Explanatory Notes on Reporting Principles

Content and Form of the Group Management Report

Changes in this Group management report compared with the previous year are intended to further improve clarity and provide a better overview. They primarily concern the structure of the Group management report and the Annual Report and adjustments made as a result of new accounting standards.

The Compensation Report, the take-over related disclosures according to §§ 289 (4), 315 (4) HGB as well as the chapter “The ProSiebenSat.1 Share” are located in the section “To Our Shareholders” of this report and are part of the audited Group management report.

Predictive Statements to the Future Earnings, Financial Position and Performance

Our forecasts are based on current assessments of future developments. Examples of risks and uncertainties which can negatively impact this forecast are e.g. lower economic dynamics, a decline in advertising investments, increasing costs for program procurement, negative rating trends and changes in legislation, regulatory requirements or media policy guidelines. If one or even more of these imponderables occur or if the assumptions on which the forward-looking statements are made do not apply, then actual results may deviate materially from the statements made or the results implicitly expressed.

Reporting on the Basis of Continuing Operations

Unless otherwise indicated, in this Annual Report the analysis of earnings, financial position and performance is based on continuing operations. This means that earnings contributions and cash flows generated up to the time of deconsolidation by activities sold in Eastern Europe in the course of 2014 are not included in the individual items of the income statement and cash flow statement. In accordance with the provisions of IFRS 5, they are recognized as “Result from discontinued operations” and “Cash flow from discontinued operations” respectively. These items also include the respective results from deconsolidation of the companies concerned. The items for the comparative previous-year periods also include the earnings contributions and deconsolidation result/cash flows of the Northern Europe portfolio, which has been sold and was deconsolidated in April 2013.

Key Figures Used

For the ProSiebenSat.1 Group, revenues, EBITDA, recurring EBITDA, underlying net income and leverage factor are the key financial indicators on the Group level. Additionally, revenues and EBITDA in the Digital & Adjacent segment are very important. The development of these figures is therefore used to analyze the Group’s earnings, financial position and performance, in addition to the key figures from the income statement, statement of financial position and cash flow statement. Audience shares are the key non-financial parameters.

The ProSiebenSat.1 Group does not report on the basis of order volumes. Instead, the development of our share of the advertising market and the analysis of the situation in the sector and with regard to competition provide important data which are also being examined within risk management. There are framework agreements in place with a large number of our advertising customers in the Broadcasting German-speaking segment, which stipulate certain order volumes and the conditions underlying these. In so-called program screenings, the ProSiebenSat.1 Group informs its customers about the direction of the station planning. Advertising customers use this preview as an important basis for making decisions about their advertising investments for the subsequent year. The price level is primarily based on the factors of audience shares, reach, broadcast time, demand and available advertising inventory. As is customary in this business, the final budgets are confirmed on a month-by-month basis — sometimes, however, only in the short term. Only then is the revenue level transparent. Furthermore, additional advertising budgets are granted at short notice towards the end of the year. In the Content Production & Global Sales segment, the development and production of programming content as well as worldwide distribution through new or re-commissioning takes place, as is customary in the industry, in the short term and continuously throughout the year. As a result, we do not report on order volumes here either.

Change Rates and Rounding

In this report the plus/minus signs relating to change rates are presented using a business perspective. Improvements are thus shown with a plus (+), declines with a minus (–). Due to rounding, it is possible that percentage figures given do not exactly reflect the absolute figures to which they relate and that the individual figures do not exactly add up to the totals shown.