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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