Meeting of the Board of Representatives

October 21, 2014

Table of Contents
Market Share

Pg. 3

EMI Overview

Pg. 6

Acquisition Strategy

Pg. 11

Sony/ATV Music Publishing

Pg. 15

o Creative Update

Pg. 16

o Business and Financial Overview

Pg. 25

o Sony/ATV-EMI Operational Overview

Pg. 30

o Impact of Withdrawal of Digital Performance Rights

Pg. 33

o MRP Financial Summary

Pg. 43

FYE 2015 Forecast

Pg. 46

Mid-Range Plan

Pg. 52

EMI Music Publishing

Pg. 58

Market Share

Sony/ATV & EMI: Remains the #1 Music Publisher

Music Publishing Market Share Based on Worldwide Revenue
Source: Music & Copyright, May 2014

40%

35%

35%
30%

30%

25%

22%

20%
15%

13%

10%
5%
0%

Other
4
Includes hundreds
of independent
publishers

Other includes BMG Rights Management and Kobalt. Based on public information available, BMG maintains revenue of
$390 million which would represent a market share of approximately 10% (based on recent acquisitions by BMG, we estimate
their market share could now be approximately 15%); Kobalt maintains revenue of $163 million which would represent a
market share of approximately 4%
4

Q2 CY2014: BDS US Radio Market Share

BDS Top 100 US Radio Airplay Songs Market Share
Source: Nielsen

35%

32%

30%
25%

22%

20%
15%
10%

14%

15%
10%
7%

5%
0%

Other

EMI Music Publishing Roster

Top Worldwide Total Revenue Earning Songs:

Twelve Months Ending June 30, 2014
#

Song Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

BLURRED LINES
WE ARE THE CHAMPIONS
DIAMONDS
OVER THE RAINBOW
AIN'T NO MOUNTAIN HIGH ENOUGH
WE WILL ROCK YOU
DRIVE BY
SUMMERTIME SADNESS
BLOW ME (ONE LAST KISS)
WE FOUND LOVE
EVERY BREATH YOU TAKE
I FOLLOW RIVERS
JUST GIVE ME A REASON
DAYDREAM BELIEVER
SMOKE ON THE WATER
BOHEMIAN RHAPSODY
FEEL SO CLOSE
SANTA CLAUS IS COMIN' TO TOWN
ROYALS
GOOD FEELIN'
CAN'T TAKE MY EYES OFF YOU
YOU CAN'T HURRY LOVE
ABC
MY GIRL
ROLLING IN THE DEEP

Artist
ROBIN THICKE
QUEEN
RIHANNA
FILM - THE WIZARD OF OZ
MARVIN GAYE AND TAMMI TERRELL
QUEEN
TRAIN
LANA DEL REY
P!NK
CALVIN HARRIS
THE POLICE
LYKKE LI
P!NK
THE MONKEES
DEEP PURPLE
QUEEN
CALVIN HARRIS
VARIOUS
LORDE
FLO RIDA
FRANKIE VALLI
THE SUPREMES
THE JACKSON 5
THE TEMPTATIONS
ADELE

Revenue
$2,628
2,312
2,312
2,103
1,630
1,586
1,554
1,405
1,404
1,372
1,326
1,310
1,309
1,258
1,225
1,225
1,192
1,179
1,130
1,130
1,067
1,057
1,035
1,024
978
($ in Thousands)

Top Worldwide Synch Deals:

Six Months Ending September 30, 2014
($ in thousands)

Originating
Territory

Song Title

US
US
US
US
US
NETHERLANDS
US
UK
UK
UK
US
NETHERLANDS
UK
FRANCE
AUSTRALIA
US
AUSTRALIA
US
US
UK
AUSTRALIA
US
GERMANY
UK
US

VARIOUS
VARIOUS
VARIOUS
VARIOUS
DANGER AHEAD
AIN'T NO MOUNTAIN HIGH ENOUGH
VARIOUS
STRANGELOVE
JAMES BOND THEME
BOHEMIAN RHAPSODY
THE WIZARD OF OZ "SELECTION"
(YOUR LOVE HAS LIFTED ME) HIGHER & HIGHER
I PUT A SPELL ON YOU
TAKING A CHANCE ON LOVE
NINE TO FIVE (THEME)
MONY MONY
ABC
YOU ARE UNDENIABLE (AMERIGO REMIX)
SECOND CHANCE
FIRST ZULU APPEARANCE AND ASSAULT
TELL ME SOMETHING GOOD
GONNA FLY NOW
KRIBBELN IM BAUCH
UNDER PRESSURE
ZORBA THE GREEK (THEME)

Project/Source
YOUTUBE (INTERNET)
MTV - TV & NEW MEDIA EXTENSION (TV)
BEAUTIFUL - CAROLE KING (STAGE)
MOTOWN THE MUSICAL (STAGE)
TUMS (COMMERCIAL)
DHL (COMMERCIAL)
JERSEY BOYS (STAGE)
GUCCI "GUILTY" (COMMERCIAL)
P&G - 007 MALE FRAGRANCE (COMMERCIAL)
TUI (COMMERCIAL)
WIZARD OF OZ STOCK & AMATEUR (STAGE)
QATAR AIRWAYS (COMMERCIAL)
BURBERRY (COMMERCIAL)
CHANEL "CHANCE" (COMMERCIAL)
NESCAFE (COMMERCIAL)
NISSAN SENTRA (COMMERCIAL)
AUTOMATIVE HOLDINGS GROUP (COMMERCIAL)
APPLE - IPAD (COMMERCIAL)
WB: TWO BROKE GIRLS - MAIN TITLE (TV)
SAMSUNG (COMMERCIAL)
COLES SUPERMARKETS (COMMERCIAL)
JBL SPORTS SERIES HEADPHONES (COMMERCIAL)
FRIENDSCOUT24.COM (COMMERCIAL)
VOLKSWAGEN POLO (COMMERCIAL)
GOOGLE CHROMECAST (COMMERCIAL)

Revenue
$3,793
2,595
1,190
787
676
546
540
480
480
480
454
439
400
346
317
315
304
300
293
280
277
275
267
255
250

EMI Restructuring & Integration

The EMI integration was completed on June 30, 2014
Total restructuring costs amounted to $116.4 million (within the budget established by the EMI
Administration Agreement)

EMI head count has been reduced by approximately 60% (370 employees) and costs by 67% ($80 million)

Over 30 office moves completed

EMIs finance, royalty and copyright systems have been integrated into Sony/ATVs systems

10

Acquisition Strategy

11

Situation Overview
Worldwide Music Publishing Industry in Transition

We believe the Global Music Publishing Industry will be in transition over the next two to three years
o Declines in digital downloads and physical sales will outpace the growth in streaming revenues for
music publishers

Before the acquisition of EMI, Sony/ATV was able to mitigate declines in the mechanical market through
growth in market share

However, with the acquisition of EMI, Sony/ATV is now the leader in the music publishing industry with a
worldwide market share of approximately 30% (1)

Given our size, it is becoming more challenging to grow market share to offset declines
Therefore, we must explore other ways to grow the business during the current period of transition in the
marketplace which will include:

o Challenging the consent decree in the U.S. and obtaining fair market value for our digital rights

o Identifying key synch opportunities and exploiting our rights

o Purchasing copyrights, either from third-parties or from our own catalog (co-pub and writers share)

12 (1) Source: Music & Copyright, May 2014, based on worldwide revenue

Growth Strategy Copyright Acquisitions

Copyright Acquisitions

Given market conditions, Sony/ATV plans to invest further in copyright acquisitions

o Copyright acquisitions represent the fastest way to grow the music publishing business
o Sony/ATV has a scalable infrastructure acquisitions can be made with minimal incremental
overheads

o Acquisitions will increase operating margins

We plan to target opportunities as they arise

o Large deals are difficult to specifically identify, target and forecast

o EMI also has the right of first refusal on all acquisitions
o To the extent EMI does not exercise its right, Sony/ATV would seek funding from Sony Corp on a
deal-by-deal basis

We also plan to target opportunities within our own catalog and offer to purchase from writers all or a
portion of their copyright interests (e.g. co-publishing and writer royalties)

13

Recent Transactions
The following table represents catalog sales from the last few years. The transactions are representative
of the size and types of opportunities that Sony/ATV would pursue
($ in millions)
Acquirer

Target

Date

Purchase
Price

Atlas Publishing

Combustion Catalog

2014

$13

$1

15.6x

BMG Rights Management

Hal David Catalog

2014

$42

$4

12.0x

BMG Rights Management

Talpa Music

2014

7.5x

BMG Rights Management

Primary Wave

2013

$150

NA

NA

Ole

Sony Pictures Catalog

2013

$114

$16

7.4x

Bertelsmann

BMG Rights Management

2013

Authentic Brands

Elvis Presley Intellectual Property

2013

$125

NA

NA

BMG Rights Management

Rosetta Catalog

2012

$90

$13

7.2x

BMG Rights Management

Bug Music

2011

$320

$25

12.6x

BMG Rights Management

Chrysalis

2010

128

12

10.8x

BMG Rights Management

EverGreen Copyright Acquisitions

2010

$80

NA

NA

BMG Rights Management

Cherry Lane

2010

$70

$5

13.0x

BMG Rights Management

Crosstown Songs America

2009

$70

NA

NA

NPS

Mult

8.2x

Blended Multiple

14

8.9x

15

Creative Update

16

Sony/ATV Music Publishing Roster

17

Major Deals Closed in H1 FYE 2015

CBS - Extension

Worldwide administration agreement extended for five years for CBS entire TV music library
Advance is $30 million with recoupment of advance delayed until third year of five-year term

DreamWorks/DW Studios - Extension

Exclusive worldwide administration deal extended for four years

Covers all musical works controlled by DW Studios, including soundtracks for the movies Gladiator,
American Beauty, Little Fockers and The Island
Total advance commitment is $8.5 million with $2.1 million paid in FY 2015

Velvet Hammer Music Inc. - New Deal

Purchase of co-venture partner David Beno Benvenistes partial copyright interests in Velvet
Hammer co-venture

Includes copyrights by Ryan Tedders band OneRepublic

Purchase price $2.5 million with a potential $750,000 additional payment if certain milestones are
exceeded

Paramount Pictures - Extension

Exclusive worldwide administration agreement extended for four years to administer Paramounts film
music library
Covers music in films including Transformers: Dark of the Moon, Mission Impossible: Ghost
Protocol and G.I. Joe
Total advance commitment is $9.8 million, $2.5 million of which will be paid in FY15

SPE Catalog - Extension

18

Three-year extension starting January 1, 2014

Catalog recently purchased by OLE which Sony/ATV administers
No advance paid

A&R Creative Highlights

Ed Sheeran

His second album X is the biggest-selling artist title of the year in the UK with nearly

700,000 copies sold

Became his first No. 1 album in the US where it has already sold half a million copies
X achieved a record first-week total of 23.7 million streams globally on Spotify
Single Sing gave him a first ever No. 1 single in the UK and has sold 650,000 downloads
Both Sing and its follow-up Dont reached the Billboard Hot 100s Top 20 and
collectively have sold 2 million downloads

Taylor Swift

Shake It Off achieved the highest first-week download sales of the year in the US and the
fourth biggest of all time when it opened with 544,000 units

The single debuted at No. 1 on the Hot 100 to become her second chart-topper and has to
date sold 2.2 million copies in the States
It has been a substantial hit around the world, including reaching No. 3 in the UK and No. 1
in Canada and Australia
Fifth studio album 1989 is released this week (October 27) and is anticipated to be one of
the biggest albums of the year

Nasri Atweh

Co-penned his band Magic!s single Rude which led the Billboard Hot 100 for six weeks
and has sold 2.7 million downloads in the US

Also reached No.1 in the UK where it has sold 600,000 downloads

The bands album Dont Kill The Magic debuted at No. 6 on the Billboard 200 chart

19

A&R Creative Highlights (Cont.)

5 Seconds of Summer

Self-titled debut album has been No. 1 around the world, including in the US where it sold
259,000 copies week one the highest for a debut album by a group since 2006
It has sold half a million copies in the US, while the singles She Looks So Perfect and
Amnesia have shifted 900,000 and 600,000 units respectively
The band have achieved a No. 1 album and three Top 10 singles in the UK, including the
chart-topping She Looks So Perfect

Pitbull

Timber is the UKs fifth biggest single of the year with 940,000 sales
Surpassed 4 million download sales in the US in May having topped the Billboard Hot 100
New single Fireball is nearing half a million download sales in the States and will be
followed this year by new album Globalization

Ella Henderson

Recent signings debut single Ghost topped the UK singles chart and is one of the 10
biggest hits of the year

First album Chapter One debuted at No.1 in the UK last week

20

A&R Creative Highlights (Cont.)

Miranda Lambert

Platinum became her first Billboard 200 No. 1 album and has sold nearly 500,000 copies
Her co-written single Automatic peaked at No. 4 on Billboards Hot Country Songs chart
and been certified for half a million sales

Gary Barlow

Another 200,000 copies sold in UK this year of his 2013 album Since I Saw You Last,
taking its cumulative tally to 700,000 units

His band Take Thats album III is released in December and preceded by the single
These Days, co-written by him

Enrique Iglesias

Bailando reached No. 12 on the Hot 100 and has sold a million download sales in the US
Bailando led the Billboard Latin Songs chart for 21 weeks, the second-longest charttopping run in history

21

A&R Creative Highlights (Cont.)

Kongos

South African bands single Come With Me Now topped Billboards Alternative Songs
chart and made Hot 100 Top 40
Has sold 1.2 million downloads in US, while Top 10 hit in Canada

Milky Chance

Stolen Dance has been one of continental Europes biggest hits of the year, including
reaching No. 1 in France and No. 3 in Germany
Broke into UK Top 40 and sold 400,00 downloads in US

OneRepublic

Love Runs Out sold 1.3 million downloads in the US and peaked at 15 on the Billboard
Hot 100

Peaked at No. 3 on the Official UK Singles Chart and followed 2013s chart-topping
Counting Stars

US sales of bands album Native now nearing 900,000 copies

22

A&R Creative Highlights (Cont.)

Eric Church

US sales of his Billboard 200 No. 1 album The Outsiders now up to 730,000 units
Produced four hit singles so far, including Give Me Back My Hometown, which hit No. 1
on the Billboard Country Airplay Chart

Kasabian

48:13 became the bands fourth consecutive No. 1 album in the UK

Among the UKs Top 20 artist albums of the year with 180,000 sales

Cole Swindell

Topped Billboard Country Songs chart with This Is How We Roll, which was recorded by
Florida Georgia Line and has sold 2 million downloads

Co-wrote the Luke Bryan single Roller Coaster which topped the Billboard Country Airplay
Chart and has sold nearly half a million US downloads

Also co-authored Thomas Rhetts Country Airplay chart-topper Get Me Some Of That
Swindells own self-titled album has sold 250,000 units
23

A&R Creative Highlights (Cont.)

Kenny Chesney

Big Revival is his 10th consecutive studio set to top the Billboard Country albums chart
Debuted at No. 2 on Billboard 200 chart and sold 170,000 in first two weeks

24

Sony/ATV Business and Financial Overview

25

Sony/ATV Business and Financial Overview

On a combined basis with EMI, Sony/ATV Music Publishing is the worlds largest music publisher with
combined pro forma revenues and operating income of $1.1 billion and $220.9 million, respectively for the
FYE 2015 forecast

o Represents over 3 million copyrights and over 250 thousand clients

o 30% market share based on worldwide revenue
Scalable infrastructure and business model
o One infrastructure manages both Sony/ATV and EMI
o In addition, future acquisitions would be accomplished with minimal incremental costs
Consistent track record of operating success for Sony/ATV
o Sony/ATV operating income increased from $44.6 million in FYE 2010 to $89.3 million in FYE 2014
(represents a 19.0% CAGR)

Stable prospects over the MRP period for Sony/ATV and EMI, on a combined basis

o Combined operating income to increase from $203.3 million in FYE 2014 to $260.3 million in FYE
2018 (represents a 6.4% CAGR)

Favorable cash flow business

o Reduced debt by approximately $275 million over the last six years
o In addition to the debt repayment, annual guaranteed payments are made to the MJ Estate and
Sony Corp (currently at $23.1 million each)
26

Top Worldwide Total Revenue Earning Songs:

Twelve Months Ending June 30, 2014
#

Song Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

NCIS
CSI
ALL YOU NEED IS LOVE
STAY
HEY JUDE
COUNTING STARS
COME TOGETHER
LET HER GO
LITTLE TALKS
REVOLUTION
FEEL THIS MOMENT
CRIMINAL MINDS
STAND BY ME
WHISTLE
ENTERTAINMENT TONIGHT
GIRLS JUST WANT TO HAVE FUN
THE HOBBIT: AN UNEXPECTED JOURNEY
SPONGEBOB SQUAREPANTS
ROTE ROSEN
BRAVE
A TEAM
HAWAII FIVE-0
SKYFALL
THE FAIRLY ODD PARENTS
JUST GIVE ME A REASON

Artist
TV SERIES
TV SERIES
THE BEATLES
RIHANNA
THE BEATLES
ONEREPUBLIC
THE BEATLES
PASSENGER
OF MONSTERS AND MEN
THE BEATLES
PITBULL
TV SERIES
BEN E KING
FLO RIDA
TV SERIES
CYNDI LAUPER
FILM
TV SERIES
TV SERIES
SARA BAREILLES
ED SHEERAN
TV SERIES
FILM
TV SERIES
P!NK

Revenue
$4,972
3,975
3,453
2,970
2,868
2,319
2,268
2,177
2,113
1,973
1,859
1,810
1,798
1,646
1,581
1,495
1,409
1,382
1,279
1,258
1,257
1,251
1,215
1,213
1,151
($ in Thousands)

27

Top U.S. Performance Revenue Earning Songs:

Twelve Months Ending June 30, 2014
#

Song Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

NCIS
ENTERTAINMENT TONIGHT
STAY
SPONGEBOB SQUAREPANTS
WHEEL OF FORTUNE
CSI
CRIMINAL MINDS
JEOPARDY!
THE FAIRLY ODD PARENTS
JUDGE JUDY
CBS EVENING NEWS
LITTLE TALKS
CBS THIS MORNING
FEEL THIS MOMENT
OMG! INSIDER
KING OF QUEENS
RULES OF ENGAGEMENT
DORA THE EXPLORER
HAWAII FIVE-0
BRAVE
A TEAM
INSIDE EDITION
COUNTING STARS
DAYS OF OUR LIVES
THE YOUNG AND THE RESTLESS

Artist
TV SERIES
TV SERIES
RIHANNA w/ MIKKY EKKO
TV SERIES
TV SERIES
TV SERIES
TV SERIES
MERV GRIFFIN
TV SERIES
TV SERIES
TV SERIES
OF MONSTERS AND MEN
TV SERIES
PITBULL
TV SERIES
TV SERIES
TV SERIES
TV SERIES
TV SERIES
SARA BAREILLES
ED SHEERAN
TV SERIES
ONEREPUBLIC
TV SERIES
TV SERIES

Revenue
$2,538
1,232
1,007
896
895
873
747
706
642
638
594
550
518
511
510
504
487
447
444
437
403
387
386
374
357
($ in Thousands)

28

Top Worldwide Synch Deals:

Six Months Ending September 30, 2014
($ in thousands)

Originating
Territory
US
AUSTRALIA
US
US
US
US
UK
FRANCE
US
US
UK
GERMANY
US
US
US
US
US
US
US
US
US
US
UK
US
US

29

Song Title
VARIOUS
VARIOUS BEATLES
VARIOUS
VARIOUS BEATLES
VARIOUS BEATLES
YOU'RE THE ONE THAT I WANT
JAMES BOND THEME (MASTER RECORDING)
ELYSIUM
THINGS HAVE CHANGED
ALL YOU NEED IS LOVE
WITH A LITTLE HELP FROM MY FRIENDS
WHERE NO MAN HAS GONE BEFORE
GONNA FLY NOW (MASTER RECORDING)
BAD CASE OF LOVIN' YOU
ALL DAY AND ALL OF THE NIGHT
THE GAMBLER
ALL YOU NEED IS LOVE
I WANT TO TAKE YOU HIGHER
LOVE NEVER FELT SO GOOD
WITH A LITTLE HELP FROM MY FRIENDS
THAT'S NOT MY NAME
SAFE AND SOUND
EVERYTHING I OWN
YOU AIN'T SEEN NOTHIN YET
SING

Project/Source
YOUTUBE (INTERNET)
BEAT BUGS (FILM)
MTV - TV & NEW MEDIA EXTENSION (TV)
CIRQUE DU SOLEIL - "LOVE" (STAGE)
"RAIN" (TOUR) (STAGE)
CHANEL (COMMERCIAL)
P&G - 007 MALE FRAGRANCE (COMMERCIAL)
TAG HEUER (COMMERCIAL)
CHRYSLER (COMMERCIAL)
SOUTHWEST AIRLINES (COMMERCIAL)
DEMENTIA FRIENDS (COMMERCIAL)
VOLKSWAGEN GOLF GTE (COMMERCIAL)
JBL SPORTS SERIES HEADPHONES (COMMERCIAL)
THE DOCTORS - MAIN TITLE / THEME (TV)
YOPLAIT (COMMERCIAL)
GEICO (COMMERCIAL)
STATION HOTELS / CASINOS (COMMERCIAL)
INHERENT VICE (TRAILER)
CHRYSLER - JEEP (COMMERCIAL)
THE WONDER YEARS - MAIN TITLE (TV)
COCA COLA (COMMERCIAL)
COCA-COLA (COMMERCIAL)
HSBC (COMMERCIAL)
C. SPIRE WIRELESS (COMMERCIAL)
MAYBELLINE - DREAM WONDER LIQUID (COMMERCIAL)

Revenue
$3,048
3,000
1,764
1,607
697
500
480
455
450
425
400
371
275
275
275
260
250
238
225
200
199
190
176
165
163

Sony/ATV-EMI Operational Overview

30

Sony/ATV-EMI Operational Overview

Sony/ATV (as administrator) manages the Sony/ATV and EMI catalogs as one business
o We have combined A&R, Synch Licensing, Finance and Administration functions focused on
growing the combined business

Over the past two years, a great deal of time was invested in combining the operations of the Sony/ATV
and EMI companies with the goal of reducing costs and improving efficiencies

The result of these efforts has been impressive:

o On the A&R front, we have increased the combined market share of the businesses to over 30%
o In terms of cost, over 67% of EMIs pre-acquisition costs have been eliminated ($80 million)
However, from a financial reporting perspective, the gains, improvements and value creation that are being
made on the EMI side are not fully reflected in Sony/ATVs results

In order to properly evaluate the performance of the business, Sony/ATVs results need to be viewed on a
combined basis with EMI

Operating profit of the combined business is projected to grow from $ 203.3 million in FYE 2014 to $260.3
million in FYE 2018 (represents a 6.4% CAGR)

31

Operating Leverage
Sony/ATV Operating Leverage FYE 2015F

Overhead costs designed to administer and manage

both businesses are currently only measured
against Sony/ATV stand-alone revenue

$1,200

While we have eliminated $80 million of costs during

$800

the Sony/ATV-EMI restructuring and integration

period, we will be incurring additional costs during
the MRP period

o Additional annual rent to Sony Corp of $3

$527.7
$400

($80.0 )

$188.8

$0
Sony/ATV
Revenue

million beginning in FYE 2017

o Unbudgeted annual advisory fee starting in

$268.8

Cost as a % of Revenue

Combined
Expenses

EMI Cost
SATV
(1)
Reductions
Expenses

50.9%

35.8%

FYE 2015 up to $1.25 million in FYE 2017

These additional costs are difficult to absorb under

the current structure and wipe-out approximately
100% of the incremental profit from managing the
EMI catalog

Sony/ATV-EMI Operating Leverage FYE 2015F

$1,200

o Essentially, all increases in operating costs

$800

that benefit the combined business need to

be absorbed through the Sony/ATV business

$400

Viewing Sony/ATV and EMI on a combined basis

$0

more accurately reflects the performance of the

business

$1,083.6

$268.8

Consolidated
Revenue

Cost as a % of Revenue

Combined
Expenses

24.8%

($80.0 )

$188.8

EMI Cost (1)

SATV
Reductions
Expenses

17.4%

(1) Represents costs already eliminated during the SATV-EMI restructuring and integration period

32

Impact of Withdrawal of Digital Performance Rights

33

U.S. Mechanical Market

Digital downloads (DPD) declined in the U.S. for the first time in CY 2013
Digital download declines accelerated after July 2013
Monthly Unit Sales % Change vs. Prior Year
15%

YTD '14
(12%)
(16%)
(14%)

DPD
Physical
Total

10%

5%

0%

-5%

-10%

-15%

-20%

-25%
DPD
Physical

34

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

9%

0%

5%

-2%

0%

0%

-8%

-3%

-7%

-9%

-8%

-12%

-12%

-12%

-16%

-10%

-10%

-12%

-11%

-13%

-12%

-12%

-22%

-8%

-12%

-9%

-15%

-12%

-6%

-9%

-19%

-20%

-14%

-14%

-19%

-22%

-16%

-16%

-16%

-14%

-17%

-13%

Sources: Nielsen SoundScan, Billboard.

TEA = 13

Sep-14

U.S. Streaming Market

Trend toward streaming continues
On-demand streams surpassed 70 billion songs in the first six months of 2014
Monthly % Change in Streams vs. Prior Year

Audio On-Demand
Video On-Demand
Streams

80%

70%

60%

50%

40%

30%

20%

10%

0%

35

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Audio

51%

51%

48%

48%

50%

53%

48%

65%

69%

Video

20%

21%

30%

40%

45%

57%

51%

64%

49%

Source: Nielsen SoundScan.

Excludes data from Pandora

YTD '14
54%
42%
47%

Differences of Streaming on Publishers and Record Labels

Music Publishing revenues are trending lower than the Record Labels due to the disparity in the
monetization of streaming

Music Publishers in the U.S. are subject to statutory rates or consent decrees which result in below market
royalties. However, because the Record Labels do not operate within these restrictions, they are able to
negotiate and receive fair market value

o Record Labels receive 92.5% of the royalties paid by Pandora (Non-Interactive Streaming) while
Publishers receive 7.5%

o Record Labels receive 85% of the royalties paid by Spotify (On-Demand Streaming) while
Publishers receive 15%

o The Record Labels are also benefiting from extremely large advances from streaming services such
as Spotify, Rhapsody and Deezer

Due to statutory rates and consent decrees in the U.S., publishers are not in a position to
receive advances or guarantees

o Record Labels are further benefitting from higher margins due to the significant reduction in
manufacturing and distribution costs with the shift from physical and digital downloads to digital
streaming

o The Record Labels are also benefiting from their ownership interest in the Interactive Streaming
Services such as Spotify. Music Publishers are not in a position to receive equity in these services

Further, with regard to digital radio, this is a new source of income for the Record Labels
o Record Labels did not previously receive revenue from radio
36

Differences of Streaming on Publishers and Record Labels

(Cont.)
Non-Interactive Streaming

On-Demand Streaming

(Pandora, Sirius, Slacker, etc.)

(Spotify, Deezer, Rhapsody, etc.)

7.5%

15.0%

85.0%

92.5%

Records

37

Publishing

Records

Publishing

Music Publishers Shift to Streaming Currently Less Profitable

The chart below represents the estimated impact to Music Publishers based on $1,000 spent at retail for
each consumer format in the United States

Given the below market royalty rates, profits from On-Demand and Non-Interactive services are
approximately 18% and 70% lower than profits from Digital Downloads
Music Publisher Revenue & Profits for every $1,000 at Retail in the United States

$88.79

$90.00
$80.00
$70.00

$64.58

$62.79

$60.00
$50.00
$40.00
$29.92

$30.00

$24.60

$21.16

$18.68

$20.00

$9.34

$10.00
$0.00

Physical

DPD
Revenue

38

YTD Market Trend:

- 16%

- 12%

On-Demand

Non-Interactive

Profits
+ 47%

Music Publishers Closing the Gap

In order to close the value gap between streaming and digital downloads in the United States, streaming
rates for publishers would need to increase as follows:

FROM
Status Quo - Royalty Rates
On-Demand Non-Interactive
10.50%

4.50%

TO
FMV - Royalty Rates
On-Demand Non-Interactive
12.77%

14.42%

% of streaming revenue from Digital Service Provides

We believe these fair market royalty rates are achievable given comparable royalty rates currently being
paid in Europe

Further, this value gap is the reason we removed our digital performance rights from both ASCAP and BMI
in January 2013 and entered into direct deals with Pandora, Apple and YouTube

Unfortunately, the U.S. courts essentially forced us back into the performance rights societies and the
statutory rates that apply

Sony/ATV continues to proactively explore alternatives in an effort to close the value gap between
streaming and digital downloads. We are currently pursuing three strategies in the United States:

o U.S. Department of Justice Consent Decree Reform

o Appeal of ASCAP and BMI Rate Decisions
o Withdrawal of Performing Rights from PROs

39

United States Publishing Market Outlook Segment

Status Quo Current Royalty Rates
$600.0

$548.0

$(124.2)

$194.2

Under the Status Quo Scenario, the U.S.

market segment is expected to decline by
approximately -1.0% CAGR
$527.0

$500.0

the U.S. Catalog, the U.S. market

segment is expected to grow by
approximately +3.7% CAGR

$(133.6)
$400.0
$14.2

$300.0

Under the Direct Licensing Scenario for

$28.4

$200.0
2014 Market
Segment

Physical

Digital
Downloads

Satellite Radio

Non-Interactive
Streaming

Interactive
Streaming

2018 Market
Segment

Direct Licensing FMV Royalty Rates

Direct Licensing Benefits 2018

$800.0

$800.0
$700.0
$600.0

$198.9
$548.0

$634.8

$600.0

$(124.2)

$500.0

$(133.6)

$400.0

$107.8

$634.8

$527.0

$500.0

$59.3
$86.4

$400.0
$300.0

$300.0

$200.0

$200.0
2014 Market
Segment

Physical

Digital Downloads

Satellite Radio

Non-Interactive
Streaming

Interactive
Streaming

2018 Market
Segment

The impact of also pulling rights for the Foreign catalog would be approximately $60 million

40

$700.0

Status Quo

Direct Benefits Direct Licensing

U.S. Publishing Market Outlook Status Quo

Music Publishing - United States Market Segments (1)

($ in millions)

FYE 2014

FYE 2015

FYE 2016

FYE 2017

FYE 2018

CAGR

(2)

Mechanical
Physical
Digital Downloads
Total Mechanicals
Performance (3)
Satellite Radio
Streaming (4)
Non-Interactive Streaming
Pandora - Ad Revenue Performance
Pandora - Subscription Performance
Free Service - Ad Revenue Performance
Total Non-Interactive Streaming
Interactive Streaming
On Demand - Performance
On Demand - Mechanical
Total Interactive Streaming
Total Streaming
Combined
% change

$197.8
250.2
448.0

$163.5
219.4
383.0

$130.8
182.1
313.0

$98.1
145.7
243.8

$73.6
116.6
190.2

(21.9%)
(17.4%)
(19.3%)

$38.7

$42.5

$46.2

$49.8

$52.9

8.1%

$8.7
2.1
6.5
17.4

$13.8
3.2
9.0
26.0

$17.7
3.9
10.6
32.3

$22.4
4.5
12.0
38.9

$27.8
5.0
13.0
45.7

33.6%
23.9%
18.7%
27.4%

15.7
28.3
44.0

26.3
47.6
73.9

41.3
74.6
115.8

59.9
108.3
168.2

84.9
153.4
238.2

52.5%
52.5%
52.5%

61.4

99.9

148.1

207.1

284.0

46.7%

$548.0
----

$525.4
(4.1%)

$507.2
(3.5%)

$500.7
(1.3%)

$527.0
5.3%

(1.0%)

(1) Represents payment to publishers only, net of society commissions; current royalty rates being applied.
(2) Based on Sony Music assumptions.
(3) Satellite Radio based on Sirius Satellite report "Morgan Stanley".
(4) Pandora based on "Morgan Stanley"; Non-Pandora streaming based on Sony Music assumptions.

41

U.S. Publishing Market Outlook Direct (U.S. Catalog)

Music Publishing - United States Market Segments (1)

($ in millions)

FYE 2014

FYE 2015

FYE 2016

FYE 2017

FYE 2018

CAGR

(2)

Mechanical
Physical
Digital Downloads
Total Mechanicals
Performance (3)
Satellite Radio
Streaming (4)
Non-Interactive Streaming
Pandora - Ad Revenue Performance
Pandora - Subscription Performance
Free Service - Ad Revenue Performance
Total Non-Interactive Streaming
Interactive Streaming
On Demand - Performance
On Demand - Mechanical
Total Interactive Streaming
Total Streaming
Combined
% change

$197.8
250.2
448.0

$163.5
219.4
383.0

$130.8
182.1
313.0

$98.1
145.7
243.8

$73.6
116.6
190.2

(21.9%)
(17.4%)
(19.3%)

$38.7

$42.5

$46.2

$109.9

$125.1

34.1%

$8.7
2.1
6.5
17.4

$13.8
3.2
9.0
26.0

$17.7
3.9
10.6
32.3

$40.4
8.1
12.0
60.5

$53.4
9.6
13.7
76.7

57.3%
45.9%
20.3%
45.0%

15.7
28.3
44.0

26.3
47.6
73.9

41.3
74.6
115.8

59.9
108.3
168.2

89.5
153.4
242.9

54.6%
52.5%
53.3%

61.4

99.9

148.1

228.6

319.6

51.1%

$548.0
----

$525.4
(4.1%)

$507.2
(3.5%)

$582.3
14.8%

$634.8
9.0%

3.7%

(1) Represents payment to publishers only, net of society commissions; FMV royalty rates being applied to U.S. domestic catalog
(2) Based on Sony Music assumptions.
(3) Satellite Radio based on Sirius Satellite report "Morgan Stanley".
(4) Pandora based on "Morgan Stanley"; Non-Pandora streaming based on Sony Music assumptions.

42

MRP Financial Summary

43

Competitive Landscape
Historical Revenue
Sony/ATV CAGR = 2.8%
Universal MP CAGR = (2.2%)
Warner/Chappell CAGR = (3.6%)

$1,050

$ in millions

$950

$930

$887

$868

$859

$852

$850
$750
$650

$582

$556

$506

$550

$544
$481

$565

$524 $515

$511

$503

$450
FYE 2010
Actual

FYE 2011
Actual

FYE 2012
Actual

FYE 2013
Actual

FYE 2014
Actual

UMG conversion of 1 = $1.30

Historical Operating Income

$ in millions

$100

Sony/ATV CAGR = 19.0%

Warner/Chappell CAGR = (3.4%)

$93

$86

$80
$60

$85

$77

$73

$85

$81

$89

$65

$45

$40
$20

$0
FYE 2010
Actual

FYE 2011

ActualActual

Actual

Universal Music Publishing

44

- UMG no longer provides breakout of Operating Income for publishing division

FYE 2012
Actual

Actual

Warner/Chappell

FYE 2013
Actual Actu

Sony/ATV

FYE 2014
Actual

Sony/ATV FYE 2015 Budget Task

$ in millions
Operating Income:
Base Business (2)
Sony/ATV Core Operating Task
EMI Admin Task (3)
Total Operating Income

FYE 2015 - Budget (1)

Sony/ATV
$71.9
11.0
2.8
$85.6

(1) At FYE 2015 Budget Rates.

(2) Base Business excludes exceptional, one-time items.
(3) EMI Admin task represents 15% of EMI NPS task of $18.4 million.

The consolidated operating income task for the FYE 2015 Budget is $13.8 million between Sony/ATV and
EMI

45

FYE 2015 Forecast

46

Sony/ATV Assumption Comparison

FYE 2015
Forecast
Mechanical - Physical
Mechanical - Downloads
Mechanical - Streaming
Total Mechanical

47

(10.5%)
(8.7)
60.9
(18.5%)

FYE 2015
Budget
(12.0%)
6.0
(5.2%)

Variance
1.5%
(14.7)
NA
(13.2%)

FYE 2015 Forecast Revenue Profile

$ in millions
Revenue:
Mechanical - Physical
Mechanical - Downloads
Mechanical - Other
Total Mechanical

FYE 2015 (1)

Forecast

FYE 2015 (1)(2)

Budget

15F v 15B
B/(W)

FYE 2014 (3)

Actual

15F v 14A
B/(W)

$48.3
34.7
28.0
111.0

% of Total
9.1%
6.6
5.3
21.0

$50.0
46.6
33.0
129.6

% of Total
9.0%
8.4
6.0
23.4

($1.7)
(11.8)
(5.1)
(18.6)

(3.4%)
(25.4)
(15.3)
(14.4)

$53.9
38.0
44.1
136.1

% of Total
9.5%
6.7
7.8
24.1

($5.7)
(3.3)
(16.1)
(25.1)

(10.5%)
(8.7)
(36.6)
(18.5)

Performance
Synch
Other
Core Revenue

235.8
107.5
28.8
483.0

44.7
20.4
5.5
91.5

224.0
117.8
36.1
507.5

40.4
21.3
6.5
91.6

11.8
(10.4)
(7.3)
(24.5)

5.3
(8.8)
(20.3)
(4.8%)

229.6
117.7
36.5
519.8

40.6
20.8
6.4
91.9

6.2
(10.2)
(7.7)
(36.8)

2.7
(8.7)
(21.1)
(7.1%)

EMI Admin Fee

44.7

8.5

46.3

8.4

(1.6)

(3.5)

45.6

8.1

(0.9)

(2.1)

Total Revenue

$527.7

100.0%

$553.8

100.0%

($26.1)

(4.7%)

$565.5

100.0%

($37.7)

(6.7%)

(1) At FYE 2015 Budget Rates.

(2) Mechanical Performance revenue has been reclassified from the Performance income type to the Mechanical income type to mak e the FYE 2015
budget on the same basis as FYE 2014 actual financials and FYE 2015 forecasted financials.
(3) At Actual Rates.

48

FYE 2015 Forecast Income Statement

$ in millions
Revenue
NPS
margin %
Employee Costs
Net Talent
Catalog Amortization
Support Services (3)
Administration Fee
Other Operating Expenses (3)
Total Operating Expenses
Other Operating Income (Loss) / Task
Operating Income
margin %

FYE 2015 (1)

Forecast Budget

15F v 15B
B/(W)

$527.7
258.9
49.1%

$553.8
265.9
48.0%

($26.1)
(7.0)

100.7
2.2
32.9
11.9
7.5
33.6
188.8

100.7
2.2
32.9
11.9
7.5
30.1
185.3

0.0
(0.0)
0.0
(3.5)
(3.5)

5.0
75.1
14.2%

5.0
85.6
15.5%

(4.7%)
(2.6)

FYE 2014 (2)

Actual

15F v 14A
B/(W)

$565.5
267.1
47.2%

($37.7)
(8.2)

(6.7%)
(3.1)

0.0
(0.0)
0.0
0.0
0.0
(11.6)
(1.9)

96.9
2.7
32.7
11.6
7.5
32.4
183.8

(3.8)
0.5
(0.1)
(0.3)
(1.1)
(5.0)

(3.9)
17.4
(0.4)
(3.0)
0.0
(3.5)
(2.7)

(10.5)

(0.0)
(12.3)

6.1
89.3
15.8%

(1.1)
(14.2)

(17.6)
(15.9)

Interest Income
Interest Expense
Pre-Tax Income

0.8
(5.5)
70.4

1.4
(9.9)
77.1

(0.6)
4.4
(6.7)

(42.9)
44.3
(8.7)

1.1
(6.3)
84.1

(0.3)
0.8
(13.7)

(28.5)
12.8
(16.3)

Income Tax

12.1

15.8

3.7

23.6

16.6

4.5

27.1

$58.3

$61.3

($3.0)

$67.6

($9.2)

Net Income

(4.9%)

(13.7%)

(1) At FYE 2015 Budget Rates.

(2) At Actual Rates.
(3) For the FYE 2015 budget, Support Services has been restated to reflect costs erroneously included in Other Operating
Expenses at the time the budget was prepared.

49

FYE 2015 Forecast Cash Flow

$ in millions
Sony/ATV Combined
Earnings before Interest & Taxes
Depreciation
Amortization
Net Talent Expense
Gain on Sale
Writer Advances
Other Balance Sheet Changes
Cash Flow before Investments and Financing
Acquisitions - Catalogs
Proceeds from Asset Sales
Capital Expenditures
Investment in Music Companies, Net.
Cash (Used In) / Provided by Investing Activities
Net Cash Provided from Operations and Investments
Distributions to Owners
Guarantee Fees
Other Financing Activities
Partial Repayment of Acquisiton Loan
Net Cash (Used) in Financing
Net Change in Cash, Excluding Foreign Exchange
(1) At FYE 2015 Budget Rates.
(2) At Actual Rates.
(3) Reflects sale of catalogs.
(4) Includes $3.9 million from the sale of Nashville building.

50

FYE 2015 (1)

Forecast
Budget
$75.1
2.4
33.7
2.2
(3.8)
(140.4)
124.8
94.0
(25.0)
2.9
(3.0)
(25.2)

$85.6
2.3
33.5
2.2
(140.4)
113.5
96.8

15F v 15B
B/(W)
($10.5)
0.1
0.2
0.0
(3.8)
11.3
(2.8)

FYE 2014 (2)

Actual
$88.9
1.8
33.8
2.7
(6.1)
(87.5)
131.4
165.1

(25.0)
(3.0)
(28.0)

2.9
2.9

68.9

68.8

0.1

173.0

(46.3)
(0.6)
0.0
(10.0)
(56.9)

(46.3)
(0.6)
(10.0)
(56.9)

(0.0)
0.0
0.0
(0.0)

(42.7)
(0.6)
(80.2)
(123.6)

$12.0

$12.0

$0.1

$49.4

(3)

15F v 14A
B/(W)

(1.5)
12.9
(2.7)
(0.7)
7.9

($13.7)
0.6
(0.1)
(0.5)
2.3
(52.9)
(6.7)
(71.0)
(4)

(23.5)
(10.1)
(0.3)
0.7
(33.1)
(104.1)
(3.5)
(0.0)
0.0
70.2
66.7
($37.4)

FYE 2015 Forecast Opportunities and Risks

Opportunities

Risks

Year-end accrual

Year-end accrual

Foreign exchange

Foreign exchange

Digital deals

U.S. mechanical market (physical and

digital downloads)

Infringement settlements

Monetization of streaming
Achievement of task

51

Mid-Range Plan

52

Key Assumptions: FYE 2015 FYE 2018

FYE 2015 MRP Assumptions
FYE 2015
Forecast
Mechanical - Physical
Mechanical - Downloads
Mechanical - Streaming
Total Mechanical
Total Performance
Total Synch
Total Revenue
NPS
Operating Income

FYE 2016
MRP

FYE 2017
MRP

FYE 2018
MRP

FY14 - FY18
Current

(10.5%)
(8.7)
60.9
(18.5)

(16.9%)
(15.6)
53.1
(7.6)

(21.8%)
(18.1)
44.8
(6.9)

(23.1%)
(20.0)
41.1
(2.5)

(23.5%)
(20.4)
71.4
(11.9)

2.7

3.0

5.3

5.6

5.6

(8.7)

2.4

7.6

12.0

4.0

(6.7)

0.6

2.9

5.0

0.5

(3.1)

1.0

2.8

4.5

1.7

(15.9%)

10.6%

2.6%

4.9%

0.0%

Assumes withdrawal of digital performing rights in FY16 and licensing the U.S. catalog directly; the impact will begin in FY17
Physical, digital download and streaming assumptions in line with Sony Music and EMI for the MRP periods
Assumes an increase in our YouTube contract in FYE 2018 based on their continued growth
Employee costs in total increase an average of approximately 3% from FYE 2015 through FYE 2018
For cash flow purposes, annual catalog investments of $25 million
Annual writer advances of $135 million over the MRP period

Guaranteed payments to MJ and Sony (each) are $23.1 million in FYE 2015 through FYE 2018
Total debt paydown to Sony of $10.0 million per year
53

Mid-Range Plan Revenue Profile

$ in millions
Revenue:
Mechanical - Physical
Mechanical - Downloads
Mechanical - Other
Total Mechanical

FYE 2016 (1)

MRP

FYE 2017 (1)

MRP

FYE 2018 (1)

MRP

$48.3
34.7
28.0
111.0

% of Total
9.1%
6.6
5.3
21.0

$40.1
29.3
33.1
102.5

% of Total
7.6%
5.5
6.2
19.3

$31.4
24.0
40.2
95.5

% of Total
5.7%
4.4
7.3
17.5

$24.1
19.2
49.8
93.1

% of Total
4.2%
3.3
8.7
16.2

Performance
Synch
Other
Core Revenue

235.8
107.5
28.8
$483.0

44.7
20.4
5.5
91.5

242.8
110.1
30.5
$485.9

45.7
20.7
5.7
91.5

255.7
118.4
31.0
$500.6

46.8
21.7
5.7
91.6

270.1
132.6
31.0
$526.8

47.0
23.1
5.4
91.7

EMI Admin Fee

44.7

8.5

45.1

8.5

46.0

8.4

47.4

8.3

Total Revenue

$527.7

(1) At FYE 2015 Budget Rates.

54

FYE 2015 (1)

Forecast

100.0%

$531.0

100.0%

$546.6

100.0%

$574.2

100.0%

Mid-Range Plan Income Statement

$ in millions
Revenue
NPS
margin %
Employee Costs
Net Talent
Catalog Amortization
Support Services
Administration Fee
Other Operating Expenses
Total Operating Expenses
Other Operating Income (Loss) / Task
Operating Income
margin %

FYE 2016 (1)

MRP

FYE 2017 (1)

MRP

FYE 2018 (1)

MRP

$527.7
258.9
49.1%

$531.0
261.5
49.2%

$546.6
268.9
49.2%

$574.2
281.0
48.9%

100.7
2.2
32.9
11.9
7.5
33.6
188.8

103.6
1.7
32.5
12.3
7.5
34.9
192.5

106.5
1.7
32.4
15.7
7.5
36.1
200.0

109.6
1.7
32.2
16.1
7.5
37.4
204.5

5.0
75.1
14.2%

14.1
83.1
15.6%

16.3
85.2
15.6%

12.8
89.3
15.6%

Interest Income
Interest Expense
Pre-Tax Income

0.8
(5.5)
70.4

0.8
(12.3)
71.5

1.1
(14.9)
71.3

1.7
(18.5)
72.5

Income Tax

12.1

12.4

12.0

12.0

$58.3

$59.1

$59.3

$60.5

Net Income
(1) At FYE 2015 Budget Rates.

55

FYE 2015 (1)

Forecast

Mid-Range Plan Cash Flow

$ in millions
Sony/ATV Combined
Earnings before Interest & Taxes
Depreciation
Amortization
Net Talent Expense
Gain on Sale
Writer Advances
Other Balance Sheet Changes
Cash Flow before Investments and Financing
Acquisitions - Catalogs
Proceeds from Catalog Sale
Capital Expenditures
Cash (Used In) / Provided by Investing Activities
Net Cash Provided from Operations and Investments
Distributions to Owners
Guarantee Fees
Partial Repayment of Acquisiton Loan
Net Cash (Used) in Financing
Net Change in Cash
(1) At FYE 2015 Budget Rates.

56

FYE 2015 (1)

Forecast

FYE 2016 (1)

MRP

FYE 2017 (1)

MRP

FYE 2018 (1)

MRP

$75.1
2.4
33.7
2.2
(3.8)
(140.4)
124.8
94.0

$83.1
2.8
33.3
1.7
(140.4)
126.5
107.0

$85.2
3.1
33.3
1.7
(140.4)
124.7
107.6

$89.3
3.4
33.1
1.7
(140.4)
121.2
108.3

(25.0)
2.9
(3.0)
(25.2)

(25.0)
(3.0)
(28.0)

(25.0)
(3.0)
(28.0)

(25.0)
(3.0)
(28.0)

68.9

79.0

79.6

80.3

(46.3)
(0.6)
(10.0)
(56.9)

(46.3)
(0.6)
(10.0)
(56.9)

(46.3)
(0.6)
(10.0)
(56.9)

(46.3)
(0.6)
(10.0)
(56.9)

$12.0

$22.1

$22.7

$23.5

Sony/ATV Music Publishing Debt Repayment

Historical Debt Balance
$750.0
$721.4
$688.3

$700.0

$649.6

$ in millions

$650.0
$600.0

$580.0

$550.0

$535.8
$519.3

$500.0
$445.3

$450.0
$400.0
FYE 2008
Actual

FYE 2009
Actual

FYE 2010
Actual

FYE 2011
Actual

FYE 2012
Actual

FYE 2013
Actual

FYE 2014
Actual

Sony/ATV has reduced the Acquisition Loan to Sony Corp by approximately $275 million over the last six
years through debt payments
57

58

Key Assumptions: FYE 2015 FYE 2018

FYE 2015 MRP Assumptions

FYE 2015
Forecast

FYE 2016
MRP

FYE 2017
MRP

FYE 2018
MRP

FY14 - FY18
CAGR

Mechanical - Physical
Mechanical - Downloads
Mechanical - Streaming
Total Mechanical

(11.8%)
(9.8)
68.0
(17.3)

(16.6%)
(15.7)
56.6
(8.2)

(21.5%)
(18.2)
45.2
(7.9)

(22.9%)
(20.0)
41.6
(3.1)

(18.3%)
(16.0)
52.5
(9.3)

Total Performance

(0.5)

3.2

6.9

9.9

4.8

Synch
Total Revenue

0.8
(4.0)

5.4
4.1

7.7
1.7

12.1
2.5

6.4
1.0

NPS

(2.1)

1.0

2.0

3.0

1.0

Assumes withdrawal of digital performing rights in FYE16 and licensing the U.S. catalog directly; the impact will be in FYE17

Physical, digital download and streaming assumptions in line with Sony Music and Sony/ATV for the MRP periods
Assumes an increase in our YouTube contract in FYE 2018 based on their continued growth
Restructuring & Integration period ends in FYE 2015
Average annual writer advances of $137 million over the MRP period

59

Mid-Range Plan Revenue Summary

$ in millions

FYE 2015 (1)

Forecast
% of Revenue

FYE 2017 (1)

MRP
% of Revenue

FYE 2018 (1)

MRP
% of Revenue

Mechanical - Physical
Mechanical - Downloads
Mechanical - Other
Total Mechanical

$61.3
41.0
47.5
149.8

10.2%
6.8
7.9
24.9

$51.2
34.6
51.8
137.6

8.2%
5.5
8.3
22.0

$40.2
28.3
58.2
126.7

6.3%
4.4
9.2
19.9

$31.0
22.6
69.2
122.8

4.8%
3.5
10.6
18.8

Performance
Synch
Other

235.1
132.8
82.9

39.2
22.1
13.8

242.7
139.9
104.8

38.8
22.4
16.8

259.5
150.7
98.7

40.8
23.7
15.5

285.1
169.0
74.6

43.8
25.9
11.5

Total Revenue
NPS
(1) At FYE 2015 Budget Rates.
(2) At Actual Rates.

60

FYE 2016 (1)

MRP
% of Revenue

600.6
$297.8

100.0%

625.1
$300.8

100.0%

635.6
$306.8

100.0%

651.5
$316.0

100.0%