INVESTMENT IN LEFT BANK PICTURES Presentation to the Group Executive Committee July 31, 2012 DRAFT – July 20, 2012.

INVESTMENT IN LEFT BANK PICTURES

Presentation to the Group Executive CommitteeJuly 31, 2012

DRAFT – July 20, 2012

Executive Summary

• SPT has an opportunity to acquire a controlling stake in Left Bank Pictures, a leading scripted television drama and film production company based in the UK

• Acquisition of Left Bank will give SPT a strong presence and credibility in the highly strategic UK scripted market, create a platform for SPT to further exploit its scripted catalogue, and drive additional growth for SPT by leveraging its worldwide network of production companies

• Left Bank’s shows have been commissioned by key UK, US and European broadcasters and have received international acclaim, including BAFTA, RTS and BPG Television and Radio Award

• SPE seeks to acquire 51% of Left Bank for $23.5M at close (FYE13) plus an earn-out of $2.7M–$8.2M in FYE15; the remaining 49% is subject to a put/call mechanism with a floor/cap of $18.5M–$46.1M. Total purchase price range of $44.7M–$77.9M for 100% if put/call is exercised

• Under SPT’s Base Case projections for Left Bank, SPT expects to pay $29.0M for 51% ($23.5M in FYE13 plus an earn-out of $5.5M in FYE15) plus expected put/call payment for the remaining 49% of $21.7M–$27.9M in FYE18. Total expected purchase price of $50.7M–$56.9M for 100%

• FYE13 payment of $23.5M is included in FYE13 International Production cash flow budget

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SPT International Production Overview

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Launch an OperationLaunch an Operation Acquire (All /Partial)Acquire (All /Partial)Launch with a PartnerLaunch with a Partner

• Miami/Latin America

• Paris

• Cologne

• Moscow

• Hong Kong

• Dubai

• Cairo

• Beirut

• SPT International Production has established a solid network of non-scripted and scripted local language production companies worldwide– Non-scripted expertise spans across all key genres with over 200 formats in its catalogue – including top franchise

Who Wants to be a Millionaire aired in over 100 countries– Has produced over 10,000 episodes of original scripted programming in all key genres across 30 countries in over 13

languages; has also adapted to date 18 US series across 25 countries in local languages, including The Nanny, Married with Children and Everybody Loves Raymond

• SPT has grown its international production operations through acquisitions and start-ups and is now a leading television producer and US studio with the most significant global footprint– Operates 20 local language television production entities in 14 countries, with programming produced in 88

countries and 73 languages

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SPT International Production Growth Strategy

• Continue to drive strong growth through significant content creation and footprint expansion

• Fuel content generation through organic development, acquisitions, strategic partnerships and synergies with Sony-owned content to create global hit formats that are exportable around the world

• Build a significant presence in all strategically important content creation territories and ensure strength in all genres in each territory – Establishing a strong UK presence in all genres is a top strategic priority to become a top global TV producer– UK is a strategically important market for global television production, being the largest exporter of TV formats in

the world and the second largest (after the US) exporter of finished TV programming

• Continue to fortify global footprint through expansion into new high-growth potential and highly strategic territories

• Investment in Left Bank aligns with SPT’s current strategic approach to rapidly build scale in the UK by aggregating quality independent producers and creative talent and would be highly strategic to SPT’s future expansion and profitability

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Overview of Left Bank Pictures

• Left Bank is a leading UK scripted series and feature film producer with four drama series currently on air

• Left Bank has grown significantly over the past five years and has built a valuable IP library driven by shows with multiple season orders, genre versatility and international sales– Has third season commissions for its most significant shows, Strike Back, Wallander and Mad Dogs– Produces a wide range of drama and comedy series for UK, US and European broadcasters including BBC, ITV 1,

Channel 4, Sky 1 HD, HBO Cinemax, Degeto Film Gmbh and RTE– Has produced 3 feature films– Has successful co-productions outside the UK with local producers and broadcasters, a growing area for SPT– [Seasoned development of original fiction as well as adaptations - explain or delete]

• Left Bank is led by CEO Andy Harries, one of the UK’s most successful and respected television and film producers– Andy and Managing Director Marigo Kehoe started Left Bank in 2007 with a minority investment from BBC

Worldwide– Andy was formerly [Head] Controller of Drama, Comedy and Film for Granada (formerly ITV studios); Marigo was

formerly Head of Production for Granada and for Tiger Aspect– Andy’s film credits include producer of BAFTA winning and Oscar nominated feature film The Queen

• Left Bank’s future growth will be driven by its strong development slate of new shows with local and international appeal, and from its partnership with SPT

• SPT to purchase 51% of Left Bank from existing shareholders on a pro-rata basis– Existing shareholders are Andy Harries (51%), Marigo Kehoe (15%), BBC Worldwide (25%) and Employees (9%) 5

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Show Broadcaster Details

Strike Back(55% of FYE12 Revenue)

Sky1 (UK )HBO Cinemax

(US)

• RTS Award-winning drama used to successfully re-launch HBO’s Cinemax channel in the US

• Season 3 commissioned and in production, seasons 4 and 5 in discussions with season 4 in paid development

• 10x60’ episodes/minutes• FYE12 revenue: $27.5M

Mad Dogs(13% of FYE12 Revenue)

SKY1 HD (UK) • Most successful UK drama in 2011 for satellite TV channels• Season 3 currently on air• US adaptation in development• 4x60’ episodes/minutes• FYE12 revenue: $6.6M

DCI Banks(14% of FYE12 Revenue)

ITV 1 (UK) • DCI Banks: Aftermath achieved an average 6.9M viewers (25% share), reinvigorating Friday night drama on ITV1

• Season 2 commissioned and in production• 6x60’ episodes/minutes• FYE12 revenue: $7.1M

Wallander(14% of FYE12 Revenue)

BBC One (UK) • Seven times BAFTA Award-winning drama• Season 3 commissioned and in production• 3x90’ episodes/minutes• FYE12 revenue: $7.1M

Key Left Bank Shows

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• Left Bank produces several drama series with multiple season commissions as well as comedies, documentaries, miniseries and feature films which strengthen its brand as a premier producer

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Strategic Benefit to SPE

• Acquisition of Left Bank will provide SPT with strong presence and credibility in the highly-strategic UK scripted market– Left Bank’s strong reputation for successful series development and production allows it to attract top talent and

advertisers – Left Bank’s shows have been commissioned by all of the major UK broadcasters – Left Bank’s success in the UK market has generated strong international broadcaster interest and significant international

distribution value

• SPT will become a stronger player in the two largest English language markets– With Strike Back, Left Bank is now one of the few companies that has produced scripted programming airing

simultaneously in the UK and US– Provides SPT with a strong platform to sell scripted shows produced in the UK to the US and vice versa

• Acquisition can generate significant strategic synergies and drive growth for both SPT and Left Bank– [SPT can leverage Left Bank to drive growth of SPT scripted business worldwide in its portfolio companies, further exploit

its large scripted format catalogue and increase international scripted co-productions]– [SPT can accelerate Left Bank’s growth through its global production network, strong US production presence and world-

class distribution team]– Opportunity to co-develop and co-produce across major markets, leveraging SPT’s other opcos and Left Bank’s co-

production experience

• Sony will distribute all future shows and formats from Left Bank that do not fall within BBCW’s existing distribution contract and charge Left Bank a commission— Left Bank’s shows have strong international appeal and over 20 programs have been sold to 45 different countries— SPT’s strong global distribution team and strong US presence will further drive Left Bank’s potential IP value 7

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• Left Bank has grown significantly since it was founded and revenue is expected to grow at a 8% CAGR from FY12–FY18

KEY LEFT BANK GROWTH DRIVERS• Reduction in FYE11 earnings was the result of no deliveries of Strike Back 2 and Wallander 3 (under UK accounting methods this Revenue and

EBITDA reduction did not exist)• FYE12 growth driven by Strike Back 2 commission on HBO Cinemax in the US, returning shows such as Wallander, DCI Banks and Mad Dogs and new

comedy Cardinal Burns• 69% of FYE13 revenue is assumed to result from content in paid development with broadcasters; growth driven by re-commissions of all key shows

and new comedy Naked House• $90M currently in development pipeline consisting of re-commissions of returning series (Strike Back, DCI Banks, Wallander, Mad Dogs) and new

series in development• Decline in FYE17 is due to SPT’s conservative assumption that Strike Back goes off the air after 6 seasons

Left Bank Financial History and Forecast

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FYE10 FYE11 FYE12 FYE13 FYE14 FYE15 FYE16 FYE17 FYE18

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

29.2 22.5

50.0 43.8

75.8

89.4 86.6

73.1 78.7

SPT Base Case Revenue

FYE10 FYE11 FYE12 FYE13 FYE14 FYE15 FYE16 FYE17 FYE18($1)

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

3.6

(0.3)

5.3

4.2

8.1

9.2

7.9

6.3 6.9

SPT Base Case EBITDA8% CAGR (FYE12–FYE18)

5% CAGR(FYE12–FY1E8)

$MM $MM

Summary of Deal Structure and Material Terms

• Acquire 100% of Left Bank Pictures for a total purchase price of $44.7M–$77.9M (£28.5M–£49.7M) with 51% to be acquired at close and the remaining 49% to be acquired in 5 years via sellers’ capped put/SPT’s capped call– SPT Base Case purchase price for 100% of $50.7M–$56.9M (£32.3M–£36.3M)

• SPT to purchase 51% of the fully-diluted shares of Left Bank from existing shareholders on a pro rata basis– Net initial consideration of $23.5M (£15.0M) to be paid in FYE13; Purchase Price to be increased by surplus cash which will then be

paid to Sony as a tax-exempt dividend– Earn-out of $2.7M–$8.2M (£1.75M–£5.25M) to be paid in FYE15 based on average EBITDA for August 2013–March 2014; SPT Base

Case earn-out of $5.5M (£3.5M)– SPT Base Case purchase price for 51% of $29.0M (£18.5M)– SPT to control the Board with 4 of 7 board seats including Chairperson appointment rights– Minority shareholders will have limited protective veto rights– 5 year transfer restriction on share transfers to 3rd parties– If put/call is not exercised, tag along/drag along rights are triggered if 51% or more of Left Bank is sold to a 3 rd party buyer

• Remaining 49% of Left Bank to be acquired five years after close via sellers’ capped put/SPT’s capped call– SPT has a call, and sellers have a put, for the remaining 49% equity in FYE18 at a floor/cap of $18.5M–$46.1M (£11.8M–£29.4M).

Within the floor/cap, the put/call will be at fair market value constrained within an EBITDA multiple of 7x–10x to be determined by an independent valuation

– Assumed SPT Base Case exercise price of $21.7M–$27.9M (£13.8M–£17.8M) in FYE18

• SPT to have worldwide distribution rights for all new formats and programs controlled by Left Bank as well as rights upon reversion from the BBC and in the UK from the commissioning broadcaster

• Principals Andy Harries and Marigo Kehoe to commit to 5 year employment terms. Left Bank’s CFO and 3 key development/creative executives under Andy and Marigo to commit to 3 year terms

• Deal is structured in British Sterling and shown in USD at an assumed fx of 1.57 GBP:USD 9

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Comparables (Public / Transactions)

DCF SPE Base Case (Min / Max )

Negotiated Purchase Price Range (Min /

Max)

$30

$40

$50

$60

$70

$80

$90

$100

Third Party Valuation

Independent Fair Market Value Range – 100% Enterprise Value

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$45

• Base Case DCF Valuation assumption: 9.5x terminal value/1% implied perpetuity growth rate, 9.5% discount rate

• Excluding estimated distribution profit to Sony, After-Tax NPV of $5.5M–$9.4M. After-Tax IRR of 14%–16%. Cumulative Cash Break-even in Year 11

Note: Implied EBITDA multiples based on FYE12 EBITDA of $5.3M. Converted from GBP at 1.57 GBP:USD

SPT Base Case Purchase Price for 100% ($57M)

After-Tax NPV: $9.3M–$13.2MAfter-Tax IRR: 17%–19%After-Tax Payback: Year 10

14.8x

8.5x

10.8x

9.6x

11.3x

17.9x

11.3x

16.4x

$60$60

$94

$78

$51–$57

$86

$MM

• KPMG was engaged to value Left Bank

• SPT’s purchase price range compares favorably to market valuations

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EBIT Impact (Excluding Terminal Value)• Acquiring a controlling interest will allow SPE to consolidate Left Bank Pictures and is expected to increase SPE’s EBIT by $4M–

$5M per year under SPT’s Base Case once initial purchase price amortization levels taper off in FYE16

Cash Impact (Excluding Terminal Value)

Financial Impact to SPE

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($000's USD; converted from GBP @ 1.57 GBP:USD) Aug–Mar Fiscal Year Ending March 31,

FYE13 FYE14 FYE15 FYE16 FYE17 FYE18 TOTAL

# of episodes 16 57 74 73 68 68

EBIT from Operations $2,730 $7,935 $9,009 $7,727 $6,134 $6,728 $40,265Less: Purchase Price Amortization (2,737) (5,272) (5,021) (4,641) (3,699) (3,143) (24,512)Plus: Distribution Profit to SPE 0 1,874 1,268 1,190 1,225 1,104 6,662

INCREMENTAL ANNUAL EBIT TO SPE ($7) $4,537 $5,257 $4,277 $3,660 $4,690 $22,414

CUMULATIVE EBIT TO SPE ($7) $4,531 $9,788 $14,064 $17,724 $22,414

($000's USD; converted from GBP @ 1.57 GBP:USD) Aug–Mar Fiscal Year Ending March 31,

FYE13 FYE14 FYE15 FYE16 FYE17 FYE18 TOTAL

Operating Free Cash Flow $2,298 $4,044 $6,403 $6,313 $5,612 $5,123 $29,792Less: SPE Base Case Purchase Price (23,540) 0 (5,493) 0 0 (27,895) (56,928)Less: Dividends to 49% Minorities (957) (1,684) (2,667) (2,629) (2,337) 0 (10,275)Plus: After-Tax Distribution Profit to SPE 0 1,443 989 928 955 861 5,177

NET CASH FLOW TO SPE ($22,200) $3,802 ($767) $4,612 $4,230 ($21,911) ($32,234)

CUMULATIVE CASH FLOW TO SPE ($22,200) ($18,398) ($19,165) ($14,553) ($10,323) ($32,234)

CUMULATIVE CASH FLOW BREAKEVEN ESTIMATED IN YEAR 10

Risks and Mitigations

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Risk MitigationSignificant revenue and gross profit come from a single show, Strike Back • Left Bank has received a strong indication from Sky that it plans to air Strike

Back for the long term• There are several long running shows in the UK comparable to Strike Back,

such Spooks and Dream Team which ran for 10 seasons• SPT has conservatively projected that Strike Back continues through season

6 (FYE16)

Left Bank will no longer qualify as an independent producer in the UK post-acquisition. Broadcasters in the UK have quotas for commissioning shows from independent producers.

• DCI Banks is the only Left Bank show currently on-air that qualifies for independent status. Sony and Left Bank have corresponded with the broadcaster who has communicated that Sony's ownership will not put future commissions of this program at risk.

• Left Bank is a very established producer in the market and Sony and Left Bank do not believe that the loss of its independent status will affect future show commissions

Key creative personnel are critical to the success of Left Bank

• The two most critical creative employees are the founders Andy Harries and Marigo Kehoe. They will enter new 5-year employment agreements and we may purchase their shares at a material discount should they breach their employment.

• The value of the earn-outs and the put will incentivize them during their 5 year employment term. The value of their put can be maximized if they agree to extend their employment upon exercise of the put

• SPE also intends to groom successors to operate the business should key employees choose to depart.

• Existing series have value and momentum independent of their employment, as does the Left Bank brand name and credibility in the marketplace

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Timing and Next Steps

• Sony Deliberations– July 27, 2012: Investment Committee– July 31, 2012: Group Executive Committee

• Targeted Date August 6-10, 2102: Sign Definitive Agreements and Close– Shareholders Agreement– Share Purchase Agreement– Articles of Association– Distribution Agreement with SPT– Employee Service Agreements

• End of Exclusivity Period: July 31, 2012– SPT believes negotiations will continue successfully beyond the exclusivity period

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