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17 OCTOBER 2013

FY13 RESULTS P R E S E N T A T I O N
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Confidential property of Ten Network Holdings

TEN NETWORK HOLDINGS LIMITED

HAMISH McLENNAN CEO PAUL ANDERSON -CFO

HAMISH McLENNAN

CHIEF EXECUTIVE OFFICER

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Confidential property of Ten Network Holdings

OVERVIEW

2013 has been another year of significant change for TEN New strategic focus and stability following the appointment of CEO with: New programming strategy targeting 25 to 54s with a young at heart focus Commitment to compete and investment in content including T20 Big Bash League, Sochi Winter Olympics, new So You Think You Can Dance, Party Tricks, Secrets & Lies Reinvigorated TEN Eyewitness News, launch of Wake Up and Studio 10 industry-leading tenplay Digital platform focus with the acclaimed launch of industry Renewed focus on key clients; increased business from Woolworths, Mitsubishi, Volkswagen Audi, Luxottica, Chrysler, Sony, Village Roadshow Revenue model expanded with the launch of InTENsify and Generate Recruitment of key onon-air talent Recruitment of new, industryindustry-best senior executives

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Confidential property of Ten Network Holdings

FINANCIAL RESULTS FOR FY13


FY13 Television EBITDA of $46.1m Television costs reduced (ex(ex-selling costs) by 8.0% NonNon-recurring charges from continuing operations of $336.2m Television license impairment $292.1m Television restructure expenses $14.4m Outdoor Impairment and Onerous Contracts $29.7m

Capital Raising of $222.8m (net of costs) in December 2012 Net debt reduced by $235m to $28m Underlying loss attributable to members of $5.0m No final dividend to be paid for FY13

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Confidential property of Ten Network Holdings

CORPORATE
Significant new fourfour-year, $200m Financing Facility announced: No financial banking covenants Allows greater flexibility to invest in new programming initiatives Investment will be strategic, prudent and measured Reflective of confidence by three major TEN shareholders Subject to shareholder approval at AGM

Strict cost control that started in 2011 will continue New and improved affiliate agreement signed for three years with Southern Cross Media Sale of Eye ANZI and UK

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Confidential property of Ten Network Holdings

PROGRAMMING HIGHLIGHTS

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Confidential property of Ten Network Holdings

2013 RATINGS
Since late July, TENs 25 to 54 audience has grown

6pm to 10:30pm

7:30pm to 10:30pm

+6%
2012 2013

+9%

TEN 25 to 54 Audience Weeks 31 to 41

TEN 25 to 54 Audience Weeks 31 to 41

Source: OzTAM, 5 City Metro, Weeks 31 to 41 2013 vs. Weeks 31 to 41 2012, TEN audience, 18:00-22:30, 19:30 to 22:30, 25 to 54s, Overnight

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Confidential property of Ten Network Holdings

2013 RATINGS
Network Ten delivers less wastage in 25 to 54s

53%
55+ 27%

0-24 20% 55+ 30%

49%
25-54

0-24 21%

0-24 16%

43 43% %
25-54 25-54 25

25-54

55+ 41%

Source: OzTAM, 5 City Metro, Weeks 7 to 41 2013 (excl. Easter Weeks 13 & 14), Network Totals including Primary and Multi-channels, 18:00-22:30, Adhesion, Consolidated (excluding Week 41 which is Overnight)

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Confidential property of Ten Network Holdings

2013 RATINGS
TENs median age is in the middle of the 25 to 54 demographic

MEDIAN AGE

MEDIAN AGE

MEDIAN AGE

42
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45
Confidential property of Ten Network Holdings

49

Source: OzTAM, 5 City Metro, Weeks 7 to 41 2013 (excl. Easter Weeks 13 & 14), Primary Channels, Median Age, 18:00-22:30, Consolidated (excluding Week 41 which is Overnight)

2013 RATINGS
Network Ten: #1 in Daytime for the 13th consecutive year

#1
36.3%

#1
38.0%

#1
37.0%

#1
37.1%

Total People

25 to 54s

Under 55s

Women

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Source: OzTAM, 5 City Metro, Weeks 7 to 41 2013 (excl. Easter Weeks 13 & 14), Network Totals including Primary and Multi-channels, 09:00-18:00 Mon to Fri, Consolidated (excluding Week 41 which is Overnight)
Confidential property of Ten Network Holdings

2013 RATINGS ELEVEN & ONE

#1
#2
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MultiMulti-channel in daytime in total people, 16 to 39s and 25 to 54s

#1
#2

MultiMulti-channel combination in daytime in total people, 25 to 54s and under 55s MultiMulti-channel combination all day and night in 25 to 54s, 16 to 39s and under 55s

MultiMulti-channel combination all day and night in 25 to 54s, 16 to 39s and under 55s

Source: OzTAM, 5 City Metro, Weeks 7 to 41 2013 (excl. Easter Weeks 13 & 14), 09:00-18:00 Mon to Fri, 06:00-24:00 Sun to Sat, Consolidated (excluding Week 41 which is Overnight)

Confidential property of Ten Network Holdings

2013-14 LOCAL PROGRAMMING

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Confidential property of Ten Network Holdings

2013-14 SPORT PROGRAMMING

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Confidential property of Ten Network Holdings

2013-14 INTERNATIONAL PROGRAMMING

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Confidential property of Ten Network Holdings

DIGITAL
TEN will transform into a multimulti-platform media company Best in class products and audience experiences around our shows Engaging rich content experiences Better process and structure Zeebox now 100,000 active users and 700,000 downloads

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Confidential property of Ten Network Holdings

DIGITAL
TV anywhere, anytime, on any device Catch up on TV shows youve missed Exclusive content and information, social media Set reminders and access a complete TV guide Strong ad revenue growth. Premium ad bundles Since launch: Page views up 35% | Video views up 9% | Unique visitors up 10% | Time spent on site up 25% | Downloads 30% above target

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Confidential property of Ten Network Holdings

OUTLOOK
Advertising market conditions remain short and the outlook uncertain Strict cost control to continue

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Confidential property of Ten Network Holdings

PAUL ANDERSON

CHIEF FINANCIAL OFFICER

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Confidential property of Ten Network Holdings

FINANCIAL RESULTS FY13 | HIGHLIGHTS


FY13 Television EBITDA of $46.1m Television costs (ex(ex-selling costs) reduced by 8.0% NonNon-recurring charges from continuing operations of $336.2m Television license impairment $292.1m Television restructure expenses $14.4m Outdoor Impairment and Onerous Contracts $29.7m

Discontinued operations loss of $5.9m (EYE ANZI and UK) Capital Raising of $222.8m (net of costs) in December 2012 Net debt reduced by $235m Underlying loss attributable to members of $5.0m No final dividend to be paid for FY13 Announcement today of a new $200m Financing Facility subject to shareholder approval at the AGM

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Confidential property of Ten Network Holdings

FY13 INCOME STATEMENT


FY13 Group Results ($m) Television Revenue Television Expenses Television EBITDA Outdoor EBITDA Group EBITDA Depreciation & Amortisation EBIT Net Interest Expense PROFIT BEFORE TAX, NRI & DISCONTINUED OPERATIONS Non Recurring Items Discontinued Operations (LOSS)/PROFIT BEFORE TAX Tax Expense - Normal Tax effect of NRI's/Discontinued Operations (LOSS)/PROFIT AFTER TAX Non-controlling interest NET (LOSS)/ PROFIT AFTER TAX ATTRIBUTABLE TO MEMBERS Underlying Net (Loss) / Profit After Tax Attributable to Members 2013 630.1 584.0 46.1 (4.3) 41.8 17.7 24.1 16.6 7.5 (336.2) (5.9) (334.6) (5.7) 62.2 (278.1) 6.9 (285.0) (5.0) 2012 727.0 644.6 82.4 (0.5) 81.9 18.4 63.5 36.8 26.7 (11.4) (9.1) 6.2 (11.3) 0.9 (4.2) 8.7 (12.9) 6.7 (174.8%) (20.8%) 49.1% (48.9%) 4.0% (62.0%) 55.0% (71.6%) Fav / (Unf) (13.3%) 9.4% (44.0%)

Onerous contract provisions of $26.4m (2012: $21.2m) for Television and $2.1m (2012: $5.2m) for Outdoor have been released during the period. The information contained on this page may not necessarily be in statutory format. A full reconciliation of EBIT is provide in Appendix 4E and TNHL Annual Report for the year ended 31 August 2013.

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Confidential property of Ten Network Holdings

NON-RECURRING & DISCONTINUED OPERATIONS


Non Rec urring Items ($m) Continuing Opera tions Impairment of television licences Restructure expenses Impairment of EYE US (Outdoor) assets Provision of Onerous Contracts (EYE US Outdoor) Total Non-Recurring Items Discontinued Opera tions Sale of EYE (ANZI and UK) Impairment loss of EYE (ANZI) Trading Loss/(Profit) Loss from Discontinued Operations Total Signific ant Items Before Tax Income Tax (Benefit)/Expense Net NRI and Disc ontinued Ops After Ta x 5.1 0.8 5.9 342.2 (62.2) 280.0 12.3 (3.2) 9.1 20.5 (0.9) 19.6 292.1 14.4 9.4 20.3 336.2 7.8 3.6 11.4 2013 2012

The information contained on this page may not necessarily be in statutory format. Refer to the Appendix 4E and TNHL Annual Report for the year ended 31 August 2013 for statutory format.

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Confidential property of Ten Network Holdings

FY13 BALANCE SHEET


FY13 Group Balance Sheet ($m) Cash & cash equivalents Receivables Program rights and inventories Intangibles Property, plant & equipment Net assets held for sale Other assets Debt - Current Debt - Non Current Other Current Liabilities Other Non Current Liabilities TOTAL SHAREHOLDERS EQUITY 2013 122.4 129.3 197.1 785.7 54.2 30.2 (150.0) (186.6) (96.4) 885.8 2012 93.9 116.0 152.2 1,079.8 70.1 96.9 18.9 (210.0) (150.0) (185.3) (140.8) 941.8

The information contained on this page may not necessarily be in statutory format. Refer to the Appendix 4E and TNHL Annual Report for the year ended 31 August 2013 for statutory format.

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Confidential property of Ten Network Holdings

FY13 CASH FLOW STATEMENT


FY13 Group Cash Flow ($m) Operating cash (outflow)/inflow Capital Expenditure Proceeds from sales of investments Other investing activities Dividends Paid Refinancing Costs Proceeds from issue of shares NET DEBT REDUCTION 2013 (54.2) (11.9) 92.0 (0.5) (12.2) (0.6) 222.8 235.5 2012 41.8 (23.2) 1.4 (4.4) (58.4) 196.0 153.3 13.7% 89.4% 79.1% Fav / (Unf) (229.7%) 48.8%

The information contained on this page may not necessarily be in statutory format. Refer to the Appendix 4E and TNHL Annual Report for the year ended 31 August 2013 for statutory format

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Confidential property of Ten Network Holdings

DEBT STRUCTURE & BANKING COVENANTS


Fac ility ($m) Fa cility USD $125m USPP AUD $150m USPP Domestic To tal Cash at Bank Net Debt Debt Service Ratio Net Debt Service Ratio Interest Cover Ratio
1Cash

Maturity

Covenant

Aug 2013 ($m)

Aug 2012 ($m)

150 80 230

Mar-13 Dec-15 Nov-15

150 150 (122) 28 < 4.0x 3.59x 0.66x > 3.0x 4.39x

210 150 360 (97) 263 3.83x 2.80x 3.32x


1

USD $125m USPP repaid in Feb 2013

$80m Domestic Facility commenced in Dec 2012

Debt reduced by $235m

at Bank for Aug 2012 includes $3m classified as Assets Held for Sale in the Appendix 4E and TNHL Annual Report for the year ended 31 August 2013..

The information contained on this page may not necessarily be in statutory format. Refer to the Appendix 4E and TNHL Annual Report for the year ended 31 August 2013 for statutory format.

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Confidential property of Ten Network Holdings

NEW FINANCING FACILITY


The Company complied with all of its financial banking covenants for the 2013 financial year
Gross Debt Service ratio 3.59x | Net Debt Service ratio 0.66x

Proposed new Financing Facility:


Four year $200m Revolving Cash Advance Facility with CBA No financial covenants Guaranteed by major shareholders associated with Bruce Gordon, Lachlan Murdoch and James Packer Shareholder Guarantors to receive a fee and will be fully secured against the assets of the Company Provides capacity to invest in new programming initiatives A portion of the proceeds, combined with existing cash reserves, will be used to repay existing $150m Senior Unsecured Notes Shareholder approval is required at the 2013 AGM in order for the Company to take up the new Financing Facility

Shareholder approval is required and sought at the 2013 AGM:


Pursuant to ASX Listing Rule 10.1, TEN must obtain shareholder approval before granting security to a related party Shareholder Guarantors and their associates will be excluded from voting Explanatory memorandum containing full details including Report of Independent Expert will be provided to all shareholders with the Notice of AGM
Confidential property of Ten Network Holdings

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INVESTOR DAY & COST GUIDANCE


FY13 television costs (ex(ex-selling costs) reduced by 8.0% Television costs (ex(ex-selling costs) are expected to increase by 8.0% in FY14, excluding oneone-off events This includes the investment in KFC T20 Big Bash League, Wake Up and Studio 10

OneOne-off events in FY14 include the XXII Olympic Winter Games in Sochi, Russia, and the XX Commonwealth Games in Glasgow, Scotland, which will add a further $55m Cost control and efficiencies remain a focus

Investor Day planned for midmid-November 2013

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Confidential property of Ten Network Holdings

QUESTIONS

TEN NETWORK HOLDINGS LIMITED

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Confidential property of Ten Network Holdings

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