sky deutschland ag q2 report 2011 · 2011. 8. 11. · sky deutschland ag continued to deliver...

Sky Deutschland AG

Q2 Report 2011

2 | Sky Deutschland AG

Key Figures YTD 2011 versus YTD 2010

YTD 2011 YTD 2010 Change (absolute)

Change(in %)

Subscribers

Direct subscribers at beginning (‘000) 2,653 2,470 183 7.4%

Gross additions 237 230 7 3.2%

Churn -131 -223 92 41.2%

Net growth 106 7 100 >100%

Direct subscribers at end1) (‘000) 2,759 2,476 283 11.4%

Premium HD subscribers2) (in ‘000) 714 370 344 93.1%

HD penetration3) (%) 25.9 14.9 11.0 -

Subscription ARPU4) (in €, monthly) 30.74 28.72 2.02 7.0%

Churn rate5) (in %, annualized) 9.7 18.1 -8.4 -

Churn rate6) (in %, 12 months rolling) 12.4 20.1 -7.7 -

Financials (in € million)

Revenues 546.3 470.9 75.4 16.0%

Operating expenses 624.7 582.7 41.9 7.2%

EBITDA -78.4 -111.9 33.5 29.9%

Depreciation and amortization 26.5 21.0 5.5 26.0%

Amortization of subscriber base 7.5 24.5 -17.0 -69.2%

EBIT -112.5 -157.4 45.0 28.6%

Financial result -26.4 -19.9 -6.5 -32.5%

Income taxes -1.6 -1.5 0.0 -0.7%

Net income -140.4 -178.9 38.5 21.5%

30.6.2011 31.12.2010 Change (absolute)

Change(in %)

Consolidated balance sheet (in € million)

Total assets 1,065.0 1,036.5 28.5 2.8%

Shareholders' equity 222.9 333.8 -110.9 -33.2%

Net debt 399.5 319.3 80.2 25.1%

Employees

Full-time employees 1,503 1,420 83 5.8%

1) Direct subscribers comprise monthly contract subscribers (residential customers, sportsbars and hotel rooms) to at least one of Sky’s channel packages and subscribers who purchased pay-per-view, and other ad hoc-services on a prepaid basis via the Flex range of products. Subscribers in the process of migration to new Sky packages are given up to ten days grace at the end of their prior contract before termination.

2) Premium HD subscribers comprise direct subscribers which have subscribed for the Premium HD channels. The respective revenue contribution of Premium HD subscribers is included in the subscription ARPU.3) HD penetration is defi ned as relation of Premium HD subscribers in relation to the total number of direct subscribers at the end of that period.4) Subscription ARPU is defi ned as monthly average subscription revenues (formerly direct program revenues) for a given period divided by the average number of direct subscribers in that period.5) The churn rate for a given period is defi ned as the number of direct subscribers that terminated their subscriptions during the course of a given period, divided by the average number of direct subscribers in that

period (calculated by dividing the sum of the number of direct subscribers on the fi rst day of that period and on the last day that period by two) and multiplied by four when referring to a quarterly period, by two when referring to a half-year period and by one when referring to a full-year period.

6) Is defi ned as the number of direct subscribers that terminated their subscriptions during the course of a 12-month period, divided by the average number of direct subscribers in that period.

Explanatory notes on the key fi gures.The fi nancial statements of Sky Deutschland group are drawn up on the basis of International Financial Reporting Standards (IFRS), with due regard to the interpretations of the International Financial Reporting Interpretations Commitee (IFRIC). Due to the totalling of individual items, the table may contain rounding differences.

| 3Q2 Report 2011

Key Figures Q2 2011 versus Q2 2010

Q2 2011 Q2 2010 Change (absolute)

Change(in %)

Subscribers

Direct subscribers at beginning (‘000) 2,726 2,471 255 10.3%

Gross additions 98 107 -9 -8.3%

Churn -65 -101 37 36.1%

Net growth 33 6 28 >100%

Direct subscribers at end1) (‘000) 2,759 2,476 283 11.4%

Premium HD subscribers2) (in ‘000) 714 370 344 93.1%

HD penetration3) (%) 25.9 14.9 11.0 -

Subscription ARPU4) (in €, monthly) 30.69 28.62 2.07 7.2%

Churn rate5) (in %, annualized) 9.4 16.3 -6.9 -

Churn rate6) (in %, 12 months rolling) 12.4 20.1 -7.7 -

Financials (in € million)

Revenues 276.7 236.1 40.5 17.2%

Operating expenses 300.1 283.5 16.6 5.9%

EBITDA -23.4 -47.4 23.9 50.5%

Depreciation and amortization 13.6 10.8 2.7 25.1%

Amortization of subscriber base 0.4 12.2 -11.9 -97.1%

EBIT -37.4 -70.4 33.1 47.0%

Financial result -14.0 -10.8 -3.2 -29.5%

Income taxes -2.2 -0.7 -1.5 <-100%

Net income -53.6 -81.9 28.4 34.6%





Explanatory notes on the key fi gures.The fi nancial statements of Sky Deutschland group are drawn up on the basis of International Financial Reporting Standards (IFRS), with due regard to the interpretations of the International Financial Reporting Interpretations Commitee (IFRIC). Due to the totalling of individual items, the table may contain rounding differences.


The 2nd quarter of 2011 at a glance

Sky Deutschland AG continued to deliver strong results during the second quarter of 2011, with

improving trends across all key areas of the business. Customers appear to be satisfi ed with the

service and quality of Sky, as shown by a constant high ARPU of € 30.69 and continuously decrea-

sing churn rates. With the expansion of the HD service including the HD+ line up and Sky Sport HD

Extra, Sky has strengthened its market-leading position in the area of HD:

Strong operational performance• Net growth of 33,000 subscribers (Q2 2010: 6,000), taking H1 net growth to over 100,000

• Total number of customers reaches 2.759 million (Q2 2010: 2.476 million)

• Quarterly annualized churn at 9.4 percent (Q2 2010: 16.3 percent), 12-month rolling churn at

12.4 percent (Q2 2010: 20.1 percent)

• ARPU of € 30.69 (Q2 2010: € 28.62)

Solid fi nancial development• Revenues increased by 17 percent to € 276.7 million (Q2 2010: € 236.1 million)

• EBITDA improved by 51 percent to negative € 23.4 million (Q2 2010: negative € 47.4 million)

Highlights• Sky HD increasing to over 30 channels, including Fox HD plus the exclusive channels Sky Sport

HD Extra and Nat Geo Wild HD, with more to come

• Sky Anytime to be launched, giving Sky+ customers on-demand access to top fi lms,

sport and more, free as part of their core package

• New Sky Guide (EPG) rolling out progressively for all Sky HD receivers

• Expanded agreement with Kabel BW covering all aspects of sales, channels, and distribution

Sky will continue to work on its positioning as the most innovative TV company in Germany and

Austria in order to set itself apart from the competition with new offers and services and to draw

new customers to its service.

| 5Q2 Report 2011

Content

Key fi gures 2

The 2nd quarter of 2011 at a glance 4

Management Report 6

Business and strategy 6

Corporate functions 13

Key metrics and quarterly trends 14

Earnings, Financial and Net Asset Position 16

Opportunities and Risks 18

Outlook 18

Share information 19

Financial statements 21

Consolidated condensed balance sheet 21

Consolidated statement of total comprehensive income (H1) 22

Consolidated statement of total comprehensive income (Q2) 23

Consolidated statement of cash fl ows 24

Consolidated statement of changes in equity 26

Notes (selected explanatory notes) 28

General information and basis of presentation 28

Signifi cant infl uences on the consolidated interim fi nancial statements 29

Statement of total comprehensive loss 31

Other explanatory comments 32

Responsibility Statement 35

Review Report 36

Further information 37

Imprint 37

Financial calendar 37


Management Report

Business and strategy

Business operations Sky’s core business is subscription pay-TV. The Company offers a wide range of programming in Germany and Austria and in addition can be received via the Teleclub in Switzerland. Sky’s program offering includes current feature fi lms, new series, children’s channels, docu-mentaries and live sports, especially the Fußball Bundesliga, the DFB Cup, the UEFA Champions League and the UEFA Europa League. At the end of the second quarter 2011 Sky customers can receive up to 29 HD channels – the leading HDTV service in Germany and Austria. The Company also offers its subscribers attractive blockbuster movies, live sports programming and adult entertainment on a pay-per-view basis. Sky distributes its pay-TV digital channel bouquet primarily via satellite and cable with a technical reach of over 90 percent of all TV households in Germany and of almost 80 percent in Austria. In addition to conventional broadcasting via satellite and cable, Sky also offers a selection of its services via Sky Go on the internet as well as on various mobile devices such as the iPad or the iPhone.

Products and ServicesAt Sky, the singular focus is on the customer to whom the Company provides compelling programming, delivered through innovative technologies and supported with the best customer service. The Sky brand stands for the broadest offer of television entertainment where quality and exclusivity provide important elements of differ-entiation from the offering of other TV broadcasters.

• Sky offers more live football than any other program provider• Sky offers the most attractive live sport available in Germany

and Austria• Sky offers the best range of fi lms on German and Austrian

television• Sky offers the broadest range and most high quality

programming in true HD• Sky offers channels for every age group and every family member

Sky is the undeniable market leader across Germany and Austria in the key areas of sports, fi lms and HD. The Company broadcasts its premium programming over 19 individual channels, 24 hours per day. In addition, Sky subscribers have access to 45 partner channels with a broadly-diversifi ed selection that caters to every taste. This service is a great fi t for the entire family. In addition to sports and fi lms, Sky also offers programming that includes drama and com-edy, documentaries and science fi ction, as well as German produc-tions and the best children’s programs.

Sky has recently introduced a number of innovative services – such as Sky Go and Sky+ that together provide customers with the opportunity to enjoy their favorite programs wherever and whenever they want.

General conditions and economic environmentEconomic environmentThe recovery of the German economy after the worldwide fi nancial and economic crisis continued in the second quarter of 2011. In Germany, the gross domestic product as an overall indicator of total economic performance is expected to grow by 0.4 percent in the second quarter over the previous quarter (source: DIW Berlin). In the full year 2011, the German economy is expected to grow at a faster pace than most other Eurozone countries, according to estimates by DIW. After record growth of 3.6 percent in 2010, the DIW forecasts a growth in price-adjusted gross domestic product of 3.2 percent for the current year. The German labour market is benefi ting from the stable growth of the German economy with the unemployment rate falling in the second quarter.

DIW expects the unemployment rate at an average of seven percent in 2011, which is below the nearly eight percent in 2010. According to DIW estimates, wages in Germany are expected to rise in 2011 and 2012. However, this progress needs to be balanced with increas-ing uncertainty surrounding the broader Eurozone recovery and global political volatility, both of which would impact the German economy and consumer confi dence.

According to the market research organisation IHS Screen Digest, at the end of 2010, there were more than 21.8 million HD households in Germany and Austria. The organisation expects the number of HD households to grow to 25.9 million by the end of 2011. The increased consumer interest in new television technology and an improved television experience is driving an increased demand for high-resolution television programs – for this reason HD has become an important success factor for the industry.

Advertising revenues, among other key fi gures, represent an important indicator of the economic activity in the media market. According to the spring forecast (Frühjahrsprognose) of the Central Association of the German Advertising Industry (ZAW), the German advertising market is expected to grow by 2.4 percent in 2011.

Sky became an offi cial licensee of TV research and work group AGF, who provides the offi cial viewer ratings for the TV market in Germany. Since 4 April 2011, all viewership data from Sky channels has been reported. This is making Sky even more relevant in the area of advertising sales.

| 7Q2 Report 2011

In the second quarter 2011 – the fi rst quarter in which Sky published ratings in the AGF system – the entire platform achieved an average audience share of 26.4 percent about all viewers in Sky subscriber homes (targetgroup Pers. 3+ in Sky subscriber homes). This means that Sky subscribers spend more than a quarter of their television viewing watching Sky channels.

CompetitionSky competes with a number of media and entertainment compa-nies to secure a supply of attractive programming for its custom-ers. Compared to European peer markets, pay-TV penetration in Germany and Austria is far below average.

As a provider of TV entertainment, Sky faces competition – among others – from free-to-air (FTA) services. In Germany and Austria, FTA channels operated by public and private broadcasters – in particular ARD, ZDF, ORF, RTL and ProSiebenSat.1 – offer competi-tive programming, e.g. movies, series and some live sports. Sky also faces competition from platform operators offering both pay-TV packages and video-on-demand services. Besides the core subscrip-tion business, Sky competes with other media and entertainment companies for advertising sales.

To set itself apart from the competition, Sky is focused on delivering high quality content, exciting innovations and great customer service.

Pay-TV Penetration in Europe

Source: IHS Screen Digest; Sky‘s own calculations on the basis of data available

on the market; State: 1 August 2011

Political and legal environmentThe “Internet and digital society“ committee of enquiry of the Ger-man Bundestag has postponed the vote for recommendations with regard to ensuring network neutrality. The governing parties are planning to introduce transport – and service classes apart from the best-effort principle and regard the planned regulation which is part of the telecommunication law as being suffi cient. The opposition, however, requires a legal binding of network neutrality. Sky promotes

non-discriminating distribution without additional fi nancial burden for content providers. The European Commission sees no need for immediate action; however, it will monitor the implementation of the corresponding telecommunication regulation into national law as well as the future developments of the internet in order to be able to take appropriate measures in case of discrimination.

The Digital Agenda – one of the seven pillars of the EU growth strat-egy “Europe 2020” – is of particular relevance at a European level. The Agenda aims to promote a domestic digital market in Europe to drive creativity and innovation. Sky welcomes the evaluation of the current legal scope with regard to these quickly developing markets and remains committed to its role as an innovative content provider.

Unlike other European countries, the legal scope for the protection of copyright owners against copyright infringements on the internet (internet piracy) in Germany has not yet been restructured to bet-ter protect copyrights holders. At a political level there is ongoing discussion about how to enhance the legal scope with regard to piracy in general and internet piracy in particular. Sky promotes the enhancement of protection against piracy and internet piracy on both a national and a European level.

On 15 December 2010 the government heads of the states in connection with the State Premier Conference agreed on a budget appropriation as a means of fi nancing public broadcasting starting with the next budgetary period and signed a corresponding amend-ment (15th amendment of the Interstate Broadcasting Agreement). It becomes effective on 1 January 2013 if it is ratifi ed by all German Länders by 31 December 2011 at the latest. Starting in 2013, there is to be a broadcasting fee per household and business premises. The amount of the fee for private households is not to be in excess of the current fee of € 17.98 per month. The broadcasters – includ-ing Sky – approved by state law are exempt from the obligation to contribute. Furthermore, the Interstate Broadcasting Treaty envisions various limitations to sponsoring for ARD and ZDF broadcasts. Sky in particular advocates limitations for sponsoring in the scope of sports broadcasts in public broadcasting.

The government heads of the German Länder had agreed in principle on a partial liberalisation of the sports betting market by 1 Janu-ary 2012. This would follow expiry of the current Interstate Gam-bling Treaty which requires amendments following a verdict by the European Court of Justice. The central issue for the European Court was the state gambling monopoly in Germany. The amendment of the Interstate Gambling Treaty has been submitted to the European Commission which has already voiced legal concerns with regard to compatibility with European law. The Länder plan to vote on the Inter-state Gambling Treaty after the summer break with the possibility for further amendments to the current draft of the Treaty. Sky promotes the liberalisation and advocates for further facilitation of advertisement rules for gambling in the context of sports programming.

Germany Austria UK Italy France

12.8% 12.0%

56.1%

53.8%

41.4%


Strategic priorities in 2011The focus of Sky is on acquiring and retaining customers and increasing their average revenue (ARPU). The fundamental work put in place in 2009 and the promise of quality, innovation and value which came with the introduction of the Sky brand, set the stage for a strong development. In 2010, Sky delivered many achievements which are driving momentum. The focus for 2011 is to continue on developing high quality and great value services that will further differentiate Sky and build its leadership as the best and most in-novative TV provider in Germany and Austria. The offer of

A. high quality contentB. exciting innovations and C. great customer service

are the core priorities of Sky as they fundamentally make a differ-ence for customers and thus drive customer and ARPU growth.

High quality contentSky offers the most exclusive and high quality TV programming in Germany and Austria. To secure and to improve its leading TV offer-ing, Sky continuously reviews its programming portfolio to ensure it renews or acquires key content rights.

Sky HD grows to over 30 channels

In April 2011, Sky agreed a strategic cooperation with HD+ GmbH. Starting in June 2011, Sky satellite customers have been able to access the full HD+ line-up, including RTL HD, VOX HD, RTL 2 HD, N24 HD, Sat.1 HD, ProSieben HD, kabel eins HD, Sixx HD, Sport1 HD, Nickelodeon HD and Comedy Central HD.

On 6 August Sky Sport HD Extra has been launched right in time for the kick-off of the new Bundesliga season. On Sky Sport HD Extra, customers can follow an additional individual Bundesliga match in true HD, every game of the DFL and experience all games involving German teams in the UEFA Champions League in true HD. With the launch of Sky Sport HD Extra Sky’s leading HD service grows to over 30 channels (as of 30 June 2011 29 channels). Where technically available Sky Sport HD Extra can be received by all customers who sub-scribe to both the Fußball Bundesliga package and the Sport package in HD. All Sky Go customers can additionally follow the channel in HD on an iPad and a second TV set.

15 Sky HD channels

included in Sky Welt*

6 HD channels of Public Broadcasters and free-to-air

11 HD+ channels

*Fox HD and Nat Geo Wild HD launch in mid October 2011 on Sky.

| 9Q2 Report 2011

Best HDTV-Provider Sky was voted „Best German HDTV Provider“ by more than two million readers of the magazines of the Auerbach publishing house in April 2011. The viewer award is a particular honor for Sky providing objective evidence of the Company’s position as a pioneer and market leader in HDTV.

Home of footballSky offers the most exclusive programming selection in German and Austrian TV. The offer comprises all matches of the German Bundesliga and 2nd Bundesliga live, all matches of the Austrian Bundesliga and Ersten Liga live, the UEFA Champions League and DFB Cup, as well as all the top UEFA Europa League and Premier League matches. As announced in early April 2011, Sky renewed the broadcasting rights and will show the UEFA Champions League and UEFA Europa League live, in HD, and in the case of the UEFA Europa League with even more exclusivity than before, through to 2015.

Live sport formatsSky produces three live sport formats which underline its leadership in sports TV entertainment. With the introduction of “Mein Stadion” in January 2011 on Thursdays before Bundesliga weekends, the launch of Sky’s own Saturday evening fl agship sports show “Sam-stag LIVE!” in September 2010, and the introduction of the football follow-up show “Sky90” on Sunday evenings in 2009, Sky offers the most comprehensive and entertaining sports programming.

Exclusive tennis and golfSky is the exclusive broadcaster of the tennis Grand Slam tournament in Wimbledon and of the most important major tournaments of the golf year. In January 2011, Sky announced the continuation of the partnership with the European Tour until 2014. In the coming three years Sky will carry the European Tour live and exclusively. The agree-ment with IMG Media includes among others the live broadcasts of all tournaments of the European Professional Tour, the Ryder Cup and the four tournaments of the World Golf Championships.

Formula One in HDWith the extension of its long-standing and successful partnership with Formula One, Sky remains the only German television provider that offers its viewers the entire racing weekend from fi rst free practice until the fi nish of the race. Sky broadcasts every race without advertis-ing interruptions and from several selectable camera perspectives. Shortly after the decision to extend the contract in December 2010, Sky announced in January 2011 that all races in the 2011 Formula One season will be broadcasted live and for the fi rst time in true HD.

Exclusive WWE partnershipIn January 2011, Sky extended its agreement with World Wrestling Entertainment, Inc. (WWE) in Germany, Austria and Switzerland for a further three years. The contract extension expands the coopera-tion beyond the area of TV to digital and mobile platforms. The new contract, which begins in January 2011, for the fi rst time comprises the broadcast of the WWE fl agship show RAW in full length as well as the thirteen yearly pay-per-view events of the WWE.

Sky Sport News HDAs announced in February 2011, Sky will launch Germany’s and Austria´s fi rst live 24/7 sport news channel. It will be named Sky Sport News HD and is planned to go to air in winter 2011/2012. The channel’s focus will be on dynamic around-the-clock sport coverage with an emphasis on live and breaking news reporting across Ger-many and Austria. The offer of a sport news channel will fi ll a market gap in Germany and Austria and extends Sky’s leadership in two areas which are important to TV viewers: sport and high defi nition.

Home of moviesAnother area for content differentiation is movie exclusivity. Sky of-fers the best movie experience with the most box offi ce hits – from the latest blockbusters to action, comedy, animation and more. Today, with 20 TV premieres in HD every month plus TV fi rsts in 3D, Sky is the undisputed home of movies.

Exciting innovations The second quarter 2011 marked the launch of Sky Go and the announcement of further innovations which dramatically enhance customer fl exibility on when and where they can watch Sky. These services, Sky Go, Sky Anytime and the new Sky Guide are unique in Germany and Austria and thus further differentiate Sky’s offering.


Sky Go on the iPhone* Sky Go on the iPad*

Sky Go on the second TV Sky Go on the web

Sky Go was launched in April 2011. This new service empowers subscribers to decide for themselves where and on what device they wish to watch their favorite program. It is a core part of Sky’s vision for TV in the years to come. With Sky Go, customers can watch a selection of Sky’s program in a second room, on the iPad, iPhone, iPod Touch, and additionally on the web via a PC or Laptop. Sky Go is the fi rst entertainment service that gives German and Austrian viewers real choice and control, anytime and anywhere. Sky Go is available exclusively to Sky customers. The service will be continuously expanded. During the next months Sky’s exclusive fi lm service will be made available via Sky Go on the iPad.

* A stable 3G or WiFi connection is required. The football Bundesliga and the HD Channels are only available through a stable WiFi connection. Reception is only possible in Germany and Austria.

SSSSSSkkkkkkkyyyyyyy Gooooo oooooooonnnnnnnnnnn ttttttttttttttthhhhhhhhhhhhheeeeee iiiiiiiPPPPPPaaaaaaaddddddd*

Rapunzel – Neu verföhnt im September auf Disney Cinemagic/HD

© D

isney

. Al

l rig

hts r

eser

ved

Sky Go on the iPhone

Rapim

y GGGGGoooo oooonnnnnnnn ttttthhhhhhhhhhheeeeeeeeeeeeeeeee iiiiiiiiiiiiiiiiiiiiiiiPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPhhhhhhhhhhhhhhhhhhoooooooooooooooooooonnnnnnnnnnnnnnnnnnnnneeeeeeeeeeeeeeee****

| 11Q2 Report 2011

Sky Anytime

In order to expand the exciting possibilities of the Sky+ HD hard disc receiver, the Company shortly will launch Sky Anytime. This new on-de-mand service will be free to all Sky+ customers and tied to their underly-ing package, giving them even more fl exibility to watch their programs whenever they want. It is enabled by downloading new content auto-matically onto customers’ Sky+ receivers overnight. The Sky Anytime service comprises top-quality movies out of the Sky fi lm package as well as a selection of the best entertainment and sports programs. Sky+ sub-scribers can also order blockbuster movies on a Pay-per-View basis on Sky Select and watch them immediately. Sky Anytime is a key feature of the Sky Guide, the new and improved Electronic Program Guide (EPG) which makes access to Sky’s programming even more intuitive.

Sky Guide

The new Sky Guide, the innovative new version of Sky’s Electronic Program Guide (EPG), makes it easier and more convenient for cus-tomers to select their favorite program, to record single titles or full series and to access the benefi ts of Sky Anytime. The new Sky Guide will shortly be available on all HD set-top boxes which have been deployed since November 2009.

Great customer serviceIn addition to content exclusivity and continued innovation, the delivery of great customer service differentiates Sky for custom-ers. Sky has made many positive steps in the past to improve its service. Today, new customers can be viewing Sky in their homes on the same day when ordering through a retailer, and within two days when ordering online or by phone.

The company has also made advances in the speed with which customer calls are answered with Sky’s pick-up times being among the shortest in the call center industry. With Sky’s online customer center, customers can add program packs, check settings and more from their PC at their convenience. Sky has also introduced an installation service that provides assistance with installing a new satellite system to adding an HD receiver, or helping a customer with a technical problem.

Expansion of distribution:Expansion of cooperation with Tele ColumbusIn March 2011, Sky and Tele Columbus agreed to expand their exist-ing cooperation through a Triple Play offering. With this, customers of the two providers now only require one digital receiver instead of two to gain access to the different digital program packages in the integrated cable networks of Tele Columbus.

New agreement with Kabel BW

Building on the success of their existing partnership, Sky and Kabel BW have agreed in July 2011 to expand their cooperation across all products, opening a new dimension of TV entertainment for customers. As part of the new agreement, Kabel BW made the full range of Sky packages as a stand-alone offering available to its customers since August 2011, providing even more choice and fl ex-ibility. No matter whether customers choose Sky directly or through their Kabel BW service, they are guaranteed to get the best avail-able TV entertainment on the market. And to make this even more attractive, Sky will add further channels to its already market leading HD portfolio on the Kabel BW service in the next few months.

Sky+ is the fi rst fully integrated Sky high defi nition hard disc recorder and receiver. In combination with a Sky subscription it offers a premium quality TV experience. Sky+ offers a wide range of easy to use functionalities. Viewers can stop and rewind currently running TV programs, and record their favorite TV events at the touch of a button, or program them via the Electronic Program Guide (EPG). With “Serial link” Sky+ makes it easy for the many fans of TV series to automatically record entire seasons of their favorite shows.


New sales area: Business Solutions In April 2011, Sky introduced its own sales team responsible for the support of business customers. This newly created sales team sup-ports business partners in the sportsbar and hotel sectors as well as other customer segments.

Sky for small and medium sized hotelsSky has introduced a new offering that is aimed at small and medium-sized hotels. Since the second quarter 2011, small and medium-sized hotels can subscribe to the Sky Hotel offering and have it delivered through receiver equipment in individual rooms. With this, the costs for head-ends and feed-in technology which have been a precondition for offering pay-TV content in the past can be dispensed with.

Capital developmentSky received proceeds of € 164.6 million on 25 January 2011 from the issuance of a convertible bond to News Adelaide Holdings B.V., an indirect 100 percent subsidiary of News Corporation. The bond can be converted to 53,914,182 registered non-par value shares from contingent capital. It has a term of four years, is unsecured and subordinated to existing credit lines. The annual interest is at a rate of 5.5 percent and is payable quarterly at the end of each quarter. The conversion price amounts to € 3.053 and thereby represents a premium of 25 percent over the volume-weighted average XETRA stock price of the Sky share in the last ten trading days prior to the resolution.

Through the issuance of the convertible bond and proceeds from the capital increase, gross proceeds received by Sky amount to € 342 million. The fi nancing measures for generating gross proceeds of a minimum of € 340 million by 31 January 2011 are accordingly concluded.

On 12 January 2011 Sky announced an agreement with News Cor-poration, whereby the gross proceeds from the fi nancing measures announced on 2 August 2010 were increased to € 400 million. The additional fi nancing, now in the amount of € 58 million, for the generation of gross proceeds totalling € 400 million will be provided at the latest by 21 December 2011 in the form of a shareholder loan by News Adelaide Holdings B.V.

On 24 February 2011 Sky announced the launch of Germany and Austria´s fi rst live 24/7 sport news channel for sport fans. The launch of Sky Sport News HD will be supported by an incremental share-holder loan of € 48 million. News Adelaide Holdings B.V. has agreed to provide the additional fi nancing over the next years.

Both shareholder loans are subordinated to Sky’s credit facilities, have a maturity of 31 March 2014 and carry an interest rate of 12 percent per annum which will accrue and be payable at matu-rity. These loans could be converted into equity by News Adelaide Holdings B.V. at a later stage, subject to the approval of Sky and its shareholders.

At the Annual General Meeting on 15 April 2011, the Management Board has been authorised, subject to the consent of the Supervi-sory Board, to increase the Company’s registered share capital in the period up to 14 April 2016 by up to € 354,049,892 by issuing in one or several tranches new registered non-par value shares against cash contribution and/or contributions in kind (Authorised Capital 2011). The Authorised Capital 2010 granted to the Management Board by the Annual General Meeting on 23 April 2010 was cancelled in the Annual General Meeting on 15 April 2011.

The Authorised Capital 2011 was registered in the commercial register on 26 July 2011.

With resolution of the Annual General Meeting of 15 April 2011 the Management Board, with the consent of the Supervisory Board, has been authorised, in the period until 14 April 2016, once or in partial amounts, to issue registered and/or bearer convertible bonds and/or notes with warrants (“bonds”) in an aggregate nominal amount of up to € 1,500,000,000 of limited or unlimited term and to grant conversion or option rights to subscribe up to 354,049,892 new registered non-par value ordinary shares (non par shares) in Sky Deutschland AG with a pro rata amount of the registered share capi-tal of up to € 354,049,892 to the holders and/or creditors of bonds as more closely defi ned in the terms and conditions for the convert-ible bonds or notes with warrants (Authorization 2011). The Annual General Meeting further resolved that the registered share capital of the Company is contingently increased by up to € 354,049,892 by issuing up to 354,049,892 new registered ordinary shares (non-par value shares) (Contingent Capital 2011). With court orders dated 16 June 2011 and 18 July 2011 the commercial register rejected the registration of the contingent capital as the corresponding resolution of the Annual General Meeting was considered exceeding the maxi-mum threshold of Sec. 192 para 3 AktG. The Company considers the resolution to be partially valid. Therefore the Company only fi led the Contingent Capital 2011 in a partial amount of € 300,133,707 for registration with the commercial register and on 4 August 2011 fi led an appeal against the court order with the Higher Regional Court of Munich. The Company expects a decision not before the end of the third quarter of 2011.

| 13Q2 Report 2011

Corporate functions

Group structureSky Deutschland AG, which incorporates all the business activities of the Sky Group, acts on behalf of the Group companies. The most important parts of the operating business are undertaken through Sky Deutschland Fernsehen GmbH & Co. KG and its subsidiaries. Unterföhring is the main location of Sky and is the registered offi ce of Sky Deutschland AG and Sky Deutschland Fernsehen GmbH & Co. KG.

Senior Management changesGary Davey, who has supported Sky as a consultant since July 2010, took responsibilities for the Programming Department in the role of Executive Vice President effective from 1 June 2011, reporting to Chief Executive Offi cer Brian Sullivan. Gary Davey is a 35-year veteran of the international broadcasting industry. Most recently Gary Davey was Chief Operating Offi cer (COO) of News Corporation Television Stations Europe.

Changes in the Supervisory BoardAt the Annual General Shareholders’ Meeting on 15 April 2011, the shareholders of Sky Deutschland AG approved the election of Jan Koeppen as Supervisory Board member of the Company. Jan Koep-pen is the successor of Steven Tomsic who resigned as a member of the Supervisory Board to become Deputy Chief Financial Offi cer on 6 December 2010 and then Chief Financial Offi cer of the Company since 1 February 2011.

EmployeesAs of 30 June 2011, the Sky group employed 1,503 full-time em-ployees. In comparison to the same quarter of the previous year, the number of employees rose by 12.8 percent (30 June 2010: 1,333). The increase of employees can be attributed to the purchase of Pre-mium Media Solutions GmbH in 2010. Furthermore the number of sales staff as well as the number of employees of the subsidiary Sky Deutschland Service Center GmbH was simultaneously expanded.

Long-term compensationIn 2011, the Company has introduced a Long-Term Incentive Plan for members of the Management Board and senior executives (Executive Vice Presidents, Senior Vice Presidents, Vice Presidents). Under the program, a certain number of virtual shares are assigned to the eligible participants. The virtual shares entitle the holders to receive under certain conditions a payment which is based on the volume-weighted average market price of the Sky share for December 2013. The entitlement to the payment is dependent on the participants being in an active employment with the Sky Group on 31 December 2013. In addition, the amount of the payment is adjusted with a factor that is determined based on the performance of the Sky Group with respect to net subscriber growth and EBITDA less capital expenditure over the three-year period until 31 Decem-ber 2013. The targets for both performance indicators were set by the Supervisory Board using the business plan projections of the Sky Group.

During the fi rst half year of 2011 1,588,280 virtual shares were granted thereof 759,793 shares to the members of the Management Board.


Key metrics and quarterly trends

‘000 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10

Direct subscribers1) at beginning 2,726 2,653 2,521 2,476 2,471

Gross additions 98 140 208 161 107

Churn –65 –67 –76 –116 -101

Net growth 33 73 131 45 6

Direct subscribers at end 2,759 2,726 2,653 2,521 2,476

Premium HD subscribers2) (in ‘000) 714 664 593 460 370

HD penetration3) (%) 25.9 24.4 22.4 18.2 14.9

Subscription ARPU4) (in €, monthly) 30.69 30.57 30.22 29.45 28.62

Churn rate5) (in %, annualised) 9.4 9.9 11.8 18.5 16.3

Churn rate6) (in %, 12 month rolling) 12.4 13.8 16.2 18.9 20.1

Wholesale subscribers at end 131 133 132 130 133





Sky continued to deliver strong results during the second quarter of 2011, with improving trends across all key areas of the business. The customer base grew net by 33,231 (Q2 2010: 5,624) to a total of 2,758,961 (30. June 2010: 2,476,135). Subscriber net growth over the fi rst half of 2011 was 106,055, an increase of 99,509 com-pared to the fi rst half 2010. Quarterly annualised churn decreased to 9.4 percent (Q2 2010: 16.3 percent) and the 12-month rolling churn rate to 12.4 percent (Q2 2010: 20.1 percent) – in both cases the lowest fi gures in almost six years. The ARPU of € 30.69 in the

second quarter 2011 represents the highest level ever achieved by the Company.

Sky HD continued its success story: The number of customers with premium Sky HD packages almost doubled year-on-year to 714,150 (Q2 2010: 369,918). The premium HD penetration rate increased to 25.9 percent as of 30 June (Q2 2010: 14.9 percent).

| 15Q2 Report 2011

Direct subscribers at end (in ‘000)

Gross additions (in ‘000)

Subscription ARPU (in €, monthly)

Net additions (in ‘000)

12 month rolling churn rate (in %) Quarterly annualised churn rate (in %)

Premium HD subscribers (in ‘000) HD Penetration (in %)

Q2 10 Q2 11

2,759

2,476

73

33

6

H1 10

7

H1 11

106

Q2

Q1

Q2

Q1H1 10 H1 11

Q2: 6

Q2: 6

237230

98

140123

107

Q2 10 Q2 11

28.6230.69

Q2 10 Q2 11

20.1

12.4

16.3

9.4

Q2 10 Q2 11

37025.9

714

14.9


Earnings, Financial and Net Asset Position

Revenues and earningsThe following fi gures relate to the six-month period of the respec-tive year, unless indicated otherwise.

RevenuesTotal revenues increased to € 546.3 million (2010: € 470.9 million). This is driven by an increase in subscription revenues of € 72.9 to € 499.1 million (2010: € 426.2 million) due to both the growth in the number of monthly contract subscribers and ARPU. Hardware rev-enues increased to € 15.4 million (2010: € 12.0 million) mainly due to higher activation fees associated with new subscribers requiring a set top box. Wholesale revenues amounted to € 7.0 million (2010: € 7.2 million). Advertising revenues increased to € 9.7 million (2010: € 9.0 million) due to higher advertising revenues associated with broadcasting the Fußball Bundesliga. Other revenues decreased to € 15.1 million (2010: € 16.5 million).

CostsCost of sales totaled € 510.8 million (2010: € 498.1 million). Pro-gramming costs decreased to € 367.5 million (2010: € 378.0 mil-lion) mainly due to the higher cost in 2010 associated with the FIFA Football World Cup 2010 and the renegotiation of sports licence fees in 2011. Technology costs increased to € 83.8 million (2010: € 71.2 million) due to higher cable broadcasting and transponder fees as well as additional bandwidth for transmission of HD chan-

nels. Customer service and other cost of sales increased to € 34.0 million (2010: € 30.7 million), mainly due to higher costs relating to the selling of the magazine TV Digital in connection with pay-TV offers. Hardware costs increased to € 25.5 million (2010: € 18.2 million) mainly due to higher depreciation for receivers recognised under non-current assets. Hardware costs included impairment losses of € 0.3 million (2010: € 0.0 million).

Selling expenses rose to € 93.1 million (2010: € 71.7 million) due to increased above-the-line marketing investments for the acquisition of new subscribers. General and administrative expenses increased to € 51.0 million (2010: € 40.2 million) due to higher IT expenses and higher personnel expenses relating to the share-based compen-sation programs.

Other operating income decreased to € 4.9 million (2010: € 8.1 million). In the previous year this included earnings from a legal judgement. Other operating expenses decreased to € 1.2 million (2010: € 1.8 million).

Amortization of the subscriber base amounted to € 7.5 million (2010: € 24.5 million). In the fi rst quarter 2011 the subscriber base, which related to an acquisition that was carried out in 2003, was fully amortised.

H1 2011 H1 2010Change

(absolute)Change

(%)

Revenues (in € million) 546.3 470.9 75.4 16.0

Operating costs (in € million) 624.7 582.7 41.9 7.2

EBITDA (in € million)1) -78.4 -111.9 33.5 29.9

EBITDA margin (in %)3) -14.4 -23.8 9.4

Depreciation and amortization 26.5 21.0 5.5 26.0

Amortization of subsciber base 7.5 24.5 -17.0 -69.2

EBIT (in € million)2) -112.5 -157.4 45.0 28.6

EBIT margin (in %)3) -20.6 -33.4 12.8

Operating result

1) Earnings before interest, taxes, depreciation and amortization2) Earnings before interest and taxes3) Ratio of EBITDA/EBIT to revenues

| 17Q2 Report 2011

Financial resultThe fi nancial result was negative € 26.4 million (2010: negative € 19.9 million). For the debt fi nancing with the banking syndicate, an interest expense in the amount of € 15.3 million (2010: € 12.2 mil-lion) was incurred. The increase in total interest expense (2011: € 25.1 million, 2010: € 18.1 million) is mainly due to the issuance of a convertible bond in January 2011, for which an interest expense in the amount of € 6,9 million was incurred in the fi rst half year of 2011. The fi nancial result also included losses in the amount of € 2.6 million (2010: gains € 0.8 million) on fair value changes of foreign currency derivatives which have not been designated as cash fl ow hedges. Interest and similar income was € 0.6 million (2010: € 0.8 million).

Consolidated net earningsHalf year earnings before taxes were negative € 138.9 million (2010: negative € 177.3 million). Income taxes comprise deferred tax expenses in the amount of € 1.6 million (2010: € 1.5 million). The consolidated net income after taxes was negative € 140.4 million (2010: negative € 178.9 million). The total comprehensive income is negative € 141,1 million (2010: negative € 172,5 million).

Basic/diluted earnings per share was negative € 0.20 (2010: nega-tive € 0.34).

Assets and fi nancial positionTrade receivables decreased to € 71.6 million (2010: € 74.4 million) primarily due to lower undue receivables from subscribers as a result of seasonal patterns. Film assets and advance payments for sports and fi lm rights decreased to € 81.4 million (2010: € 88.8 million) mainly due to a usage-related decrease of fi lm assets as well as a decrease in advance payments for sports rights particularly for broadcasting the UEFA Champions League and the UEFA Europa League. Inventories increased to € 50.7 million (2010: € 35.3 mil-lion). The decrease of current assets due to the reclassifi cation of rented receivers to non-current assets was more than offset by the purchase of new receivers. Intangible assets decreased to € 696.6 million (2010: € 700.3 million). Amortization, in particular amortiza-tion of subscriber base, exceeded the additions due to investments in the subscriber management system and in other software. Prop-erty, plant and equipment increased to € 23.3 million (2010: € 22.4 million) largely due to investments associated with the new Unter-föhring headquarters. The carrying amount of receivers, recognised under non-current assets, increased to € 85.7 million (2010: € 73.7 million). The additions mainly related to HD receivers. Other assets decreased to € 29.7 million (2010: € 35.8 million) mainly as a result of lower advanced payments as well as lower deferred marketing expenses.

The loss for the period, partially offset by the equity component of the convertible bond issued in 2011, caused shareholders’ equity to decrease by € 110.9 million to € 222.9 million (2010: € 333.8 million). At the end of the fi rst half year of 2011 the ratio of equity to total assets was 20.9 percent (2010: 32.2 percent).

Total liabilities increased to € 842.1 million (2010: € 702.7 million) and were affected by the following developments. Borrowings rose to € 425.5 million (2010: € 324.3 million). The increase mainly resulted from the issuance of the convertible bond. Net fi nancial liabilities (fi nancial liabilities less cash) amounted to € 399.5 million (2010: € 319.3 million). Trade payables increased to € 228.2 million (2010: € 183.7 million) primarily as a result of an increase in payables for licenses due to the acquisition of fi lm rights as well as an increase in other trade payables mainly due to higher liabilities for the purchase of new receivers. Other provisions increased to € 4.5 million (2010: € 3.3 million) mainly due to higher costs for litigation. Other liabili-ties decreased to € 131.6 million (2010: € 140.7 million) primarily due to payments in connection with the shareholder claims as well as a reduction in purchase price commitments regarding the buy-back of all shares in Premiere Star GmbH, the acquisition of Loxxess Medienlogistik GmbH and the buyback of shares in Premium Media Solutions GmbH.

Deferred tax liabilities increased to € 45.6 million (2010: € 44.3 million) and relate primarily to the different amortization methods applied for tax purposes and in the IFRS balance sheet regarding intangible assets.

Liquidity and cash fl owCash fl ow from operating activities for the fi rst half year 2011 amounted to negative € 38.7 million (2010: negative € 173.8 mil-lion). The net cash outfl ow resulted from the negative operating result and was only partially compensated by the change in working capital.

Cash fl ow from investment activities was negative € 46.0 million (2010: negative € 18.4 million). Payments for investments in intan-gible assets and property, plant and equipment primarily related to the acquisition of naming rights and receivers, the extension of the subscriber management system, investments associated with the new headquarters as well as investments in software. Payments for acquisition of entities are mainly due to the buyback of all shares in Premiere Star GmbH, the acquisition of Loxxess Medienlogistik GmbH as well as the buyback of shares in Premium Media Solutions GmbH.

Cash fl ow from fi nancing activities amounted to € 105.7 million (2010: € 220.5 million). The infl ow of funds as a result of the issu-ance of a convertible bond exceeded the outfl ow of funds for repay-ment of credit facilities, interest payments as well as payments for transaction costs in connection with the taken fi nancing measures.

At the end of the fi rst half year of 2011, Sky had at its disposal liquid funds of € 26.0 million (2010: € 5.0 million). The existing fi nanc-ing facilities (excluding guarantees and capitalized interests) were utilised in the amount of € 439.6 million (2010: € 312.7 million). Thereof € 31.3 million classifi ed as equity according to IAS 32.


Opportunity and Risks

Outlook

Technical risks As a pay-TV operator, Sky is dependent on its ability to protect its content from unauthorised access from third parties. With regard to cable customers, cable network operators are responsible for the encryption of Sky’s signals over their cable networks. Sky became aware that in the cable area of Unity Media, where encryption is provided by Nagravision, illegal reception of Sky’s channels could be possible. The nature of the technical fault has now been ascertained and Unitymedia, in cooperation with Sky, will take the necessary measures to rectify the problem as soon as possible.

Shareholder claimsSky Deutschland AG is facing damage claims by shareholders with respect to public information on its subscriber numbers.

Up until now twelve actions for damages have been fi led against Sky. One case has been fi nally judged in favour of the Company by the court of appeal. After due consideration and even though it has already won the majority of the cases in trial court, Sky has achieved out-of-court settlements with nine other claimants totalling an amount of K€ 122 in order to provide for a quick termination of the legal disputes. In another case, the claimant has withdrawn his ap-peal upon a respective indication by the court, resulting in the action being fi nally settled. Currently, only one case is still pending, now at the court of appeal in Munich, after the Company succeeded in the fi rst instance. So far, the claim totals approximately K€ 30.

Further claims for damages have been asserted out of court, mostly by institutional investors („the Funds“) which had initiated mediation proceedings (Güteverfahren). The Company entered into a settle-ment agreement in October 2010 according to which the Funds’ claims are fi nally and absolutely settled upon payment of € 14.5 million in instalments.

The Company believes that the total amount of the settlements as well as any associated cost – in particular legal costs – will be

covered by existing insurance policies (prospectus insurance for the 2007 Prospectus and D&O insurance). The Company provided the required documentation with respect to the claims. The evaluation of the insurance companies is ongoing and a cover note is yet to be provided.

In the consolidated interim fi nancial statements as of 30 June 2011 the Company has accounted for the abovementioned obligations in the amount of € 14.6 million less € 9.1 million already paid.

Credit conditionsOn 13 April 2011 Sky agreed with its banking syndicate certain amendments to the conditions of its credit facilities where a speci-fi ed threshold of free cash fl ow for each preceding twelve month-period must be ensured on a quarterly basis. As of 30 June 2011 the free cashfl ow was above the defi ned threshold. From 31 De-cember 2012 (used to be 30 June 2012 before) until the maturity date of the credit facilities, Sky must, on a quarterly basis, maintain specifi ed relationships between its EBITDA and its net fi nancial result and between its net debt and EBITDA. The covenant, to maintain a specifi ed relationship between the cash fl ow and the debt service from 31 December 2012 onwards, has been cancelled.

Sports rightsSky holds the broadcasting rights to the games of the Bundesliga and second division Bundesliga until the end of the 2012/2013 sea-son. The Deutsche Fußball Liga (DFL) has announced preparations for the tender of rights for the seasons commencing 2013/2014. While no specifi c timetable has been announced, Sky management expect the bidding process to be fi nished some time in 2012.

Aside from this, the opportunities and risks have not changed sig-nifi cantly from the statements in the 2010 Combined Management Report. Sky foresees no development in the risk area at the present time that would jeopardise the Company’s continued existence.

For the full year 2011 Sky expects net subscriber growth to be in the range of 300,000 and the 12-month rolling churn rate to move below 12 percent, together with a slight increase in ARPU. Sky ex-pects full-year 2011 EBITDA to be between negative € 145 to € 175 million and the positive operational and fi nancial trends seen so far in 2011 to accelerate in 2012. Additional investments in the areas of HD, the Sky+ hard-disk receiver and other innovations should

support the positive trend of the past quarters. The management expects a correspondingly high outfl ow of funds in 2011 and 2012. Sky intends to fi nance these investments with the funds available to it under its credit facilities and its shareholder loans and, increas-ingly, with cash generated in the ordinary course of its business.

| 19Q2 Report 2011

4.0 €

3.5 €

3.0 €

2.5 €

2.0 €

1.5 €

1.0 €

January 2011 February 2011 March 2011 April 2011 May 2011 June 2011

Sky Deutschland AG MDAX DAX

Sky’s share price traded up from € 1.69 at the end of December 2010 to € 3.73 at the end of the fi rst half-year on 30 June 2011 as shown in the chart above.

Sky Deutschland AG shares increased by 103.37 percent over the course of the fi rst half-year of 2011 versus an increase of 6.96 per-cent in the DAX and 9.92 percent in the MDAX.

Based on the closing price, Sky Deutschland AG’s market capitali-sation on 30 June 2011 was € 2,637m with a free fl oat market capitalisation of € 1,321m.

The average daily trading volume for the fi rst half-year in 2011 was 4,066,419 shares.

Inclusion in indicesThe Sky stock is part of the MDAX and was ranked 22nd in terms of trading volume and 25th in terms of market capitalisation on 30 June 2011. In addition to being represented in other indices of the DAX family such as DAXsector Media, Sky shares are also included in the MSCI Global Investable Market and the Dow Jones STOXX indices.

Shareholder structureSky Deutschland AG’s share capital currently amounts to € 708,099,784 with 708,099,784 issued shares.

Shareholder structure (in%)

50.1% Free Float 49.9% News Corporation

All shares other than those held by News Corporation are included in the free fl oat as defi ned by the standards of the German Stock Exchange.

1 The stated share prices are based on the daily XETRA closing prices of the German Stock Exchange

Share information

Share price developmentShare price 1 January to 30 June 2011

Free Float50.1%

NewsCorporation

49.9%


Shares held by News CorporationNews Adelaide Holdings B.V., a fully-owned indirect subsidiary of News Corporation, currently holds 353,341,792 shares in Sky Deut-schland AG. This equates to 49.90 percent.

Shares held by institutional investorsInstitutional investors who exceed notifi able thresholds of voting rights in Sky Deutschland AG are Odey Asset Management LLP (notifi cation of 10 August 2011, stake of 15.01 percent) and Taube Hodson Stonex Partners LLP (notifi cation of 6 October 2010, stake of 4.92 percent).

Shares held by ManagementDr. Holger Enßlin, Chief Offi cer Legal, Regulatory & Distribution, held 15,000 Sky shares on 30 June 2011.

Shares held by members of the Supervisory BoardDr. Stefan Jentzsch, member of the Supervisory Board of Sky Deutschland AG, held 120,000 Sky shares on 30 June 2011.

| 21Q2 Report 2011

Financial statementsConsolidated condensed balance sheet

K€ 30/6/2011 31/12/2010

AssetsCurrent assetsCash and cash equivalents 26,024 4,999Trade receivables 70,357 72,499Film assets and advance payments for sport and fi lm rights 62,996 67,657Inventories 50,734 35,311Other assets 25,148 31,553Total current assets 235,259 212,019

Non-current assetsTrade receivables 1,268 1,899Deferred taxes 10 40Film assets and advance payments for sport and fi lm rights 18,382 21,184Investments and non-current fi nancial assets 87 691Receivers 85,685 73,700Property, plant and equipment 23,282 22,413Intangible assets 696,557 700,309Other assets 4,508 4,251Total non-current assets 829,779 824,487Total assets 1,065,038 1,036,506

Liabilities and equityCurrent liabilitiesBorrowings 138,970 43,772Trade payables 214,126 167,714Other provisions 4,548 3,266Other liabilities 73,518 81,839Total current liabilities 431,163 296,590

Non-current liabilitiesBorrowings 286,529 280,541Trade payables 14,100 16,015Provisions for pensions and similar obligations 6,614 6,398Deferred taxes 45,603 44,264Other liabilities 58,125 58,861Total non-current liabilities 410,970 406,079Total liabilities 842,133 702,670

EquityCapital stock 708,100 708,100Additional paid-in capital 1,517,186 1,487,009Reconciling item for shareholder transactions without change in control –58,245 –58,245Accumulated other comprehensive income –2,148 –1,454Retained defi cit –1,941,941 –1,801,546Equity attributable to stockholders 222,952 333,864Non-controlling interests –47 –28Total equity 222,905 333,836Total liabilities and equity 1,065,038 1,036,506


Consolidated statement of total comprehensive income (H1)

K€ 1/1/ – 30/6/2011 1/1/ – 30/6/2010

Revenues 546,254 470,854Cost of sales –510,832 –498,098 Program –367,536 –378,010 Technology –83,842 –71,183 Hardware –25,471 –18,156 Customer service and other cost of sales –33,983 –30,749Gross profi t 35,422 –27,244Selling expenses –93,052 –71,702General and administrative expenses –51,037 –40,225Other operating income 4,932 8,068Other operating expenses –1,172 –1,805Amortization of subscriber base –7,545 –24,496Result from operations –112,452 –157,405Gain from entities accounted for at equity – 449Interest and similar income 649 780Other fi nancial result –1,999 –3,067Loss from entities accounted for at equity – –40Interest and similar expenses –25,061 –18,060Net income before taxes –138,864 –177,343Income taxes –1,551 –1,540Net income –140,414 –178,882Other comprehensive income –693 6,390Changes in fair value of available–for–sale fi nancial assets (net of tax) –130 70Changes in fair value of derivatives in cash fl ow hedges (net of tax) –563 6,320Change in translation reserve resulting from foreign currency – 0Total comprehensive income –141,107 –172,492

Net income attributable to: Stockholders –140,395 –178,872 Non–controlling interests –20 –11

Total comprehensive loss attributable to: Stockholders –141,088 –172,482 Non–controlling interests –20 –11

Earnings per share total (€) basic/diluted –0.20 –0.34

| 23Q2 Report 2011

Consolidated statement of total comprehensive income (Q2)

K€ 1/4/ – 30/6/2011 1/4/ – 30/6/2010

Revenues 276,660 236,124Cost of sales –246,377 –240,457 Program –175,473 –182,701 Technology –42,466 –34,176 Hardware –11,680 –9,011 Customer service and other cost of sales –16,758 –14,569Gross profi t 30,283 –4,334Selling expenses –43,499 –38,774General and administrative expenses –25,178 –20,056Other operating income 1,540 5,179Other operating expenses –145 –233Amortization of subscriber base –354 –12,221Result from operations –37,353 –70,439Interest and similar income 372 359Other fi nancial result –969 –2,563Loss from entities accounted for at equity – –34Interest and similar expenses –13,398 –8,566Net income before taxes –51,348 –81,243Income taxes –2,216 –680Net income –53,563 –81,923Other comprehensive income 126 3,502Changes in fair value of available-for-sale fi nancial assets (net of tax) –92 –Changes in fair value of derivatives in cash fl ow hedges (net of tax) 218 3,502Total comprehensive income –53,438 –78,421

Net income attributable to: Stockholders –53,548 –81,923 Non-controlling interests –15 0

Total comprehensive loss attributable to: Stockholders –53,423 –78,421 Non-controlling interests –15 0

Earnings per share total (€) basic/diluted –0.08 –0.15


Consolidated statement of cash fl ows

K€ 1/1/ – 30/6/2011 1/1/ – 30/6/2010

Net income before income taxes –138,864 –177,343Net interest expense 24,412 17,280

Depreciation, amortization and impairment losses/reversal of impairment losses on property, plant and equipment, intangible assets and fi nancial assets 26,492 21,033

Amortization of subscriber base 7,545 24,496Result from sale of interests in subsidiaries – 108Other non-cash income and expenses 5,195 2,492Changes in other provisions 1,282 –393Loss / gain on disposal of intangible assets, property, plant and equipment and receivers 5 21Changes in inventories, trade receivables and other assets –4,647 –45,063Changes in trade payables and other liabilities 39,211 –16,770Interest received 635 293Net cash used by operating activities –38,733 –173,845

Proceeds from sale of intangible assets, property, plant and equipment and receivers 354 313Proceeds from sale of interests in entities – 67Payments for acquisition of entities, net of cash acquired –6,400 –5,766Payments for investments in intangible assets and property, plant and equipment –39,907 –13,024Net cash used by investing activities –45,953 –18,409

Net proceeds from increase in capital by stockholders / net proceeds from stock issues – 110,283Proceeds from the granting of borrowings – 192,250Repayment of fi nance lease liabilities –3,022 –4,587Repayment of borrowings –37,697 –65,164Proceeds from issuance of convertible bonds 164,600 –Payments for transaction costs in connection with fi nancing –5,775 –4,057Interest paid –12,394 –8,275Net cash provided by fi nancing activities 105,712 220,450

Net increase in cash and cash equivalents 21,026 28,196

Cash and cash equivalents at beginning of period 4,999 8,124Cash and cash equivalents at end of period 26,024 36,320

| 25Q2 Report 2011


K€ Subscribed capitalAdditional

paid-in capital Retained defi cit

Reconciling item for shareholder

transactions without change in control

Balance as of 1/1/2010 490,147 1,425,720 –1,394,011 –58,245

Increase in capital for contribution in cash carried out on 21 January 2010 (less capital procurement costs)

49,015 60,723 – –

Total transactions with stockholders 49,015 60,723 – –

Total comprehensive income – – –178,872 –

Balance as of 30/6/2010 539,162 1,486,443 –1,572,882 –58,245

Balance as of 1/1/2011 708,100 1,487,009 –1,801,546 –58,245

Equity component of the convertible bond issued (less transaction cost)

– 30,178 – –

Subsequent capital issuance costs in connection with an increase in capital for contribution in cash carried out on 30 September 2010

– –1 – –

Total transactions with stockholders – 30,177 – –

Total comprehensive loss – – –140,395 –

Balance as of 30/6/2011 708,100 1,517,186 –1,941,941 –58,245

Consolidated statement of changes in equity

| 27Q2 Report 2011

Accumulated changes in fair value

of derivatives in cash fl ow hedges

Accumulated changes in fair value of available-for-sale

fi nancial assets

Change in translation reserve

resulting from foreign currency

Accumulated other comprehensive

incomeEquity attributable

to stockholdersNon-controlling

interests Total

–838 258 0 –581 463,031 11 463,041

– – – – 109,738 – 109,738

– – – – 109,738 – 109,738

6,320 70 0 6,390 –172,482 –11 –172,492

5,482 328 – 5,810 400,287 – 400,287

–1,584 130 – –1,454 333,864 –28 333,836

– – – – 30,178 – 30,178

– – – – –1 – –1

– – – – 30,177 – 30,177

–563 –130 – –693 –141,088 –20 –141,107

–2,148 – – –2,148 222,952 –47 222,905


Notes(selected explanatory notes)

General information and basis of presentation

General information about the groupSky Deutschland AG (also referred to as “the Company” or “Sky”) has prepared its interim consolidated fi nancial statements in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), as adopted by the EU. The accompanying interim consolidated fi nancial statements have been prepared in compliance with International Accounting Standard 34 (IAS 34). In accordance with IAS 34.10, Sky publishes condensed interim consolidated fi nancial statements and selected explanatory notes thereon. Due to the totalling of individual items, rounding differences may occur in the tables provided.

Accounting policiesThe accounting policies applied for Sky’s interim consolidated fi nancial statements as of 30 June 2011 correspond with the policies described in the Company’s IFRS consolidated fi nancial statements as of 31 December 2010. For further information we refer to the consolidated fi nancial statements as of 31 December 2010.

The following standards had to be adopted by Sky with obligatory effect for the fi rst time in the fi scal year:

Omnibus Standard Annual Improvements Project 2010IAS 32 Classifi cation of Rights IssueIAS 24 Related Party DisclosuresIFRIC 19 Extinguishing Financial Liabilities with Equity InstrumentsIFRIC 14 Prepayments of a Minimum Funding Requirement

The aforementioned standards, interpretations and amendments respectively have no relevance for Sky so that their fi rst-time application in the fi scal year had no impact on Sky’s condensed interim consolidated fi nancial statements.

The following standards and amendments issued by the IASB do not have to be applied by Sky with obligatory effect as of 30 June 2011 either because they have not yet been adopted by the EU or because the date of fi rst-time application in the EU has not yet been reached:

IFRS 9 Financial InstrumentsIFRS 10 Consolidated Financial StatementsIFRS 11 Joint ArrangementsIFRS 12 Disclosure of Interest in Other EntitiesIFRS 13 Fair Value Measurement

Amendment to IFRS 7 Financial Instruments: DisclosuresAmendment to IAS 1 Presentation of Items of Other Comprehensive IncomeAmendment to IAS 12 Deferred tax: Recovery of Underlying AssetsAmendment to IAS 19 Employee Benefi ts

The Management Board is currently in the process of evaluating the potential effects the adoption of the aforementioned standards and amendments might have on its consolidated fi nancial statements.

| 29Q2 Report 2011

Signifi cant infl uences on the consolidated interim fi nancial statements

Adjustment of prior year disclosuresIn the fi rst quarter 2011, as a result of a different assessment of the contracts in connection with the acquisition of Loxxess Medienlogistik GmbH, the comparative information as of 31 December 2010 included in the consolidated balance sheet relating to goodwill and other (fi nancial) liabilities was adjusted by K€ 740.

Changes in the balance sheetInventoriesThe carrying amount of the inventories recognised at net realisable value amounts to K€ 3,259. Impairment losses on receivers in the amount of K€ 176 were recognised as expense in the reporting period of 2011.

Other provisionsAs of 30 June 2011 this comprises provisions for current summary offence proceedings with the Federal Network Agency (“FNA”) in the amount of K€ 2,023 due to alleged breaches of the Act against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb – “UWG”). For further information please refer to the notes to the interim consolidated fi nancial statements as of 31 March 2011.

BorrowingsThe increase in borrowings from K€ 324,313 as of 31 December 2010 to K€ 425,499 as of 30 June 2011 is mainly due to the issuance of a convertible bond to News Adelaide Holdings B.V. and conversely the redemption of the Revolving Facility in the amount of K€ 37,685.

Pursuant to IAS 32.31, the amounts raised by issuing the bond need to be divided into a debt and an equity component using the residual value method. At fi rst, the fair value of the liability component without the equity conversion feature is determined. The equity component is then allocated the residual amount after deducting from the amount of the instrument as a whole the fair value separately determined for the liability component.

Sky raised gross proceeds in the amount of K€ 164,600 through the issuance of the bond, of which K€ 133,325 were classifi ed as borrowings and the remaining K€ 31,275 as equity.

The bond can be converted into 53,914,182 ordinary registered shares sourced from contingent capital. The convertible bond has a four-year maturity, is unsecured and subordinated to the existing credit facilities. With the exception of certain periods, holders can exercise their con-version rights from 8 March 2011 until the business day preceding the 25th trading day prior to the maturity date. It has a cash coupon of 5.5 percent per annum, payable quarterly in arrears. The conversion price was set at € 3.053, representing a premium of 25 percent on the volume weighted average XETRA price per Sky Deutschland AG share over the last 10 trading days prior to the resolution.

Sky paid fees and other transaction costs in the amount of K€ 5,774 at market standard terms for this type of fi nancing arrangement. The costs were allocated to both debt and equity proportionately. Costs in the amount of K€ 4,677 were allocated to the debt component and are deducted from the carrying amount of the liability and amortised over its term using the effective interest method. The remaining costs in the amount of K€ 1,097 were deducted from the equity component.


EquityAt the Annual General Meeting on 15 April 2011, the Management Board has been authorised, subject to the consent of the Supervisory Board, to increase the Company’s registered share capital in the period up to 14 April 2016 by up to € 354,049,892 by issuing in one or several tranches new registered non-par value shares against cash contribution and/or contributions in kind (Authorised Capital 2011). The Authorised Capital 2010 granted to the Management Board by the Annual General Meeting on 23 April 2010 was cancelled in the Annual General Meeting on 15 April 2011.

The Authorised Capital 2011 was registered in the commercial register on 26 July 2011.

With resolution of the Annual General Meeting on 15 April 2011, the Management Board, with the consent of the Supervisory Board, has been authorised, in the period until 14 April 2016, once or in partial amounts, to issue registered and/or bearer convertible bonds and/or notes with warrants (“bonds”) in an aggregate nominal amount of up to € 1,500,000,000 of limited or unlimited term and to grant conver-sion or option rights to subscribe up to 354,049,892 new registered non-par value ordinary shares (non par shares) in Sky Deutschland AG with a pro rata amount of the registered share capital of up to € 354,049,892 to the holders and/or creditors of bonds as more closely de-fi ned in the terms and conditions for the convertible bonds or notes with warrants (Authorization 2011). The Annual General Meeting further resolved that the registered share capital of the Company is contingently increased by up to EUR 354,049,892 by issuing up to 354,049,892 new registered ordinary shares (non-par value shares) (Contingent Capital 2011). With court orders dated 16 June 2011 and 18 July 2011 the commercial register rejected the registration of the contingent capital as the corresponding resolution of the Annual General Meeting was considered exceeding the maximum threshold of Sec. 192 para 3 AktG. The Company considers the resolution to be partially valid. Therefore the Company only fi led the Contingent Capital 2011 in a partial amount of EUR 300,133,707 for registration with the commercial register and on 4 August 2011 fi led an appeal against the court order with the Higher Regional Court of Munich. The Company expects a decision not before the end of the third quarter of 2011.

| 31Q2 Report 2011

The following fi gures relate to the six-month period of the respective year, unless indicated otherwise.

Revenues Revenues primarily consist of subscription revenues in the amount of K€ 499,105 (2010: K€ 426,182) and revenues from hardware of K€ 15,356 (2010: K€ 11,972). Wholesale revenues amount to K€ 7,033 (2010: K€ 7,193).

Amortization of subscriber baseThe amortization of subscriber base amounts K€ 7,545 (2010: K€ 24,496). In the fi rst quarter of 2011 the subscriber base, which related to an acquisition that was carried out in 2003, was fully amortised.

Earnings per share

Basic earnings per share are calculated as the ratio of the Group net income attributable to the Company’s shareholders and the weighted average number of shares outstanding during the applicable period.

On 25 January 2011, Sky issued a convertible bond to News Adelaide Holdings B.V. through a private placement. The bond can be converted into 53,914,182 ordinary registered shares sourced from contingent capital.

Upon conversion of the bond into ordinary registered shares, the weighted average number of outstanding shares would have increased to 742,545 thousand.

Due to the consolidated loss incurred in the fi rst half of 2011, the diluted earnings per share correspond to the basic earnings per share.

Statement of total comprehensive income

1/1/ – 30/6/ Second Quarter

2011 2010 2011 2010

Net income attributable to stockholders of Sky Deutschland AG (K€) –140,395 –178,872 –53,548 –81,923

Weighted average number of outstanding shares (K) 708,100 533,746 708,100 539,162

Basic earnings per share (€) –0,20 –0,34 –0.08 –0.15


Shareholder claimsSky Deutschland AG is facing damage claims by shareholders with respect to public information on its subscriber numbers.

Up until now twelve actions for damages have been fi led against Sky. One case has been fi nally judged in favour of the Company by the court of appeal. After due consideration and even though it has already won the majority of the cases in trial court, Sky has achieved out-of-court settlements with nine other claimants totalling an amount of K€ 122 in order to provide for a quick termination of the legal disputes. In another case, the claimant has withdrawn his appeal upon a respective indication by the court, resulting in the action being fi nally settled. Currently, only one case is still pending, now at the court of appeal in Munich, after the Company succeeded in the fi rst instance. So far, the claim totals approximately K€ 30.

Further claims for damages have been asserted out of court, mostly by institutional investors („the Funds“) which had initiated mediation proceedings (Güteverfahren). The Company entered into a settlement agreement in October 2010 according to which the Funds’ claims are fi nally and absolutely settled upon payment of € 14.5 million in instalments.

The Company believes that the total amount of the settlements as well as any associated cost – in particular legal costs – will be covered by existing insurance policies (prospectus insurance for the 2007 Prospectus and D&O insurance). The Company provided the required docu-mentation with respect to the claims. The evaluation of the insurance companies is ongoing and a cover note is yet to be provided.

In the consolidated interim fi nancial statements as of 30 June 2011 the Company has accounted for the abovementioned obligations in the amount of € 14.6 million less € 9.1 million already paid.

For further information please refer to the notes to the consolidated fi nancial statements as of 31 December 2010.

Additional fi nancing measuresIn January 2011, News Corporation increased its fi nancing commitment as stipulated by the Financial Support Agreement from € 340 mil-lion to € 400 million.

With the placement of the convertible bond together with the gross proceeds from the rights offering completed on 28 September 2010, Sky raised gross proceeds in the amount of € 342 million. The incremental funding in the amount of the remaining € 58 million to reach overall gross proceeds of € 400 million as announced on 12 January 2011 will be provided as a shareholder loan by News Adelaide Holdings B.V. by no later than 21 December 2011.

On 24 February 2011 Sky announced the launch of Germany and Austria’s fi rst live 24/7 sport news channel for sport fans. It will be named “Sky Sport News HD” and is planned to go to air next winter.

The launch of ‘Sky Sport News HD’ will be supported by an incremental shareholder loan of € 48 million. News Adelaide Holdings B.V. has agreed to provide the additional fi nancing over the next years.

As of 30 June 2011 no drawing of the shareholder loans had been made.

The shareholder loans are subordinated to Sky´s credit facilities, have a maturity of 31 March 2014 and carry an interest rate of twelve per-cent per annum which will accrue and be payable at maturity. The loans could be converted into equity by News Adelaide Holdings B.V. at a later stage, subject to the approval of Sky and its shareholders.

As had already been achieved by an amendment on 2 August 2010, Sky agreed with the banking syndicate to amend the credit conditions on 13 April 2011. What remains unaltered is the fact that Sky must ensure on a quarterly basis until maturity date that its free cash fl ow during the immediately preceding twelve months meets certain thresholds. From 31 December 2012 (used to be 30 June 2012 before) until the maturity date of the credit facilities, Sky must, on a quarterly basis, maintain specifi ed relationships between its EBITDA and its net fi nance result and between its net debt and EBITDA. The covenant, to maintain a specifi ed relationship between the cash fl ow and the debt service from 31 December 2012 onwards, has been cancelled.

Other explanatory comments

| 33Q2 Report 2011

Long-term compensation In 2011, the Company introduced a Long-Term Incentive Plan for members of the Management Board and senior executives. Under the pro-gram, a certain number of virtual shares are assigned to the eligible persons. The virtual shares entitle the persons to receive under certain conditions a payment which is based on the volume-weighted average market price of the Sky share for December 2013. The entitlement to the payment is dependent on the persons being in active employment with the Sky Group on 31 December 2013. In addition, the amount of the payment is adjusted with a factor that is determined based on the performance of the Sky Group with respect to net subscriber growth and EBITDA less capital expenditure over the three-year period until 31 December 2013. The targets for both performance indicators were set by the Supervisory Board using the business plan projections of the Sky Group.

The Long-Term Incentive Plan is classifi ed as a cash-settled share based compensation in accordance with IFRS 2. Any changes in the fair value of the virtual shares are recognised in profi t and loss over the vesting period of three years. The fair value of the shares is determined using the Black-Scholes-model.

At 30 June 2011, the calculation was based on the following parameters: Risk free interest rate: 1.72 percentDividend yield: 0.00 percentVolatility: 98.70 percentPrice of Sky share: € 3.73

In addition, a fl uctuation of 25.00 percent over the vesting period was considered for the calculation.

During the fi rst half year of 2011, 1,588,280 virtual shares were granted thereof 759,793 shares to the members of the Management Board. The fair value of the shares amounts to K€ 5,699 (thereof K€ 2,833 for members of the Board) at 30 June 2011 resulting in an expense of K€ 712 (thereof K€ 354 for members of the Board) recognised for the six-month period ended 30 June 2011.

Related party transactionsRelated parties are persons or companies on which the Company can exercise signifi cant infl uence or which can exercise signifi cant infl u-ence on the Company. In addition to the members of the Company’s Management and Supervisory Boards, they also include family mem-bers and the partners of the persons affected.

For share-based compensation granted to members of the Management Board, an expense in the amount of K€ 2,866 (2010: K€ 728) has been recognised.

In connection with the issuance of the convertible bond in January 2011, transaction costs in the amount of K€ 5,201 were paid to News Adelaide Holdings B.V. in the fi rst half of 2011.

Sky has reached agreement with Fox International Channels Germany GmbH on the key terms regarding the provision of a partner channel by Fox until December 2015 at the latest. Based thereon, a reversal in the amount of K€ 4,704 of the provision recognised at 31 December 2010 was recognised in the fi rst half of 2011.

The scope of transactions with affi liated companies described in the consolidated fi nancial statements as of 31 December 2010 remains unchanged. In the course of the normal business activities, all delivery and service transactions with non-consolidated entities are carried out under the terms and conditions normal in the market that would also apply to non-related third parties.

(in K€) Revenues from sales and services

Personnelexpenses

Other incomeExpenses from

services received Net Payables Receivables

Companies with signifi cant infl uence over the Company 1,888 –665 267 –42,288 –40,798 158,026 5,499

Total 1,888 –665 267 –42,288 –40,798 158,026 5,499


Other fi nancial commitmentsOther fi nancial commitments as of the reporting date are as follows:

Future commitments under non-cancellable operating leases are as follows:

In the fi rst quarter of 2011, Sky identifi ed additional obligations relating to prior years. These obligations are revenue-dependant and may re-quire payment of a single-digit million euro sum at maximum. Based on an assessment of the complex contractual structures, Sky assumed that counterclaims can be asserted to be offset against the obligations. In the second quarter of 2011 initial discussions with the contractual counterparty took place. Based on the discussions the Company still assumes that no material obligation is incurred. In regard to further disclosures the group makes use of the exemptions provided by IAS 37.92.

Segment reportingThe business activities of the Sky group concentrate on the operation of a pay-TV business in Germany and Austria under the Sky brand name and related activities.

Accordingly, the internal reporting to the Management Board of the Company provides information on the combined operation of the pay-TV business in both countries. In addition, the allocation of resources follows this internal reporting structure. Insofar, Sky does not have different operating segments in accordance with IFRS 8.

Supervisory Board changesOn 24 January 2011, Jan Koeppen was appointed to the Supervisory Board of Sky Deutschland AG by way of judicial decree. He was elected as a member of the Supervisory Board at the Annual General Meeting on 15 April 2011.

Events after the balance sheet dateApart from the transactions disclosed under the individual captions of these notes, no other signifi cant transactions have occurred since the balance sheet date.

(in K€) Total 30/6/2011 Total 31/12/2010

Film licenses 128,277 159,857

Sport licenses 835,258 819,236

Partner channels 282,951 242,806

Purchase commitments for receivers 69,198 60,935

Miscellaneous 220,381 282,870

Total 1,536,065 1,565,704

(in K€) Total 30/6/2011 Total 31/12/2010

Network operators and transponder rent 718,495 802,194

Offi ce buildings 89,127 93,938

Motor vehicles 2,264 2,274

Technical offi ce equipment 30 50

Total 809,916 898,456

| 35Q2 Report 2011

Responsibility Statement

To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the group, and the group management report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group.

Unterföhring, 4 August 2011

The Management Board


To Sky Deutschland AG, UnterföhringWe have reviewed the condensed interim consolidated fi nancial statements – comprising the consolidated condensed balance sheet, the consolidated statements of comprehensive loss, statement of changes in equity, statement of cash fl ows and selected explanatory notes – together with the interim group management report of Sky Deutschland AG, Unterföhring, for the period from January 1 to June 30, 2011, that are part of the half year fi nancial report according to § 37w WpHG (German Securities Trading Act). The preparation of the condensed interim consolidated fi nancial statements in accordance with those IFRS applicable to interim fi nancial reporting as adopted by the EU, and of the interim group management report in accordance with the requirements of the WpHG applicable to interim group management reports, is the responsibility of the Company’s management. Our responsibility is to issue a review report on the condensed interim consoli-dated fi nancial statements and on the interim group management report based on our review.

We performed our review of the condensed interim consolidated fi nancial statements and the interim group management report in accor-dance with the German generally accepted standards for the review of fi nancial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated fi nancial statements have not been prepared, in material aspects, in accordance with the IFRS applicable to interim fi nancial reporting as adopted by the EU, and that the interim group management report has not been prepared, in material aspects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a fi nancial statement audit. Since, in accordance with our engagement, we have not performed a fi nancial statement audit, we cannot issue an auditor’s report.

Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated fi nancial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim fi nancial reporting as adopted by the EU, or that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports.

Munich, August 4, 2011

KPMG AGWirtschaftsprüfungsgesellschaft

SchmidtWirtschaftsprüfer

KremerWirtschaftsprüfer

Review Report

| 37Q2 Report 2011

Contact information and fi nancial calendar

Imprint

Published bySky Deutschland AGMedienallee 2685774 Unterföhringwww.info.sky.de

Contact and further information:

CommunicationsPhone: +49 89 99 58 50 00E-mail: [email protected]

Investor RelationsPhone: +49 89 99 58 10 10E-mail: [email protected]

Financial calendar 2011:10 November 2011 Q3 results

DisclaimerThis report contains forward-looking statements based on the currently held assessments and assumptions of the management of Sky Deutschland AG, which are expressed in good faith and given to the best of knowledge of the Company. This document contains statements on future developments based on currently available information and also includes risks and uncertainties that could lead to actual results deviating from these forward-looking statements. Considering these risks, uncertainties and other factors, recipients shall not rely on these forward-looking statements in an unreasonable way. Sky Deutschland AG assumes no obligation to update, modify or amend any forward-looking statements

sky deutschland ag q2 report 2011 · 2011. 8. 11. · sky deutschland ag continued to deliver...

Documents