Creating the new Sky

25th July 2014 Ryder Cup

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This document includes statements that are, or may be deemed to be, "forward-looking statements", including within the meaning of Section 27A of the Securities Act and Section

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future financial years would necessarily match or exceed the historical published earnings per share of the Company.

As the Company has only conducted a limited due diligence exercise of Sky Deutschland AG's non-public information, the information included in this document in relation to Sky

Deutschland AG has been compiled on the basis of publicly available information and has not been verified by the Company or by Sky Deutschland AG or Sky Deutschland AG

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Creating the new Sky

• UK business is performing well

– Excellent growth in products and customers

– Strong financial performance

– Clear opportunity for continued growth

• The new Sky opens up an even bigger opportunity

– Expanded headroom for growth

– Benefits of scale

– Leverage capabilities across multiple markets

• Enhanced value creation German Grand Prix

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BSkyB Full Year Preliminary Results

Approach to growth and creating the new Sky

Transaction details

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2013 2014

2.6m

3.1m

1. Organic growth, excluding product growth attained through the acquisition of O2 broadband and fixed line telephony business in June 2013.

2. Annual customer additions in 000’s.

342

257

2013 2014 2013 2014

264

134

7

£576

£541

£504

2014 2012 2010 2014 2012 2010

/

/ /

/ /

10.5% 9.9%

10.7%

/ / / / /

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Game of Thrones

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• Great year for Sky Sports

– Share of viewing highest for 7 years

– 49 of top 50 Premier League matches

• Sky Movies service stronger than ever

– Total consumption up

– Renewal of output agreements

• Biggest year of entertainment

– Channels rated as must have content

– Record audiences

Strong performance on screen

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Jun 12 Jun 14 Jun 13 Jun 12 Jun 14

3.5

5.5 4.6

Jun 13 Jun 12 Jun 14

1.0

5.7

2.7

Jun 13

/ /

/

/

/

1.3

6.2

18.7

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Strong returns from connected services

• Higher propensity to take premium services

• TV Box Sets driving upgrades

• Sky Store revenue up 100% year on year

• Over 10% increase in satisfaction among

connected box and Sky Go customers

• Positive impact on brand perceptions

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1Other operating costs include Marketing, Subscriber Management, Fixed Transmission and Administration costs, excluding adjusting items, for the 12 months ended 30 June

2Excludes £70 million of one–off costs relating to connected home investment

• Fewer, bigger, better

– Reviewed routes-to-market

• Right first time

– Most reliable box in 83% of homes

– In-sourcing broadband service visits

• Self service

– Installing fibre without engineer visit

– Continued to reduce call volumes

2010 2014

1

43.7%

36.8%2

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Revenue adjusted for exceptional items and the discontinued retailing of the ESPN channel

Adjusted for exceptional items

2014 Change

y-o-y

Revenue1

£7,611m +7%

EBITDA2

£1,667m -1%

EPS2

60.0p -

Dividend 32.0p +7%

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2004

6.0

32.0

2014

• Strong cash generation

• 7% increase in dividend

in FY14

• Consistent track record

of growth

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• Excellent year of performance

• Delivered against a clear plan

• Strong finish to the year

• Clear pathway for growth

Summary

Frozen

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BSkyB Full Year Preliminary Results

Approach to growth and creating the new Sky

Transaction details

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Sky today

Got To Dance

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• A broader business than ever before

• New headroom for growth

• Track record of returns from investment

• Transformation in scale

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Revenue, EBITDA and EPS adjusted for exceptional items.

1,071

7.6

2009 2014 2009 2014 2009 2014

1,667

25.9

60.0

5.3

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Content

Customers Innovation

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• A world-class multinational pay-TV business

• Serving 20 million Sky customers in five countries

• Shared ethos of increased choice, better content

and superior TV experience

• Leveraging best-in-class capabilities

• Substantial opportunity

• Good for customers and shareholders

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True Detective

Clear and compelling rationale

• Expanded growth opportunity

• Platforms of choice

• Better for customers

• Enhanced value creation

– Greater long term revenue growth

– Earnings enhancing

– Progressive dividend

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• Drive pay-TV penetration

• Sell more products

• Accelerate innovation

• Develop adjacent business revenues

• Target new customer segments

Sources: Screendigest, Company data

1. as at December 2013

Sky today1

new Sky

TV

Ho

us

eh

old

s (

m)

Pay-TV penetration Pay-TV headroom

26% 53%

14m

32%

66m 4.7x

30m

97m 100

80

60

40

20

0

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• Number one position in three out of

four biggest TV markets in Europe

• Leading in multiplatform service delivery

• Europe’s biggest investor in content

• Partner for creative and tech industries

• c.50% increase in revenue to £11.2bn

• Deploying capability at significantly

increased scale

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Sky Italia: well placed to return to growth

• Attractive market

– Fourth largest market in Europe

– Low penetration of pay-TV & additional products

– Strong sports culture

– No triple play operators

• Strengths

– #1 position in market

– Stable customer base

– Brand leadership

– Leading premium content offering

– Original production capability

– Growth and efficiency plans in place

X Factor

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Bundesliga

Sky Deutschland: strong momentum

• Attractive market

– Largest market in Europe

– Low penetration of pay TV and additional products

– Partnerships with cable and telecoms operators

• Strengths

– #1 position in market

– Clear leader in premium sport with strong fan base

– High TV growth rates

– Track record of innovation

– Strong performance in churn and ARPU

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• Highly complementary assets

• Shared brand and culture

• Accelerated innovation

• Bringing together core strengths

Content

Customers Innovation

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Well positioned for future growth

Up

• Exposure to broader opportunity

• Strong foundation from track record of UK success

• Combination of high quality assets

• Core areas of strength shared across enlarged group

• Better placed for increasingly global marketplace

• Significant value creation for shareholders

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BSkyB Full Year Preliminary Results

Approach to growth and creating the new Sky

Transaction details

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• Total cash consideration of £4.9 billion2

– Sky Deutschland: cash of £2.9bn for 57.4% of equity held by 21CF3 (equivalent to €6.75 per share)

– Sky Italia: cash of c.£2.07bn plus transfer of minority stake in National Geographic International

to 21CF (c.£380m)4

• 21CF subscribe for c.£500 million via pro-rata placing

• Subject to BSkyB shareholder approval5

• Required offer to Sky Deutschland minority at €6.75; no minimum acceptance condition

1. See appendix for full sources and uses table

2. Rises to £7.0bn at 100% take-up by the minority shareholders in Sky Deutschland

3. On a fully diluted basis

4. Valuation of USD $650m

5. As 21CF are a related party, they will not vote on the deal

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£m1

30 Jun-142

31 Mar-142 30 Jun-14

2

Revenue 7,617 1,282 2,270 11,169

Programming

(2,662) (757) (1,147) (4,566)

Operating costs4 (3,695) (582) (1,052) (5,329)

EBITDA 1,667 16 250 1,933

EBIT 1,260 (57) 71 1,274

OpFCF5 1,124 (72) 109 1,161

Net Debt 5,533

Net debt/EBITDA ratio 2.9x

1. Results of Germany and Italy converted at exchange rate of €1.25:£1

2. The combined figures do not comprise proforma financial information and are based on different accounting policies and financial information provided at and for periods ended at different dates. BSkyB and

Sky Italia accounts applying IFRS and BSkyB policies, SkyD accounts applying IFRS and SkyD policies. Sky Italia based on unaudited information received from management and is subject to final confirmation: All

figures 12 months ending

3. “Enlarged Group” is the arithmetic aggregation of three entities. The information in relation to SkyD is based on public information extracted without material adjustment from SkyD’s consolidated financial

statements for the year ended 31 December 2013. Net debt is on the basis of 57.4% take-up of SkyD

4. To better reflect the on-going run rate, Sky Italia excludes the one off impact of 2014 Winter Olympics which results in an increase in EBITDA of £30m

5. EBITDA less cash capex.

Enlarged Group3

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• Lower value per subscriber than peer group

• SkyD: nil premium to six month VWAP

• Capitalised value of synergies c.£2 billion2

• €300 million NPV of German tax losses3

Estimated value per subscriber (£)

BSkyB DirecTV Canal + SkyD/Sky Italia

blended avg.

TEF / D+

£649

£877 £921 £943

£1,436

1. See appendix for calculation and source materials

2. £200 million pa valued at BSkyB’s current EV/EBITDA multiple of 9.2x as at 23 July 2014

3. Estimated

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Assuming transaction closes before December 2014.

Production and commissioning

New revenue opportunities

Back office, IT and procurement

Product and set top box development

• Specific plans already in place

• Draws on track record of operating efficiency

• Prudent approach; less than 4% of enlarged operating cost base

• Almost all within UK and Italy

• Further synergies expected over longer timeframe

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Production and commissioning

• Common channel brands and creative

• Cross-border use of original programming

• Shared production of live events

New revenue opportunities

• AdSmart

• Sky Store

• Sky Go Extra

Back office, IT and procurement

• Broadcast infrastructure

• Transmission

• IT systems

Product and set top box

development

• Aligning roadmap

• Sharing R&D capability

• Consolidation of TV platform operations

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• Enhanced long term sustainable revenue growth

• Earnings enhancing

– Earnings neutral in second full year of ownership (FY 2017), strongly accretive thereafter

– Before benefit of German tax losses1

• Returns to exceed cost of capital within five years

• Good financial flexibility

– Investment grade credit rating of at least Baa3 and BBB-

– Low sensitivity to the level of Sky Deutschland acceptances

1. Subject to formal confirmation by German tax authorities

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• Utilise existing cash of

£500 million

• Expected cost of new debt

less than 4.5% p.a.

• £5.1bn of transaction debt

fully underwritten1

• £1bn Revolving Credit Facility

• Transfer of minority stake in

National Geographic to 21 CF

– Exit multiple of c.21x2

• Proceeds from disposal

of ITV stake

• Almost £1bn of value unlocked

• Maintained investment

grade credit rating

• Fully underwritten 9.9%

equity placing3

Balance sheet capacity Effective use of

minority investments Retain financial flexibility

1. Debt requirement assumes 100% acceptances in Sky Deutschland offer. Fewer acceptances will decrease the financing requirement.

2. Consideration of c£380m divided annual JV income of c£18m

3. Commitment from 21CF to participate pro-rata in the placing

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Clear financial policies

• Commitment to strong investment-grade credit rating

– Aiming to reduce leverage by between 0.5x and 0.7x by June 2016

• Target to reduce to 2.0x EBITDA in the medium term

• Uses of capital

– Progressive dividend maintained

– Cessation of share buyback

Moto GP

Grand Prix of Germany

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c. Sept Sept/Oct Oct/Nov late Aug

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Conclusion

Formula 1®

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• Highly attractive opportunity

• Significant expansion in headroom for growth

• Complementary businesses

• Enhancing to both revenue and earnings

• Significant value creation for BSkyB shareholders

Q & A

Ryder Cup

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Appendix

Ryder Cup

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£ millions Scenario 1: 57.4% of SkyD Scenario 2: 100% of SkyD Assumptions

Uses

SkyD consideration 2,851 4,967 €6.75 per share

SkyD shareholder loans 126 126 Estimate at completion

Sky Italia consideration 2,450 2,450 Gross of Nat Geo stake

Transaction fees 150 150 Estimate

Total 5,578 7,694

Sources

Equity placing 1,399 1,399 Based on 30-day average share price of £8.96

Nat Geo stake consideration 382 382 Stake translated from $650m at 1.70 (24 July 2014)

ITV stake 530 530 Disposal of 6.4% on 17 July 2014 plus hedge unwind

Use of existing cash 500 500

Contingency (250) (250)

New transaction debt 3,017 5,133

Total 5,578 7,694

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1. Fair Value adjustments, debt-related derivative MtM, unamortised bond fees, finance leases, EUR Loan Notes

2. Operating cashflow, dividends, rights payments, etc.

3. Disposal of 6.4% on 17 July 2014 plus hedge unwind

4. Estimated at €225m, translated at €1.2653:£1 (23 July 2014)

5. Transaction related bond proceeds + use of existing cash

6. EBITDA for the enlarged group excludes the one off impact of 2014 Winter Olympics which results in an increase in EBITDA of £30m

Scenario 1: 57.4% of SkyD Scenario 2: 100% of SkyD

£ millions Gross debt Cash Net debt EBITDA Net debt /

EBITDA Gross debt Cash Net debt EBITDA

Net debt /

EBITDA

$750m bond due Oct 2015 441 441

£400m bond due Oct 2017 400 400

$750m bond due Feb 2018 441 441

$582.8m bond due Nov 2018 (ex-$600m) 342 342

$800m bond due Nov 2022 470 470

£300m bond due May 2027 300 300

$350m bond due Oct 2035 206 206

Existing bonds 2,599 2,599

Other (1) (10) (10)

30 June 2014 2,589 1,377 1,211 1,667 0.7x 2,589 1,377 1,211 1,667 0.7x

Net cash movement (2) (627) (627)

ITV stake (3) 530 530

Estimate pre-completion 2,589 1,280 2,589 1,280

Consolidation of SkyD external debt (4) 178 178

Transaction related bond issuance 3,017 3,017 5,133 5,133

Net cash used for transaction (5) (4,047) (6,163)

Completion (enlarged group) 5,783 250 5,533 1,933(6) 2.9x 7,900 250 7,650 1,933 (6) 4.0x

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Notes:

1. Exchange rate assumptions of Euro:GBP at 1.2653 and USD:GBP at 1.7035

2. Share price of 914p as at 23 July 2014, market capitalisation of 14.1 billion. Net debt of £1,212 million as at 25 July 2014. Total TV products of 10.7 million as at 30 June 2014

3. Share price of $86.95 as at 23 July 2014, market capitalisation of $44.8 billion. Net debt of $17.8 billion, Non Controlling Interest of $0.4 billion as at March 2014 (Q1 10Q). Unconsolidated

Associates of $1.2 billion as at 31 December 2013 (10K). Total subscribers of 38.4 million as at 30 March 2014 (including DirecTV USA, PanAmericana, Sky Brasil, Sky Mexico) as reported in DTV’s

10Q as at 30 March 2014

4. EV of €7.1bn is median brokers Sum-of-the-Parts valuation from Citigroup, JP Morgan, Barclays, Bank of America Merrill Lynch and Morgan Stanley latest available analyst reports. Pay TV

subscribers of 6.1 million for individual Pay-TV subscribers in mainland France as at 31 December 2013 (Vivendi Q1 2014 investor presentation)

5. Combined EV of £7.4 billion, divided by total Sky Italia and Sky Deutschland subscribers of 8.5 million. Sky Italia subscribers of 4.8 million as reported by Sky Italia on 1 July 2014 in Business Plan

Update. Sky Deutschland direct subscribers of 3.7 million as at 30 March 2014 (Q1 report)

6. EV of €1.3 billion is calculated based on the acquisition of 56% stake from Prisa. 1.6m satellite subscribers as of 30 March 2014, as reported in Prisa Q1 report

BSkyB2 DirecTV3 Canal+4 Sky D/Sky I blended

avg.5 TEF / D+6

EV1 £15.3bn $61.7bn €7.1bn n/a €1.3bn

GBP EV1 £15.3bn £36.2bn £5.6bn £7.4bn £1.1bn

Subscribers 10.7m 38.4m 6.1m 8.5m 1.6m

EV per sub £1,436 £943 £921 £877 £649

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Sky Deutschland, 20 November 2012

“Following a binding ruling by the Munich tax

authorities, Sky’s accrued tax losses could be

preserved in the event of changes to the

Company’s shareholder structure. The tax

authorities granted approval on the technical

approach for application of the hidden reserve

clause, a part of the German Corporate Tax Law

to protect tax loss carry forwards.

“While the exact amount of the tax loss carry

forwards which Sky could preserve can only be

determined at the date when certain

shareholding thresholds are exceeded,

management believes that this ruling will

allow the Company to retain a significant part

of its tax loss carry forwards”

“As of 30 September 2012, the total amount of

Sky’s tax loss carry forwards was 2.3 billion Euros,

2.1 billion Euros of which relate to Sky’s German

operations”

“Börsenzeitung, 31 May 2014

“With regard to tax losses of Sky Deutschland,

we have received a binding ruling of the tax

authorities that despite a change in the

shareholder structure – back then the subject

was the investment of News Corporation in Sky

Deutschland – the tax losses would remain.

Our understanding of the situation is that this

will also be the case if another change of

ownership occurs.

At the moment we are valuing the hidden

reserves which determine to what extent the tax

losses are secured. If a change in

shareholdership occurs, we will have to repeat

this process of valuation. To my understanding,

the exception is, however, not affected thereby.”

Green’s 2013 Rights Issue prospectus

“Under German law, current tax loss carry-

forwards and interest will be forfeited if more

than 50% of the shares in a corporation are

transferred within a five-year period to another

person or entity or a group of acquirers acting in

concert. However, to the extent Sky

Deutschland has hidden reserves (stille

Reserven) in assets being subject to German

taxation at the time of a generally harmful

acquisition, its current tax losses, tax loss carry-

forwards and interest carry-forwards, should –

based on current German corporate income and

trade laws and an advance tax ruling by the

Munich tax authorities – still be available even

after such a generally harmful acquisition. Sky

Deutschland’s management therefore

believes that Sky Deutschland should be able

to retain a significant part of its current tax

losses and tax loss carry-forwards despite

News Adelaide’s acquisition of a majority

stake and in the event that another

shareholder will exceed certain shareholding

thresholds, e.g., 50% in the future. ”