Quarterly Report 2014

Q1

Content Q1 2014

Content

2 Key Figures

3 First Quarter 2014

4 Foreword by the Chairman of the Management Board

6 Constantin Medien AG Share

9 Interim Group Management Report

32 Consolidated Interim Financial Statements

40 Consolidated Interim Financial Statements | Notes to the Consolidated Interim Financial Statements

50 Finance Calendar | Imprint

Forward-looking statements

This quarterly report contains statements relating to future events thatare based on management’s assessments of future developments. A se-ries of factors beyond the control of the company, such as changes in thegeneral economic and business environment and the incidence of indi-vidual risks or occurrence of uncertain events, can result in actual re-sults differing substantially from the forecast. Constantin Medien AGdoes not intend to continually update the forward-looking statementscontained in this quarterly report.

Important notice

This document is a free translation into English of the original Germantext. It is not a binding document. In the event of a conflict in inter-pretation, reference should be made to the German version, which isthe authentic document.

2

Q1 2014 The Company

Key Figures

Key Figures

Non-current assets

Film assets

Other intangible assets

Balance sheet total

Subscribed capital

Equity

Equity ratio (in percent)

Non-current financial liabilities

Current financial liabilities

Sales

Sports

Film

Sports- and Event-Marketing

Other Business Activities

Earnings before interest, taxes, depreciation and amortization (EBITDA)

Amortization, depreciation and impairment

Loss/profit from operations (EBIT)

Earnings before taxes (EBT)

Earnings attributable to shareholders

Cash flow from operating activities

Cash flow for investing activities

Cash flow for financing activities

Shares outstanding in million

Share price in EUR

Market capitalization (based on shares outstanding)

Average number of shares outstanding (basic) in million

Earnings per share (basic) in EUR

Earnings per share (diluted) in EUR

Employees (at closing)

3/31/2014

225.1

135.5

31.9

465.0

85.1

49.7

10.7%

109.8

99.1

1/1 to3/31/2014

136.1

33.4

92.1

10.1

0.5

51.3

-53.6

-2.3

-4.2

-5.5

46.8

-18.4

-25.2

3/31/2014

77.7

1.58

122.8

1/1 to3/31/2014

77.7

-0.07

-0.07

1,600

12/31/2013

258.8

172.2

31.6

495.6

85.1

55.2

11.1%

109.6

124.0

1/1 to3/31/2013

103.7

37.1

55.8

10.1

0.7

19.2

-17.4

1.8

0.7

-0.5

17.2

-15.9

-9.4

12/31/2013

77.7

1.69

131.3

1/1 to3/31/2013

77.7

-0.01

-0.01

1,547

in EUR million

3

The Company Q1 2014

First Quarter 2014

First Quarter 2014

January

Effective January 1, 2014, Bernhard Burgener, Chairman of

the Management Board of Constantin Film AG until that point,

moves to the Company's Supervisory Board and is elected as

Chairman of this Board on January 7, after the previous office

holder Fred Kogel stepped down ahead of time. The Man age-

ment Board Member Martin Moszkowicz is appointed as new

Chairman of the Management Board of Constantin Film AG.

At this year’s Bavarian Film Awards ceremony in mid- January,

the Constantin Film blockbuster “Fack ju Göhte” receives the

Audience Award. The Constantin Film co-production “Ostwind”

receives the Bavarian Film Award in the category Best Chil-

dren's and Teen Film of 2013.

Since the end of January, SPORT1 US can also be received via

Entertain, the pay-TV platform of Deutsche Telekom, in SD and

HD quality. A co-operation was concluded with Zattoo: also

since the end of January, Zattoo HiQ subscribers can receive

SPORT1 HD.

February

In early February, SPORT1 acquires the exploitation rights to

the Women's and Men's Rabobank Hockey World Cup 2014,

which is to take place in Den Haag, Netherlands, from May 31

to June 15. In addition, it also acquires the rights package for

the biennial FIH Champions Trophy, which is due to take place

in November and December 2014.

After obtaining the exploitation rights for the Olympic Men's

and Women's Ice Hockey Tournaments at the 2014 Olympics

Winter Games in Sochi, SPORT1 in February broadcasts a total

of 27 live matches in free-TV and as live streamings on

SPORT1.de.

At this year's Monte-Carlo Film Festival de la Comédie at the

end of February, “Fack ju Göhte” receives three awards:

Director and scriptwriter Bora Dagtekin wins Best Directors,

Elyas M'Barek wins Best Lead Performance and cameraman

Christof Wahl receives the Special Jury Prize.

March

SPORT1 agrees a co-operation with Ticketmaster GmbH and

since March 3 offers its own online ticket shop on SPORT1.de,

offering tickets for numerous sports, music and comedy high-

lights.

In mid-March, SPORT1 announces the acquisition of the

exploitation rights to Major League Baseball (MLB) for the

German-speaking region for the next three match periods. The

pay-TV channel SPORT1 US is broadcasting at least 60 live

matches per period with original US commentary.

Also in mid-March, the Constantin Film co-production “3096”

receives the “Deutscher Hörfilmpreis” in the category Theat ri-

cal Film. The Constantin Film TV series “Dahoam is Dahoam”

receives the “Deutscher Hörfilmpreis” Audience Award.

In the reference funding of the German Federal Film Board

(Filmförderungsanstalt, FFA) for 2013, the Constantin Film

Group is awarded the Golden FFA Industry Tiger for the ninth

time in the category Production and for the tenth time in the

category Distribution at the end of March 2014.

4

Q1 2014 The Company

Foreword by the Chairman of the Management Board

Foreword by the Chairman of the Management Board

Dear Shareholders,

in the first three months of the current year, the Constantin

Medien Group recorded a varied development in its operative

segments. Overall, business development remained in line with

expectations, even though our Company's earnings position

was impacted by non-recurring charges.

In the Sports Segment, the positive development of market

shares and coverage of our multimedia offers continued. The

free-TV channel SPORT1 was able to increase its market share

compared to the previous year's quarter, and also our pay-TV

offers SPORT1+ and SPORT1 US recorded further growth in

terms of subscribers. The accumulated coverage of the online

and mobile offers under our umbrella brand SPORT1 recorded

in visits went up in the first quarter by a monthly average of

more than 13 percent to 63.5 million, considering that the

shift of content use from online to mobile, which has been ap-

parent for some time, remained at a high level. The consist -

ently favorable response of viewers and users to our extensive

sports contents demonstrates that we are on the right track with

our digi ti zation strategy and with our further program develop-

ments implemented in 2013.

However, as expected, the increase in sales of SPORT1 in the

first quarter were insufficient to compensate for the loss of the

production of the former Bundesliga channel LIGA total! Con-

sequently, segment sales in the first quarter of EUR 33.4 mil-

lion were below the previous year’s figures. The segment result

of EUR 1.2 million was further impacted by the higher expen-

ses for our digitization strategy. Nevertheless, we view this as

an important investment for the future of our Sports Segment.

The Film Segment recorded a jump in revenues by 65 percent

to EUR 92.1 million between January and March. In particular,

the areas of theatrical distribution and license trading were

able to generate significantly higher sales compared to the

comparative quarter in 2013 due to the global distribution of

the film title “Pompeii”. In a slightly declining German thea-

tri cal market, German in-house and co-productions pleasingly

increased their market share compared to the previous year's

first quarter by almost 10 percentage points to 42 percent.

Taking together the performance of all of its films released in

German cinemas in the first quarter 2014, the Constantin Film

Group reached an impressive market share of 11.9 percent by

viewers and 11.0 percent by revenue. The basis for this was

the teen adventure “Fünf Freunde 3”, which was released in

January 2014 and attracted 1.2 million viewers, as well as the

sensational success “Fack ju Göhte” already launched in

November 2013, which attracted a further 1.5 million movie-

goers in the first quarter 2014. Impairments on film assets, in

particular the movie “Tarzan”, had a negative impact. The

impair ments significantly contributed to the negative segment

result for the first three months of EUR 2.6 million.

The Sports- and Event-Marketing Segment continued to pre-

sent itself highly successful. In the first quarter 2014, the

TEAM group was able to realize additional agreements in the

marketing process for the commercial rights for the UEFA

Champions League and UEFA Europa League (each for the

match periods 2015/16 to 2017/18). TV contracts were con-

cluded for such varied markets as Italy, Israel and Myanmar. In

the sponsorship rights area, the Japanese automobile manufac -

turer Nissan was acquired as a new sponsor for the UEFA Cham-

pions League. At stable revenues, the segment result increased

by EUR 0.5 million to EUR 3.9 million.

The Constantin Medien Group generated sales of EUR 136.1

million for the first three months, an increase of 31 percent

compared to the same period last year. However, earnings

attrib utable to shareholders – our key reporting figure for the

development of earnings – amounted to EUR -5.5 million, thus

weaker than last year (EUR -0.5 million). In addition to higher

impairments, non-recurring charges in the context of our Com-

pany's so-called Formula One proceedings also had an im pact.

In February 20 this year, the High Court of Justice in London

as the Court of First Instance had rejected the claim. As a result,

we took legal steps in order to achieve admission to appeal and

to further assert our compensation claims.

On May 19, 2014 we announced that we will not continue

negotiations with Sky Deutschland regarding the transaction

agreed on December 5, 2013. The agreement provided the

sale of 100 percent of the shares of PLAZAMEDIA and of 25.1

5

percent each of the shares in Sport1 GmbH and Constantin

Sport Marketing GmbH. The execution, among others, was sub-

ject to the conclusion of a new multi-year production frame-

work contract between Sport1 GmbH and PLAZAMEDIA GmbH

TV- und Film-Produktion. However, it was not possible to reach

an agreement with Sky regarding this arrangement.

As a result, we have adjusted our financial expectations for the

current year because the sales of PLAZAMEDIA now continue

to be included in the year and due to the loss of the transac-

tion's income. We now assume sales of between EUR 460 mil-

lion and EUR 500 million for the Constantin Medien Group

(previously: EUR 420 million to EUR 460 million) and Group

earnings attributable to shareholders of between EUR

-13 million and EUR -15 million (previously: EUR +13 million

to +15 million).

Strategically, the non-conclusion of the transaction has no im-

pact on our Sports Segment. We will proceed on the path that

we have chosen and also continue our multimedia strategy with

the same determination as before in order to profit from the

digitization as best as possible.

With best regards

Bernhard Burgener

Chairman of the Management Board

6

Q1 2014 The Company

Constantin Medien AG Share

XETRA closing prices of the Constantin Medien share compared to SDAX and DAXsector Media

Comparative indices indexed to Constantin Medien's closing price as of December 31, 2013

12/31/13 1/31/14 2/28/14 3/31/14

1.85

1.80

1.75

1.70

1.65

1.60

1.55

1.50

Constantin Medien AG SDAX DAXsector Media

Constantin Medien AG Share

Performance of the capital markets

In the first quarter 2014, the German stock market and most

international capital markets were marked by a volatile lateral

shift. The most important international prime rates remained

unchanged on a very low level in the first quarter 2014. The

relaxed monetary policy of the federal banks con tinued to

stimulate the markets. In the meantime, geopolitical tensions

around the future annexation of Crimea to Russia led to

uncertainty in the markets. The DAX rose by 0.04 percent in

the first quarter, closing at 9,556 points on March 31. In the

same period, the German small-cap index SDAX showed a sig-

nificantly more positive development with an increase of 5.6

percent, closing at 7,169 points. The German media index

(DAXsector Media) closed at 318 points at the end of March

2014 after a drop of 6.7 percent.

Constantin Medien share performance

In the first quarter 2014, the Constantin Medien share's per-

formance was marked on the whole by a downward movement.

At a markdown of 6.4 percent since the start of 2014, the

share of Constantin Medien AG was below the comparative

small-cap index of the SDAX but in line with the German media

index DAXsector Media. The Constantin Medien share closed

at EUR 1.58 at the end of the first quarter. As of March 31,

2014, the 52-week high stood at EUR 1.88 (April 2, 2013)

with the 52-week low coming in at EUR 1.35 (June 13, 2013).

In the remaining post-balance sheet period, the Constantin

Medien AG share followed a lateral movement, closing at EUR

1.49 on April 30, 2014.

7

The Constantin Medien share is being actively monitored by

no table research institutions. In the last twelve months, the

follow ing institutions published studies on Constantin Medien

AG:

– Close Brothers Seydler Bank – Deutsche Bank

– DZ Bank – Matelan Research

Share capital and shareholder structure

Constantin Medien AG's share capital did not change during

the first quarter 2014, amounting to EUR 85.1 million as of

March 31, 2014. As a consequence of the full consolidation

of its subsidiary Highlight Communications AG, its shares in

Constantin Medien AG qualify as treasury shares; and so the

Company held a total of 7.4 million non-voting treasury shares

(8.7 percent of share capital) through Highlight Communica-

tions AG as of March 31, 2014. After deducting these shares,

there were approximately 77.7 million shares out standing as of

the balance sheet date.

There were no reportable changes to the shareholder structure

of Constantin Medien AG in the first quarter 2014. The free

float of the Constantin Medien share stood at 51.9 percent of

the share capital as of March 31, 2014.

Additional Constantin Medien AG capital market

securities

At a drop of 6.3 percent, the share of Highlight Communica -

tions AG also fell below the comparative small-cap index SDAX

in the first quarter 2014 and was in line with the comparative

German media index DAXsector Media. The share price closed

at EUR 3.72 on March 31, 2014. As of April 30, 2014, the

shares traded at EUR 3.75.

On October 13, 2010, Constantin Medien AG had issued a cor-

porate bond with a volume of EUR 30 million in the form of a

private placement with institutional investors in Germany and

abroad. The bond has a term of five years and accrues interest

at 9.0 percent p.a. The bond was included as a follow-through

by third parties in the open market of the Stock Exchange. At

the end of the first quarter 2014 the bonds closed at 104.70

percent. As of April 30, 2014, they stood at 104.20 percent.

On April 4, 2013, the Company's Management Board with the

consent of the Supervisory Board decided to issue a corporate

bond with a volume of up to EUR 65 million, a coupon of 7.0

percent p.a. and a maturity of five years. As a result of the strong

demand, Constantin Medien AG was able to successfully place

its 7.0% corporate bond 2013/2018 with private investors and

institutional investors on April 15, 2013 – already on the first

day of the subscription period. The trad ing of the bond started

on April 17, 2013 in the open market of Deutsche Börse AG

(Regulated unofficial market of the Frankfurt Stock Exchange)

in the segment Entry Standard for Bonds. April 23, 2013 was

the issuance and value date. At the end of the first quarter

2014 they closed at 99.70 percent. As of April 30, 2014 they

stood at 101.25 percent.

KF 15 GmbH & Co. KG

Treasury shares1

Dr Erwin Conradi

Bernhard Burgener

BWVA2

Dr Dieter Hahn

1Predominantly held through Highlight Communications AG2Baden-Württembergische Versorgungsanstalt für Ärzte, Zahnärzte und Tierärzte

Shareholder structure as of March 31, 2014

Share capital: 85.1 million shares

18.7%

8.7%

6.2%

51.9%

6.7%

5.1%2.7%

Free float

8

Q1 2014 The Company

Constantin Medien AG Share

DE0009147207 / 914720

CH0006539198 / 920299

DE000A1EWS01 / A1EWS0

DE000A1R07C3 / A1R07C

DAXsector Media

EUR 1.58 / 1.88 / 1.35

EUR 3.72 / 4.45 / 3.43

104.70 / 105.00 / 100.40 percent

99.70 / 103.00 / 94.00 percent

85.1 million shares

77.7 million shares

29,000 bonds

65,000 bonds

EUR 122.8 million

EUR 165.7 million

EUR 30.4 million

EUR 64.8 million

ISIN/WKN

– Ordinary share (Prime Standard Segment)

– Highlight Communications AG share (Prime Standard Segment)

– Corporate bond 2010/2015 (Open market)

– Corporate bond 2013/2018 (Segment Entry Standard for Bonds)

Indices

Closing rate 3/31/2014 / 52-week high / 52-week low

– Constantin Medien AG (Xetra)

– Highlight Communications AG (Xetra)

– Corporate bond 2010/2015 (Frankfurt)

– Corporate bond 2013/2018 (Frankfurt)

Share capital (3/31/2014)

Shares outstanding (3/31/2014)

Corporate bond 2010/2015 outstanding

Corporate bond 2013/2018 outstanding

Market capitalization (related to shares outstanding as of 3/31/2014)

– Constantin Medien AG (Xetra)

– Highlight Communications AG (Xetra)

– Corporate bond 2010/2015

– Corporate bond 2013/2018

Information on Constantin Medien securities as of March 31, 2014

Directors’ Dealings/Shareholdings of Board Members as of March 31, 2014

In the first quarter 2014, the Company was not notified of any

reportable purchase and sales transactions by Members of the

Management Board and the Supervisory Board. The number of

shares held by the executive bodies and their related persons

as of March 31, 2014 has therefore not changed compared to

the table shown in the 2013 annual report. No share entitle-

ments associated with option rights for executive Board Mem-

bers exist.

The Board Members Mr Bernhard Burgener (Chairman of the

Management Board) and Dr Dieter Hahn (Supervisory Board

Member) each held a direct or indirect holding in shares or

share entitlements exceeding 1 percent of the share capital as

of March 31, 2014.

9

Interim Group Management Report

1. Basis of the Group

1.1 Group structure and business activities

Constantin Medien AG is an internationally operating media

company and based in Ismaning near Munich. The Company is

focused on the Sports Segment and, through its holding in the

Swiss media company Highlight Communications AG, on the

Segments Film, Sports- and Event-Marketing as well as the

Segment Other Business Activities.

As parent company, Constantin Medien AG is the controlling

holding company. With the areas Finance, Accounting, Con-

trolling, Internal Audit, Communication, Investor Relations,

Human Resources and Legal, Constantin Medien AG provides

intercompany services and is responsible for the strategic con-

trol of the Group. Through its 100-percent subsidiary Constan -

tin Sport Holding GmbH, it holds a 100-percent share in each

of the companies in the Segment Sports.

Highlight Communications AG is a stock corporation according

to Swiss law, which has been listed on the Frankfurt Stock

Exchange since 1999. Its holdings include 100-percent hold -

ings in Constantin Film AG, in Rainbow Home Entertainment

AG, Pratteln/Switzerland, in Rainbow Home Entertainment

Ges.m.b.H., Vienna/Austria as well as in Team Holding AG,

Lucerne/Switzerland. In addition, it holds a 68.63-percent

share in Highlight Event & Entertainment AG, Düdingen/Swit-

zerland, which is listed on the Swiss Stock Exchange (SIX

Swiss Exchange).

The Segment Sports covers the activities in the TV area with

the free-TV channel SPORT1, the pay-TV channel SPORT1+

and since August 1, 2013, also the new pay-TV channel

SPORT1 US. Furthermore, the online portal SPORT1.de, the

mobile SPORT1 applications for iPhone/iPad and Android and

since July 19, 2013, the new digital sports radio SPORT1.fm

belong to the portfolio under the SPORT1 umbrella brand.

PLAZAMEDIA is another Group subsidiary and offers compre-

hensive services in the field of production together with its sub-

sidiaries in Austria and Switzerland. In addition, the central -

ized marketer Constantin Sport Marketing is responsible for

the integrated and cross-platform marketing of the Group-

owned brands in the Sports Segment.

On December 5, 2013, Constantin Sport Holding GmbH

agreed with Sky Deutschland Fernsehen GmbH & Co. KG the

sale of PLAZAMEDIA GmbH TV- und Film-Produktion, includ -

ing its subsidiaries as well as the sale of 25.1 percent each in

Sport1 GmbH and in Constantin Sport Marketing GmbH. The

transaction was subject, among others, to the conclusion of a

new multi-year production framework contract between

SPORT1 and PLAZAMEDIA. The total sales price for the 100-

percent share in PLAZAMEDIA as well as for the 25.1 percent

stake each in SPORT1 and Constantin Sport Marketing should

amount to around EUR 57.5 million (cash and debt free). The

execution of the transaction was provided for the first half of

2014 (for details, please refer to chapter 4).

In the Sports Segment the main sources of finance in the free-

TV/online/mobile area are the advertising and/or sponsoring rev -

enues and in the pay-TV area particularly the contractually

agreed guarantee payments and subscriber-based feed-in con-

tracts. In the production area, these include long-term pro-

duction framework contracts and indirectly also the advertising

revenues of the TV channels. The main expense items in the

Sports Segment comprise the costs of licensing rights, the

costs of production and manufacturing, distribution costs and

personnel expenses. In the production sector, these particu-

larly include the costs of production services, investments in

technical innovations and extensions, maintenance and service

as well as the costs of signal feeds and not least personnel.

The Segment Film contains the activities of Constantin Film

AG and its subsidiaries as well as the Highlight Communications

subsidiary Rainbow Home Entertainment. The Constantin Film

group is the most important independent German producer and

distributor of theatrical films. Its operations encompass the

development and production of films as well as the exploitation

of in-house productions and acquired film rights. In-house film

productions are usually distributed worldwide, while third-party

productions are basically exploited in German-speaking coun-

tries. In this, all steps along the exploitation chain are utilized

(theatrical distribution, DVD/Blu-ray, television). Apart from

theatrical films, the Constantin Film group creates fictional

and non-fictional productions for German and foreign TV sta-

tions. For purpose of exploiting the video rights for in-house

and licensed films, Highlight Communications AG has its own

distribution organization. In Switzerland and Austria, distribu-

tion is performed by the Rainbow Home Entertainment com-

panies. Distribution on the German market is conducted by

Highlight Communications (Deutschland) GmbH in co-opera-

tion with Paramount Home Entertainment.

Interim Group Management Report Q1 2014

Basis of the Group

10

Q1 2014 Interim Group Management Report

Basis of the Group

In the Film Segment, the main sources of finance result from

the exploitation of in-house and acquired film rights across all

steps along the exploitation chain. Additional revenues are

generated by production orders for TV channels and by natio-

nal and international film promotion grants. The main expense

items comprise acquisition and exploitation rights from scripts

and materials, production costs as well as marketing and re-

lease and promotion expenses for individual films (marketing

and copies).

The Segment Sports- and Event-Marketing includes the activ -

ities of Team Holding AG (TEAM) and its subsidiaries. The

TEAM group specializes in the global marketing of interna -

tional major sports events. Being one of the world's leading

agencies in this field, it exclusively markets on behalf of the

Euro pean Football Association (UEFA), the UEFA Champions

League as well as the UEFA Europa League and the UEFA

Super Cup.

In the Sports- and Event-Marketing Segment, the main sources

of finance are agency commissions relating to the marketing of

TV and sponsoring rights.

The Segment Other Business Activities includes the activities

of Highlight Event & Entertainment AG. The company operates

in the event and entertainment business and holds the market -

ing mandates for the Eurovision Song Contest and the Vienna

Philharmonic Orchestra. The Highlight Communications sub-

sidiary Rainbow Home Entertainment has a 50.004 percent

holding in the full service agency Pokermania GmbH located in

Cologne, which specializes in the development of online

gaming business models and on the social games market. The

activities in the area online/social gaming are included in the

Segment Other Business Activities.

In the Segment Other Business Activities, the main sources of

finance are revenues resulting from agency commissions relat -

ing to the marketing of TV and sponsoring rights as well as from

the marketing of social/online gaming products. The main

expense items here comprise technology costs as well as costs

relating to the development and programming of new social/on-

line gaming products.

Others primarily include the activities of the holding company

Constantin Medien AG.

1.2 Management system and performance indicators

1.2.1 Group management

The Management Board of Constantin Medien AG is respon-

sible for the strategy and control of the Group. With respect to

the Group companies of the Sports Segment, the operational

responsibility falls to the particular management of each sub-

sidiary. The controlling of the companies within this segment

is conducted through shareholder meetings, strategic manage -

ment meetings and regular meetings of the Executive Board

and the Corporate Board. Short- and medium-term planning

and regular reports are the basis for managing the activities of

the sports companies.

Highlight Communications AG and Highlight Event & Enter-

tainment AG as stock corporations subject to Swiss law as well

as Constantin Film AG as a stock corporation under German

law are autonomously managed by the Board of Directors and

the Management Board, respectively. As shareholder, Con-

stantin Medien AG exercises control in the Highlight Commu-

nications group by means of its 52.39 percent interest. Here,

short- and medium-term planning as well as regular reports to

the Boards also form the basis for managing the corresponding

activities. In addition, Highlight Communications AG reports

to Constantin Medien AG as part of the regular Group reporting.

1.2.2 Financial performance indicators

Sales figures and earnings attributable to shareholders are the

key performance indicators within the Constantin Medien

Group. In addition, the financial ratios earnings before interest

and taxes (EBIT), earnings before interest, taxes, depreciation

and amortization (EBITDA) and net debt (cash and cash equi-

valents less financial liabilities) are identified regularly for con-

trolling and managing the segments.

1.2.3 Non-financial performance indicators and success factors

Beyond the financial key performance indicators, non-financial

performance indicators and success factors arising from the

specific requirements of the particular business model are also

of key significance for the Company's performance.

Coverage and market shares: Market and TV viewer research is

the basis for Sport1 GmbH for monitoring the programming

line-up of its free-TV and pay-TV channels to examine its viewer

appeal, to acquire attractive license rights, to develop innova-

tive formats and to ensure programming that accurately reflects

viewer preferences.

11

In the free-TV area, these indicators include the daily coverage

and market shares that are surveyed by the Society for Consu-

mer Research (GfK). In case of SPORT1, this is in particular

the market share of its core target group of males aged 14 to

49 years (M14-49). In the pay-TV area, the key indicator is the

number of subscribers, and in the online area the standardized

online coverage currency unique user, which is reported

monthly by the Online Research Group (Arbeitsgemeinschaft

Online Forschung e.V., AGOF). Moreover, the German Infor-

mation Association for the Ascertainment of Distri bution of

Advertising Media (Informationsgemeinschaft zur Feststellung

der Verbreitung von Werbeträgern e.V., IVW) monthly reports

the number of page impressions (PI) and visits. In the mobile

area, visits are also reported by IVW and download figures are

shown via App Figures, Android Developer Market and the You-

Tube content management system.

In the TV service production area in the Film Segment, cover -

age and market shares are also important ratios for determining

the audience success of a broadcast format and often form the

basis for decisions regarding future commissions.

Technical coverage: Regarding the free-TV channel SPORT1's

appeal as a platform for advertisers, the technical coverage of

the channel is of great importance. SPORT1's coverage extends

to almost 32.08 million, and thus 87.4 percent of all acces -

sible households in Germany, which means that it can be

received area-wide. In pay-TV, area-wide distribution of the two

channels SPORT1+ and SPORT1 US using the main cable net-

work operators and infrastructure providers as far as possible

is a key non-financial performance indicator.

Number of visitors: In the theatrical distribution area of Con-

stantin Film AG, the number of viewers generated by a film is

a decisive factor because theatrical success usually also im-

pacts subsequent exploitation levels – particularly in Home

Enter tainment. In spite of intense prior market monitoring in

the target groups, the taste of cinema audiences is only

assessable to a limited extent. In addition, the theatrical films

released by Constantin Film AG always compete with titles by

other distributors running at the same time so that even a

marketing campaign perfectly matched to the relevant film can

not always meet the expected viewer figures.

Moreover, non-financial performance indicators and success

factors, which are not evaluated quantitatively and used for in-

ternal monitoring, are also of key importance to the Company's

performance, and essential for the Company's business model.

Access to rights: For the platforms under the umbrella brand

SPORT1 the access to and availability of attractive sports rights

are of great importance. This applies in particular to the broad-

casting of soccer matches. The access within this sector is also

dependent upon factors such as convincing programming con-

cepts, a solid finance basis and a close-knit network of con-

tacts with decision-makers in this area. In free-TV, attractive

sports rights are essential to be able to maintain or expand the

market share in the core target group (M14-49), for the pay-

TV sports channels SPORT1+ and SPORT1 US to guarantee

and successively increase their pay value and for the digital

sports radio SPORT1.fm to further expand listener and user

numbers.

With regard to the acquisition of literary material and scripts,

as well as to conclusions of contracts with successful directors,

actors and film studios, the Constantin Film group faces strong

competition. Therefore, Constantin Film AG has been working

for decades very closely with renowned and experienced

screenwriters, directors and producers in Germany and abroad,

who have a high level of know-how in the production of thea-

trical films and TV formats.

Professional expertise and network of contacts: Not only in

light of the increasingly digital and convergent media usage

behavior and the transformation to consuming cross-platform

offers, both technology and content competence are essential.

Correspondingly, recruiting, advancement and retaining well-

trained, qualified, dedicated and creative employees are of

high priority

In addition, a distinctive network of contacts and close and

trusting relationships with business partners are important

indicators for the success of the group of companies. In the

Sports Segment, this applies e.g. with regard to rights holders

and the advertising industry or media-political institutions. In

the Film Segment, the co-operation with scriptwriters, directors

and producers in Germany and abroad is particularly impor-

tant. In the Sports- and Event-Marketing Segment and in the

Segment Other Business Activities, trusting business rela tion -

ships with the rights holders and with existing and potential

sponsors are essential in marketing major international sports

or entertainment events.

1.3 Material legal factors

Constantin Medien AG has to comply with a large number of

stock market and legal requirements. As a stock corporation

listed on the regulated market (Prime Standard) of the Frank-

furt Stock Exchange according to German law, the Company is

in particular subject to the German Stock Exchange and

Capital Market legislation and has to comply with the recom-

mendations of the German Corporate Governance Code. High-

light Communications AG is a stock corporation according to

Swiss law, which has been listed on the Frankfurt Stock

Exchange and Highlight Event & Entertainment AG as stock

corporation under Swiss law has to meet the “Codes of Best

Practice“ of the SIX Swiss Exchange. The operational activities

of the companies in the individual segments are in accordance

with a variety of media, data protection and copyright laws as

well as with regulatory requirements.

Compared to the presentation in the Combined Group Man age-

ment and Management Report of Constantin Medien AG for

the 2013 financial year, there were the following changes in

the Segment Film:

The Constantin Film group makes use of different national and

international public film promotions when producing films. The

Federal Government promotes the production of theatrical

films in Germany in order to improve the general economic

conditions of the film industry in Germany, support the com-

panies in the film industry and their international competi tive-

ness as well as to sustainably expand Germany as film pro -

duction site. In 2013, the Federal Government made available

around EUR 30 million via promotion programs and awards for

the production of German films. In addition, it provides EUR

60 million for the “German Federal Film Fund” in 2014, which

compensates producers for up to 20 percent of specific film

production costs. The German states also provide significant

financing for the production of German films each year.

Further more, the European Union also awards film funding.

Sources: HDF Kino, April 17, 2014; Online Publication for the Fede-ral Government on Film Promotion (last accessed: April 28, 2014)

The amendment of the Film Funding Act (FFG) enacted by the

Federal Cabinet became effective with its planned changes

(expansion of the fee obligation for additional film providers,

flexibilization of holdback periods etc.) on January 1, 2014.

The judges of the Federal Constitutional Court confirmed the

constitutionality of the FFG on January 28, 2014.

Source: SKW Schwarz, Film & TV Ticker 1/2014

With its ruling on March 27, 2014, the European Court of Jus-

tice affirmed that courts can obligate internet providers to

block websites offering illegal contents for their customers.

This ruling constitutes a further milestone against piracy and

for the creative industry.

1.4 Market research and development

Compared to the presentation in the Combined Group Man age-

ment and Management Report of Constantin Medien AG for

the 2013 financial year, there were no changes regarding the

activities of the companies in the different Segments in the

area of market research and development.

2. Economic Report

2.1 Overall economic conditions in the first quarter 2014

After several difficult years, the global economic is slowly

regaining momentum. Especially in the industrial nations, the

economic framework conditions improved at the start of 2014.

In Europe, the recession in the Eurozone, which has continued

since 2011, is coming to an end. Since most early indicators

have improved, nearly all countries in the Eurozone are likely

to achieve a positive growth rate this year.

According to the Federal Ministry for Economy and Energy,

economic activity in Germany increased in the first months of

2014. The manufacturing industries particularly sent positive

impulses. On average in January and February, monthly aver -

ages exceeded those in the final quarter of 2013. This demon -

strates further growth in total production for the first quarter of

2014 compared to the previous quarter.

Private consumption was also on the rise. Stronger consumer

willingness to spend was reflected in the significant increase

in retail sales revenues (excluding passenger vehicle retail) in

January and February. The economic retail climate improved in

March – for a second month running. This positive trend is due

to higher income and a consistently moderate price develop-

ment.

Sources: M.M. Warburg & Co., Hamburg: Capital Market Perspectives,February 2014; Federal Ministry for Economic and Energy, Press Release,April 10, 2014

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2.2 Sector-specific general conditions, operating performance

of the segments and analysis of non-financial performance

indicators

2.2.1 Sector-specific general conditions in the Segment Sports

According to the information and media company Nielsen

Media Research, gross advertising investments in Germany had

a volume of EUR 6.3 billion in the first quarter of 2014. This

corresponds to a growth of 2.9 percent compared to the com-

parative period in 2013. Its most significant percentage

increase compared to the previous year was recorded in Feb-

ruary with a plus of 3.5 percent. In absolute terms, March

2014 may have been the strongest advertising month of the

first quarter at EUR 2.5 billion. However, compared to March

2013, it only achieved an increase of 2.4 percent, which was

particularly due to the fact that in 2013, Easter already took

place at the end of March. This resulted in traditionally inten-

sive advertis ing investments before Easter.

According to Nielsen, the categories TV, Online, Cinema, and

Out-of-Home were able to increase their gross sales in the first

quarter of 2014 compared to the previous year's reporting

period. The lead medium TV recorded the most significant

increases at around EUR 2.8 billion – a plus of 6.5 percent. As

a result, TV advertising in the reporting period had a share of

45.3 percent of the total gross advertising market. Advertising

expenditures in the online area went up to EUR 685.5 million

in the first quarter of 2014 – an increase of 2.9 percent com-

pared to the prior year period.

Mobile advertising continues to flourish inexorably and across

industries. Particularly customers with large advertising budg -

ets are increasingly including mobile display advertising in

their communication mix, which led to a growth of advertising

investments by 24.2 percent in the first quarter of 2014 to

approx. EUR 27 million.

By contrast, investments in radio advertising remained declin -

ing, falling below the prior year value by minus 0.2 percent at

EUR 388 million overall. However, the situation for radio is

likely to improve again in spring because advertising revenues

were up again in March. Print media also suffered losses in

advertising placements in the first quarter.

Quelle: Nielsen Media Research GmbH, press release, 16. April 2014

In the first quarter, the production market was also charac -

terized by technical innovations and further developments. The

focus in the reporting period was on the introduction of the

new high-resolution production technology 4K (Ultra-HD), as

well as the increased use of Cloud services, which will continue

to greatly impact the production market in the next few years.

Already, 4K is to be used for live sports reporting at the 2014

FIFA World Cup™ in Brazil.

2.2.2 Operating performance in the Segment Sports

Further expansion of rights portfolio – In the first quarter of

2014, Sport1 GmbH added further attractive rights to its pro-

gram portfolio: In the 2014 season, extensive highlights and

some live reporting of the FIA World Rally Championship

(WRC) will also be broadcast in free-TV on SPORT1. The agree-

ment with WRC Promoter GmbH concluded at the start of

Janu ary contains extensive, platform-neutral exploitation rights

for Germany, Austria and Switzerland. In February, Sport1

GmbH acquired the platform-neutral, Germany-exclusive media

exploitation rights to the Women's and Men's Rabobank

Hockey World Cup 2014, which is to take place in Den Haag,

Netherlands, from May 31 to June 15. In addition the rights

package also contains the biennial FIH Champions Trophy,

which is due to take place in November and December 2014.

In January, Sport1 GmbH already acquired the rights to the final

round of the HERO Hockey World League and broadcasted

them. In mid-March, Sport1 GmbH announced that it had ob-

tained the platform-neutral exploitation rights to Major League

Baseball (MLB) for the German-speaking region. Since the start

of this year's season on March 22, up to and including the

2016 season, the pay-TV channel SPORT1 US will be broad-

casting at least 60 matches per match period with original US

commentary.

SPORT1 and SPORT.fm with new Apps – Since the start of the

return leg of the Soccer Bundesliga at the end of January, the

new version of the SPORT1 App for Android Smartphones and

tablets has been available from the Google Play Store. It has also

been possible to download the digital sports radio SPORT1.fm

for free as an App for Windows Phone and Windows 8 since the

start of March – in addition to the Apps for iOS and Android.

New distribution platforms for SPORT1 US and SPORT1 HD –

Since January 31, SPORT1 US can also be viewed via Enter-

tain, Germany's largest-range IPTV offer, in SD and HD quality.

With Zattoo, Sport1 GmbH gained a new co-operation partner

for SPORT1 HD. The live-TV provider has been offer ing

SPORT1 HD to its HiQ subscribers also since late January.

SPORT1.de launches co-operation with Ticketmaster –

SPORT1.de has been running an own online ticket shop since

March 3. Since then, tickets for numerous sports, music and

comedy highlights have been on offer via this channel as part

of a co-operation with Ticketmaster GmbH. The new online

ticket shop can be reached via the menu item “Tickets” and on

tickets.sport1.de.

Expansion/renewal of important marketing agreements and

expansion of new customer business – In the first quarter

2014, Constantin Sport Marketing renewed and/or expanded

important sponsoring co-operations with long-term partners for

the relevant core rights. In addition, new customers were

acquired in the traditional advertising area, including Luft-

hansa, Apple and BMW.

PLAZAMEDIA expands circle of customers – Commissioned by

FC Bayern Munich, PLAZAMEDIA as host broadcaster pro -

duced six home matches of FC Bayern Basketball in the report-

ing period in the Top-16 round of the Turkish Airlines Euro-

league. In addition to SPORT1, which broadcast a number of

selected live matches, the signal was used by around ten TV

channels around the world and was also streamed live on the

Euroleague website.

PLAZAMEDIA provides technical broadcasting services for

long-term customers – In the reporting period, PLAZAMEDIA

was host broadcaster for ZDF in the round of sixteen of the

UEFA Champions League between FC Schalke 04 and Real

Madrid CF. In addition, PLAZAMEDIA was also responsible for

the unilateral provision of broadcasting technology for three

further UEFA Champions League broadcasts by the channel.

In the first quarter, productions for the Sky Deutschland focused

on 16 UEFA Champions League matches – including two as

host broadcaster – and on five UEFA Europa League matches.

PLAZAMEDIA also worked for Sky in this year's Formula One

season, as in previous years. In the reporting period, PLAZA -

MEDIA provided the unilateral production of the first two races

in Melbourne (Australia) and Sepang (Malaysia).

2.2.3 Analysis of non-financial performance indicators in the

Segment Sports

Positive development in free-TV continues – After the upswing

in 2013, the upward trend in free-TV also continued in the

first quarter of 2014: SPORT1 achieved a market share of 0.8

percent of total viewers (Z3+). At a market share of around 0.7

percent, this corresponds to an increase of 12 percent com-

pared to the previous year's quarter. In the core target group of

males aged 14 to 49 years (M14-49), SPORT1 went up by 11

percent – from 1.2 percent in the first quarter of 2013 to 1.3

percent in the quarter under review.

The “Hattrick Live” broadcasts of the 2nd Bundesliga Monday

match in the first quarter contributed to the positive develop-

ment of market share. SPORT1 achieved the quarter's highest

percentage of viewers on March 17 with its broadcast of the

season's top game between 1. FC Kaiserslautern and 1. FC

Köln. An average of 1.24 million viewers (Z3+) watched the

teams draw at nil goals, making up a market share of 3.8 per-

cent. 1.9 million even watched at peak. In the core target

group M14-49, the market share was 6 percent. In addition,

“Der Volkswagen Doppelpass” again achieved top coverage in

the first three months. For instance, 1.05 million viewers (Z3+)

on average watched the broadcast on February 16, which cor-

responded to a market share of 6.8 percent. The market share

for M14-49 was around 10 percent. Other soccer formats,

such as “Bundesliga Pur” or “Der Mobilat Fantalk” at times

recorded coverage in excess of half a million viewers (Z3+). In

addition to soccer reporting, SPORT particularly met viewer

taste with the finals of the Darts World Cup, watched by nearly

one million viewers at peak (Z3+) when it was aired on New

Year's Day. Around 700,000 viewers at peak (Z3+) watched

the final of the Handball European Championship between the

host Denmark and France on January 26 and the season kick-

off of the Motorcycling World Championship MotoGP in Katar

on March 23. Moreover, the Men's and Women's Olympic Ice-

Hockey Tournaments in Sochi, which SPORT1 broadcast in

free-TV and on SPORT1.de as a free livestream, also received

a positive resonance. A total of 27 matches were broadcast

live, and a further two matches were broadcast live and exclu-

sively only on SPORT1.de.

Slight increases in pay-TV area – At the end of March, the

number of subscribers of the pay-TV channel SPORT1+ were

around 1.87 million, plus those subscribers reached via the Sky

platform. The new US sport channel SPORT1 US, which went

on air in August 2013, had around 1.56 million subscribers at

the end of March, plus those subscribers reached via Sky.

Significant increase in accumulated online and mobile cover -

age – In the first quarter of 2014, SPORT1.de recorded growth

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in accumulated online and mobile coverage compared to the

previous year's period, and reached an increase in visits from

around 56 million to around 63.5 million per month on average

– a plus of around 13.3 percent. Page impressions (PIs) were

also on the rise and went up by just over 18.8 percent from

381 million to a monthly average of 452.5 million.

Online coverage continues at high level – In spite of the in-

creasing shift of content use from online to mobile, pure online

coverage remained at a high level: At an average of 30 million

visits, SPORT1.de was only just under the prior year value of

30.9 million visits. In terms of page impressions, SPORT1.de

achieved an average of 233.5 million page impressions per

month in the first quarter 2014, which was slightly below the

figure for the previous year (235 million page impres sions). In

spite of the slight reduction in coverage in the first quarter of

2014, SPORT1 attracted more unique users in January than

the previous year. At 2.87 million unique users, the online plat-

form exceeded the prior year value of 2.83 million.

Favorable development thanks to Olympics and early cham-

pionship decision – The reporting of the Winter Olympics in

Sochi in February especially contributed to the positive devel -

opment – inter alia with intensive editorial commentary from

SPORT1 reporters on location and with the live ticker. The early

championship decision in the Soccer Bundesliga, the knock-

out rounds of the UEFA Champions League, the kick-off of the

Formula One and the MotoGP in March as well as the closely

followed tax proceedings against Uli Hoeneß contributed to an

increase in access figures.

Reduction in access figures in video area – In the video area,

the number of access figures in the online and mobile field in

the first quarter 2014 averaged at 4.7 million per month,

which put them clearly below the value for the first quarter

2013 (5.2 million). This was e.g. due to the lower access

figures in January, particularly in the soccer and news areas. In

addition, it is worth noting that user videos are also increas -

ingly consumed directly on YouTube and no longer only on their

original content platforms.

Strong growth in mobile area – At around 33.3 million visits a

month on average, SPORT1 was very successful in the first

quarter of 2014, achieving an increase of around 32.6 per-

cent compared to the previous year (25.1 million visits per

month on average). Page impressions in the mobile area also

developed very well during the reporting period. At around 219

million page impressions per month, PIs were also significantly

above their prior year value (146 million page impressions).

This development is particularly due to the relaunch of the

SPORT1 App for Android and the mobile website, as well as

the general shift from online to mobile use.

After the first quarter of 2014, the SPORT1 App for iPhone/

iPad stood at 2.2 million unique downloads (after Q1 2013:

1.9 million unique downloads). The unique downloads of the

SPORT1 Android App developed very positively and after the

first quarter of 2014 totaled more than 1.2 million compared

to around 764,000 unique downloads after the first quarter of

2013.

Sources: IVW (German Information Association for the Ascertainment ofDistribution of Advertising Media e.V.) 1-3 2013/2014; AGOF internet-facts: January 2013/2014; App Figures 4/2014; Android DeveloperMarket 4/2014; YouTube Content Management System 1-3 2013/2014

New monthly record for sports radio SPORT1.fm – The digital

sports radio SPORT1.fm, which was launched in July 2013,

in March achieved a total of around 4.2 streaming sessions,

and thus a new monthly record. Streaming sessions are calls of

the SPORT1.fm stream with a duration of at least 60 seconds.

Overall, SPORT1.fm recorded more than 7.5 million streaming

sessions in the first quarter 2014. The reporting highlights of

SPORT1.fm in the quarter under review included the live

broadcasts of the Bundesliga and 2nd Bundesliga from the kick-

off of the second leg, the quarter finals of the DFB Pokal as

well as the round of sixteen of the UEFA Champions League.

The access figures for the SPORT1.fm App in the first quarter

also developed very positively. From going on air to the end of

March, the SPORT1.fm App for Android, iOS, Windows Phone

and Windows 8 reached a total of 1.12 million downloads. In

addition to distribution via WLAN radios, SPORT1.fm reached

additional listeners in the context of a co-operation via ENERGY

via DAB+, which also aired the soccer live broadcasts as part

of their program.

2.2.4 Sector-specific general conditions in the Segment Film

Theatrical production/rights acquisition – On the film market at

this year's Berlinale in February 2014, the offer and the

demand of high quality licensed films was rather weak – a fact

which had already been apparent at the film markets in

Cannes, Toronto and Los Angeles last year. This development

is primarily due to the fact that the conclusion of correspond -

ing contracts on these markets is by now more of an exception

than the rule. In addition, film markets could also not escape

the drastic changes in the film industry, particularly due to the

opportunities of digitization and the strategic realignment of

Hollywood studios.

Source: Blickpunkt:Film 47/13

TV service production – Discussions regarding the shift from

traditional TV consumption to a more individual use in terms

of time of internet-based program contents have grown further.

In particular, the user behavior of younger viewers is changing,

with social media, YouTube or the use of a second screen

(Smartphone, Tablet PC etc.) playing an ever bigger role in the

consumption of moving image contents. As a result, cross-plat-

form concepts or even concepts working independently of tradi -

tional television were implemented increasingly. One example

of this is the online TV-channel group Mediakraft Networks,

which produces program formats and – without airing them on

TV first – distributes them via portals such as YouTube, Clip-

fish and Snack-TV.

Source: Blickpunkt:Film 10/14

In other countries, online services such as Netflix, amazon,

Hulu and other providers have already significantly changed

the TV landscape. For instance, Netflix users in the USA can

access unlimited films and series without set program listings

for only just less than eight US dollars per month. By now, the

way has also been smoothed for Netflix in Germany, after the

joined video-on-demand services of ARD and ZDF were closed

down after an intervention by the supervisory authorities.

Source: Association of German TV and Film Producers e.V., January 23,2014

The reduction of the radio license fee recommended by the

commission determining the financial needs of the public

channels was unanimously rejected by TV producers. For exam-

ple, the Producer Alliance demanded that a reduction of the

fee should be waived. The expected surplus from license fee

revenues should be used to balance out the higher costs in the

production area, which in the past have been born by the TV

producers. This was said to be the only way not to endanger the

future extent and quality of TV productions.

Source: Association of German TV and Film Producers e.V., press release, March 10, 2014

Theatrical distribution – In the first three months of 2014, Ger-

man cinemas generated approx. EUR 248 million (first quarter

of 2013: approx. EUR 265 million) and around 30.7 million

cinema tickets were sold (first quarter of 2013: 33.1 million).

The theatrical market was thus below the prior year's compara -

tive values by around 6.4 percent by revenues and 7.3 percent

by viewers.

This reduction is especially due to the relatively weak perfor-

mance of many Hollywood productions, with US films tailored

to a young audience particularly staying behind expectations.

Only the finance drama “The Wolf of Wall Street” generated

convincing results. With at nearly 2.4 million viewers it was

the most successful film by viewers of the first quarter. Only

two other US productions achieved seven-digit viewer figures:

the fantasy spectacle “The Hobbit: The Desolation of Smaug”

(around 1.5 million) and the CGI production “Frozen” (more

than 1.2 million), which had already been released in mid-

December and at the end of November 2013, respectively.

By contrast, already five German in-house and co-productions

attracted more than one million viewers in the first quarter of

2014. The most successful of these was the Matthias Schweig-

höfer comedy “Vaterfreuden” (nearly 2.3 million), followed by

the surprising success “Stromberg – Der Film” (more than 1.2

million) and the Constantin Film co-production “Fünf Freunde 3”

(around 1.2 million). These were supplemented by the block-

buster “Der Medicus” (Q1 2014: more than 2.4 million) and

“Fack ju Göhte” (Q1 2014: nearly 1.5 million), which were

already launched in the previous year.

Based on these audience successes, the viewer market share

of German films in the first three months of this year went up

to 41.7 percent (first quarter of 2013: 31.9 percent) – a value

which had not been achieved in decades.

Source: Rentrak Report, Evaluations of the theatrical market, 1st quarter2014

Home Entertainment – The Society for Consumer Research

(GfK) forecasted total sales from the German video rental and

sell-through market for the first two months of 2014* of EUR

271 million. As a result, the German Home Entertainment in-

dustry was slightly below the comparative prior year value of

EUR 276 million.

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According to GfK’s forecast, the sale of DVDs and Blu-ray discs

in the months January and February 2014* generated retail

sales of EUR 191 million (prior year period: EUR 207 million).

Thereof, DVDs generated EUR 131 million, 11.4 percent less

than in the prior year period (EUR 148 million). By contrast,

revenues from Blu-ray discs went up from EUR 59 million to

EUR 60 million, thus gaining further in importance.

The digital video sell-through market continued to be on the

rise: Total sales in electronic sell-through in the first two

months* of 2014 grew by 33.3 percent to EUR 16 million

(comparative period 2013: EUR 12 million). However, the

increases in sales from Blu-rays and electronic sell-through

were not able to compensate for the reduction in sales from

DVDs, so that total sales in the physical and digital purchasing

market fell from EUR 219 million to EUR 207 million.

For the video rental market, GfK predicted total sales of EUR

64 million for the months January and February 2014* – an

increase of 12.3 percent compared to the same period in 2013

(EUR 57 million). Thereof, EUR 38 million (comparative

period in 2013: EUR 39 million) related to rentals of DVDs

and Blu-ray discs, and EUR 26 million (comparative period in

2013: EUR 18 million) to digital rentals via video-on-demand

or pay-per-view. The digital video rental market was able to gain

44.4 percent, thereby continuing its positive development of

the prior year. This increase was particularly due to the higher

sales figures of internet-compatible TVs, which are driving

digital rentals.

Source: GfK 2014, Forecast of Key Figures for the Months January andFebruary 2014

*GfK data for the first quarter of 2014 were not yet available at thetime of editorial

License trading/TV exploitation – Based on current analyses, in

2013, every adult and adolescent (from 14 years of age) in Ger -

many spent an average of 221 minutes per day in front of their

TVs. However, the free TV channels are ever more strongly com-

peting with pay-TV, download portals and streaming platforms,

with pay-TV even being called the strongest growth segment in

the German TV market. Particularly for TV series, stream ing

platforms seem to be tailored to the needs of viewers, allowing

them to watch several episodes or even whole seasons in a row.

Video-on-demand offers, such as the platform iTunes run by

Apple, Maxdome by ProSiebenSat.1, Videoload, the video-on-

demand offer by Deutsche Telekom, Select Video by Kabel

Deutschland or Prime by amazon, are playing an ever bigger

role.

Sources: Association of Private Broadcasting and Telemedia e.V., pressrelease, February 11, 2014; Blickpunkt:Film 7/14)

2.2.5 Operational development in the Segment Film

New in-house and co-productions in the theatrical production

area – After the major success of the dramatization “Dampf-

nudelblues. Ein Eberhoferkrimi”, which attracted both cinema-

goers and TV viewers last year, a further part of the bestseller

book series by Rita Falk, “Winterkartoffelknödel”, started shoot -

ing in the first quarter of 2014. Shooting was completed in

early April, and theatrical release is scheduled for mid-October

2014.

In mid-March, shooting started for the new Sönke Wortmann

comedy “Frau Müller muss weg”, which is based on the award-

winning play of the same name by Lutz Hübner and Sarah

Nemitz. The film is scheduled for release in Germany in mid-

November 2014.

Shooting starts for two ZDF projects in TV service production –

At MOOVIE – the art of entertainment GmbH, shooting started

for the ZDF two-parter “Die Abrechnung” at the end of Febru-

ary. Inspired by true events like the fate of Schlecker, the movie

thematize the collapse of a drug store empire. The drama will

probably be aired in the fall this year. Also for ZDF, the TV film

“Das Zeugenhaus”, which is based on true events surrounding

the Nuremberg Trials in 1945, started shooting in early March.

On behalf of SAT.1, Constantin Entertainment GmbH produced

further episodes for the dailies “Schicksale” and “Im Namen

der Gerechtigkeit” in the first quarter of 2014. In addition, the

pilot for “Geht’s noch?! Kayas Woche” was produced for RTL.

Seven further episodes of this format have been commissioned

and have been broadcast weekly since April 25, 2014.

In other European countries, the subsidiaries of Constantin

Entertainment GmbH in Poland among others produced new

seasons of the tried and tested formats “Kuchenne Rewolucje”

and “Malanowski & Partnererzy”, in Israel “The Voice of Israel

3” and “Dan Shilon-Show” and in Switzerland “The Voice of

Switzerland 2” and in Hungary “Csaladi Titkok”.

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“Fünf Freunde” series successful again in theatrical distribu-

tion – In the theatrical distribution area, the Constantin Film

Group released a total of five films (four in-house/co-produc tions

and one licensed film) in German cinemas in the reporting pe-

riod. Especially, “Fack ju Göhte” and the youth adventure

“Fünf Freunde 3”, which was even more successful than the

first two parts, were very popular with viewers.

Stable market position in the Home Entertainment area – In

the first quarter of 2014, the Highlight Communications Group

was able to stabilize its market position in the German-speak -

ing Home Entertainment market. In particular, it was able to

benefit from the new releases under the Constantin Film label,

above all “The Mortal Instruments – City of Bones”. In addi-

tion, the licensed film “Ender's Game”, which was released at

the start of March 9, achieved highly favorable sales results.

Development in the license trading/TV exploitation areas im-

pacting on revenues – In license trading of the Constantin Film

Group, the first licenses for free-TV of “Glück” (ZDF), “Benve-

nuti al Sud” (ProSiebenSat.1), “Werner Eiskalt” (ProSieben-

Sat.1) and “Wrong Turn 4” (ProSiebenSat.1) all impacted on

sales. Added to these in pay-TV were the first licenses of “Free-

lancers”, “LOL”, “Step Up: Miami Heat” and “Resident Evil:

Retribution”. All of these films were licensed for Sky Deutsch-

land.

2.2.6 Analysis of non-financial performance indicators in the

Segment Film

Long-term commitment of know-how carriers and talents in the

theatrical production/rights acquisition area – Constantin Film

AG relies strongly on the long-term commitment of talents and

has for decades worked very closely with renowned and expe-

rienced screenwriters and producers in Germany and abroad,

who have a high level of know-how in the production of thea-

trical films and TV formats.

Continued coverage succes in TV service production – Two TV

productions by the Constantin Film subsidiaries were able to

generate very favorable ratings in the first quarter of 2014. For

example, the “Tatort” episode “Kopfgeld” starring Til Schweiger,

a service production of Constantin Television GmbH for ARD,

was aired in early March and attracted 10.12 million viewers.

This corresponds to a total audience market share of 27.7 per-

cent – ARD's highest coverage of that weekend.

Source: mediabiz/Blickpunkt:Film, March 10, 2014

One of the big TV projects of MOOVIE – the art of entertain-

ment GmbH, “Die Hebamme” starring Josefine Preuß, was

broadcast on SAT.1 at the end of March, and at a market share

of 22.8 percent (2.64 million viewers) secured the success of

the day in the advertising target group of 14- to 49-year-olds.

At a total audience coverage of 5.36 million viewers (market

share: 17.5 percent), it reached third place for that TV

evening.

Source: mediabiz/Blickpunkt:Film, March 26, 2014

Constantin Film stays most successful independent distributor –

In the theatrical distribution business area, the Constantin

Film Group achieved very good results in the first quarter 2014,

with two films reaching the Top Ten of the German cinema

charts. The sensational success “Fack ju Göhte”, which was

already released in November 2013, made it to number five,

again attracting around 1.5 million viewers in the first three

months of this year. The teen adventure “Fünf Freunde 3”

released in mid-January 2014 came eighth, also attracting

seven-digit viewer figures at 1.2 million viewers.

Taking together the performance of all of its films released in

German cinemas in the first quarter of 2014, the Constantin

Film group reached an impressive market share of 11.9 per-

cent by viewers and 11.0 percent by sales. In the ranking of

distributors, it came third after Warner and Universal in both

categories, once again securing its pole position among inde-

pendent German distributors.

Source: Rentrak, “Evaluations of the theatrical market”, 1st quarter of2014

“The Mortal Instruments – City of Bones” bestseller in Home

Entertainment exploitation – In the first quarter of 2014, the

Home Entertainment are continued to enjoy stables sales –

both with new releases and with catalog titles. For instance the

Constantin Film co-production “The Mortal Instruments – City

of Bones”, released in mid-January, shot directly to the top of

the German sales charts, remaining in the Top Ten until mid-

March. Overall, 200,000 units were sold in the German-speak-

ing area by the end of the quarter.

Based on its attractive program line-up and on numerous

financially successful second utilizations, the Constantin Film

Group – in co-operation with its distribution partner Paramount

Home Entertainment – was able to secure a market share of 10

percent in the German video sell-through market in January

19

and February 2014 (2013: 9 percent).

Source: GfK 2014, Forecast of Key Figures for the Months January andFebruary 2014

*GfK data for the first quarter of 2014 were not yet available at thetime of editorial.

When first aired, the cartoon “Werner – Eiskalt”, whose license

start impacted on sales in the first quarter of 2014, reached a

total of 2.13 million viewers on ProSieben at the end of April,

making up a total audience market share of 7.6 percent (13.2

percent of 14- to 49-year-olds).

Source: mediabiz/Blickpunkt:Film, April 28, 2014

2.2.7 Sector-specific general conditions in the Segment

Sports- and Event-Marketing

TV rights/Sponsoring – The changes in the media landscape

have strengthened the position of sports contents in the media

mix. Particularly commercial channels need viewer magnets in

order to retain their subscribers and to secure advertising rev -

enues. Sports events are ideally suited to this. The US cable

chan nel Comcast is proof of this, reporting an increase in net

earnings by 30 percent in the first quarter of 2014 compared

to the previous year's period. To a large part, this increase is due

to the TV broadcast of the Winter Olympics in Sochi in Feb-

ruary 2014.

Quelle: Sportcal, April 22, 2014

2.2.8 Operational development in the Segment Sports- and

Event-Marketing

Additional marketing successes at UEFA tournaments – After

the positive results achieved in the 2013 financial year, the

TEAM group was also able to realize additional important

agreements in the first quarter of 2014 in the marketing

process for the commercial rights of the UEFA Champions

League and the UEFA Europa League (each for the match cycle

2015/16 to 2017/18).

TV contracts were concluded in as varied markets as Italy

(Mediaset and Sky Italia), Israel or Myanmar. In terms of spon-

sor ship rights, also further progress was made. Starting with

the 2014/15 season, the Japanese automobile manufac turer

Nissan will act as sponsor of the UEFA Champions League,

replacing Ford, the sponsoring partner for many years.

The finals in the spotlight – Operatively, TEAM focused on ac -

tively supporting the commercial partners in the knock-out

rounds of both tournaments. In addition, preparations were

under way for the major finals in Turin on May 14 (UEFA Europa

League) and in Lisbon on May 24 (UEFA Champions League).

2.2.9 Analysis of non-financial performance indicators in the

Segment Sports- and Event-Marketing

UEFA Champions League generates high viewer figures – The

TV broadcast of the UEFA Champions League matches con-

tinues to attract many viewers. In Germany, for instance, 8.0

million viewers on average watched the group phase matches

of the current season in free-TV and 2.1 million in pay-TV. Both

values are the highest achieved in the last eight match periods.

The same applies to Italy, where the group phase also gener-

ated the best value of the last eight match periods, at an aver-

age of 9.9 million viewers.

Source: ZenithOptimedia, Sponsorship Intelligence

2.2.10 Sector-specific general conditions in the Segment

Other Business Activities

Event/Entertainment business – Sponsoring is gaining in im-

portance in the financing mix of cultural providers in the Ger-

man-speaking region. Whereas in 2007, only an average of 6.7

percent of their total revenues came from sponsoring, this

proportion had increased to 16.5 percent by 2013 – more than

double the 2007 figure. In addition, a clear upward trend

towards long-term partnerships between the cultural providers

and sponsors is apparent. The financial services sector (banks,

insurances, etc.) are by far in the lead, followed by the media

industry (TV, radio, publishing houses) and energy providers.

Source: Causales – Gesellschaft für Kulturmarketing und Kulturspon-soring mbH, “Der Kultursponsoringmarkt 2013” (survey period: April tothe end of July 2013)

Online/Social gaming – A current representative survey by the

Federal Association for Interactive Entertainment Software (BIU)

shows that computer and video games have by now become a

mass medium in Germany. At the start of 2014, around 34.2

million Germans used digital games correspond ing to a pro-

portion of 46 percent of the population. Compared to the pre-

vious year with 31.4 million, the number of active gamers thus

increased by 9 percent. The increase was par ticularly notice-

able in the daily use of digital games, whose figure went up by

around 31 percent to 13.5 million. Computer and video games

are also becoming ever more popular with women (+12 per-

cent) and with the generation of the over-50s (+12 percent).

Source: Federal Association for Interactive Entertainment Software(BIU), press releases, March 10 and 20, 2014

20

Q1 2014 Interim Group Management Report

Economic Report

2.2.11 Operational development in the Segment Other Busi-

ness Activities

Successful realization of the New Year's Concert – At the start

of the year, the activities of Highlight Event AG initially focused

on the commercial realization of the Vienna Philharmonic

Orchestra’s New Year’s Concert 2014, conducted for the

second time by the world famous conductor Daniel Barenboim.

Major events in preparation – The operative preparations for

the 59th Eurovision Song Contest, which took place in the

Danish capital Copenhagen between May 6 and 10, 2014, also

progressed well in the reporting period. The activities particu-

larly focused on the implementation of design, hospitality area,

sponsor media presence (TDC/Samsung, Visit Denmark and

ALCON), the Eurovision Village, sponsorship campaigns and

merchandising.

Highlight Event AG further concentrated on preparing the com-

memorative concert of the Vienna Philharmonic Orchestra on

the occasion of the start of World War I 100 years ago. The

European Broadcasting Union (EBU) called this concert, which

is scheduled to take place in Sarajevo/Bosnia-Herzegovina at

the end of June 2014, a key event for all public channels in

Europe. For the first time, Highlight Event AG will act as a link

between the orchestra and the EBU at this event.

Continuous further development of the FunPoker software –

Pokermania GmbH continued to develop further its “White -

label” software FunPoker in the first quarter of 2014. The aim

of this development work is to integrate additional poker ver-

sions into the game in order to be able to acquire new gamers

internationally.

2.2.12 Analysis of non-financial performance indicators in the

Segment Other Business Activities

New Year's Concert again broadcast globally – The successful

marketing activities of Highlight Event AG significantly contri-

buted to the broadcast of the Vienna Philharmonic Orchestra's

New Year's Concert 2014 in more than 80 countries – as the

previous year. This international coverage of the New Year's

Concert again demonstrated that it is the biggest classical

music event in the world.

2.3 Results of operations, net assets and financial position of

the Constantin Medien Group

The accompanying unaudited consolidated interim financial

statements as of March 31, 2014 have been prepared in con-

formity with IAS 34 Interim Financial Reporting. Details regard -

ing the accounting are presented in note 2 and 3 of the notes

to the consolidated interim financial statements in this report.

2.3.1 Overall assessment of the reporting period

Business development in the first quarter 2014 was generally

in line with own expectations. In the Sports Segment sales

declined in the first quarter as expected due to the loss of the

production of LIGA total! The Film Segment achieved signifi-

cant growth in sales in the first quarter due to numerous film

releases, while there has been a decline in earn ings. The

development in the Segments Sports- and Event-Marketing

and Other Business Activities was as expected.

In the first quarter, the Group reached sales of EUR 136.1 mil-

lion. This corresponds to an increase of 31.2 percent com -

pared to the prior year’s quarter (EUR 103.7 million). Profit

from operations (EBIT) decreased by EUR 4.1 million to EUR

-2.3 million (3M 2013: EUR 1.8 million). On the one hand,

the decline in earnings in the Film Segment had an impact. On

the other hand, in the Others divison non-recurring charges

were incurred in connection with the so-called Formula One

proceedings in London.

Earnings attributable to shareholders amounted to EUR -5.5

million in the first three months 2014, after EUR -0.5 million

in the same period last year.

21

The Sports Segment recorded sales of EUR 33.4 million in the

first three months 2014, a decrease of 10.0 percent compared

to the corresponding previous year’s value (3M 2013: EUR

37.1 million). In the first quarter both market share and cover -

age in the TV and accumulated in the online and mobile sector

could be further increased. This led to an increase in sales

at SPORT1 compared to the same quarter last year, but as

expected could not compensate the decline in sales after the

loss of the production of LIGA total! At the same time the

digitization strategy of the sports business was further driven

forward, which resulted in higher material expenses compared

to the same quarter last year. Therefore, the segment result

decreased by 25.0 percent to EUR 1.2 million (3M 2013:

EUR 1.6 million). Higher other operating income, mainly from

the reversal of provisions, could not fully compensate the de-

cline in sales and increased cost of materials.

In the first three months 2014, the Film Segment recorded

sales of EUR 92.1 million, 65.1 percent more than in the same

period of the previous year (3M 2013: EUR 55.8 million). In

particular, the areas of theatrical distribution and license trad -

ing achieved significantly higher sales due to the global distribu -

tion of the movie “Pompeii”, compared to the first quarter of

the previous year. With the release of the film, the minimum

guarantees which are used to finance the production costs of

the film, were realized. At the same time the capitalized pro-

duction costs of the film were written down, so that the mini-

mum guarantees were set off against appropriate amortization.

Furthermore, impairments on film assets, in particular the

movie “Tarzan", impacted the result. Thus, the impairments on

film assets rose by EUR 5.8 million to EUR 7.3 million in the

first quarter 2014. The segment result of EUR -2.6 million for

the first three months 2014 was therefore below the level of

the previous year’s period (3M 2013: EUR -1.8 million).

Sales in the first three months 2014 in the Sports- and Event-

Marketing Segment stood with EUR 10.1 million at the previous

year’s level (3M 2013: EUR 10.1 million). The segment result

of EUR 3.9 million was EUR 0.5 million above the result of the

corresponding period of the previous year due to cost savings

(3M 2013: EUR 3.4 million).

The Other Business Activities Segment achieved sales of EUR

0.5 million in the first three months 2014 (3M 2013: EUR

Sales

Sports

Film

Sports- and Event-Marketing

Other Business Activities

Others

Total

Segment result

Sports

Film

Sports- and Event-Marketing

Other Business Activities

Others

Total

Change

-3,668

36,271

-12

-200

0

32,391

-388

-773

481

-133

-3,231

-4,044

1/1 to3/31/2013

37,085

55,816

10,152

695

0

103,748

1,592

-1,835

3,425

-399

-1,014

1,769

1/1 to3/31/2014

33,417

92,087

10,140

495

0

136,139

1,204

-2,608

3,906

-532

-4,245

-2,275

Segment performance January 1 to March 31, 2014 in EUR ‘000

2.3.2 Segment performance

Q1 2014 Interim Group Management Report

Economic Report

22

0.7 million) as well as a result of EUR -0.5 million (3M 2013:

EUR -0.4 million). The segment loss results from the online/

social gaming area.

The result of the Others division stood at EUR -4.2 million (3M

2013: EUR -1.0 million). The significant decline in earnings

resulted in particular from expenses of EUR 3.0 million for

counterparty lawyers in the Formula One proceedings, which

Constantin Medien AG has to bear following the ruling of the

High Court of Justice in London.

2.3.3 Sales and earnings performance of the Constantin

Medien Group

The Group’s net result for the first quarter 2014 amounted to

EUR -5.0 million after EUR 0.5 million in the same quarter last

year. Earnings attributable to shareholders included therein

amounted to EUR -5.5 million after EUR -0.5 million in the

same period last year. Thus, earnings per share both basic and

diluted stood at EUR -0.07 (3M 2013: EUR -0.01) in the first

quarter 2014.

Despite the increase in total output (sales including capital-

ized film production costs and other own work capitalized) by

EUR 26.9 million to EUR 143.1 million (3M 2013: EUR

116.2 million) and in spite of lower cost of materials and

licenses (from EUR 53.9 million by EUR 8.0 million to EUR

45.9 million) profit from operations (EBIT) was negative with

EUR 2.3 million in the first quarter 2014 (3M 2013: EUR

+1.8 million). The reason for this are disproportionately in-

creased amortization, depreciation and impairment by EUR

36.1 million to EUR 53.6 million (3M 2013: EUR 17.5 mil-

lion) in the first quarter 2014.

While sales increased by EUR 32.4 million to EUR 136.1 mil-

lion (3M 2013: EUR 103.7 million), the capitalized film pro-

duction costs and other own work capitalized went down by

EUR 5.4 million to EUR 7.0 million (3M 2013: EUR 12.4 mil-

lion) due to lower production volume of in-house film pro-

ductions. The reasons for the development of sales are pres -

ented in the explanations in chapter 2.3.2.

The decrease in the cost of materials and licenses in the first

quarter 2014 largely related to the lower production volume in

the Film Segment.

The increase in amortization, depreciation and impairment is

primarily attributable to the increase of amortization of film

assets due to higher consumption of film rights. Those amoun-

ted in the first three months to EUR 45.2 million compared to

EUR 13.1 million in the first three months 2013. Also impair -

ment on film assets increased significantly. They amounted to

EUR 7.3 million compared to EUR 1.5 million in the previous

year’s period.

The increase in other operating expenses by EUR 3.2 million

to EUR 22.6 million in the first three months (3M 2013: EUR

19.4 million) mainly related to legal and consulting costs,

which increased by EUR 3.0 million to EUR 5.0 million. The legal

and consulting costs include EUR 3.0 million in connection

with the Formula One proceedings of Constantin Medien AG.

The financial result amounted to EUR -2.0 million in the first

three months 2014 after EUR -1.0 million in the previous

year’s period. The reason for the decline is essentially due to

the interest expense of EUR 1.2 million for the corporate bond

2013/2018 issued in April 2013.

Non-current assets

Current assets

Total assets

Change

-33,694

3,146

-30,548

12/31/2013

258,796

236,793

495,589

3/31/2014

225,102

239,939

465,041

Consolidated balance sheet (abbreviated version) as of March 31, 2014 in EUR ‘000

2.3.4 Net assets position of the Constantin Medien Group

23

The Constantin Medien Group’s equity as of March 31, 2014

decreased to EUR 49.7 million (December 31, 2013: EUR

55.2 million). Equity attributable to shareholders decreased

due the development of earnings by EUR 5.7 million to EUR

8.7 million. Equity attributable to non-controlling interests

remained virtually unchanged with EUR 41.0 million (Decem-

ber 31, 2013: EUR 40.8 million).

The equity ratio (total equity divided by the balance sheet total)

as of March 31, 2014 stood at 10.7 percent after 11.1 per-

cent as of December 31, 2013. The decline in the equity ratio

is attributable to the negative result in the first quarter; the

decline in the balance sheet total was only able to offset this

partially. The adjusted equity ratio (after netting advance pay-

ments received against film assets and film-related cash and

cash equivalents with the corresponding financial liabilities)

amounted to 12.1 percent (December 31, 2013: 12.6 percent).

The decrease in non-current liabilities by EUR 2.7 million to

EUR 135.8 million (December 31, 2013: EUR 138.5 million)

is mainly related to lower deferred tax liabilities (EUR -3.2 mil-

lion). The decrease in deferred tax liabilities is primarily due to

the change of the item film assets.

The current liabilities decreased by EUR 22.4 million to EUR

279.5 million in the first quarter 2014 (December 31, 2013:

EUR 301.9 million). Thereby, current financial liabilities

decreased by EUR 24.9 million to EUR 99.1 million, as loans

to finance film projects were repaid following the theatrical

release of these films and sales realizable in this context. Also

advanced payments received decreased (EUR -4.9 million).

This was partly offset by the increase in liabilities due to

associated companies and joint ventures (EUR +2.5 million)

and the increase in income tax liabilities (EUR +3.9 million).

2.3.6 Liquidity development of the Constantin Medien Group

The Constantin Medien Group reported a positive cash flow

from operating activities of EUR 46.8 million in the first three

months 2014 (3M 2013: EUR 17.2 million). The increase is

mainly attributable to the cash inflow from the film business.

A cash outflow of EUR 18.4 million resulted from investing

activities (3M 2013: cash outflow of EUR 15.9 million), which

was mainly incurred in the Film Segment.

The Group’s financing activities led to a cash outflow of EUR

25.2 million (3M 2013: cash outflow of EUR 9.4 million). The

Equity attributable to the shareholders

Non-controlling interests

Total equity

Non-current liabilities

Current liabilities

Total equity and liabilities

Change

-5,669

192

-5,477

-2,634

-22,437

-30,548

12/31/2013

14,353

40,843

55,196

138,475

301,918

495,589

3/31/2014

8,684

41,035

49,719

135,841

279,481

465,041

2.3.5 Financial position of the Constantin Medien Group

Consolidated balance sheet (abbreviated version) as of March 31, 2014 in EUR ‘000

The reason for the decline in non-current assets in the first

quarter 2014 was primarily the amortization-related reduction

of film assets by EUR 36.7 million to EUR 135.5 million (De-

cember 31, 2013: EUR 172.2 million).

The increase in current assets (EUR +3.1 million to EUR

239.9 million) is mainly due to the increase in the item “non-

current assets held for sale and disposal group” (EUR +2.7

million to EUR 44.7 million). This item increased mainly due

to the increase in cash and cash equivalents of the PLAZA ME-

DIA companies by closing-date comparison (EUR +2.5 million

to EUR 17.6 million).

24

Q1 2014 Interim Group Management Report

Personnel Report | Addendum Report

3. Personnel Report

At closing day March 31, 2014, the Constantin Medien Group

had a total of 1,600 employees including freelance employees

(March 31, 2013: 1,547 employees). The number of salaried

employees as of March 31, 2014 increased to 1,201 em-

ployees (March 31, 2013: 1,155 employees). The number of

freelance employees slightly increased to 399 (March 31,

2013: 392 employees). New salaried employees were espe -

cially added in the Film Segment in the TV service production

area. An increase in the number of freelancers in the Film Seg-

ment compensated for the reduction in freelancers in the

Sports Segment, especially due to the loss of LIGA total!

4. Addendum Report

Intended transaction with Sky Deutschland will not be executed

On May 19, 2014, Constantin Medien AG announced its

decision, not to continue the negotiations with Sky Deutsch-

land Fernsehen GmbH & Co. KG in connection with the trans-

action agreed on December 5, 2013. The agreement provided

the sale of 100 percent of the shares of PLAZAMEDIA GmbH

TV- und Film-Produktion (including its subsidiaries in Austria

and Switzerland) as well as the sale of 25.1 percent each of the

shares in Sport1 GmbH and Constantin Sport Marketing GmbH.

The transaction was subject, among others, to the conclusion

of a new multi-year production framework contract between

Sport1 GmbH and PLAZAMEDIA GmbH TV- und Film-Produk-

tion. But no agreement could be reached on this arrangement.

This development requires a change of the financial targets of

the Constantin Medien Group for the 2014 financial year. The

continuation of the activities of PLAZAMEDIA GmbH TV- und

Film-Produktion and its subsidiaries under the umbrella of

Constantin Medien AG on the one hand leads to an increase in

sales of the Constantin Medien Group and simultaneously to

the loss of the other income from the deconsolidation of the

PLAZAMEDIA companies. Therefore, the profit planning 2014

was adjusted and this has also been considered in the guid -

ance for the 2014 financial year (see chapter 6.3).

Constantin Medien AG is planning measures to refinance the

corporate bond 2010/2015

Capital increase planned – On the one hand, the Management

Board of Constantin Medien AG intends to perform, in agree-

ment with the Supervisory Board and using part of the Author -

ized Capital 2013/I, a capital increase against cash contribu -

tions excluding subscription right of the shareholders pursuant

to § 186 para. 3 sentence 4 German Stock Companies Act

(Aktiengesetz). For this purpose, selected investors will be ad-

dressed. It is planned to increase the share capital of Constan-

Cash and cash equivalents

Current financial liabilities

Non-current financial liabilities

Net debt

Change

3,283

-24,896

166

28,013

13/31/2013

82,918

123,988

109,640

-150,710

3/31/2014

86,201

99,092

109,806

-122,697

Net debt as of March 31, 2014 in EUR ‘000

cash outflow resulted from the repayment of short-term loans

in the Film Segment.

The total cash inflow in first three months 2014 amounted to

EUR 3.2 million after a cash outflow of EUR 8.1 million in the

first three months 2013.

High cash effective sales in the Film Segment, particularly

from the global distribution of “Pompeii”, which were also

used to repay short-term loans to finance this film, have posi-

tively impacted the net debt of the Constantin Medien Group.

It is composed as follows as of March 31, 2014

25

Interim Group Management Report Q1 2014

Risks and Opportunities Report

tin Medien AG of EUR 85,130,780.00 through the issu ance

of new bearer shares of up to 10 percent of the share capital

with a calculated proportion of the share capital of EUR 1.00

per share. The Management Board and the Supervisory Board

of Constantin Medien AG will decide on the execution of the

capital increase, if the other parameters of this capital in-

crease, in particular the issue price, have been determined.

New loan agreement with private investor – Moreover, a further

loan agreement totaling CHF 14 million and EUR 4.5 million

will be concluded with a private investor in addition to the exist -

ing loan amounting to approximately EUR 17.5 million. The

new loans will have a term up to June 30, 2016; the interest

rate will be 5.0 percent p.a. as before.

Proceedings of Constantin Medien AG against Bernard Eccle-

stone and others

In the proceedings of Constantin Medien AG against Mr Ber-

nard Ecclestone and others, the High Court of Justice in Lon-

don, the Court of First Instance, rejected a direct claim and

this action against Mr Bernard Ecclestone and others with its

ruling on February 20, 2014. The appeal launched by Con-

stantin Medien AG with the High Court of Justice was also

rejected on March 27, 2014. On April 24, 2014, Constantin

Medien AG submitted an application to admit an appeal with

the Court of Appeal in London, the Court of Second Instance.

The decision regarding this application is still pending.

Changes to personnel in the bodies of the Constantin Medien

Group

On April 2, 2013, Constantin Medien AG announced changes

to the Group's bodies. After five years as Chairman of the

Supervisory Board, Mr Fred Kogel will leave the media com-

pany's Supervisory Board with the end of the Annual General

Meeting of Constantin Medien AG on July 30, 2014. He is to

be appointed as Chief Operating Officer (COO) in the Manage-

ment Board of Constantin Medien AG effective from October 1,

2014. At the same time, he shall become COO in the Man age-

ment Board of the Group company Constantin Film AG and

shall be responsible for the TV and new business areas. Dr

Dieter Hahn is to succeed Mr Fred Kogel as Chairman of the

Supervisory Board of Constantin Medien AG. He will again be

recom mended for the Board on the upcoming Annual General

Meeting. Werner E. Klatten, Deputy Chairman of the Super visory

Board of Constantin Medien AG sine 2008, will no longer run

for an appointment to the Supervisory Board. Jean-Baptiste

Felten and a further qualified person will be proposed to the

Annual General Meeting as new members to the Supervisory

Board.

The National Hockey League (NHL) live and exclusive on

SPORT1 US

On May 6, 2014, Sport1 GmbH announced the acquisition of

the platform-neutral exploitation rights to the National Hockey

League (NHL) for the next two match periods up to and includ -

ing 2015/16 for Germany, Austria and Switzerland from the

rights agency Advisers Media International (AMI) and Medge.

From the upcoming season starting in October 2014, the pay-

TV channel SPORT1 US will be broadcasting at least 60 live

matches with original US commentary.

5. Risk and Opportunities Report

5.1 Risk management system

Entrepreneurial actions and utilization of opportunities always

also involve risks. In order to protect the continuing existence

of the Constantin Medien Group, and to support the achieve-

ment of corporate objectives, an integrated, enterprise-wide

risk management system (RMS) was implemented.

The risk management system of the Constantin Medien Group

comprises both risks and opportunities. According to the de-

cen tra lized Group structure, the operative responsibility in

dealing with risks lies with the relevant risk officers. These are

largely the Boards and Committees as well as the Managing

Directors and the department heads of the individual subsidi -

aries. The repor ted risks are consolidated, and if applicable cat-

e gorized consistently, at Constantin Medien AG level, and as-

sessed at Group level.

A detailed presentation of the risk management system is set

out in chapter 8.1.2 of the combined Group management and

management report of the Annual Report 2013 of Constantin

Medien AG. The same applies to the description of the internal

control system in relation to the Group financial statement pro-

cess and the opportunities and risks of Constantin Medien AG.

Additionally, reference is made to the opportunities and risks

report of the Interim Financial Report of Highlight Communi-

cations AG as of March 31, 2014.

5.2 Main changes to opportunities and risks in the reporting

period

The opportunities and risk profile of the Constantin Medien

Group for the months coming after the first three months of

2014 largely corresponds to the assessments reported in the

consolidated financial statements as of December 31, 2013.

A detailed presentation of the company's risks is set out in

chapter 8.1.2 of the combined Group management and man -

agement report of the Annual Report 2013 of Constantin

Medien AG. Additionally, reference is made to the opportuni-

ties and risks report of the Annual Report 2013 as well as of

the Interim Financial Report of Highlight Communications AG

as of March 31, 2014.

Compared to previous reports, particularly the Group manage-

ment report for the 2013 financial year, no noteworthy devia-

tions could be identified in the distribution of individual factors

to the different classes. The current assessment of risk factors

by the responsible parties still supports the classification of

opportunities and risks of Constantin Medien AG as summarized

in the combined Group management report and management

report for the 2013 financial year.

The following changes or additions to the risks described in

the 2013 Annual Report have occurred:

Currently, shareholder claims are pending against Constantin

Medien AG as the legal successor of EM.TV & Merchandising

AG. The damage claims asserted in these proceedings amount

to approx. EUR 1.45 million as of March 31, 2014. The claims

of these shareholders are based on a number of different cir-

cum stances and legal foundations, the background being the

drop in the EM.TV stock price that occurred during 2000/

2001. Several shareholders have filed petitions for rulings on

certain facts and judicial subjects based on the German Capi-

tal Investor Proceedings Act (KapMuG). So far, the competent

senate of the Munich Higher Regional Court only announced

only one best case proceedings on April 2, 2012 in the Federal

Gazette. So far, these best case proceedings have not yet been

finalized. In order to settle the best case proceedings and the

above-mentioned pending shareholder claims, the Company

has submitted an agreement for a settlement for these pro-

ceedings to the plaintiffs and the best case plaintiffs. This

agreement was published by the competent senate of the

Munich Higher Regional Court in the Federal Gazette on March

5, 2014. The settlement was, among others, subject to the

condition that at least 95 percent of the total disputed value

join the settlement agreement or waive withdrawal from the

settlement (hereinafter called “quorum”). This quorum has not

yet been achieved so that the Company will not present the

settlement to the Annual General Meeting 2014 of Constantin

Medien AG for a vote. A new settlement offer with an adjusted

quorum is currently being checked.

With its ruling on February 20, 2014, the High Court of Justice

in London, the Court of First Instance, rejected a direct claim

and this action against Mr Bernard Ecclestone and others in

the proceedings of Constantin Medien AG against Mr Bernard

Ecclestone and others. The appeal launched by Constantin

Medien AG with the High Court of Justice, was also rejected by

this Court on March 27, 2014, and the legal costs of the

opposing parties, which have to be born, have partially been

speci fied (Q1 2014: EUR 3.0 million). On April 24, 2014,

Con stantin Medien AG submitted an application to admit

an appeal with the Court of Appeal in London, the Court of -

Second Instance. The decision regarding this application is

still pend ing.

From today's perspective, it cannot be ruled out that Constan-

tin Medien AG might have to bear additional legal costs for the

opposing parties. Given the potential effects, this risk must be

classified as medium.

Constantin Sport Holding GmbH had agreed with Sky Deutsch-

land Fernsehen GmbH & Co. KG to sell 100 percent of its shares

in its subsidiary PLAZAMEDIA GmbH TV- und Film-Produktion,

including its subsidiaries PLAZAMEDIA Austria Ges.m.b.H and

PLAZAMEDIA Swiss AG, as well as 25.1 percent each of the

shares in Sport1 GmbH and Constantin Sport Marketing GmbH

to Sky Deutschland Fernsehen GmbH & Co. KG.

Since – as already described – the transaction had not been

executed, the results planning for 2014 was adjusted accord -

ingly, and this is also taken into account in the guidance for the

2014 financial year.

5.3 Consolidated presentation of opportunities and risk

situation

The Management Board sees the main risk factors in regulatory

interventions, the maintenance of technical coverage as a basis

for generating strong revenues, the access to licenses and

literary materials for exploitation and in anticipating customer

26

Q1 2014 Interim Group Management Report

Risk and Opportunities Report

taste as well as the future media use. The Management Board

continues to see the biggest opportunities in the co-operation

with script authors, directors and producers in Germany and

abroad as well as the access to attractive literary materials and

licenses, which the Constantin Medien Group not least can at-

tribute to its image and its creative and committed personnel,

as well as to its portfolio of existing rights and licenses.

Based on the information available and on estimates, particu-

larly the probability of occurrence, the maximum amount of

damage and the effect of counter measures taken, the Manage -

ment Board of Constantin Medien AG reaches the conclusion

that these risks do not represent a going concern character.

This particularly applies to individual risks, as well as to the

risks as a whole as far as the effect of all risks together can be

reasonably simulated or otherwise estimated. The Management

Board considers the Group to be sufficiently prepared to deal

with the remaining risks not reduced by counter measures. It

is convinced that the measures taken keep risk at an econo-

mically reasonable level and that the Group's ability to bear

risks is sufficient.

6. Outlook

6.1 Economic environment

The International Monetary Fund (IMF) is expecting the global

recovery this year to result in global economic growth of 3.6

percent, with regional differences in growth subject to high

risks: As a consequence of the last financial and economic cri-

sis, many countries continue to have high debt and unem-

ployment ratios. Added to these are new risks such as a low

inflation rate in the developed industrial nations, weaker

growth prospects for emerging markets and new geopolitical

conflicts such as the crisis in the Ukraine.

The leading German economic research institutes in their spring

forecasts are expecting a further economic recovery in the Euro-

zone. In particular, gross investments are to be on the rise, due

to the required replacement investments and a low level of un-

certainty regarding the future of the Euro. Private consump-

tion is also predicted to increase again. However, this encour -

aging development is burdened by the slow reduction in un-

employment in the Eurozone, the still high debt ratios of com-

panies and countries as well as the bank's limited willingness

to grant credits.

For Germany, the economic research institutes are predicting

an economic upswing in the current year. Almost all available

early indicators (Ifo Index, ZEW and Consumer Climate or the

Purchasing Managers' Indices for the Processing Industry and

the Services Sector) suggest that the economic framework con-

ditions for companies are improving. The gross domestic pro-

duct is to grow by 1.9 percent in 2014, after a forecast of only

1.6 percent growth in the 2013 autumn report. Private con-

sumption is to make the biggest contribution to the increase in

general economic production. Stronger consumers’ willingness

to spend is supported by an increase in available income and

in only a moderate increase in consumer prices.

Sources: International Monetary Fund (IMF): World Economic Outlook,Update April 2014; M.M. Warburg & Co., Hamburg: Capital market per-spectives, February 2014

6.2 Priorities for the financial year 2014

6.2.1 Segment Sports

Sector-specific general conditions

In their current quarterly forecast ”Advertising Expenditure

Fore cast“, the media agency group ZenithOptimedia is predict -

ing further growth for the global advertising market also in the

next three years. After 2013 ended with a plus of 3.9 percent,

the agency is expecting a growth rate of 5.5 percent for 2014,

5.8 percent for 2015 and even 6.1 percent in 2016. Zenith-

Optimedia thus revises its forecast for the global advertising

mar ket upward for the third time in a row. The ongoing positive

development of the global economy and the continuing growth

in mobile advertising were the reasons for this confident pre-

diction.

In 2014, the advertising market will be driven by the Winter

Olympics, the Soccer Wold Cup and the US midterm elec tions,

with the medium TV profiting most. In 2013, TV bundled 40

percent of the global advertising budget – almost twice as

much as investments in online advertising (21 percent). In ad-

dition, the confidence of advertising customers in the Euro-

zone strengthened, particularly the situation in the Southern

European countries stabilized.

For Germany, ZenithOptimedia expects growth of 1.5 percent

for the current year, and growth rates of 1.3 or 1.2 percent for

2015 and 2016. Germany will profit especially in the category

TV. Notwithstanding, the internet will continue to be the fastest

growing medium in Germany according to ZenithOptimedia,

with a predicted increase in net investments of 8.5 percent in

27

Interim Group Management Report Q1 2014

Outlook

2014. According to ZenithOptimedia, the rapid development of

the medium is due to the “revolution of programmatic pur-

chases”, which enable agencies and advertising customers to

select advertising spots automatically and target-group-specifi-

cally, thus managing and optimizing digital campaigns in real

time. By now, this is also true of social ads and online videos,

so that several trends are reinforcing each other.

ZenithOptimedia still expects the highest growth rates in the

mobile area: The advertisements on mobile devices are to go

up by an average of 50 percent a year until 2016. Globally,

USD 13.4 billion were spent on mobile advertising in 2013.

This corresponds to 12.9 percent of total spendings for online

advertising and 27 percent of the total advertising volume. By

2016, investments in mobile advertising are to increase to

USD 45 billion, making up 28 percent of online investments

and 7.6 percent of total investments. Therefore, mobile will

advance to become the fourth biggest advertising medium glo-

bally after radio, magazines and outdoor advertising.

Source: ZenithOptimedia, press release, April 7, 2014 for the study“Advertising Expenditure Forecast”

In its advertising statistics for Germany, the Circle of Online

Marketers (Online-Vermarkterkreis, OVK) assumes total spend -

ings of EUR 1,430 billion for the current year, which corre -

sponds to a strong growth of +8.4 percent. The Unit Mobile

Advertising (MAC) also expects further growth for the display

advertising area on mobile devices and for 2014 is forecasting

an increase of total advertising spendings of around 65 per-

cent to EUR 107 million.

Source: Circle of Online Marketers (OVK) and Unit Mobile Advertising(MAC) in BVDW e.V., press release, March 27, 2014

For the pay-TV area, the auditing company PwC is predicting

a slight increase in the proportion of pay-TV households of total

households in Germany to 53.5 percent by 2017. The propor-

tion was 52.6 percent in 2012. Overall, PwC is expecting 20.5

sub scriber households for 2017. This development will be

especially due to the further increase in the demand for IPTV

and pay-TV offers. Subscriber households are made up of cable

and IPTV households, satellite households with pay-TV as well

as customers of the pay-TV platform Sky, and the users of pay-

TV HD packages via satellite as well as the users of 3D offers

– however, the latter will for now continue to be a niche as fore-

cast by PwC. According to PwC, the number of pay-TV house -

holds in Germany will total 12.2 million in 2017, which

cor responds to an annual increase of 6.6 percent based on 8.9

mil lion pay-TV households in 2012. PwC expects the propor-

tion of pay-TV households to be 31.9 percent in 2017 (23.1

percent in 2012).

Source: PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft,“German Entertainment and Media Outlook: 2013 – 2017”, October2013

According to PwC, in the production sector, the medium TV will

benefit from the continuing strong demand for program offers

in high definition and from the higher number of TV channels

as part of the ongoing digitization. As a result, TV usage is at

a stable high level and TV is staying attractive to advertisers.

Source: PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft,“German Entertainment and Media Outlook: 2013 – 2017”, October2013

The TV industry continues to be significantly driven by the intro -

duction of the new TV standard Ultra HD (4K). This was also

confirmed on the world's biggest specialist trade fair for pro-

duction technology, the NAB, which takes place in Las Vegas

in mid-April each year. In addition to innovative IP broadcast-

ing techniques, which are to make the broadcasts of live events

more cost efficiently and more flexible, the focus was particu-

larly on the 4K production technology (Ultra-HD). Sony and

FIFA announced their co-operation to this aim: For the first

time, the official film for the 2014 FIFA World Cup™ will be

produced in 4K resolution. At some match sites, professional

4K equipment will be integrated into the production workflow.

This once more documents the development from HD to 4K.

Sources: “4k-Produktionen zur FIFA WM als neue hochauflösende Produktionstechnik”; mebucom.de, April 14, 2014; “Fast schon Geschichte: die NAB2014” in film-tv-video.de, April 10, 2014

Priorities for the financial year 2014

Alongside the further continuous expansion of sports contents

and live broadcasts, both in free-TV and in pay-TV, the even

more consistent cross-platform content use and distribution

will be a focus in the current financial year – not least against

the background of the further increase in digital and conver-

gent media use for cross-platform offers. As a result, SPORT1

will drive the digitization of its offers even more stringently.

Above all, SPORT1.de will aim at positioning itself also as

a portal for access to all digital offers under the SPORT1 um-

brella brand. For this purpose, SPORT1 will create the corre -

sponding technical infrastructure and implement user inter -

28

Q1 2014 Interim Group Management Report

Outlook

faces focused on convergent media use. In addition, the digi-

tal diversification of the SPORT1 brand is to be driven forward

via additional sub-brands in the online area, while simulta-

neously creating new marketing environments. In the context

of the perpetual increase in the distribution of mobile devices

such as Smartphones and Tablets, SPORT1 will further focus

on extending its mobile offers and Apps, and on intensifying its

social media activities, in 2014.

6.2.2 Segment Film

Sector-specific general conditions

As a result of the now secured continuation and increase of

the DFFF until 2016, an important contribution to financing

German films will also be made in the next few years. This will

inspire production companies such as Constantin Film AG to

offer a creative and ambitious production business in Germany.

The ruling of the Federal Constitutional Court, which confirmed

the unlimited legality of the German Film Funding Act, pro vides

the entire industry with an immensely important basis for sus-

tainable growth perspectives.

In the TV service production area, innovations in the product

portfolio of private program providers can be assumed, par tially

due to stagnating coverages for long-term formats. Pay-TV

could become an increasingly interesting partner for service pro-

ductions, whose growth is currently strong and stable. Fans of

sports, films and demanding TV series are increasingly shift ing

towards pay-TV. The internet (subscription video-on-demand)

can also be viewed as a potential competitor of commercial TV

and must hence be monitored closed as a potential new partner.

In the theatrical distribution area, it can be assumed that the

theatrical market in Germany will be able to generate a good

result by sales and viewers in the second quarter 2014 – in

spite of the upcoming 2014 FIFA World Cup™. This is because

international titles such as “The Amazing Spider-Man 2: Rise

of Electro”, “The Other Woman”, “Godzilla”, “X-Men: Days of

Future Past”, “Maleficent” and “A Million Ways to Die in the

West” will be released in this period.

On the German Home Entertainment market, digital exploita-

tion formats (Electronic sell-through, Video-on-Demand and

Pay-per-View) will continue to gain in importance. For instance,

Constantin Film AG assumes that – compared to the current

market volume – video-on-demand will reach a two-digit market

share in the next few years.

Priorities for the financial year 2014

In theatrical production, Constantin Film AG's priority is on the

continuous optimization of the persistent high quality of its

national and international in-house productions. It is the aim

to primarily produce titles that are emotionally-triggered to the

needs of the audience and that are based e.g. on specific

brands and/or have event-character. But also productions with

smaller budgets and correspondingly a containable audience

risk are of interest if they are compelling. Each project must be

measured based on high creative and economic benchmarks.

Due to the current plans, a further ten promising film projects

are in the pipeline for the rest of 2014. Three of these thea-

trical films – including “Fantastic Four 2” and “Resident Evil

6” – are English-speaking productions tailored to the interna-

tional market. Productions for the German theatrical market

include, among others, “Ostwind 2 – Die Rückkehr nach Kal-

tenbach” as well as a second part to “Fack ju Göhte”.

In the TV service production area, the subsidiaries of Con-

stantin Film AG are continually working on developing innova-

tive TV formats and establishing contacts with the major TV

chan nels. For the coming months, Constantin Film AG is ex-

pecting an improved order situation in this area, which could

also be influenced positively by the increasingly aggressive

acquisition policy of the major online portals. In 2014, these

include the Ken Follett dramatization “The Pillars of the Earth”

as well as a further episode of the Rita Falk provincial crime

series “Schweinskopf al dente”.

In theatrical distribution, Constantin Film AG will continue to

rely on its tried and tested strategy of combining national and

international in-house and co-productions with high-quality

third-party titles, which are released in cinemas at a strategi-

cally favorable time with an appropriate press and marketing

strategy. Against the background that especially American stu-

dios spend large marketing budgets when releasing their major

event films in order to attract audience attention, Constantin

film AG will in future analyze more closely when and how to po-

si tion its films on the German theatrical market.

From today's perspective, approximately nine films will be

released to German cinemas between April and December

2014. Due to the 2014 FIFA World Cup™, only one film

release is planned for the second quarter of 2014 with “Irre

sind männlich” (in cinemas since April 24). Other theatrical

29

30

Q1 2014 Interim Group Management Report

Outlook

releases – contrary to the usual seasonal trend – are planned

from August because in the summer months, the theatrical

market is dominated by US blockbusters released globally.

In the current financial year, the Home-Entertainment area will

benefit particularly from the re-release of the theatrical hit

“Fack ju Göhte”, which came on the market at the beginning

of May. Other significant sales are expected from titles such as

“Pompeii”, “Need for Speed” and “Fünf Freunde 3”.

Revenues in free-TV exploitation in the second quarter of 2014

will be largely determined by the license starts of the films

“Agent Ranjid rettet die Welt” (ZDF), “The Three Musketeers”

(ProSiebenSat.1), “God of Carnage” (ARD), “Wickie auf großer

Fahrt” (ProSiebenSat.1) and “Blutzbrüdaz” (ProSiebenSat.1).

In pay-TV exploitation, “So Undercover”, “Fünf Freunde 2”,

“Texas Chainsaw – The Legend is back” and “Wrong Turn 5”

will generate revenues in the second quarter of 2014.

6.2.3 Segment Sports- and Event-Marketing

Sector-specific general conditions

According to estimates by the consulting company for spon-

sor ship measurement IEG, global sponsoring expenditures in

2014 will increase by 4.1 percent (previous year: 3.9 percent)

to USD 55.3 billion. IEG expects the largest percentage growth

spurt in the Asia/Pacific region (5.6 percent after 5.0 percent

the previous year), but the Central and South American region

will also increase due to the 2014 FIFA World Cup™, which is

to take place in Brazil (5.0 percent after 2.6 percent last year).

By contrast, IEG forecasts a strong curbing of the growth rate

in Europe (2.1 percent after 2.8 percent the previous year),

whereas at 4.3 percent, the increase in North America is to be

slightly below the prior year value (4.5 percent).

Source: IEG Sponsorship Report, January 7, 2014

Priorities for the financial year 2014

The repeated extension of the TEAM mandate for the marke-

t ing of the commercial rights for the UEFA Champions League,

UEFA Europa League and UEFA Super Cup (each for the

match periods 2015/16 to 2017/18) still provides very good

per spec tives for continuing the close co-operation with the

Euro pean Foot ball Association. If contractually agreed perfor-

mance targets for the current marketing process will be

achieved, then TEAM’s mandate will be automatically extend -

ed for three additional match periods (2018/19 to 2020/21).

As a result, it is the primary target of the TEAM group to

achieve a premature extension with UEFA.

For this purpose, as many new agreements at best possible

conditions are to be conducted in the current financial year –

both in the area of TV rights and for sponsorship rights. The two

finals in Turin and Lisbon are offering the perfect sales plat-

form in the current marketing phase.

6.2.4 Segment Other Business Activities

Sector-specific general conditions

Online/Social Gaming – PwC assumes that the games market

in Germany will grow more strongly again in the next few years

and is expecting revenues of EUR 2.4 billion for 2016. Com-

pared to the comparative value of EUR 1.85 billion in 2012,

this corresponds to an average increase per year of 3.9 per-

cent. PwC mentions additional virtual contents in the so-called

free-to-play area as one of the most important growth drivers.

In this business model, game publishers provide basic game

contents for free in order to offer potential users the lowest

possible entrance threshold. Additional contents such as game

extensions or functional items can be acquired during the

course of the game for a charge. PwC assumes that this sector

will grow by an average of 10 percent per year – a significantly

stronger growth than the market as a whole.

Source: PricewaterhouseCoopers (PwC), study “Media Trend Outlook –Virtuelle Zusatzinhalte in Videospielen: ein Geschäftsmodell mit Aus-sicht“, August 2013

Priorities for the financial year 2014

Highlights Event AG is primarily focusing on the high-quality

implementation of the events of the Vienna Philharmonic

Orchestra and the EBU, as these projects offer the greatest op-

portunities for the future. With regard to the newly added

projects (merchandising for the Eurovision Song Contest and

Eurovision Young Musicians), there are good strategic possibil -

ities to further expand the existing business areas. This par -

ticularly applies to the Eurovision Young Musicians project,

which combines existing activities in the area of classical music

with those of the EBU, with which there is a long-standing and

successful partnership.

Furthermore, online gaming provides the great opportunity to

interact with users/fans in the forward-looking social media,

events and entertainment sector. As a result, any already made

activities are to be extended further.

31

6.3 Financial targets of the Group

It should be noted that actual results could significantly differ

from expectations of projected developments if the assump -

tions underlying the forward-looking statements prove to be

inaccurate.

Since the originally agreed sale of PLAZAMEDIA GmbH TV-

und Film-Produktion as well as the sale of the minority stake

of 25.1 percent each in Sport1 GmbH and Constantin Sport

Marketing GmbH to Sky Deutschland Fernsehen GmbH & Co.

KG will not be executed, this results in a change of the finan-

cial targets of the Constantin Medien Group for the financial

year 2014.

Caused by the continuation of the activities of PLAZAMEDIA

GmbH TV- und Film-Produktion and its subsidiaries under the

umbrella of Constantin Medien AG, compared to the previous

year, now an increase in sales is expected for the financial year

2014 in the Segment Sports. Despite the loss of the planned

other income resulting from the transaction with Sky Deutsch-

land Fernsehen GmbH & Co. KG, however higher earnings are

assumed compared to the previous year (previous guidance for

the financial year 2014: lower sales together with an increase

in earnings).

Overall, the Management Board now assumes Group sales of

between EUR 460 million and EUR 500 million (previously:

EUR 420 million and EUR 460 million) for the financial year

2014. Considering the holding costs and the financial expenses

and taxes and due to the fact, that the intended transaction

has not been executed, the Management Board is expecting

Group earnings attributable to shareholders of between EUR

-13 million and EUR -15 million (previously: EUR +13 million

and EUR +15 million).

Ismaning, May 22, 2014

Constantin Medien AG

Bernhard Burgener Antonio Arrigoni

Chief Executive Officer Chief Financial Officer

32

Q1 2014 Consolidated Interim Financial Statements | Consolidated Balance Sheet

Assets

3/31/2014

135,461

31,900

43,471

5,461

378

1,130

2,964

187

4,150

225,102

4,071

116,747

1,859

1,501

2,495

68,576

44,690

239,939

465,041

12/31/2013

172,154

31,558

43,295

5,455

328

871

2,512

201

2,422

258,796

3,178

118,505

1,862

1,850

1,593

67,851

41,954

236,793

495,589

Non-current assets

Film assets

Other intangible assets

Goodwill

Property, plant and equipment

Investments in associated companies and joint ventures

Non-current receivables

Receivables due from associated companies and joint ventures

Other financial assets

Deferred tax assets

Current assets

Inventories

Trade accounts receivable and other receivables

Receivables due from associated companies and joint ventures

Other financial assets

Income tax receivables

Cash and cash equivalents

Non-current assets held for sale and disposal group

Total assets

Consolidated Balance Sheet as of March 31, 2014 in EUR ‘000

33

3/31/2014

85,131

-7,422

103,605

12,824

-179,679

-5,775

8,684

41,035

49,719

109,806

130

5,660

4,347

15,898

135,841

99,092

43,159

107,796

2,478

8,227

4,796

13,933

279,481

465,041

12/31/2013

85,131

-7,422

103,605

12,718

-170,054

-9,625

14,353

40,843

55,196

109,640

137

4,907

4,653

19,138

138,475

123,988

48,031

107,446

21

8,674

949

12,809

301,918

495,589

Equity/Liabilities

Equity

Subscribed capital

Treasury stock

Capital reserve

Other reserves

Accumulated loss

Shareholders' interests

Equity attributable to the shareholders

Non-controlling interests

Non-current liabilities

Financial liabilities

Other liabilities

Pension liabilities

Provisions

Deferred tax liabilities

Current liabilities

Financial liabilities

Advance payments received

Trade accounts payable and other liabilities

Liabilities due to associated companies and joint ventures

Provisions

Income tax liabilities

Liabilities of the disposal group

Total equity and liabilities

Consolidated Balance Sheet as of March 31, 2014 in EUR ‘000

34

Q1 2014 Consolidated Interim Financial Statements | Consolidated Income Statement

Sales

Capitalized film production costs and other own work capitalized

Total output

Other operating income

Costs for licenses, commissions and materials

Costs for purchased services

Cost of materials and licenses

Salaries

Social security and pension costs

Personnel expenses

Amortization and impairment on film assets

Amortization/depreciation and impairment on intangible assets

and property, plant and equipment

Impairment on goodwill

Amortization, depreciation and impairment

Other operating expenses

Loss/profit from operations

Profit from investments in associated companies and joint ventures

Financial income

Financial expenses

Financial result

Loss/profit before taxes

Income taxes

Deferred taxes

Taxes

Net loss/profit

thereof non-controlling interests

thereof shareholders' interests

Consolidated Income Statement

1/1 to3/31/2014

136,139

6,970

143,109

5,809

-10,614

-35,304

-45,918

-25,490

-3,604

-29,094

-52,527

-1,074

0

-53,601

-22,580

-2,275

50

2,047

-4,049

-2,002

-4,227

-5,220

4,485

-735

-4,962

533

-5,495

1/1 to3/31/2013

103,748

12,427

116,175

5,845

-12,434

-41,440

-53,874

-25,913

-3,651

-29,564

-14,706

-2,746

0

-17,452

-19,361

1,769

4

1,943

-2,970

-1,027

746

-532

277

-255

491

1,036

-545

January 1 to March 31, 2014 in EUR ‘000

35

Consolidated Statement of Comprehensive Income | Consolidated Interim Financial Statements Q1 2014

1/1 to3/31/2014

-0.07

-0.07

77,708,287

77,708,287

1/1 to3/31/2013

-0.01

-0.01

77,706,409

77,706,409

Earnings per share

Earnings per share attributable to shareholders, basic (in EUR)

Earnings per share attributable to shareholders, diluted (in EUR)

Average number of outstanding shares (basic)

Average number of outstanding shares (diluted)

Net loss/profit

Foreign currency translation differences

Items that probably will be reclassified to profit or loss in subsequent periods

Actuarial gains and losses on defined benefit plans

Items that will not be reclassified to profit or loss in subsequent periods

Other comprehensive loss/income, net of tax

Total comprehensive loss/income

thereof non-controlling interests

thereof shareholders' interests

1/1 to3/31/2014

-4,962

81

81

-534

-534

-453

-5,415

254

-5,669

Consolidated Statement of Comprehensive Income

1/1 to3/31/2013

491

178

178

0

0

178

669

1,239

-570

January 1 to March 31, 2014 in EUR ‘000

January 1 to March 31, 2014

36

Q1 2014 Consolidated Interim Financial Statements | Consolidated Statement of Cash Flows

Net loss/profit

Deferred taxes

Income taxes

Financial result

Profit (-) / loss (+) from investments in associated companies and joint ventures

Amortization, depreciation and impairment and write-ups on film assets, intangible assets

and property, plant and equipment

Profit (-) / loss (+) from disposal of film assets, intangible assets and property, plant and equipment

Other non-cash items

Increase (-) / decrease (+) in inventories, trade accounts receivable

and other assets not classified to investing or financing activities

Decrease (-) / increase (+) in trade accounts payable and other

liabilities not classified to investing or financing activities

Dividends received from associated companies and joint ventures

Interest paid

Interest received

Income taxes paid

Income taxes received

Cash flow from operating activities

Change in cash and cash equivalents due to acquisitions of companies/shares in companies, net

Payments for intangible assets

Payments for film assets

Payments for property, plant and equipment

Payments for financial assets

Proceeds/payments due to sale of companies/shares in companies, net

Proceeds from disposal of intangible assets and film assets

Proceeds from disposal of property, plant and equipment

Proceeds from disposal of financial assets

Cash flow for investing activities

Consolidated Statement of Cash Flows

1/1 to3/31/2014

-4,962

-4,485

5,220

2,768

-50

53,601

26

-1,044

1,662

-3,022

0

-713

80

-2,276

8

46,813

0

-855

-16,123

-1,022

-439

0

0

0

0

-18,439

1/1 to3/31/2013

491

-277

532

1,268

-4

17,452

4

-1,232

-9,566

12,184

0

-1,113

271

-5,800

2,982

17,192

0

-225

-14,827

-800

-8

0

0

8

0

-15,852

January 1 to March 31, 2014 in EUR ‘000

37

Proceeds from capital increase and from issuance of equity instruments

Payments for purchase of treasury stock

Proceeds from sale of treasury stock

Payments for purchase of non-controlling interests

Proceeds from sale of non-controlling interests

Repayment and buy-back of non-current financial liabilities

Repayment and buy-back of current financial liabilities

Proceeds from receipt of non-current financial liabilities

Proceeds from receipt of current financial liabilities

Dividend payments

Cash flow for financing activities

Cash flow from/for the reporting period

Cash and cash equivalents at the beginning of the reporting period

Change in cash and cash equivalents due to exchange rate movements

Cash and cash equivalents at the end of the reporting period

Change in cash and cash equivalents

1/1 to3/31/2014

0

0

0

0

0

0

-25,828

0

708

-62

-25,182

3,192

82,918

91

86,201

3,192

1/1 to3/31/2013

0

0

0

0

0

0

-10,208

0

814

0

-9,394

-8,054

91,113

-11

83,048

-8,054

January 1 to March 31, 2014 in EUR ‘000

38

Q1 2014 Consolidated Interim Financial Statements | Consolidated Statement of Changes in Equity

Balance 1/1/2014

Foreign currency translation differences

Items that probably will be reclassified to profit or loss in subsequent periods

Actuarial gains and losses on defined benefit plans

Items that will not be reclassified to profit or loss in subsequent periods

Other comprehensive income/loss

Net profit/loss

Total comprehensive income/loss

Reclassification of prior year's net result

Capital increase

Change in treasury stock

Dividend payments

Other changes

Balance 3/31/2014

Balance 1/1/2013

Retrospective change in accounting principle due to adoption of IAS 19R

Adjusted balance 1/1/2013

Foreign currency translation differences

Items that probably will be reclassified to profit or loss in subsequent periods

Actuarial gains and losses on defined benefit plans

Items that will not be reclassified to profit or loss in subsequent periods

Other comprehensive income/loss

Net profit/loss

Total comprehensive income/loss

Reclassification of prior year's net result

Capital increase

Change in treasury stock

Dividend payments

Other changes

Balance 3/31/2013

Subscribedcapital

85,131

0

0

0

0

85,131

85,131

85,131

0

0

0

0

85,131

Treasurystock

-7,422

0

0

0

0

-7,422

-7,424

-7,424

0

0

0

0

-7,424

Capitalreserve

103,605

0

0

0

0

103,605

110,195

110,195

0

0

0

0

1

110,196

Otherreserves

12,718

106

106

0

106

106

12,824

14,788

-888

13,900

-25

-25

0

-25

-25

13,875

Consolidated Statement of Changes in Equity

January 1 to March 31, 2014 in EUR ‘000

39

Shareholders'interests

-9,625

0

-280

-280

-280

-5,495

-5,775

9,625

-5,775

4,962

-11

4,951

0

0

0

-545

-545

-4,951

-545

Non-controlling

interests

40,843

-25

-25

-254

-254

-279

533

254

-62

41,035

50,959

-1,175

49,784

203

203

0

203

1,036

1,239

51,023

Equity attributable to

shareholders

14,353

106

106

-280

-280

-174

-5,495

-5,669

0

0

0

0

0

8,684

32,766

-899

31,867

-25

-25

0

0

-25

-545

-570

0

0

1

0

0

31,298

Total

55,196

81

81

-534

-534

-453

-4,962

-5,415

0

0

0

-62

0

49,719

83,725

-2,074

81,651

178

178

0

0

178

491

669

0

0

1

0

0

82,321

Accumulatedloss

-170,054

0

0

0

0

-9,625

-179,679

-174,886

-174,886

0

0

0

0

4,951

-169,935

40

Notes to the Consolidated Interim Financial Statements

1. General information about the Group

The Group parent company, Constantin Medien AG, has its re-

gistered office in Münchener Straße 101g, Ismaning, Germany.

Constantin Medien AG's Management Board authorized the

publication of the accompanying unaudited, condensed con-

solidated interim financial statements at its meeting on May

22, 2014.

2. Accounting and valuation principles

The accompanying unaudited, condensed consolidated interim

financial statements for the period from January 1, 2014 to

March 31, 2014 have been prepared according to Internatio-

nal Accounting Standard Interim Financial Reporting (IAS 34).

The condensed consolidated interim financial statements do

not include all explanations and disclosures required for annual

reports and should be read in conjunction with the consolidated

financial statements as of December 31, 2013 published by

the Company.

The accounting and valuation principles used in this condensed

consolidated interim financial statements are consistent with

those applied in the consolidated financial statements as of

December 31, 2013 (refer to the annual report 2013, notes to

the consolidated financial statements, note 4) except for the

first-time adoption of new or revised standards and interpreta-

tions explained below.

The consolidated interim financial statements are presented

in Euros, which represent the functional and reporting currency

of the Group parent company. In general, the amounts are

stated in thousands of Euros (EUR thousand or EUR ‘000),

except where otherwise indicated.

The preparation of the condensed consolidated interim finan-

cial statements requires management to use estimates and

assumptions that affect the classification and measurement of

reported income, expenses, assets, liabilities and contingent

liabilities as of the balance sheet date. These estimates and

assumptions represent management's best estimate based on

historical experience and other factors, including estimates

about future events. The estimates and assumptions are contin -

ually reviewed. Changes in accounting estimates are necessary

if changes occur in the circumstances on which the estimates

were based on or as a result of new information or additional

findings. Such changes are recognized in the period of the

change. For additional information, refer to the annual report

2013, notes to the consolidated financial statements, note 5.

3. Changes in accounting principles

The Group has the following standards and amendments of

accounting standards, mandatory applicable in the EU from

January 1, 2014, already voluntarily early adopted in the

financial year 2013:

Q1 2014 Consolidated Interim Financial Statements | Notes to the Consolidated Interim Financial Statements

General information about the Group | Accounting and valuation principles | Changes in accounting principles

IFRS 10, Consolidated Financial Statements

IFRS 11, Joint Arrangements

IFRS 12, Disclosures of Interest in Other Entities

Transition Regulations (Amendments to IFRS 10, IFRS 11, IFRS 12)

IAS 27, Separate Financial Statements (Amendment)

IAS 28, Investments in Associates and Joint Ventures (Amendment)

IAS 36, Impairment (Amendment)

Mandatory application for annual periods beginning on or after:

1/1/2014

1/1/2014

1/1/2014

1/1/2014

1/1/2014

1/1/2014

1/1/2014

Standards/Amendments/ Interpretations

41

For additional information, refer to annual report 2013, notes

to the consolidated financial statements, note 2.

The mandatory first-time adoption for annual periods begin-

ning on January 1, 2014 of the following accounting standards

and interpretations did not materially impact this condensed

consolidated interim financial statements and it is not ex-

pected that these changes materially impact the full financial

statements at year-end.

Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)

IAS 32, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities

(Amendment)

IAS 39, Financial Instruments: Recognition and Measurement – Novation of Derivatives

(Amendment)

IFRIC 21, Levies

Mandatory application for annual periods beginning on or after:

1/1/2014*

1/1/2014*

1/1/2014*

1/1/2014**

Standards/Amendments/ Interpretations

* Already endorsed by the EU** Interpretation not yet been endorsed by the EU

The Constantin Medien Group waived the early application of

new or revised standards and interpretations, whose applica-

tion is not yet mandatory for the Constantin Medien AG on

January 1, 2014. For additional information, refer to annual

report 2013, notes to the consolidated financial statements,

note 2.

4. Changes in the scope of consolidation

Acquisitions, new formations and first-time consolidation

In the reporting period no new acquisitions, formations and

first-time consolidation took place.

Other changes

On January 1, 2014 Constantin Production Services Inc., USA

was merged to the Constantin Film Development Inc., USA.

This transaction has no effect on these consolidated interim

financial statements.

5. Explanatory notes to selected line items in the

balance sheet and income statement

Film assets

Film assets include third-party and in-house productions. In

the first three months of the financial year 2014 EUR 15,826

thousand (3M 2013: EUR 14,101 thousand) were invested in

film assets. Amortization and impairment for the reporting

period amount to EUR 55,527 thousand (3M 2013: EUR

14,706 thousand).

Trade accounts receivable and other receivables

Trade accounts receivable and other receivables are as follows:

Other receivables include loans to co-producers for film pro-

jects of EUR 34,139 thousand (December 31, 2013: EUR

35,211 thousand).

Cash and cash equivalents

Cash and cash equivalents are as follows:

Trade accounts receivable

Other receivables

Total

12/31/2013

52,798

65,707

118,505

3/31/2014

48,006

68,741

116,747

Trade accounts receivable and other receivables in EUR ‘000

Notes to the Consolidated Interim Financial Statements | Consolidated Interim Financial Statements Q1 2014

Changes in the scope of consolidation | Explanatory notes to selected line items in the balance sheet and income statement

42

Q1 2014 Consolidated Interim Financial Statements | Notes to the Consolidated Interim Financial Statements

Explanatory notes to selected line items in the balance sheet and income statement

As of March 31, 2014 Constantin Medien AG has pledged a

total of cash and cash equivalents in the amount of CHF 7.6

million for guarantees in variable amounts (December 31,

2013 CHF 0 million). As of the balance sheet date thereof

EUR 3,175 thousand (December 31, 2013: EUR 0 thousand)

have been claimed.

Non-current assets held for sale

This item comprises on the one hand the property held for sale

from Highlight Event & Entertainment AG, whose activities are

reported in the Other Business Activities Segment, in the

amount of EUR 3,197 thousand (December 31, 2013: EUR

3,181 thousand) as well as the disposal group of PLAZAMEDIA

GmbH TV- und Film-Produktion and its subsidiaries. As of

March 31, 2014 the disposal group is measured at carrying

value. The assets and liabilities presented include the values

of PLAZAMEDIA GmbH TV- und Film-Produktion, PLAZA -

MEDIA Austria Ges.m.b.H and PLAZAMEDIA Swiss AG:

3/31/2014

83,201

3,000

86,201

-17,625

68,576

12/31/2013

72,918

10,000

82,918

-15,067

67,851

Cash on hand and balance at banks

Short-term deposits

Subtotal

Reclassification to disposal group

Total

Cash and cash equivalents in EUR ‘000

Assets

Other intangible assets

Property, plant and equipment

Non-current receivables

Deferred tax assets

Inventories

Trade accounts receivable and other receivables

Income tax receivables

Cash and cash equivalents

Assets of the disposal group

Liabilities

Trade accounts payable and other liabilities

Income tax liabilities

Non-current other liabilities

Deferred tax liabilities

Provisions

Liabilities of the disposal group

12/31/2013

608

7,426

689

1,722

434

12,827

0

15,067

38,773

12/31/2013

12,169

75

0

116

449

12,809

Disposal group in EUR '000

3/31/2014

642

7,839

621

1,528

434

12,803

1

17,625

41,493

3/31/2014

13,212

84

5

321

311

13,933

The cumulative gains or losses in other comprehensive income,

which are assigned to the disposal group, amount to EUR -1

thousand (December 31, 2013: EUR 4 thousand). For addi-

tional information, refer to the annual report 2013, notes to

the consolidated financial statements, note 6.13.

43

Equity

As of March 31, 2014, the balance of directly and indirectly

held non-voting treasury shares stood at 7,422,493 Constantin

Medien AG shares taking into account shares held by Highlight

Communications AG (December 31, 2013: 7,422,493 shares).

Non-current financial liabilities

The following table shows the composition of non-current fi-

nancial liabilities as of March 31, 2014:

Current financial liabilities

Current financial liabilities consist of EUR 99,092 thousand

(December 31, 2013: EUR 123,988 thousand) of current liabil -

ities due to banks, whereof EUR 54,003 thousand (December

31, 2013: EUR 79,123 thousand) fall upon film financing.

Trade accounts payable and other liabilities

Trade accounts payable and other liabilities are as follows:

Sales

Sales in the first three months 2014 amounted to EUR

136,139 thousand compared to EUR 103,748 thousand in

the same period in 2013. For further details about the sales

development refer to note 7 (segment reporting) of these notes

and to chapter 2.3.2 (segment performance) of the interim

group management report. Sales from barter transactions

involv ing dissimilar advertising services amount in the report -

ing period to EUR 1,031 thousand (3M 2013: EUR 597 thou-

sand).

Other operating expenses

In Constantin Medien AG’s proceeding against Mr Bernard

Ecclestone, among others, the High Court of Justice in London,

Court of First Instance, rejected a direct claim against Mr

Bernard Ecclestone, among others, in its judgment dated Feb-

ruary 20, 2014. The appeal filed by Constantin Medien AG

was rejected by the High Court of Justice in London on March

27, 2014. For further comments on the legal proceedings of

Constantin Medien AG against Mr Bernard Ecclestone, among

others, refer to note 10, events after balance sheet date, of these

notes. Due to the decision of the Court in late March a negative

impact on earnings of EUR 2,964 thousand relating to costs

for counterparty lawyers resulted in the first quarter 2014.

Amortization, depreciation and impairment

Amortization, depreciation and impairment for the first three

months 2014 are as follows:

Financial result

Financial income and financial expenses for the first three

months 2014 are as follows:

Corporate bond 2013/2018

Corporate bond 2010/2015

Loan private investor

Total

12/31/2013

63,401

28,700

17,539

109,640

3/31/2014

63,479

28,739

17,588

109,806

Non-current financial liabilities in EUR ‘000

Trade accounts payable

Other liabilities

Total

12/31/2013

41,466

65,980

107,446

3/31/2014

37,072

70,724

107,796

Trade accounts payable and other liabilities in EUR ‘000 Scheduled amortization of film

assets

Scheduled amortization of

intangible assets

Scheduled depreciation of pro-

perty, plant and equipment

Impairment on film assets

Total

1/1 to3/31/2014

45,239

483

591

7,288

53,601

1/1 to3/31/2013

13,168

652

2,094

1,538

17,452

Amortization, depreciation and impairment in EUR '000

44

Q1 2014 Consolidated Interim Financial Statements | Notes to the Consolidated Interim Financial Statements

Financial risk management

Unrecognized allocable loss from entities accounted for at

equity

In the reporting period the unrecognized allocable loss from

entities accounted for at equity amounts to EUR 323 thousand

(3M 2013: EUR 388 thousand). The cumulative unrecogni-

zed allocable loss totals EUR 2,528 thousand (December 31,

2013: EUR 2,193 thousand).

6. Financial risk management

The Group is exposed to various financial risks arising from

operating business activities and financing activities. Finan-

cial risks of relevance to the Group arise from changes in foreign

exchange rates, market risks for financial assets as well as

changes in interest rates, liquidity, creditworthiness and the

payment ability of the Group's business partners. There have

been no changes relating to the classification of the financial

assets and liabilities compared to the latest consolidated

financial statements. For additional information, refer to the

annual report 2013, notes to the consolidated financial state-

ments, note 8.

Fair value hierarchy

Financial assets and liabilities that are measured at fair value,

or fair values to be disclosed in the notes, are allocated to the

following levels of the fair value hierarchy, based on the lowest

level input that is significant for the fair value measurement as

a whole:

– Level 1: Inputs are quoted prices (unadjusted) in active mar-

kets for identical assets or liabilities that the entity can

access at the measurement date

– Level 2: Inputs are inputs, other than quoted prices included

within Level 1, that are observable for the asset or liability,

either directly or indirectly

– Level 3: Inputs are unobservable inputs for the asset or lia-

bility

In the first three months until March 31, 2014, there have

been no changes in the valuation principles (refer to the annual

report 2013, notes to the consolidated financial statements,

note 4.3).

Foreign currency exchange gains

Gains from changes in the fair value of financial instruments

Other interests and similar income

Total

1/1 to3/31/2014

1,605

155

287

2,047

1/1 to3/31/2013

920

720

303

1,943

Financial income in EUR '000

Interest expenses on the corporate bonds (previous year: incl. convertible bond)

Foreign currency exchange losses

Loss arising from changes in the fair value of financial instruments

Other interest and similar expenses

Total

1/1 to3/31/2014

1,882

838

243

1,086

4,049

1/1 to3/31/2013

706

678

25

1,561

2,970

Financial expenses in EUR ‘000

45

Financial assets

Derivative financial instruments

Financial assets at fair value through profit or loss

Financial liabilities

Financial liabilities (non-current)

Derivative financial instruments

Level 1

0

179

95,168

0

Level 2

143

0

19,946

388

Level 3

0

0

0

0

Total

143

179

115,114

388

Fair value hierarchy as of March 31, 2014 in EUR ‘000

The following table presents an allocation of financial assets

and liabilities measured at fair value, or fair values to be dis -

closed in the notes according to the three-level fair value hier -

archy:

Net carryingvalue

143

179

109,806

388

Financial assets

Derivative financial instruments

Financial assets at fair value through profit or loss

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities (non-current)

Financial liabilities with hedging relationships

Derivative financial instruments

Level 1

0

185

0

94,870

0

0

Level 2

543

0

520

19,816

413

704

Level 3

0

0

0

0

0

0

Total

543

185

520

114,686

413

704

Fair value hierarchy as of December 31, 2013 in EUR ‘000

Net carryingvalue

543

185

520

109,640

413

704

For the determination of fair values the own credit risk and the

default risk of the counterparty has been taken into account

according the Group’s accounting principles (refer to the

annual report 2013, notes to the consolidated financial state-

ments, note 4.3).

There have been no reclassifications between the individual

categories of the fair value hierarchy.

Fair value of financial assets and liabilities

The valuation at fair value of financial assets measured at fair

value through profit or loss, which is included in level 1, is

deter mined by means of stock prices. Derivative financial

instru ments included in level 2 are measured at current mar-

ket prices. To determine the fair value of financial instruments

in level 2, a discounted cash flow method has been applied.

Financial assets and liabilities measured at amortized cost

The carrying amounts of current financial assets and liabilities

almost correspond to their fair value due to the short-term ma-

turities of these instruments. The non-current receivables are

discounted according to their maturity and therefore the carry -

ing amounts correspond almost to their fair value. A differ ence

between the amortized cost and fair value exist for the non-

current financial liabilities.

Fair value

Fair value

46

Q1 2014 Consolidated Interim Financial Statements | Notes to the Consolidated Interim Financial Statements

Segment reporting

The fair value of the corporate bonds accounted for at amor -

tized cost is equivalent to the XETRA closing rate at the

balance sheet date, and is therefore included in level 1.

The fair value of the loan from a private investor accounted for

at amortized cost was determined using the discounted cash

flow method. The discount rates adopted correspond to the

market yield curve of a German government bond at the

balance sheet date. As the market interest rate is the most sig-

nificant input factor and thus deemed to be observable, the

fair value is classified in level 2 of the fair value hierarchy.

Fair value of non-financial assets and liabilities

As of March 31, 2014, with the exception of the property, no

non-financial assets and non-financial liabilities have been

measured at fair value. The property which is measured at fair

value less cost to sell is classified in level 2 of the fair value

hierarchy like on December 31, 2013 (refer to annual report

2013, notes to the consolidated financial statements, note

6.13).

7. Segment reporting

The segment information below is based on the man agement

approach. The Company's Management Board, as the chief

operating decision maker, makes decisions about the allo cation

of resources to the segments and still assesses their success on

the basis of key indicators for sales and segment result. Based

on the internal management reporting system and the under-

lying organizational structure of internal reporting, the Group

is still classified into the four operative segments Sports, Film,

Sports- and Event-Marketing as well as Other Business Activ -

ities. Others contain the administrative functions of the holding

company, Constantin Medien AG, and in the previous year

additionally the activities of EM.TV Finance B.V. until the com-

pletion of its liqui dation in October 2013.

The segment result is defined as earnings before earnings from

investments in associated companies and joint ventures, before

financial result and before taxes.

Sales and services transacted between business segments are

generally rendered at prices that would have been agreed with

third parties.

Sports

33,417

85

33,502

2,707

-35,005

-218

0

1,204

External sales

Intercompany sales

Total sales

Other segment income

Segment expense

thereof scheduled amortization

and depreciation

thereof impairments

Segment result

Non-allocated items

Earnings from investments in associated

companies and joint ventures

Financial income

Financial expenses

Loss before taxes

Sports- andEvent-

Marketing

10,140

0

10,140

111

-6,345

-177

0

3,906

Others

0

0

0

781

-5,026

-57

0

-4,245

Group

136,139

0

136,139

12,779

-151,193

-46,313

-7,288

-2,275

50

2,047

-4,049

-4,227

Film

92,087

0

92,087

10,025

-104,720

-45,591

-7,288

-2,608

Recon -ciliation

0

-121

-121

-1,046

1,167

0

0

0

Segment reporting January 1 to March 31, 2014 in EUR ‘000

Other Business Activities

495

36

531

201

-1,264

-270

0

-532

47

Notes to the Consolidated Interim Financial Statements | Consolidated Interim Financial Statements Q1 2014

Financial commitments, contingent liabilities and other financial commitments | Relationships with related companies and persons

Sports

37,085

127

37,212

867

-36,487

-1,696

0

1,592

External sales

Intercompany sales

Total sales

Other segment income

Segment expense

thereof scheduled amortization

and depreciation

thereof impairments

Segment result

Non-allocated items

Earnings from investments in associated

companies and joint ventures

Financial income

Financial expenses

Profit before taxes

Sports- andEvent-

Marketing

10,152

0

10,152

21

-6,748

-211

0

3,425

Others

0

0

0

1,800

-2,814

-59

0

-1,014

Group

103,748

0

103,748

18,272

-120,251

-15,914

-1,538

1,769

4

1,943

-2,970

746

Film

55,816

0

55,816

16,563

-74,214

-13,688

-1,538

-1,835

Recon -ciliation

0

-163

-163

-1,189

1,352

0

0

0

Segment reporting January 1 to March 31, 2013 in EUR ‘000

Other Business Activities

695

36

731

210

-1,340

-260

0

-399

8. Financial commitments, contingent liabilities

and other financial commitments

Financial commitments, contingent liabilities and other finan-

cial commitments decreased by EUR 19,008 thousand to EUR

166,616 thousand as of March 31, 2014, compared to the

consolidated financial statements as of December 31, 2013.

9. Relationships with related companies and

persons

The Company maintains relations as part of the ordinary busi-

ness activities with associated companies and joint ventures

as well as companies that are controlled by Members of the

Supervisory Board. Receivables due from associated compa-

nies and joint ventures include in some cases loans, which

have arisen from non-binding financing activities of operational

projects. The volume of actual transactions in the reporting

period can be seen in the following table.

There were no business relationships between Constantin

Medien AG and associated companies and joint ventures in the

reporting period and in the previous year. Transactions with

associated companies and joint ventures were made by the

Highlight Communications group.

Transactions with other related companies and persons include

mainly the following relationships:

Expenses of EUR 75 thousand are incurred in the first three

months 2014 (3M 2013: EUR 75 thousand) from the consul-

tancy agreement between the Constantin Film group and the

Fred Kogel GmbH covering license trading, TV service produc -

tions and film distribution. As of March 31, 2014, liabil ities

to taled EUR 25 thousand (December 31, 2013: EUR 25 thou-

sand).

There exists a legal consultancy agreement between Constantin

Medien AG and the Sozietät Kuhn Rechtsanwälte. In the first

three months 2014, expenses are incurred in the amount of

EUR 40 thousand (3M 2013: EUR 0 thousand). The liabil ities

amount to EUR 0 thousand as of March 31, 2014 (December

31, 2013: EUR 0 thousand). A provision in the amount of EUR

107 thousand (December 31, 2013: EUR 200 thousand) has

been recognized for services not yet billed.

48

There exists a consultancy agreement between Constantin

Sport Marketing GmbH, Sport1 GmbH, Sky Deutschland Fern-

sehen GmbH & Co. KG and Dr Dieter Hahn which has been

signed in the financial year 2013.

Constantin Medien AG is asserting, out of court and/or in court,

the rights granted in a debtor warrant in the context of an

agreement dated February 17, 2003 for the sale and transfer

of the holding in Speed Investments Ltd. to BayernLB Motor-

sport Ltd., with the help of a rights association of former For-

mula One shareholders – Civil rights Association. The

shareholders of the rights association have made an agreement

(i) in the case of a successful prosecution of these claims an

arrangement for distribution of the remaining proceeds after

deduction of any legal costs, and (ii) in the case of an unsuc-

cessful prosecution of these claims an arrangement of distri-

bution for payment of the legal costs incurred. KF15 GmbH &

Co. KG is also a shareholder of the rights association. In the

context of the agreement, Constantin Medien AG has incurred

legal costs of EUR 0 thousand in the reporting period (3M

2013: EUR 0 thousand) for KF 15 GmbH & Co. KG.

Related persons comprise of the Management and Supervisory

Board Members and their relatives. In the first three months

2014 no material transactions between Constantin Medien AG

and Members of the Management Board and the Supervisory

Board as well as their relatives occurred.

All transactions with related companies and persons are carried

out on an arm’s length basis.

Q1 2014 Consolidated Interim Financial Statements | Notes to the Consolidated Interim Financial Statements

Relationships with related companies and persons

Joint Ventures

Receivables

Liabilities

Sales and other income

Cost of materials and licenses and other expenses

Associated companies

Receivables

Liabilities

Sales and other income

Cost of materials and licenses and other expenses

Other related companies and persons

Receivables

Liabilities

Provisions

Sales and other income

Legal and consulting expenses

3/31/2014

1,840

2,442

1/1 to3/31/2014

1,060

945

3/31/2014

2,983

36

1/1 to3/31/2014

1

37

3/31/2014

0

25

107

1/1 to3/31/2014

0

115

12/31/2013

1,862

0

1/1 to3/31/2013

1,850

1,924

12/31/2013

2,512

21

1/1 to3/31/2013

0

35

12/31/2013

0

46

200

1/1 to3/31/2013

0

75

Relationships with related companies and persons in EUR ‘000

49

10. Subsequent events after the balance sheet date

On May 19, 2014, Constantin Medien AG announced its de-

cision, not to continue the negotiations with Sky Deutschland

Fernsehen GmbH & Co. KG in connection with the transaction

agreed on December 5, 2013. The agreement provided the

sale of 100 percent of the shares of PLAZAMEDIA GmbH TV-

und Film-Produktion (including its subsidiaries in Austria and

Switzerland) as well as the sale of 25.1 percent each of the

shares in Sport1 GmbH and Constantin Sport Marketing

GmbH.

The transaction was subject, among others, to the conclusion

of a new multi-year production framework contract between

Sport1 GmbH and PLAZAMEDIA GmbH TV- und Film-Pro-

duktion. But no agreement could be reached on this arrange-

ment.

This development requires a change of the financial targets of

the Constantin Medien Group for the financial year 2014. The

continuation of the activities of PLAZAMEDIA GmbH TV- und

Film-Produktion and its subsidiaries under the umbrella of

Constantin Medien AG on the one hand leads to an increase in

sales of the Constantin Medien Group and simultaneously to

the loss of the other income from the deconsolidation of the

PLAZAMEDIA companies. Therefore, the profit planning 2014

was adjusted and this has also been considered in the guid -

ance for the 2014 financial year.

Constantin Medien AG is planning measures to refinance the

corporate bond 2010/2015. On the one hand, the Manage-

ment Board of Constantin Medien AG intends to perform, in

agreement with the Supervisory Board and using part of the

Authorized Capital 2013/I, a capital increase against cash con-

tributions excluding subscription right of the shareholders pur-

suant to § 186 para. 3 sentence 4 German Stock Companies

Act (Aktiengesetz). For this purpose, selected investors will be

addressed. It is planned to increase the share capital of Con-

stantin Medien AG of EUR 85,130,780.00 through the issu-

ance of new bearer shares of up to 10 percent of the share

capital with a calculated proportion of the share capital of EUR

1.00 per share. The Management Board and the Supervisory

Board of Constantin Medien AG will decide on the execution of

the capital increase, if the other parameters of this capital in-

crease, in particular the issue price, have been determined.

Moreover, a further loan agreement totaling CHF 14 million

and EUR 4.5 million will be concluded with a private investor

in addition to the existing loan amounting to approximately

EUR 17.5 million. The new loans will have a term up to June

30, 2016; the interest rate will be 5.0 percent p.a. as before.

In the legal proceedings of Constantin Medien AG against Mr

Bernard Ecclestone, among others, Constantin Medien AG has

filed an application of appeal at the Court of Appeal in London,

Court of Second Instance, on April 24, 2014. The decision

regarding this application is still pending.

Ismaning, May 22, 2014

Constantin Medien AG

Bernhard Burgener Antonio Arrigoni

Chief Executive Officer Chief Financial Officer

Notes to the Consolidated Interim Financial Statements | Consolidated Interim Financial Statements Q1 2014

Subsequent events after the balance sheet date

50

Q1 2014 Finance Calendar

Finanance Calendar 2014 | Imprint

Imprint

Published by

Constantin Medien AG

Münchener Straße 101g, 85737 Ismaning, Germany

Phone +49 (0) 89 99 500-0, Fax +49 (0) 89 99 500-111

E-Mail info@constantin-medien.de

www.constantin-medien.de

HRB 148 760 AG Munich

Edited by

Constantin Medien AG

Communication/Accounting/Investor Relations

Frank Elsner

Kommunikation für Unternehmen GmbH, Westerkappeln

Finance Calendar 2014

May 23, 2014

Report for the first quarter of 2014

July 30, 2014

Annual General Meeting (AGM) for the financial year 2013

August 2014

Interim Financial Report 2014

November 2014

Report for the third quarter of 2014

Constantin Medien aG

Münchener Straße 101g

85737 Ismaning, Germany

constantin-medien.de