted by FRS 8, Related Party Disclosures,not to disclose transactions with Group entities where 90% of the voting rights are controlled withinthe group.

Terra Firma Investments (GP) 2 Limited, acting as general partner of the six limited partnershipswhich constitute the Terra Firma Capital Partners II Fund, Terra Firma Capital Partners II LP-H, TFCPII Co-Investment 2 LP and TFCP II Co-Investment 2A LP (‘‘Terra Firma’’), has the ability to exercisea controlling influence over the Company through the holding of shares in a parent of the Company.The directors therefore consider it to be a related party. Unsecured discounted loan notes of £nil(2007: £nil) were held by Terra Firma at 31 December 2008 following redemption and replacement withother loan notes by the Company in August 2007. Discount accrued of £nil (2007: £20,839,000) inrelation to these notes was charged during the year.

Monterey Capital III Sarl (‘‘Monterey’’), a company registered in Luxembourg, was a parent of theCompany at 31 December 2008, and the directors therefore consider it to be a related party.Unsecured loan notes, including interest accrued, of £58,589,000 (2007: £43,491,000) were held byMonterey at 31 December 2008. These notes were partly redeemed and replaced with other loan notesin August 2007. Interest of £5,098,000 (2007: £6,021,000) in relation to these notes was charged duringthe year.

Odeon and UCI Cinemas Holdings Ltd (‘‘Holdings’’) was the immediate parent of the Company at31 December 2008, and the directors therefore consider it to be a related party. Unsecured loan notes,including interest accrued, of £243,397,000 (2007: £189,571,000) were held by Holdings at 31 December2008. These notes were issued by the Company to Holdings in August 2007. Interest of £21,894,000(2007: £7,936,000) in relation to these notes was charged during the year.


F-106


NOTES (Continued)



The companies to which the freehold and leasehold properties were sold (the ‘‘Propcos’’) are listedbelow:


The total consideration for the properties sold, excluding VAT, was £178,750,000. The considerationwas partly settled during May 2007. The aggregate remaining balance due from the Propcos at31 December 2008 was £50,556,000 (2007: £46,715,000) (Note 17), including interest. The balanceattracts interest at LIBOR plus a margin of 2.375%. Interest accrued during the year was £3,842,000(2007: £2,583,000).

The relevant trading companies with the group entered into lease contracts with the Propcos. Theamount payable from the group to the Propcos during the year was £10,548,000 (2007: £5,170,000). Theterms of the leases are between 25 and 30 years.

31 Acquisitions

(a) Current year acquisitions

In September 2008, the group acquired four cinemas previously operating under the Kinoplexbrand in Germany.

The consideration and provisional fair value to Odeon & UCI Cinemas Group Ltd is shown below:

Book value Accountingof assets Fair value policy Provisionalacquired adjustments adjustments fair value

£000 £000 £000 £000Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . 997 — — 997Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 — — 55Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 — — 56Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 — — 28Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,042) — — (1,042)

Net assets acquired . . . . . . . . . . . . . . . . . . . . . 94 — — 94

Goodwill at cost (Note 12) . . . . . . . . . . . . . . . . —

94

Satisfied by:Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94Acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . —

94

The fair values contain provisional amounts, which will be finalised in the 2009 financial statementswhen the detailed acquisition investigation has been completed.

F-107


NOTES (Continued)


31 Acquisitions (Continued)

(b) Fair values on acquisition

In July 2007, the group acquired the Cinestar business in Italy.

Estimatedfair value at31 December Revised fair

2007 Adjustments value

£000 £000 £000Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,177 2,291 22,468Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 — 117Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,371 (235) 1,136Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 — 14Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (556) (1,544) (2,100)Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (603) (240) (843)

Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,520 272 20,792

Goodwill at cost as at 31 December 2007 . . . . . . . . . . . . . 3,299Goodwill revision (Note 12) . . . . . . . . . . . . . . . . . . . . . . (252)

23,839

Satisfied by:Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,312 — 23,312Deferred consideration . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 20 527

23,819 20 23,839

Adjustments represent:

1. Fixed assets held under finance leases.

2. Bad debt provision.

During the year, the group paid the final instalment (£443,000) of the deferred consideration dueon the December 2006 acquisition of three businesses previously operating under the Europlex brand inItaly.

32 Reconciliation of movement in shareholders’ (deficit)/funds



£000 £000 £000 £000GroupLoss for the year . . . . . . . . . . . . . . . . . . . . . . . — — (53,403) (53,403)Pension movement . . . . . . . . . . . . . . . . . . . . . . — — (6,801) (6,801)Deferred tax on pension loss . . . . . . . . . . . . . . . — — 1,904 1,904Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Foreign exchange differences . . . . . . . . . . . . . . . 3 17,562 (52,397) (34,832)

Net increase/(decrease) in shareholders’ funds . . 3 17,562 (110,697) (93,132)Shareholders’ deficit as at 31 December 2007 . . . 18 87,036 (134,154) (47,100)


F-108


NOTES (Continued)


32 Reconciliation of movement in shareholders’ (deficit)/funds (Continued)

£000

CompanyProfit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,615Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Foreign exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,432

Net increase in shareholders’ funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,047Shareholders’ funds as at 31 December 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,968

Shareholders’ funds as at 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,015


There were no disclosable post balance sheet events prior to the date of signature of thesefinancial statements.

F-109

Merrill Corporation Ltd, London11ZBI76001

6MAY201110401952

Odeon & UCI Finco plc

£300,000,000 9.0% Senior Secured Notes due 2018

E200,000,000 Senior Secured Floating Rate Notes due 2018

OFFERING MEMORANDUM

May 13, 2011

BofA Merrill Lynch

Goldman Sachs International

Lloyds Bank Corporate Markets

Mizuho International plc