Modo de Ejecución de Ensayos y Adquisición de Datos

Overview

Sky Deutschland believes that it is the leading pay-TV provider in Germany and Austria, with 2.476 million contract subscribers as of June 30, 2010. In its core business, subscription-based pay-TV, which contributes the vast majority of its revenues, Sky Deutschland offers subscribers comprehensive programming in digital quality via up to 61 TV channels, comprising current feature films, new series, live sports and a number of third-party channels, as well as seven digital audio channels, distributing its content via cable, satellite and the internet. The core of Sky Deutschland’s subscription-based pay-TV offering consists of the live broadcasts of all matches of the first and second divisions of the German football league (Fußball-Bundesliga), for which Sky Deutschland holds the exclusive pay-TV rights for Germany (with the exception of IPTV and mobile TV rights), Austria and Switzerland until the end of the 2012/2013 season, Sky Deutschland’s HDTV services and the exclusive pay-TV broadcasting rights to the vast majority of movies produced by the major Hollywood studios, and a wide variety of general entertainment programming. To a lesser extent, Sky Deutschland also derives revenues from, among other things, pay-per-view services, commercial subscriptions, the activation and installation of Sky Deutschland receivers and the sale of advertising time. In addition to conventional broadcasting via satellite and cable, Sky Deutschland also offers some of its programming via Web-TV on a pay-per-view basis.

Sky Deutschland offers its subscribers several packages based on a “buy-through” model. Under this model subscribers are offered a basic package, Sky Welt, which contains a broad range of family-focused programming. Subscribers to the basic package then have the option to subscribe to one or more of the three premium packages: Film, Fußball Bundesliga, and Sport. There is also the

possibility of subscribing to Sky Deutschland’s HDTV option, Sky HD, which currently comprises up to ten channels. On subscribing to any premium package, households with satellite TV receivers also receive Sky Welt Extra, a bonus package with 17 additional TV channels. Sky Deutschland recently launched the Sky+ service, an HDTV digital video recorder and receiver for satellite customers, for easy recording and convenient viewing of Sky Deutschland’s programming, and Sky Deutschland’s Multiroom service, an option for existing subscribers to order an additional receiver with a second smartcard. Furthermore, Sky Deutschland offers customers a selection of newly released movies, special-interest shows, live sporting events and adult entertainment for on-demand access via cable, satellite and the internet. Sky Deutschland also provides pay-TV services to hotels, sports bars and other public venues.

Starting in the second half of 2008 and following significant financial difficulties, Sky Deutschland adopted a comprehensive restructuring plan, raised several rounds of new capital, negotiated new credit facilities and redeveloped its strategy. The new strategy is aimed at increasing the number of Sky Deutschland’s subscribers and its ARPU by further enhancing the attractiveness of its

programming, improving the usability of its products and services, increasing customer satisfaction and expanding its sales and marketing activities. A major milestone of the strategy was the July 4, 2009 launch of Sky Deutschland’s current product line-up and new branding under the “SKY”

brand. Sky Deutschland has since revised and adjusted this strategy, deciding to invest further in order to drive momentum in the business by expanding its HDTV offering, deploying the Sky+

HDTV digital video recorder and receiver, investing in innovations and product extensions, implementing new sales and distribution initiatives and improving customer service. Sky Deutschland believes that its relaunch laid a strong foundation for the growth of the business.

Nevertheless, although certain key metrics of the business – such as net subscriber additions,

quarterly annualized churn rate, ARPU, HDTV penetration and brand awareness – are moving in the right direction, Sky Deutschland has not fully achieved its own operating targets. To finance the above mentioned growth-enhancing measures and to secure the financial position of the Company and, in particular, to remedy liquidity constraints, Sky Deutschland has therefore decided to raise further capital through this offering and, if applicable the Convertible Bond and/or the Shareholder Loan. See “The Offering”.

In the first half of 2010, Sky Deutschland recorded revenues ofA470.9 million and a loss of A178.9 million compared to a loss of A445.8 million in the first half of 2009, and expects to incur additional significant losses in the remainder of 2010 and in 2011. Sky Deutschland had

2.476 million contract subscribers as of June 30, 2010 and an ARPU ofA28.62 for the second quarter of 2010.

Restructuring and Relaunch of the Company’s Business

Sky Deutschland announced its plans to restructure its business at the beginning of October 2008. In its ad-hoc release dated October 2, 2008, in which it forecast a significant EBITDA loss for 2008 and disclosed the fact that it had commenced discussions with its banks regarding a restructuring of its credit facilities, Sky Deutschland also announced that in the future it would use a different methodology to classify its subscribers to focus on direct subscribers and exclude other subscribers who generated only limited or no revenues. The new subscriber classification methodology resulted in a decrease in Sky Deutschland’s reported number of subscribers and a corresponding increase in reported ARPU. See “—Subscribers” for further information.

Given the significant EBITDA loss in 2008, on November 15, 2008, Sky Deutschland would, absent a waiver by its lenders, have breached a covenant contained in its then-existing revolving credit facility that required it to maintain a certain relationship between its EBITDA and its net financial result. A breach of this covenant would have entitled the lenders to terminate the then-existing revolving credit facility with immediate effect and, due to contractual linkages between the

revolving credit facility and its other credit facilities, would also have entitled them to terminate the then-existing bridge loan and to demand repayment of the outstanding amounts. To refinance its then-existing bank debt, Sky Deutschland negotiated new credit facilities, consisting of two term loans in the aggregate amount ofA275 million, a revolving credit facility in the amount of A125 million and a guarantee facility in the amount of A125 million. These credit facilities were entered into on December 23, 2008 and became effective upon, among other things, a capital increase resulting in gross proceeds ofA450 million, which Sky Deutschland achieved by increasing its capital in two steps in January and April 2009 by way of rights offerings. These capital increases were guaranteed by the Company’s major shareholder, News Adelaide, an indirect wholly owned subsidiary of News Corporation, as News Adelaide committed to exercise subscription rights and/or to acquire New Shares that had not been purchased in the rights offerings.

Furthermore, the Company thoroughly reviewed its operations in 2008, launched a new strategy intended to resolve the difficulties it had faced in previous years and decided to relaunch its business. The new business strategy was designed to increase the number of Sky Deutschland’s monthly contract subscribers as well as its ARPU. The operational measures that made up the strategy affected all aspects of Sky Deutschland’s business and were designed to increase the attractiveness of Sky Deutschland’s programming, improve the usability of its products and services by making its packaging and pricing structure clearer and simpler, increase customer satisfaction, and expand Sky Deutschland’s sales and marketing activities. See “—Products and Services” for further information on the offered products and services. A major milestone of the new strategy was the launch of Sky Deutschland’s current product line-up and new branding on July 4, 2009. Prior to that time, Sky Deutschland had marketed its product offering under the “PREMIERE” brand. Sky Deutschland decided to discontinue the use of its former “PREMIERE” brand, which led to a write-off of the value of the trademarks Sky Deutschland formerly used. This full write-write-off of the

Premiere trademark amounted toA331.6 million. The write-off generated deferred tax income in the amount ofA77.7 million, resulting from the reversal of temporary differences between the carrying amount of the trademark in accordance with IFRS and its tax basis. See “Operating and Financial Review—Key Factors Influencing Sky Deutschland’s Results and Operating Performance” for further information on the impacts of the decision to re-brand the Company.

To increase its financial flexibility and to be able to invest in further initiatives to support sustained subscriber growth, such as increased direct marketing activities, additional investments in

programming and the Sky+ service, and investments in Sky Deutschland’s HDTV channels, Sky Deutschland further increased its share capital by 10 per cent in January 2010 by way of a direct placement to News Adelaide, generating proceeds ofA110 million. In connection with the capital increase in January 2010, Sky Deutschland negotiated with its bank syndicate a waiver of a clause in its financing agreements requiring that proceeds from equity offerings first be used to repay the credit facilities and an adjustment of the existing financial covenants to reflect the additional investments.

Sky Deutschland believes that its relaunch has provided a strong foundation for the growth of the business. Sky Deutschland revised and adjusted its strategy and decided to invest further funds to drive momentum in the business by expanding its HDTV offering, deploying Sky+ (an HDTV digital video recorder and receiver), investing in innovations and product extensions, implementing new

sales and distribution initiatives, and improving customer service. The key metrics of the business are moving in the right direction – thus Sky Deutschland has been able to record:

k net additions to its subscriber base of 112,002 subscribers within one year of the launch of the

“SKY” brand (number of subscribers on June 30, 2009 compared with number of subscribers on June 30, 2010),

k a quarterly annualized churn rate declining from 20.8% in the second quarter of 2009 to 16.3%

in the second quarter of 2010 (the quarterly annualized churn rate is defined as the number of direct subscribers that terminated their subscriptions during the course of a quarter, divided by the average number of direct subscribers in that period (calculated by dividing the sum of the number of direct subscribers on the first day of the quarter, e.g., on April 1, 2010, and on the last day of the quarter, e.g., on June 30, 2010 by two) and multiplied by four),

k ARPU increasing fromA25.20 in the second quarter of 2009 to A28.62 in the second quarter of 2010,

k an HDTV penetration rate increasing from 8.4% in the second quarter of 2009 to 14.9% in the second quarter of 2010, and

k brand awareness of the “SKY” brand increasing from 36% in June 2009 to 78.4% in August 2010 (Source: Icon Added Value: Brand- and Advertising Tracker August 2010, a study that was commissioned by Sky Deutschland).

Nevertheless, the pace of development is not fast enough and Sky Deutschland has not fully achieved its operating targets.

To finance the growth-enhancing measures described above and to secure the financial position of the Company and, in particular, to remedy liquidity constraints, Sky Deutschland has decided to raise further capital. In order to (i) avoid mandatory repayment of the credit facilities from the proceeds of the offering or the other financing measures described in the financial support agreement, (ii) adjust financial covenants and other restriction to reflect the intended use of proceeds and payments in connection with the financing and (iii) avoid a breach of financial covenants that would have occurred at some point in time, which would have entitled the lenders to terminate the credit facilities and demand repayment of the outstanding amounts, Sky Deutschland has agreed on an amendment to the credit facilities with its syndicate banks. The amendment and waiver agreement to the credit facilities was entered into on August 2, 2010 and has partially become effective after the Company entered into a financial support agreement (FSA) with News Adelaide and News Corporation, under which News Adelaide committed to support the Company in raising financing in an aggregate gross amount ofA340 million (Total Funding Amount). Certain of these amendments are subject to the condition subsequent that the Company has entered into

agreements under which it may draw new financing in the amount ofA80 million net by October 31, 2010 andA340 million gross by December 31, 2010. This condition subsequent does not apply if the Company has actually received the amounts prior to the mentioned dates. Further, the actual receipt of the Total Funding Amount on or before January 31, 2011 is an additional condition subsequent for this amendment and waiver agreement. Upon completion of this offering, the Company expects, assuming placement of all offered shares in full, to receive gross proceeds ofA283.1 million; the Company expects to generate the remainingA56.9 million (gross) from the direct placement of a convertible bond to News Adelaide, expected to occur on or before January 28, 2011 and/or the grant of a Shareholder Loan, expected to occur on or before January 31, 2011. See “Related Party Transactions—Relationship with News Corporation—Financial Support Agreement” for further information on News Adelaide’s commitment to exercise subscription rights and/or to acquire New Shares that have not been purchased and for further information on News Adelaide’s commitment to subscribe for the Convertible Bond or to grant the Shareholder Loan.

Competitive Strengths

Sky Deutschland believes that it has the following competitive strengths, which position it well in its continued efforts to turn around its business and achieve lasting profitability.

k Exclusive broadcasting rights. Sky Deutschland holds exclusive licenses for Germany and Austria for a range of premium sporting events and movies. The centerpiece of Sky

Deutschland’s offering is the live broadcasting of the matches of the first and second divisions

of the German football league (Fußball-Bundesliga). Sky Deutschland has entered into an exclusive license agreement with respect to the 2009/2010 through 2012/2013 seasons with DFL (except for IPTV and mobile TV rights). Sky Deutschland believes that these

arrangements position Sky Deutschland well to generate revenues from the marketing of these important sporting events through the 2012/2013 season. Sky Deutschland also holds pay-TV rights to other types of premium sporting events, such as the DFB Cup (DFB-Pokal) until the 2011/2012 season and the UEFA Champions League until the 2011/2012 season the Wimbledon grand slam tennis tournament from 2011 to 2013 as well as the Formula One races and all major golf tournaments until the end of 2010. In addition, Sky Deutschland holds exclusive pay-TV rights to the vast majority of movies produced by the major Hollywood studios and selected European studios. Furthermore, Sky Deutschland holds the exclusive rights to a number of third-party channels and exclusive satellite rights to, among other channels, Eurosport HD, the Disney Channel, the FOX Channel and TNT Serie.

k Extensive high definition broadcasts. Sky Deutschland believes that it is the leading provider of HDTV broadcasts in Germany. Sky Deutschland focuses on offering most of its HDTV

programming with a true HD signal – in contrast to the widely broadcast HD programming with an upscaled resolution. In the view of Sky Deutschland, the use of a true HD signal results in crisper and brighter television pictures than does upscaled resolution. Screen Digest forecasts that at the end of 2010, 20.7 million TV sets in 18.3 million TV households in Germany and Austria will be suitable for HDTV (Source: Screen Digest from August 2010). With currently ten HDTV channels showing many of the exclusive sport, movies and other programming mentioned above, Sky Deutschland offers to its subscribers a wide variety of HDTV channels, mostly in true HDTV quality.

k Secured access to almost every household in Germany and Austria via the use of various distribution platforms. Sky Deutschland’s core competences include the acquisition of rights to premium entertainment, the compilation of tailored programming packages and the

marketing of these packages to subscribers. Sky Deutschland believes it can benefit from these competences irrespective of whether its programming is broadcast via satellite, cable or other distribution platforms. Because Sky Deutschland has the requisite technical capacity to make use of most available distribution platforms, it can decide on a case-by-case basis which platforms it wishes to use to provide its content to subscribers. Since the various platform operators compete with each other, they have an incentive to enhance the attractiveness of their offering by carrying Sky Deutschland’s programming.

k Significant and attractive subscriber base. As of June 30, 2010, Sky Deutschland had 2.476 million contract subscribers in Germany and Austria and 133,029 wholesale subscribers, who are subscribers whose contractual relationship is with a platform provider and not directly with Sky Deutschland. Monthly contract subscribers are individuals who subscribed for one or more of Sky Deutschland’s pay-TV packages and bars, restaurants, hotels and other public venues with commercial subscriptions (with each room in one of these hotels or other public venues in which Sky Deutschland is receivable counting as a separate subscriber; subscriptions to Sky Deutschland’s Multiroom service do not increase the number of subscribers but result in a higher ARPU per subscriber). Sky Deutschland believes this subscriber base makes it an attractive partner for movie studios, promoters of sporting events and other content providers and positions it well for future growth. Based on internal analyses carried out by Sky Deutschland, the majority of its subscribers are households comprising more than two persons. Sky Deutschland believes that these households are more likely to be interested in a wide variety of programming.

k Widespread and diverse sales network. Sky Deutschland has access to a widespread and diverse sales network. It relies on retail stores to market its products and services alongside direct acquisition channels such as telesales, web sales and direct mail. At June 30, 2010, Sky Deutschland had sales partners, at approximately 6,000 locations in Germany and

approximately 700 locations in Austria. Among the partners in Germany are the electronics and media retail chains “Media Markt” and “Saturn” of Media-Saturn-Holding GmbH, which is a subsidiary of METRO AG, one of Europe’s largest wholesale chains. Furthermore, Sky Deutschland has distribution agreements with all the cable network operators, and specific marketing agreements with Kabel BW GmbH & Co KG (“KBW”), NetCologne Gesellschaft fu¨r Telekommunikation mbH (“NetCologne”), Tele Columbus Multimedia GmbH

(“Telecolumbus”) and Versatel Telekabel GmbH (“Versatel”). Under these marketing

agreements, Sky Deutschland’s programming is offered to the customers of these cable network providers, either as a stand-alone subscription or in combination with telephone and internet flat rate offerings of the cable network provider. Sky Deutschland believes that this widespread and diverse sales network gives the Company access to a large number of potential customers.

k Clear and simple product offer and pricing structure. Sky Deutschland has implemented a clear and simple pricing structure. Subscribers may sign up for a basic package (“Sky Welt”) that offers a variety of Sky Deutschland’s channels. Premium packages, such as the German football league (“Fußball Bundesliga”), the movie package (“Film”) and sports package (“Sport”), are offered in combination with the basic package. The basic package, Sky Welt, is currently available in the form of a 12-month subscription at a price ofA16.90 per month. Each of the premium packages may be subscribed to for an additionalA16.00 per month for the first package, A12.00 per month for the second package andA10.00 per month for the third package. Sky HD may be purchased on

k Clear and simple product offer and pricing structure. Sky Deutschland has implemented a clear and simple pricing structure. Subscribers may sign up for a basic package (“Sky Welt”) that offers a variety of Sky Deutschland’s channels. Premium packages, such as the German football league (“Fußball Bundesliga”), the movie package (“Film”) and sports package (“Sport”), are offered in combination with the basic package. The basic package, Sky Welt, is currently available in the form of a 12-month subscription at a price ofA16.90 per month. Each of the premium packages may be subscribed to for an additionalA16.00 per month for the first package, A12.00 per month for the second package andA10.00 per month for the third package. Sky HD may be purchased on