1. SPE Monetization Opportunities
April 2010
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CONFIDENTIAL

2. DRAFT DRAFT Executive Summary
SPE is currently in the process of pursuing the sale of two assets
Discussions for a potential sale of SPE’s participation in Spider-Man Merchandise will begin in late May
We are in active discussions for the sale of SPE’s interest in Shine
There may be an opportunity to pursue two additional opportunities, subject to resolving issues
SPT is defining a process to determine IGT’s interest in extending their Wheel of Fortune Game of Chance rights into perpetuity; however we do not know IGT’s current interest or wherewithal for the deal
A sale of SPE’s Music Publishing Library could yield a significant gain for SPE but would need to address potential concerns by SPE Legal and may not yield a Sony Corporate gain if sold to Sony ATV
A sale of our remaining interest in GSN could yield a significant gain, but timing is out of our control
Other opportunities have been identified but are on hold as we explore the above deals
A sale of FilmFlex likely requires renewal of Virgin deal and further expansion to attract buyers (which may delay a deal beyond the current fiscal year) and the asset has some ongoing strategic value
Exercising our put option for our remaining interest in HBO Latin America would decrease our visibility into a large and strategically important region
We have had in-bound interest in Imageworks and could seek financing for SPA films simultaneously
Financial benefits of an Imageworks sale may not merit the strategic risk of selling these assets
SPA financing would have cash benefit in the year, but no EBIT benefit until release
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3. DRAFT Potential Monetization Summary
(a) Entity figures may differ from SPE figures due to fiscalization of amounts
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4. Spider-Man Merchandise Revenue
Key Considerations
Sale makes sense if valuation captures potential upside driven by Disney without impacting promotional benefits to our films
Adjusting SPE retail controls could capture a premium
Completed episodes of S-M animated series could be added to deal to close or potentially extract minor increase in valuation
Valuation Basis
Low case assumes future cash flows in-line with historical average, excluding Disney uplift
High case assumes future cash flows include uplift from Disney Int’l sales and other outlets and elimination of 3rd party agency fees
SPE Participation in S-M Merchandise Revenue
Description
SPE 25% share in Spider-Man merchandise revenue
FY08E
FY09E
FY10E
FY11P
FY12P
SPE EBIT*
$50.4MM
$50.2MM
$31.2MM
$30.0MM
$36.8MM
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5. DRAFT Shine Shine Key Considerations
To date, Shine has been unable to find a buyer for SPE’s stake at the minimum price of $73.5MM agreed upon in March 2009
SPE is in the process of negotiating a revised offer with Shine at a valuation range of $50MM–$60MM with potential upside
Valuation Basis
DCF analysis based on terminal value range of 5x–7x EBITDA and 10% discount rate
Implied multiple of 0.8x-1.0x FY10E revenue and 9.1x-11.3x EBITDA
Shine
Description
Leading UK production super-indie with ownership of Reveille in U.S. and Metronome in Scandinavia
Equity Ownership
20% SPE; 53% Elizabeth Murdoch; 27% other
CY09A
CY10E
CY11E
CY12E
Revenue(100%)
$469MM
$532MM
$592MM
$642MM
EBIT (100%)
$41MM
$55MM
$64MM
SPE EBIT
$6MM
$5MM
$7MM
$9MM
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6. DRAFT Music Publishing Music Publishing Background
Transaction was last reviewed in detail in 2005; will need to engage with Legal to more accurately update the current state-of-play
As of 2005, Library included over 300,000 music cues and 9,000 songs
SPE had a worldwide publishing administration agreement with Sony/ATV Music Publishing which was set to expire at the end of 2006 but we believe was renewed
Concerns as of 2005
Legal expressed concerns relating to risk that buyer restricts SPE's future access to the content for our own productions and does not provide accurate accountings (jeopardizing relationships with profit participants)
Sony ATV may have concerns if the asset is sold to a 3rd party
Valuation Basis
Limited comparable data is available, but assuming a 10x multiple, a transaction would yield a gain of between $95MM and $115MM
Evergreen Publishing rumored to be paying 9x-13x for small deals, depending on assets in the library
When Columbia last sold its music library, the buyer paid a multiple of 10.5x, although this is a very dated comp (1988)
Music Publishing
Description
Wholly owned music publishing entity with music rights to current and previous SPE television and film properties
Equity Ownership
100% SPE
FY07
FY08
FY09
FY10
Revenue (100%)
$17MM
$18MM
Less: Participations
($3MM)
SPE EBIT*
$14MM
*Numbers may not foot due to rounding
1) Music Revenues are after Sony/ATV’s 10% administration fee
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7. DRAFT GSN GSN Key Considerations
Sizeable divestiture; sale of our 35% stake could generate ~$270MM of cash and ~$200MM in EBIT
May be difficult to entice DirecTV to acquire in the near-term
Buy/sell or put/call provisions are not triggered until December 2011
Valuation Basis
Value estimate based on recent transaction values, may be at high-end of range
GSN valued at $600MM
FUN valued at $180MM
Implied combined value of $780MM
GSN
Description
Cable network with a primary programming focus on game show content with distribution to over 66MM homes
Equity Ownership
35% SPE; 65% DirecTV
CY07A
CY08A
CY09A
CY10E*
CY11E*
CY12E*
Revenue (100%)
$126M
$134M
$218M
$231M
$261M
$292M
EBIT (100%) (1)
$26.7M
$47.4M
$51.5M
$65.5M
$83.4M
$108.0M
SPE EBIT
$13.8M
$19.9M
$20.8M
$22.9M
$29.2M
$37.8M
* Includes pro forma acquisition of CPM Star and Mesmo (base case)
(1) CY07 and CY08 EBIT is before audit adjustments
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8. DRAFT FilmFlex FilmFlex Key Considerations
2 years remaining on carriage agreement with Virgin; currently negotiating renewal (which appears likely)
If renewal is successful, Filmflex has growth potential through expanding to broadband and new territories which would significantly enhance valuation if sale can be delayed
Without renewal venture to end in 3 years, with incentive for partners to cut costs and maximize value of remaining cash flow stream
No obvious potential buyer – Disney has no desire to buy up and sale to Virgin would not generate attractive valuation
Valuation Basis
If assume projected expansion into new territories and platforms as well as terminal value of 6-8x based on long term growth, estimated value $30-$40MM (implied current EBITDA multiples of 7-10x)
If assume carriage is not renewed (i.e. no terminal value or expansion potential), expected enterprise valuation of ~$10MM implying ~2-3x EBITDA
Note: SPE and Disney bought ODG's share in 2008, at implied enterprise valuation of ~$40MM (excluding part of consideration paid in lieu of future dividends
FilmFlex
Description
UK VOD service on Virgin Media
Equity Ownership
50% SPE; 50% Disney
FY08A
FY09A
FY10E
FY11E
FY12E
Revenue(100%)
$56MM
$49MM
$50MM
$58MM
$64.5MM
EBIT (100%)
$5.3MM
$5.5MM
$2.6MM
$5.1MM
$5.4MM
SPE EBIT
$1.9MM
$2.3MM
$1.3MM
$2.2MM
$2.4MM
NOTE: projections do not include potential expansion to broadband and new territories
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9. DRAFT HBO Latin America HBO Latin America Key Considerations
SPE closed the sale of a 21.2% equity stake and certain voting rights in HBO Latin America Group (LAG) to Time Warner Entertainment (TWE) in March 2010
Transaction based on a 100% valuation of $950MM
Generated cash of $217MM and gain of $201MM
SPE has a put option for the remaining 8.2% equity stake, exercisable with 4 months prior notice
Ownership interest provides visibility into a key region for the Networks’ business along with voting protections for our basic channels
If put exercised, SPE’s distribution agreements would be extended 5 years from the put date with a further 5 year extension at SPE’s option
Valuation Basis
Put contractually valued at $62.3MM and would generate an estimated gain of $38MM
Valuation based on 8.2% equity stake x $950MM valuation less $15.6MM already received for voting interest)
Value would escalate 5% per year for 5 years
After 5 years, put valued at 6.6% of Fair Market Value
Gain would deduct remaining book value from equity interest sold plus the book value recorded on put option
HBO Latin America
Description
Programs, operates, and distributes HBO and Cinemax channels across Latin America
Equity Ownership
8.2% SPE, 11.8% Ole Communications, 80% TWE
FY09A
FY10A
FY11E
FY12E
Revenue(100%)
$328MM
$333MM
$374MM
$408MM
EBIT (100%)
$51.9MM
$38.1MM
$54.2MM
$72.6MM
SPE EBIT (1)
$17.7MM
$12.9MM
$1.4MM
$TBDMM
(1) FY10 includes SPE share up through 3/9/10; following the transaction, SPE’s share of distributions will be accounted for as Other Income (above EBIT); FY11 based on SPE’s share of an estimated $17.1MM in dividends; no forecast for FY12
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10. Imageworks Image works Key Considerations
Description
State-of-the-art visual effects and character animation company majority owned and operated by SPE
Equity Ownership
100% SPE
FY09A
FY10E
FY11E
FY12E
Revenue(100%)
$137MM
$182MM
$155MM
EBIT (100%)
($40MM)
$9MM
$1MM
$0MM
EBITDA (100%)
($26MM)
$21MM
$13MM
$10MM
SPE EBIT
($38MM)
$8MM
Key Considerations
Imageworks is the sole low cost supplier of FX and animation to SPA and Columbia and may be viewed as a strategic necessity
However, the visual effects business is low margin, highly competitive, and labor intensive, and Imageworks is only breakeven on standalone basis
Valuation Basis
Adjusted 2007 HL valuation down in 2 ways:
Adjusted mkt multiples down 21% for S&P 500 decline since July 2007
Adjusted 3-yr forward avg EBITDA down from $11.7 mil to $10.9 mil for slight decline in Imageworks performance since 2007
Results in ~$50-$65 mil valuation vs. ~$70- $90 mil HL valuation in 2007
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1) 3-yr forward average includes FY11, FY12 and FY13
2) Assumes SPE's basis is after deducting $1.8MM for Frameflow's 25% non-controlling interest in Imageworks India.  Need to validate that Frameflow's stake would remain intact as part of the sale and not be liquidated