Mtvnetworks Annual Report 2006 En

ANNUAL ACCOUNTS

MTV Networks B.V., AMSTERDAM

M N Networks B.V. AMSTERDAM (in '000)

Contents

Directors report

Financial statements

Balance sheet as at 31 December 2006

Income statement 2006

Notes to the balance sheet and income statement

l General

tf ! 2 Principles of valuation of assets and liabilities

i .

3 Principles of determination of result

4 Notes to the balance sheet

5 Notes to the income statement

6 Supplementary information

Other information

Appropriation of net result

Auditors' report

PricewaterhouseCoopers Accountants N V. Fot identification purposes only 2

MTV Networks B.V. AMSTERDAM (in '000)

Directors report

The Directors present their report and audited financial statements of MTV Networks B.V, for the year ended december 31,2006.

1.1 General

The Directors herewith subrnit the financial statements for the year ended december 31, 2006. The immediate parent company is Viacom Global (Netherlands) B.V.. It's ultimate parent company is Viacom Inc., New York, United States of America.

1.2 Principal activity

The company is incorporated in the Netherlands with its statutory seat in Amsterdam. The company's q main activities are establishing and operating television stations and al! relating activities that support or 1 .

promote that activity.

' 1.3 Result for the year

The result for the year amounted to a net profit of B 26.901,000 (2005 loss: E 8.327.000) was derived from continuing operations. The majority of the profit is caused by an incidental receipt of EUR 22,7M relating to a termination of a sales contract. The Directors recommend the profit be added to retained earnings and carried forward pending a decision of the shareholder in the General Meeting regarding any distribution. The Directors do not recommend the payment of a dividend.

1.4 Fufure developments

No major changes are envisaged in the company's activities during the corning year. There are no plans for significant investments in the future and no changes in the financing structure or the number of employees are foreseen.

1.5 Subsequent events .

No subsequent events occurred during the year which had an impact on the annual report for the year december 31,2006.

1.6 Business risks

The management of the Company and execution of the Company's strategy are subject to a number of risks. The Directors have identified the need to manage the Company's material financial risks, including foreign exchange, liqiiidity, credit and interest rate risks. These risks are monitored through a Group Treasury management function which invests surplus funds, mitigates foreign exchange exposure and manages borrowings for Viacom Inc. group cornpanies (the 'Group').

Group Treasury also seeks to limit counter-party risk by conducting al1 of its banking and dealing activities with a limited number of major international banks, whose status is kept under review.

PricewaterhouseCoopen Accountants Ny. For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

Liquidity Risk

The Company finances its operations through a combination of retained earnings and intercompany loans.

Interest Rate Risk

To the extent that the Company enters int0 banking arrangements, the Company's exposure to interest risk arises on the surplus cash bank accounts on which the interest income is based on UBOR -0.25bp. For the deficit bank accounts the interest expenses are based on LIBOR +0.25bp. The Company does not participate in interest rate hedging.

Credit Ris k

The Company has iniplemented policies that require appropriate credit checks on potential customers before sales are made. The arnount of exposure to any individual counterparty is subject to a limit, which

. is reassessed annually by the managing directorc.

Foreign Exchange Risk

To the extent that the Company enters into banking arrangements and inter company agreements in currencies different to that of the Company's functional currency, there is an exposure to movements in exchange rates. The Company does not participate in cross-currency hedging. -

PricewaterhouseCoopers Accountants N.Y. For identification purposes oniy

MTV Networks B.V. AMSTERDAM (in '000)

l .7 Directors

The persons who serve as Directors of the Company are:

Mr. R. Affourtit (appointed August 18", 2000)

Mr. M.D. Ligtvoet (appointed September 3d, 2004)

Mr. M. de Ruiter (appointed of December 21", 2004)

Mrs. L.I. Kirby (appointed of September 24th, 2007)

Mr. J.R. Currell (appointed of November 5th, 2007)

Amsterdam, March 27,2008

PricewaterhouseCoopers Accountants N#. For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

Financial statements

PricewaterhouseCoopers Accountants %V. For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

Balance sheet as at 31 December 2006 (after proposed appropriation of result)

31 December 2006 31 December 2005

Assefs

Intangible assets Property, plant and equiprnent Financial assets

Current assetc /' 1 Receivables 1. , Cash and cash equivalents

PricewaterhouseCoopers Accountants N?. For identification purposes only

M N Networks B.V. AMSTERDAM (in '000)

31 December 2006 31 December 2005

Shareholders' equity Share capital Share premium Retained earnings Result for the year

Provisions

Non-current liabilities

,: ; Current liabilities

PricewaterhouseCoopers Accountants N.Y. For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

lncome statement 2006

Revenue

Cost of sales

Gross profit

Selling expenses Generai and administrative expenses Other operating expenses Total expenses

\ Operating result

Other operating income 5.4

Finance casts 5.5

Operating income before taxation

Income tax expenses

Profitl(loss) for the year

PricewaterhouseCoopers Accountants N.V.g For identification purposes only

MTV Nehvorks B.V. AMSTERDAM (in '000)

Notes to the balance sheet and income statement l General

l. 1 Activities The activities of the company and its subsidiaries mainly comprise:

- running television stations which wil1 produce, provide and broadcast commercial television programmes nationwide via cable, satellite or other distribution methods;

- operating and distributing associated websites; - rnaintaining telecommunication networks and television studios necessary to the production of television programmes andlor websites. - holding of investments

1.2 Group structure ' M W Networks B.V. is a subsidiary of Viacom Global (Netherlands) B.V. The ultimate parent company of

L this company is Viacarn Inc., a cornpany incorporated in the United States.

l. 3 Consolidation In accordance with article 408, Book 2 of the Dutch Civil Code no consolidated financial data relating to the subsidiary companies have been disclosed in these financial statements. The financial data of the company and its subsidiaries are included in the consolidated group accounts of Viacorn Inc. These accounts have been prepared in accordance with generally accepted accounting principles in the United States. The group accounts of Viacom Inc. are filed at the Chamber of Commerce in Amsterdam.

1.4 Related parties Al1 group companies mentioned in Note 4.3 above and the associates mentioned in Note 6.3 below are considered to be related parties. The ultimate parent company Viacom Inc. also qualifies as a related party.

1.5 Cash t7ow sfatement The financial statements of the Company are included in the consolidated f nancial statements of Viacom Inc., United States, which are l e d separately at the Chamber of Commerce in Amsterdam. Consequently, the Company has taken advantage of the exemption from preparing a cash fiow statement as described by the Dutch Accounting Standards Board Guideline 360, paragraph 104.

1.6 Estimafes In applying the accouriting poticies and guidelines for preparing the financial statements, the Management Board of MTV Networks B.V. makes a range of estimates and judgments that might be essential for the amounts disclosed in the financial statements. If necessary for the purposes of providing the view required under Section 362(1), Book 2, of the Netherlands Civil Code, the nature of these estimates and judgments, including the related assumptions, is disclosed in the notes to the financial statement items in question.

PricewaterhouseCoopers Accounianis k/#. For identfication purpases only

MTV Networks R.V. AMSTERDAM (in '000)

2 Principles of valuation of assets and liabilities

2.1 Generai The financial statements have been prepared in accordance with the statutory provisions of Part 9, Book 2, of the Netherlands Civil Code and the firm pronouncements in the Guidelines for Annual Reporting in the Netherlands as issued by the Dutch Accounting Standards Board. The financial statements are denominated in euros.

In general, assets and liabilities are stated at the amounts at which they were acquired or incurred, or fair value. If not specifically stated otherwise, they are recognised at the amounts at which they were acquired or incurred. The balance sheet, income statement and cash fiow statement include references to the notes.

2.2 Companson with prior year I . The principjes of valuation and determination of result remained unchanged compared to the prior year.

2.3 Foreign wrrencies

Functional currency Items in the financial statements of group companies are stated with due observance of the currency of the primary economic environment in which the respective group company operates (the functional currency). The financial statements are denominated in euros, i.e. the functional and reporting currency of MTV Networks B.V.

Transactions, receivables and debts Transactions denominated in foreign currencies in the reporting period are recognised in the financial statements at the exchange rate ruling at the transaction date. Monetary assets and liabilities denorninated in foreign currencies are translated at the rate of exchange prevailing at the balance sheet date. Exchange differences resulting from settlement and translation are recognised through profit or loss.

Where the currency risk on monetary assets and liabilities has been hedged, transiation gains and losses are not yet taken to the income statement, but included under accruals and deferrals if unrealised gains on these hedges should neutralise these gains or losses at the balance sheet date.

Exchange differences on foreign-currency loans contracted to finance a net investment in a foreign operation are recognised in the statutory reserve for translation differences if and when such loans effectively hedge the exchange rate exposure on that net investment in a foreign operation.

PricewaterhouseCoopers Accountants NIY. For identification purposes only

MTV Networks B.V. AMSTERDAM fin '000)

Goodwill Goodwill arising from acquisitions is capitalised and arnortised on a straight-line basis over the estimated econornic life with a maximum of 20 years.

Other Other intangible assets are valued at acquisition cost and amortised on a straight-line basis over the remaining economic life based on the underlying license.

For determining whether an impairment charge in respect of an intangible fixed asset applies, reference is made to note 2.7.

2.5 Property, plant and equipment Propetty, plant and equipment is valued either at cost plus additional direct expenses, less straight-line

r S". depreciation over the estimated economic life. '. .

Any impairment as at the balance sheet date is taken into account. For determining whether an impairment charge in respect of an intangible fixed asset applies, reference is made to note 2.7.

2.6 Financial assets

Group companies As a consequence of applying article 408, Book 2 of the Dutch Civil Code, investments in gtoup companies and other participating interests in which the Company exercises significant infl uence are carried at cost or lower market value. The Company is considered to exercise significant influence if it holds at least 20% of the voting rights. A provision against subsidiaries whose net equity value is below their carrying value is made only when management believes that the diminution is of permanent nature.

Assocated companìes Participating interests in which no significant influence can be exercised are stated at acquisition price. If an asset qualifles as irnpaired, it is measured at its impaired value; any write-offs are discfosed in.the income statement.

Ofher receivables Other receivables disdosed under financial assets are stated at the fair value of the amount owed, which normally consists of its face value net of any provisions considered necessary.

2.7 Impairment of non-current assets On the balance sheet date, the Company tests whether there are any indications of an asset which could be subject to impairrnent. If there are such indications, the recoverable amount of the asset concerned is estimated. If this is not possible, the recoverable amount of the cash-genarating unit to which the asset belongs, is identified. An asset is subject to impairrnent if its book value is higher than its recoverable value; the recoverable value is the higher of the realisable value and the value to the business.

PricewaterhouieCoopers Accountants N,y For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

2.8 Receivables Trade receivables are carried at the fair value of the consideration, usually its face vatue. If payment of the receivable is postponed under an extended payment deadline, fair value is measured on the basis of the discounted value of the expected revenues. The difference between fair value and face value is accounted for as interest income during the period up to the expected receipt of payment. A provision is made for expected bad debts.

2.9 Cash and cash equivalents Cash and cash equivalents consists of cash in hand, cash at banks and deposits with a maturity of less than twehe months. Current account Iiabilities at banks are recognised under bank overdrafts forming part of current liabilities.

2.10 Deferred fax assets and liabilities Deferred income tax assets and liabilities are recognised to provide for temporary differences between the

f. ., tax bases of assets and liabilities, and their carrying amounts in the financial statements. Deferred income

h. tax is determined using tax rates prevailing at the balance sheet date or the rates that wil1 apply in the future, insofar as these have been enacted.

Deferred income taxes are recognised for temporary differences concerning group companies, associates and joint ventures, unless MTV Networks B.V. is able to determine the moment of expiry of the temporary difference and it is not likely that the ternporary difíerence wil1 expire in the foreseeable future. Deferred incorne taxes are recognised at face value.

2.11 Non-currenf liabilities Non-current liabilities are carried at amortised cost, being the arnount received taking account of any premium or discount, less transaction costs. The difference between the carrying amount determined and the ultimate repayment value, together with the interest due, is determined such that the effective interest is taken to the income statement during the term of the liabilities.

PricewaterhouseCoopers Accountants N&. For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

2.12 Leasing

Financial lease The Cornpany leases part of the equipment and has, to a large extent, the risks and rewards incidental to ownership of these assets. When the lease contract is entered into, the assets are capitalised on the balance sheet at their fair value, or the cash value of the minimum'lease terrns, if lower. The lease amounts payable are split on a linear basis between a redemption and interest part, based on a fixed interest rate. The relating lease obligations, excluding the interest element, are taken up under noncurrent liabilities. The interest component of the lease term is recognised in the income statement. The reIating assets are depreciated over the rernaining economic life or lease term, if shorter.

Operational lease Lease contracts for which a large part of the risks and rewards incidental to ownership of the assets does not lie with the Company, are recognised as operational leases. Obligations under operational leases are recognised on a straight-line basis in the income statement over the term of the contract, taking into account reimbursements received from the lessor.

PricewaterhouseCoopers Accountants N.h For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

3 Principles of determination of result

3.1 General The result represents the difference between the value of the services rendered and the costs and other charges for the year. The results on transactions are recognised in the year they are realised; losses are taken as soon as they are foreseeable.

3.2 Exchange rate diferences Exchange rate differences arising upon the settlement of monetary items are recognised in the incorne statement in the period that they arise.

3.3 Revenue recognition Revenue is recognised when al1 significant risks and rewards incidental to the ownership of the advertising are transferred to the buyer.

I p . , Royalty and license incorne is allocated to the reporting period in accordance with the substance of the relevant agreements.

3.4 Revenue Revenue is determined as income frorn the supply of services, less discounts and such like, exclusive of revenue taxes.

Revenue includes:

- advertising sales consisting of airtime revenue and sponsorships on analogue television stations;

- online and digitaf media sales including banner sales and online sponsorships and revenue from consumers through SMS and 0900 phone numbers; - syndication sales resulting frorn the exploitation of the brands of MTV Networks;

- dissimilar barter sales representing agreements with third parties, which wil1 invoice an equal arnount in barter cost; - affiliate sales consisting of sales of digital channels to distributors throughout Scandinavia and ernerging

' markets (Eastern Europe, Israel and South Africa);

- other sales including ticket sales, distribution services and other incidental revenues.

3.5 Cosfs Costs are recognised at the historica1 cost convention and are allocated to the reporting year to which they relate.

3.6 Cosf of saies Cost of sales represents the direct and indirect expenses attributable to revenue, including uplink and transmission costs, studio costs and license fees.

PricewaterhouseCoopers Accountan~ N , k For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

3.7 Selling expenses Selling expenses concern the direct expenses of the sales activities. Selling expenses also include the costs for sponsorships and events.

1

3.8 General and administrafive expenses General and administrative expenses include the expense of the directors and the adrninistration department.

3.9 Personnel remuneratjon

Regular payments Salaries, wages and social security costs are charged to the incorne statement when due, and in accordance with employrnent contracts and obligations.

Pensions The Company runs a defined benefit scheme. This career average-pay pension plan is accommodated by the industry sector pension fund, PNO Media. The Group has accounted for the defined benefit scheme as if it was a defined contribution scheme.

Share option plan The Company operates a share option plan for directors and personnel.

No costs related to the share options are incurred at MTV Networks B.V. level. The related costs are beared by Viacom lnc., the ultimate parent company.

3.10 Depreciation Intangible assets, including goodwill, are amortised and property, plant and equipment depreciated over their expected useful Jives as from the inception of their use. Land and investment property are not depreciated. Future depreciation and amortisation is adjusted if there is a change in estirnated useful life.

Gains and losses on the sale of property, plant and equipment are included in other operating income and expenses.

3. f 1 Other operating income

Other operating incorne includes recharges to other Viacom entities and income which does not fall within the regular operations.

PricewaterhouseCooperc Accountznts v#. For identification purposes only

MTV Networks B.V. AMSTERDAM ( in '000)

3.12 Finance costs

Interest income and expenses Interest income and expense are time apportioned, taking int0 account the effective interest rate for the relating assets and liabilities.

Dividends Dividends receivable from participations are recognised as soon as the Company acquired the right to the divide nds.

3. j3 Taxation Tax on result is calculated on the profit/loss before taxation in the income statement, taking into account any losses carried forward from previous financial years, tax-exempt items and non-deductible expenses, and using current tax rates. Account is also taken of changes in deferred tax assets and deferred tax liabilities owing to changes in the applicable tax rates.

3. i 4 Financial instruments

Market risk MTV Nehvorks B.V. rnainly operates in the European Union. The currency risk for MTV Networks B.V. largely concerns positions and future transactions in US dollars and pounds Sterling. The denominated currency is euros, so the currency risk is minimal and there is no hedging.

Interest rate risk The company incurs interest rate risk on interest-bearing receivables (in particular those included under financial assets and cash) and on interest-bearing non-current and current liabilities (including borrowings).

Where variable-interest loans are concerned, MTV Networks B.V. incurs risk regarding future cash flows.

Credit risk MTV Networks B.V. does not have any significant concentrations of credit risk. Sales are made to

* customers that meet the company's credit rating. Goods are soldlservices provided subject to payment deadlines for 30 days. A different payment period may apply to major supplies, in which case additional securities are demanded, including guarantees.

PticewaterhouseCoopers Accountants N.Y7 For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

4 Notes to the balance sheet

O i January 2006 Acquisition costs Accumulated amortisation

Goodwill Other

Book value 31.559 3.005

Movements 2006 Additions Amortisation

31 December 2006 Acquisition costs Accumulated amortisation

Book value 29.542 2.892

Amortication rates 5,0% 20-33,3%

The goodwill resulted from the acquicition of TMF B.V. in 2001. Subsequent to the acquisition date, the assets, liabilities and activities of TMF were included in M N Networks B.V. and the company TMF B.V. was liquidated.

Other intangibte assets comprise the Nickelodeon library for Scandinavia and emerging markets acquired per 1 January 2003 from Nickelodeon International Ltd. and the cost of subsequent additions to the library. Amortisation is catculated based on the estimated economic life of the individual titles.

PricewaterhouseCoopers Accountants %V. For identification purposes only

MTV Nehuorks B.V. AMSTERDAM (in '000)

4.2 Property, plant and equipment

Machinety and Other non- Leasehold equlpment current assets Improve-ments Transponder Total

O 1 January 2006 At cost Accumulated decreases in value and depreciation

Book value

Movements 2006 Acquisitions: Additions Disposals

i; - Decreases in value: Depreciation Depreciation disposals Revaluations

31 December 2006 At cost Accumulated decreases in value and depreciation

Book value

Depreciation rates

PricewaterhouseCoopers Accountants P+y. For identification purposes onty

MTV Networks B.V. AMSTERDAM (in '000)

Investments in

gr*uP Assoclated Other cornpanles cornpanlos Jolnt ventures receivables Total

01 January 2006 Book value

Movements 2006 New acquisitions Reclass Disposals

, 1 31 December 2006 . i Book value

In 2006 the Company incorporated a 100% share in Viacom Acquisition KK in Tokyo, Japan.

The Company acquired an additional 12% share in Game One SAS and has funded MTV Networks Productions BV with share premium.

Participations Participations directly held by MTV Networks B.V. are:

Share in equity

Investments in group companies and statutory seat M W Networks Productions B.V., Amsterdam, The Netherlands Preview Investments B.V., Amsterdam, The Netherlands MTV Networks Japan B.V., Amsterdam, The Netherlands M W Networks Belgium BVBA, Lint, Belgium

I j M W Networks SARL, Paris, France M W Networks LDA, Lisbon, Portugal Viacom Holdings Brasil LTDA, Sao Paulo, Brasil Game One SAS, Paris, France Viacom Acquisition K.K., Tokyo, Japan MTV Networks Polska VOF, Amsterdam, The Netherlands

Joint ventures and associated companies MTV Group Japan K.K., Tokyo, Japan MTV Channel Espana St, Madrid, Spain MTV Networks de Mexico S de RL de CV, Mexico City, Mexico Servicios para Empresas de Entretenimiento S de RL de CV, Mexico City,

PricewaterhouseCoopers Accountants For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

Other receivables Other receivables include an interest-bearing loan to group company Game One SAS. This loan bears interest at EONIA +2.5% per year. No repayment schedufe is in place.

4.4 Receiva bles 2006

Trade debtorc Arnounts due from affiliated cornpanies Accrued income Other receivables and prepayrnents

4.5 Cash and cash equivalents 5 . All cash and bank balances are available on demand. The Company is party to Viacom group overdraft

facilities at Lloyds TSB Bank of up to £ 60 million gross.

PricewaterhouseCoopen Accountants %Y. For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

4.6 Shareholders' equity

Share capita1 The authorised share capital of the company amounts to EUR 90.000 and consists of 180 ordinary shares of EUR 500 each.

Issued share capital amounts to é18.500 and consists of 37 ordinary shares with a nomina1 value of EUR 500 each (2005: 37).

On 23 December 2005, 37 shares in the capital of the Company, jointly representing the entire issued share capital of the Company, were transferred from Viacom International (Netherlands) B.V. to Viacom Global (Netherlands) B.V.

The movements in shareholders' equity are as follows:

Issued share Share Retained Result for the capital premium earnIngs year Total

Movements 2005 Share issue Appropriation of result prior year Result current year

31 December 2005

01 January 2006

Movernents 2006 Share issue Appropriation of result prior year Result current year

31 December 2006

Issued share Share Retained Result for the capita] premium earnlngs year Total

In 2006 the parent company Viacom Global (Netherlands) B.V. funded M N Networks B.V. with additional share capita!.

PricewaterhouseCoopers Accountants &y. For identification purposes oniy

MTV Networks B.V. AMSTERDAM (in '000)

Movernents in provisions are specified as follows:

Deferred tax liabillties

01 January 2006

Additions Releases

31 December ZOOG

Financial lease obligations Loan from parent cornpany

Financial lease obligations Repayment liabilities within 12 months of the end of the financial year amounting to €974,000, are included under the current liabilities. The remaining leaseperiod is less than five years.

Loan from parent conlpany During 2005 the loan from former parent company, Viacom International (Netherlands) B.V. was transferred to Viacom Overseas Holding C.V. in Curacao, Netherlands Antilles. The loan is denominated in US Dollars and bears no interest. No repayment schedule is in place.

4.9 Currenf liabilities i

Bank overdrafis Trade creditors Arnounts due to affiliated companies Corporate income tax Accruals and deferred income Other liabilities

PricewaterhouseCoopers Accountants N% For identification purposes only

MTV Networks B.V. AMSTERDAM ( in '000)

4.10 Commitments nof included in the balance sheet Third-party liability M W Networks B.V. is a partner in MTV Networks Polska VOF in Amsterdam. As such, it is jointly and severally liable for al1 debts incurred by MTV Networks Polska VOF.

Pension obligations The Company has made use of the option to account for a defined benefit scheme as a defined contribution scherne. Therefore, the risks relating to thic pension scherne are not refiected in the balance sheet.

Fiscal unity The Company forms a fiscal unity for corporate incorne tax with MTV Networks Productions B.V., MTV Networks Japan B.V., Preview Investments B.V., Invisions Holding B.V., Visionair Television B.V., Kindernet C.V. and MTV Networks Polska vof. Under the Tax Collection Act, the Company is jointly and severally liable for the taxes payable by the group.

I ' .. a

Lease cornmitments The lease comrnitments as at 31 December 2006 can be specified as follows:

Term < 1 year Term 1-5 years Term r 5 years Total

Rent agreements buildings Equipment Other

31 December 2006

PricewaterhouseC~opers Accountants N-(. For identification purposes only

M N Networks B.V. AMSTERDAM (in '000)

5 Notes to the income statement

5. l Revenue The revenue increased by 16,0% compared to last year.

Revenue split by region:

Netherlands Europe Rest of the world

Revenue split by order type:

Advertising Syndication Barters Online Affiliates Others Mobile Other

PricewaterhouseCoopers Accountants For identification purposes only y?.

MTV Networks B.V. AMSTERDAM (in '000)

5.2 Wages, salanes and sociai security costs 2006

Wages and salaries Pension costs Other social security costs Other personnel costs

5.3 Amortisation of intangibie assets and depreciation of propetfy, plant and equipmenf and other changes in value Amortisation and depreciation

2006 2005

Intangible assets (note 4.1) (- ', Property, plant and equiprnent (note 4.2)

5.4 Other operating income 2006

Other operating income 34.933 3.224 34.933 . 3.224

PricewaterhouseCoopers Accountaris N.V. For identification purposes oniy 26

MTV Nehvorks B.V. AMSTERDAM (in '000)

Resuit on participations carried at net asset value Interest income Interest expense Foreign exchange gainsl(losses)

The income tax expense of E 9.606k can be broken down as follows:

Operating incorne Income tax expense

) Effective tax rate Applicable tax rate

Operating incorne before taxation in the financial statements 36.507

Current year taxation Deferred tax liability Taxation prior years due to corrected estimates and final tax assessments

The applicable tax rate is based on the relative proportion of the group companies' contribution to profit and the tax rates ruling in the countries concerned.

The effective tax rate differs from the applicable tax rate due to the amortisation of goodwill, which is not tax-facilitated, and the exclusion of deferred income tax assets in respect of losses for the financial year. The effective tax rate differs from last yeafs rate due to the relatively higher amortication of goodwill in the income statement.

PricewaterhouseCoopers Accocintanis N& For identification purposes oniy

MTV Networks B.V. AMSTERDAM (in '000)

6 Supplementary information

6.1 Employees During this financial year an average of 158 employees (2005: 153) were employed by the company.

6.2 Equity incentive plan Financial instruments are used to reduce interest rate and foreign currency risks. Financial instruments are not used for speculative purposes. Foreign currency instruments are used to reduce the foreign currency risk arising on operating activities and financing in foreign currencies. Forward exchange contracts with a term of up to one year are used to hedge the foreign currency risks from operating activities. The valuation of these contracts at year-end rates, equals the valuation of the respective business transactions.

6' 1 The exercise price of options granted shall not be less than the fair market value of the common stock on . . the date of grant. Options generally vest equally over a four-year period from the date of grant and have a maximum term of up to 10 years after the date of grant. Restricted share units vest equally over a five- year period from the date of grant.

Share options The movements in share options outstanding can be specified as follows:

Weighted Nurnber of average

share options exercise price

Outstanding as at 1 January 2006

Granted Forfeitedlcancelled

Outstanding as at 31 December 2006

Options exercisable at 31 December 2005 Options exercisable at 31 December 2006

PricewaterhouseCoopers Accc:!niari:s i426 For identification purposes oiiiy

M N Networks 8.V. AMSTERDAM (in '000)

As at 31 December 2006 the share options outstanding can be specified as fofiows:

Welghted average

remalnfng Number of contractual life

Exercise price share optlons (years)

Outstanding as at 31 December 2006 34.592

Resfricted share units The parent company determined in 2005 to grant restricted share units to participating managers who previously received non-qualified share options in previous years. The grant-date fair value of the restricted share units was $52.37 and the restricted units vest rateably over a fìve-year period.

The movernents in restricted share units outstanding can be specified as follows:

Number of Weighted restricted average grant-

share units date falr value

Outstanding as at 1 January 2006

Granted Vested Forfeited

Outstanding as at 31 December 2006

PricewaterhouseCoopers Accountat-its N For identification purposes oniy

MTV Networks B.V. AMSTERDAM (in '000)

6.3 Related parties Al1 Viacom group companies and the participations mentioned in note 6 are considered to be related parties. Related party transactions are made at arm's length.

Balance sheet positions with affiliated companies are as follows:

2006 Amounts due from aJfliated companies

M N Networks Polska VOF M W Networks Belgium BVBA Kindernet C.V. MTV Networks Productions B.V. M W Networks Europe . Nickelodeon International Ltd. Other

Amounts due to affiliafed companies

Nickelodeon International Ltd. The Box Holland B.V. M N Networks AB MTV Networks Europe M W Networks Belgium BVBA Viacom Global (Netherlands) B.V. Viacom Inc.

PricewaterhouseCoopers AccouritantS %l. For identification purposes only

MTV Networks B.V. AMSTERDAM (in '000)

Sales to affiliated companies and costs charged by afiliated companies are as follows:

Sales to afiliated companies

M W Networks Polska VOF M N Nehvorks Productions B.V. Kindernet C.V. M W Networks Belgium BVBA Nickelodeon International Ltd. The Box Holland B.V. MTV Nehvorks Europe

n Costs charged by affiliated companies

M W Networks Productions B.V. MTV Networks Europe Nickelodeon International Ltd. M W Networks Belgium BVBA The Box Holland B.V.

PricewaterhouseCoopers Ac~:o!~nt;tiis N.V. For identification purposes only 31

MTV Networks B.V. AMSTERDAM n (in '000)

Amsterdam, March 27,2008

Currell, J.R.

M W Networks B.V. tt. Neveritaweg 6 1033 W C AMSTERDAM

PricewaterhouseCoopers Accountants %y. For identification purposec only

M N Nehuorks B.V. AMSTERDAM (in '000)

Other information

Appropriation of net result

in accordance with the company's articles of association, the result for the year is at the disposition of the shareholders at the Annual General Meeting.

Proposed profit appropriation

The Directors propose is to add the profit of € 26.901 .O00 to retained earnings. This proposal has already been reflected in the financial statements.

Auditors' report

The auditor's report is included on page.34. r. ,;t

Amsterdam, March 27,2008

PricewaterhouseCoopers Accountants N.ijs For identification purposes only

To the General Meeting of Shareholders of M N Nehvorks B.V.

Auditor's report

Report on the financial statements

PricewaterhouseCoopers Accountants N.V. Newtonlaan 205 3584 BH Utrecht P.O. Box 85096 3508 AB Utrecht The Netherlands Telephone +31 (30) 21 9 15 00 Facsimile +31 (30) 219 15 55

We have audited the accompanying financial statements 2006 of MTV Nehivorks B.V., Amsterdam as set out on pages 6 to 32 which comprise the balance sheet as at 31 December 2006, the income statement for the year then ended and the notes.

The directors' responsibility The directors of the company are responsible for the preparation and fair presentation of the financial statements and for the preparation of the directors' report, both in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethica1 requirements and plan and peiform the audit to obtain reasonable assurance whether the financiai statements are free frorn material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, wkiether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit afso includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as wel1 as evafuating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufíicient and appropriate to provide a basis for our audit opinion.

Basis for qualified opinion The notes to the financial statements do not disclose the remuneration of directors and former directors which constitutes a departure frorn 2:383 sub 1 of the Netherlands Civil Code.

Qualified opinion

PricewatehouseCoopers is the trade name of arnong others the following cornpanies: PricewaterhouseCoopers Accountants N.V. (Chamber of Commerce 34180285). PricewaterhouseCwpers Betastingadviseurs N.V. (Chamber of Commerce 34180284), PticewaterhouseCoopers Advisory N.V. (Chamber of Commerce 34180287) and PlicewalerhouseCoopers B.V. (Chamber of Commerce 34180289). The services rendered by these cornpanies are govemed by General Terrns & Conditions, which include provisions regarding our liability. These General Tenns & Conditions are liled with the Amsterdam Chamber of Commerce and can aho be viewed at www.pwc.cordnl

In our opinion, except for the effect of the matter described in the 'Basis for qualified opinion paragraph', the financial statements give a true and fair view of the financial position of MTV Networks B.V. as at 31 December 2006, and of its results for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

Report on other legal or regulatory requirements

Pursuant to the legal requirement under 2393 sub 5 part e of the Netherlands Civil Code, we report, to the extent of our cornpetence, that the directors' report is consistent with the financial statements as required by 2:391 sub 4 of the Netherlands Civil Code.

Utrecht, 27 March 2008

PricewaterhouseCoopers Accountants N.V.

Originalfy signed by drs. J.W. Middelweerd RA

Auditor's report MTV Networks B.V. 212