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MID RANGE PLANFISCAL YEARS 2012–2015
SEPTEMBER 8, 2011
Series10
1,000
2,000
3,000
4,000
5,000
6,000
7,000
3,030 2,9323,364 3,352
3,709 3,733 4,044
1,648 2,0501,866
2,2882,035
2,3962,561
Int'l U.S.
$MM
Revenue Generated by SPT
Revenue
5,230
6,1295,744
6,605
5,640
4,6784,982
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
2
Revenue Generated by SPT
($ MM) Generated RevenueFY12 FY13 FY14 FY15
Budget Q2 Fcst Variance PY MRP* MRP Variance PY MRP MRP Variance MRPUS Networks 22 307 285 32 371 339 45 414 369 445 US Distribution 664 716 52 806 788 (18) 852 749 (103) 764 US Ad Sales 188 182 (6) 246 218 (28) 284 280 (4) 339 US Production & Library 774 845 71 782 911 129 854 953 99 1,013
Total US 1,648 2,050 402 1,866 2,288 422 2,035 2,396 361 2,561
Int'l Networks 1,284 1,217 (67) 1,236 1,373 137 1,363 1,560 197 1,752 Int'l Distribution 1,343 1,420 77 1,386 1,505 119 1,483 1,605 122 1,655 Int'l Production & Format Sales 403 295 (108) 742 474 (268) 863 568 (295) 637
Total Int'l 3,030 2,932 (98) 3,364 3,352 (12) 3,709 3,733 24 4,044
TOTAL 4,678 4,982 304 5,230 5,640 410 5,744 6,129 385 6,605
* Prior U.S. Dis tribution and U.S. Ad Sa les MRP restated to refl ect trans fer of SVOD from Home Enterta inment and Sharecare revenue on a net bas is
3
.
Se-ries1
0
100
200
300
400
500
600
700
800
203 192 202 224 256 277351
222 233288
326334
423
449
26
Int'l U.S. Monetization$MM
Se-ries1
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1,726 1,5372,012 1,871
2,261 2,1532,414
1,486 1,9581,625 2,151
1,8182,383
2,527
Int'l U.S.$MM
SPT Financial Summary
TV Product & Channel Revenue from all Sources TV EBIT
3,637
4,536
4,079
4,941
4,022
3,2123,495
490
700
590
800
550
425451
Note: EBIT excludes 3Net EBIT of ($8MM), ($6MM), ($2MM) and $2MM in FY12-FY15, respectively.
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
4
SPT Financial Summary($ MM) Revenue
FY12 FY13 FY14 FY15Budget Q2 Fcst Variance PY MRP* MRP Variance PY MRP MRP Variance MRP
US Networks 34 319 285 51 389 338 69 447 378 492US Distribution 50 50 0 50 52 2 47 49 2 42US Ad Sales 3 8 5 7 6 (1) 8 9 1 14US Production & Library 1,399 1,581 182 1,517 1,704 187 1,694 1,878 184 1,979
Total US 1,486 1,958 472 1,625 2,151 526 1,818 2,383 565 2,527
Int'l Networks 1,284 1,217 (67) 1,236 1,373 137 1,363 1,560 197 1,752Int'l Distribution 10 7 (3) 4 5 1 3 6 3 4Int'l Production & Format Sales 432 313 (119) 772 493 (279) 895 587 (308) 658
Total Int'l 1,726 1,537 (189) 2,012 1,871 (141) 2,261 2,153 (108) 2,414
TOTAL 3,212 3,495 283 3,637 4,022 385 4,079 4,536 457 4,941
EBITFY12 FY13 FY14 FY15
Budget Q2 Fcst Variance PY MRP MRP Variance PY MRP MRP Variance MRPUS Networks 15 10 (5) 28 69 41 31 119 88 149US Distribution 37 38 1 36 39 3 34 36 2 28US Ad Sales (13) (7) 6 (9) (9) 0 (10) (8) 2 (4)US Production & Library 183 192 9 233 227 (6) 279 276 (3) 276
Total US 222 233 11 288 326 38 334 423 89 449
Int'l Networks 211 213 2 189 234 45 224 265 41 321Int'l Distribution (39) (41) (2) (42) (44) (2) (43) (46) (3) (48)Int'l Production & Format Sales 31 20 (11) 55 34 (21) 75 58 (17) 78
Total Int'l 203 192 (11) 202 224 22 256 277 21 351
TOTAL 425 425 0 490 550 60 590 700 110 800
Shine Monetization 0 26 26
TOTAL Including Monetization 425 451 26
3Net (9) (8) 1 (5) (6) (1) 1 (2) (3) 2
* Prior US Distribution and US Ad Sales MRP restated to reflect transfer of SVOD from Home Entertainment, and Sharecare revenue on a net basis.5
1. Production
2. Distribution & Ad Sales
3. Networks
3 Areas of Discussion
6
International Production – Market Environment
New Formats & Programs
Key Global Competitors
Market Opportunities
• Limited flow of new IP from top light entertainment format origination markets – UK and Netherlands
– UK market continues to be fiercely competitive– Dutch market heavily dominated by Talpa (John de Mol)
• Latin America maintains strong scripted focus with increasing popularity of local productions
• Asia market opportunities limited in short term but emerging territories have high strategic value in long term (e.g., China)
• Endemol in a state of turmoil
• Fremantle continues to be a strong production network
• Shine and Shed Media sold to large media companies News Corp and Warner Bros
• Continued rapid consolidation activities by major super-indies All3media, Zodiak and Banijay, driving significant competition for acquisitions of remaining independent players• Challenging economic conditions in key markets creating demand for competitors to take greater financial risks (e.g., pilot funding, series deficit funding)
• SPT well-positioned to grow scripted format remakes activity, but market opportunity may be limited
Limited flow of new IP from key origination markets; rapid industry consolidation continues
7
International Production – Strategic Priorities
Develop and produce hit
format
Build scale via strategic
investments
Launch competitive
incentive program
• Develop new break-out hits by focusing creative, operational and financial efforts on a few high potential formats (e.g., Exit List, Angry Birds, Famous)
• Identify and attach new creative talent to group (in any form or shape), be competitive in remuneration, and initiate start-ups
• Initiate, coordinate and intensify light entertainment collaboration between US and International Production businesses to drive more synergies and production flow on both sides
• UK is top priority – imperative to develop significant local production presence
• Strengthen presence in major European markets and expand to emerging territories
• Drive interactive extensions and revenue opportunities and innovative multiplatform businesses
• Pursue strategic partnerships to expand market share in key markets (especially the U.K.) and opportunistically enter new markets in Eastern Europe and Asia
• Important for hit format creation, multi-territory format exploitation and talent retention
• SPT’s major competitors all benefit from similar programs – e.g., Banijay, Zodiak
Drive development of blockbusters and continue to expand global network
8
Norway, Sweden, Portugal, India, Indonesia, Ivory
Coast, Sri Lanka, Bangladesh,
Uganda, Albania, Georgia, Nigeria, Honduras, Chile, Panama, Poland, Russia, Austria,
Ukraine, Armenia, UK, France, Afghanistan,
Angola/Kosovo, Australia, Germany,
Hungary, Japan, Middle East,
Ecuador, Denmark, Costa
Rica, USA, Vietnam,
Philippines, Ghana, Brazil, El Salvador, Turkey,
Netherlands, Bulgaria, Italy,
Venezuela, Romania,
Switzerland, Moldova
FranceItaly
RussiaChina
Middle EastBrazil Chile
Columbia
UKIrelandCzech
RepublicPoland
RomaniaTurkey
Saudi ArabiaUSA
Panama
ArgentinaBoliviaBrazil Chile
Columbia Costa Rica
MexicoPanama
PeruUruguay
ItalyLithuaniaMoldovaPortugalTurkeyUkraine
PhilippinesColumbia
Formats That Have Been Sold In Over 5 Territories (FY10-FY11)
Note: Specials are denoted in PURPLE.
9
Se-ries
1
0
100
200
300
400
500
600
700
800
900
432
313
$MM
Se-ries
1
0
10
20
30
40
50
60
70
80
90
35
59
79
26
Shine Monetization$MM
Se-ries
1
0
10
20
30
40
50
60
70
80
31
55
75
26
$MM
International Production – Financial Summary
Revenue Profit Contribution EBIT
46
40
65
82
34
58
78
493
895
658 53
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
772
587
28% CAGR
45% CAGR57% CAGR
• Total FY12 EBITDA of $34MM growing to $90MM in FY15
• Missed budget EBIT targets for FY12 mainly due to Latin America restructuring, various delays or shifts from operating companies, lack of consolidation for Teleset
• Better than expected performance from Russia and 2waytraffic distribution and all start-ups are projected to be profitable in FY12
• MRP below previous MRP primarily due to delayed hit
• Strong projected autonomous growth driven by strong light entertainment creative pipeline, strong scripted remakes pipeline, and a hit assumed to get traction in FY13
Strong underlying autonomous year-on-year revenue and EBIT growth
27
20
10
International Production – Detailed EBIT
11
EBIT($MM) FY12 FY13 FY14 FY15
Budget Forecast VariancePrior MRP
Current MRP Variance
Prior MRP
Current MRP Variance
Current MRP
2waytraffic 26 27 1 22 21 (1) 24 21 (3) 22
France (SPT + Starling) 6 6 - 7 6 (1) 9 9 - 12 Russia (SPT + Lean-M) 8 10 2 9 8 (1) 10 10 - 10 Germany 2 1 (1) 4 3 (1) 5 4 (1) 5 UK (SPT + Gogglebox + Victory) 1 1 - 3 2 (1) 4 4 - 6 Tuvalu 2 2 - 4 4 - 5 5 - 6 Toro JV 5 3 (2) 6 6 - 7 8 1 9
Europe 24 23 (1) 33 29 (4) 40 40 - 48
Latin America 11 2 (9) 13 10 (3) 16 13 (3) 14
Asia/Middle East 2 - (2) 5 4 (1) 6 5 (1) 7
Global Hit Format 1 - (1) 17 3 (14) 22 17 (5) 22
Creative (Development & Overhead) (6) (6) - (4) (7) (3) (5) (8) (3) (8) Overhead including Allocations (7) (6) 1 (10) (7) 3 (9) (7) 2 (7) M&A & Other - - - 2 2 - 3 2 (1) 3 Reserves/Challenge (3) 1 4 (9) (3) 6 (8) (6) 2 (6) Total Other (16) (11) 5 (21) (15) 6 (19) (19) - (18)
Profit Contribution before PPA 48 41 (7) 69 52 (17) 89 77 (12) 95
Purchase Price Amortization (13) (14) (1) (10) (12) (2) (10) (12) (2) (12)
Profit Contribution after PPA 35 27 (8) 59 40 (19) 79 65 (14) 83 Distribution of Profit to Other Divisions (4) (7) (3) (4) (6) (2) (4) (7) (3) (5)
EBIT 31 20 (11) 55 34 (21) 75 58 (17) 78 Shine Monetization - 26 26 - - - - - - -
EBIT after Shine Monetization 31 46 15 55 34 (21) 75 58 (17) 78
International Production – Detailed Revenue
REVENUE($MM) FY12 FY13 FY14 FY15
Budget Forecast VariancePrior MRP
Current MRP Variance
Prior MRP
Current MRP Variance
Current MRP
2waytraffic 67 72 5 62 64 2 64 65 1 68
France (SPT + Starling) 46 31 (15) 60 50 (10) 69 64 (5) 74 Russia (SPT + Lean-M) 73 60 (13) 78 72 (6) 84 81 (3) 89 Germany 37 25 (12) 47 40 (7) 55 49 (6) 55 UK (SPT + Gogglebox + Victory) 17 21 4 13 26 13 21 33 12 38 Tuvalu 21 23 2 27 28 1 31 34 3 39 Toro JV 38 29 (9) 39 44 5 46 49 3 54
Europe 232 189 (43) 264 260 (4) 306 310 4 349
Latin America 115 41 (74) 122 118 (4) 135 130 (5) 138
Asia/Middle East 24 18 (6) 44 34 (10) 38 40 2 43
Global Hit Format - - - 72 33 (39) 91 71 (20) 90
M&A & Other 36 1 (35) 254 25 (229) 302 29 (273) 35 Reserves/Challenge (36) 36 (39) (35) 4 (33) (50) (17) (60) Total Other 139 60 (79) 453 175 (278) 533 220 (313) 246
Revenue Contribution 438 321 (117) 779 499 (280) 903 595 (308) 663
Distribution of Profit to Other Divisions (6) (8) (2) (7) (6) 1 (8) (8) - (5)
Net Revenue 432 313 (119) 772 493 (279) 895 587 (308) 658
12
• Broadcast networks have reinvested in primetime dramas. ABC and NBC the most aggressive with development to redefine their brands (ordering 14 new dramas, or 58% of all new dramas).
• Increase in the variety of sub-genres - period (60’s), escapist, paranormal, action-adventure and musical (+8 new across these sub-genres).
• Crime procedurals still king (13), however traditional crime procedurals giving way to character driven procedurals (with CBS industry leader in both).
• Cable and SVOD networks aggressive on original series development and purchasing established franchises to gain subscribers. Netflix becoming a series buyer – House of Cards deal.
• Increase in volume of comedies (36 vs. 29). Multi-cams rebound (47% of all new comedies), but single-cams still majority (58% of all live action comedies).
• ABC building off Modern Family success with push into Weds night. NBC redefining brand around it’s Thurs night block. CBS still favors multi cam
• Focus on the 8PM hour (+8 new comedies). Female leads & voices (over half of new comedies). FBC has broadened to female leads the most.
• Talent floor competition shows continue to be huge on network, but little traction in other sub-genres.• Formats still matter (X Factor, The Voice, etc). • Docu-reality ultra successful on cable (Bravo, E!, A&E, History).
• Broadcast stations trending towards producing their own content to save costs and control ad inventory.• NBC stations in New York and Los Angeles testing locally produced Daily Connection and LX TV in their
daytime lineups
• SPT is combating this trend by partnering with local stations and station groups to help them produce programs and partner in the distribution efforts.
U.S. Production – Market Environment
Drama
Comedy
Non-Scripted
Syndication
13
U.S. Production – Strategic Priorities
• Continue to grow our broadcast drama slate and support our current primetime dramas Charlie’s Angels, Pan Am and Unforgettable to secure syndication opportunities
• Nurture our broadcast comedies Community and Happy Endings to reach syndication
• Invest heavily in A-list writers, directors and producers for future drama/comedy/unscripted development
• Continue to maximize international revenues through exploring co-production opportunities and maximizing tax credits
- Develop series with broad international appeal with globally marketable talent to sell in the US and abroad
• Continue to be on the forefront of the burgeoning subscription VOD market (Netflix, DirecTV) to sell and develop series
• Build on our syndication success (Dr. Oz, Nate Berkus) to expand into the daytime market with A-list talent
• Expand our prime time broadcast reality slate off the success of Sing Off, Shark Tank and Re-Modeled and continue to sell formats abroad
• Continue to maintain a balanced portfolio across the cable and broadcast business to secure SPT’s position as a prime destination for premiere talent in scripted and non-scripted programming
14
• Rules sold in syndication in 97% of U.S.
• 7 shows on 2011 primetime fall schedule (most since 2002)
• SPT has broadcast programming on 6 of 7 nights of the 2011 fall schedule
• SPT has the best broadcast drama pilot-to-series conversion ratio of any studio (75%)
• Rules sold in syndication in 97% of U.S.
• 7 shows on 2011 primetime fall schedule (most since 2002)
• SPT has broadcast programming on 6 of 7 nights of the 2011 fall schedule
• SPT has the best broadcast drama pilot-to-series conversion ratio of any studio (75%)
Charlie’s AngelsPan Am
UnforgettableNecessary RoughnessRe-ModeledSubstituteBreaking In
Franklin & BashHappy Endings
The Big CNate BerkusCommunity
Rules of EngagementShark Tank
The Sing-OffThe BoondocksBreaking Bad
DamagesDrop Dead Diva
HawthorneJustified
Rescue MeDr. Oz
Newlywed Game
2011–2012
24 series
• Only studio to get a new series on each of the 5 broadcast networks
• Rules of Engagement becomes primetime’s #2 comedy
• SPT becomes the #1 producer of scripted cable series
• SPT achieves 29 Emmy nominations
• The Shield becomes SPT’s first cable-to-cable series sale; $32M
• SPT secures partnership with Harpo and successfully launches Dr. Oz
• Rescue Me sells into U.S. syndication and has an ultimate profit of $47M
• Community becomes first new comedy to anchor Thursday nights since The Cosby Show
• Highest volume year in SPT history with 13 stand-alone profitable series
• Three primetime broadcast reality series
• SPT has more new broadcast comedy series than any other studio
2008–2009
17 series
Happy EndingsMad Love
Mr. SunshineBreaking InPlain JaneThe Big C
Franklin & BashNate BerkusCommunity
Rules of EngagementShark Tank
The Sing-OffThe BoondocksBreaking Bad
DamagesDrop Dead Diva
HawthorneJustifiedMy Boys
Rescue MeNewlywed Game
Dr. Oz
2010–2011
22 series
2005–2006
11 series
Book of DanielEmily’s Reasons
Love MonkeyBeautiful PeopleThe BoondocksKing of Queens
HuffRescue Me
Strong MedicineThe Shield
Judge Hatchett
2006–2007
16 seriesBig Day
HeistKidnapped
Rules of Engagement
RunawayTil Death
10 Items or LessMy Boys
Judge Maria LopezGreg BehrendtThe Boondocks
HuffKing of Queens
Rescue MeThe Shield
Judge Hatchett
Sit Down, Shut UpThe Unusuals
The BeastNewlywed Game
Judge KarenRules of
EngagementSpider-ManTil Death
10 Items or LessThe BoondocksBreaking Bad
DamagesMy Boys
Rescue MeThe Shield
Judge David YoungJudge Hatchett
2009–2010
17 series
BrothersCommunityShark Tank
The Sing-OffDrop Dead Diva
HawthorneJustified
Make My DayDr. Oz
Rules of Engagement
Til DeathThe BoondocksBreaking Bad
DamagesMy Boys
Rescue MeNewlywed Game
2007–2008
17 series
Canterbury’s LawCashmere Mafia
Power of 10Spider-Man
Viva LaughlinBreaking Bad
DamagesJudge David Young
Rules of Engagement
Til Death10 Items or LessThe Boondocks
My BoysRescue MeThe Shield
Judge HatchettJudge Maria Lopez
SPT Timeline: 2005 – 2011(excluding Wheel of Fortune, Jeopardy!, Days of Our Lives, Young & The Restless)
Pilots
Inv. Pool
16
$(96)MM
15
$(78)MM
8
$(63)MM
12
$(72)MM
14
$(85)MM
14
$(86)MM
16
$(81)MM 15
U.S. Production Assumptions
Network:• Days Of Our Lives / The Young & The Restless continue through plan
• Rules Of Engagement continues through 12/13 (7 Seasons). Community continues through the plan (6 seasons); Happy Endings continues through the plan (5 seasons); Breaking In continues through 11/12 (2 seasons)
• 10 Pilots for the 11/12 season. Thereafter 9 Scripted Pilots per year resulting in 3 new series next year
• 5 new series succeed and run through plan: 2 from the 11/12 season and 1 from each season thereafter
Cable:• Rescue Me – 6th and final season airing now
• Boondocks continues through 12/13 (4 seasons); Damages continues through 11/12 (5 seasons). Breaking Bad continues through 12/13 (6 seasons). Hawthorne continues through 10/11 season (3 seasons). Justified and Drop Dead Diva continue through 13/14 (5 seasons). The Big C continues through 12/13 ( 3 seasons) Franklin And Bash runs through plan (5 seasons)
• 4 pilots produced in FY12 and 3 pilots per year resulting in 1 series in FY13 and 2 per year in FY14 and FY15
• Necessary Roughness premieres in 11/12 and continues through the plan (4 seasons). 5 new series launch during plan and 3 succeed: 1 from 12/13 season and 2 from 13/14 season
First-Run Syndication:• Wheel Of Fortune and Jeopardy! continue through plan
• Dr. Oz continues through plan (6 seasons). Nate Berkus continues through 11/12 ( 2 seasons). 2 new syndicated series launch and continue through plan: 1 in 13/14 and 1 in 14/15
Non-Scripted:• Shark Tank continues through 13/14 (5 seasons); Sing Off continues through the plan (6 seasons)
• 3 new series per year: Re-Modeled and 2 TBD series premiere in 11/12 of which 2 continue through plan (4 seasons); 2 new cable series & 1 new broadcast network series per year thereafter. 2 series per year continue through plan
MOW:• 13 movies in FY12; 9 movies and 1 miniseries per year from FY13–FY15
16
U.S. Production – Consolidated Financial Summary
Revenue EBIT
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
Se-ries1
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1,399
1,581 1,517
1,704 1,694
1,878 1,979
$MM
Se-ries1
0
50
100
150
200
250
300
183 192
233 227
279 276 276
$MM
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
17
EBIT
Se-ries1
0
50
100
150
200
250
91
112
171 163
224
198 214
$MM
U.S. Production – Current Series & Development
Revenue
Se-ries1
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1,210
1,397 1,340
1,540 1,517
1,710 1,830
$MM
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
18
U.S. Production – Current Series & Development
EBIT($MM) FY12 FY13 FY14 FY15
FY11 Budget Q2 FCST Variance PY MRP MRP Variance PY MRP MRP Variance MRP Broadcast Network: Scripted Pilots and Series (53) (32) (33) (1) 13 5 (8) 33 41 8 59 Cable Network: Scripted Pilots and Series 21 13 29 16 7 27 20 25 27 2 8 First-Run Syndication 5 14 13 (1) 20 22 2 30 18 (12) 23 Non-Scripted (1) - (4) (4) 5 - (5) 7 2 (5) 2 Development Expense (25) (30) (30) - (20) (32) (12) (20) (34) (14) (34) Total Before Embassy Row (53) (35) (25) 10 25 22 (3) 75 54 (21) 58
Embassy Row 1 3 2 (1) 5 4 (1) 6 5 (1) 7
Subtotal (52) (32) (23) 9 30 26 (4) 81 59 (22) 65
Days of Our Lives, Young & Restless 26 26 34 8 25 31 6 25 29 4 28 Wheel of Fortune, Jeopardy! 103 97 101 4 116 106 (10) 118 110 (8) 121 Total Daytime & Games 129 123 135 12 141 137 (4) 143 139 (4) 149
Total 77 91 112 21 171 163 (8) 224 198 (26) 214
19
U.S. Production – Library and Net Overhead
20
($ MM) FY12 FY13 FY14 FY15Budget Q2 FCST Variance PY MRP MRP Variance PY MRP MRP Variance MRP
Library 91 93 2 89 92 3 87 87 - 86 All Other Products (3) - 3 (5) (6) (1) (5) (4) 1 (7) Net G&A (18) (22) (4) (22) (22) - (23) (23) - (23) Challenge 22 9 (13) - - - (4) 18 22 6 TOTAL 92 80 (12) 62 64 2 55 78 23 62
EBIT
FY12 Frcst FY13 Current FY14 Current FY15 Current
(100)
(90)
(80)
(70)
(60)
(50)
(40)
(30)
(20)
(10)
0
(46)(37)
(31) (35)
(30)
(32)(34)
(34)
(10)
(7)(9) (5)
Scripted Pilot/Series Scripted Development Allocated Overhead$MM
U.S. Production – New Series Investment & Development
Budget/Prior MRP (90)
Variance 4
(47)
(29)
(46)
(28)
Represents ONLY development expense and deficit pilots/series and EXCLUDES profitable series
(86)
(74)(74)(76)
21
Wheel of Fortune, Jeopardy!, Y&R and Days of Our Lives
Syndicated Game Shows Daytime Serials
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
Se-ries1
0
20
40
60
80
100
120
140
62 6881
7382
7582
3533
35
33
3635
39
WOF EBIT Jeopardy! EBIT$MM
Se-ries1
0
5
10
15
20
25
30
35
1721
1719
17 18 17
9
13
8
12
8
1111
Y&R EBIT Days EBIT$MM
97101
116
106
118
110
121
26
34
25
31
25
2928
22
0
20
40
60
80
100
120
140
160
180
67 67 71 74 74 74 74
39 40 39 40 36 36 36
14 14 14 12 13 9 86
13 6 5 65 5
3634 35 30 31
26 22
Int'l TV U.S. TV SPHE Merch/Other Off-Net Ad Sales$MM
U.S. Product Library
EBITRevenue
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
162168 165
161 160150
145
• SPHE revenues drop from FY12 to FY15 due to worldwide trend toward current domestic product, and significant availability of older product in rental and subscription markets
• Ad Sales consists of TV series in off-net syndication which ratings decline over time
• Consideration from a renegotiated Starz deal has not been included in the MRP
Se-ries1
0
20
40
60
80
10091 93 89
92 87 87 86
$MM
23
1. Production
2. Distribution & Ad Sales
3. Networks
3 Areas of Discussion
24
• New competition among premium subscription services (Netflix, Hulu, Amazon) is increasing demand for new/library film and television product
• Cable networks continue to emphasize original programming and top-level film/TV series acquisitions
– Premium new release movies continue to be the gold standard and the demand for exclusive rights is growing to protect against competition
– Buyers are mostly interested in series from the 1990s and forward
• In syndication, stations continue to pay aggressively for top-quality talk shows and comedies
– In the near future, there will be opportunities to introduce new shows and for Dr. Oz ratings to grow as aging daytime hosts leave their franchises
– Digital network space continues to develop and offers increased licensing opportunity (e.g. Antenna TV, Bounce, Me.TV)
• Retransmission agreements create a new revenue stream for broadcaster-owned stations (e.g., ABC, CBS) to receive cash payment from cable operators (e.g., Comcast, Time Warner) for the right to air the station's signals
– This incremental revenue puts our network and station clients in a stronger economic position to license product
U.S. Distribution – Market Environment
25
U.S. Distribution – Strategic Priorities
Pay TV Subscription
Cable TV
Syndication
• Although uncertain, an opportunity may exist to modify the Starz pay TV deal– Internet caps in the existing Starz deal have created the renegotiation opportunity– Negotiating directly with Netflix on consideration– If the Starz deal is not renegotiated, an opportunity exists to make deals directly
with Netflix that are not related to the content included in the Starz pay TV deal
• Sell library film and TV series into non-exclusive subscription deals
• Complete WWAG deal with Netflix• Split library windows, license multiple rights, structure non-exclusive
deals
• Aggressively sell slate carve-out windows utilizing more aggressive inventory tracking and planning
• Sell offnet cable series: Drop Dead Diva (linear avail FY14), Justified (avail FY14), Damages (linear avail FY15)
• Develop consistent flow of first-run product with top talent
• Sell all offnet syndication series: Rules of Engagement (avail FY13), Community (avail FY14), Happy Endings (avail FY15)
• Sell library film and TV series onto broadcast digital platforms
• Acquire 3rd party distribution rights with minimal financial risk (e.g. Right This Minute)
26
Se-ries1
0
5
10
15
20
25
30
35
40
45
37 38 36 39
34 36
28
$MM
Se-ries1
0
100
200
300
400
500
347 365
419 412 423
368 386
$MM
Se-ries1
500
540
580
620
660
700
740
780
820
860
664
716
806 788
852
749 764
$MM
U.S. Distribution – Financial Summary
Revenue Profit Contribution EBIT
FY12Bdgt/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Bdgt/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Bdgt/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
• Revenue and corresponding profit contribution volatility is largely driven by release timing, size of theatrical slate and timing of off-net syndication avails (e.g., Rules of Engagement (FY13), Community (FY14), Happy Endings, (FY15))
• EBIT drops in FY15 due to lower contractual annual bonus from Starz
• Consideration from a renegotiated Starz deal has not been included in the MRP 27
U.S. Distribution – Financial Summary by Division
28
($MM)GROSS REVENUE
FY12 FY13 FY14 FY15Budget Q2 FCST Variance PY MRP MRP Variance PY MRP MRP Variance MRP
MPG2011 to 2014 Major Releases (Pay) 223 219 (4) 273 211 (62) 264 188 (76) 202 2009 to 2013 Major Releases (Free) 97 103 6 141 127 (14) 132 111 (21) 129 Other Current 47 56 9 50 73 23 62 51 (11) 78 Catalog 50 50 - 54 54 - 57 60 3 63 Total MPG 417 428 11 518 465 (53) 515 410 (105) 472 Current Year Slate 30 33 3 36 47 11 35 16 (19) 16 Catalog 13 18 5 15 15 - 16 16 - 14 Total WW Acquisitions 43 51 8 51 62 11 51 32 (19) 30 Starz Bonus 50 50 - 50 50 - 47 47 - 42 First Run and off-net Syndication 113 145 32 147 169 22 201 222 21 182 Library 41 42 1 40 42 2 38 38 - 38 Total TV 204 237 33 237 261 24 286 307 21 262 TOTAL 664 716 52 806 788 (18) 852 749 (103) 764
PROFIT CONTRIBUTION (incl. estimate of product amortization)FY12 FY13 FY14 FY15
Budget Q2 FCST Variance PY MRP MRP Variance PY MRP MRP Variance MRPMPG 254 261 7 311 282 (29) 311 251 (60) 286 WW Acquisitions 18 22 4 23 27 4 23 13 (10) 12 TV 88 94 6 98 116 18 103 118 15 102 TOTAL 360 377 17 432 425 (7) 437 382 (55) 400 G&A (13) (12) 1 (13) (13) - (14) (14) - (14) NET CONTRIBUTION 347 365 18 419 412 (7) 423 368 (55) 386
Note: PY Budget & Prior M RP restated for Netflix/SVOD (transfer from Home Entertainment)
U.S. Distribution – Library Gross Revenue by Division
9296 98 101
FY12Bdgt/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
9194 95
• Consideration from a renegotiated Starz deal has not been included in the MRP
Series10
20
40
60
80
100
120
50 50 54 54 57 60 63
41 4240 42 38
3838
MPG TV$MM
29
International Distribution – Market Environment
Traditional TV customers are still struggling to rebound from the global financial crisis
• Public broadcasters remain under severe pressure
• Private broadcasters’ ad revenues slow to recover
Traditional business of selling movies to Free TV and Pay TV broadcasters is changing
• Free TV broadcasters are moving away from buying features to selective one hour drama series, and as a result, we’re having to look at other solutions in those markets
o For example, we’ve sold or are contemplating sale of our Free TV window to non-traditional players in 3 of our top 7 markets (Italy – SkyItalia, UK – Netflix, Canada – Netflix)
o Leveraging TV drama slate with traditional buyers (TFI-France)
Arrival of new SVOD services creates competition with established Free and Pay TV players
• Creates opportunity to increase product value in markets where traditional media is declining such as the UK and Canada
• Prompts a number of issues around usage and deployment that we need to manage
Multiplying our options to lessen our dependence on the traditional marketplace
30
• Sustained delivery of network dramas will enable revenues for TV product to double to >$500MM by FYE15 and amplify feature film revenue
– Continue to work closely with SPT U.S. Production to secure and sustain strategically important network dramas
– Broaden scope of broadcaster relationships to explore English language, European content, co-production opportunities
– Look for key series acquisition opportunities
International Distribution – Strategic Priorities
Exploit market trends and broadcaster relationships to maximize content value
Leverage Slate of Network
Dramas
Capitalize Upon New Market
Entrants
Build Secure Pipeline of
Future Revenue
• Take full advantage of opportunities with emerging SVOD players• Work with a wide range of partners to develop deal structure options to help them
maximize value of their offerings and compete with traditional businesses
• Focus on select emerging markets to expand SPT’s presence and better capitalize on opportunities (Netherlands, Scandinavia, Poland, Hungary, South Africa)
• Deepen relationship with clients to ensure success through partnering on launches, promotions
Develop Stronger
Relationships in Key Markets
• Close long-term deals in key markets over the plan
• Ensure we keep rights to key revenue-driving feature film franchises
31
International Distribution – Network Dramas
New network series drove record prices for one hour broadcast dramas, achieving 20% improvement on previous highest ultimate value
• Charlie’s Angels $2MM per episode
• Pan Am $2.1MM per episode
• Unforgettable $2.2MM per episode
Network dramas help to sustain value and drive improvements across the SPE portfolio
Looking to partner with key broadcasters in major markets to ensure shows become hits in those markets
Network dramas drive significant value in the international market
32
International Distribution – Building a Secure Deal Pipeline
Closing key deals in top markets will help secure new revenue over the plan
33
CLIENT(DEAL EXPIRY)
LAST U.S. SLATEINCLUDED
CLIENT(DEAL EXPIRY)
LAST U.S. SLATEINCLUDED
CLIENT(DEAL EXPIRY)
LAST U.S. SLATEINCLUDED
UKBSKYB*(Jun-15)
Mid 2014LOVEFILM**
(TBD)Mid 2013
NETFLIX**(TBD)
2011
FRANCECANAL Plus
(Mar-13)Mid 2012
TPS (Mar-13)
Mid 2011TF1
(Dec-14)2012
GERMANYSKY DEUTSCHLAND
(Sep-16)Mid 2015
LOVEFILM (Nov-12)
Mid 2010PRO7
(Dec-12)2012
ITALYSKY ITALIA
(Dec-16)2015
SKY ITALIA(Dec-15)
2012
SPAINSOGECABLE
(Dec-13)2012
CINEMANIA (Dec-13)
2011
A3(Feb-14)FORTA
(Dec-13)TVE
(Dec-13)
2011
CANADATMN / MOVIE CENTRAL
(Mar-13)2015
NETFLIX(Sep-12)
2012
AUSTRALIAPMP SHOWTIME
(Dec-18)2017
NINE (Jun-13)
Mid 2010
JAPAN
WOWOW**(Mar-12)
STAR CHANNEL(Jun-15)
2014
KOREAOCN
(Feb-13)2012
CJ MEDIA (Sep-15)
2012
BRAZILHBO OLE(Mar-18)
Mid 2017NETFLIX (Aug-14)
2011GLOBO(Jul-13)
Mid 2010
MEXICOHBO OLE(Mar-18)
Mid 2017NETFLIX (Aug-14)
2011TELEVISA(Mar-13)
2011
* Deal subject to contract** New deal in negotiation
U.S. FEATURE SLATE CURRENT COMMITMENTS FOR MAJOR TERRITORIES
FIRST PAY WINDOW SECOND PAY WINDOW FIRST FREE TV WINDOW
None
None
None
None
None
None
Se-ries1
(50)
(40)
(30)
(20)
(10)
0
(41) (44)
(46) (48)
$MM
Se-ries1
0
100
200
300
400
500
600
700
800
640 670 698
711
$MM
Se-ries1
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,420
1,505
1,6051,655
$MM
International Distribution – Financial Summary
Revenue Profit Contribution EBIT
FY12Bdgt/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Bdgt/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Bdgt/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
Driving strong growth over the plan – revenue hits $1.65B in FY15; Profit contribution reaches over $700MM
17
52
56
88
823
25
FX ImpactFX Impact FX Impact
(1)(40)
FX Adj
632FX Adj
1,360FX Adj
(3)(2)
• Favorable currency movement contributes to revenue growth, with continued volatility of the Dollar and Euro providing potential for both opportunity and risk
(44) FX Adj (46)
FX Adj
659FX Adj
711FX Adj
1,438FX Adj
1,539FX Adj
34
1,343
1,386
1,483
624636
686
(39) (42) (43)
International Distribution – Financial Summary by Division
Revenues from U.S. TV product doubles to >$500MM over the plan
($MM)GROSS REVENUE
FY12 FY13 FY14 FY15Budget Q2 FCST Variance PY MRP MRP Variance PY MRP MRP Variance MRP
MPG Current 502 499 (3) 529 555 26 593 585 (8) 580 MPG Flow 173 175 2 161 166 5 167 175 8 182 MPG Library 175 177 2 180 180 - 180 180 - 180 Total MPG 850 851 1 870 901 31 940 940 - 942
WW Acquisitions 150 165 15 150 165 15 160 170 10 175
TV Current 227 297 70 247 330 83 262 385 123 430 TV Library 68 68 - 72 75 3 75 75 - 75 TV Int'l Production 35 25 (10) 38 25 (13) 40 26 (14) 27 TV Int'l Acquired/Other 13 14 1 9 9 - 6 9 3 6 Total TV 343 404 61 366 439 73 383 495 112 538 TOTAL 1,343 1,420 77 1,386 1,505 119 1,483 1,605 122 1,655
Total Excl Digital Trans. 1,254 1,333 79 1,292 1,411 119 1,382 1,504 122 1,543
PROFIT CONTRIBUTIONFY12 FY13 FY14 FY15
Budget Q2 FCST Variance PY MRP MRP Variance PY MRP MRP Variance MRPMPG 540 543 3 547 573 26 590 597 7 597 WW Acquisitions 68 74 6 68 74 6 72 76 4 79 TV 59 67 8 67 70 3 71 74 3 85 TOTAL 667 684 17 682 717 35 733 747 14 761 G&A (43) (44) (1) (46) (47) (1) (47) (49) (2) (50) NET CONTRIBUTION 624 640 16 636 670 34 686 698 12 711
35
U.S. Ad Sales – Market Environment
• Strong Upfront– Strong scatter pricing and positive economic forecast leading into 2011 upfront– London Summer Olympics and US Presidential Election in 2012 helped create strong demand
• Broadcast Network Prime, up +8%, $9B total– FOX led market, up +10% with strong demand for A18-49 demos; American Idol and X Factor– ABC, CBS, NBC up +6-7%; CW small share of dollars but +10% increase driven by A18-34 demo
• Cable, overall up +12% $9B+ total– Closer parity with broadcast driven by break-out hits (Breaking Bad, Mad Men, etc.)– CPM’s continue to get closer to Network, some reports that total dollars exceeded Network
• Syndication, overall up +10%, $2.4B total– Oprah Winfrey’s departure from daytime helped drive double-digit gains for first-run– Off-nets achieved mid-to-high single digit increases with an emphasis on high profile shows– Dr. Oz was one of the biggest beneficiaries of Oprah’s departure with a 21% increase in the Upfront
• Migration of TV dollars to Digital– Crackle saw some benefit – but largely this was content-driven: matching current network content
on-air and online– Exploring extended screen test with Nielsen this fall
36
U.S. Ad Sales – Strategic Priorities
• Continue to drive additional revenue for first run through advertiser integrations
–i.e., The Dr. Oz Show: Walgreens, Subway, Weight Watchers
• Expand current base of advertisers for :30s and :10 to off-nets• Develop emerging Cable Networks business
–Amount of potential revenue growth tied to sub growth
• Find new 3rd party representation opportunities• Continue to support cable/network properties through Branded
Entertainment
Television
Priorities
• Activate cross-platform sales of Seinfeld to grow TV and digital dollars–Working with Nielsen to create cross-platform ratings (extended screen)
• Drive dollars to Crackle with connected device strategy–BIVL, PSN, iPad, Android
• Increase PlayStation Network revenue through enhanced reporting • Seek new opportunities/platforms to grow digital portfolio
–i.e. Sharecare
• Find new 3rd party representation opportunities
Digital
Priorities
37
U.S. Ad Sales – Growth Strategy
• Diffuse volatility in TV ad revenue market by growing a strong digital base
• Digital markets are continuing to emerge through an increase in digital platforms (i.e., mobile devices, game consoles, handheld tablets)
• Client base extends beyond traditional entertainment markets which allows for a more diverse portfolio – e.g., Sharecare
Opportunity
• Year-over-year growth in TV ad revenue is limited by available shows
• Opportunities for 3rd party ad sales representation in TV are declining
Current Environment
• Consolidate inventory across platforms to create a digital ad network
• Initiate video only digital upfront market• Utilize audience tracking to optimize CPMs• Grow 3rd party and digital revenue from $32MM to $106MM
over the plan years resulting in profit contribution growth of almost 200%
Strategy
38
U.S. Ad Sales – Financial Summary
Revenue Profit Contribution EBIT
Se-ries
1
0
10
20
30
40
50
60
70
80
25 24
35 37
47
54
67
$MM
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
Se-ries1
(20)
(16)
(12)
(8)
(4)
0
(13)
(7)
(9) (9) (10)
(8)
(4)
$MM
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
Se-ries1
0
50
100
150
200
250
300
350
188 182
246
218
284 280
339
$MM
39
U.S. Ad Sales – Financial Summary
($ MM) FY12 FY13 FY14 FY15Budget Q2 Var Prior Current Var Prior Current Var Current
Gross RevenueKING OF QUEENS 23 19 (4) 23 18 (5) 20 16 (4) 14 TIL DEATH 5 4 (1) 16 6 (10) 14 5 (9) 5 RULES OF ENGAGEMENT - - - 10 17 7 23 32 9 27 COMMUNITY - - - - - - 8 13 5 24 SEINFELD 43 45 2 40 40 - 37 34 (3) 30 DR OZ 50 47 (3) 60 60 - 62 62 - 67 NATE BERKUS 22 18 (4) 34 10 (24) 36 - (36) - TBD SYNDICATED SERIES - - - 15 - (15) 31 20 (11) 51 WHEEL OF FORTUNE, JEOPARDY! 14 13 (1) 13 13 - 13 14 1 15 All Other 3 4 1 2 14 12 2 13 11 - Subtotal 160 150 (10) 213 178 (35) 246 209 (37) 233
Third Party Distribution * 15 19 4 15 22 7 16 39 23 61 Crackle 13 13 - 18 18 - 22 32 10 45
Total Gross Revenue 188 182 (6) 246 218 (28) 284 280 (4) 339
($ MM) FY12 FY13 FY14 FY15Budget Q2 Var Prior Current Var Prior Current Var Current
Product Profit 41 39 (2) 52 52 - 64 69 5 83 Ad Sales Overhead (16) (15) 1 (17) (15) 2 (17) (17) - (17)
Profit Contribution 25 24 (1) 35 37 2 47 54 7 67
Transfer to Product Owner (38) (31) 7 (44) (46) (2) (57) (62) (5) (71)
SPTAS EBIT (13) (7) 6 (9) (9) - (10) (8) 2 (4)
* Prior MRP restated to reflect Sharecare revenue on a net basis.
40
1. Production
2. Distribution & Ad Sales
3. Networks
3 Areas of Discussion
41
Networks – Market Environment
• Macro economy is still recovering but not as fast or steady as originally anticipated– Subscriber revenue continues to be strong but ad revenues are softer than anticipated
– India continues to prosper and Latam is strong but Europe is recovering much slower
– Asia/Japan - Asia cable/satellite market continues to show growth; Japan growth slowing
– US - carriage continues to be challenging but cross-divisional leverage creates opportunity
• Competition increasing as players roll out channels worldwide (e.g., Fox, NBCU, Turner, Discovery)
• Securing programming continues to be a challenge due to rising cost considerations and supplier constraints
• Numerous opportunities remain to acquire or launch new networks with significant returns
• FX movements now have an increasingly material impact on Networks projections – Annual EBIT variability of $40MM - $55MM across the plan if the dollar FX rate moves up
(unfavorable) or down (favorable) by 10%
42
Networks – Strategic Priorities
• Buy out Indian partners and realize an Indian regional opportunity
• Explore ways to leverage studio relationship with GSN
• Carry on launching channels in new and existing territories to increase scale and
increase sales leverage and program buying power
• Continue to invest in ad and affiliate sales infrastructure (Dolphin, AXN Central
Europe, Russia Channels, Crackle Latam)
• Continue to secure programming supply through studio output deals and investment
in original programming (The Firm). Increase 3rd party acquisitions for US businesses
• Carry on expanding U.S. channels (CineSony, FEARnet buy up) and increase U.S.
channels’ contribution to portfolio throughout the MRP period
• Maximize value in Crackle US and expand internationally (Latam, Brazil, Canada)
• Expand SPTL Asia facility to service EMEA channels
43
Networks – A Continuation of Strong Sustainable Growth
Networks strong year-on-year earnings and revenue growth is forecast to continue• Breaking through the $200MM milestone in FY12 (1 year ahead of plan) and the $300MM and
$400MM milestones will also be achieved within the MRP period
• EBIT CAGR of 28% across the plan
• Revenue CAGR growth of over 14%, breaking both the $1.5B and $2B barriers within the plan
Margin* pressure continues but expected to rise from 18% to 22% across the plan• MSM India is forecast to have double digit margins (18%)
• Rising content costs, increased broadcasting costs from HD roll outs and the investment in ad sales and affiliate infrastructure keeps margins in check
Continued annual investment in new operations will underpin future earnings growth• Thirteen investments from prior years are expected to become profitable in the next 3 years
• Separately, the six planned launches/acquisitions in FY12 are expected to collectively generate $13MM of positive earnings in FY15
* Margin excludes GSN PPA to normalize year-on-year progression
44
Networks – Growth Opportunities
Europe• Dolphin Adsales and Channels in the UK• Enter Turkey/Greece market• AXN SPIN Central Europe• 3Net Portugal
Asia/Australia• India Regional channels acquisitions/launches• MSM buy-up• Expansion of SET One• Launch of Animax Japan on BS and AXN Mystery on CS110• China
Latin America• Crackle Latin America
U.S.• CineSony - U.S. Spanish-language Channel
45
Se-ries1
0
50
100
150
200
250
300
350
400
450
500
211 213 189234 224
265321
15 1028
6931
119
149
17 30
35
Int'l Series3 FX$MM
243FX Adj
247 FX Adj
290 FX Adj
Se-ries1
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
1,284 1,217 1,2361,373 1,363
1,5601,752
34319
51
389
69
447
492
49 76
84
Int'l Series3 FX$MM
Networks – Financial Summary
Revenue EBIT
1,287
2,007
1,432
2,244
1,762
1,318
1,536
217
384
255
470
303
226223
14%
CAGR 28%
CAGR
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
FY12Budget/Frcst
FY13Prior/Current
FY14Prior/Current
FY15Current
1,367 FX Adj
Note: EBIT excludes 3Net EBIT of ($8MM), ($6MM), ($2MM) and $2MM in FY12-FY15, respectively.
1,363 FX Adj
1,516 FX Adj
46
Networks – Financial Summary
47
Revenue($MM) FYE12 FY13 FYE14 FY15
Budget Forecast Variance PY MRP CY MRP Variance PY MRP CY MRP Variance CY MRPInternational
EMEA 214 214 - 232 240 8 250 262 12 282 Latin America 197 195 (2) 221 240 19 248 277 29 314 Asia 211 211 - 239 241 2 260 268 8 288 MSM India 621 588 (33) 518 619 101 560 684 124 766
Home Offi ce 1 1 - 2 1 (1) 2 - (2) -
FY12/13/14/15 New Launches/Committed & New Opps 12 8 (4) 24 32 8 43 69 26 102
Challenge 28 - (28) - - - - - - -
Total International 1,284 1,217 (67) 1,236 1,373 137 1,363 1,560 197 1,752
U.S.
GSN - 292 292 - 334 334 - 368 368 394 Crackle US & Clips 20 20 - 29 32 3 37 43 6 55 Other US 9 7 (2) 19 19 - 22 27 5 31
FY12/13/14/15 New Launches/Committed & New Opps 5 - (5) 3 4 1 10 9 (1) 12
Total U.S. 34 319 285 51 389 338 69 447 378 492
Total 1,318 1,536 218 1,287 1,762 475 1,432 2,007 575 2,244
EBITFYE12 FY13 FYE14 FY15
Budget Forecast Variance PY MRP CY MRP Variance PY MRP CY MRP Variance CY MRPInternational
EMEA 29 32 3 46 49 3 55 62 7 73 Latin America 72 74 2 94 92 (2) 105 107 2 128 Asia 43 42 (1) 52 48 (4) 63 61 (2) 74 MSM India 91 100 9 46 110 64 52 120 68 141 Home Offi ce (26) (26) - (31) (30) 1 (33) (33) - (36)
FY12/13/14/15 New Launches/Committed & New Opps (18) (9) 9 (18) (35) (17) (18) (52) (34) (59)
Challenge 20 - (20) - - - - - - -
Total International 211 213 2 189 234 45 224 265 41 321
U.S. GSN - Operational 29 83 54 34 113 79 35 137 102 156 GSN - PPA - (61) (61) - (35) (35) - (23) (23) (21) Crackle US & Clips (3) (3) - - (2) (2) 6 3 (3) 7 Other US (5) (7) (2) 1 (2) (3) 3 3 - 6
FY12/13/14/15 New Launches/Committed & New Opps (6) (2) 4 (7) (5) 2 (13) (1) 12 1
Total U.S. 15 10 (5) 28 69 41 31 119 88 149
Total 226 223 (3) 217 303 86 255 384 129 470
3NET (9) (8) 1 (5) (6) (1) 1 (2) (3) 2
EBIT
Year vs. Year
48
($ MM) FY12 to FY13
FY13 to FY14
FY14 to FY15
Prior Year EBIT Excl Monetization 425 550 700
Growth in Int'l Networks (excl MSM India) 41 40 46 Growth in US Networks (excl GSN) 5 10 7 MSM India IPL and base business growth 10 11 20 GSN digital business growth and reduced purch price amort. 56 36 21 Increased Networks new growth fund/reserve (28) (13) (5)
Growth in Int'l. Production business (excl. Latin America) 11 10 10 Growth in Latin America Production Business (incl Telest consol in FY13) 8 2 2 Millionaire 3-year Germany revnewal and UK print sale in FY12 (7) Non-Scripted "Hit" 3 14 5
Less deficit US scripted series episodes 10 2 Rules of Engagement final season and initial off-net avail in FY13; SVOD avail in FY14 15 (12) (6) Community continues/ syndication avail in FY14 9 28 (18) Happy Endings SVOD avail assumed in FY15 19 Breaking Bad final season (13) Two of current broadcast network dramas continue through MRP 21 21 Dr. Oz full year of improved time periods in FY13 (FY12 was 1/2 year) 5 - 3 Justified off-net avail and last season in FY14 9 (11) General TV Challenge ($9, $0, $18, $6mm in FY12 - FY15) (9) 18 (12)
Contractual Reduction in Starz bonus (2) (5) US Distribution Acquired Product assumptions 2 (2)
Other (6) (11) 5
Total Change 125 150 100
MRP EBIT 550 700 800
Variance to Budget / Prior MRP
EBIT
49
($ MM) FY12 FY13 FY14
FY12 Budget/Prior Year MRP 425 490 590
Favorable Networks FX 17 30 35 GSN consolidation and operations (7) 44 79 MSM India IPL and base business performance 8 63 67 Int'l Networks ad sales slower growth than assumed in Prior MRP (although still year-over-year growth) and sale of HBO Latin America (12) (31) (26) US Networks (excl GSN) increased investment in Crackle and delayed SMC carriage (2) (5) (3) Reduced new networks investment in FY12 and increased thereafter 13 (15) (23) Int'l Networks FY12 budget challenged primarily covered above (20)
Int'l Production Latin America restruct. and delay in Teleset consolidation to FY13 (9) (3) (4) Int'l Production slower growth than assumed in Prior MRP (although still year-over- year growth) (6) (5) (5) Delay in Int'l Production "Hit" (15) (5)
Increased US scripted development and more pilots than assumed in prior MRP (although consistent with FY12 budget/forecast) 4 (29) (28) Improved overall economics on new series (Charlie's, Pan Am, Unforgettable) 5 2 23 Rules of Engagement & Community improved US off-net ultimate 10 9 Happy Endings coproduction vs. Mr. Sunshine wholly owned (7) Breaking Bad 4th/5th season network renegotiation incl. early SVOD avail 12 12 (2) Nate Berkus lower ratings and assumed to end after 2nd season (4) (3) (7) New First-Run syndication series assumed one year later (FY14 instead of FY13) (7) Sharecare vesting of warrants in FY12 5 - General TV Challenge (achieved above in FY12, greater than incl in prior MRP for FY14) (13) 22
Shine Monetization 26
Other 9 5 (8)
Total 26 60 110
FY12 Forecast/MRP 451 550 700
FY12 Risks & Opportunities
50
M&A Items Not Included in FY13:• Shine Escrow of approximately $11mm• MSM nor ETV transactions• GSN Put
($ MM) EBIT Cash
MSM India Performance 5 3
Int'l networks ad sales assumptions do not hold up as expected (5) (3)
GSN acheives better than expected digital growth 3 2
Int'l Production commissions delayed to FY13 (2) (2)
Days of Our Lives NBC license fee reduction (3) (2)
Int'l Distribution incremental deals or product selections (50% profit rate assumed) 25 5
Int'l Distribution customer reneg. or assumed deals don't close (assumed 50% profit rate) (10) (5)
CBS/ Kingworld Audit +TBD +TBD
Starz/ Netflix renegotiation +TBD +TBD
FX Fluctuation +/- TBD +/- TBD
Total 13 (2)
