SONY TURBO TV RussiaInvestment Opportunity

May 31, 2012

Executive SummaryOpportunity to launch a new male skewing channel, SONY TURBO TV, in Russia / Ukraine / CIS /

Baltics

• Sony is looking to launch a male skewing channel across Russian footprint• Existing competitors are strengthening their channel portfolios (Fox, Universal, Viasat & Discovery all have >4

channels)• New competitors evaluating channel opportunities (e.g. AETN, Comedy Central, HBO)• Operators have limited channel capacity especially in basic tier• Demand from advertisers and operators for channels targeting underserved male demographic

• Advantages of launching Sony Turbo across the region• Supports operator and advertiser relationships with male skewing channel complimenting Sci Fi and female

skewing SET• Provides additional buying power and shelf space for program acquisitions• Leverages existing infrastructure and new in-house distribution team resulting in lower investment requirement• Benefits from new ad sales agreement that delivers improved power ratio and earlier monetisation of ratings • Supports negotiations with Operators in a market where CPS/Flat fee pricing is under pressure• Channel will launch with distribution on key cable operator MTS, DTH platforms and other medium-size cable

operators• FY15 forecast subscriber growth to 4.1MM HHs

• Projected SPE deepwater mark for Sony Turbo TV of $9.2 million, post-tax NPV of $9.1 million and IRR of 44%

• Excluding terminal value post-tax NPV is $(2.8)MM and IRR 6.5%• Assumes SPE programming comprising of 15% of programming costs throughout the 10-year plan• If we exclude the cost of SPE content licenses, deepwater mark is $8.7 million, post-tax NPV of $10.7 million and

IRR of 48%• FY13 business plan forecasts EBIT $(3.3)MM vs. $(3.6)MM FY13 budget and Cash $(4.3)MM vs. $(4.8)MM FY13

budget

• 1 August launch date

• Request approval to launch Sony Turbo for a total investment of $9.2MM over 3 years

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Update on CURRENT CHANNELS: AXN Sci FI, SET Russia and SET baltics

Both channels within business plan deepwater mark

• AXN Sci Fi launched in Russia/CIS in November 2008 • SET launched in Russia/CIS in April 2009 and in Baltics in June 2010

Channel update

• AXN Sci Fi now has over 7MM paying subscribers and SET Russia has 5.5MM paying subscribers (with a further 1.5MM Mostel subscribers)

• AXN Sci Fi now reaches over 7.5MM individuals each month and SET Russia reaches over 12MM individuals

• SET Baltics now has 0.6MM subscribers

Financial update

• Both the Russia channels and SET Baltics are forecast to be cash flow positive from FY14• Overall the projected cash DWM for AXN Sci Fi and SET Russia is in line with business plan at

$36.5MM• AXN Sci Fi is expected to be $0.4MM ahead and SET Russia is expected to be $0.4MM behind

(note this excludes potential $1MM cash investment from Peter Gerwe)

• The projected cash DWM for SET Baltics is expected to be $0.4MM behind business plan due to lower ad sales

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DWM Bus Plan Act / Fcst Var

($ in MM's)

AXN SCI FI (20.0) (19.7) 0.4

SET RUSSIA/CIS (16.5) (16.9) (0.4)

SET BALTICS (1.4) (1.8) (0.4)

TOTAL (37.9) (38.3) (0.4)

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Key Operating Assumptions

• SONY TURBO TV launches on MTS and some of the key regional operators: VimpelCom (0.1 MM), Dalgeocom (0.2 MM), UfaNet (0.1 MM)

• 1.7+ MM subs by end of Yr1

• Further operator launches in FY14 include ER-Telecom (0.2MM), Akado (0.1MM) and OAO (0.1MM)

• Plan does not include distribution on MosTel

• Male skewing channel gives us stronger positioning with operators. Having 3 different demo channels we are able to offer male, female and younger sci-fi demographic

• Acting now helps secure 3rd channel distribution ahead of AETN and HBO who are rumoured to be coming to market. Operators benefitting from upgrades now but capacity will quickly fill up• August launch provides a solid level of distribution and enough time to get data from Gallup to start ads sales in Jan 2013

• Revenue assumptions benchmarked vs. existing channels

• Potential for advertising revenue upside to plan if Mostel distribution can be secured

• Third channel will attract new male targeted advertisers to SPT networks in addition to increasing overall inventory

Distribution

Ad Sales

Programming &

Marketing

• Programming mix features male oriented quality series, features, reality shows, factual

• Primary target male 25 -49 with core 30- 44 male

• High quality US series – CSI, The Shield, Strike Back

• Sony Turbo plan benefits from 20% shared programming with SET and AXN Sci Fi

• Sony-licensed product assumed (15% through-out plan period)

• Launching with 850 hours of acquired programming; 500 new hours p.a. steady state

• Target male skewing promotional outlets including relationships with magazine such as Maxim Russia

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Key Operating Assumptions

• Leverages existing Moscow and London infrastructures and Moscow office space

• Additional 4 heads in Moscow (Finance, Program Acquisitions, Marketing, Program Planner), 2 in Estonia (Marketing, Baltics Scheduler) and 6 in London/Poland (SSC Finance, Russia Scheduler, Traffic, Techops, Producer, Baltics Traffic), total of 12 overall

Headcount+ Overhead

Baltics

• Plan assumes simultaneous launch of Sony Turbo launch in Baltics

• Benefits from shared infrastructure and resources with Russia (e.g. Program acquisition, dubbing)

• Benchmarked against SET Baltics which launched as an extension of SET Russian channel in FY11

• Sony channels in Baltics and Russian markets have now evolved to the point where it makes sense to separate the feeds to enable Baltics to maximise revenue opportunities through more localised program scheduling and marketing

• Sony Turbo Baltics plan includes additional 3 headcount and infrastructure to build a local team (including marketing, scheduling and playout) to support both Sony Turbo and SET (and future channel launches)

Gerwe impact

• Peter Gerwe holds 5-10% equity in three channel joint venture (actual amount subject to current negotiation)

• Business plans currently assumes 100% cashflows retained by SPT

Key Financials

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$USD

AD funded FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Cumulative

HOUSEHOLDS 772 2,362 4,141 5,258 6,230 7,094 7,761 8,491 9,289 10,164

REVENUESubscription Revenue $525 $2,074 $3,855 $4,882 $5,769 $6,444 $6,908 $7,397 $7,921 $8,483 $54,257Advertising Revenue $90 $928 $1,733 $2,736 $3,295 $3,971 $4,790 $5,601 $6,337 $6,915 $36,396Total Revenue $614 $3,002 $5,588 $7,618 $9,064 $10,415 $11,698 $12,998 $14,258 $15,398 $90,653Annual Revenue Growth % 389% 86% 36% 19% 15% 12% 11% 10% 8%

OPERATING EXPENSES 0Programming 1,220 2,320 2,880 2,860 3,190 3,510 3,660 3,800 3,950 4,110 31,500 As a % of Revenues 199% 77% 52% 38% 35% 34% 31% 29% 28% 27%

Other Expenses 2,669 3,895 4,316 4,619 4,889 5,196 5,522 5,847 6,163 6,452 49,568 Total Operating Expenses $3,889 $6,215 $7,196 $7,479 $8,079 $8,706 $9,182 $9,647 $10,113 $10,562 $81,068

EBITDA ($3,275) ($3,213) ($1,608) $139 $986 $1,709 $2,516 $3,351 $4,145 $4,836 $9,585

EBIT ($3,295) ($3,247) ($1,642) $105 $951 $1,674 $2,482 $3,317 $4,111 $4,802 $9,258Margin -536% -108% -29% 1% 10% 16% 21% 26% 29% 31% 10%

CHANNEL VIEWFree Cash Flow ($4,329) ($3,410) ($1,417) ($12) $807 $1,631 $2,294 $2,745 $2,908 $3,298 $4,514Cume Free Cash Flow ($4,329) ($7,739) ($9,156) ($9,168) ($8,361) ($6,730) ($4,436) ($1,691) $1,217 $4,514

SPE VIEWSPE Share of License Fees $95 $180 $224 $222 $248 $273 $285 $295 $307 $2,169 $4,299Free Cash Flow ($4,234) ($3,230) ($1,193) $211 $1,055 $1,904 $2,578 $3,041 $3,215 $5,467 $8,813Cume Free Cash Flow ($4,234) ($7,464) ($8,657) ($8,446) ($7,391) ($5,487) ($2,909) $132 $3,346 $8,813

$USD ChannelView

Total Investment ($9,168) ($8,657)Post-Tax NPV (15.0%, 10X EBIT) $9,097 $10,658Post-Tax IRR 44% 48%Cash Flow Breakeven Year FY16 FY15Cume CF Breakeven Year FY20 FY19

SPE View w/ License Fees

Next Steps / Timeline

May 29–June 8, 2012

• Seek necessary SPE approvals for channel launch

June-July , 2012 • Move towards signature with Comstar (MTS), Raduga TV and Orion Express

August 1st, 2012 • Launch of the channel

Sept - November 2012

• Main marketing push launch to coincide with autumn campaign

January 2013 • Launch ad sales

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JAMIE”S MEAL

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