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CYFROWY POLSAT S.A. CAPITAL GROUP Interim Consolidated Report for the three month period ended March 31, 2019 Place and date of publication: Warsaw, May 14, 2019 Place and date of approval: Warsaw, May 13, 2019 Interim Consolidated Report of Cyfrowy Polsat S.A. Capital Group for the three month period ended March 31, 2019 TABLE OF CONTENTS REPORT OF THE MANAGEMENT BOARD ON THE ACTIVITIES OF CYFROWY POLSAT S.A. CAPITAL GROUP FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2019 POLSAT GROUP AT A GLANCE ....................................................................................................................................................... 4 DISCLAIMERS ............................................................................................................................................................................... 5 FINANCIAL DATA OVERVIEW .......................................................................................................................................................... 7 1. CHARACTERISTICS OF POLSAT GROUP ............................................................................................................................... 10 1.1. Composition and structure of Polsat Group ..................................................................................................................10 1.2. Shareholders with qualifying holdings of shares of Cyfrowy Polsat ..............................................................................13 1.3. Shares of Cyfrowy Polsat held by members of the Management Board and the Supervisory Board ...........................13 2. BUSINESS REVIEW OF POLSAT GROUP ................................................................................................................................ 14 2.1. Segment of services to individual and business customers ..........................................................................................14 2.2. Broadcasting and television production segment .........................................................................................................18 3. SIGNIFICANT EVENTS ......................................................................................................................................................... 21 3.1. Corporate events ..........................................................................................................................................................21 3.2. Business related events ................................................................................................................................................24 3.3. Events after the balance sheet date .............................................................................................................................26 4. OPERATING AND FINANCIAL REVIEW OF POLSAT GROUP ...................................................................................................... 27 4.1. Operating review of the Group ......................................................................................................................................27 4.2. Key positions in the consolidated income statement ....................................................................................................34 4.3. Review of the Group’s financial situation ......................................................................................................................37 5. OTHER SIGNIFICANT INFORMATION ...................................................................................................................................... 59 5.1. Transactions concluded with related parties on conditions other than market conditions ............................................59 5.2. Discussion of the difference of the Company's results to published forecasts .............................................................59 5.3. Material proceedings at the court, arbitration body or public authorities .......................................................................59 5.4. Factors that may impact our operating activities and financial results at least in the subsequent quarter ...................60 GLOSSARY ................................................................................................................................................................................. 70 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2019 INTERIM CONDENSED FINANCIAL STATEMENT FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2019 2 REPORT OF THE MANAGEMENT BOARD ON THE ACTIVITIES OF CYFROWY POLSAT S.A. CAPITAL GROUP FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2019 3 Report of the Management Board on the activities of Polsat Group for the three month period ended March 31, 2019 POLSAT GROUP AT A GLANCE Polsat Group is Poland’s leading multimedia group. Within the scope of our activities we provide a comprehensive array of integrated media and telecommunication services in the following areas: • pay TV services offered mainly by Cyfrowy Polsat – the largest pay TV provider in Poland and one of the leading satellite platforms in Europe – and our subsidiary Netia. We offer our customers access to about 170 TV channels broadcast in satellite and IPTV technologies as well as additional modern OTT services (e.g. Cyfrowy Polsat GO, pay-per-view, Video On Demand) and Multiroom. We also provide online video services through IPLA, the leader on Poland’s online video market, by offering them in a subscription and transaction (PPV) model, as well as free of charge (financed by advertising revenue); • telecommunication services, including voice and data transmission services, as well as various added services (VAS). We provide mobile telecommunication services mainly through our subsidiary Polkomtel – one of Poland’s leading telecommunications operators, and fixed-line telecommunication services through our subsidiary Netia; • mobile broadband Internet, offered under two alternative brands: Cyfrowy Polsat and Plus. We provide these services in the state-of-the-art LTE and LTE Advanced technologies. We offer the largest LTE coverage in Poland and our customers attain the highest data transmission speed among offers provided by national mobile network operators; • fixed-line broadband Internet, offered under Netia and Plus brands based on the infrastructure of our subsidiary Netia whose own access networks reach over 2.5 million homes passed in ca. 180 Polish locations. In addition, Netia provides services based on the access to the infrastructure of Orange Polska; • broadcasting and television production through Telewizja Polsat, the leading commercial TV broadcaster on the Polish market, offering 33 popular TV channels, including our main channel POLSAT, one of the leading FTA channels in Poland; • wholesale services to other operators, including, i.a., network interconnection, IP and voice traffic transit, lease of lines and national and international roaming services. The Group operates mainly on the territory of Poland in two business segments: the segment of services to individual and business customers which relates to the provision of services to the general public and the broadcasting and television production segment. Cyfrowy Polsat shares are listed in the Warsaw Stock Exchange in Warsaw since May 6, 2008. Our mission and main strategic goals Our mission is to create and deliver the most attractive TV content, telecommunication products and other services for the home, as well as residential and business customers, using state-of-the-art technologies to provide top quality multiplay services that match the changing needs of the market, while maintaining the highest possible level of customer satisfaction. The superior goal of our strategy is the permanent growth of the value of Cyfrowy Polsat for its Shareholders. We intend to achieve this goal by implementing the major elements of our operational strategy which include: • growth of revenue from services provided to residential and business customers through consistent building of the customer base value by maximizing the number of users of our services as well as the number of services offered to each customer, while simultaneously increasing average revenue per user (ARPU) and maintaining high levels of customer satisfaction, • growth of revenue from produced and purchased content by expanding its distribution, maintaining the audience shares of our channels and improving our viewer profile, • effective management of the cost base of our integrated media and telecoms group by exploiting its inherent synergies and economies of scale, and • effective management of the Group’s finances, including its capital resources. 4 Report of the Management Board on the activities of Polsat Group for the three month period ended March 31, 2019 DISCLAIMERS This constitutes the quarterly report of Cyfrowy Polsat Capital Group S.A. (the “Report”) prepared as required by Article 60 section 1 and 2 and Article 66 of the Ordinance of the Minister of Finance of March 29, 2018 regarding current and periodic information to be submitted by issuers of securities, and the conditions for recognizing equivalence of information required under non-member states regulations (Journal of Laws 2018.757 dated April 30, 2018). Presentation of financial data and other information References to the Company or Cyfrowy Polsat contained in this Management Board’s report on the activities of Cyfrowy Polsat S.A. Capital Group (hereafter "Report")

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