SKY NETWORK TELEVISION ANNUAL RESULTS 2011

CEO

JOHN FELLET

$619$659 $692

$742$797

2007 2008 2009 2010 2011

Total Revenue

5% 7.2% 7.4%6.5%

Total Net Gain

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total Net Gain

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

-8.00%

-3.00%

2.00%

7.00%

12.00%

GDP

Earthquake Impact

Commercial DisconnectsUninhabitable Full Disconnect Subscribers opting for temporary downgrade

Loss of Revenue - Temporary Downgrades $409kJune 2011 - Domestic Disconnects $216k

- Commercial Disconnects $633K

Feb 11 Jun 11 Aug 11

10%12%14%16%18%20%22%24%26%28%30%32%

Jun-98

Jun-99

Jun-00

Jun-01

Jun-02

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

Moving Annual Churn

0.50%

1.00%

1.50%

2.00%

2.50%

Jul

Aug

Sep OctNov

Dec Jan

Feb Mar AprMay Ju

n

2009 2010 2011

Monthly Churn

Subscribers

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

UHF Digital Wholesale MY SKY

Subscriber Growth

‘000 2010 2011 % Change

DBS (Satellite) Residential 469.3 395.3 (15.8%)

DBS MYSKY 189.9 279.9 47%

DBS Wholesale 118.4 124.7 5.3%

Commercial/Other 24.8 29.4 18.5%

Total Subscribers 802.4 829.4 3.4%

19,760 27,764

103,991

189,975

279,875

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

275,000

2007 2008 2009 2010 2011

MY SKY Subscribers

73,75184,770

103,974

127,703

151,509

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

2007 2008 2009 2010 2011UHF Digital MYSKY

Additional Outlets

Total ARPU

$60.50$62.10

$64.00

$67.61$70.45

2007 2008 2009 2010 2011

$41

$23

$40

$23

$36

$22

$33

$21

$39

$24

2007 2008 2009 2010 2011Year End 30 June

SKY PRIME

Advertising Revenue

Total Television Market Advertising Revenue

4%-2%

-7%-10%

-16%-18%

-4%3%

8%11%

4%-1%

5%

Jun 08 Qtr Sep 08Qtr

Dec 08Qtr

Mar 09Qtr

Jun 09 Qtr Sep 09Qtr

Dec 09Qtr

Mar 10Qtr

Jun 10 Qtr Sep 10Qtr

Dec 10Qtr

Mar 11Qtr

Jun 11 Qtr

Programming Costs % Revenue

33% 32% 33% 33% 32%

2007 2008 2009 2010 2011

$249.4 $266.6 $261.0$287.5

$321.7

2007 2008 2009 2010 2011

EBITDA

$77.9 $97.7 $88.1$103.0

$120.3

2007 2008 2009 2010 2011

Net Profit/(Loss)

CFO

JASON HOLLINGWORTH

Results Summary

$NZ Million 2010 2011 % Change

Revenue 741.8 796.9 7.4%

Operating Expenses 454.3 475.3 4.6%

EBITDA 287.5 321.6 11.9%

Depn & Amort 112.5 124.9 11.0%

EBIT 175.0 196.7 12.4%

Interest 31.0 25.3 (18.4%)

Tax 43.5 51.7 18.9%

Other (2.5) (0.6) (64.0%)

Net Profit after Tax 103.0 120.3 16.8%

Revenue Analysis

$ NZ million 2010 2011 %Change

Residential Satellite Subscriptions 594.9 641.3 7.8%

Other Subscriptions 61.9 59.1 (4.5%)

Installation 14.6 13.8 (5.5%)

Advertising 53.7 62.7 16.8%

Other Income 16.7 20.0 19.8%

Total Revenue 741.8 796.9 7.4%

Expense Analysis$million 2010 2011 % Change

Programme rights 195.8 209.0 6.7%

Programme operations 50.4 46.9 (6.9%)

Subscriber management 60.2 65.9 9.5%

Sales and marketing 39.2 40.9 4.3%

Advertising 16.9 19.4 14.8%

Broadcasting and infrastructure 74.5 72.7 (2.4%)

Depreciation and amortisation 112.5 124.9 11.0%

Other administrative 17.3 20.6 19.1%

Total Operating Expenses 566.8 600.3 5.9%

Capital Expenditure Analysis

$ NZ million 2010 2011 %Change

Subscriber Equipment 102.5 95.5 (6.8%)

Studio Upgrade 14.7 0 (100%)

Acquisition of OSB 0 34.7 100%

HD Truck 0 7.5 100%

Building 4.3 3.7 (14.0%)

Other 17.5 28.3 61.7%

Total Capital Expenditure 139.0 169.7 22.1%

Funding

FACILITY DRAWN MARGIN MATURITY

Bank Debt $375m $200m 37.5bp July 2012

Bond $200m $200m 65bp Oct 2016

2007 2008 2009 2010 2011

Decoder Material/Labour

DBS (Satellite) Install Costs

$506 $439$445$463

$392

2009 2010 2011

Decoder Material/Labour

MY SKY  Install Costs

$854 $857 $772

Prime Financials

$NZ Million 2010 2011

Revenue 20.8 23.7

Rights 14.6 15.8

Operations 3.1 3.4

Program Costs 17.7 19.2

Margin 3.1 4.5

Foreign Currency Hedging• SKY’s

hedging positions at 30 June 2011

• 92% hedged for  0 ‐12 months $US exposures @

.6962• 74% hedged for 13‐24 months $US exposures @ 

.7022

• 20% hedged for 25‐36 months $US exposures @

.7339• 90% hedged for  0 ‐12 months $ A exposures @ 

.7882

• 0% hedged for 13‐24 months $ A exposures ‐

• 0% hedged for 25‐36 months $ A exposures ‐

• average $US payment rate – for opex for year to 

June 11 = 68.88c

June 10 = 65.06c

MY SKY HDi

%

Churn

HDi

Subs

HDi

Net Gain

%

New

%

Multiroom

% 

HD Ticket

%

Upfront

June 09 9.9% 84,002 84,002 21% 41% 17% 12%

June 10 11.4% 170,248 86,246 19% 29% 30% 6%

June 11 11.0% 264,296 94,048 24% 26% 15% 5%

CEO

JOHN FELLET

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Use of Operating Cashflow

2011 Operating Cashflow

Bank Debt repayment

Dividends

Capex

SKY Highlights1.

Purchasing of the OSB Fleet

2.

New Channels‐

Kidzone

‐

June 2011

‐

MTV Classics

‐

June 2011

‐

France 24

‐

June 2011

‐

SKY Sport Mosaic

‐

Dec 2010

‐

SKY Sport 3 HD

‐

Apr 2011

‐

ESPN HD

‐

Apr 2011

3.

SKY Sports‐

Silver Ferns

‐

Jan 2011

‐

Super 15 expansion

‐

Feb 2011

‐

ANZ Championship renewal

‐

Apr 2011

‐

Condensed ITM Cup

‐

Winter 2011

‐

ICC World Cup

‐

Mar 2011

– Net profit of $120.3m, up 16.8%

– Subscriber numbers up 3.4% to 829k.

– Just under 300,000 MY SKY Subscribers , up 47%

– ARPU up 4.2% to $70.45– Churn stable at 14.0%

2011 Key Messages

Dividends

– The SKY Board has declared a fully imputed final dividend of 10.5 cps, and a special dividend of 25 cps.

– Record date is 9 September 2011.– Payment date is 16 September 2011.– Total fully imputed dividend for the year is 43.5 cps

0

10

20

30

40

50

2006 2007 2008 2009 2010 2011

Total Special

SKY NETWORK TELEVISION ANNUAL RESULTS 2011