1. Participations PARIS Implementation & Residuals Outsourcing to Entertainment Partners Greenlight deck
May 21, 2013

2. Participations PARIS Implementation & Residuals BPO – Greenlight deck
Agenda
►Executive Summary
►Business Problem Statement
►Assessment Phase Status Update
►PARIS for Participations - Assessment
►PARIS for Participations - Project Plan
►PARIS for Participations - Financials
►EP for Residuals Outsourcing - Assessment
►EP for Residuals Outsourcing - Project Plan
►EP for Residuals Outsourcing - Financials
►Appendix
►Participations & Residuals work volume metrics
►PARIS Impact Assessment Approach
►State of other studios
Participations PARIS Implementation & Residuals BPO – Greenlight deck

3. Participations PARIS Implementation & Residuals BPO – Greenlight deck
Executive Summary
The Participations and Residuals systems are outdated, lack integrations with key enterprise systems and promote many manual, in-efficient and error prone processes increasing the risk of inaccurately paying the Participants and the Talents (Guilds)
The total project cost to convert Participations to NBCU PARIS and outsource Residuals to Entertainment Partners is estimated at approximately $17,710,366 (Net new funds requested is $16,761,041)
The PARIS project cost is $10,742,748 (includes the cost of the Inception phase)
Net new funds requested is $10,358,106
The Residuals BPO project cost is $6,967,618 (includes the cost of the Inception phase)
Net new funds requested is $6,402,935
Participations PARIS Implementation & Residuals BPO – Greenlight deck

4. Participations PARIS Implementation & Residuals BPO – Greenlight deck
Problem Statement – Participations
● Very manual, time-consuming and inefficient processes are employed for Data Sourcing, Payout Calculations, Paper copying and filing.
● The OPUS system is not enabled to model participant contracts, calculate payouts and to directly generate participant statements. A mix of manual procedures and excel manipulations are employed to prepare Talent Statements.
● The volume and type of products and the complexity of talent deals are ever increasing which results in keeping up with the statement generation schedule very difficult. Additional headcounts are required to keep up with the ever growing volume of work. To deal with the work load, for the deals which are forecasted to not pay do not have statements created (i.e. statements are “bugged”)
● Upstream data sources lacking governance and consistency in usage providing data in a form that lacks the appropriate level of granularity and attributes. Lack of complete understanding of the information flowing into and filtered out of the data feeds into the department.
● Unable to focus on value-add activities (e.g. breakout projections, proactive buyout assessments, ‘What-if’ analysis, impact assessment & feedback to Business Affairs across title, market & media types).
Participations PARIS Implementation & Residuals BPO – Greenlight deck

5. Participations PARIS Implementation & Residuals BPO – Greenlight deck
Problem Statement – Residuals
● Very manual, inefficient, and error-prone processes employed for data sourcing, payout calculations, guild reporting, paper copying/filing.
● Majority of the data sourcing and systems feeding is done manually by the clerks which is error-prone. Data reconciliation processes are not rigorous and error prone due to human involvement.
● The volume and type of Products, the complexity of guild rules along with expansion of the reuse markets and the manual departmental procedures results in keeping up with the workload very difficult. This in turn results in un-recoupable overpayments, late fees and penalties on the department.
● The increasing workload and the lack of a system results in the work being handled by the staff through overtime and by outsourcing to third party providers. This has also resulted in temporary staff being used permanently.
● Unable to focus on value-add activities (e.g. projections, analysis for negotiations and ultimates).
● Recurring errors in payouts and the accompanying claims might strain relations with the Talents.
Participations PARIS Implementation & Residuals BPO – Greenlight deck

6. Participations PARIS Implementation & Residuals BPO – Greenlight deck
Current Challenges and Issues by Area
Difficult to manage the volume with time-consuming manual calculations
Changes to the guild agreements cannot be accommodated; system is not equipped to support current guild agreements
Unable to capture pension or pension ceilings so often overpaying or underpaying
Cannot adjust tax rates as the change will be applied retroactively and recalculate all previous statements/payments
Payments are manually tracked on a spreadsheet
Retrieve data from 12 different feeds/sources; input data manually from hard copy reports
Electronic reporting to the guilds and talents requires improvement
Data reconciliation of financial and trigger information is not being done due to lack of system capabilities
Residuals
Difficult to manage the volume with time-consuming manual calculations
Statement generation is manual and very cumbersome; OPUS does not produce “headsheets” or statements, only the data to support them
18-month limit on detailed monthly data in OPUS; difficult to calculate historical point-in-time data
Spends a significant amount of time responding to queries from other groups; lack any type of estimation/modeling tools for calculating “what-if” scenarios
No system support for payout calculations for the digital markets, and complex talent deals
Participations
Spends a significant amount of time researching data discrepancies, statement adjustments, etc.
System “tricks”, dummy numbers, and manual adjustments (“one-sided entries”) pose risks during audits
Lack of formal checks and balances
Audit
Residuals system is inflexible and has several system limitations (e.g. field sizes are limited to $99,999) as it was implemented in the 1960’s
IT support for the Residuals mainframe system is very limited due to aging technology. The team has recently lost one-half of the IT support team –resources who had been supporting the department for several years. Additional turnover events (like retirement) will pose serious risks to IT operations and the obsolete technology makes it harder to find suitable replacements. IT
Participations PARIS Implementation & Residuals BPO – Greenlight deck

7. Participations PARIS Implementation & Residuals BPO – Greenlight deck
Since we last convened …
An Assessment phase was funded with the primary objective of assessing the functional fit-gap of NBCU PARIS against SPE requirements and assessing the feasibility of Residuals BPO.
Workstream
Description
Deliverables
PARIS Impact Assessment
Fit gap analysis of NBCU-PARIS with respect to the process consolidation and systems implementation needs of the Participations and the Residuals departments.
- High-level Functional Requirements
- Functional Demonstration Scripts for PARIS Evaluation
- Technical Questionnaire for PARIS Evaluation
- Executive Report with Impact Assessment
Residual Outsourcing Assessment
Assessment of the various options available to outsource the Residuals business processes to a third party organization.
- Request for Information (RFI) - Requirements for Assessment - Request For Quote (RFQ) - Scoring Model - Executive Report with Preliminary Business Case and next steps
Residuals Outsourcing Due Diligence with Entertainment Partners
Detailed assessment of Entertainment Partners' organization, future state of SPE's organization, the proposal approach, timeline, effort and the pricing.
- Future State Process Flows
- EP-Outsourcing Due Diligence Report
Business Cases Comparative Analysis
Business case comparison of the Systems implementation option (i.e. PARIS for Participations and Residuals) versus Outsourcing (i.e. Entertainment Partner's for BPO).
- Comparative analysis of Business Cases
Interfaces and MDM assessment
Detailed analysis of the data sourcing interfaces, including tracing back to the upstream master and reference data systems to document the functional needs for PARIS integration
- Interface Strategy Assessment Report
- Functional Requirements for MDM / GPMS enhancements
- Data Overlap Analysis Assessment between P&R
Data Structure & Quality Assessment
Detailed analysis of the current state of the data sourcing interfaces, issues with the integrity and the quality of data, and recommendations on
- Data Flow analysis document
- Data Quality Assessment report
- Data GAP Analysis report
Participations PARIS Implementation & Residuals BPO – Greenlight deck

8. Assessment Phase Summary
Timeline: August 2011 to August Phase Cost: $949,325
Activities summary:
Delivered selection of Software Platform and Operations Model using PARIS for Participations
Delivered Business Case Assessment and subsequent Due Diligence for BPO with Entertainment Partners
Gathered High Level Requirements through Focus interviews and Workshops with key stakeholders
Finalized Overall Project Scope
Developed High-level Project Budget, Schedule and Timeline, Resource Plan (including backfill requirements)
Developed Data Conversion & Migration Strategy and Plan
Developed Data Sourcing & Interface Strategy and Plan
Developed Greenlighting Material for full project funding
2011
2012
Jul – Sep
Oct – Dec
Jan – Mar
Apr - Jun
Jul - Sep
Data & Interface Assessment
NBCU PARIS Impact Assessment
PARIS Impact Assessment Report
Residuals Outsourcing Assessment
BPO Due Diligence
BPO Business Case
Comparative Review
Executive
Debrief
The project has already seen paybacks in terms of recoupments for Participations and Residuals in the Inception phase.
Participations PARIS Implementation & Residuals BPO – Greenlight deck 8

9. PARIS for Participations - Impact Assessment
Participations module of NBCU-PARIS has a good level of functional fit relative to SPE’s requirements.
● The Business Process automations delivered by PARIS far exceeds the current automation levels at SPE.
● PARIS capabilities and feature-set for Participations & Audit scored at over 86% and 81% respectively by SPE stakeholders.
● PARIS provides a strong coverage for most of the requirements.
● The Participations, Data Staging and Audit modules are quite robust, flexible and more mature than the Residuals module.
● PARIS architected on the latest Microsoft technologies including the .NET framework.
NBCU facilitated 4 sessions with SPE:
PARIS overview and orientation
Admin features (Data staging and Administration) demo
Residuals demo
Participations demo
The NBCU demonstrations of PARIS were based on scripted demo scenarios :
These scenarios were based on SPE’s high-level functional requirements.
The scenarios represented a selection of high- and medium priority processing requirements.
Demos were attended by SPE stakeholders across Participations, Residuals, Input Consolidation, Audit, Finance and IT groups.
Participations PARIS Implementation & Residuals BPO – Greenlight deck 9

10. Participations PARIS Implementation & Residuals BPO – Greenlight deck
PARIS for Participations - Project Phases
2 Months
12 Months
Ongoing
Planning
Implementation
Conversion
Impact Assessment
Hands-on Evaluation
Conversion planning
Installation and Configuration
Development and Integration
System & Parallel Testing
Training and Change management
Participations Conversion
Parallel Operations
IT Support
Impact assessment
Requirements
Functional fit
Estimates
Hands-on evaluation
Early design
Support model decision
Refined estimates
Conversion planning
Approach and priorities
Resources and backfill
Controls and Acceptance
Planning for Parallel Ops.
Installation and Configuration
Data loads (migration)
Lookups/mappings
Templates and hierarchies
Development and Integration
Interfaces
Reports
Testing
Functional tests
Parallel tests
Training and Change management
Org and process design
Participations conversion
Parallel operations
Data refreshes
Porting converted titles
IT support
Hypercare
Systems maintenance
User support
Participations PARIS Implementation & Residuals BPO – Greenlight deck

11. PARIS for Participations - Project Timeline
Years
Quarters 1 2 3 4 5
Program management/planning
Hands-on evaluation
Implementation
Hypercare
Participations Conversion
Parallel operations
IT Support
Implementation model decision
Go Live
Planning
Conversion
Decommission legacy systems
Conversion Complete
Key Estimation Drivers and Project Considerations
● The PARIS Configuration within the Implementation phase is the key design activity to prepare the system for Participations usage.
● The detail- and research-oriented nature of Conversion makes it the most intensive phase in time and effort. Issues unearthed demand strong decision making skills and Standard Exception Handling procedures need to be instituted.
● Resource planning and Department alignment is critical to the success of the project. Determining backfill, ratio of SPE-to-contractor resources and regular training will help mitigate the risk of PARIS knowledge being confined to contractors.
● There exists a steep learning curve to PARIS, and the departmental functions will become more analytical and less data entry / processing type.
Participations PARIS Implementation & Residuals BPO – Greenlight deck

12. PARIS for Participations - Project Costs & Benefits Summary
Project Costs (includes Inception phase)
Software
$3,500,000
Hardware/Peripherals
$411,000
Internal Labor
$199,981
External Labor
$6,627,322
Miscellaneous (i.e. Travel)
$4,445
Total
$10,742,748
Ongoing Costs (Twelve-year Summary)
Incremental support labor
$851,877
Incremental maintenance
$739,800
$1,591,677
Project Benefits (Twelve-year Summary)
Cost Avoidance
$12,759,929
Risk Mitigation
$40,000,000
$52,759,929
Twelve-year Summary
Total Costs (One-time + Incremental Ongoing)
$12,334,425
Total Benefits
$52,759,929
Internal Rate of Return
42.02%
Net Present Value
$15,034,230
Payback Periods (in months)
30.47
Future Funding Needed
FY14
$6,117,030
FY15
$1,770,339
FY16
$1,100,740
FY17
$1,095,998
FY18
$273,999
$10,358,106
Note:
Twelve year summary includes the costs of Inception phase
CBA has been calculated over a timeline starting FY12
Participations PARIS Implementation & Residuals BPO – Greenlight deck

13. PARIS for Participations - Project Benefits
Category $
Description
Cost Reduction / Avoidance
$230,535
Avoiding SCA mainframes hosting and support cost
$1,393,273
(average)
Avoiding the need to increase the Participations staff to support the departmental functions
Risk Mitigation
$5,000,000
Mitigating the risk of overpayments
Participations PARIS Implementation & Residuals BPO – Greenlight deck

14. EP for Residuals Outsourcing - Assessment
Entertainment Partners selected as the leading vendor from a Business Process Outsourcing RFQ concluded in 2012.
A detailed due diligence assessment of the EP proposal was conducted. The assessment included review of - Organization & Transition approach, Conversion approach, IT Systems, Timeline and Level of Effort. The goal of the due diligence was to craft the future state organization for SPE and EP, create the BPO Business Case and confirm the Pricing.
● EP proposes to completely take over certain functions, including product and cast setup, residuals calculations and payment processing.
● SPE would retain ownership over interpreting agreements, determining triggers, supporting audits, forecasting and reporting,
● Improved Data Staging is the key to realizing the benefits. The option being considered is the use of EP’s proposed new feeder system (go-live expected in July 2013).
● There is a potential to offshore 2 FTEs in the retained organization.
Draft for discussion 14

15. EP for Residuals Outsourcing - Project Phases
Project (24 Months)
Implementation
Conversion
Operations
Implement Organization, Processes & Infrastructure
Import historic data and recreate balances between SPE & EP
Business-as-usual interaction between SPE and EP
Finalize Contracts, SLAs, and KPIs
Define Processes & Controls
Perform Data Reconciliation
Build Data Enrichment Platform
Build Interfaces for triggers & payments
Design Organization and Change Management
Conduct recruitment for Backfill and retained Organization
Build the SPE system sunset roadmap
Title/cast setups for 1,442 features and 52,714(1) episodes
Revenue and air date history import
Reconciliation of historic SPE payments with EP system results
Document collection for new setups
Review/approval of setups, triggers and payments
Audit & forecast support
New acquisitions processing
Residual payment processing
Infrastructure maintenance
Note:
1. Size of the library as of August 2012
Draft for discussion

16. Contract Negotiations
EP for Residuals Outsourcing - Project Timeline
Months 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Contract Negotiations
Process Transition
EP Client
On-Boarding
Data Conversion
Confirm final process design
Future process documentation & desktop procedures
Basic Cable
Game Shows
Pay Cable / Video
Network / Soaps
Fox
Syndications
Other Non Networks
Foreign
Employee Masters
Finalize KPI/SLA
Review and finalize MSA
Finalize new Air Date vendor
Vendor introductions
Account setups
Finalize EP client profile
User access rights (hosted environment, VPO)
Signed Contract with EP
Planning and Administration
Cutover Plan
Finalize transition plan
Confirm transition team
Obtain resources
Develop and approve cutover approach (business and IT)
Decommission transition backfill
Data Staging / Enrichment
Confirm Data Enrichment requirements
Configure Data Enrichment requirements
Develop Data Enrichment rules
Test enrichment rules
Deploy enrichment rules to production
Organizational Transition
Features
Roles & responsibilities
Identify skillsets for retained organization
Identify key process owners
Coordination with HR (compensation, termination, recruitment)
Interview potential hires
Identify resource transition plan and timeline
Data Enrichment / Staging Complete
Initial Cutover
Data Conversion Complete
IT Design & Development
Build interface for revenue /run data
GL interface from EP
Reports development
Reconciliation reports
IT Design & Development Complete
Training
Hosted environment
VPO
Conduct future state process training
EP work shadow and knowledge transfer
Transition Complete
Integration Testing
Project Closure
Revenue triggers
Run triggers
GL feed to SAP
Integration Testing Complete
Project completion planning
Implement retained organization
Archive historic data
Decommission conversion backfill
Decommission RP00
Data Reconciliation
Review and finalize communication requirements
Draft communication to internal organization
Draft communication to external organizations (talent, guilds, etc.)
Communication

17. EP for Residuals Outsourcing - Project Costs & Benefits Summary
Project Costs (includes Inception phase)
Hardware/Peripherals
$68,000
Internal Labor
$308,813
External Labor
$6,048,995
Miscellaneous (i.e. Travel)
$4,445
Duplicate Payroll Tax
$306,436
Severance and Retention Payouts
$230,929
Total
$6,967,618
Ongoing Costs (Twelve-year Summary)
Outside Services (i.e. EP Fees)
$6,281,811
Incremental support labor
$222,433
Incremental maintenance
$122,400
$6,626,644
Project Benefits (Twelve-year Summary)
Costs Reduced
$27,581,168
Costs Avoided
$403,438
FTE Savings
$7,582,733
$35,567,339
Twelve-year Summary
Total Costs (One-time + Incremental Ongoing)
$13,594,262
Total Benefits
$35,567,339
Internal Rate of Return
44.98%
Net Present Value
$8,581,677
Payback Periods (in months)
30.83
Future Funding Needed
FY14
$2,263,021
FY15
$3,239,638
FY16
$861,276
FY17
$39,000
$6,402,935
Note:
Twelve year summary includes the costs of Inception phase
CBA has been calculated over a timeline starting FY12
Participations PARIS Implementation & Residuals BPO – Greenlight deck

18. EP for Residuals Outsourcing – Project Benefits
Category $
Description
Cost Reduction / Avoidance
$573,427
Reduction in late fees / handling fees
$909,000
Reduction in over reported foreign remittance taxes
$1,138,838
Reduction in overpayments
$415,240
Recoupable overpayments
$42,296
Savings in print material and labor
$23,695
Avoiding DGA employee contributions
$57,634
Avoiding SCA mainframes hosting and support cost
$92,000
Eliminating check processing and reporting Costs
Annual FTE Savings
$571,880
Incremental reduction in the Residuals department overhead due to reduction in the need for labor
$280,686
Incremental reduction in the IT department overhead due to reduction in the need for labor
Participations PARIS Implementation & Residuals BPO – Greenlight deck

19. Headcount request
One Director role to Television IT team to replace Mark Quinto
One Director/Manager role to Corporate IT team to backfill Rajeev Nair
Draft for discussion

20. Participations PARIS Implementation & Residuals BPO – Greenlight deck
Questions ?
Participations PARIS Implementation & Residuals BPO – Greenlight deck 20

21. Participations PARIS Implementation & Residuals BPO – Greenlight deck
State of other Studios
Studio
Participations Environment
Residuals Environment
Warner Brothers
Currently, a mainframes based system is used for Revenue and Cash register with a front end to edit the revenue section and to generate video statements. The actual statements are currently generated manually using Excel
They purchased the Participations module of the PARIS solution
The PARIS implementation is currently underway The projected go live date for the implementation phase is mid-June 2013, which will be followed by the Data conversion phase
Custom in-house solution known as AIRS is being used and they plan to stay on this platform
NBC Universal
Comprehensive in-house solution called PARIS (Participations And Residuals Information System) to generate participant statement and to calculate Residuals payout
The Residuals module within PARIS is leveraged to calculate payouts
Paramount
Participations and Residuals payments were being processed by mainframes based system.
They evaluated alternatives and decided to purchase the PARIS system from NBCU. They are about two months away from completing the conversion to PARIS
They are currently in the planning phase for the implementation of the Residuals module
Disney
Disney internally developed BRUCE, a custom client-server application for generating Participations statements
The application relies heavily on SAP as single source of data
Disney tried to rally “Residuals as a service” effort couple of years ago, but it did not take root.
They are currently in discussion with Entertainment Partners and conducting a feasibility study
Fox
Fox has a homegrown solution coupled with manual processes
Fox has homegrown solution coupled with manual processes
Participations PARIS Implementation & Residuals BPO – Greenlight deck

22. PARIS Impact Assessment Approach
The PARIS Impact Assessment was identified as an initial planning tool as part of the SPE Participations and Residuals Program Alignment Session in July 2011
As part of the assessment, high-level requirements were gathered for Participations and Residuals processing and these requirements were prioritized to create:
► Scripted scenarios for a PARIS demo
► A technical questionnaire covering system configuration and maintenance inputs
Three PARIS demo sessions spanning 8 hours were held to:
► Assess key capabilities and functional fit
► Gather high-level implementation inputs
Additional inputs on implementation and conversion were collected from other studios’ experiences with PARIS and other solutions
These inputs were distilled to:
Create a work plan and estimates with the implementation approach and timeline
Document risks and considerations around deploying and transitioning operations to PARIS
Draft for discussion

23. Participations PARIS Implementation & Residuals BPO – Greenlight deck
PARIS manages the range and complexity of scenarios and calculations employed by Participations & Residuals
Area
Observations
►Head-sheet, statement and backup schedule generation
►Powerful expression builder for Participations calculations
►Extensive Residuals rules library
►Can handle receipts/expenses from multiple sources
►Configurable GL account definitions for both departments
►Adjustments applicable to Participations
►By-season and multi-title reporting for Participations
►Wizard based non-financials setup to ease data entry and edits
►Upload capability on financial setup to eliminate entry (including adjustments)
►Upload capability on cast setups to minimize data entry
►Wide range of features entails steep learning curve
►Interface reconciliation, threshold and variance management tools
►Strong audit trails against record changes
►No statement versioning
►Payout calculations not linked to payment records
Fit
Flexibility
Usability
Controls
Administration
Participations
Score %
81%
86%
Average
83%
Total Requirements
412
# of Requirements covered
311
Participations PARIS Implementation & Residuals BPO – Greenlight deck

24. Residuals departmental work metrics
10 Years Ago
5 Years Ago
Last Year
YOY increase
Annual Residual Payments
$150.4
$197.9
$237.7
5.80%
Average increase over 5 years
31.58%
20.11%
Number of Features Requiring Quarterly Reporting
945
1,206
1,538
6.28%
27.62%
27.53%
Number of New Episodes of TV Series Requiring Set-up
1,165
1,602
2,140
8.37%
37.51%
33.58%
Number of Titles with Quarterly New Media Payments
4,867
Features with Quarterly Reporting
Net New TV Episodes requiring setup
Titles with New Media Payments (Quarterly Payments)
Participations PARIS Implementation & Residuals BPO – Greenlight deck

25. Participations departmental work metrics
Number of statements issued for 12 months ending
Line of Business
Oct, 2009
Oct, 2010
Oct, 2011
Oct, 2012
Television
9,016
9,388
10,458
10,001
Theatrical
2,929
4,712
3,385
2,985
Video
12,458
13,305
25,064
33,278
Merchandising 5 12 10 26
Revolution
586
557
551
552
Soundtrack 92 85 81
SPC
513
508
504
536
Total statements =>
25,599
28,567
40,064
47,459
YOY increase
11.59%
40.25%
18.46%
Participations PARIS Implementation & Residuals BPO – Greenlight deck