1 1 sony pictures entertainment information technology fiscal year 2015 q2 forecast and 2014 mid...
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SONY PICTURES ENTERTAINMENT
Information Technology
Fiscal Year 2015 Q2 Forecast
and
2014 Mid Range Plan
August 7, 2014
2Wave 5 Assessment & Data Review – Confidential, Not for distribution - Attorney Client Privilege
Executive Summary
Budget to Q2 Variance:• IT is expected to be $2.7m unfavorable to budget due primarily to:
– Accounting for SPIRIT World & C2 Sales ($1.2m)
– Discontinued Brazil JV allocation to Fox ($0.7m)
– Unbudgeted / transferred headcount ($0.5m)
– Non cap associated with additional cap spending ($0.5m)
From PY MRP ($9+m)– Groups transferred in FY15, net of allocation ($2.5m)
– TV Networks growth in UK ($1.2m)
– Accounting for SPIRIT World & C2 Sales ($2.2m)
– Non cap & depr. on incremental FY15 projects ($3.0m)
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Overview
• FY15 Budgeted headcount higher than 2014 MRP by 19, offset by telecom cost & overhead allocation to projects
• Q2 headcount variance from budget: Interactive (4) and AMMO (2)
• Incremental FY16 Costs:• Three incremental heads for UK TV growth• Elimination of DMG salary allocation ($500k)• SaaS for CSC ($500k)
• Year over year gross overhead growth between 3 and 4.4%
• Outer year depreciation & non-cap spending based on 2013 MRP + incremental on active projects
• Assumes no changes to allocation methods to LOBs, 3rd parties, and projects
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2013 MRP to FY15 Budget & Q2 Forecast
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Depreciation Expense
DMG ($3m) not PY MRP + Increment
al FY15 spending
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Allocations
• If the “allocations at risk” items are discontinued, net unfavorable variance from MRP = $1.6m• Proceeds from C2 assumed to be $0 (reduces NBV)• Proceeds from Spiritworld sale ($1.7m) now accounted for under depreciation
Potentially discontinued in the
outer years ($6.4m)
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Projects
Projects
Non-Cap (Project Expense
s)
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Project and Non-Cap Risks
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MRP 2013 vs. 2014
• Increased IT organization by 28 heads• Incremental Outside Service expenses for DMG, TV and various LOBs • Higher depreciation and non-cap due to added project spend