Obligation CZE 4.25% ( XS0764313614 ) en USD

Société émettrice CZE
Prix sur le marché 100 %  ▼ 
Pays  Republique tcheque
Code ISIN  XS0764313614 ( en USD )
Coupon 4.25% par an ( paiement semestriel )
Echéance 03/04/2022 - Obligation échue



Prospectus brochure de l'obligation CEZ XS0764313614 en USD 4.25%, échue


Montant Minimal 200 000 USD
Montant de l'émission 700 000 000 USD
Description détaillée CEZ est une importante société énergétique tchèque, principalement active dans la production et la distribution d'électricité et de chaleur.

L'Obligation émise par CZE ( Republique tcheque ) , en USD, avec le code ISIN XS0764313614, paye un coupon de 4.25% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 03/04/2022







OFFERING MEMORANDUM
CEZ, a. s.
U.S.$1,000,000,000
consisting of
U.S.$700,000,000 4.250% Notes due 2022
U.S.$300,000,000 5.625% Notes due 2042
CEZ, a. s., incorporated as a joint-stock company under the laws of the Czech Republic (the "Issuer"), is offering
U.S.$700,000,000 4.250% notes due 2022 (the "2022 Notes") and U.S.$300,000,000 5.625% notes due 2042 (the "2042 Notes" and,
together with the 2022 Notes, the "Notes"). The Issuer will pay interest on the Notes semi-annually in arrear on April 3 and October 3
of each year, commencing on October 3, 2012. The 2022 Notes will mature on April 3, 2022 and the 2042 Notes will mature on
April 3, 2042. The Notes will be unsecured and will rank equally in right of payment with the Issuer's other unsecured and
unsubordinated indebtedness.
The Issuer may redeem the Notes at 100% of their nominal amount plus accrued interest if certain tax events as described in
this offering memorandum occur. In addition, the Issuer may redeem the Notes in whole or in part at any time at a redemption price
equal to the nominal value of the Notes plus any applicable premium. Please see "Terms and Conditions of the 2022 Notes" and
"Terms and Conditions of the 2042 Notes."
This offering memorandum constitutes a prospectus for the purpose of the Luxembourg law of July 10, 2005 on Prospectuses
for Securities (the "Prospectus Law"). Application has been made to the Commission de Surveillance du Secteur Financier (the
"CSSF") in its capacity as competent authority under the Prospectus Law to approve this offering memorandum as a prospectus.
Application has also been made to list the Notes on the Official List of the Luxembourg Stock Exchange and to trade the Notes on the
regulated market of the Luxembourg Stock Exchange. In accordance with Article 7(7) of the Prospectus Law, the CSSF assumes no
responsibility regarding the economic and financial soundness of the offering of the Notes nor the quality or solvency of the Issuer.
Investing in the Notes involves risks. See "Risk Factors" beginning on page 16.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities
Act"), or under any U.S. state securities laws, and may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act ("Regulation S")) except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. The Notes are being offered and sold
within the United States only to "qualified institutional buyers" (as defined in, and in reliance on, Rule 144A under the U.S. Securities
Act ("Rule 144A")) and in offshore transactions outside the United States only to non-U.S. persons in reliance on Regulation S.
Prospective investors who are qualified institutional buyers are hereby notified that the Initial Purchasers (as defined in "Subscription
and Sale") may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A. Please
see "Subscription and Sale-Notices to Investors" and "Form of the Notes and Transfer Restrictions" for additional information about
eligible offerees and transfer restrictions.
Offering Price of the 2022 Notes: 99.300%, plus accrued interest, if any
Offering Price of the 2042 Notes: 99.669%, plus accrued interest, if any
Notes which are offered and sold in reliance on Regulation S will be represented by beneficial interest in one or more
permanent global notes (the "Unrestricted Global Notes") in registered form, without interest coupons attached, which will be
registered in the name of Citivic Nominees Limited as nominee for, and shall be deposited on or about April 3, 2012 (the "Closing
Date") with Citibank Europe PLC as common depository for, and in respect of interests held through Euroclear Bank S.A./N.V.
("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). Notes which are offered and sold in reliance
on Rule 144A will be represented by beneficial interests in one or more permanent global notes (the "Restricted Global Notes" and,
together with the Unrestricted Global Notes, the "Global Notes") in registered form, without interest coupons attached, which will be
deposited on or about the Closing Date with Citibank, N.A., as custodian for, and registered in the name of Cede & Co. as nominee for
The Depository Trust Company ("DTC"). Notes sold (i) in offshore transactions in reliance on Regulation S under the U.S. Securities
Act will be issued in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof and (ii) to qualified
institutional buyers in reliance on Rule 144A will be issued in minimum denominations of U.S.$200,000 and integral multiples of
U.S.$1,000 in excess thereof. See "Terms and Conditions of the 2022 Notes--Form, Denomination and Title" and "Terms and
Conditions of the 2042 Notes." Interests in the Restricted Global Note will be subject to certain restrictions on transfer. See "Form of
the Notes and Transfer Restrictions." Beneficial interests in the Global Notes will be shown on, and transfers thereof will be effected
only through, records maintained by DTC, Euroclear and Clearstream, Luxembourg and their participants. Except as described herein,
certificates for Notes will not be issued in exchange for beneficial interests in the Global Notes.
Global Coordinator and Joint Lead Manager
Citigroup
Joint Lead Managers and Bookrunners
Barclays
Goldman Sachs International
SOCIETE GENERALE
The date of this offering memorandum is March 27, 2012.


TABLE OF CONTENTS
IMPORTANT INFORMATION....................................................................................................................................ii
NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES..................................................................iv
NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY.............................................................................................iv
CERTAIN DEFINITIONS............................................................................................................................................iv
SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS .......................................................................v
PRESENTATION OF FINANCIAL INFORMATION .................................................................................................v
AVAILABLE INFORMATION...................................................................................................................................vii
FORWARD-LOOKING STATEMENTS...................................................................................................................viii
HISTORICAL AND CURRENT MARKET AND INDUSTRY DATA......................................................................ix
TRADEMARKS AND TRADE NAMES....................................................................................................................ix
SUMMARY ...................................................................................................................................................................1
RISK FACTORS..........................................................................................................................................................16
EXCHANGE RATE INFORMATION........................................................................................................................37
USE OF PROCEEDS ..................................................................................................................................................38
CAPITALIZATION .....................................................................................................................................................39
SELECTED FINANCIAL INFORMATION ..............................................................................................................40
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS............................................................................................................................44
REGULATION ............................................................................................................................................................74
BUSINESS...................................................................................................................................................................96
MANAGEMENT AND CORPORATE GOVERNANCE ........................................................................................138
PRINCIPAL SHAREHOLDERS...............................................................................................................................148
RELATED PARTY TRANSACTIONS.....................................................................................................................149
DESCRIPTION OF OTHER INDEBTEDNESS......................................................................................................152
TERMS AND CONDITIONS OF THE 2022 NOTES.............................................................................................155
TERMS AND CONDITIONS OF THE 2042 NOTES.............................................................................................169
FORM OF THE NOTES AND TRANSFER RESTRICTIONS...............................................................................170
TAXATION................................................................................................................................................................175
SUBSCRIPTION AND SALE ..................................................................................................................................180
LEGAL MATTERS ...................................................................................................................................................185
INDEPENDENT AUDITORS...................................................................................................................................185
LISTING AND GENERAL INFORMATION ..........................................................................................................186
ANNEX A ­ GLOSSARY OF TERMS AND DEFINITIONS.................................................................................A-1
ANNEX B ­ DOCUMENTS INCORPORATED BY REFERENCE.......................................................................B-1
i


IMPORTANT INFORMATION
CEZ, a. s. was incorporated as a joint stock company under the laws of the Czech Republic on May 6, 1992
with unlimited duration and was registered in the Commercial Register administered by the Municipal Court in
Prague, File B, Section 1581, with identification number 45274649. Its registered office is at Duhová 2/1444,
140 53 Prague 4, Czech Republic and its telephone number at that address is +420 211 041 111. In this offering
memorandum, references to "CEZ" and the "Issuer" are to CEZ, a. s. and references to the "CEZ Group," the
"Group," "we," "us," and "our" are to CEZ, a. s. and its consolidated subsidiaries. The obligations of the Issuer are
not in any way guaranteed by, or otherwise backed by the credit of, the Czech Republic or any agency, ministry or
political subdivision thereof.
You should rely only on the information contained or incorporated by reference into this offering
memorandum. The Issuer has not, and neither has any of Barclays Bank PLC, Citigroup Global Markets Inc.,
Goldman Sachs International or SG Americas Securities, LLC (collectively, the "Initial Purchasers"), authorized
anyone to provide you with different information. The Issuer is not, and the Initial Purchasers are not, making an
offer of the Notes in any jurisdiction where such offer is not permitted.
No person is authorized to give any information or make any representation not contained in this offering
memorandum in connection with the issue and offering of the Notes and, if given or made, such information or
representation must not be relied upon as having been authorized by the Issuer or any of the Initial Purchasers or
any of their directors, affiliates, advisors or agents. You should not assume that the information contained in this
offering memorandum is accurate as of any date other than the date on the front of this offering memorandum. The
delivery of this offering memorandum does not imply that there has been no change in the Group's business and
affairs since the date hereof or that the information herein is correct as of any time subsequent to its date.
The Issuer has prepared this offering memorandum solely for use in connection with the proposed offering
of the Notes and their listing on the Luxembourg Stock Exchange. The only persons authorized to use this offering
memorandum in connection with an offer of the Notes are the persons named in this offering circular as the Initial
Purchasers. This offering memorandum is personal to each offeree and does not constitute an offer to any other
person or to the public generally to subscribe for or otherwise acquire securities. Distribution of this offering
memorandum to any person other than the offeree and any person retained to advise such offeree with respect to
its purchase is unauthorized, and any disclosure of any of its contents, without the Issuer's prior written consent, is
prohibited. By accepting delivery of this offering memorandum, you agree to the foregoing and to make no
photocopies of this offering memorandum or any documents referred to herein.
The Issuer reserves the right to withdraw this offering of the Notes at any time. The Issuer and the Initial
Purchasers reserve the right to reject any offer to purchase the Notes, in whole or in part, for any reason or for no
reason, and to allot to any prospective purchaser less than the full amount of the Notes sought by such purchaser.
The Initial Purchasers have not independently verified any of the information contained in this offering
memorandum (financial, legal or otherwise). No representation or warranty, express or implied, is made by the
Initial Purchasers or any of their directors, affiliates, advisors or agents with respect to the accuracy or
completeness of such information. Nothing contained in this offering memorandum is, is to be construed as, or
shall be relied upon as, a promise, warranty or representation, whether to the past or the future, by the Initial
Purchasers or any of their respective directors, affiliates, advisors or agents in any respect. The contents of this
offering memorandum are not, are not to be construed as, and should not be relied on as, legal, business or tax
advice and each prospective investor should consult its own legal and other advisors for any such advice relevant
to it. You agree to the foregoing by accepting this offering memorandum.
Except as provided below, the Issuer accepts responsibility for the information contained in this offering
memorandum. To the best of the Issuer's knowledge and belief, having taken all reasonable care to ensure that
such is the case, the information contained in this offering memorandum is, to the best of its knowledge, in
accordance with the facts and does not omit anything likely to affect the import of such information. The
information contained under the heading "Exchange Rate Information" includes extracts from information and
data publicly released by official and other sources. While the Issuer accepts responsibility for accurately
summarizing the information concerning exchange rate information, the Issuer accepts no further responsibility in
respect of such information. The information set out in relation to sections of this offering memorandum
describing clearing arrangements, including the section entitled "Form of the Notes and Transfer Restrictions" is
subject to any change in or reinterpretation of the rules, regulations and procedures of DTC, Euroclear and
Clearstream, Luxembourg as currently in effect. While the Issuer accepts responsibility for accurately summarizing
the information concerning DTC, Euroclear and Clearstream, Luxembourg, the Issuer accepts no further
responsibility in respect of such information. In addition, this offering memorandum contains summaries believed
to be accurate with respect to certain documents, but reference is made to the actual documents for complete
information. All such summaries are qualified in their entirety by such reference. Copies of documents referred to
herein will be made available to prospective investors upon request to the Issuer.
ii


Neither this offering memorandum nor any other information supplied in connection with the Notes should
be considered as a recommendation by the Issuer or any of the Initial Purchasers that any recipient of this offering
memorandum or any other information supplied in connection with the Notes should purchase any Notes. Each
investor contemplating purchasing any Notes should make its own independent investigation and appraisal of the
Group's financial condition and affairs and creditworthiness.
By receiving this offering memorandum, you acknowledge that you have had an opportunity to request
from the Issuer for review, and that you have received, all additional information you deem necessary to verify the
accuracy and completeness of the information contained in this offering memorandum. You also acknowledge that
you have not relied on the Initial Purchasers in connection with your investigation of the accuracy of this
information or your decision whether to invest in the Notes.
Neither the Issuer nor the Initial Purchasers nor any of the Issuer's or their respective representatives are
making any representation to you regarding the legality of an investment in the Notes, and you should not construe
anything in this offering memorandum as legal, business or tax advice. You should consult your own advisors as to
the legal, tax, business, financial and related aspects of an investment in the Notes. You must comply with all laws
applicable in any jurisdiction in which you buy, offer or sell the Notes or possess or distribute this offering
memorandum, and you must obtain all applicable consents and approvals. Neither the Issuer nor the Initial
Purchasers shall have any responsibility for any of the foregoing legal requirements.
The Notes are subject to restrictions on offers, sales and transfers, which are described under "Form of the
Notes and Transfer Restrictions." By possessing this offering memorandum or purchasing any Notes, you will be
deemed to have represented, warranted and agreed to all of the provisions contained in those sections of this
offering memorandum. You may not use any information in this offering memorandum for any purpose other than
considering an investment in the Notes. Any investor in the Notes should be able to bear the economic risk of an
investment in the Notes for an indefinite period of time.
THE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES AND
EXCHANGE COMMISSION (THE "U.S. SEC") OR ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OF THE NOTES OR
THE ACCURACY OR ADEQUACY OF THIS OFFERING MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE IN THE UNITED STATES.
This offering memorandum does not constitute an offer to sell or a solicitation of an offer to buy the Notes
by any person in any jurisdiction where it is unlawful to make such an offer or solicitation. The distribution of this
offering memorandum and the offer or sale of the Notes in certain jurisdictions is restricted by law. This offering
memorandum may not be used for, or in connection with, and does not constitute, any offer to, or solicitation by,
anyone in any jurisdiction or under any circumstance in which such offer or solicitation is not authorized or is
unlawful. In particular, this offering memorandum does not constitute an offer of securities to the public in the
United Kingdom. No offering memorandum has been or will be approved in the United Kingdom in respect of the
Notes. Consequently, this offering memorandum is being distributed only to, and is directed at (a) persons who
have professional experience in matters relating to investments falling within article 19(1) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Financial Promotion Order") or (b) high
net worth entities falling within article 49(2)(a) to (d) of the Financial Promotion Order, and other persons to
whom it may be lawfully communicated, falling within article 49(1) of the Financial Promotion Order (all such
persons together being referred to as "relevant persons"). Any person who is not a relevant person should not act
or rely on this offering memorandum or any of its contents. Persons into whose possession this offering
memorandum may come are required by the Issuer and the Initial Purchasers to inform themselves about and to
observe such restrictions. Further information with regard to restrictions on offers, sales and deliveries of the Notes
and the distribution of this offering memorandum and other offering material relating to the Notes is set out under
"Subscription and Sale" and "Form of the Notes and Transfer Restrictions."
The issue of Notes under this offering memorandum will not be an "issue of bonds in the Czech Republic"
as defined in section 2(4) of the Czech Act No. 190/2004 Coll., on Bonds, as amended (the "Czech Bonds Act")
and such issue of Notes will only be notified to the Czech National Bank (the "CNB") as a foreign issue under
section 3(3) of the Czech Bonds Act, section 5 of Czech Act No. 219/1995 Coll., Foreign Exchange Act, as
amended and section 8a of Czech Decree No. 34/2003 Coll.
Each initial and subsequent purchaser of Notes will be deemed, by its acceptance or purchase thereof, to
have made certain acknowledgements, representations and agreements intended to restrict the resale or other
transfer of such Note, as described in this offering memorandum, and, in connection therewith, may be required to
provide confirmation of its compliance with such resale or other transfer restrictions in certain cases. Please see
"Subscription and Sale" and "Form of the Notes and Transfer Restrictions."
iii


IN CONNECTION WITH THIS OFFERING, CITIGROUP GLOBAL MARKETS INC. (OR
PERSONS ACTING ON BEHALF OF CITIGROUP GLOBAL MARKETS INC.) (THE "STABILIZING
MANAGER") ACTING FOR THE BENEFIT OF THE INITIAL PURCHASERS, MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES
AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. ANY STABILIZATION
ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE
OF THE TERMS OF THE OFFERING IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME,
BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF
THE NOTES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE NOTES. ANY
STABILIZATION ACTIVITIES CONDUCTED BY THE STABILIZING MANAGER (OR PERSON(S)
ACTING ON BEHALF OF THE STABILIZING MANAGER) MUST BE CONDUCTED IN
ACCORDANCE WITH ALL APPLICABLE LAWS AND REGULATIONS.
TO ENSURE COMPLIANCE WITH INTERNAL REVENUE SERVICE CIRCULAR 230,
HOLDERS ARE HEREBY NOTIFIED THAT (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN
THIS OFFERING MEMORANDUM IS NOT INTENDED OR WRITTEN BY THE ISSUER TO BE
RELIED UPON, AND CANNOT BE RELIED UPON BY HOLDERS FOR THE PURPOSE OF AVOIDING
PENALTIES THAT MAY BE IMPOSED ON HOLDERS UNDER THE INTERNAL REVENUE CODE, (B)
SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF
THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN, AND (C) HOLDERS SHOULD SEEK
ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX
ADVISOR.
NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES
NEITHER THE U.S. SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS OFFERING MEMORANDUM
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE NOTES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE U.S.
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. AS A PROSPECTIVE INVESTOR, YOU SHOULD BE AWARE THAT
YOU MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. PLEASE REFER TO THE SECTIONS IN THIS OFFERING
MEMORANDUM ENTITLED "SUBSCRIPTION AND SALE" AND "FORM OF THE NOTES AND
TRANSFER RESTRICTIONS."
NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR
LICENSE HAS BEEN FILED UNDER CHAPTER 421 B OF THE NEW HAMPSHIRE REVISED
STATUTES ("RSA") WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY
IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW
HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT
FILED UNDER RSA 421 B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH
FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY
OR TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON
THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY
PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE,
TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION
INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
CERTAIN DEFINITIONS
Please see "Annex A--Glossary of Terms and Definitions" for the meaning of certain terms and definitions
used in this offering memorandum.
iv


SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS
The Issuer is a joint stock company organized under the laws of the Czech Republic and a substantial
portion of its assets are located in the Czech Republic. The Issuer's directors, officers and other executives are
neither residents nor citizens of the United States or the United Kingdom as of the date of this offering
memorandum. Furthermore, all of the Issuer's assets are located outside the United States and the United
Kingdom. As a result, it may not be possible (a) to effect service of process upon the Issuer or any such person in
the United States or the United Kingdom or any other jurisdiction outside the Czech Republic, (b) to enforce
against any of them, in courts of jurisdictions other than the Czech Republic, judgments obtained in such courts
that are predicated upon the laws of such other jurisdictions or (c) to enforce against any of them, in Czech courts,
judgments obtained in jurisdictions other than the Czech Republic, including judgments obtained on the Fiscal
Agency Agreements and Deeds of Covenant in the courts of England and judgments obtained in the United States
predicated upon the civil liability provisions of the federal securities laws of the United States.
The Notes, the Fiscal Agency Agreements and Deeds of Covenant are governed by English law and the
Issuer has agreed in the Notes, the Fiscal Agency Agreements and Deeds of Covenant that disputes arising
thereunder are subject to the jurisdiction of the English courts. Please see "Terms and Conditions of the 2022
Notes--Governing Law and Submission to Jurisdiction" and "Terms and Conditions of the 2042 Notes."
Judgments rendered by English courts in civil and commercial matters will be recognized and enforced by Czech
courts, subject to EC Regulation No. 44/2001 of December 22, 2000, on jurisdiction, recognition and enforcement
of court judgments in civil and commercial matters, which is directly applicable in the Czech Republic. Under EC
Regulation No. 44/2001, a decision issued by an English court may not be recognized and enforced by a Czech
court if, for example:
·
such recognition is manifestly contrary to public policy in the Czech Republic;
·
the defendant was not served with the document instituting proceedings in sufficient time and in such
a way as to enable the defendant to arrange for a defense;
·
it is irreconcilable with a judgment given in a dispute between the same parties in the Czech Republic;
or
·
it is irreconcilable with an earlier judgment given in another E.U. or non-E.U. country involving the
same cause of action and the same parties.
PRESENTATION OF FINANCIAL INFORMATION
The consolidated financial statements of the CEZ Group as of and for the years ended December 31, 2009,
2010 and 2011 have been audited by Ernst & Young Audit, s.r.o. and prepared in accordance with IFRS. The
audited consolidated financial statements of the CEZ Group as of and for the years ended December 31, 2009 and
2010, which are incorporated by reference into this offering memorandum, were approved by our General Meeting
on June 1, 2011 and June 29, 2010, respectively, and the audited consolidated financial statements of the CEZ
Group as of and for the year ended December 31, 2011, which are incorporated by reference into this offering
memorandum, were authorized for issue on February 27, 2012. With the exception of certain non-IFRS measures,
the financial information as of and for the years ended December 31, 2009, 2010 and 2011 included in this
offering memorandum has been derived from the audited consolidated financial statements of the CEZ Group as of
and for the years ended December 31, 2009, 2010 and 2011, which are incorporated by reference into this offering
memorandum (see "Annex B--Documents Incorporated by Reference"). The audited financial statements of CEZ,
a. s. for the year ended December 31, 2011 are incorporated by reference in this offering memorandum for
information purposes only (see "Annex B--Documents Incorporated by Reference").
The consolidated financial statements of the CEZ Group as of and for the year ended December 31, 2010
were restated in 2011 to reflect the final accounting for our acquisition of Teplárna Trmice, a.s. in May 2010. The
consolidated financial statements of the CEZ Group as of and for the year ended December 31, 2010 were
prepared using provisional accounting for the acquisition, based on book values. In connection with the
preparation of the interim consolidated financial statements of the CEZ Group for the six months ended June 30,
2011, the final accounting for the acquisition was completed based on determined fair values of acquired
identifiable assets and liabilities as of the date of the acquisition. This final accounting indicated variations from
the initial accounting determined provisionally and used in the audited consolidated financial statements for the
year ended December 31, 2010. As a result, solely for purposes of the audited consolidated financial statements for
the year ended December 31, 2011, financial data for the 2010 comparison-year was restated to conform to the
definitive valuations of acquired assets and liabilities. The restated financial data for the 2010 comparison year
was audited in connection with the audit of the consolidated financial statements of the CEZ Group for the year
v


ended December 31, 2011. In "Management's Discussion and Analysis of Financial Condition and Results of
Operations," as well as in certain other sections of this offering memorandum, the restated financial data for the
year ended December 31, 2010 is presented alongside financial data for the years ended December 31, 2009 and
2011 for comparison purposes only.
IFRS differs in certain important respects from generally accepted accounting principles in the United
States. In making an investment decision, you must rely on your own examination of our audited consolidated
financial statements and financial data included in this offering memorandum and you should consult your
professional advisors for an understanding of, among other things:
·
the differences between IFRS and other systems of generally accepted accounting principles and how
those differences might affect the financial data included in this offering memorandum; and
·
the impact that future additions to, or amendments of, IFRS principles may have on our results of
operations and financial condition, as well as on the comparability of prior periods.
The audited consolidated financial statements of the CEZ Group for the years ended December 31, 2009,
2010 and 2011 and the audited financial statements of CEZ, a. s. for the year ended December 31, 2011, which are
incorporated by reference into this offering memorandum, are not intended to comply with U.S. SEC reporting
requirements. Compliance with such requirements would require the modification or exclusion of certain
information presented in this offering memorandum and the presentation of certain other information not included
in this offering memorandum.
For the convenience of the reader, this offering memorandum contains translations of certain Czech crown
amounts into U.S. dollars at specified rates. Unless otherwise indicated, these translations are based on the Czech
National Bank rate on December 31, 2011 of CZK 19.94 per U.S$1.00. The Issuer makes no representation that
the Czech crown or U.S. dollar amounts shown in this offering memorandum could have been or could be
converted into U.S. dollars or Czech crowns, as the case may be, at such rate or at any other rate. Please see
"Exchange Rate Information."
Information in this offering memorandum relating to the net debt, EBITDA or EBITDA margin of our
European peers (EdF, EdP, EnBW, Enel, E.ON, Fortum, Iberdrola, RWE and Verbund) has been derived from
information publicly disclosed by those companies. However, the Issuer has not independently verified such
information and cannot give any assurance as to the accuracy or completeness of such information.
Certain amounts and percentages which appear in this offering memorandum have been subject to rounding
adjustments, and, accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the
figures that precede them.
Non-IFRS Measures
In this offering memorandum, we present certain financial data and measures which are not calculated in
accordance with IFRS, such as "EBIT," "EBITDA" and the related ratios. As presented herein:
·
EBIT represents income before income taxes and other income/(expenses);
·
EBITDA consists of income before income taxes and other income/(expenses) plus depreciation and
amortization;
·
EBITDA Margin consists of income before income taxes and other income/(expenses) plus
depreciation and amortization, divided by total revenues, expressed as a percentage; and
·
Net Debt consists of long-term debt, net of current portion, plus short-term loans, plus current portion
of long-term debt, minus cash and cash equivalents plus highly liquid financial assets.
EBIT, EBITDA, EBITDA Margin and Net Debt are supplemental measures of our performance and
liquidity that are not required by or presented in accordance with IFRS. Furthermore, EBIT, EBITDA, EBITDA
Margin and Net Debt should not be considered as an alternative to income after taxes, income before taxes or any
other performance measures derived in accordance with IFRS or as an alternative to cash flow from operating
activities, as a measure of our liquidity or as a measure of cash available to us to invest in the growth of our
business.
The non-IFRS measures presented in this offering memorandum may not be comparable to other similarly
titled measures of other companies and have limitations as analytical tools and should not be considered in
isolation or as a substitute for analysis of our operating results as reported under IFRS. These non-IFRS measures
and ratios are not measurements of our performance or liquidity under IFRS and should not be considered as
alternatives to operating income or net profit or any other performance measures derived in accordance with IFRS
vi


or any other generally accepted accounting principles, or as alternatives to cash flow from operating, investing or
financing activities.
Our non-IFRS measures have limitations as analytical tools, and you should not consider them in isolation,
or as a substitute for analysis of our results as reported under IFRS as set out in our audited consolidated financial
statements and you should not place any undue reliance on our non-IFRS measures. Some of these limitations
related to non-IFRS measures are:
·
they do not reflect our cash expenditures or future requirements for capital expenditures or contractual
commitments;
·
they do not reflect changes in, or cash requirements for, our working capital needs;
·
they do not reflect the interest expense or cash requirements necessary to service interest or principal
payments on our debt;
·
they do not reflect gains or losses in hedging or foreign exchange contracts;
·
they do not reflect any cash income taxes that we may be required to pay;
·
they are not adjusted for all non-cash income or expense items that are reflected in our statements of
cash flows;
·
they do not reflect the impact of earnings or charges resulting from certain matters we consider not to
be indicative of our ongoing operations;
·
assets are depreciated or amortized over differing estimated useful lives and often have to be replaced
in the future, and these measures do not reflect any cash requirements for such replacements; and
·
other companies in our industry may calculate these measures differently than we do, limiting their
usefulness as comparative measures.
Because of these limitations, our non-IFRS measures should not be considered as measures of discretionary
cash available to us to invest in the growth of our business or as measures of cash that will be available to us to
meet our obligations. You should compensate for these limitations by relying primarily on our IFRS results and
using these non-IFRS measures only as supplemental means for evaluating our performance. Please see
"Summary--Summary Financial and Other Information," "Selected Financial Information," "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and our audited consolidated financial
statements and the notes thereto, which are incorporated by reference into this offering memorandum.
AVAILABLE INFORMATION
The Issuer is not currently subject to the periodic reporting requirements under Sections 13 or 15 of the
United States Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act") and other information
requirements of the U.S. Exchange Act. To permit compliance with Rule 144A in connection with resales and
transfers of Notes, the Issuer has agreed that, for so long as any of the Notes are "restricted securities" within the
meaning of Rule 144(a)(3) under the U.S. Securities Act, it will provide to any holder or beneficial owner of such
restricted securities, or to any prospective purchaser of such restricted securities designated by a holder or
beneficial owner, upon the request of such holder, beneficial owner or prospective purchaser, the information
required to be provided by Rule 144A(d)(4) under the U.S. Securities Act, if at the time of such request it is not a
reporting company under Section 13 or Section 15(d) of the U.S. Exchange Act or exempt from reporting pursuant
to Rule 12g3-2(b) under the U.S. Exchange Act. Please see "Terms and Conditions of the 2022 Notes--Provision
of Information" and "Terms and Conditions of the 2042 Notes."
For so long as the Notes are listed on the Luxembourg Stock Exchange and the rules of that exchange so
require, copies of the Issuer's organizational documents, the Fiscal Agency Agreements relating to the Notes and
the most recent audited consolidated financial statements of the CEZ Group published by the Issuer may be
inspected and obtained at the office of the listing agent in Luxembourg. Please see "Listing and General
Information--Documents on Display."
vii


FORWARD-LOOKING STATEMENTS
This offering memorandum includes forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the U.S. Exchange Act; however, this offering memorandum is not entitled to
the benefit of the safe harbor created thereby. These forward-looking statements can be identified by the use of
forward-looking terminology, including the terms "believe," "estimate," "anticipate," "expect," "forecast,"
"foresee," "intend," "may," "plan," "project," "seek," "should," "will," "would" or, in each case, similar
expressions or the negative thereof, or other variations or comparable terminology. These forward-looking
statements include all matters that are not historical facts. Such forward-looking statements are necessarily
dependent on assumptions, data or methods that may be incorrect or imprecise and that may be incapable of being
realised. They appear in a number of places throughout this offering memorandum and include statements
regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations,
financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other
factors because they relate to events and depend on circumstances that may or may not occur in the future. The
Issuer cautions you that forward-looking statements are not guarantees of future performance and that the actual
results of the Group's operations, including its financial condition and liquidity, and the development of the
Group's industry may differ materially from those made in or suggested by the forward-looking statements
contained in this offering memorandum. In addition, even if the Group's results of operations, financial condition
and liquidity, and the development of the Group's industry are consistent with the forward-looking statements
contained in this offering memorandum, those results or developments may not be indicative of results or
developments in subsequent periods. Factors that could cause these differences include, but are not limited to:
·
a decrease in demand for electricity, including as a result of the continuation or deepening of the
global economic crisis;
·
our strategy, outlook and growth prospects;
·
our ability to expand our business and our generation capacity;
·
fluctuations in electricity generated by our power plants;
·
changes in government regulation and expectations as to future governmental policies and actions;
·
unanticipated increases in fuel and other costs;
·
fluctuations in interest rates and other market conditions, including foreign currency exchange rates;
·
our ability to generate cash flow and to finance our capital expenditure needs;
·
any decision by the Czech Government to undertake a partial or full privatisation of CEZ, a. s.;
·
diverse political, economic, legal, tax and other conditions affecting the markets in which we operate;
·
competition in the markets in which we operate and our ability to compete in such markets;
·
costs, liabilities and penalties we may incur in connection with litigation;
·
other risks and factors discussed in this offering memorandum including under the heading "Risk
Factors;" and
·
other factors that are unforeseen or beyond our control.
Although the Issuer believes the expectations reflected in any forward-looking statement are reasonable, the
Issuer cannot give any assurance that they will materialize or prove to be correct.
The Issuer urges you to read "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Regulation" and "Business" for a more complete discussion of the factors
that could affect the Issuer's future performance, its industry and related regulation thereof. In light of these risks,
uncertainties and assumptions, the events described or suggested by the forward-looking statements in this offering
memorandum may not occur.
These forward looking statements speak only as of the date on which the statements were made. Except as
required by law or applicable stock exchange rules or regulations, the Issuer undertakes no obligation to update or
revise publicly any forward looking statement, whether as a result of new information, future events or otherwise.
All subsequent written and oral forward looking statements attributable to the Issuer or to persons acting on its
behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained
elsewhere in this offering memorandum.
viii


HISTORICAL AND CURRENT MARKET AND INDUSTRY DATA
Certain information contained in this offering memorandum was derived from various public sources,
including information published by Bloomberg, the Czech National Bank, the Czech Statistical Office, the Czech
Energy Regulatory Office, the State Commission for Energy and Water Regulation in Bulgaria, the Romanian
Energy Regulatory Authority and the Albanian Electricity Regulation Authority. Where information has been
sourced from a third party the source has been identified, the information has been accurately reproduced and (as
far as the Issuer is aware and is able to ascertain from information published by that third party) no facts have been
omitted which could render the reproduced information inaccurate or misleading.
The Issuer believes that the market and industry information contained in this offering memorandum
provides fair and adequate estimates of the size of the Group's market and fairly reflects the Group's competitive
position within that market. However, the Group's internal company surveys and management estimates have not
been verified by any independent expert, and the Issuer cannot give any assurance that a third party using different
methods to assemble, analyze or calculate market data would obtain or generate the same results.
Industry publications, surveys and forecasts generally state that the information contained therein has been
obtained from sources believed to be reliable, but the accuracy and completeness of such information is not
guaranteed. The Issuer believes that these industry publications, surveys and forecasts are reliable but the Issuer
has not independently verified them and cannot guarantee their accuracy or completeness. Further, the information
presented in this offering memorandum has been derived from several sources, as there is no single industry report
or other source that covers all of the areas in which the Group conducts its operations.
In addition, the Issuer has provided the data contained in this offering memorandum as to installed capacity,
generation and other market share information with respect to the electricity and heating industries in the Czech
Republic (unless explicitly stated otherwise). The Group compiles and publishes certain of this data on a regular
basis, and also supplies certain of this data to the Czech Statistical Office and the Czech Energy Regulatory Office
for use in compiling national data on the energy sector. Unless otherwise indicated, all figures in this offering
memorandum presenting units of generation of electricity are gross (i.e., including the electricity consumed by the
power plants themselves).
TRADEMARKS AND TRADE NAMES
The Group owns or has rights to certain trademarks or trade names that the Group uses in conjunction with
the operation of its business. Each trademark, trade name or service mark of any other company appearing in this
offering memorandum is the property of its respective holder. Please see "Business--Intellectual Property."
ix


Document Outline