David Campbell

London - A World Class City David Campbell

President & CEO

AEG Europe

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• Innovative Live Entertainment & Sports

• State Of The Art Facilities

• Global Coverage

– 115 Locations

– 4 Continents

– 17,500 Employees

Who Are AEG?

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AEG Content (Software)

• World Tours To Regional Concerts

• Exhibitions To Festivals

• Focused Sector Specialists

• Changing Market With Residencies

• Largest Owner / Manager Of Sports Teams &

Events

• Focused On Marquee Sports

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• Capital Markets

– 17 Of Top 50 US Markets

– 5 Of Top 12 European Markets

– Top 2 Australian Markets

– Top 2 Chinese Markets

• Host To 55 Sports Teams Worldwide

• 6,200 Events

– 22 Million Tickets

– 42 Million Guests

AEG Facilities (Hardware)

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2009 Pollstar Worldwide Arena Rankings

• 20 of The Top 66 Venues

– 3 Continents

– 5 Countries

– 12 US States

• 31% of Total Ticket Sales Across Top 66 Venues

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This Morning

1.1. Location, Location, LocationLocation, Location, Location

2. A Video Fairy Tale (BBC)

3. The O2 Today

4. Room For A Hotel?

5. Here’s One We Made Earlier

6. The Opportunity

7. Summary

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The O2 - Accessible

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The O2 – Fast Access

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The O2 – At Heart of New London

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This Morning

1. Location, Location, Location

2.2. A Video Fairy Tale (BBC)A Video Fairy Tale (BBC)

3. The O2 Today

4. Room For A Hotel?

5. Here’s One We Made Earlier

6. The Opportunity

7. Summary

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This Morning

1. Location, Location, Location

2. A Video Fairy Tale (BBC)

3.3. The O2 TodayThe O2 Today

4. Room For A Hotel?

5. Here’s One We Made Earlier

6. The Opportunity

7. Summary

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Finishing the Decade

• Finished 2009 At All Time High

• 2.5 Million Arena Ticket Sales

– 3rd Consecutive Year As World’s No.1

– +75% vs. Any Other Venue Worldwide (Music)

– +30% vs. Own 2008

• Gary Bongiovanni, Editor in Chief, Pollstar:

‘I get the sense that, on a worldwide basis, the

reputation of The O2 is rapidly growing to iconic status’

• Total Building Footfall: 7.5 million

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The O2 – Under The Tent

• 20,000 Seat Arena

• 2,500 Seat Music Club – indigO2

• 2,500 Capacity Night Club - matter

• 25 High Quality Restaurants, Bars and Cafés

• 11 Screen Cinema – 2,700 seats

• Major Exhibition Space - Bubble

• Flexible Event Space – London Piazza

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ArenaArena /1

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Arena /2Arena /2

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IndigO2IndigO2

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mattermatter

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Entertainment DistrictEntertainment District

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British Music ExperienceThe British Music Experience

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London PiazzaLondon Piazza

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Our Commercial Partners

• Major International Blue Chip Companies

– Olympic Sponsor Family Has Allowed

Adidas, Visa And Coke

• Often Global Relationships

• Consumer Brands Have Confidence In

AEG Delivery, And Also East London

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This Morning

1. Location, Location, Location

2. A Video Fairy Tale (BBC)

3. The O2 Today

4.4. Room For A Hotel?Room For A Hotel?

5. Here’s One We Made Earlier

6. The Opportunity

7. Summary

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London Tourism Shows Signs of Recovery

Tourism Visitors (mil) £(bil)

Overseas 14.1 8.32Domestic 10.8 2.23

Total 24.9 10.6

• Overnight Tourism Was £10.6 Billion Of Spend In 2009• Highest Spend Since 2000; Spending “Power” Of The Weak Pound• Modest Growth Forecast For 2010

• London Is No.1 City Destination Worldwide• Drives Large Overnight Stays

Tourism Nights (mil) Ave nights (%) Ave spend/dayOverseas 85.8 6.1 £98.06Domestic 23.8 2.2 £94.54

Total 108.6 4.4 £97.15

Source: ONS, IPS, Visit London, Visit Britain, UK Tourism Society

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London Hotel Provision

By Properties By Rooms

• We Are Looking At 4 Star+ Hotels

London

Local O2 Arena

Area 4-5 Star RoomsGreenwich 34%

Canary Wharf 100%

City Airport / Excel 45%

44% 56%

59% 41% 44% 56%

37% 63%

Other Star Rating

4-5 Star Rating

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Market Is Coming Back

“hotels are on the comeback trail. More accurately, hotels appear to be on two separate trails to recovery – a super highway for London and a much rougher provincial trail”.

2009 2010F 2011FOccupancy (%) 80.42 82.25 85.41

% Change 0.9% 2.3% 3.8%

ARR (£) 115.58 119.60 124.03

% Change -5.70% 3.5% 3.70%

Rev PAR (£) 93.1 98.47 106.15

% Change -4.80% 5.80% 7.8%

London Hotels

• New Supply Will Not Fulfil Demand• Strong Pipeline But Some Projects Stalled

Source: Econometric Forecasts PricewaterhouseCoopers February 2010, Benchmarking Data; STR Global February 2010

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Demand At The O2

• Driving Demand

– 4 Star Offer

– Local, Jubilee Line, River

• Mid April: 350 Guests

– Purchased Tickets >£100

– 40 – 90 Miles From The O2

– 94% Consider i.e. At The O2 For An Event

– 36% Consider If No Event

– 51% Would Pay £100+

– 42% Visited 4+ Times

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Creating Customer Delight

• The O2 Has Already Helped Redefine Customer Service

Source: JD Power 2009 European Hotel Guest Satisfaction Index Study; Bespoke AEG / The O2 Tracker

11%

51%

29%

10%9%

49%

33%

9%

Delighted Pleased Indifferent Dissappointed

The O2 Tracker

European Hotel Guest Satisfaction

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This Morning

1. Location, Location, Location

2. A Video Fairy Tale (BBC)

3. The O2 Today

4. Room For A Hotel?

5.5. Here’s One We Made EarlierHere’s One We Made Earlier

6. The Opportunity

7. Summary

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We Love LALA Live

A New Destination And Event Centre For Downtown Los Angeles

A New Paradigm For The Entertainment Industry

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$2.5 Billion Investment

Stimulating More Than $3 Billion Additional Investment

8,000 Permanent Jobs; 7,500 In Construction

$2.5 Billion Investment

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LA Live: A Content Campus

• Anchored By:

– Staples Center – 20,000 Arena

– Nokia Theatre – 7,000 Theatre

– Club Nokia – 2,500 Club

• 15 Restaurants

• 3 Clubs

• Museum & Event Space

• 14 Screen Cinema

• 650 Live Events Annually

• 12 Million Visitors

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• 878 Room JW Marriot

• 123 Room Ritz Carlton

• 224 Ritz Carlton Residences

• 80,000 sq ft Of Event Space

– Ballrooms, Banqueting & Meetings

– Largest In LA

• $1 Billion Investment

• Opened 2010

And Now A Hotel And Event Space

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This Morning

1. Location, Location, Location

2. A Video Fairy Tale (BBC)

3. The O2 Today

4. Room For A Hotel?

5. Here’s One We Made Earlier

6.6. The OpportunityThe Opportunity

7. Summary

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The O2 Campus

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As We See It

• 4 Star+

• 450 Rooms

• 30,000 sq ft Event Space

• 100 Serviced Apartments

• 250 Parking Spaces

• Outline Permission With Dome Acquisition

• 999 Year Lease

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The Brief

• 3 Hectares

• 180m River Frontage

• Litschutz Davidson Sandilands

– High Quality Design

– Compliments The O2 & Peninsula

Masterplan

– Maximise River Views

– Lean, Mean & Green

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Status

• Challenging Site

– Physical Constraints

• Challenging Politics

– Council, HCA, CABE, GLA,

Local MP, Local Residents,

Local Amenity Groups, MDL And

Many More!

– No Consistent View!!

• Planning Application

– Extensive Pre Consultation

– Open Book

– Decision Imminent…Post

Election

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Repelling Magnets – The Hotel Jigsaw

• Hotel “Jigsaw” Complicated To Complete

• Key Brands On Aggressive Expansion Trail, Banks Lending Again:

• But Key Brands Do Not Generally Build, Or Give Lease Payments, And Banks Still Want

Security Before Lending Flow

• The Hotel Jigsaw Remains Difficult To Piece Together

– Construction Pricing Being Very Keen

– 2012 On The Horizon

“…we expect to double our number of guest rooms in Europe in the next 5 years…” (Bill Marriott)

“ More banks are willing to lend real estate development in the UK again, ending a two year hiatus…” (Savills)

“to accommodate potential growth a further 40,000 net hotel bedrooms should be provided in the period up to 2026…”

(The London Plan)

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The O2 Hotel & Event Space

• Hotel

– 450, 4 Star+ Rooms

– Restaurant, Bar, Sky Bar

– Spa With Pool, Business Centre

• Serviced Apartments

– 24/7 Service

– Offsite Affordable

• Public Space To River

– Can Be Programmed In Season

• Integrated With The O2 Tent

– Onsite Parking

– Jubilee Line

– New Pier Planned

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The O2 Event Space

• Opportunity To Do To Event Space What The O2 Did

To Arenas

• The O2 = London’s Entertainment And Events

Destination

– Excel = Exhibitions

– Earls Court & Olympia = Smaller Exhibitions /

Conferences (West)

• Event Space

– 30,000 Sq Ft / 3,000 People

– Biggest Space In An Underserved City

– 2 X Nearest Space, But Flexible & Scaleable

– Above Ground With Stunning Views From Pre-event

Space

– Awards, Seminars, Conferences, Meetings, Small

Exhibitions, Banqueting, Weddings , Product Launches

And Much More

– River Transport To Door Plus Tube, Taxi & Parking

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In Summary

• Dramatic Riverside Location

• Highly Accessible, Including Boat

• Local Bed Stock At Bottom End

• Multi User Group Demand

– Canary Wharf: 2 Minutes

– Excel / City Airport: 10 Minutes

– Greenwich Peninsula / Historic Greenwich

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In Summary/2

• The O2!

– 5% Of Current The O2 Footfall = 100% Occupancy

– 15% Of Arena Footfall = 100% Occupancy

– Bon Jovi Audience Fill Hotel For A Year

• Large Event Space Will Drive Group Business

• Strong Existing Commercial Relationships

• Finalising Operator Selection

• Initial Conversations On Equity And Debt

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Video Summary

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Thank You For Listening

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Arena

• The O2 Arena:

• 20,000 seat arena

• 96 suites

• 1000+ VIP Club

• 170 event days 2009– 209 events– Music 57%– Sport 12%

• Probably best music arena in the world

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IndigO2

• 2,500 capacity music club

• 170 event days – 2009

• Highly Flexible– Broad range of music

– Many different formats

– Awards to investor presentations to lunches/dinners

• Total Building footfall; 7.5 million

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matter

• matter Night Club:

• Operated by Fabric Group (No.1 Club Worldwide– matter now No.6 club worldwide!

• 2,600 capacity nightclub– Mainly weekends

• Highly Flexible– McCartney to Pink to Corporate

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Entertainment District

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British Music Experience

• The Bubble:• 60,000 sq ft Exhibition Space

• Permanent home to The British Music Experience

• Former touring exhibitions include Tutankhamun Valley of The Kings, Bodyworlds, Michael Jackson

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London Piazza

• London Piazza Events:

• Large event space in the heart of The O2

• Events include;– Hot (Beach)– Cold (Ice Skating, Ski Slopes)– ATP warm up to roller disco