ITV - SDN pension partnership

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Slaughter and May advised ITV plc on the terms of a partnership with the Trustees of the main section of the ITV Pension Scheme which is backed by SDN Limited (a digital terrestrial television multiplex licence-holder wholly owned by ITV). As a consequence, ITV's pension deficit on a funding basis is reduced by £124 million.

Under the Partnership arrangements, ITV has committed to making a payment to the Scheme of up to £150 million in 2022, if and to the extent that the Scheme remains in deficit. In addition, the Partnership will make an annual distribution of £8.4 million to the Scheme for 12 years from 2011. The Partnership's interest in SDN will provide collateral for these payments. SDN's revenues, profits and cashflows will continue to be consolidated in ITV's accounts and ITV will retain day-to-day operational control of SDN.

Having acquired the partnership interest, ITV's pension deficit on a funding basis is reduced by £124 million (effectively reflecting the present value of the annual distributions and the £150 million payment). The agreement does not impact the deficit calculated on an IAS 19 basis.

Nigel Boardman (partner), Paul Dickson (associate), Paul Mudie (associate); Financing: Marc Hutchinson (partner), Oliver Wicker (associate); Tax: Gareth Miles (partner), John Meehan (associate)