Music Publishing Overview May 2010

1. Music Publishing Overview May 2010 CONFIDENTIAL

2. Executive Summary • SPE has been asked by Nick Oneda to identify non-strategic asset divestitures that would generate incremental EBIT in the current fiscal year • SPE believes the Music Publishing Catalog is non-core and is salable • Music publishing is a passive revenue stream • Catalog was sold twice previously (once in 1976 to EMI, once in 1988 to Filmtrax) • From SPE’s perspective, a deal would need to be carefully structured to ensure: • Buyer accurately accounts to SPE for participations • SPE retains access to key works at reasonable prices • Buyer and SPE do not have conflicts on future use of key works • A sale to a third-party would generate a gain at a Sony Group level, assuming a third-party sale is acceptable to SCA • Assumes sale would be to a financial investor (rather than a direct Sony/ATV competitor) • Financial investors are increasingly the drivers of music publishing acquisitions and may retain Sony/ATV as administer

3. Acquisitions Landscape • Sony Pictures’ Music Publishing catalog could be valued between 9 to 11x; with an implied value of over $100MM • Although multiples were not disclosed on larger deals in 2009, Evergreen Publishing, claims to be paying 9x to 13x on smaller deals • Industry sources, quoted in 2009, claim to be paying multiples of 7x to 14x • Multiples have historically been lower for libraries that are not heavily song-based • Based on recent trends, it appears feasible to structure a sale with a financial investor that is not directly competitive with Sony/ATV • Financial investors have represented a significant percentage of music publishing acquisitions in the last 10 years • This percentage is increasing, with financial investors completing X% of acquisitions over $50MM between 2000 and 2005 and X% of such deals between 2006 and 2010

4. Acquisitions Landscape Continued • ~60% of total deals listed above were completed by strategic buyers, but more recent transactions have been led by financial buyers • 2000 – 2005: 36% of the above deals were completed by financial buyers • 2006 – 2010: 45% of the above deals were completed by financial buyers

5. Deal Complexities • Participation obligations • Sony will be liable to pay program participations after the deal, regardless of deal structure • SPE could require that the acquirer pay SPE annually for estimated participations • Lowers sale price but eliminates the obligation for SPE to book the liability at close • Requires an ongoing relationship with the buyer, who must accurately account to SPE • SPE could sell the cash flow before participations and fund the cash portion itself • Higher sales price • SPE required to pay participations going forward without the associated income • SPE may be required to book a liability at the time of close • Access to and management of certain songs post-sale could be problematic, but risks may be mitigated if Sony ATV is the buyer • Future Use – SPE will seek continued access to key songs for future works (e.g., Spider-Man theme) and will need to either pre-negotiate usage rights and cost or be subject to ongoing negotiations • Conflicts – Unless prohibited in advance, there is risk a buyer would license songs for promotional purposes at the same time Sony is using in new production • Reporting – Buyer must provide accurate accounting for SPE to pay participants (1976 sale to EMI resulted in multiple audits) • SPE must determine whether to sell the rights to future compositions, which it did as part of the 1988 sale to Filmtrax (newly acquired works were sold through Dec. 1992)

6. SPE Music Publishing Economics and Valuation • Financials • Revenues are shown as “Net Publisher’s Share,” after Sony/ATV’s 10% administration fee • EBIT is after an assumed 20% participation expense • Valuation • Valuation is based on income after participations • Assumes buyer pays SPE estimated participation expenses on a go-forward basis • Estimated gain to SPE is after assuming 20-30% accelerated amortization due sale