Divisional detailsTelevision

1

● Multiple factors are driving growth in the global television market

− The global number of television households continues to grow

− There are a greater number of distribution customers in the marketplace

− SVOD customers (e.g., Netflix, Amazon Instant Video, local SVOD players) are creating greater demand for studio content

● U.S. television product, particularly TV dramas, is increasingly sought for international markets

● Affiliate fees are generally stable; ad sales have rebounded since the 2008 downturn, although economic conditions in some territories have slowed growth

● The television industry will also face some challenges

− Studio programming prices continue to rise creating margin pressure on networks

− Volatility of foreign currencies creates uncertainty for predicting financial results in U.S. dollars

● Competition across the global TV industry remains strong, however SPE’s assets and expertise leave it well positioned to succeed

TelevisionMarket Update

2

Media networks

3

• Continue to focus on maximizing efficiencies

• Continue to invest in both local and global original programming

• Continue to invest in programming, marketing, ad sales infrastructure, and technology infrastructure for Crackle U.S.

• Invest in programming and marketing for GSN

Media NetworksStrategic Priorities

4

Existing Operation

s

New Operation

s

• Launch a Hindi language rural channel, TV ON, in India

• Launch a second Hindi movie channel in India, MAX2

• Selectively launch channels in new and existing territories through EBIT accretive acquisitions to build scale and remain competitive

SONY GENERALENTERTAINMENT

AXN GENERALENTERTAINMENT

ANIME/YOUTHLIFESTYLE/MUSIC

DIGITAL

MOVIES

PARTNER NETWORKS

Media NetworksNetworks Brands by Genre

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SPT’s portfolio of network brands cover a wide variety of genres and demographics

159 COUNTRIES 860+ MILLION HOMES 124 FEEDS 22 LANGUAGES

EUROPE & RUSSIA

Media Networks Networks Worldwide Reach

6

KOREA

AUSTRALIA

AFRICA

JAPAN

ASIA

EUROPE & RUSSIA

LATIN AMERICA

NORTH AMERICA

$190

$243

$266 $230

$335

$375

$36

$1

$930

$2,004

$0

$500

$1,000

$1,500

$2,000

$2,500

$0

$100

$200

$300

$400

$500

$600

$700

FYE11 FYE12 FYE13 FYE14 FYE15

One-Time Events/Monetizations

Operating Income

7

Note: All years restated on a consistent basis to include U.S. channels and Networks HO Aspire; excludes 3net

Media NetworksStrong and Consistent Earnings Growth

• Revenue reaches over $2 billion in FYE15, growing at a 21% CAGR over the five year period

• Operating Income reaches $335 million in FYE15, growing at a 15% CAGR over the five year period (excluding monetizations)

OI Revenues

• Ad sales across the portfolio are expected to grow by +20% year on year

• Continue to invest in new business opportunities to help sustain the strong growth profile into the future (i.e. GEC and Movie channel in India, strategic EBIT accretive acquisitions such as Bash Games in US)

($ In millions)

$565

Revenues Budget Assumptions

$266

$336

North America; 27%

Europe; 14%

Latin America; 16%

India; 34%

Rest of Asia / Australia; 10%

Operating Income FYE15

North America; 7%Europe; 8.9%

Latin America; 33%India; 29%

Rest of Asia / Australia; 22%

Operating Income FYE11

Media NetworksOperating Income by Region

8Note: All years restated on a consistent basis to include U.S. channels; excludes 3net

As a result of recent investments, North America and Europe grow as a percentage of Networks’ Operating Income from 16% in FYE11 to 41% in FYE15

● Revenue and EBIT are budgeted for double digit year-over-year growth

− Revenue is expected to grow from $588 million to $695 million (+18%) driven mainly by recovery in domestic Indian ad sales performance and ongoing digitization efforts

− EBIT will grow from $122 million to $151 million (+24%) (excluding new channel launches) with the increase primarily from higher expected performance at SET

● In spite of FX and economic headwinds, MSM expects to continue its strong growth trajectory in FYE15 and increase its offering in India

− TV On, a new Hindi GE channel targeting a female-centric, more rural audience, is expected to launch in June 2014

− Goal is to capture 10% incremental share from the Hindi GEC market

− MAX 2, a library Hindi movie channel, is expected to launch in April 2014

− A flanker channel for the existing MAX channel which will help MSM mitigate a recent rule change that limits ad minutes by broadcast hour

● Indian Premier League (IPL) Cricket

− IPL season 7 will shift to an 8 team, 60 match format - ad sales and license fees reduced accordingly, EBIT expected to grow slightly from Season 6

− EBIT margin remains strong at 22%

− Season 7 may move outside India for the second time in its history due to general elections running concurrently with the tournament. Final decision still TBD

Media Networks MSM India update

9

Television ProductionS

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• Drama – Maximize value of worldwide appetite for quality drama across all outlets with continued emphasis on broadcast and cable and additional focus on new platform opportunities

• Comedy – Maintain and support a strong comedy strategy as part of our overall portfolio business as comedy continues to maintain strong value in the syndicated marketplace

• First Run Syndication – Stabilize and grow the Queen Latifah daytime series for the 14/15 broadcast season and look to expanding the business into new lower cost opportunities

Television ProductionStrategic Priorities

11

U.S. TV Productio

n

Int’l TV Productio

n

• Create IP that travels (e.g. The Patch, Fan Band, Popheads, Beat Shazaam)

• Maximize prelaunch of The Crown through integrated sales, marketing and publicity campaign

• Rebuild SPT Russia’s capacity to produce enduring sitcoms and dramas that travel

• Support and strengthen existing production companies

• Support SPT Latin America/Teleset to execute 5 year plan to build high quality, sustainable library of Spanish language programming for the region

• Seek extension of HUASO (China) license and restructure operation

• Explore expansion opportunities for network of production companies in key strategic markets (e.g. Scandinavia, Turkey, Netherlands, Australia, N. Ireland)

Scripted Non-Scripted Other

Drama Comedy Game Show Reality/Talk MOWs / Mini

Network • Battle Creek (CBS)

• Blacklist (NBC)

• Days of our Lives (NBC)

• Unforgettable (CBS)

• The Young & the Restless (CBS)

• Goldbergs (ABC) • Shark Tank (ABC)

• Sing Off (NBC)

Cable • Before Crack (Netflix)

• Better Call Saul (AMC)

• Drop Dead Diva (Lifetime)

• Helix (SyFy)• Justified (FX)• Masters of

Sex (Showtime)

• Outlander (Starz)

• Untitled KZK Project (Netflix)

• Men at Work (TBS) • Mom’s Got Game (OWN)

• The Dorm (MTV)

• Fallout Asylum (SyFy)

• Outlaw Prophet (Lifetime)

• Red Tent (Lifetime)

First Run Syndication

• Jeopardy!

• Wheel of Fortune

• The Dr. Oz Show

• The Queen Latifah Show

U.S. ProductionCurrent Programs

12Note: Current Programs reflect named programs projected for the 14/15 broadcast season. TBD series are not reflected.

SPT’s portfolio of current programs is diversified across all genres to balance risk vs. reward

($52)

$0

$57

$126

$92

($80)

($60)

($40)

($20)

$0

$20

$40

$60

$80

$100

$120

$140

FYE11 FYE12 FYE13 FYE14 FYE15

U.S. ProductionCurrent Series, Pilots & Development

Significant contribution from current series

• Breaking Bad approaches $275 million in series ultimate profit due to performance in all markets (i.e Home Entertainment, SVOD and international), contributing $150 million in operating income for FYE14

• The Blacklist is ordered for a second season and becomes available in syndication in FYE15

Budget AssumptionsOperating Income from Current Series, Pilots &

Development:

New series investment ($82) ($95) ($93) ($134) ($77)

& development

All other current series $30 $95 $150 $260 $169

Total current series ($52) $0 $57 $126 $92

13($ In millions)

$138 $111 $118 $112 $127

$103$104 $117 $106 $91

$26 $34

$36 $38 $32

$163

$0

$100

$200

$300

$400

$500

FYE11 FYE12 FYE13 FYE14 FYE15

Licensing Daytime Serials

Wheel of Fortune and Jeopardy! Library

• Wheel of Fortune and Jeopardy! are renewed through 15/16 season

• Licensing deal extended through 2024 generating $163 million in EBIT in FYE14

• Days of Our Lives and The Young and the Restless renewed through 15/16 and 16/17 seasons, respectively

U.S. ProductionLibrary, Game Shows and Daytime Series

Budget Assumptions

Core programs continue to perform

$267$249

$271

$419

14($ In millions)

$250

International ProductionOperating Companies

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Miami (Latin America/USH)

Bogota

Sao Paolo

Rome

Cologne MoscowBeijing

Hong KongDubai

BeirutCairo

ParisLondon

Amsterdam

AMERICAS EMEA (Europe, Middle East, Africa)

ASIA

Culver City

Companies in 13 countries around the world covering multiple regions;Programs aired in 88 countries, 73 languages and counting…

Tuvalu

$12

$5

$17

($3)

$6 $10

$15

($10)

$--

$10

$20

FYE11 FYE12 FYE13 FYE14 FYE15

Op Income Shine Equi ty

• Continue internal collaboration to drive business across Sony companies

• Who Wants to Be a Millionaire continues to be a major profit contributor

• Strong growth from Production across UK and Europe

9% NM 3% 3%Margin 3%

International ProductionFinancial Summary

Budget Assumptions

16($ In millions) Note: FYE12 and FYE13 exclude gains from the Shine monetization of $26 million and $12 million, respectively

$199 $206 $220

$301

$434

$--

$150

$300

$450

FYE11 FYE12 FYE13 FYE14 FYE15

Revenue

Television distribution

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• Leverage existing relationships to find new homes for cancelled series and maximize selling opportunities for serialized dramas (e.g. The Blacklist, Helix)

• Negotiate a lucrative, long-term deal for feature slate output on basic cable

• Increase licensing of library product in diginet space (e.g. Antenna, Cozi, GetTV)

• Split rights with Turner to sell an additional Seinfeld window

Television DistributionStrategic Priorities

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U.S. Distribution

International Distribution

• Maximize growth opportunities across SVOD and emerging markets

• Look for local content creation opportunities (e.g. Russia, UK, Latam) and work within SPT to find new ways to create shows (e.g., EMEA co-production with US Production)

• Close long-term deals in key markets (i.e. Russia, S. Korea, Italy)

• Pursue distribution opportunities with non-traditional content creators such as Amazon

$586 $716 $795 $944 $1,068 $233

$278 $240$231

$221

$1,200

$1,335 $1,443 $1,328 $1,274

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

FYE11 FYE12 FYE13 FYE14 FYE15

MPG Acquisit ions TV

Distribution Gross Revenue

• Secure long-term deals in key territories

• Exploit growth opportunities with SVOD players across the globe

• Maximize the value of key properties (e.g. The Blacklist, Seinfeld)

Television DistributionMaximize Distribution Sales

Budget Assumptions

Generate over $2.5 billion in gross revenue in FYE15

$2,019

$2,329$2,478 $2,504

19($ In millions)

$2,563