LA ANTIMATERIA COMO PROPULSOR

financial performance

revenues from continued operations rose by 7.0% to € 2.4 billion in 2012 compared to € 2.2 billion in 2011. The recurring EBITDA result rose to € 745 million (2011: € 726 million). strong growth has been realised in the area of digital activities and the revenues increased by 38% to € 351 million. Other segments of growth were television broadcasting in the German speaking area and content production. In December Prosiebensat.1 announced the disposal of the activities in scan-

dinavia. The activities are classified as assets held for sale. A successful con- summation of the sale of the Northern European TV and radio activities is ex- pected in the first half of 2013. valuation

pursuant to the ifrS accounting principles, TMG’s equity interest in Prosiebensat.1 is classified as an associate, i.e. a participating inter- est over which significant influence is exercised. TMG recognises the 6% of the Prosiebensat.1 net result as the result from participating interests

and the value of the participating interest on the balance sheet. The net result includes the activities in Northern Europe. In July 2012, TMG received a dividend payment on its shares with voting rights in the amount of € 1.15 per share. In total, subject to the deduction of income tax at source, an amount of € 13.7 million was deducted from TMG’s equity interest in Prosiebensat.1.

As at 31 December 2012, the carrying value of TMG’s eq- uity interest (prior to the payment of the dividend over 2012) in Prosiebensat.1 amounted to € 230.8 million (2011: € 226.7 million) or approximately € 17.58 per share with voting rights. The share price of the preference shares (without voting rights) rose to € 21.30 as at year end of 2012.

The acquisition value of the shares was € 182 million, which is the exercise price of the option at the time (€ 377 million) sub- ject to the deduction of the already recognised impairment of € 195 million when the option was exercised in 2008, which ac- cording to the current IFrs rules is irreversible. The valuation of the interest in the Prosiebensat.1 associate as at 31 December 2008 includes an impairment of € 99.8 million. In 2010, € 43.8 million (2009: € 56 million) was recovered, which means that the full amount of the impairment deducted in 2008 has been recovered.

prosiebensat.1 2013 developments

In 2012 Prosiebensat.1 sold its activities in scandinavia for € 1.325 billion. The transaction is subject to merger control clearance. Following a successful consummation of the sale of the Northern European TV and radio activities, Prosiebensat.1 intends to use a partial amount of Eur 500 million of the pro- ceeds for partial prepayment of term debt and the remainder for reinvestments in the business of Prosiebensat.1. hence, a

prosiebensat.1 Media aG

prosiebensAt.1 mediA AG (prosiebensAt.1) is one of the leAdinG mediA enterprises in europe. its core business consists of operAtinG free television chAnnels thAt Are finAnced from Adver- tisinG revenues. in Addition to A stronG diGitAl And Joint ventures portfolio, prosiebensAt.1 Also hAs An internAtionAl production network. the compAny reAches 86 million individuAls eAch dAy. prosiebensAt.1’s heAd office is locAted in unterfoehrinG neAr munich. prosiebensAt.1 wAs founded in 2000, is A listed compAny And hAs more thAn 3,000 employees.

TMg jaarverslag 2012 38

The recurring

ebiTda of

prosiebensaT.1 Media ag

rose To

€ 745 Million

significant portion of the operating cash flow will be available for other purposes. Therefore, provided the disposal is success- fully consummated, Prosiebensat.1 intends to propose to the Annual General Meeting a dividend for 2012 of € 5.63 per com- mon share.

The actual implementation of the aforementioned proposal would mean an incoming cash flow for TMG of approximately gross € 74 million (gross dividend for 2011: approx. € 14.7 mil- lion). A dividend tax will be levied on the payment amount that depending on the outcome of the discussion in the German Parliament is expected to be between 0-15%.

Furthermore, Prosiebensat.1 intends to propose to the com- ing shareholders’ meeting a conversion of its non-voting pref- erence shares into voting common shares. In connection with the conversion, which shall be effected without requirement for the preference shareholders to pay any premium, all common

shares would be admitted to trading at the stock exchange. The company’s majority shareholder has informed the company of its intention to support this measure in the case of a success- ful consummation of the Nordic transaction. The conversion of preference shares into common shares requires a special reso- lution of preference shareholders with a majority of 75 percent of the votes cast.

If the proposal to convert the preference shares actually materi- alises, TMG’s interest in Prosiebensat.1 would consist of listed securities and as such would be more liquid than is currently the case.

possible incoMing

dividend of

€ 74 Million froM

prosiebensaT.1 Media ag

TMG Annual Report 2012 40

risK ManaGeMent

risk management is embedded in business operations and is actively applied as a management tool.

Internal Audit each year audits various processes in terms of the presence and operation of control measures. The results are discussed by the Executive Board and the Audit committee of the supervisory Board. The Audit committee monitors the qual- ity of the risk management, the internal risk controls and the risk management methodology.

The Executive Board is aware that it is not possible for any risk management and control system to provide an absolute guaran- tee for achieving the enterprise’s objectives, nor can this system completely exclude substantive errors, fraud or a violation of laws and regulations from occurring.

strategic risk Management

Pursuant to the renewed strategy, the strategic risk analysis has been updated at the TMG level. The key risks that are relevant to achieving the objectives and strategy were identified for this purpose. The strategy is described on pages 118-119 of this annual report. The progress of the adopted measures for the identified risks are reported twice each year and discussed by the Executive committee.

operational risk Management

In line with the current risk management policy, all business units will be updating their risk analyses as part of their semi- annual risk management reporting. In addition, risk analyses were completed for corporate functions and for key projects and programmes. In addition, the results of tests of identified internal control measures are reported twice each year. At the end of 2012 the tests and the reports were comprehensively reported via a risk management tool. The risk management progress is reported in the operational business reviews each quarter. financial Risk Management

control measures have been identified for the financial risks as- sociated with significant items in the financial statements or these items in the financial statements are integrally analysed and docu-

mented at the corporate level. The op- eration of these control measures is regularly tested for significant items in the financial statements that occur on a routine basis. TMG recognises the market, credit, foreign exchange and interest rate risks as part of its normal business operations. The risks related to these elements are described in the section on Financial risk Management in the financial statements.

compliance risk Management To secure compliance with laws and regulations within the or- ganisation, the compliance Officer has developed and distrib- uted various policy guidelines and directives, such as the code of conduct and the Fraud Policy document.

changes in laws and regulations and changed TMG policy are regularly explained and discussed in the business units’ man- agement team meetings.