SPE Investment Approach

September 2013

CONFIDENTIALDRAFT

Key Investment CriteriaDRAFT – FOR DISCUSSION

Market Growth

Strategic Fit

Target Return

SPE identifies investments based on the following key criteria

SPE looks to expand its core businesses or leverage its strengths to enter complementary businesses (SPE does not make strictly financial investments)

Investments should take advantage of industries and/or territories with anticipated growth

SPE generally targets an IRR of at least 10% on a post-tax basis for its investments

SPE utilizes a rigorous diligence process to determine whether an investment meets SPE’s goals (see next slide)

Investment Process

Strategic Rationale

Valuation and Diligence

FinalEvaluation

Approval Process

• Determine the strategic rationale for the investment

• Supports a core business strategy?

• Diversifies SPE into a new business?

• Synergistic with other businesses?

• Expands existing businesses into new territories?

• Provides an opportunity for financial benefit?

• Engage target management in discussions regarding business, finance, legal, and other aspects

• Establish SPE’s view on future financial performance of the business

• Execute full breadth of valuation methodologies: Discounted Cash Flow Analysis, comparable companies and precedent transactions

• Select appropriate discount rates through comparable company cost of capital analysis and adjusting for potential company, industry or market risks

• Employ independent 3rd parties to provide valuation and diligence support, if necessary

• Begin negotiations of transaction documents

• Determine if final deal terms and valuation support strategic goals for growth of SPE’s business

• Confirm that the valuation is favorable and will meet SPE’s returns goals

• Analyze risk and potential impact of any issues that may arise (e.g., integration risk, execution risk, financial risk, etc.)

• Undergo comprehensive approval process both within SPE as well as with Sony Corp.

• Internal approval process to obtain SPE executive approval and potentially SPE Board approval

• IC and GEC deliberations to obtain Sony Corp. approval and clearance for investment of funds

DRAFT – FOR DISCUSSION

Current Focus

• SPE is currently focused on the expansion of TV networks and TV production

• The global presence and scale of SPE’s TV network portfolio coupled with the growing importance of networks, both domestically and internationally, will enable SPE to successfully invest for the future

– Pay television continues to expand, particularly overseas

– Networks create substantial asset and brand value as they mature

– Networks offer high margins that are insulated from economic volatility by dual advertising and subscription revenue streams

• TV production represents a core strength of SPE and presents strong secular trends to support further investment

– Worldwide TV viewership continues to grow

– Demand for local programming and for the adaptation of proven “Hollywood formats” has increased exponentially

– TV production is a natural partner to the TV networks business and together can be mutually beneficial to each other

DRAFT – FOR DISCUSSION

• SPE was seeking to acquire 53% of Maa Television Network Limited (“Maa TV”), a bouquet of 4 television channels based in the Southern Indian state of Andhra Pradesh, in Q2 FYE13 for a total investment of $112.8MM

– Payments were to be made in two installments: $107.4MM at close for 51% and an additional $5.4MM in FYE15 for 2%

– The transaction also granted SPE a 2-year option to acquire substantially all of the remaining minority position in Maa TV at fair market value beginning on the 5th anniversary of closing

• Strategic and financial benefits for acquiring a controlling stake in Maa TV included:

– Diversifying SPE’s international cable networks business and market exposure in India beyond its current northern Hindi-speaking regions

– Establishing a strategic presence in Southern India, improving SPE’s competitive positioning and national footprint

– Capitalizing on ad revenue growth for Southern India regional language channels

– Providing future collaboration opportunities with Sony’s TV, electronics, and mobile divisions and franchises

– Broadening and deepening SPE’s international brand exposure

DRAFT – FOR DISCUSSION

Case Study: Maa TV (Q2 FYE13)

• According to SPE’s base case projections, the net present value (NPV) from the investment was estimated at $23MM, the internal rate of return (IRR) was estimated at 17% and the payback period was estimated at 11 years

– SPE used a 12.5% discount rate for this analysis based on the weighted average cost of capital for pure-play comparable companies, adjusted for any additional company, industry and/or market risk that was anticipated

• SPE’s TV business development team managed the diligence process, which included analysis of strategic fit, business plan preparation, valuation, structuring, negotiation and documentation, with support from Finance, Legal, Tax and Compliance groups

• SPE also retained 3rd party advisors, Deloitte LLP and Ernst & Young, to conduct an independent valuation, PPA and due diligence

• The transaction was approved by SPE and SPE Board executives, and reviewed by Sony Corp.’s Investment Committee and Group Executive Committee in Q2 FYE13

• The transaction is currently on hold as a major shareholder of Maa has been arrested in India, raising concern that the Indian Tax Authority may file claim against SPE in relation to its involvement with Maa TV

DRAFT – FOR DISCUSSION

Case Study: Maa TV (Q2 FYE13)

DRAFT – FOR DISCUSSION

Case Study: Maa TV (Q2 FYE13)

Valuation Summary (100% Value)

$120

$140

$160

$180

$200

$220

$240

$260

Source: Deloitte Valuation(1) SPE’s proposed purchase of 53% for $113MM represents the purchase of $104MM of equity and includes the assumption of $9MM of debt.

$257

$235

$195$168

$144

Proposed SPE enterprise value ($205MM)(1) for

100%

($Millions)

$208

Weighted Overall ValueDCFComparables

Public/Transaction

• Deloitte LLP was engaged to value Maa TV

• SPE’s proposed purchase price was at the low end of the value that SPE or another strategic buyer was expected to derive from an acquisition of Maa TV