1. Terminator-Based Television Property Future Derivative Series With the lack of success of THE SARA CONNOR CHRONICLES, the property would likely need to be rested before attempting to develop and sell a new derivative series. A new TV series would most likely air on cable rather than broadcast. Without the specifics of a new derivative series (cast, story line, network, budget, etc.) a generic 1-hour cable series could roughly approximate the economic opportunity: –First season loss of $1m to $5m. –A successful 5-season series could generate $35m in nominal profit before overhead. Discounted cash flow at 16% is break even [assuming 3 year rest before airing?] –Approximately only 1/3 of original scripted cable series are “successful” and survive 4 or more seasons [strike this bullet] –A highly successful 5-season sci-fi series could generate up to $75m in nominal profit before overhead. Discounted cash flow is $18m. [assuming 3 year rest before airing?] –These figures don’t assume any extraordinary costs associated with acquisition of rights. Sci-fi series likely cost more due to special effects, costumes and action sequences. These additional expenses do not have a direct correlation to additional revenue generation.

2. Generic 1-Hour Scripted Cable Series A generic 1-hour cable series with strong international appeal can generate $34m before allocated overhead. Discounted cash flow is break-even before any extraordinary rights acquisitions costs. Cable success rate is approximately 1/3. Sci-fi series would likely cost more than a standard 1-hour series likely decreasing profits. [shouldn’t NPV on 3 year rest be worse??]

3. Generic 1-Hour Scripted Cable Series Highly Successful Scenario An uncommonly successful 1-hour cable series can generate $75m in profit. Discounted cash flow is $18m assuming the property is rested. Assumptions: International TV Sales - $1.5m / episode (top end of int’l sales model.) DVD of 450k units / season. The top two sci-fi series on DVD sold 550k units / season (BATTLESTAR GALACTICA) and 435k units / season (STARGATE SG-1)

4. Terminator-Based Television Property TERMINATOR: THE SARA CONNOR CHRONICLES Series had strong premiere ratings on FOX, but ratings quickly declined resulting in cancellation partially through it’s second season with a total of 31 episodes. –Premiere Rating: 7.7 A18-49 –Season 1 Average Rating: 4.4 A18-49 –Season 2 Average Rating: 1.7 A18-49 DVD was a modest success - season 1 has sold 150k units. –Successful sci-fi series have sold far more DVD units: BATTLE STAR GALACTICA has sold 2.2m units over 4 seasons (550k units / season) and STARGATE SG-1 has sold 3.9m units over 9 seasons (435k units / season) The producing studio (Warner Bros.) likely realized a loss on this project. Given the experience of THE SARA CONNOR CHRONCILES, it appears as though the TERMINATOR brand does not appear to enhance the potential for success for a derivative series.