Fitch Report

Volume VI 2013-2014
Credit Encyclo-Media
Fitchs Comprehensive Analysis of the U.S. Media
& Entertainment Sector

September 19, 2013

Corporates Corporates

Table of Contents
Executive Summary..............................................................................................................................................................1
The Evolution of Media .................................................................................................................................................1
European Media ...........................................................................................................................................................2
U.S. Ratings and Outlooks ...................................................................................................................................................3
Research Activity ..................................................................................................................................................................5
Operating Trends ..................................................................................................................................................................6
Financial Trends/Uses of Cash.............................................................................................................................................7
20122013 Debt Issuance....................................................................................................................................................9
Market Trends Media Volatility, Statistics and Estimates
Advertising and Media Statistics and Estimates .................................................................................................................10
Economic Sensitivity ...................................................................................................................................................10
Statistics and Estimates .............................................................................................................................................. 11
U.S. Media Volatility............................................................................................................................................................19
Downturn Analysis ......................................................................................................................................................19
Media Business Risk ..................................................................................................................................................25
Product Line Diversity .................................................................................................................................................26
Geographic Diversity ..................................................................................................................................................27
Market Trends Key Trends in Advertising and Media
Over-the-Top Technology ............................................................................................................................................30
Measurement ..............................................................................................................................................................40
Demographics .............................................................................................................................................................42
Pricing .........................................................................................................................................................................44
Sports Programming ...................................................................................................................................................45
Tablets and E-Books ...................................................................................................................................................52
Commercial Printers ............................................................................................................................................53
Consumer Books .................................................................................................................................................53
Magazines ...........................................................................................................................................................54
Newspapers .........................................................................................................................................................55
Professional and Educational Publishing ............................................................................................................56
Video ...................................................................................................................................................................56
Cloud Storage .............................................................................................................................................................58
Subsector Overview
Advertising Related
U.S. Media and Entertainment Subsector Summary ..................................................................................................60
B-to-B/Trade Magazines .............................................................................................................................................62
Consumer Magazines .................................................................................................................................................63
Direct Mail/Free-Standing Inserts ...............................................................................................................................64
Emerging Advertising ..................................................................................................................................................65
Online .........................................................................................................................................................................66
Mobile .........................................................................................................................................................................70
Newspapers ................................................................................................................................................................72
Outdoor .......................................................................................................................................................................74
Radio ..........................................................................................................................................................................75
Television ....................................................................................................................................................................76
TV Broadcasting Eco-System ..............................................................................................................................76
TV Broadcasting Affliates ....................................................................................................................................77
Automotive Advertising ........................................................................................................................................77
Aereo/FilmOn X ...................................................................................................................................................78
AutoHop ...............................................................................................................................................................79
Political ................................................................................................................................................................80
Broadcast Network TV .........................................................................................................................................83
Retransmission and Reverse Network Compensation ........................................................................................83
Upfront Market .....................................................................................................................................................85
TV Studios ...........................................................................................................................................................87
Ad-Supported Cable Networks ............................................................................................................................90
Premium Cable ....................................................................................................................................................93
Yellow Pages ..............................................................................................................................................................95
Non-Advertising Related
Advertising Agencies ..................................................................................................................................................96
Commercial Printing ...................................................................................................................................................98
Consumer Books ........................................................................................................................................................99
Educational Publishing .............................................................................................................................................100
Continued on next page.
Analysts
Rolando Larrondo
+1 212 908-9189
rolando.larrondo@ftchratings.com
Mike Simonton, CFA
+1 312 368-3138
mike.simonton@ftchratings.com
David Peterson
+1 312 368-3177
david.peterson@ftchratings.com
Brian Yoo, CFA
+1 212 908-9175
brian.yoo@ftchratings.com
Timothy Lee
+1 312 368-3179
timothy.lee@ftchratings.com
Rachael Shanker
+1 212 908-0649
rachael.shanker@ftchratings.com
Editorial Advisors
Editorial
Michael Sykes, Lead Editor
Brad Lewis, Editor
Denver Smith, Graphics Specialist
Stephanie Deshpande,
Production Manager
Publisher
John Forde
New Content
This years edition includes the following
European issuers:
Bertelsmann SE & Co. KGaA
British Sky Broadcasting Group plc
Reed Elsevier PLC
Vivendi SA
WPP plc

September 19, 2013

Corporates

Table of Contents (Continued)
Subsector Overview (continued)
Movie Exhibitors .......................................................................................................................................................102
Movie Studios and Distributors .................................................................................................................................106
Music ........................................................................................................................................................................109
Professional Publishing ............................................................................................................................................ 111
Satellite Radio ........................................................................................................................................................... 112
Theme Parks ............................................................................................................................................................ 113
Trade Shows ............................................................................................................................................................. 115
Video Gaming ........................................................................................................................................................... 116
Key Credit Trends and Issues
Fundamental Analysis and Comparison ................................................................................................................... 117
Liquidity ..................................................................................................................................................................... 119
Short-Term Ratings/CP Backup ................................................................................................................................122
Pensions ...................................................................................................................................................................124
Regulation .................................................................................................................................................................126
Tax and Accounting ...................................................................................................................................................138
Event Risk .................................................................................................................................................................141
Corporate Governance .............................................................................................................................................144
Unions .......................................................................................................................................................................145
Parent and Subsidiary Rating Linkage .....................................................................................................................147
Leases/Adjusted Leverage .......................................................................................................................................149
Equity Credit for Hybrids and Other Capital Securities .............................................................................................150
M&A and LBO Risk ...................................................................................................................................................151
Historical Defaults .....................................................................................................................................................157
Debt Exchanges .......................................................................................................................................................161
Recovery and Notching ............................................................................................................................................163
Covenants .................................................................................................................................................................167
Company Summaries
Investment Grade
Bertelsmann SE & Co. KGaA ..................................................................................................................................171
British Sky Broadcasting Group plc .........................................................................................................................177
CBS Corporation ......................................................................................................................................................183
Cox Enterprises, Inc. ...............................................................................................................................................198
Discovery Communications LLC ..............................................................................................................................208
The Dun & Bradstreet Corporation ..........................................................................................................................222
The Interpublic Group of Companies, Inc. ...............................................................................................................238
McGraw Hill Financial, Inc. ......................................................................................................................................253
NBCUniversal Media LLC ........................................................................................................................................267
Pitney Bowes Inc. ....................................................................................................................................................275
Reed Elsevier PLC ..................................................................................................................................................288
Thomson Reuters Corporation ................................................................................................................................294
Time Warner Inc.......................................................................................................................................................307
Twenty-First Century Fox, Inc. (formerly News Corporation) ...................................................................................321
Verisk Analytics, Inc. ................................................................................................................................................334
Viacom Inc. ..............................................................................................................................................................347
Vivendi SA ...............................................................................................................................................................363
The Walt Disney Company ......................................................................................................................................370
WPP plc ...................................................................................................................................................................386
Non-Investment Grade
AMC Entertainment, Inc. ..........................................................................................................................................392
Belo Corp. ................................................................................................................................................................403
Clear Channel Communications, Inc. ...................................................................................................................... 411
Houghton Miffin Harcourt Publishers Inc. ...............................................................................................................440
Liberty Interactive LLC/QVC Inc. .............................................................................................................................448
McGraw-Hill Global Education Holding, LLC ...........................................................................................................461
Nielsen Holdings N.V. ..............................................................................................................................................464
Regal Entertainment Group .....................................................................................................................................480
Univision Communications, Inc. ...............................................................................................................................492
Appendix
Industry Resources. .................................................................................................................................................505
1 Credit Encyclo-Media
September 19, 2013

Corporates

Executive Summary
The Evolution of Media
Media consumption continues to evolve with the emergence and adoption of new technologies,
driving fragmentation of audiences and disrupting business models. These new entrants will
intensify competition and pressure growth. Nonetheless, Fitch Ratings believes that traditional
media platforms that can capture large audiences, can be measured and can target specifc
demographics will remain relevant such as TV. Other traditional platforms, such as magazines
(pages 5455) and newspapers (page 55), must evolve their content, technologies (including
content delivery) and business models to maintain proftability and remain relevant. Fitch believes
yellow pages (page 95) and newspapers will be the most challenged to evolve.
New technologies are disrupting the linear television model (pages 7694). If ultimately found
to be legal and viable businesses, Aereo/FilmOn X (pages 7879) could pressure the growing
retransmission model (pages 8385), while AutoHop (pages 7980) could reduce the appeal
of network advertising. Fitch believes the content creators will weather any disruption and fnd
avenues to successfully monetize in-demand content (including sports, pages 4546). New
digital content aggregators (Netfix, Amazon, Hulu, Google, page 30) have created a new
distribution window that allows for monetization of library content.
On the print side, Fitch believes publishers are in the best position to weather the evolution to
digital media given the rapid adoption of tablets (page 52). In contrast, commercial printers (page
54) are expected to bear the greatest negative impact from this digital evolution.
For emerging media (page 65), particularly online (page 66), the development and deployment
of measurement tools (page 40) will be key in growing digital CPMs (page 44) and ad volume.
The ability to measure audiences and ROI is necessary for this segment to meaningfully grow
share.
Fitch maintains a stable outlook on most advertising and non-advertising-related subsectors
(page 96). This is based on Fitchs macro expectations, with low single-digit GDP growth in
the U.S. and continued softness in Europe (page 10). The stable outlook also refects Fitchs
expectation for advertising growth in the low single digits in 2013 and 2014, excluding political
and Olympic advertising spend (see pages 1416).
Fitch believes liquidity (see pages 119121) will remain robust for most companies. Event risk
(pages 141142), such as shifts in fnancial policy, will continue to be a risk that plagues all
investment-grade investors. Financial policies and cash deployment (including acquisitions
[pages 151152] and shareholder return activity) have remained within the context of current
ratings for most issuers. By and large, managements are expected to remain fairly conservative.
These and other issues are identifed and analyzed in this sixth edition of Fitchs annual Credit
Encyclo-Media report. The report contains data and opinions on 28 media companies (including
fve European issuers) and more than 20 media subsectors. It contains more than 200 charts
and tables, including detailed organizational debt structures, in-depth debt document summaries
and an event risk dashboard to help investors assess various categories of event risk.
September 19, 2013

Corporates

European Media
Stable Outlook, but Watch for Disruption
The European media outlook has stabilized following the seismic shifts that occurred in
2008/2009. Fitch expects advertising spend in Europe to be fat in 2013 and no better in 2014.
Within these expectations certain geographies such as the UK and Germany will perform better,
and across the region digital is expected to record high single-digit growth.
The overall outlook hides regional imbalances. The macro pressures being felt in peripheral
countries, where advertising spend is falling by 9%10% on an annual basis, is pressuring the
cash fows and balance sheets of cyclically exposed media such as free-to-air (FTA) TV and
consumer publishing. Even in nonperipheral European countries, anemic economic growth
results in a lack of real visibility on media trends beyond 69 months.
That said, there are positive media developments in the sector. TV entertainment has proven
quite resilient in the downturn as people opt to stay at home and consume more of this value-
for-money media proposition. Recognizing this, corporates, in turn, are willing to retain and even
grow TV advertising budgets to push brand image. The major European TV companies are also
taking advantage of the proliferation of distribution channels to increase their share of original
content production (including acquisition of independent content producers) and thus expand
their viewing reach. As a result, TV companies like ITV (BBB Stable) and Pro Sieben (NR)
are starting to show meaningful new digital revenue generation and Fitch expects this trend to
continue.
European advertising agencies such as WPP (BBB+ Stable) showed the benefts of global
diversifcation and vertical digital integration in weathering the 2008/2009 crisis in good shape.
Their business model can adapt its cost base quickly to avoid regional downturns (such as
in Europe) while maintaining growth in emerging markets. The increasingly complex and
rapidly evolving media habits resulting from digital convergence have added an element of
defensiveness to the large global holding companies (GHC) business model. These companies
act more as marketing consultancies through the full digital value chain.
Professional publishers such as Reed Elsevier (A Stable) continue to take advantage
of technology trends in further embedding their products in the workfow IT systems of their
customers. In doing so, their cash fows show greater visibility and, while certain segments
remain competitive, scale and diversifcation help offset subsegment weakness or technical
disadvantage while problems are addressed.
Print media continues its structural decline with some subsegments, for example regional news
and magazines, falling faster than others as a result of the digital online threat. Media groups
are attempting to combat this process by pursuing economies of scale, such as the Penguin/
Random House merger. In isolated cases where a traditional market position is very solid or
editorial content is considered must-have, companies like the Financial Times (NR) and TSL
Education (NR) have successfully transitioned their business models on line.
September 19, 2013

Corporates

U.S. Media and Entertainment Ratings
IDR Rating Outlook/Watch
Diversified Media
CBS Corporation BBB Stable
Cox Enterprises, Inc. BBB+ Stable
Discovery Communications LLC BBB Stable
Liberty Interactive LLC BB Stable
McGraw Hill Financial, Inc. BBB+ Watch Negative
NBCUniversal Media LLC BBB+ Positive
Twenty-First Century Fox BBB+ Stable
Time Warner Inc. BBB+ Stable
Thomson Reuters Corporation A Stable
Viacom Inc. BBB+ Stable
The Walt Disney Company A Stable
Publishing, Printing, Radio, TV Broadcasting, Outdoor
Belo Corp. BB Watch Positive
Clear Channel Communications, Inc. CCC Stable
Clear Channel Worldwide Holdings Inc. (Outdoor) B Stable
Houghton Mifflin Harcourt Publishers Inc. B+ Stable
McGraw-Hill Global Education Holding LLC B+ Stable
Univision Communications Inc. B Stable
Movie Exhibitors
AMC Entertainment, Inc. B Stable
Regal Entertainment Group B+ Stable
Business Products and Services, Ad Agencies
The Dun & Bradstreet Corporation BBB+ Negative
The Interpublic Group of Companies, Inc. BBB Stable
Pitney Bowes Inc. BBB Negative
Nielsen Holdings N.V. BB Positive
Verisk Analytics Inc. A Stable
IDR Issuer Default Rating.
Source: Fitch Ratings.
0
5
10
15
20
25
30
(%)
U.S. Media and Entertainment
IDR Distribution
0
20
40
60
80
100
Positive Stable Negative
(%)
U.S. Media and Entertainment
Rating Outlook Distribution
September 19, 2013

Corporates

Recent Rating Affirmations
Date Company IDR Rating Rating Outlook/Watch
9/3/13 The Walt Disney Company A Stable
8/9/13 The Dun & Bradstreet Corporation BBB+ Negative
8/5/13 McGraw Hill Financial, Inc. BBB+ Negative
8/2/13 Viacom Inc. BBB+ Stable
7/30/13 Discovery Communications LLC BBB Stable
7/25/13 Cox Enterprises, Inc. BBB+ Stable
6/28/13 Twenty-First Century Fox BBB+ Stable
6/26/13 Houghton Mifflin Harcourt Publishers Inc. B+ Stable
6/11/13 Univision Communications Inc. B Stable
5/22/13 Clear Channel Communications CCC Stable
5/22/13 Clear Channel Worldwide Holdings, Inc. (Outdoor) B Stable
5/6/13 Viacom Inc. BBB+ Stable
5/3/13 Thomson Reuters Corporation A Stable
5/2/13 CBS Corp. BBB Stable
4/17/13 The Interpublic Group of Companies, Inc. BBB Stable
3/14/13 Verisk Analytics, Inc. A Stable
2/20/13 Liberty Interactive Corporation BB Stable
2/5/13 Regal Entertainment Group B+ Stable
11/8/12 NBCUniversal Media LLC BBB Stable
9/19/12 Nielsen Holdings N.V. BB Positive
9/17/12 The Walt Disney Company A Stable
7/31/12 Discovery Communications LLC BBB Stable
7/19/12 The Dun & Bradstreet Corporation A Stable
Recent Rating Actions
Date Company IDR From IDR To
Rating Outlook/
Watch
6/14/13 Belo Corporation BB BB Watch Positive
5/20/13 AMC Entertainment Inc. B B Stable
5/7/13 Nielsen Holdings N.V. BB BB Positive
4/4/13 Time Warner Inc. BBB BBB+ Stable
3/6/13 McGraw-Hill Global Education Holding, LLC NR B+ Stable
2/22/13 Belo Corporation BB BB Positive
2/13/13 NBCUniversal Media LLC BBB BBB+ Positive
2/7/13 The McGraw-Hill Companies A BBB+ Watch Negative
2/4/13 Pitney Bowes Inc BBB BBB- Negative
12/19/12 Nielsen Holdings N.V. BB BB Stable
8/10/12 Dun & Bradstreet A BBB+ Negative
8/9/12 The McGraw-Hill Companies A A Stable
7/26/12 Cox Enterprises, Inc. BBB BBB+ Stable
September 19, 2013

Corporates

Research Activity
Date Title Type
Special Reports
7/23/13 Technology Handbook Special Report
7/22/13 Media & Entertainment Stats Quarterly First-Quarter 2013 Special Report
7/19/13 U.S. Telecom and Cable Stats Quarterly First-Quarter 2013 Special Report
7/18/13 U.S. Communications Industry Leaders Competitive Scorecard First-Quarter 2013 Special Report
7/16/13 Leveraged Finance Stats Quarterly First-Quarter 2013 Special Report
7/11/13 Fitch 50 Structural Profiles of 50 Leveraged U.S. Credits Special Report
6/26/13 Global IT Services Quarterly Insights Special Report
6/17/13 Fitchs Telcom and Cable Company Handbook
(A Detailed Review of Companies in the U.S. and Canada Telecom and Cable Sector)
Special Report
6/4/13 Technology Dashboard Special Report
5/24/13 U.S. Telecom and Cable Dashboard Special Report
5/20/13 Scrutinizing Topical Accounting Issues Special Report
5/17/13 U.S. Leveraged Finance Multiple EV-aluator Special Report
5/14/13 Major Moves of U.S. Leveraged Corporate Issuer Ratings (Fallen Angels, Rising Stars, and Multi-Notch Rating Migration) Special Report
5/9/13 Lagging Equity Performance Unveils Potential Risks for Bondholders: Volume III Special Report
5/9/13 U.S. Corporates LBO Screen Special Report
5/8/13 Ratings Reality (Explaining What Fitchs Ratings Do and Do Not Address) Special Report
5/1/13 Pay Television Industry Revolution and Evolution Special Report
4/12/13 An Exclusive Preview Fitch's 2013 Movie Exhibitor Outlook and Analysis Special Report
4/8/13 H-OTT Topic, Limited Credit Impact Volume 2 Special Report
4/8/13 Leveraged Finance Annual Manual for the Americas Special Report
4/8/13 U.S. Media and Entertainment Event Risk Dashboards Special Report
2/14/13 Case Studies in Bankruptcy Enterprise Values and Creditor Recoveries Volume 2 Special Report
2/11/13 U.S. Telecom Competitive Landscape: Living on the Edge Special Report
1/29/13 Rating Asset-Based Lending (ABL) Facilities (Recovery Outcomes and Analysis for ABL Inclusive Capital Structures) Special Report
1/4/13 Bridging the Refinancing Cliff Special Report
12/19/12 The Bond Bubble: Risks and Mitigants Special Report
12/12/12 An LBO Scenario of The Dun & Bradstreet Corp. Special Report
Recovery Models
8/5/13 Telecommunications and Cable Recovery Models First Quarter 2013 Recovery Models
7/16/13 U.S. Technology Recovery Models First Quarter 2013 Recovery Models
6/3/13 U.S. Media and Entertainment Recovery Models First Quarter 2013 Recovery Models
Credit Market Research Reports
06/03/13 Fitch Ratings Global Corporate Rating Activity Update Credit Market Research
05/29/13 Fitch U.S. High Yield Default Insight April 2013 Credit Market Research
05/07/13 U.S. Corporate Bond Market: First-Quarter 2013 Rating and Issuance Activity Credit Market Research
03/15/13 Fitch Ratings Global Corporate Finance 2012 Transition and Default Study Credit Market Research
Full Rating Reports
05/15/13 Thomson Reuters Corp. Full Rating Report
03/04/13 Liberty Interactive LLC and QVC Inc. Full Rating Report
02/14/13 U.S. Leveraged Finance Spotlight - Sprint Nextel Corporation Full Rating Report
10/18/12 Cablevision Systems Corporation Full Rating Report
10/15/12 Nielsen Holdings NV Full Rating Report
06/14/12 Time Warner Cable Inc. Full Rating Report
05/03/12 U.S. Leveraged Finance Spotlight: Clear Channel Communications, Inc. Full Rating Report
04/20/12 U.S. Leveraged Finance Spotlight: Nielsen Company B.V. (The) Full Rating Report
02/15/12 DISH Network Corporation Full Rating Report
September 19, 2013

Corporates

Operating Trends
EBITDA margins for Fitchs rated media and entertainment portfolio (included in the charts
below) have steadily increased since the recession leading to margins now above pre-recession
levels. This result has been driven by a combination of positive operating leverage, business
mix and cost cuts. Certain business lines and operators in secularly challenged industries have
not seen margins return to pre-recession levels and it will continue to be challenging for these
operators to achieve this goal.
0
3
6
9
12
10
13
16
19
22
2009 2010 2011 2012 LTM 2Q13
FCF FCF Margin
Note: Years 20092012 reflect December LTM data for companies that do not have a December fiscal year end
(AMC Entertainment, Disney, Twenty-First Century Fox and Viacom as of 2010).
Source: Company filings, Fitch Ratings.
($ Bil.)
FCF and Margin
(%)
15
18
21
24
27
30
2009 2010 2011 2012 LTM 2Q13
Note: Years 20092012 reflect December LTM data for companies that do not have a December fiscal year end
(AMC Entertainment, Disney, Twenty-First Century Fox and Viacom as of 2010).
(%)
EBITDA Margin
September 19, 2013

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Financial Trends/Uses of Cash
FCF has remained robust for the sector despite a meaningful increase in dividends in 2012.
Growth in EBITDA has covered most of the increases in capital expenditures and dividends. Fitch
believes capital expenditures will continue to increase amid a stable macroeconomic forecast.
Media conglomerates CBS, Liberty Interactive, Twenty-First Century Fox, Time Warner, Viacom
and Walt Disney alone accounted for over 85% of the portfolios nearly $14 billion in share
repurchases in the past twelve months. Fitch expects cash and FCF to be directed predominantly
toward internal growth initiatives (capital expenditures), buybacks, dividends and acquisitions.
Because most issuers are near or at target leverage levels, Fitch is not expecting material debt-
funded/shareholder-friendly activity in the near future.
With sizable cash balances and ample access to capital, Fitch expects there to be a steady
amount of acquisition activity over the next several years, despite valuation multiples that have
increased from downturn lows. Consolidation is inherent in the media space, and a certain
level of activity can be accommodated within the investment-grade ratings that many media
companies carry.
0
10
20
30
40
2009 2010 2011 2012 LTM
2Q13
Capex Dividends
Net Equity Buybacks Net Cash Acquisitions
Note: Years 20092012 reflect December LTM data for
companies that do not have a December fiscal year
end (AMC Entertainment, Disney, Twenty-First Century
Fox and Viacom as of 2010). Dividends issued by Clear
Channel Outdoor Holdings in first-quarter 2012 are
excluded from this data set, along with 2011 Nielsen
Company initial public offering proceeds.
($ Bil.)
Use of Cash Flow from Operations
2.5
2.7
2.9
3.1
3.3
3.5
100
120
140
160
180
200
2009 2010 2011 2012 LTM
2Q13
Total Debt Leverage
Fox and Viacom as of 2010).
($ Bil.)
Total Debt and Leverage
(x)
September 19, 2013

Corporates

3.0
3.4
3.8
4.2
4.6
5.0
0
3
6
9
12
15
2009 2010 2011 2012 LTM
2Q13
Capex Capex/Revenue
($ Bil.)
Capital Expenditures
(%)
0.0
1.5
3.0
4.5
6.0
7.5
2009 2010 2011 2012 LTM
2Q13
Source: Company reports, Fitch Ratings.
($ Bil.)
Net Cash Acquisitions
0
4
8
12
16
20
2009 2010 2011 2012 LTM
2Q13
Fox and Viacom as of 2010). Initial public offering
proceeds at Nielsen in 2011 are excluded from
this data.
($ Bil.)
Net Equity Buybacks
0.0
2.0
4.0
6.0
8.0
10.0
2009 2010 2011 2012 LTM
2Q13
Fox and Viacom as of 2010). Dividends issued by Clear
Channel Outdoor Holdings in first-quarter 2012 are
excluded from this data set. Dividends issued by
NBCUniversal Media are excluded.
($ Bil.)
Dividends
September 19, 2013

Corporates

20122013 Debt Issuance
(Select Issues, $ Mil., Unless Otherwise Noted, As of August 2013)
Issuer Date Issue Rating
a
Issue Amount Coupon (%) Tenor (Years) Security Type
R.R. Donnelley & Sons Company 8/12/2013 NR 400 7.000 9 Senior Unsecured Notes
Viacom, Inc. 8/12/2013 BBB+ 500 2.500 5 Senior Unsecured Notes
Viacom, Inc. 8/12/2013 BBB+ 1,250 4.250 10 Senior Unsecured Notes
Moodys Corp. 8/7/2013 NR 500 4.875 11 Senior Unsecured Notes
Sirius XM Radio Inc. 7/29/2013 NR 600 5.750 9 Senior Unsecured Notes
Gannett Co Inc. 7/29/2013 NR 600 5.125 8 Senior Unsecured Notes
Midcontinent Communications 7/24/2013 NR 250 6.250 8 Senior Unsecured Notes
Clear Channel Communications Inc. 6/12/2013 CC/RR6 1,280 14.000 8 Senior Unsecured Notes
Expo Event TransCo Inc. 6/12/2013 NR 200 9.000 8 Senior Unsecured Notes
Regal Entertainment Group 5/29/2013 B/RR6 250 5.750 10 Senior Unsecured Notes
Thomson Reuters Corp. 5/23/2013 A 350 4.500 30 Senior Unsecured Notes
Thomson Reuters Corp. 5/23/2013 A 500 0.875 3 Senior Unsecured Notes
Cinemark Inc. 5/22/2013 NR 530 4.875 10 Senior Unsecured Notes
Univision Communications Inc. 5/17/2013 B+/RR3 700 5.125 10 Secured Notes
Dish DBS Corp. 5/15/2013 BB 1,250 5.000 4 Senior Unsecured Notes
Cox Communications, Inc 5/1/2013 BBB+ 1,000 2.950 10 Senior Unsecured Notes
Cox Communications, Inc 5/1/2013 BBB+ 500 4.500 30 Senior Unsecured Notes
CCO Holdings LLC 4/19/2013 BB 1,000 5.750 11 Senior Unsecured Notes
Cogeco Cable Inc. 4/18/2013 BB+ 400 4.875 7 Senior Unsecured Notes
Discovery Communications LLC 3/19/2013 BBB 850 4.875 30 Senior Unsecured Notes
Discovery Communications LLC 3/19/2013 BBB 350 3.250 10 Senior Unsecured Notes
Sinclair Television Group Inc. 3/18/2013 NR 600 5.375 8 Senior Unsecured Notes
MDC Partners Inc. 3/15/2013 NR 550 6.750 7 Senior Unsecured Notes
McGraw-Hill Global Education Finance, Inc. 3/15/2013 BB/RR2 800 9.750 8 First-Lien Notes
Pitney Bowes, Inc. 3/7/2013 BBB 425 6.700 30 Senior Unsecured Notes
CCO Holdings LLC 3/1/2013 BB 500 5.250 8 Senior Unsecured Notes
CCO Holdings LLC 3/1/2013 BB 500 5.750 10 Senior Unsecured Notes
RR Donnelley & Sons Co. 3/1/2013 NR 450 7.875 8 Senior Unsecured Notes
Cedar Fair LP 2/28/2013 NR 500 5.250 8 Senior Unsecured Notes
Clear Channel Communications Inc. 2/22/2013 CCC/RR4 575 11.250 8 Secured Notes
The Walt Disney Company 2/15/2013 A 800 Float 2 Senior Unsecured Notes
Starz LLC 2/6/2013 NR 175 5.000 7 Senior Unsecured Notes
Regal Entertainment Group 1/15/2013 B/RR6 250 5.750 12 Senior Unsecured Notes
News America Incorporated 1/7/2013 BBB+ 1,000 3.000 10 Senior Unsecured Notes
Equifax, Inc. 12/17/2012 NR 500 3.300 10 Senior Unsecured Notes
Dun & Bradstreet Corporation 12/3/2012 BBB+ 450 3.250 10 Senior Unsecured Notes
Dun & Bradstreet Corporation 12/3/2012 BBB+ 300 4.375 5 Senior Unsecured Notes
The Walt Disney Company 11/30/2012 A 1,000 1.100 5 Senior Unsecured Notes
The Walt Disney Company 11/30/2012 A 1,000 2.350 10 Senior Unsecured Notes
The Walt Disney Company 11/30/2012 A 500 3.700 30 Senior Unsecured Notes
The Walt Disney Company 11/30/2012 A 500 0.450 3 Senior Unsecured Notes
Cox Communications, Inc. 11/29/2012 BBB+ 1,000 3.250 10 Senior Unsecured Notes
Cox Communications, Inc. 11/29/2012 BBB+ 500 4.700 30 Senior Unsecured Notes
Interpublic Group of Companies, Inc. 11/8/2012 BBB 500 3.750 10 Senior Unsecured Notes
Interpublic Group of Companies, Inc. 11/8/2012 BBB 300 2.250 5 Senior Unsecured Notes
News America Incorporated 9/14/2012 BBB+ 1,000 3.000 10 Senior Unsecured Notes
Univision Communications Inc. 8/29/2012 B+/RR3 625 6.750 10 Secured Notes
Laureate Education Inc. 7/20/2012 NR 350 9.250 7 Senior Unsecured Notes
Harland Clarke Holdings Corp. 7/17/2012 NR 235 9.750 6 Secured Notes
Experian Finance PLC 7/3/2012 NR 600 2.375 5 Senior Unsecured Notes
QVC, Inc. 7/2/2012 BBB 500 5.125 10 Secured Notes
a
Represents rating at issuance. NR Not Rated. RR Recovery Rating. Note: Date refers to pricing or closing date of the issuance.

September 19, 2013

Corporates

Market Trends
Media Volatility, Statistics and Estimates
Advertising and Media Statistics and Estimates ....................................................... 10
Economic Sensitivities ........................................................................................ 10
Statistics and Estimates ...................................................................................... 11
U.S. Media Volatility.................................................................................................. 19
Downturn Analysis............................................................................................... 19
Media Business Risk ........................................................................................... 25
Product Line Diversity ......................................................................................... 26
Geographic Diversity ........................................................................................... 27
10 Market Trends Media Volatility, Statistics and Estimates
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Advertising and Media Statistics and Estimates
Included in this section are various industry statistics and industry analyst estimates.
Economic Sensitivity
Fitch Global Economic Forecast Summary
(As of June 2013)
2012 2013F 2014F 2015F
GDP Growth (%)
U.S. 2.2 1.9 2.8 3.0
Eurozone (0.6) (0.6) 0.9 1.3
Japan 1.9 1.8 1.5 1.2
U.K. 0.3 0.8 1.8 2.0
MAEs
a
1.1 0.9 1.9 2.0
BRICs
a,b
5.5 5.6 6.0 5.8
World
a
2.5 2.4 3.1 3.2
Inflation (%)
U.S. 2.1 2.0 2.0 2.0
Eurozone 2.5 1.6 1.6 1.6
Japan 0.1 0.3 2.0 1.5
U.K. 2.8 2.6 2.3 2.1
MAEs
a
1.9 1.6 1.9 1.8
Interest Rates (%)
U.S. 0.3 0.3 0.3 0.5
Eurozone 1.0 0.5 0.5 0.5
Japan 0.1 0.1 0.1 0.1
U.K. 0.5 0.5 0.5 0.5
MAEs
a
0.5 0.3 0.3 0.5
Assumptions
Oil (USD/Barrel) 112.0 105.0 100.0 100.0
JPY/USD 79.8 98.6 98.6 98.6
EUR/USD 0.78 0.77 0.77 0.77
GBP/USD 0.63 0.65 0.65 0.65
a
Weighted by 2011 GDP at market exchange rates.
b
Brazil, Russia, India and China. F Forecast.
MAEs More advanced economies.
The U.S. recovery continues at a slow pace, with Fitch expecting GDP growth of 1.9% in 2013.
The main downside risk to the U.S. economic outlook in the near term is the drag on the economy
from the tax rises at the beginning of the year and cuts in federal government spending (the
sequester). However, the growth momentum in the private sector appears to be well supported
by the recovery in the housing market, improving household balance sheets as well as the strong
proftability of the corporate sector. Fitch forecasts growth will accelerate to 2.8% in 2014 and 3%
in 2015. Continued recession in the eurozone and volatility in various eurozone countries (Italy,
Cyprus) and recent events in the Middle East continue to contribute volatility and market shocks.
In Fitchs view, most media companies have enough liquidity to endure a weakening
environment, but they would likely have diffculty preserving margins given the meaningful fxed-
cost actions already taken during the downturn. Fitch expects marketers to continue to increase
their advertising spend cautiously. Fitch expects spending levels that give media companies an
opportunity to compete with one another for GDP-level growth or better.
Advertising is hypercyclical, declining 20% cumulatively in 2008 and 2009 according to Magna
Global, more than three times worse than the previous downturn in 2001. Advertising is more
sensitive to economic fuctuations than non-advertising/entertainment subsectors. Non-
advertising subsectors typically exhibit some level of volatility that may be correlated with the
economy, but usually the down years are driven more by an absence of hits (or other sector-
specifc variations) rather than by economic weakness. Typically, these entertainment forms
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do not make up a signifcant enough proportion of a consumers overall spending (or, for
nonconsumer mediums, are essential to the businesses they serve) to be cut dramatically in
a downturn. The exceptions among non-advertising subsectors are theme parks, commercial
printing and educational publishing, which exhibit meaningful cyclical characteristics, particularly
in EBITDA volatility.
Local print advertising mediums (newspapers and Yellow Pages) have been left behind in the
economic recovery. Fitch expects there will be continued share shifts toward more measurable
and targeted mediums. National advertising (TV networks, cable networks, online) will remain
susceptible to acute pressure when big advertisers pull back, but Fitch expects the slow shift of
advertising dollars from local to national to continue.
Statistics and Estimates
(4.0)
(2.0)
0.0
2.0
4.0
6.0
8.0
Source: Bureau of Economic Analysis (BEA.gov).
(%)
Real U.S. GDP Growth
0
2
4
6
8
10
12
Source: U.S. Department of Labor Statistics (BLS.gov).
(%)
U.S. Unemployment Rate
0
5
10
15
20
25
Source: Federal Reserve.
(%)
U.S. Fed Funds Rate
0
20
40
60
80
100
120
140
Source: Conference Board.
U.S. Consumer Confidence Index
(1985 = 100)
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U.S. Media and Entertainment Industry Statistics Summary
Description Amount Unit As of Source
Overall
Communications Spending 1,189.0 $ Bil. 2012E VSS
Advertising Spending (Including Political and Olympics) 175.5 $ Bil. 2012 Magna
Print
Newspaper Advertising (Print and Online) 17.1 $ Bil. 2012 Magna
Consumer Magazines 7,390 Units 2012 MPA
Magazine Ad Pages 150,699 Units 2012 MPA
Ad Pages as a % of Total Magazine Pages 45.0 % 2012 MPA
Subscription Revenue as % of Circulation Revenue (vs Single Copy) 75.0 % 2012 MPA
Magazine Advertising Revenue 12.6 $ Bil. 2012 Magna
Direct Mail Advertising Revenue 19.5 $ Bil. 2012 Magna
Change in Coupon Use (2012 over 2011) (14.3) % 2012 Inmar
Total Number of Mail Pieces Attributed to Direct Mail 86.7 Bil. Units 2012 DMA
Percent of Total Mail Volume Attributed to Direct Mail 54.2 % 2012 DMA
Yellow Pages Advertising Revenue 4.1 $ Bil. 2012 Magna
Value of All Books Sold
a
27.2 $ Bil. 2012 AAP
Value of Trade Books Sold
a
15.0 $ Bil. 2012 AAP
Value of Trade E-books Sold 3.0 $ Bil. 2012 AAP
Radio
Licensed FM Commercial Radio Stations 6,606 Units June 2013 FCC
Licensed AM Radio Stations 4,738 Units June 2013 FCC
Number of Radio Stations Broadcasting in High Definition ~2,300 Units 2012 RAB
Sirius XM Subscribers 24.4 Mil. March 2013 Company filing
Pandora Active Users
b
70.1 Mil. April 2013 Company filing
Spotify Active Users
b
/Subscribers 24.0/6.0 Mil. June 2013 Press release
TV
Broadcast TV Stations, Including Class A and Educational 2,215 Units June 2013 FCC
Television Households (HH) 115.6 Mil. Units 2012 Nielsen
Television Penetration of Total HH 97.5 % 2012 Magna
Multichannel Subscriber Penetration of TV HH (Excluding OTT) 89.6 % 2012 Magna
DVR Subscriber Penetration of Multichannel Subscribers 39.2 % 2012 Magna
Netflix Streaming Subscribers (U.S.) 29.17 Mil. 2012 Company filing
Internet
Total U.S. HH 121.2 Mil. Units 2012 Magna
Total Residential Internet Access 90.7 Mil. Units 2012 Magna
Internet Penetration of U.S. HH 74.9 % 2012 Magna
Total Residential Broadband Internet Access 82.9 Mil. Units 2012 Magna
Broadband Penetration of Internet HH 91.4 % 2012 Magna
Facebook Registered Monthly Active Users (U.S and Canada only)
c
195.0 Mil. March 2013 Company filing
Film
Number of Theaters 5,683 Units 2012 NATO; company filings
Number of Indoor Screens 39,136 Units 2012 NATO; company filings
Admissions 1.36 Bil. Units 2012 BOM
Average Ticket Price 7.96 $ 2012 BOM
Box Office (U.S. and Canada) 10.8 $ Bil. 2012 BOM
Major Studio Release Window (Average) 4.0 Months 2012 NATO
Number of Pictures 660 Units 2012 BOM
Music
Overall Music Sales
d
1.82 Bil. Units 2012 RIAA
Total Physical Sales (Manufacturer Shipments) 225.8 Mil. Units 2012 RIAA
Total Digital Sales (Manufacturer Shipments) 1,615.9 Mil. Units 2012 RIAA
Total Mobile Sales (Manufacturer Shipments) 69.3 Mil. Units 2012 RIAA
Estimated Percentage of U.S. Shipments in Digital 59.0 % 2012 RIAA
Estimated Global Digital Sales Revenue 5.6 $ Bil. 2012 IFPI
Estimated Percentage of Global Industry Revenue from Digital 34 % 2012 IFPI
a
Includes non-print books.
b
Users active within the previous 30 days.
c
Company discloses more than 1.1 billion monthly active users wordwide.
d
Albums, singles, music
video, mobile, digital tracks. Continued on next page.
Sources: Direct Marketing Association (DMA), Radio Advertising Bureau (RAB), The Nielsen Company (TNC), The Television Bureau of Advertising (TVB), Association
of American Publishers (AAP), National Association of Theater Operators (NATO), Box Office Mojo (BOM), CTIA The Wireless Association (CTIA), Consumer Electronics
Association Market Research (CEA), Recording Industry Association of America (RIAA), International Federation of the Phonographic Industry (IFPI), company filings
(CF) for Idearc, R.H. Donnelley, AT&T, Yell Group (U.S.), NPD Group, and Fitch Ratings estimates (FRE).
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U.S. Media and Entertainment Industry Statistics Summary (Continued)
Description Amount Unit As of Source
Video Games, Mobile
Video Game Hardware Sales 4.04 $ Bil. 2012 CEA
HH Penetration Rate of Video Game Hardware 59 % 2013 ESA
Video Game Software Sales 15.1 $ Bil. 2012 CEA
Wireless Subscriber Connections 326.4 Mil. Units 2012 CTIA
Wireless Penetration (of U.S. Population) 102.2 % 2012 CTIA
Wireless-Only HH 35.8 % 2012 CTIA
Wireless Data Revenues 185.0 $ Bil. 2012 CTIA
Annualized Minutes of Wireless Use 2.3 Trillion Units 2012 CTIA
Annualized SMS Messages 2.19 Trillion Units 2012 CTIA
a
Includes non-print books.
b
Users active within the previous 30 days.
c
Company discloses more than 1.1 billion monthly active users wordwide.
d
Albums, singles, music
video, mobile, digital tracks.
Sources: Direct Marketing Association (DMA), Radio Advertising Bureau (RAB), The Nielsen Company (TNC), The Television Bureau of Advertising (TVB), Association
of American Publishers (AAP), National Association of Theater Operators (NATO), Box Office Mojo (BOM), CTIA The Wireless Association (CTIA), Consumer Electronics
Association Market Research (CEA), Recording Industry Association of America (RIAA), International Federation of the Phonographic Industry (IFPI), company filings
(CF) for Idearc, R.H. Donnelley, AT&T, Yell Group (U.S.), NPD Group, and Fitch Ratings estimates (FRE).
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MAGNA Advertising Forecast Summary
(Media Supplier Advertising Revenues)
($ Mil., As of August 2013) 2011A 2012A 2013E 2014E 2013-2018 CAGR (%)
Direct Online
a
19,496.2 23,085.5 26,811.4 30,381.1
Annual Growth/Decline (%) 25.9 18.4 16.1 13.3 12.2
Directories
b
5,466.8 4,126.0 2,963.3 2,373.2
Annual Growth/Decline (%) (20.2) (24.5) (28.2) (19.9) (28.0)
Direct Mail 20,403.8 19,522.0 19,111.9 18,180.6
Direct 45,366.8 46,733.5 48,886.6 50,934.8
National and Local Cinema 644.3 673.5 717.3 761.8
Annual Growth/Decline (%) (2.1) 4.5 6.5 6.2 5.8
National Newspapers
b
848.5 754.1 699.1 639.1
Network and Satellite Radio 1,209.7 1,257.1 1,216.9 1,198.1
Annual Growth/Decline (%) 3.7 3.9 (3.2) (1.5) (2.1)
National Digital/Online
c
7,945.3 8,694.9 9,756.4 10,902.0
Magazines
b
13,746.6 12,644.8 11,821.1 11,089.7
National Television
b,d
38,699.0 39,869.1 41,289.6 42,789.4
National 62,449.0 63,220.2 64,783.0 66,618.2
Local Digital/Online
c
4,524.8 4,791.5 4,942.8 5,281.2
Outdoor 6,388.4 6,651.9 6,920.1 7,265.6
Local Radio
b
14,060.0 14,205.0 14,109.7 14,103.4
Annual Growth/Decline (%) (0.9) 1.0 (0.7) (0.0) 1.2
Local TV
b,e
19,594.9 20,372.1 20,851.3 22,017.0
Local Newspapers
b
20,691.8 18,944.2 16,654.8 15,064.1
Local 65,259.9 64,964.6 63,478.6 63,731.3
Annual Growth/Decline (%) (1.1) (0.5) (2.3) 0.4 2.0
Total Excluding Political and Olympics 173,075.7 174,918.3 177,148.2 181,284.4
Political
f
357.1 2,663.4 371.6 2,970.4
Olympics
g
639.0 635.3
Total Supplier Ad Revenues 173,432.8 178,220.7 177,519.9 184,890.0
Annual Change (%) 1.6 2.8 (0.4) 4.2 3.3
a
Includes paid search, lead generation and Internet Yellow Pages.
b
Excludes Internet-based advertising revenues.
c
Includes rich media/online video, Internet classifieds,
email, digital display and mobile.
d
Includes English and Spanish-language network TV, national cable and national syndication. Excludes incremental Olympic revenues.
e
Includes local broadcast and local cable TV. Excludes local political advertising revenues.
f
Total political advertising revenue on local broadcast and local cable TV.
g
Incremental advertising revenue from Olympics on network TV. A Actual. E Estimate.
Source: Magna Global.
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Jack Myers Media Business Report
2012 2013E 2014E
($ Mil., As of Jan. 14, 2013) % Change No. % Share % Change No. % Share % Change No. % Share
Direct-to-Trade Promotion/Slotting Allowances 170,129 28.7 170,129 28.9 (4.5) 162,473 27.6
Consumer Sales Promotion/FSI/Incentives (All Platforms) (2.6) 139,923 23.6 (4.7) 133,333 22.6 (4.2) 127,695 21.7
Direct Mail/ E-Mail Marketing (All Platforms) (6.9) 44,294 7.5 (6.5) 41,398 7.0 (5.0) 39,308 6.7
Newspaper Advertising (Print + All Platforms) (5.0) 25,991 4.4 (4.1) 24,929 4.2 (4.4) 23,842 4.0
Local and National Spot Broadcast TV (All Platforms) 16.4 24,129 4.1 (15.6) 20,372 3.5 7.5 21,890 3.7
Cable/Satellite Network Television (All Platforms) 7.6 24,132 4.1 5.8 25,534 4.3 4.8 26,751 4.5
Broadcast Network TV (All Platforms) 5.0 19,708 3.3 (0.1) 19,681 3.3 1.2 19,922 3.4
Experiential/Event Marketing 2.5 18,911 3.2 2.0 19,289 3.3 4.0 20,061 3.4
Consumer Magazines Advertising (Print + All Platforms) (0.2) 16,559 2.8 (0.4) 16,489 2.8 1.5 16,730 2.8
Terrestrial Radio (All Platforms) 4.9 16,957 2.9 (1.7) 16,670 2.8 4.0 17,339 2.9
Search Marketing (Online/Mobile) 18.0 17,254 2.9 20.0 20,705 3.5 18.0 24,432 4.1
Yellow Pages (Print + Digital) (14.0) 9,565 1.6 (12.2) 8,394 1.4 (8.2) 7,703 1.3
Media Directed Promotion/Event/Sponsorships 7.5 13,109 2.2 8.5 14,223 2.4 12.0 15,930 2.7
Branded Entertainment/Product Placement 4.5 8,773 1.5 3.0 9,036 1.5 5.0 9,488 1.6
Out-of-Home/Place-Based (excl. Cinema and POI) 3.0 6,818 1.1 2.8 7,009 1.2 3.1 7,226 1.2
Business-to-Business Magazines (Print + All Platforms) (7.5) 5,624 0.9 (6.6) 5,251 0.9 (2.5) 5,118 0.9
Online Originated Display Advertising 11.0 6,982 1.2 8.0 7,540 1.3 8.2 8,159 1.4
Local/Regional Cable TV (All Platforms) 9.3 5,198 0.9 (3.9) 4,994 0.8 5.5 5,268 0.9
Offline Public Relations (2.0) 4,290 0.7 (3.0) 4,161 0.7 (4.0) 3,995 0.7
Broadcast Syndication (All Platforms) (1.3) 2,391 0.4 0.9 2,414 0.4 (2.3) 2,359 0.4
Custom Publishing/Site Advertising (Print + Digital) 0.5 1,706 0.3 (2.7) 1,661 0.3 (3.1) 1,609 0.3
Social Marketing/WOM/Conversational Marketing 32.0 3,300 0.6 40.0 4,620 0.8 35.0 6,237 1.1
Videogame/Virtual Marketing and Advertising 40.0 1,813 0.3 25.0 2,266 0.4 22.0 2,764 0.5
Mobile and Apps Advertising 80.0 2,303 0.4 70.0 3,915 0.7 50.0 5,873 1.0
Cinema Advertising (All Platforms) 1.6 720 0.1 6.8 769 0.1 5.0 807 0.1
Point-of-Influence/GPS (Multi-Platform) 12.0 838 0.1 4.5 875 0.1 9.6 959 0.2
Internet Originated Radio 42.0 640 0.1 38.0 883 0.1 38.0 1,219 0.2
Online Originated Video Content Advertising 75.0 1,180 0.2 70.0 2,007 0.3 60.0 3,211 0.5
Interactive, VOD and Addressable TV Advertising 70.0 119 0.0 120.0 262 0.0 85.0 484 0.1
Total U.S. Only 0.9 593,356 100.0 (0.8) 588,809 100.0 0.0 588,852 100.0
VOD Video on demand. POI Point of influence. E Estimate. WOM Word of mouth. Note: Figures exclude World Cup revenues, but include political revenues. Also
includes Olympics, NFL, NCAA and other sports programming. Facebook display ads included in display category.
Source: Jack Myers Media Business Report Copyright 2013, Extracted from Jack Myers Media Business Report 2010-2020 Marketing/Advertising Investment Data
and Forecast.
September 19, 2013

Corporates

5.07
10.81
17.10
25.64
34.84
43.43
54.77
63.61
68.01
72.14
75.47
79.11
82.91
87.99
91.21
93.43
95.69
97.99
0
25
50
75
100
2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E
Broadband Total Internet Access
A Actual. E Estimate.
Internet Access Forecast Broadband and Total
(Mil.)
Internet Access Forecast
(000) 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E
Total Households (Census) 114,738.6 115,838.7 116,835.6 117,864.0 117,713.3 118,493.1 120,215.9 121,213.8 121,941.1 122,672.7 123,408.8 124,149.2 124,894.1
YOY Growth (%) 1.2 1.0 0.9 0.9 (0.1) 0.7 1.5 0.8 0.6 0.6 0.6 0.6 0.6
Total Residential
Broadband Access 43,432.4 54,773.0 63,606.9 68,007.0 72,144.0 75,472.0 79,111.0 82,911.0 87,989.9 91,207.8 93,431.2 95,690.5 97,986.0
% of Internet Access (%) 64.7 78.5 87.4 88.6 88.7 89.1 89.3 91.4 95.4 97.0 97.5 98.0 98.5
Total Narrowband Only
a
23,718.3 14,990.9 9,181.7 8,781.4 9,195.9 9,250.6 9,488.1 7,817.5 4,258.6 2,820.9 2,395.7 1,952.9 1,492.2
% of Internet Access (%) 35.3 21.5 12.6 11.4 11.3 10.9 10.7 8.6 4.6 3.0 2.5 2.0 1.5
Total Residential
Internet Access 67,150.8 69,763.9 72,788.6 76,788.4 81,339.9 84,722.6 88,599.1 90,728.5 92,248.4 94,028.7 95,826.9 97,643.4 99,478.2
Internet Household
Penetration (%) 58.5 60.2 62.3 65.2 69.1 71.5 73.7 74.9 75.7 76.7 77.7 78.7 79.7
Net Adds 2,754.1 2,613.1 3,024.7 3,999.8 4,551.5 3,382.6 3,876.6 2,129.4 1,519.9 1,780.2 1,798.3 1,816.5 1,834.8
a
Represents implied number of subscribers to dial-up services who do not also have broadband services. A Actual. E Estimate. YOY Year over year.
Source: Magna Global, U.S. Census Housing Vacancy Survey, FCC, NCTA.
20
30
40
50
60
70
80
90
100
National Local
F Forecast. Note: Direct Media Advertising, not included in the chart above, has also been growing and expanding its share of total media advertising spend.
National Versus Local Advertising
(%)
September 19, 2013

Corporates

Shifts in Media Mix
Gain/(Loss) in Past
(%, As of May 2013) 1982 1992 2002 2012 10 Years 20 Years
Newspapers 33 30 24 10 (14) (20)
Magazines 13 12 10 7 (3) (4)
Directories (Yellow Pages) 7 9 7 2 (5) (7)
Broadcast Television 23 21 20 20 0 (0)
Direct Mail 12 12 12 11 (1) (1)
Radio 10 10 12 9 (3) (1)
Outdoor 3 3 3 4 1 1
Cable 1 4 9 16 7 12
Internet 4 21 17 21
Total 100 100 100 100
Source: Fitch Ratings, Magna Global.
Top 10 Advertising Categories
Across All Media
($ Mil., JanuaryDecember 2012)
2011 2012
%
Change
Retail 15,866 16,345 3
Manufacturers (Auto) 8,582 8,859 3
Dealers (Auto) 5,266 5,981 14
Total Automotive 13,848 14,840 7
Local Services 8,736 8,978 3
Telecom 8,349 8,660 4
Financial Services 8,074 7,889 (2)
Personal Care Products 6,525 6,836 5
Food and Candy 6,433 6,567 2
Direct Response 6,224 6,342 2
Restaurants 5,912 6,185 4
Insurance 4,949 4,860 (2)
Total 84,916 87,502 3
Note: Total may not add due to rounding.
Source: Kantar Media.
Top 10 Advertisers
Across All Media
($ Mil., JanuaryDecember 2012)
Company 2012
%
Change
Proctor & Gamble Co. 2,805 (5)
Comcast Corporation 1,713 10
General Motors Corporation 1,642 (7)
AT&T 1,572 (14)
L'Oreal SA 1,461 9
Verizon Communications Inc. 1,409 (13)
Twenty-First Century Fox 1,274 6
Toyota Motor Corporation 1,239 13
Berkshire Hathaway Inc. 1,165 12
Chrysler Group LLC 1,065 (14)
Total 15,345 (2)
Note: Total may not add due to rounding.
Source: Kantar Media.
Top 10 Ad Markets
(USD Mil., As of April 2013)
2012 2015E
Ranking Country Ad Spend Country Ad Spend
1 U.S. 161,241 U.S. 182,427
2 Japan 51,724 Japan 53,453
3 China 36,190 China 48,678
4 Germany 25,646 Germany 27,155
5 U.K. 19,502 Brazil 23,901
6 Brazil 18,217 U.K 20,689
7 France 13,525 Russia 13,714
8 Australia 12,633 Australia 13,658
9 Canada 11,325 France 13,456
10 South Korea 10,899 South Korea 13,303
E Estimate. Note: Currency conversion at 2011 average rates.
Source: ZenithOptimedia.
September 19, 2013

Corporates

88.3
73.0
58.8
36.1
27.8
24.8
11.7
0
20
40
60
80
100
Television Internet Radio Newspapers Mobile Phone Magazines Tablet
Source: TVB Media Comparisons Study 2012, Knowledge Networks Inc. custom survey.
Media Reach: % Reached Yesterday (Persons 18+)
(%)
5.2
3.0
1.4
0.7
0.4 0.3 0.2
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Television Internet Radio Mobile Phone Newspapers Tablet Magazines
Source: TVB Media Comparisons Study 2012, Knowledge Networks Inc. custom survey.
Time Spent Yesterday with Media (Persons 18+)
(Hours)
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U.S. Media Volatility
Downturn Analysis (Incorporating Cyclical, Hit-Driven and Secular
Impact)
Although Fitch expects a more stable environment over the next few years, volatility is
incorporated into its downside cases to assess the tolerance of media credit profles to potential
weaknesses in whatever form they may take. The ultimate goal is to incorporate a historical and
current perspective of the subsectors volatility into a forward-looking estimate that captures how
the subsector may behave differently in future downturns. Fitch categorizes the variability into
three buckets: 1) economic sensitivity, 2) hit-driven or other noneconomic volatility (i.e. adoption
cycle for educational publishing or political/Olympic for TV); and 3) secular shifts toward or away
from certain mediums.
Intuitively, most advertising mediums reach their trough when the economy is at its weakest
point. Non-advertising subsectors fuctuate meaningfully due to noneconomic factors. However,
the troughs for many of these subsectors were not experienced during times of economic
weakness. Video games, music, movies and books all have a hit-driven component, while
educational publishing experiences meaningful fuctuations related to the health of state budgets
and the adoption cycle.
Clearly, the economics of certain subsectors are under signifcant pressure from longer term
industry trends. Although quantifying these secular pressures can be diffcult, Fitch factors these
risks into its analysis both quantitatively (layering incremental stress on downturn scenarios)
and qualitatively (understanding how event risk could be heightened for these companies). In
general, Fitch stresses revenue beyond historical subsector downturn performance to capture
the fact that the underlying drivers of the three forms of volatility (economic, hit-driven and
secular) can exert pressure concurrently, but might not be correlated.
The Cyclical, Hit-Driven (or Other) and Secular Volatility Categorization table demonstrates that
certain subsectors have a high degree of fxed costs and that this operating leverage can make
cash fow more volatile than revenue. Further, Fitch recognizes that many media companies do
not have much discretion over signifcant portions of their cost structures (such as programming
and newsprint), meaning that much of the cost cutting is focused on the labor component. Fitch
remains cautious that labor costs for some of these companies could be diffcult to reduce going
forward, as union affliations could obstruct the timeliness and magnitude of cost actions.
As expected, the subsectors with the strongest industry structures exhibit the lowest business
risk in the U.S. media and entertainment space. Non-advertising subsegments, such as
professional publishing and video games, are unlikely to compete on price in a downturn. Thus,
these subsectors are expected to exhibit the least volatility in a stress scenario.
20 Market Trends Media Volatility
September 19, 2013

Corporates

U.S. Media Revenue Downturns
(Past 20 Years)
1990s Early 2000s Late 2000s
% Decline Low Year % Decline Low Year % Decline Low Year
Newspaper (6.1) 1991 (9.4) 2001 (47.6) 2009
Business Papers 3.6 1992 (20.1) 2002 (29.2) 2009
Radio (0.1) 1991 (7.4) 2001 (29.2) 2009
Magazines (1.8) 1991 (10.1) 2001 (25.6) 2009
TV (Noncable) (4.7) 1991 (13.2) 2001 (23.6) 2009
Yellow Pages 2.3 1993 (0.3) 2002 (22.7) 2009
Outdoor (3.3) 1992 (0.8) 2001 (19.0) 2009
Direct Mail 2.3 1996 2.4 2001 (17.4) 2009
Cable TV (1.9) 1995 1.8 2001 (6.8) 2009
Internet N.A. N.A. (25.5) 2002 (3.2) 2009
Total Advertising (0.9) 1991 (5.7) 2001 (20.0) 2009
Music (2.4) 1997 (20.1) 2002 (47.1) 2008
Commercial Printing (2.4) 1991 (11.8) 2002 (17.5) 2009
El-Hi Publishing (5.6) 1994 (5.0) 2002 (17.0) 2009
Trade Books
a
0.4 1995 (6.3) 2000 (5.3) 2008
Movie (Box Office) (4.4) 1991 0.9 2003 (0.3) 2008
Video Games
b
(3.1) 1991 (0.5) 2003 5.1 2006
Real GDP (0.2) 1991 1.1 2001 (2.4) 2009
Nominal GDP 3.3 1991 3.2 2001 (0.3) 2009
a
Includes adult trade and juvenile trade categories.
b
Software. N.A. Not applicable. Note: Percent decline reflects the
multiyear cumulative effect of the downturn for each segment.
Source: TVB.org, Universal McCann, IAAPA, RIAA, BEA, AAP, CEAMP, Fitch Ratings.
(20)
(10)
0
10
20
Real GDP Growth Total U.S. Advertising
Note: Shaded area depicts periods of economic downturn.
Source: Magna Global, BEA, Fitch Ratings.
U.S. Advertising Cyclicality
(%)
September 19, 2013

Corporates

Cyclical/Secular Exposure Summary
Source: Fitch.
III. Lower
Cyclical/Hit Driven;
Lower Secular
II. Higher
Lower Secular
I. Higher Cyclical/Hit
Driven;
Higher Secular
IV. Lower
Higher Secular
Theme Parks
B-to-B Magazines
Film Studios
TV Stations
Educational Publishing
Trade Shows
Cable Networks
Direct Mail
Outdoor
Ad Agencies
Books
Newspapers
BroadcastNetworks
Movie
Exhibitor
Commercial
Printing
Yellow
Pages
Music
Video Games
Radio
Consumer Magazines
Professional Publishing
Higher Cyclical/
Hit-Driven Volatility
Less Cyclical/
Hit-Driven Volatility
Less
Secular
Issues
Secular
Issues
September 19, 2013

Corporates

Cyclical, Hit-Driven (or Other) and Secular Volatility Categorization
Rank Subsegment
Economic
Sensitivity Subsegment
Hit-Driven
Fluctuations Subsegment
Secular
Volatility
1 B-to-B Magazines High Movie Exhibitor High Yellow Pages High
2 Newspapers High Film Studios High Newspapers High
3 Consumer Magazines High TV Station High Commercial Printing High
4 Yellow Pages High Broadcast Network High Consumer Magazines High
5 Theme Parks High Educational Publishing High B-to-B Magazines High
6 Radio High Video Games High Radio High
7 TV Stations High Music High Direct Mail Medium
8 Broadcast Network High Books Medium TV Station Medium
9 Commercial Printing High Cable Network Medium Broadcast Network Medium
10 Outdoor High Ad Agencies Medium Movie Exhibitor Medium
11 Trade Shows High Theme Parks Low Music Medium
12 Educational Publishing High Newspapers Low Film Studios Medium
13 Direct Mail Medium Radio Low Educational Publishing Medium
14 Ad Agencies Medium Consumer Magazines Low Books Medium
15 Online Advertising Medium B-to-B Magazines Low Video Games Medium
16 Cable Network Medium Online Advertising Low Ad Agencies Medium
17 Video Games Medium Commercial Printing Low Cable Network Medium
18 Music Low Direct Mail Low Trade Shows Low
19 Books Low Outdoor Low Theme Park Low
20 Film Studio Low Professional Publishing Low Online Advertising Low
21 Movie Exhibitor Low Trade Shows Low Professional Publishing Low
22 Professional Publishing Low Yellow Pages Low Outdoor Low
September 19, 2013

Corporates

Summary of Key Secular Issues
Secular Issue
Who is most
affected?
Who is least
affected?
How material is the
risk? Comment/Mitigating Factors
1.) Digital Piracy Movie studios, music TV studios High Fitch believes digital piracy will continue to increase and be a risk for
the music industry and movie business but not necessarily the TV
networks or studios, as the serial nature of much TV content does not
lend itself to piracy. Fitch believes the bulk of piracy risk will come from
home entertainment (not theatrical sales). However, this is important,
as the industry is often dependent on DVD sales and, recently, digital
rental and sell through, in order to generate positive free cash flow.
Digital downloads make piracy easy as web speeds have increased. If
piracy continues unabated, movie studios will need to manage their cost
structures appropriately in order to generate profits out of the theatrical
window instead of using it as a promotional vehicle.
2.) OTT Television/
Cutting the Cord
Cable networks,
particularly premium,
and those that show
syndicated content
Broadcast networks;
film and TV studios
Medium See Alternative Distribution OTT Television Threats by
Subsector Table on pages 3637.
3.) Tablets Newspaper
publishers, magazine
publishers, consumer
and education
textbook publishers,
commercial printers
Film and TV studios High for commercial
printers; medium for
publishers
Tablet adoption has exploded and penetration is projected by eMarketer
to reach 40% of the US population by 2015. Their mobility and ease
of use are altering media consumption habits, particularly for books,
magazines and newspapers, as well as video. However, Fitch believes
publishers will be able to utilize digital platforms while retaining
profitability. E-books are growing rapidly and are more profitable.
Tablet-based magazines are in the early stages of adoption; pricing
and economics are not fully set. Publishers are experimenting, but are
not expected to price subscriptions in a way that reduces their overall
profitability. The increased penetration of tablets will likely accelerate
the decline of print newspapers. It remains to be seen to what degree
newspaper publishers will be able to monetize tablet-based sales
and subscriptions. Consumption of video content over tablets should
remain largely incremental, as trends point to consumers using multiple
screens at home (large-screen TV and tablet/smartphone). Commercial
printers will see a material reduction in demand for magazines, catalogs
and books as publishers migrate away from physical distribution. Fitch
expects these business lines could decline in the mid teens.
4.) DVR Broadcast networks,
cable networks, TV
studios, local TV
stations
First-run syndication,
sports programming
Medium Ad rates already factor in the aspect of fast-forwarding commercials,
as advertising is currently purchased using commercial viewing over
a three-day period (which in some instances outperforms live-only
ratings). Data thus far suggests commercial skipping is generally offset
by the incremental number of viewers. 41% DVR penetration of TV
households is likely to increase by more than 5 points in the next five
years. Fitch believes early adopters are likely the most aggressive
commercial skippers, meaning the largest impact has already occurred.
Product placements and sponsorships are also ways to mitigate this
technology. However, execution risk exists. Reduced live primetime
viewing could pressure the carryover into local evening news.
5.) Internet News and
Weather
Local TV stations N.A. High Fitch estimates that the newscasts of local broadcasters account for
approximately 30%40% of revenue. The proliferation of Internet news
sources will continue to affect local broadcast news. However, the
continued rationalization of newspapers and Yellow Pages should help
maintain advertiser demand. Despite challenges, Fitch expects the top
stations in the top markets to continue to be one of the few material
aggregators of the local audience. Investment in news can be a good
differentiator and competitive advantage for a station in a local market.
6.) Radio Technologies Local radio stations N.A. High Internet radio streaming services such as Pandora and Spotify are
resonating with consumers, and Fitch believes they will continue to
grow audiences, particularly via increased mobile penetration. There
remain hurdles to the streaming service business model, including high
royalty payments that prohibit economies of scale, few paid subscribers
and consumer aversion to advertising. Fitch believes satellite radio
and music devices played through car stereos will continue to pressure
listenership. Wireless Internet in cars, although still a few years out,
will certainly increase the adoption of digital radio. However, Fitch
believes consumer behavior will continue to factor in data pricing and
usage. Broadcasters digital efforts (iHeartRadio), although in their early
stages, could provide an opportunity to capture a sizeable portion of
digital listening over the next few years. Whether the ability to capture
digital audience will translate into incremental revenue will depend on
advertising demand and pricing.
September 19, 2013

Corporates

Summary of Key Secular Issues
Secular Issue
Who is most
affected?
Who is least
affected?
How material is the
risk? Comment/Mitigating Factors
7.) Saturation of Cable
Networks
Broadcast networks,
cable networks
TV studios Medium In addition to OTT alternatives, another issue facing TV networks today
could be the proliferation of new networks. There are more than 200
channels on most cable packages. As a result, the supply of ad space
on TV has never been greater. Successful cable networks have used
their leverage with cable providers to add new niche networks that
further fragment the audience. Fitch believes the cable network industry
has reached a saturation point, and that most networks have now
wandered outside of their initial genre of programming. This can make
brand identity difficult for many viewers. It also drives up programming
expenses as networks seek to differentiate themselves via original
and engaging content. To the extent that programming cost increases
exceed affiliate rate increases, networks could experience modest
margin pressure.
8.) E-Books Publishers N.A. High Currently approximately 20% of consumer book sales. Accelerating
adoption of tablets and e-readers will drive continued growth. The DoJ
lawsuit removes the ability of publishers who settled to set retail prices.
While e-books will accelerate the secular decline in traditional sales,
which will pressure revenue, margins will increase given the absence of
inventory/distribution costs and lower author royalties.
9.) Emerging video
technologies
Broadcast networks N.A. TBD; High if business
model is found legal
in court
Aereo and Dish Networks Autohop have emerged as potential threats
to the broadcast network model. They are currently being challenged
in court, and it remains to be seen whether they will be found legal
and able to continue to operate. If Aereo is found legal, retransmission
revenue would likely be under pressure, as pay-TV providers could
threaten to deploy similar services. If AutoHop is found legal, Fitch
believes the draw of network advertising would be reduced significantly,
as more consumers would easily skip the commercials. Mitigants
to AutoHop include the incremental cost and prevalence of live-TV
viewing. Even if they are not found legal, Fitch believes new entrants
will continue to emerge that seek to challenge the model.
10.) Digital advertising Newspaper
publishers, magazine
publishers,
yellowpages,
broadcast networks,
cable networks
Outdoor Medium Digital advertising opportunities are growing rapidly as the internet
becomes integrated with the daily life of more of the population.
Increased broadband penetration and smartphone/tablet penetration
are driving this. Advertising follows eyeballs, and advertisers are
increasingly allocating portions of their marketing budgets to digital,
mobile and social. Tablets are increasing the digital/mobile advertising
opportunity while cannibalizing some of the physical. Mitigants include
the still-experimental nature of much of this advertising, as well as
uncertainties around its efficacy. There is a need for measurement of
eyeballs for tablet magazines and digital/mobile video impressions.
Newspapers and yellow pages are most at risk; broadcast and cable
will benefit from market share shifts away from these more challenged
mediums, offsetting their own share loss to digital.
September 19, 2013

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Media Business Risk
Many trends are affecting the various advertising mediums and non-advertising subsectors. The
Risk Spectrum for Media Subsectors chart classifes a subsectors exposure to particular risk
factors and distinguishes the various subsectors based on these characteristics. Fitch views
there to be more risk in advertising subsectors that: 1) marketers perceive to be less capable
of measuring return on investment (ROI); 2) are distributed in predominantly printed form; 3)
have a high risk of digital substitution; 4) are less targeted; and 5) have a local footprint. For
non-advertising subsectors, risk differentiators include: 1) pay-per-use (versus more stable
subscription models); 2) consumer (versus business-to-business) end markets; 3) weaker
industry structures (low barriers to entry, heavy direct or indirect competition); and 4) the threat
of digital substitution, piracy and/or obsolescence.
Higher
Risk
Lower
Risk
Non-Advertising Based
Risk Factor
Pay
per Use
Consumer End
Market
Weak Industry
Structure
Digital
Substitution
Commercial Printing +
Music +
Theme Parks +
Books + /+
Exhibitor + +
Film Studio + +
Tradeshows + + +
Ed. Publishing + + + /+
Ad Agency + + + +
Pro Publishing + + + +
Higher
Risk
Lower
Risk
Advertising Based
Risk Factor
ROI
Measurability Print
Digital
Substitution Targeted Local
Newspapers
Yellow Pages /+ +
Magazines + +
Direct Mail /+ /+
Radio + +
TV Stations + /+
TV Networks + /+ +
Cable Networks + /+ + +
Outdoor + +
Online + + + + +
Risk Spectrum for Media Subsectors Differentiating Characteristics
ROI Return on investment. Note: + represents less risk; represents more risk.
September 19, 2013

Corporates

Product Line Diversity
Media conglomerates derive revenue from a variety of businesses that face a range of challenges
and opportunities. The companies classify their segments differently, and the level of detail in
revenue disclosure can vary. The chart below provides a granular breakout of the conglomerates
revenue composition based on public flings and Fitch estimates. This chart, in combination
with the tables and charts on the previous and subsequent pages, provides a framework within
which to model revenue volatility for these companies going forward. Key observations include
CBS generating approximately 60% of its revenue from advertising; Disney and Time Warner
generating approximately 20% of revenues from advertising; and a substantial portion of all
the conglomerates revenue portfolios that are composed of stable, high-margin carriage fees,
with Discovery being the most heavily weighted at approximately 46%. CBSs planned outdoor
REIT transaction will reduce CBSs exposure to cyclical advertising revenues. Fitch believes that
CBSs revenues generated from advertising will fall to approximately 50% following completion
of the transactions.
Conglomerate Product Line Diversity
(% of Total Revenue)
Business Line CBS DIS DISCA FOXA NBCU TWX VIA
Advertising
Cable Networks (Advertising) 0.1 8.2 45.4 14.7 14.0 14.5 33.9
Internet Properties
a
4.6 1.0 0.0 0.0 0.0 0.0 0.0
Outdoor Advertising 9.0 0.0 0.0 0.0 0.0 0.0 0.0
Inserts/Direct Marketing 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Broadcast Television (Network and Stations) 36.1 9.3 0.0 16.1 24.3 0.0 0.0
Magazines 0.0 0.5 0.0 0.0 0.0 6.1 0.0
Radio 9.2 0.7 0.0 0.0 0.0 0.0 0.0
Newspapers 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0 0.3 0.0
Subtotal Advertising 59.0 19.7 45.4 30.8 38.3 20.9 33.9
Non-Advertising
Cable MSO/Satellite 0.0 0.0 0.0 15.4 0.0 0.0 0.0
Cable Networks (Carriage) 12.2 21.5 46.4 23.0 19.0 29.2 27.0
Broadcast Retransmission 2.4 0.4 0.0 0.8 0.0 0.0 0.0
Syndication/TV Licensing (Includes Digital) 16.5 7.3 2.8 15.0 15.5 20.5 10.7
Consumer Products 0.0 6.1 2.9 0.0 0.0 1.7 4.2
Book Publishing 5.5 1.1 0.0 0.0 0.0 0.0 0.0
Filmed Entertainment 0.3 3.5 0.0 7.5 5.8 6.4 9.3
Theme Parks 0.0 30.6 0.0 0.0 8.6 0.0 0.0
Home Entertainment 1.1 5.3 0.0 7.5 7.6 11.2 13.7
Video Games 0.0 1.0 0.0 0.0 0.0 0.0 0.0
Other 2.9 3.6 2.6 0.0 5.2 10.0 1.1
Subtotal Non-Advertising 41.0 80.3 54.6 69.2 61.7 79.1 66.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
a
As reported, if broken out as a separate segment. Some companies have digital revenue streams within other divisions.
Note: Ranked within each category by volatility least to most.
September 19, 2013

Corporates

Geographic Diversity
Major advertisers have expanded their international presence in step with the emergence of
middle classes in terms of size, scale and purchasing power in many markets, and ad agencies
and most media entertainment companies have followed. The number of international TV
channels has grown signifcantly over the last fve years as pay-TV penetration and foreign
demand for viewing variety continues to increase (albeit still at signifcantly lower levels than the
U.S. market). In addition, over the past several years, the international market has become a
critical distribution channel for U.S.-based movie distributors and syndicated content providers,
while Clear Channel Communications, Inc. has a meaningful presence in the international
outdoor segment. Film studios are increasingly co-producing and co-fnancing projects with
Chinese flm studios.
Fitch believes that international markets represent a compelling revenue and cash fow growth
story for many diversifed media companies as they capitalize on global brands and leverageable
content. The demand for high-quality content by international broadcasters and pay-TV providers
positions large media companies to further monetize their content in international markets. Fitch
expects the major media conglomerates to continue seeking growth in international markets by
deploying and leveraging strategies and content developed in the U.S., particularly in the BRIC
(Brazil, Russia, India and China) countries. Advertising agencies and large media conglomerates
are expected to continue dedicating investment dollars toward building up a long-term presence
in these and other emerging countries.
However, they remain vulnerable to cyclical factors. The downturn demonstrated a high degree
of correlation between U.S. and non-U.S. markets. Further, fallout from the eurozone debt
crisis, as well as slowing growth in China and other emerging markets, is expected to weigh on
international markets for the foreseeable future. Fitch believes this risk is limited to slower growth
rates at media companies rather than signifcant operating pressures. First, the international
exposure of many media companies, while expected to grow, remains moderate relative to other
industries, with non-U.S. revenue generally less than 30%. Additionally, Fitch expects that even
in a slowdown, international consumer demand for U.S.-produced content will remain strong.
There are meaningful execution risks associated with international expansion, due, among
other things, to differences in entertainment consumption trends, political instability, uncertain
or less developed regulatory regimes, and variations in competitive dynamics (state-owned
competitors) that can pose challenges. These risks can sometimes outweigh the diversifcation
benefts of having an international presence. As such, Fitch has seen measured approaches to
international expansion over the last few years, including the licensing of brands and content
versus an owned model in certain markets. Moves such as Time Warners increased stake in
Central European Media Enterprises Ltd. and Discovery Communications, LLCs acquisition of
ProSiebenSat.1 Groups SBS Nordic operations, as well as its 20% minority interest in TF1s
Eurosport, demonstrate that conglomerates will continue to expand their investments and
presence in international markets.
On the content side, Fitch expects to see continued efforts at greater effciency through brand
licensing (versus owning) and leveragability of content at the preproduction stage. Viacoms
move to license some brands in select countries, for example, was a result of its international
margins lagging those of its U.S. operations. This was due to specifc country-by-country tastes
that limited the amount of scale Viacom could gain with its programming, relative to Discovery,
which has been able to leverage its programming internationally as its content is generally
neutral to origin.
September 19, 2013

Corporates

GDP Growth in the BRICs
(%, As of June 2013) 2012 2013F 2014F 2015F
Brazil 0.9 2.5 3.2 3.5
Russia 3.4 2.2 3.0 3.0
India
a
5.0 5.7 6.5 6.8
China 7.8 7.5 7.5 7.0
a
India forecasts represent fiscal year; e.g. 2012 = FY13.
F Forecast.
Source: Fitch.

Global Advertising
(USD Bil., As of June 2013)
U.S. Non-U.S. Total World
Year Amount % Change Amount % Change Amount % Change
2001 137.8 (7.5) 201.3 (2.0) 339.2 (4.3)
2002 141.1 2.4 200.2 (0.6) 341.3 0.6
2003 144.8 2.6 208.6 4.2 353.5 3.6
2004 155.2 7.1 225.2 8.0 380.4 7.6
2005 161.7 4.2 242.3 7.6 404.0 6.2
2006 168.7 4.4 259.9 7.2 428.6 6.1
2007 169.2 0.3 280.4 7.9 449.6 4.9
2008 160.3 (5.2) 288.0 2.7 448.3 (0.3)
2009 134.6 (16.1) 267.0 (7.3) 401.5 (10.4)
2010 143.2 6.4 291.2 9.1 434.4 8.2
2011 147.5 3.0 306.4 5.2 453.8 4.5
2012 154.4 4.7 317.3 3.6 471.7 3.9
2013
a
155.0 0.4 330.8 4.3 485.8 3.0
2014
a
164.1 5.9 351.3 6.2 515.4 6.1
2015
a
167.6 2.2 373.2 6.2 540.9 4.9
a
Forecast. Note: Constant currency basis using 2012 foreign exchange rates.
Top 10 Ad Markets
(USD Mil., As of April 2013)
2012 2015E
Ranking Country Ad Spend Country Ad Spend
1 U.S. 161,241 U.S. 182,427
2 Japan 51,724 Japan 53,453
3 China 36,190 China 48,678
4 Germany 25,646 Germany 27,155
5 U.K. 19,502 Brazil 23,901
6 Brazil 18,217 U.K 20,689
7 France 13,525 Russia 13,714
8 Australia 12,633 Australia 13,658
9 Canada 11,325 France 13,456
10 South Korea 10,899 South Korea 13,303
E Estimate. Note: Currency conversion at 2011 average rates.
Source: ZenithOptimedia.
September 19, 2013

Corporates

Geographic Diversity
Revenue Mix
(%) U.S. Europe ROW Total
Nielsen Holdings N.V.
a
50 25 25 100
Interpublic Group of Companies, Inc. 55 20 25 100
Twenty-First Century Fox
b
58 28 14 100
McGraw Hill Financial, Inc. 60 24 16 100
Thomson Reuters Corp.
a,c
60 28 12 100
Discovery Communications LLC 63 N.A. 37 100
Pitney Bowes, Inc. 68 N.A. 32 100
Liberty Interactive LLC 70 18 12 100
Viacom Inc. 71 17 12 100
Time Warner Inc.
b,d
72 17 11 100
Dun & Bradstreet Corp.
b,e
74 14 12 100
Clear Channel Communications, Inc. 72 N.A. 28 100
Walt Disney Company
b
75 15 10 100
R.R. Donnelley & Sons Co. 76 10 14 100
CBS Corp. 88 5 7 100
Cox Enterprises Inc.
f
95 N.A. 5 100
Houghton Mifflin Harcourt Publishers Inc. 95 N.A. 5 100
AMC Entertainment Inc. 100 N.M. N.M. 100
Belo Corp. 100 100
Regal Entertainment Group 100 100
Verisk Analytics Inc. 100 N.M. N.M. 100
Univision Communications, Inc. 100 100
a
Europe includes Europe, Middle East and Africa.
b
U.S. includes Canada.
c
U.S. includes all North American, Latin
American and South American countries.
d
Europe includes only UK, Germany and France operations.
e
Europe includes
other international markets.
f
Fitch estimate; international operations related to Manheim business.
ROW Rest of the world. N.A. Not available. N.M. Not meaningful.

September 19, 2013

Corporates

Market Trends
Key Trends in Advertising and Media
Over-the-Top Technology ......................................................................................... 30
Measurement............................................................................................................ 40
Demographics .......................................................................................................... 42
Pricing....................................................................................................................... 44
Sports Programming................................................................................................. 45
Tablets and E-Books................................................................................................. 52
Commercial Printers ............................................................................................ 53
Consumer Books................................................................................................. 53
Magazines ........................................................................................................... 54
Newspapers ........................................................................................................ 55
Professional and Educational Publishing ............................................................ 56
Video ................................................................................................................... 56
Cloud Storage........................................................................................................... 58
30 Market Trends Key Trends in Advertising and Media
September 19, 2013

Corporates

Over-the-Top Technology
Internet-based, or over-the-top (OTT), television distribution represents a new method of video
content consumption and a growing source of demand for content produced by the large media
conglomerates. Fitch continues to believe that large media companies are well positioned to
address the threats and opportunities presented by emerging alternative distribution platforms
such as OTT. Fitch also believes demand for high-quality content remains strong across all major
end markets (broadcast, cable networks and subscription video on demand) and that large, well-
capitalized content providers will remain crucial to the industry. Fitch expects content creators
and studios will continue to distribute its owned content rationally and with the goal of maximizing
its long-term proftability and franchise value. Further, in Fitchs opinion the proliferation of new
distribution platforms and methods of consumption (e.g. smartphones and tablets) will continue
to drive more demand for content, providing upside.
The growth of OTT video streaming applications together with the wide availability of high-
bandwidth internet connectivity (at acceptable price points) represents yet another alternative
to traditional linear television consumption. The risk is that the linear model is upended as
households forego their cable subscriptions and opt to watch content sourced from the Internet
(cut the cord) as a way to reduce their monthly pay-TV bill. Fitch believes that cord cutting
will not materially affect the media conglomerates FCF generation or credit profles. Media
conglomerates ratings would be able to withstand modest subscriber losses due to cord cutting,
and there are no expected rating implications over the next fve years. See chart on page 32 for
Fitchs analysis of OTT threats by subsector.
The primary impact of cord cutting falls upon the multichannel video programming distributors.
However the cable networks, which aggregate programming, charge distributors on a per-
subscriber basis and receive advertising revenue based on ratings, would collect lower affliate
and advertising revenue. Fitch believes losing the ability to aggregate a large niche audience
would put pressure on per-subscriber affliate fees and costs per thousand (CPM), further
compounding revenue losses, in the event subscriber losses are large enough. However, Fitch
notes that incremental revenue gained by selling content into the SVOD and digital windows
provides offsets to revenue losses experienced within the traditional linear mode.
Fitch believes only 10%20% of the overall population is at risk of cutting the cord. In general,
these households can be characterized as middle income, low TV consumption, single-person,
technologically savvy and young. Fitch sees several mitigants to widespread rejection of the
current model of content distribution, including a less compelling lineup of OTT content, the
OTT viewing experience (slow speeds at peak times), sports programming, DVRs and initiatives
taken by the distributors. The money-saving opportunity of a compelling OTT lineup is likely to
recede as subscription-based services increase in price, and heavy use of broadband data for
streaming purposes becomes more expensive. There are ultra-high-speed Internet initiatives in
the market, such as Google Fiber. These services would pose a signifcant incremental threat if
offered at competitive prices, as they would materially improve the viewing experience without
signifcant incremental cost. However, Fitch does not anticipate such services being rolled-out to
a large enough population to present a credible threat over the medium term.
Fitch believes demand for high-quality, expensively produced content will remain. As a result,
large, well-capitalized content providers remain crucial to the industry. Demand from digital
providers has given rise to a new window that enables content owners to monetize previously
syndicated library content. Fitch believes these deals will be recurring, as OTT providers seek
to build out libraries and studios sell content that has recently come out of network airing and
September 19, 2013

Corporates

syndication. Fitch expects content providers to remain rational and protect their long-term
franchise values. The cable networks, particularly premium cable and networks that rely largely
on buying syndicated content, face elevated risk of lower audiences and potential business
model interruption. Home entertainment is also expected to be negatively affected. The flm and
TV studios, as the content creators and license holders, are best positioned in an OTT world.
Netfix, Hulu, Amazon and Google are all experimenting with original programming, which is risky
because of the cost and hit-driven nature of TV shows. Fitch believes, as the cost of licensed
content increases, streaming service providers will look to invest more in original programming,
as they try to adopt a similar model to the premium cable networks. However, since most of
the streaming service providers do not have the necessary capital to risk allocating signifcant
portions of their budgets to original programming, Fitch believes streaming providers will be
forced to continue licensing previously syndicated content at potentially increased costs.
The pay-TV providers are seeking to retain subscribers via TV Everywhere initiatives, which
enable online and mobile viewing (in or out of home, depending on the provider) for authenticated
subscribers. These efforts are still in their relatively early stages, and remain hampered by
uncertainty around digital rights in legacy affliate contracts, as well as lack of a compelling
go-to-market strategy. If multichannel video programming distributors (MVPDs) and networks
can resolve these issues, it would increase the value proposition and be a strong subscriber
retention tool.
September 19, 2013

Corporates

Alternative Distribution OTT Television
(Threats by Subsector)
Subsector Description of Risk
Risk
Level
a
Mitigants
Key
Affected
Credits
Cable
Networks
The near-term, most acute risk is fewer subscribers at the MSOs
(i.e. cord cutting) will reduce the amounts paid by the MSOs to the
networks, as they are based on number of subscribers. Additionally,
ad revenues would be affected by reduced ratings, though Fitch
expects CPMs to remain resilient near term as cable networks
will remain a good way to aggregate a targeted demographic. The
more severe and longer term risk is that subscriber losses are large
enough to cause the MSOs to push for lower per-subscriber affiliate
fees and for lower CPMs as the audience shrinks.
3 Same mitigants as MSOs/distributors apply (see below). In
addition: Mitigant to pressured CPMs is that cable networks
remain a good way to aggregate a targeted demographic.
Mitigant to pressured per-subscriber affiliate fees is the
contractual rate increases built into current multiyear
contracts (though admittedly a near-/medium-term
mitigant only).
High margins of cable networks provide room to absorb
material margin pressure before significantly affecting FCF.
Many networks owned by conglomerates that own studios/
control content and are expected to make business decisions
that benefit the total franchise.
VIA, FOX,
DISCA,
TWX, DIS
and NBCU
Cable
Networks,
Largely
Syndicated
Content
Networks that rely largely on syndicated programming face a higher
risk of their content being viewed less due to increased audience
fragmentation/availability of it on alternative OTT platforms. Without
a lure of original content unavailable elsewhere, these networks run
the risk of losing viewers/ratings and advertising, even absent full
cord cutting. Longer term, they risk additional competition (higher
prices) and being disintermediated if there is an OTT content
aggregator willing and able to pay the desired price.
3 Studios desires to maximize their long-term profitability are
likely to result in them foregoing near-term OTT revenue
streams in favor of maintaining longer term syndicated
revenue streams in the event OTT deals prove cannibalizing.
TWX,
FOX and
NBCU
Cable
Networks,
Original
Content
Less at risk of devaluation of content, assuming programming slate
is popular/an audience draw. Could eventually face higher prices
from content creators/producers as OTT providers emerge
as bidders.
2 Original content reduces risk that it will be devalued by
alternative platforms. Can monetize library content via selling
license to OTT distributors.
VIA,
DISCA
and DIS
Cable
Networks,
Premium
The incremental expense to consumers makes premium networks
more vulnerable to cord shaving, particularly when the content
(new releases and library films) can be substituted, if not exactly
replicated, by content available OTT. Longer term, the networks
risk being disintermediated if studios go directly to an OTT content
aggregator willing to pay the desired price.
4 Exclusive output deals that limit OTT avenues in which
content can be shown while it is being aired on premium
cable. TV Everywhere initiative limits content access without
a traditional subscription. Compelling original content can
make these networks a must carry for some consumers.
TWX and
CBS
Home
Entertainment
Fitch expects alternative distribution will only increase the already
significant pressures facing physical DVDs. Fitch expects high
single-digit/low double-digit declines going forward as alternatives to
buying a physical DVD proliferate.
5 More profitable electronic rental and sell-through offsetting
declines. Additional modest mitigants exist. Certain segments
of the population, such as children, want to watch the same
movie multiple times, which may make owning a copy a more
economical alternative to renting.
DIS, TWX
and VIA
Movie Studios Fitch perceives more upside than risk. A proliferation of content
distribution platforms should result in an overall increase in demand
for studio-produced content. More distribution channels will more
than offset any reduced demand from one particular channel that
may purchase less content as a result of a smaller audience.
A positive in particular for small, independent studios that may
otherwise have a difficult time placing their content (e.g. Netflix
agreement with Relativity Media, Nu Image, Film District, etc.).
1 Studios control the content and can decide who will show
it, when it will be shown, and if it will be blocked from any
distributors/aggregators. They have the ability to contract
directly with new content aggregators, bypassing the current
cable/broadcast subscription model if they so choose.
DIS,
TWX, VIA,
NBCU and
FOX
TV Studios Fitch perceives more upside than risk. OTT content providers
represent incremental sources of demand for syndicated content,
and a small amount of original content. They have created a new
window through which studios can monetize old library content,
driving incremental, high-margin revenue. The risk exists that a TV
studio could enter into a deal with an OTT provider such as Netflix
that limits the value of their content in the syndication market.
However, deals brokered by the studios thus far indicate this is not
likely to be the case.
1 The studios control the content and, therefore, dictate
to whom they will sell the licenses, and if they will block
distributors. Fitch believes the studios will act in their long-
term best interest and not sell the content too cheaply or in
such a way as to limit its value in the profitable
syndication market.
CBS,
TWX, FOX
and DIS
Broadcast
Networks
Cancelation of cable subscriptions would result in lower
retransmission revenues and reverse network compensation.
Further audience fragmentation from the proliferation of content
alternatives could further pressure audiences/ratings.
3 Fitch believes consumers will retain free over-the-air TV in a
cord-cutting scenario. Additionally, broadcasters are expected
to remain one of the few outlets able to aggregate
large audiences.
CBS,
NBCU,
DIS and
FOX
Local TV
Stations
Cancelation of a cable subscription would result in lower
retransmission revenues. Further audience fragmentation from the
proliferation of content alternatives could add incremental pressure
to audiences/ratings.
3 Fitch believes consumers will retain free overthe-air TV in
a cord-cutting scenario. Televised local news and weather
are not likely to be available OTT, and these outlets have
retained significant viewership amid the existence of news
and weather Internet sites.
BLC, CBS
and NBCU
a
Risk Levels: 1 = Least Risk and 5 = Most Risk. MSOs Multiple-system operators. OTT Over the top. CPMs Cost per thousand. Continued on next page.
September 19, 2013

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Alternative Distribution OTT Television (Continued)
(Threats by Subsector)
Subsector Description of Risk
Risk
Level
a
Mitigants
Key
Affected
Credits
MSOs/
Distributors
Customers cutting the cord, canceling their cable subscriptions, and
instead opting to watch content that is sourced from the Internet,
whether streaming or downloaded. Fitch believes most cord cutters
will watch OTT content via TV, rather than directly on the computer.
The big driver of cord cutting will be the desire to lower the cost of
at-home entertainment. There is certainly a subsector of customers
that are highly likely to cut the cord. However, Fitch believes it is
quite small and does not expect material subscriber losses over the
next five years, as several mitigants exist.
3 Mitigants include the following: Potential for tiered data
pricing that would reduce the economic incentive. Inability of
current alternatives to replicate the full spectrum of content
available on broadcast/cable/premium cable TV. Sports
content is a big draw for a certain segment of the population
and cannot be fully replicated online (piracy aside). Ease
of having a slate of programming served up to a viewer
(channel line up), and not having to go searching through
a massive set of options to choose. Upfront cost of some
equipment can be high, reducing the economic incentive.
Lack of technological savvy for a segment of the population
(though this mitigant will be reduced as the population
ages). Even at approximately $80 for a full-channel line up,
it is a strong value proposition for households that watch
a lot of TV. Streamed content can only be shown on one
device, significantly increasing upfront (for the equipment)
and monthly (Netflix subscription) costs for households with
multiple televisions; Growing DVR penetration increases
stickiness of cable/broadcast setup. TV Everywhere initiative
likely to retain subscribers.
CMCSA,
COX,
TWC,
CVC,
DISH and
DTV
a
Risk Levels: 1 = Least Risk and 5 = Most at Risk. MSOs Multiple-system operators. OTT Over the top. CPMs Cost per thousand.
September 19, 2013

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Recent OTT Deals and Developments
Date Deal Announcement
Reported Price Tag/
Timing (If Available) Notes
09/10/13 Virgin Media to offer Netflix on its TiVo
set-top box.
To be rolled out to 1.7 million Virgin Media Tivo users this year after initial testing
phase. Netflix subscription required. Netflix content will be included in TiVo
search results. Marks first time web-based product is distributed in partnership
with a pay-TV provider.
09/09/13 Tencent Holdings Ltd. to bring Disney
film to its online video streaming site
Hollywood VIP.
Not disclosed. Deal includes live action and animated films from Disney, Pixar and Marvel.
Terms not disclosed. Tencent already has similar deals with Lionsgate, Miramax,
Universal and Warner Bros.
09/04/13 LOVEFiLM adds animated kids content
from Warner Bros.
Multiyear. Deal adds animated superhero shows such as the Batman series from 1992 to
2011, Superman, Justice League, and both the original and recent Thundercat
series.
09/04/13 LOVEFiLM (Amazon's UK video
streaming service) adds Viacom content.
Multiyear. Deal similar to the June agreement struck between Amazon Prime and Viacom.
Includes shows from Nickelodeon, MTV and Comedy Central.
08/20/13 Netflix and The Weinstein Company
enter into multiyear deal.
Multiyear, exclusive. Replaces Showtime as exclusive provider beginning in 2016. Deal includes films
from The Weinstein Company and Dimension Films. Movies will stream during
the pay-TV window.
07/09/13 Netflix and CBS renew streaming deal. Multiyear. Adds programming from TV series "L.A. Complex," "Complex," "4400" and
"CSI:NY." It also continues availability of titles "Jericho," "Medium," and
"Flashpoint."
07/03/13 Netflix expands agreement with PBS for
U.S. and Canada.
Partially exclusive. In the fall of 2013, Netflix members will have exclusive access to all seasons of
"The Bletchley Circle and, in 2014, will have exclusive access to "Super Why!"
from PBS KIDS.
06/26/13 Amazon expands agreement with PBS. Multiyear. Adds hundreds of additional episodes of PBS programs including "NOVA,"
"Masterpiece," and Ken Burns documentaries. It also adds more programming
from PBS KIDS.
06/24/13 Amazon's LOVEFiLM entered into
multiyear licensing agreement with
CBS Studios International in UK and
Germany.
Multiyear. Includes CBS television series "The Good Wife" and "Blue Bloods" and
SHOWTIME programming "Nurse Jackie," "Californication" and "Dexter."
06/17/13 Netflix inks multiyear deal with
DreamWorks Animation.
Multiyear, Netflix will have
exclusive rights in all
countries in which it operates.
No financial details disclosed. The deal will supply a flow of first-run episodic
content inspired by DreamWorks Animation (Shrek and The Croods) and Classic
Media characters (Casper the Friendly Ghost and Lassie).
06/04/13 Amazon and Viacom announce deal to
stream preschool content.
Multiyear. Amazon's largest deal yet and estimated at several hundred million dollars.
Content includes shows such as "Blue's Clues" and "Dora the Explorer." For
Amazon, possible tie-ins to sell consumer products based on characters. Deal
also includes rights to stream content that airs on Viacom's Comedy Central and
MTV, such as "Awkward" and "Teen Mom 2."
05/16/13 Amazon enters into expanded
agreement with NBCUniversal Cable
and New Media Distribution.
Partially exclusive. Amazon prime members will have exclusive streaming access to prior seasons
of NBCUniversal shows: "Grimm," "Suits," "Covert Affairs," "Hannibal" and
"Defiance." In addition, the expanded agreement will include several new shows.
05/09/13 Netflix announces deal with Walt Disney
for additional kids' programming
Multiyear, exclusive. Netflix gained exclusive U.S. subscription-TV service rights for five popular
shows from Disney Junior and Disney XD. The deal includes one of the most
popular shows on Disney Junior, Jake and the Never Land Pirates, and Disney
XD show Tron:Uprising.
04/22/13 Netflix to let Viacom deal expire. CEO Reed Hasting, in a letter to investors, says Netflix will not renew broad
Viacom deal which includes shows from Nickelodeon, BET and MTV. Instead will
focus on exclusive and curated content.
04/11/13 Netflix enters into expanded agreement
with Hasbro Studios.
Exclusive. Netflix becomes the exclusive over-the-top streaming subscription destination
in the U.S. for five of Hasbro Studios most popular shows "My Little Pony
Friendship Is Magic," "Transformers Prime," "Transformers Rescue Bots,"
"Kaijudo: Rise of the Duel Masters" and "Littlest Pet Shop." New seasons will
be available one month after the season finale airs on The Hub Network.
02/28/13 Amazon and Scripps enter into a
licensing agreement for TV programming
from HGTV, DIY Network, Food Network,
Cooking Channel, and Travel Channel.
This is the first online-only distribution deal for Scripps. Agreement includes
the following shows: "Rachel Ray's Week in a Day," "Anthony Bourdain:
No Reservations," "Cupcake Wars," "House Hunters," Iron Chef America,"
"Chopped," and "Throwdown With Bobby Flay."
02/13/13 Amazon and CBS expand content
licensing agreement to include additional
TV programming.
Amazon Prime subscribers will have access to past TV episodes of "America's
Next Top Model," "Everybody Loves Raymond," "Undercover Boss," "United
States of Tara," among others.
02/11/13 Amazon and CBS enter into content
licensing agreement for rights to TV
series, "Under the Dome."
Exclusive. Amazon Prime subscribers will have unlimited access to CBS's new TV series,
"Under the Dome," just four days after initial broadcast. This in-season, serialized
release schedule differs from past content agreements that typically allow
streaming of past full seasons.
OTT Over the top. Continued on next page.
September 19, 2013

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Recent OTT Deals and Developments (Continued)
Reported Price Tag/
02/01/13 Amazon enters into content licensing
agreement with PBS Distribution that will
make Prime Instant Video the exclusive
digital subscription service to stream
"Downton Abbey."
Exclusive. Seasons 1 and 2 already available. Beginning June 18, 2013, Prime Instant
Video will be exclusive subscription service for streaming the new Season 3
and later in 2013, no other digital subscription service will offer any seasons.
01/16/13 Amazon's UK streaming service, LOVEFiLM,
signs a deal with NBCUniversal.
Gives subscribers access to hundreds of episodes, including from TV series
"The Office," "30 Rock," "Heroes," and "Knight Rider".
01/14/13 Netflix and Time Warner enter into
agreement giving Netflix subscribers access
to Cartoon Network and Adult Swim content.
TNT series "Dallas" will also be available
exclusively starting in 2014.
Multiyear. Starting March 30, 2013, Netflix subscribers will get access to past seasons of
Cartoon Network shows ("Adventure Time," "Ben 10," "Regular Show," Johnny
Bravo") and Adult Swim shows ("Robot Chicken," "Aqua Teen Hunger Force,'
"The Bookdocks," "Children's Hospital"). Starting January 2014, seasons 1
and 2 of TNT series "Dallas" will also become available (exclusively).
01/07/13 Netflix enters into licensing agreement with
Warner Bros for TV drama content.
Exclusive online rights. US Netflix subscribers will carry eight current Warner Bros shows airing in
2012-2013, as well as potential future shows. Shows include: "Revolution,"
"Political Animals," "Longmire," "666 Park Avenue," "The Following," "Chuck,"
"Fringe," and "The West Wing."
01/04/13 Amazon enters into licensing agreement with
A+E Networks.
Previous seasons of A&E, bio, HISTORY and Lifetime TV series will be
available for Prime Instant Video subscribers. Programming includes some
of A+E Networks highest rated programming, such as Pawn Stars, Storage
Wars, and Dance Moms.
12/04/12 Netflix and Disney announce deal allowing
Netflix subscribers to stream movies from
Disney, Pixar, and Marvel studios.
Exclusive; three-year deal
(starts in 2016).
Does not include DreamWorks. Netflix subscribers can stream Disney
movies beginning seven to nine months after the movies appear in theaters.
Deal starts in 2016 when Disney's agreement with Starz ends. Starting
immediately, Netflix gets nonexclusive streaming rights to some of Disney's
older titles, such as Dumbo and Pocahontas.
11/05/12 Hulu and CBS enter into licensing agreement
allowing Hulu Plus subscribers to stream
CBS TV library.
Non-exclusive; multiyear. Hulu Plus subscribers will have access to more than 2,600 episodes from
the CBS TV show library, including "Medium," Numb3rs," "CSI: Miami," and
classics such as "Star Trek," "I Love Lucy," and "The Twilight Zone."
10/09/12 Hulu and Viacom expand content partnership
to include Nickelodeon programming.
Hulu Plus subscribers will have access to five recent episodes of currently
airing Nickelodeon live action and animated series 21 days after the episodes
air on television. Series include "iCarly," SpongeBob Squarepants," "Kung
Fu Panda," and the new season of "Teenage Mutant Ninja Turtles," among
others.
09/18/12 YouTube and Google Play video services
add more than 600 programs from Twentieth
Century Fox.
Deal includes both TV shows and movies, including "Family Guy," "Glee," and
"X-Men."
09/04/12 Amazon and Epix enter into movie licensing
agreement.
Three-year deal. Adds about 3,000 movies, including access to "The Avengers," Iron Man 2,"
and "The Hunger Games."
08/24/12 Amazon announced expanded licensing
agreement with NBCUniversal Cable & New
Media Distribution
Adds hundreds of TV episodes to Prime Instant Video, including prior seasons
of "Parks and Recreation", "Parenthood", "Friday Night Lights", "Heroes",
"Battlestar Galactica" and more.
08/23/12 Netflix and RADiUS-TWC announce U.S.
output deal
Multiyear. Adds a slate of films from The Weinstein Company's new multiplatform
distribution label.
08/15/12 Netflix to launch in Norway, Sweden,
Denmark and Finland
Will offer streaming of TV shows and movies in these countries before
YE2012.
07/31/12 Hulu Plus becomes available on Apple TV Adds more TV shows to Amazon's Prime Instant Video catalog. TV shows
include "The West Wing" and "Fringe," among others.
07/20/12 Amazon announces digital video license
agreement with Warner Bros.
Adds more TV shows to Amazon's Prime Instant Video catalog. TV shows
include "The West Wing" and "Fringe," among others.
07/17/12 Hulu gets streaming rights to "Larry King
Now."
Exclusive; multiyear. Agreement between Ora TV and Hula gives Hula rights to steam "Larry King
Now." New episodes will be available every Monday through Thursday on
Hulu, Hulu Plus and Ora TV.
06/28/12 Hulu enters into an agreement to bring select
HBO shows to Japan.
Multiyear. Shows include "Sex And The City" and "The Sopranos."
06/13/12 Amazon announces licensing agreement
with Metro-Goldwyn-Mayer Studios, Inc.
(MGM).
Adds hundreds of classic movies and TV episodes to the Prime Instant Video
catalog. Content includes The Silence of the Lambs, Dances with Wolves,
Rain Man, The Terminator, and TV series "Stargate."
06/11/12 Netflix and Warner Bros announce licensing
agreement.
Exclusive; multiyear. Complete previous seasons of TV shows "Pretty Little Liars" and "The Lying
Game."
05/30/12 LOVEFiLM, a UK based Amazon company,
announces digital license agreement with
NBCUniversal.
Exclusive; multiyear. LOVEFiLM members will be able to instantly watch Universal Pictures films
including Kick-Ass, Despicable Me, American Reunion, Battleship, and
Senna.
05/29/12 Amazon Instant Video becomes available on
Xbox360
A new Amazon Instant Video app for Xbox LIVE Gold subscribers gives
customers access to content on their Xbox 360 console.
September 19, 2013

Corporates

Reported Price Tag/
05/23/12 Amazon and Paramount Pictures
announce licensing agreement that
will bring hundreds of new movies to
Amazon Prime Members.
No financial details; three
years.
Hundreds of new movies and TV shows, including Mission: Impossible 3,
Braveheart, and Forrest Gump.
05/09/12 Netflix and Twentieth Century Fox
announcement agreement in Latin
America and Brazil.
Multiyear. Includes both TV series and films. TV series include 24, Prison Break, How
I Met Your Mother, Glee, and Bones. Films include Gentlemen Prefer
Blondes, Wall Street and Office Space.
05/02/12 Amazon Studios to develop original
comedy and children's series for
Amazon Instant Video.

04/09/12 Skitter launches a service that streams
broadcast stations ABC, NBC and CBS
straight to a Roku or WD Live set-top
box.
Service launched in Portland in March. It has plans to expand its service to five
additional markets by midyear. Service will cost $12$15. The company is also
currently working on DVR functionality.
04/03/12 Amazon Instant Video becomes
available on Playstation 3.
03/15/12 Amazon and Discovery announce

licensing agreement.
Adds about 3,000 shows to Amazon's premium video streaming service. The
new shows include Discovery Channel's "Dirty Jobs," TLC's "Say Yes to the
Dress," and Animal Planet's "Whale Wars," among others.
03/12/12 Intel developing web-based TV service. Plans to create a "virtual cable operator," which would offer their U.S. TV
channels over the Internet in a bundle similar to subscriptions sold by cable
and satellite TV operators. It will have its own set-top box to carry the service.
Intel hopes to launch the service by the end of 2012. No programming deals
mentioned.
03/11/12 Hulu partners with FremantleMedia
Enterprises (FME) to provide FME
international distribution rights to Hulus
original commission programming.
FME can distribute Hulu original series globally across platforms, including
traditional media. Marks the first time a distributor has signed such an agreement
with an online video service. First distributed title is Morgan Spurlocks
documentary series, "A Day In The Life."
02/21/12 Netflix and The Weinstein Company
announce film licensing agreement.
Exclusive; multiyear. Will make foreign language, documentary and other movies from the Weinstein
Company available to Netflix customers in the U.S. Films include "The Artist"
and "Undefeated."
02/16/12 Hulu Plus becomes available on Wii.
02/08/12 Amazon and Viacom announce licensing
agreement.
Allows Amazon Prime customers to stream ~2,000 TV shows from MTV, Comedy
Central, Nickelodeon, TV Land, Spike, VH1, BET, CMT and Logo. Some of
the shows highlighted were The Hills, Jersey Shore, The Real World,
Chappelle's Show, iCarly, Dora the Explorer and SpongeBob SquarePants.
The deal brings the total number of Prime Instant Videos to more than 15,000.
02/06/12 Redbox to team with Verizon to launch
streaming video service.
Due out by 2H 2012 (no prices revealed), the service will be national and not
limited to Verizon customers. Subscribers will be able to access DVD and Blu-
ray discs as wells as streaming movies.
01/31/12 BSkyB announces plans for an Internet
movie-streaming service in the U.K.
Customers will be able to pay a monthly fee for unlimited access to Sky Movies
or rent single movies as one-off purchases. The service does not require that
customers buy a satellite-TV package. BSkyB buys the U.K. rights to air many of
the films that potential NFLX customers would want to watch.
01/17/12 Hulu announced an increase in original
show programming.
It will roll out two new shows between Jan and summer, while bringing back a
third that debuted in 2011.
10/31/11 Netflix and Disney extend streaming
deal.
Deal also expands the lineup of Disney and ABC series and TV movies available
to U.S. Netflix subscribers. New season episodes of some shows will become
available to subscribers 30 days after the last episode of each season airs.
10/31/11 Amazon and Disney reach agreement
on streaming deal.
The agreement allows streaming of a broad selection of library content from ABC
Studios, Disney Channel, ABC Family and Marvel. Offerings to Amazon Prime
subscribers will include prior seasons of "Grey's Anatomy" and all episodes of
"Lost" and "Felicity," among others.
10/28/11 The CW and Hulu enter into licensing
agreement.
Five-year; no financial terms
disclosed.
Gives Hulu the rights to stream in-season episodes of the CW's programming on
Hulu and Hulu Plus.
10/24/11 Netflix plans to offer online subscription
service to the United Kingdom and
Ireland
Service is planned to start in early 2012 and will include unlimited TV shows and
movies streaming to subscribers' televisions, computers, etc. for a monthly fee.
10/11/11 HBO and Roku announces the launch of
HBO GO on Roku's streaming platform.
Consumers will be able instantly to access more than 1,400 titles, including
every episode of every season of HBO's top shows. Shows include Game of
Thrones, Boardwalk Empire, True Blood, The Sopranos, Sex and the City,
in addition to HBO original films, documentaries, and specials.
10/10/11 Netflix abandons plan to rent DVDs on
Qwikster
Netflix decides to keep the DVD-by-mail and online streaming services together
under one name and one website.
September 19, 2013

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Reported Price Tag/
09/27/11 Viacom's Paramount Pictures combines
its home entertainment and licensing
operations into newly created division
called Home Media Distribution.
The new division will oversee home entertainment, digital and television licensing
activities worldwide.
09/26/11 Amazon announces digital video license
agreement with Twentieth Century Fox.
Allows Amazon Prime members to instantly stream a broad selection of movies
and TV shows from the FOX library. Movies include contempories like "Speed,"
"Mrs. Doubtfire," "Doctor Dolittle" and "Office Space," as well as classics like
"The Longest Day." The selection of TV shows includes "24," "NYPD Blue," "The
X-Files," and "Buffy the Vampire Slayer."
09/25/11 Netflix, Inc. enters into streaming deal
with DreamWorks Animation.
Exclusive, no terms
disclosed.
The Netflix deal replaces the previous deal DreamWorks had with HBO. The
deal is for an unspecified number of years and undisclosed financial terms but
analysts estimate it is worth $30 million per picture. Netflix will begin streaming
films in 2013 ("The Croods," "Turbo," and "Peabody & Sherman"). Other titles
("Kung Fu Panda" and "Antz" will become available over time). Netflix will also
gain streaming rights to DreamWorks television specials.
09/21/11 Netflix and Discovery enter into
streaming agreement.
Non-exclusive, two-year deal
with the option to extend for a
short period.
Agreement includes prior season episodes of "Man vs. Wild," "Say Yes to the
Dress," and "River Monsters," but is limited to Netflix subscribers in the U.S
(content from all channels except OWN).
09/19/11 Netflix, Inc. announces it will split its
DVD operation from the streaming
service business.
The new DVD-by-mail service will be named "Qwikster" and be a wholly owned
subsidiary of Netflix.
09/02/11 Starz calls off talks to renew its
streaming deal with Netflix, Inc.
Netflix will no longer be able to offer newer movies like "Toy Story 3" and others
from studios of Disney and Sony. According to reports, Starz was asking for an
increase of 10 times the licensing fee that Netflix originally paid in 2008 (which
was $30 mil./year).
08/26/11 Apple discontinues its 99-cent TV show
rentals
Apple removed the 99-cent TV show rentals from iTunes Store and Apple TV. It
is believed networks were reluctant to sign on due to the low price point.
08/02/11 Zediva, a company that allowed
customers to remotely rent a DVD and
DVD player to stream videos online, was
ordered to shut down by a California
judge. Zediva is also being sued by
a number of Hollywood studios for
copyright infringement.

08/02/11 Apple TV customers are able to
purchase videos directly from their
device and stream videos that they
already purchased through iTunes.
Apple TV was previously a rental-only
model.

07/27/11 CBS and Netflix launch licensing
agreement in Canada and Latin America.
Non-exclusive, no terms
disclosed.
Canada Current and complete back seasons for 90210 (CW), past seasons
of Californication, Dexter, and The United States of Tara (Showtime). Also
CBS library of programming: Numb3rs, Sleeper Cell, and Twin Peaks.
Latin America Previous seasons of 90210, Medium, Nurse Jackie,
Californication and Dexter. Library titles including Star Trek, Star Trek: The
Next Generation, Charmed and Twin Peaks.
07/20/11 CBS and Amazon announce licensing
agreement.
Non-exclusive, no terms
disclosed.
Will enable Amazon customers to stream thousands of episodes from the CBS
library at no additional cost to their membership. The deal includes full seasons
of The Tudors, Numb3rs, Medium, the complete Star Trek franchise,
Frasier and Cheers.
07/13/11 Netflix and NBC renew agreement. Non-exclusive, multiyear
deal.
Includes episodes of The Office, 30 Rock, Law & Order:SVU, and movies
include Eternal Sunshine of the Spotless Mind and The Motorcycle Diaries.
07/12/11 Netflix increases prices to $7.99
streaming and $7.99 to rent one DVD.

07/07/11 ABC licenses One Life to Live and All
My Children to Prospect Park.
Exclusive, multiyear deal. Prospect Park will produce and deliver the soaps via online formats and
additional emerging platforms that include Internet-enabled television sets.
07/05/11 Netflix expanding into Latin America. Netflix will expand to 43 countries throughout Latin America and the Caribbean
later in 2011.
06/03/11 Popcornflix launches free, ad-supported
streaming movie service.
Currently has clearance for 204 movie titles, but expects to get to a total of 1,000
titles by the end of the year.
06/01/11 Hulu Partners with Miramax. Hulu gets access to hundreds of movies that it will distribute to both paying and
nonpaying consumers. The movies include Pulp Fiction, Good Will Hunting,
Scream, and Swingers.
05/16/11 Netflix enters into multi-year agreement
with Miramax.
Reportedly five years, $100
million.
Gives Netflix the rights to several hundred of Miramax's movie titles, including
Shakespeare in Love, The English Patient and Pulp Fiction.
September 19, 2013

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Reported Price Tag/
05/09/11 YouTube Adding 3,000 Movie Rentals. Not disclosed Agreed to
pay more for content.
Rentals will include blockbuster new releases like Inception, The King's
Speech, Little Fockers, The Green Hornet and Despicable Me.
04/05/11 Netflix licenses Mad Men from
Lionsgate.
Netflixs first entry into first-cycle syndicated content. Additional seasons added
annually after they complete airing on AMC.
04/01/11 Netflix expands agreement with
Twentieth Century Fox.
Adds some episodes of Glee and Sons of Anarchy, as well as some popular
library content.
03/18/11 Netflix licenses streaming rights to
House of Cards from Media Rights
Capital.
Netflixs first entry into licensing of original content.
03/08/11 Warner Bros. begins offering selected
titles for purchase or rental on Facebook.

02/22/11 Amazon announces launch of unlimited
streaming service for Amazon Prime
customers.
Content is largely older movies (five or more years) from Warner Bros., Sony and
independent studios.
02/22/11 Netflix reaches non-exclusive deal to
license certain CBS content.
Hundreds of millions of
dollars cumulative for the
two-year deal, with two-year
optional extension.
Mostly noncurrent, previously exploited library of shows.
02/02/11 Hulu and Viacom reach content
agreement for Hulu and Hulu Plus
content.
Colbert Report and Daily Show on free Hulu, other content only on Hulu Plus.
Programming available on Hulu Plus 21 days after TV air.
12/08/10 Netflix acquires streaming content rights
from ABC/ABC Family/Disney Channel
(reruns of TV shows).
Reportedly $150
million$200 million for one
year.
No earlier than 15 days after original airing. According to Business Insider, Netflix
used to be able to get content closer to original air date, but traded this right in
for more shows further from the air date.
to independent producer/distributor
FilmDistrict distributed content.
In the pay-TV window a few months after release on DVD (rather than premium
cable).
to a selection of broadcast and cable
series from NBCUniversal.
Prior seasons for most shows, day after broadcast for Saturday Night Live
through 2012.
to 510 films per year from independent
producer/distributor Nu Image/
Millennium Films.
510 films/year. In the pay-TV window a few months after release on DVD (rather
than premium cable).
08/10/10 Netflix acquires streaming content
rights from EPIX (3,000 movies from
Paramount, Lionsgate, and MGM).
$1 billion for five years. Three months after debut on EPIX.
rights to various catalog TV shows from
Warner Bros. Home Entertainment.
Four years.
from Relativity Media.
Reportedly could go to $100
million per year.
1,215 pictures in 2011. In the pay-TV window a few months after release on DVD
(rather than premium cable).
05/20/10 Google announces GoogleTV.
04/09/10 Netflix and Universal Studios reach
agreement on physical distribution of
movies; expand digital streaming movie
selection.
28 days from street date for Blu-ray/DVD release.
04/09/10 Expansion of agreement between Netflix
and 20th Century Fox for digital and
physical distribution.
28 days from street date for Blu-ray/DVD release; various for streaming TV at
Foxs discretion.
02/16/10 Warner Bros. agrees to provide Redbox
with DVDs of its titles.
Through January 2013. 28 days from street date for Blu-ray/DVD release.
rights from various independent film
distributors.
300 titles.
01/06/10 Netflix and Universal Studios reach
agreement on physical distribution of
new release and streaming of catalog
titles.
28 days from street date for Blu-ray/DVD release.
to several hit ABC series.

04/30/09 Disney joins Hulu as joint-venture
partner and equity owner, contributes
current and library TV series and feature
films.

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Reported Price Tag/
rights from Starz (Walt Disney and Sony
movies).
Reportedly $30 million per
year. Deal goes through
third-quarter 2011.
Approximately 2,500 movies from Starz and live feed from the network when
available on Starz.
for current season episodes of a number
of CBS and Disney Channel TV shows.
Current season episodes of some hit CBS shows (e.g. CSI); 24 hours after
initial broadcast from some hit Disney Channel shows (e.g. Wizards of Waverly
Place).
10/29/07 Hulu debuts in Beta, with licensing deals
from MGM and Sony Pictures Television;
film and TV content from owners Fox
and NBC networks, cable channels, and
studios; content partnerships with other
programmers. More than 90 feature films
and TV series available.

OTT Over the top.
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Measurement
The fragmentation of video media consumption has fueled the need to create an audience-
measurement product that can measure audiences across any video platform (TV, online, tablet
and mobile). To date, there is no one holistic product that can provide this information. However,
much of the research and development by Nielsen Holdings N.V. (Nielsen) and its peers is
dedicated to this goal.
In addition to the fragmentation of media, advertisers and marketers are increasingly challenged
to justify costs. Improved audience and engagement measurements are sought after to
quantify the ROI on advertising and marketing spend. They are also seeking better audience
measurement analytics to better target and infuence their customers purchases.
For content creators and distributors, better measurements can aid in differentiating them from
both peer competitors and cross-platform competitors (TV versus radio versus mobile), allowing
them to better maximize their value.
This focus on improved measurement includes understanding how, when and where media
is consumed. It also incorporates better ways of collecting, using and understanding data
(particularly more granular data such as set-top-box data), as well as linking different databases
to maximize their potential.
In the near to midterm, Fitch believes the adoption of measurements for emerging-media
platforms will be constrained by advertiser confdence in the new tools and data. There has been
uncertainty regarding absolute and historical changes to audience measurement metrics and
the introduction of new measures that have limited historical backtesting. So far, this has made
it diffcult for advertisers and media buyers to justify more dramatic changes to their media mix,
as well as for the media companies to properly sell total viewership across all outlets for their
content. Despite this slow adoption, revenues attributed to emerging media are expected to grow
at high rates.
Over the long term, Fitch expects the measurement enhancements, studies and pilots on media
consumption will accelerate share shifts. While this may be detrimental to some traditional
media outlets (reduced CPMs and pricing power), this shift is unavoidable as consumers adopt
new ways to consume media. However, Fitch believes certain traditional media outlets will not
disappear and will remain relevant. This is particularly true of TV, given its ability to aggregate
large audiences. Fitch believes emerging-media platforms will beneft greatly from the enhanced
measurement tools. However, Fitch also believes the benefts may be constrained due to the vast
amount of new content being created (be it news, social media or gaming), further fragmenting
audiences.
STB Data
Cable multiple-system operators (MSOs) and TiVo have access to vast amounts of viewing habit
data (in the millions) from set-top boxes. Fitch believes set-top-box data will become a more
prominent tool used in determining media buys and measuring ROI for media planners/buyers.
However, Fitch believes that people meter/diary measurements will not be replaced by set-top-
box measurements. Rather, both set-top-box data and meter/diary data will be used together in
order to measure the media audience.
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The Coalition for Innovative Media Measurement
CIMM was established in September 2009 by 14 founding members and has grown to 22
members. CIMM was established to promote innovation in audience measurement across media
platforms and to help initiate, fund and evaluate pilot programs with measurement companies
(such as Nielsen, Rentrak Corp., Arbitron Inc., Kantar, comScore Inc.).
To date, CIMM has initiated a number of studies. One study on set-top-box data resulted in the
development of a lexicon for set-top-box measurement. Another study examined the feasibility
of an open standard to track and identify both entertainment content and advertisements across
traditional, as well as digital, media platforms (project TAXI). A third study was conducted on
linking cross-media measurement and understanding usage in the context of daily life activities
(USA touchPoints). Finally, a pilot test was undertaken to measure three screen users and their
behavior with content and advertising across TV, Internet and mobile platforms.
Fitch believes the efforts to establish better currency for consumption of content across various
platforms will most beneft advertisers and media buyers and is an overall positive step for the
media and entertainment industry. Fitch notes that many of the traditional media conglomerates
provide content or own either highly traffcked websites and/or highly used mobile applications.
Therefore, the traditional media conglomerates should ultimately beneft from the improved
measurement tools and a more standard cross-media sales platform.
The Media Rating Council
The MRC (previously named Broadcast Rating Council) was established by the Harris Committee
Hearings on Broadcast Ratings held in the 1960s. The MRC was established as an industry-
funded organization to review and accredit audience rating services. The mission of the MRC
is to secure audience measurements that are valid, reliable and effective for the media industry
and related users. The MRC accomplished this mission by setting standards and conducting
audits performed by an independent CPA frm to verify compliance with the MRCs standards.
Membership includes media organizations and any party that uses media research (including
consumer packaged goods [CPG] companies) but excludes companies that provide ratings.
Currently, membership is at approximately 100 members.
Fitch recognizes that users of measurement data will use services and products that are not
MRC accredited to make allocation and marketing spend decisions. However, Fitch believes
the MRC accreditation for national and top 25 designated market area measurement products/
services is important in establishing that product as the currency of media.
CIMM Current
Membership
(As of June 2013)
A+E Networks
Belo Corp.
Carat International, Ltd.
CBS Corporation
ConAgra
Discovery Communications
GroupM
Hearst Television Inc.
Lego
Interpublic Group's Mediabrands
Microsoft
NBC Universal
Omnicom Media Group
Procter & Gamble
Publicis Groupe
Scripps Networks Interactive
Time Warner Inc.
Unilever
Univision Communications
Viacom Inc.
The Walt Disney Co.
Source: Coalition for Innovative
Media Measurement.
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Demographics
Fitchs current view is that despite proliferating alternative media delivery methods and ongoing
audience fragmentation, advertising mediums that can effectively aggregate a relatively large
audience will continue to receive a signifcant portion of advertising dollars. That said, shifting
demographic trends could potentially alter the media landscape over the longer term. Different
segments of the population exhibit different media consumption trends, and changing consumer
tastes and preferences can shift toward and away from certain mediums. Two key trends that
Fitch expects to shape the future media landscape in the U.S. are immigration and the aging of
the population. These trends should infuence advertiser behavior and provide opportunities to
certain media companies over the longer term.
The Hispanic population in the U.S. is large and growing, driven by ongoing immigration and
a higher birth rate relative to the overall U.S. According to U.S. Census data, the Hispanic
population (more than 50 million) grew 43% from 20002010, comprises more than 16% of the
total U.S. population and is expected to reach 20% by 2020. Hispanic buying power is also on
the rise and outpacing overall U.S. growth, as the demographic shifts from frst generation to
second generation. Marketers are increasingly targeting the Hispanic community as a result.
Strengthened buying power and an ongoing marketing focus on the Hispanic population will
bolster CPMs. Fitch believes this will beneft Spanish-language broadcasters such as Univision
Communications Inc. and NBC Universal Inc.s Telemundo, as well as cable networks that target
the demographic (Galavision, Hispanic satellites of traditional channels such as ESPN Deportes
and Discovery en Espaol). The recent infux of Hispanic broadcast and cable networks (Twenty-
First Century Foxs MundoFox, Univisions Hispanic cable networks, ABC News and Univisions
Hispanic-targeted news network) over the last two years is evidence of this.
Media consumption trends are expected to be infuenced by an increasing average age of
the U.S. population, driven by declining birth rates, longer life expectancy and an aging baby
boom generation. Unsurprisingly, the older demographic spends more time with television,
newspapers and magazines, while younger people spend more time with the Internet and
mobile applications. Internet and mobile media consumption will become more prevalent at the
expense of TV, magazines and newspapers as those who are more likely to use traditional
media and are not comfortable with the Internet or mobile become a smaller segment of the
population and the technologically savvy become a larger proportion. This leads to longer term
uncertainties around current traditional media models. Fitch does not expect cord cutting to be
material over the intermediate term, but acknowledges greater uncertainty over the longer term
due to demographic shifts.
Fitch sees some offsets to this dynamic, particularly for television. First, television remains the
dominant medium for all age groups by far. Total minutes of daily media consumption across all
forms increases with age, which bodes well for all forms of media in general as the population
ages. Fitch expects media companies to develop content that attempts to aggregate baby
boomers, given this audiences size and affuence. Most of this activity will likely be focused
on traditional advertising platforms, with owners of ad-supported cable networks and broadcast
networks being the primary benefciaries.
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0
3
6
9
12
1317 1834 3564 65+
Television Newspapers Radio Magazines Total
Note: Total includes both traditional and emerging mediums.
Source: TVB Media Comparisons Study 2012.
Time Spent Traditional Media
(By Age Group)
(Hours/Day)
0
2
4
6
8
10
12
1317 1834 3564 65+
Internet Mobile Phone Tablet Total
Note: Total includes both traditional and emerging mediums.
Source: TVB Media Comparisons Study 2012.
Time Spent Emerging Media
(By Age Group)
(Hours/Day)
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Pricing
Cost per Thousand (CPM) is typically the metric used by advertisers to compare cost effciency
between various mediums. Assuming the fnal absolute measure is a fair representation for a
particular medium (which it may not be in all cases), these comparisons can be valuable in laying
out the spectrum between premium-priced and lower priced mediums. For example, CPMs
charged by broadcast networks are typically higher than CPMs for cable networks. Other gaps
include Hispanic- versus English-language media and emerging versus traditional platforms,
among others.
In some cases, CPM gaps can be justifed; in others, Fitch expects the gap to close (or diminish)
over time. Interpreting the causes and implications of a CPM gap can be complex due to
several factors. In particular, advertisers appear willing to pay for targeting, measurability and
engagement. For example, an online video ad associated with specifc content that an end-user
clicked, and is likely to be highly focused on, would command higher pricing than an outdoor ad
that might not be of interest to or noticed by a particular driver. Furthermore, Fitch recognizes
CPM metrics do not account for scalability or other costs associated with the advertising process.
Premium-priced outlets are most vulnerable to pricing pressure, while, all things being equal,
mediums like outdoor and online will likely face fewer pricing headwinds. In particular, broadcast
networks (which are premium priced) are losing audiences, making them reliant on CPM
increases for revenue growth. Although such increases are achievable in the near term, given
favorable supply/demand dynamics, Fitch is cautious about their sustainability. Cable networks
are priced lower than broadcast given their inability to aggregate as large an audience. However,
that gap is shrinking as advertiser demand for cable networks targeted audiences grows. Cable
networks that can offer bundled advertising purchases by aggregating the audiences of all of
their cable networks might be better able to close the CPM gap. Not all cable networks will have
that ability, as part of their appeal is the specifc niche demographic they offer. However, general
interest channels, such as those offered by Time Warner Inc. and Discovery Communications,
Inc. may be better positioned to offer cross-network purchases. Magazines and radio are less
likely to cede share purely due to price but could still face pressure due to deterioration in
core operating fundamentals (circulation or listenership) and advertiser perception related to
engagement and effectiveness.
0
12
24
36
48
60
Free TV Cable TV Magazines Newspapers Online Display Radio Out-of-Home
Note: Free TV is primetime broadcast national TV.
U.S. Media CPMs
($)
September 19, 2013

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Sports Programming
Sports programming remains one of the few opportunities for broadcast and cable networks
to generate large live viewing audiences in an increasingly fragmented media landscape. The
primacy and real time nature of sports programming for many people is key and live sports
programming remains largely resilient to time shifting and OTT viewing. Additionally, sports
programming is not a target of piracy. Fitch believes sports programming will give the networks
incremental leverage in securing carriage from multichannel video program distributors and
reverse network compensation from broadcast affliates.
Broadcast and cable networks pay licensing fees to the sports leagues (i.e. NBA, NFL, MLB)
and teams for the rights to air sports programming. With nearly half the U.S. a close or very
close follower of sports, this programming draws large audiences. The networks use the large,
stable and, in some instances, growing audiences to obtain higher advertising rates, and as a
promotional tool to advertise their schedules. See the table on page 47 for a breakdown of sports
rights by league and network.
Sports license fees are very high, and a network can pay several hundred million dollars annually
to a league and tens of millions to professional sports teams that have individual local network
contracts. Therefore, despite the considerable ad revenue, the networks realize only a modest
proft at best on sports programming. The networks usually share the rights to air a specifc
leagues programming, in an effort to reduce costs. Fitch anticipates the demand for sports rights
to remain strong by the networks, and that the cost of rights will likely continue to increase given
the draw of sports programming and its value to the networks. Recent NFL and MLB contract
renewals have included substantially higher fees.
Sports programming also serves as a tool for the network to promote its programming schedule;
10%20% of advertising time is typically dedicated to network promotion. While alternative
content would be cheaper and likely more proftable for that specifc time slot, it would not
provide the promotional opportunity and would reduce the networks overall value to advertisers,
in Fitchs view. The networks generally have more than one sports licensing deal, which helps to
avoid concentration risk.
Broadcast rights to major U.S. sports leagues tend to be long term in nature providing a degree
of cost and revenue certainty to the broadcasters and sports league respectively. This drives
the risk that advertising rates may not increase at the same rate as costs. Offsetting the risk
somewhat is the broadcasters ability to match the tenors of sports broadcast rights agreements
with the terms of the various affliation agreements entered into with the multichannel video
programming distributors. Fitch acknowledges that the benefts of sports programming to the
networks hinge on the continued depth of the sports fan base. There is no guarantee that future
attendance and corporate support as well as television viewership will be at historical levels,
despite a signifcant history of support for the four professional sports leagues in the U.S. Fan
interest may be challenged by new or cost-competitive entertainment outlets and alternative
sports leagues. A decline in popularity over the course of a contract could result in signifcant
losses for the networks.
Recent years have seen an increase in popularity of regional sports networks (RSNs), cable
stations that show sports programming to a local market. Most RSNs are affliated with Fox
Sports Net or Comcast SportsNet. Individual teams have formed RSNs as a means of improving
their fnances and monetizing future license payments up front (i.e. YES Network, which is 40%
September 19, 2013

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owned by the New York Yankees). As broadcasters of local sports content to a local market,
RSNs do not compete with the broadcast and cable networks for license fees.
Work-stoppage risks are present in all sports leagues, and have both short-term and long-term
implications. Fitch generally views a work stoppage in excess of one season in professional
sports as a highly unlikely event, given the motivation by both owners and players to return to
play, and the historical track record of settling labor disputes and resuming play. The longest U.S.
professional sports work stoppage was the 20042005 National Hockey League lockout, which
lasted a full season. Long-term labor unrest in professional sports has the potential to alienate a
sports fan base. Broadcasters are generally required to pay 12 months of rights fees in the event
games are not played. These fees are credited over the remainder of the contract, based on
various formulas, so there would likely be no overall cash fow impact over the life of the contract.
September 19, 2013

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Major Sport Contracts with Television Broadcast and
Cable Networks
($ Mil.)
Brand Sports Total
NFL
FOX Eight Years; 20062013 5,715
CBS Eight Years; 20062013 4,985
NBC Eight Years; 20062013 4,800
ESPN Eight Years; 20062013 8,873
FOX Nine Years; 20142022 10,100
CBS Nine Years; 20142022 9,100
NBC Nine Years; 20142022 8,700
ESPN Eight Years; 20142021 15,200
Total NFL 20062013 24,373
Total NFL 20142022 43,100
NBA
ABC/ESPN Eight Years (from 20082009 Season to 20152016 Season) N.A.
TNT Eight Years (from 20082009 Season to 20152016 Season) N.A.
Total NBA 7,400
MLB
FOX Seven Years; 20072013 Season 1,800
Turner Seven Years; 20072013 Season 1,100
ESPN Eight Years; 20062013 Season 2,400
FOX Eight Years; 20142021 Season 4,200
Turner Eight Years; 20142021 Season 2,600
ESPN Eight Years; 20142021 Season 5,600
Total MLB 20062013 5,300
Total MLB 20142022 12,400
NHL
NBC/Versus/OLN 10 Years; 20112021 2,000
Total NHL 2,000
Olympics
NBC 2014 and 2018 Winter Olympics 1,738
NBC 2016 and 2020 Summer Olympics 2,644
Total Olympics 4,382
NCAA March Madness
CBS 11 Years; 20002010 6,000
CBS 14-year Agreement with Turner Sports; 20112024 N.A.
Turner 14-year Agreement with CBS; 20112024 N.A.
Total NCAA March Madness 20002010 6,000
Total NCAA March Madness 20112024 10,800
Select Division I Conferences
a
ESPN (Tier 13) ACC: 15 Years; 20122026 3,600
ESPN/ABC (Tier 1 and 2) Big 12: 13 Years; 20122024 1,430
Fox Sports (Tier 1 and 2) Big 12: 13 Years; 20122024 1,170
ESPN and Fox Sports (Tier 1 and 2) Pac-12: 12 Years; 20122023 3,000
CBS (Tier 1) SEC: 15 Years; 20092023 (CBS waived some exclusive football
rights in 2013's renegotiation)
825
ESPN (Tier 2) SEC: 20 Years; 20132033. Financial terms undisclosed. Original,
pre-restructured 15-year deal (2009-2024) was worth $2.25 billion.
>2,250
ESPN (Tier 1) Big Ten: 10 Years; 20072016 1,000
Big Ten Network (Tier 2) Big Ten: 25 Years; 20072031 2,800
a
Tier 1: First rights to broadcast football and/or basketball nationally; Tier 2: Second rights to football and/or basketball
not selected by Tier 1. Tier 3: Games not selected by Tier 1 and 2 plus any other college sports. N.A. Not available.
Source: Fitch Ratings, MLB, NFL, NBA, company filings, press reports.
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Major Sport Contracts with Television Broadcast and
Cable Networks (Continued)
($ Mil.)
Brand Sports Total
Grand Slam - Tennis
ESPN U.S. Open: 11 Years; 20152026 770825
ESPN Wimbledon: 12 Years; 20122024 500
ESPN Australian Open: 10 Years; 20122024 N.A.
NBC French Open: 12-year deal beginning in 2012 N.A.
The Majors Golf
CBS (ESPN first two rounds) Masters Tournament: Successive one-year contracts N.A.
NBC (ESPN first two rounds) U.S. Open: 20 Years; 19952014. Estimated to be $35$38 million
per year for 3 tournaments: U.S. Open, U.S. Women's Open and U.S.
Senior Open.
700
ESPN/ABC Open Championship/British Open: 8 Years; 20102017 200
CBS (TNT first two rounds) PGA Championship: 19912019 N.A.
Fox/Fox Sports U.S. Open: 12 Years; 20152026 (includes U.S. Womens Open and
U.S. Senior Open).
N.A.
PGA Tour Golf
CBS/NBC Six Years; 20072012 Season N.A.
Golf Channel (now NBC) 15 Years; 20072021 Season N.A.
CBS/NBC Nine Years; 20132021 Season N.A.
NASCAR
ABC/ESPN Eight-Year Deal with Fox/FX and TNT (20072014). 2,160
Fox/FX Eight-Year Deal with ABC/ESPN and TNT (20072014). Fox becomes
the official home of the Daytona 500 (most watched auto race in the
country).
1,760
TNT Eight-Year Deal with ABC/ESPN and Fox/FX (20072014). 560
Fox/Fox Sports Ten-Year Deal running 20152024 (includes first 16 Sprint Cup races
and first 14 Nationwide Series races).
3,800
NBC Ten-Year Deal running 20152024 (includes the final 20 Sprint Cup
races and the final 19 Nationwide Series races).
4,400
Total NASCAR (20072014) 4,480
Total NASCAR (20152024) 8,200
World Cup
ABC/ESPN 20072014 English language (includes 2010 and 2014 World Cups,
2007 and 2011 Womens World Cups, and the 2009 and 2013
Confederations Cups).
100
Univision 20072014 Spanish language (includes 2010 and 2014 World
Cups, 2007 and 2011 Womens World Cups, and the 2009 and 2013
Confederations Cups).
325
Fox 20152022 English language (includes 2018 and 2022 World Cups,
2015 and 2019 Womens World Cups, 2017 and 2021 Confederations
Cups, and all other FIFA tournaments between 2015-2022).
425
NBC (Telemundo) 20152022 Spanish language (includes 2018 and 2022 World Cups,
2015 and 2019 Womens World Cups, 2017 and 2021 Confederations
Cups, and all other FIFA tournaments between 2015 and 2022).
600
Total World Cup 20072014 425
Total World Cup 20152022 1,025
N.A. Not available.
Source: Fitch Ratings, MLB, NFL, NBA, company filings, press reports.
September 19, 2013

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Regional Sports Networks
Owner Name of RSN Area Served Major Teams
Fox
Twenty-First Century Fox Fox Sports Arizona Arizona, New Mexico, Utah, Southern Nevada Arizona Diamondbacks, Phoenix
Coyotes, Phoenix Suns
Fox Entertainment Group
(division of Twenty-First Century Fox)
Fox Sports Carolinas North Carolina, South Carolina Carolina Hurricanes, Charlotte Bobcats
Fox Sports Detroit Michigan, Northeast Indiana, Northwest Ohio,
Northeast Wisconsin, nationwide via satellite
Detroit Tigers, Detroit Pistons, Detroit
Red Wings
Twenty-First Century Fox Fox Sports Florida and Sun
Sports
Florida, Southwestern Alabama, nationwide via satellite Miami Marlins, Florida Panthers, Tampa
Bay Rays, Orlando Magic, Miami Heat,
Tampa Bay Lightning
Fox Cable Networks (Twenty-First
Century Fox)
Fox Sports Indiana Central Indiana, Nationwide via DirecTV Indiana Pacers, Indiana Fever
Fox Cable Networks (Twenty-First
Century Fox)
Fox Sports Kansas City Kansas City, Western and Central Missouri, Eastern
Nebraska, Iowa, Nationwide via DirecTV
Kansas City Royals
Fox (Twenty-First Century Fox) Fox Sports Midwest Eastern and Central Missouri, Central and Southern
Illinois, Southern Indiana, Iowa, Nebraska, nationwide
via DirecTV and Dish Network
St. Louis Cardinals, St. Louis Blues
Fox Sports New Orleans Louisiana, East Texas, Alabama, Mississippi New Orleans Pelicans
Twenty-First Century Fox Fox Sports North Minnesota, Wisconsin, Iowa, Upper Michigan, North
Dakota, South Dakota
Minnesota Twins, Minnesota Wild,
Minnesota Timberwolves
Fox Sports Ohio Ohio, Indiana, Kentucky, Northwest Pennsylvania, West
Virginia, Southwest New York
Cleveland Cavaliers, Columbus Blue
Jackets, Cincinnati Reds
Fox Sports Oklahoma Oklahoma Oklahoma City Thunder
Prime Ticket and Fox Sports WestSouthern California, Central California, Southern
Nevada, Hawaii
Los Angeles Dodgers, Anaheim Ducks,
Los Angeles Clippers, Los Angeles
Angels, Los Angeles Kings
and San Diego Padre (20%)
Fox Sports San Diego San Diego metro area, Southern Arizona,
Southern Nevada
San Diego Padres
Fox (Twenty-First Century Fox) Fox Sports South and
SportsSouth
Alabama, Georgia, Kentucky, Mississippi, North
Carolina, South Carolina, Tennessee
Atlanta Braves, Atlanta Hawks, Atlanta
Dream
Fox Sports Southwest Texas, Louisiana, Oklahoma, Arkansas, Alabama,
Mississippi, part of Florida, parts of New Mexico
Texas Rangers, Dallas Mavericks, San
Antonio Spurs, Dallas Stars
Fox Sports Tennessee Tennessee, Northern Alabama, Northeastern
Mississippi
Nashville Predators, Memphis Grizzlies
Twenty-First Century Fox Fox Sports Wisconsin Wisconsin, Eastern Minnesota, Western U.P. of
Michigan, Northwestern Illinois, Iowa, nationwide via
satellite
Milwaukee Brewers, Milwaukee Bucks
Comcast SportsNet
NBCUniversal (45%),
San Francisco Giants (30%),
Fox Entertainment Group (25%)
Comcast SportsNet Bay Area San Francisco Bay Area, Northern California, Central
California, Southern Oregon, Nevada, nationwide via
satellite
San Francisco Giants, Golden State
Warriors
NBCUniversal Comcast SportsNet California San Francisco Bay Area, Northern California,
Sacramento, Oregon, Western Nevada
Sacramento Kings, Oakland Athletics,
San Jose Sharks
NBCUniversal (20%),
J. Joseph Ricketts family (20%),
Jerry Reinsdorf (40%),
Rocky Wirtz (20%)
Comcast SportsNet Chicago Illinois, Indiana, Iowa, Southern Wisconsin, nationwide
via satellite
Chicago Cubs, Chicago White Sox,
Chicago Blackhawks, Chicago Bulls
Houston Astros (46.4%),
Houston Rockets (30.9%),
NBCUniversal (22.7%)
Comcast SportsNet Houston Texas, Louisiana, Arkansas, Oklahoma, New Mexico Houston Rockets beginning in the
201213 NBA season, and the Houston
Astros beginning in the 2013 MLB
season
NBCUniversal,
Philadelphia Phillies
Comcast SportsNet Philadelphia Philadelphia Metro area, Eastern Pennsylvania,
Southern New Jersey, Delaware
Philadelphia Phillies, Philadelphia
76ers, Philadelphia Flyers
NBCUniversal Comcast SportsNet Northwest Oregon, Washington Portland Trail Blazers
NBCUniversal Comcast SportsNet New England Massachusetts, Eastern Connecticut, Central
Connecticut, Vermont, Maine, New Hampshire, Rhode
Island
Boston Celtics, New England
Revolution
New York Mets (65%),
Time Warner Cable (27%),
NBCUniversal (8%)
Sportsnet New York NY Metro Area, nationwide via satellite New York Mets
Comcast, Charter Communications Comcast/Charter Sports
Southeast
Alabama, Arkansas, Florida, Georgia, Kentucky,
Louisiana, Mississippi, North Carolina, South Carolina,
Tennessee, Texas, Virginia, West Virginia
Focus on regional college and high
school sports
Source: Company filings, Company web pages, Press reports.
September 19, 2013

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Regional Sports Networks (Continued)
Comcast SportsNet (Continued)
NBCUniversal Comcast SportsNet Mid-Atlantic Maryland, Virginia, Washington, D.C., Southern
Pennsylvania, Eastern West Virginia, Southern Delaware
Washington Wizards, Washington
Capitals, DC United
DirecTV
DirecTV Sports Networks,
Seattle Mariners
Root Sports Northwest Washington, Oregon, Idaho, Montana, Alaska Seattle Mariners
DirecTV Sports Networks Root Sports Pittsburgh Pittsburgh, Western, Central and Northeastern
Pennsylvania, West Virginia, Eastern and Southeastern
Ohio, Western Maryland, nationwide via satellite
Pittsburgh Pirates, Pittsburgh
Penguins
DirecTV Sports Networks Root Sports Rocky Mountain Colorado, Wyoming, Southern Idaho, Western Kansas,
Western Nebraska, Northeastern Nevada, Western
South Dakota, Nationwide via satellite
Colorado Rockies
DirecTV Sports Networks Root Sports Utah Utah, nationwide via satellite Utah Jazz
Independent
Stan Kroenke Altitude Sports & Entertainment Colorado, Utah, Kansas, Montana, Nebraska, New
Mexico, Nevada, South Dakota, Wyoming, nationwide
via DirecTV and Dish Network
Colorado Avalanche, Denver
Nuggets, Colorado Rapids
Block Communications BCSN Ohio Cleveland Indians, Toledo Mud Hens
Bright House Networks Catch 47 Tampa Bay, Central Florida University of South Florida, University
of Central Florida, local high school
sports
Cox Communications Channel 4 San Diego San Diego County, Imperial County, Riverside County,
Yuma County
Select Mountain West games
Comcast Comcast Television (Michigan) Available exclusively on Comcast to Michigan customers CCHA hockey games, Great Lakes
Intercollegiate Athletic Conference
football, Mid-American Conference
football, high school sports
Cox Communications Cox Sports Television Louisiana, Texas, Florida and Arkansas New Orleans Hornets
Walt Disney (80%),
Hearst Corp. (20%), Raycom Sports
owned by Raycom Media
ESPN Plus and Raycom Sports Raycoms syndicated sports programming is available
on ESPN GamePlan and ESPN Full Court members
(nationwide)
ACC Football and Basketball
IMG World Image Sports Network Erie, Pennsylvania PSAC Conference Athletics
Madison Square Garden, Inc. MSG Network (including MSG
Plus)
New York City Metropolitan Area; nationwide New York Knicks, New York Rangers,
New York Islanders, New Jersey
Devils, Buffalo Sabres, New York
Liberty, New York Red Bulls
Time Warner Cable Metro Sports Kansas City Metropolitan Area, Lawrence, Kansas,
Nebraska
Kansas City high school athletics
Washington Nationals,
Baltimore Orioles
Mid-Atlantic Sports Network Washington, D.C., Maryland, Virginia, North Carolina,
West Virginia, Pennsylvania, Delaware, nationwide on
DirecTV and Dish
Washington Nationals, Baltimore
Orioles, NCAA football and basketball
Midcontinent Communications Midco Sports Network South Dakota, North Dakota and Western Minnesota University of South Dakota, South
Dakota State University, University of
North Dakota, smaller colleges in the
Dakotas and Minnesota
Fenway Sports Group (80%),
Delaware North (20%)
New England Sports Network New England, nationwide via special satellite packages Boston Red Sox, Boston Bruins,
Hockey East Association, ACC
football and basketball
SportsTime Ohio Ohio, nationally on DirecTV and Dish Network Cleveland Indians, Mid-American
Conference sports
Time Warner Cable Time Warner Cable SportsNet Upstate New York Local college and minor league
sports broadcasts
Time Warner Cable Time Warner Cable Sports 32 Milwaukee, Northeast Wisconsin Marquette Golden Eagles, high
school sports
Service Electric TV2 Sports Eastern Pennsylvania, Western New Jersey Lehigh Valley IronPigs, Reading
Phillies and local high school sports
for portions of eastern Pennsylvania
Twenty-First Century Fox. (49%),
Yankee Global Enterprises LLC (25%),
Goldman Sachs (12%),
NJ Holdings (12%)
Yankees Entertainment &
Sports (YES)
New York Metro Area, nationwide New York Yankees, New Jersey Nets,
Ivy League college sports
Time Warner Cable TWC SportsNet and TWC
Deportes (English and Spanish)
United States Los Angeles Lakers beginning
201213 NBA Season, LA Galaxy
and LA Sparks
Source: Company filings, Company web pages, Press reports.
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Regional Sports Networks (Continued)
College Networks
Big Ten Conference (51%),
Twenty-First Century Fox (49%)
Big Ten Network United States, Canada Big 10 conference college athletics
Pacific-12 Conference Pac-12 networks United States, Canada Pac-12 Sports, including Olympic
sports
Brigham Young University BYU Television United States, Worldwide BYU Cougar athletics
University of Texas at Austin, ESPN,
IMG College
Longhorn Network United States University of Texas at Austin athletics
Source: Company filings, company web pages, press reports.
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Tablets and E-Books
Tablets, which gained broad consumer popularity in April 2010 with the Apple iPad, are a relatively
recent entrant but are quickly changing the already dynamic media landscape. The small size/
portability, interactive touch screens, internet access and other features are quickly turning
tablets into the preferred platform of digital media consumption. Fitch believes the mobility and
ease of use associated with tablets are altering media consumption habits and will be disruptive
to traditional media platforms. That said, Fitch believes that the opportunities offered by tablets
outweigh the risks and that the devices will have a net positive impact on media companies in
general.
Tablet adoption has exploded as consumers expect constant access to Internet-based content.
Growth has accelerated amid lower priced new entrants, with 52.4 million tablet owners as of
year-end 2012, according to comScore. In June 2012, eMarketer projected that penetration will
exceed 40% of the total U.S. population by 2015. The largest player remains the iPad. However,
its market share has declined to 30%. Other major players include Microsofts Surface, which
was introduced in 2012, and Android-based platforms from Samsung (Galaxy), Amazon (Kindle
Fire) and Asus (Eee Pad Transformer). Further, rapid enterprise adoption is underway.
The opportunities for media companies include the lower cost of content delivery, given the
absence of printing/publishing/storage costs; mobility, which provides increased opportunities
for content consumption; the enhanced media consumption experience associated with their
interactivity, which could prove a draw to audiences; and their ability to potentially attract
incremental audiences given the ease of buying/accessing content. The risks are associated
with the cannibalization of traditional and real-time content consumption, as it is much easier to
access digital, OTT, and time-shifted content. There are also issues involved with advertising
on digital media, including uncertainties around measuring, lower pricing and investing in digital
platforms.
Worldwide Tablet Shipment Market Share
(%) 4Q 2011 2Q 2012 4Q 2012 2Q 2013
Apple 51.7 60.3 43.6 32.4
Samsung 7.3 7.6 15.1 18.0
Amazon 15.9 N.A. 11.5 N.A.
ASUS 2.0 3.3 5.8 4.5
Barnes & Noble 4.6 N.A. 1.9 N.A.
Lenovo N.A. 1.3 N.A. 3.3
Acer N.A. 1.4 N.A. 3.1
Other 18.5 26.2 22.1 38.8
N.A. Not Available.
Source: IDC Press Releases, Tablet Shipments Soar to Record Levels During Strong Holiday Quarter, According to IDC,
Jan. 31, 2013; Tablet Shipments Slow in the Second Quarter As Vendors Look To Capitalize on a Strong Second Half of
2013, According to IDC, Aug. 5, 2013.
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Commercial Printers
Of all the media subsectors, Fitch expects commercial printers to face the most negative impact
from tablet adoption. While content owners can distribute their content in new digital models,
the commercial printers will face a material reduction in demand for their printed products and
services as publishers migrate away from physical distribution. Fitch believes the industry will
continue to see volume declines, as the adoption of tablets and mobile devices grows. Fitch
expects these exposed business lines will decline in the midteens at the commercial printers.
However, companies with fnancial fexibility, access to capital and the ability to provide a wide
range of print-related, logistical and document management services will be able to take share
from weaker players (albeit in a declining market), providing some offset to the secular declines.
Consumer Books
The book market is among the subsectors most vulnerable to the digital transition, due to the
earlier entry and relatively low price point of e-readers. According to the Pew Research Center,
19% of adults in the U.S. own an e-reader (up from 10% in 2011). E-book sales continue to
grow rapidly (nearly 44% in 2012) having represented 20% of sales in 2012 versus 15% in 2011,
according to the Association of American Publishers. Fitch expects e-book sales to continue
to grow meaningfully, as price reductions, technological improvement and new entrants drive
increased consumer adoption of tablets and e-readers. The main e-reader devices are Amazon.
com Incs Kindle, Barnes & Noble Inc.s NOOK, and Sony Corp.s Reader. These preceded the
iPad introduction by about four years and have lower price points relative to many tablets. Fitch
expects e-readers to cede market share to tablets going forward.
The Justice Departments price fxing and anticompetitive practices lawsuit severely curtailed the
pricing power of those publishers named in the suit, which have all since settled [Hachette Book
Group, Inc., HarperCollins Publishers LLC, Simon & Schuster, Inc., Macmillan and Penguin
Group (USA) Inc.]. The settlement prevents these publishers from setting the retail price of
e-books for two years and prohibits most favored nation (MFN) clauses.
HarperCollins was the frst publisher to sign a new pricing deal with retailers after the settlement,
and Amazon (and other retailers) lowered the prices on HarperCollins new releases and best-
sellers. The wholesale prices paid by the retailers have not been disclosed.
Even in the event of lower wholesale prices, e-books and tablets are a boon to the publishers
from a proftability standpoint. The associated costs are signifcantly lower due to the absence
of printing, storage and shipping, as well as lower payments to retailers, lower royalty payments
(which could potentially be reduced further amid wholesale pricing pressure) and modestly lower
design costs (no compelling reason to increase graphical interactivity). E-books are therefore
modestly more proftable on an absolute dollar basis and signifcantly more proftable on a
margin basis. See analysis on page 54 for details. Therefore, Fitch believes there is signifcant
fexibility to absorb lower prices in a wholesale model while remaining proftable. Furthermore,
the ease of e-book purchases drives consumers to buy more titles. Amazon has reported that
customers buy more than three times the number of titles after buying a Kindle than before.
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EBooks Strong Growth Off Low Base
($ Bil.) 2010 2011 2012
2012 vs. 2011
% Change
Print Trade Books 13.0 11.9 12.0 0
Trade E-Books 0.9 2.1 3.0 45
Total Trade Books 13.9 14.0 15.0 7
Source: Association of American Publishers, Fitch Ratings.
Profitability Analysis Hardcover Versus E-Book
($) Hardcover E-Book Note
Price Paid by Consumer 26.00 12.99
Less:
Amount Kept by Retailer (13.00) (3.90) Assumes retailer keeps 50% of hardcover;
e-bookstore keeps 30%.
Royalty to Author (3.90) (3.25) Assumes hardcover royalties 15% of retail
sale price; e-bookstore royalties 25% of
retail sale price.
Printing, Storage, and Shipping Costs (3.25) 0.00
Design/Digitizing, Typesetting, Editing (0.80) (0.50)
Marketing (1.00) (0.78)
Total Costs (21.95) (8.42)
Profit Before Overhead 4.05 4.57
Profit Margin (%) 16 35
Source: New York Times, Fitch estimates.
Breakeven Profitability Hardcover/E-Book Sales
($) Hardcover E-Book Break Even
Revenue 26.00 12.99 2.00
Profit 4.05 4.57 0.90
Source: Fitch estimates.
Magazines
Tablet-based magazines remain in the early stages of adoption. According to the Alliance for
Audited media, digital circulation jumped 88.9% in the frst half of 2013, and made up 3.3%
of total circulation versus 1.7% of total circulation in frst-half 2012. While digital circulation is
growing rapidly, it is still a very small component of total circulation. Total circulation was down
approximately 1%. Fitch believes that the increased penetration of tablets will accelerate the
decline of print magazines. Unlike a desktop computer, tablets provide a reading experience
similar to a printed magazine.
Publishers are still in the fairly early stages of the digital transition, and their product offerings
are maturing (interactive tablet-specifc editions rather than exact replicas of physical copy) as
they gain experience with digital distribution. They also continue to experiment with the business
model, including price points, subscription, advertising and bundling. Whatever the fnal business
model, proftability is likely to be higher than that of physical magazine sales, given the absence
of printing, publishing and mailing costs, offset somewhat by the investment in users interactive
experiences. Fitch does not believe magazine publishers will price subscriptions in a way that
reduces overall proftability.
Magazines are ahead of newspapers in charging for their content, as consumers did not become
accustomed to accessing magazine content for free online, the way they did with newspapers.
Fitch believes tablet editions could increase a magazines subscriber base. First, they could
introduce the content to an incremental audience and drive additional subscribers. They are
easy to access and purchase via an app store. Secondly, Fitch believes bundled digital/physical
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subscriptions could serve as a moderate retention tool for some physical subscriptions. However,
the trend seems to be moving more towards digital-only subscriptions, and Fitch believes many
users will opt for digital delivery. Several magazines over the past year have converted to digital
only, including Newsweek, SPIN, Variety and Sporting News.
Advertising formats will differ among individual titles. However, tablet magazines need to gain
more scale and reach to become a compelling platform for advertisers. Advertisers also need
more transparency and granular data about subscribers and their behavior.
Next Issue Media is a consortium of magazine publishers (Cond Nast, Hearst Corp., Meredith
Corp., Time Inc. and News Corp.) that launched an app that allows unlimited access to all
monthly titles for $9.99/month, or all monthly and weekly titles for $14.99/month. Fitch sees the
potential benefts as being larger audiences for some of the smaller titles, which a consumer
may not pay for a la carte but may still look at in a bundle; increased advertiser interest in some
of these titles; and the ability to bundle advertising dollars/cross-platform advertising dollars.
Potential detriments include the cannibalization of subscription revenue at individual titles (both
digital and physical).
Newspapers
In Fitchs view, tablets offer moderate upside to newspaper publishers. Fitch expects the increased
penetration of tablets to accelerate the decline of print newspapers, given their portability. They will
also continue to erode print advertising revenues. Most newspaper publishers have created paid
or free versions of their publications for tablets in a bid to capture online revenues. Newspaper
publishers face many of the same issues as magazine publishers, regarding subscription models/
paywalls, audience measurement and growing advertiser interest. It remains to be seen to what
degree publishers will be able to monetize tablet-based sales and subscriptions, although Fitch
believes users may be more willing to pay for tablet-delivered newspapers compared with PC-
based, because of tablets portability and superior user experience. The opportunity to provide
print subscribers with a mobile digital version may slow the decline in circulation revenues,
although many users will likely opt for digital-only subscriptions. This may enable publishers to
compete better and capture some audience share and ad revenue that they have lost to online
news websites on the PC. However, Fitch does not expect the advertising revenues earned
from tablets and mobile devices to offset the declines in print advertising in the near term. The
transition to digital will continue to provide opportunities to cut costs for publishers.
Fitch believes The New York Times and Wall Street Journal are among the few newspapers that
possess the unique content niche and loyal audience base required to charge successfully for
online content. Local newspaper companies continue to experiment with metered subscriptions.
The Daily, News Corp.s digital-only national news publication, published its last edition on
Dec. 15, 2012. The digital publication was unable to fnd a large enough audience to sustain the
business model in the long term. Fitch believes this demonstrates the challenges newspapers
will face given the numerous sources of news information.
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Professional and Educational Publishing
Fitch believes the professional and educational publishing (particularly higher education)
categories of the book industry are most likely to experience signifcant near-term adoption of
e-books. However, Fitch does not believe these publishers are signifcantly exposed to being
disintermediated in the near term. Rather, they are more likely to become complementary
partners to e-book companies. All of the major educational publishers have taken a device-
agnostic strategy.
Fitch recognizes the risk that digital conversion may make creating content easier, allowing
new entrants into the market. However, educational publishers have a vast infrastructure of
relationships with authors and editors, as well as an extensive web of state and local school
district decision makers, which would be diffcult for an e-book publisher or hardware company
to replicate easily in the near term. Fitch believes that quality content will continue to be a driver
in textbook selection by educators and districts. Large publishers are expected to continue to
invest in the quality and the interactive capabilities of digital textbooks in order to defend market
share.
The transition from physical education materials to digital products in higher education has been
advancing at a materially faster pace relative to the K-12 education level. Fitch believes that the
transition will lead to a net beneft for publishers over time.
Video
Fitch sees tablets as the optimal complement to mobile video content viewing, more so than
mobile phones (too small) or laptops (not portable enough). As devices proliferate, mobile viewing
will grow. Importantly, Fitch expects the consumption of video content over tablets to remain
largely incremental and not materially cannibalistic. Consumers will continue to prefer the at-
home viewing experience on a large-screen TV. Tablets facilitate OTT content viewing, but Fitch
believes this viewing will remain predominantly simultaneous with traditional TV in the home and
out of the home. Multitasking, or simultaneous viewing of television and tablets (for research,
social networking, online shopping), serves to increase the total time spent consuming media.
It is very popular among tablet users, and Fitch believes only a small proportion of consumers
watch less television after getting a tablet. According to a Nielsen survey, 46% of smartphone
owners and 43% of tablet owners use their devices as second screens while watching TV. In
addition, more than two-thirds of table and smartphone owners say they have used these second
screens multiple times a week.
Fitch believes OTT and tablets will certainly affect linear television to a degree. However, Fitch
does not believe tablets are going to accelerate cord-cutting. A number of factors provide
traditional television with some degree of protection: the smaller viewing size of a tablet screen
(relative to the screen size of a home television set); the immediacy of some programming
(sports, appointment television for many viewers); viewers multitasking tablet use with
watching television and TV Everywhere initiatives that will allow networks to capture eyeballs
once cross-platform measurements are implemented. The two video services to which tablets
have added the most value are subscription video on demand (SVOD) and TV Everywhere. Pay-
TV providers have deployed TV Everywhere authentication strategies to ensure digital viewers
are also paying subscribers. SVOD providers are also limited to what the content owners sell
them (i.e. older content). Therefore, the limited content lineup available to a nonsubscriber is
only going to be a good enough substitute for a certain segment of the population. That said,
some viewers connect their tablets directly to their TV sets, and Fitch believes that this could
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substitute for a full content lineup for a small portion of the population.
In contrast, Fitch views tablets as a beneft to video content providers (TV studios) and content
aggregators (cable networks). As an incremental way of viewing media, largely where it was
not previously consumed, tablets are an additional source of content demand, as well as an
additional platform for advertising. As stated, tablets facilitate in-home SVOD viewing, and the
TV studios beneft from these new digital content buyers (Netfix, Amazon, Hulu) and new digital
windows. Mobility also facilitates iTunes sales and rentals. Tablets also increase the value
proposition of the TV Everywhere platform in that they enable more outlets for authenticated
content viewing. In this way, they can be seen as a subscriber retention tool and a means of
protecting the lucrative linear distribution model.
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Cloud Storage
Consumers expect to access their data and content across all of their mobile devices, now that
smartphones and tablets have been widely adopted. This has led to increased streaming and
the use of cloud storage providers that allow the storage of and access to content on demand
across multiple devices. Cloud storage eliminates the need to store data or media fles on a
digital device; synchronizing fles and media content across all web-enabled devices. Media
content providers have realized the importance of interoperability in the digital world, and are
using cloud storage to make the purchasing of movies, music, books and other media content
more compelling and convenient for the consumer.
Most of the major cloud storage providers allow a nominal amount of data storage, generally
5GB, to be saved on their platforms, free of cost. For cloud providers that have a retail store
(e.g. Google), content purchased through the store does not count toward the data allotment.
If the user wants to exceed the free allotment, there are tiered monthly/annual pricing plans
for additional data storage capacity. While Fitch believes a majority of the population is still
familiarizing itself with the cloud concept, Fitch believes the options are cost effective and create
effciency for users that use multiple computers or devices.
The movie content providers themselves have started to develop their own cloud-like platforms
in an attempt to drive increased revenues and offset declining DVD sales. The one furthest along
but still in early stages is UltraViolet, which was started by a consortium that includes most of the
major Hollywood studios (excluding Disney) called Digital Entertainment Content Ecosystem
(DECE). Walt Disney Co. has opted to start its own service Keychest but no release date
has been set.
Major Cloud Storage Providers
Service Company Storage Cost
iCloud Apple Up to 5 GB for free; $20/yr for additional 10 GB; $40/year for additional 20 GB;
and $100 for additional 50 GB.
Cloud Drive/Cloud Player Amazon Up to 5 GB for free; $10/yr for upgrade to 20 GB; $25/yr for 50 GB; $50/yr for
100 GB; $100/yr for 200 GB; and $250/yr fpr 500 GB; $500/yr for 1 TB.
Google Drive Google Up to 5 GB free; $2.49/mo for 25 GB; $4.99/mo for 100 GB; $19.99/mo for
400 GB; $49.99/mo for 1 TB.
Dropbox Dropbox, Inc. Up to 2 GB free; receive additional 500 MB per referral (up to 18 GB max.);
$9.99/month for 100 GB; $19.99/month for 200 GB; $49.99/month for 500 GB.
SkyDrive Microsoft Up to 7 GB free; $10/yr for additional 20 GB; $25 for additional 50 GB; $50 for
additional 100 GB
SugarSync SugarSync Up to 5 GB free; upgrade to 30 GB for $49.99/yr; upgrade to 60 GB for $99.99/
yr; 500 GB for $399/yr.
Media and Entertainment Alliances (Movies)
Service Provider Summary Comments
Ultraviolet Digital Entertainment
Content Ecosystem
(DECE)
An online locker that stores and adds digital copies of movies when the user
purchases through a physical or online retailer. From Ultraviolet, the user can
watch the movie on any of the devices (tablet, smartphone, etc.) registered
to its account. A household account is set up when the user registers, which
allows six members of the users family to access the same videos.
With the exception of Apple, consortium
has participation from major physical/online
retailers. Does not include Disney movies.
Keychest Disney Similar to Ultraviolet, KeyChest would give purchasers near-immediate
access to Disneys movies across multiple platforms and even across service
providers depending on what partnerships Disney can obtain. Service is still
not launched.
Still not launched. KeyChest will not be too
successful without the participation of a
broad range of retailers and other studios.
Vudu Wal-Mart Wal-mart disc to digital service that converts standard DVD and Blu-ray discs
for a $2 fee ($5 for HD). The digital copies will be compatible with Ultraviolet,
allowing all of the digital copies to be stored in one central location.
Should benefit Ultraviolet; users will now be
able to store a whole collection of DVDs (old
and new) in the Ultraviolet locker.
Source: Company filings.
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Ultraviolet gives consumers the ability to purchase movies or television shows in physical form
or through a digital download through any of the UltraViolet distributors, and watch them through
a wide array of devices registered to their account. Not only are these platforms convenient for
the consumer, but there will be some level of piracy prevention after the purchase since users
will be registered to the platform, and retailers can verify purchases.
The cloud also provides media content owners with an additional, recurring revenue stream. The
creators of music cloud storage platforms (such as Google, Apple and Amazon) have various
licensing agreements with the record companies. For example, the iTunes Match service ($25/
year), determines which songs in a users collection are available in the iTunes store and adds
those songs to Apples iCloud (even though they were not purchased through iTunes). This gives
the user the ability to listen to those songs on any of its devices. In addition, the copyright holders
receive a royalty fee for each time the song is played. Amazon and Google have also recently
launched similar scan and match services.
Cloud storage platforms will become more widespread as tablet devices and smartphones
continue to grow over time. Fitch expects media companies will be able to beneft from this shift
as they will have a new medium to monetize their content and potentially mitigate piracy risk.

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Subsector Overview
Advertising Related
U.S. Media and Entertainment Subsector Summary ................................................ 60
B-to-B/Trade Magazines ........................................................................................... 62
Consumer Magazines............................................................................................... 63
Direct Mail/Free-Standing Inserts ............................................................................. 64
Emerging Advertising................................................................................................ 65
Online ....................................................................................................................... 66
Mobile ....................................................................................................................... 70
Newspapers.............................................................................................................. 72
Outdoor..................................................................................................................... 74
Radio ........................................................................................................................ 75
Television .................................................................................................................. 76
TV Broadcasting Eco-System ............................................................................. 76
TV Broadcasting Affliates ................................................................................... 77
Automotive Advertising........................................................................................ 77
Aereo/FilmOn X................................................................................................... 78
AutoHop .............................................................................................................. 79
Political ................................................................................................................ 80
Broadcast Network TV ........................................................................................ 83
Retransmission and Reverse Network Compensation........................................ 83
Upfront Market .................................................................................................... 85
TV Studios........................................................................................................... 87
Ad-Supported Cable Networks............................................................................ 90
Premium Cable ................................................................................................... 93
Yellow Pages ............................................................................................................ 95
Non-Advertising Related
Advertising Agencies ................................................................................................ 96
Commercial Printing ................................................................................................. 98
Consumer Books ...................................................................................................... 99
Educational Publishing ........................................................................................... 100
Movie Exhibitors ..................................................................................................... 102
Movie Studios and Distributors ............................................................................... 106
Music ...................................................................................................................... 109
Professional Publishing ...........................................................................................111
Satellite Radio ........................................................................................................ 112
Theme Parks .......................................................................................................... 113
Trade Shows .......................................................................................................... 115
Video Gaming ......................................................................................................... 116
60 Subsector Overview
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U.S. Media and Entertainment Subsector Summary
Sector
Credit
Outlook Issues/Concerns
Conglomerates Stable 23 points above nominal GDP level organic growth expected, augmented by smaller acquisitions. Weak economic environment could
moderately pressure ad revenue, but accommodated within ratings. Product line and geographic diversity reduce impact of cyclical and
secular downturns. Strong liquidity, manageable maturity schedules and substantial levels of FCF allow management to adapt to changing
landscape and retain ratings.
Advertising Supported
Newspapers Negative Continued price and volume declines across all print components, and revenue pressure across all advertising categories, in particular
classifieds (real estate, auto and employment) and national. Digital and tablet-related growth is not enough to offset print declines.
Local content development and delivery are most publishers keys to remaining competitive/relevant. Management teams will remain
under pressure to cut costs, although labor-related costs could prove difficult given union obstacles. Business, financial and event-risk
environment will be heightened for foreseeable future until compelling organic growth catalysts emerge.
Yellow Pages Negative Unable to offset cyclical and secular declines in print ad demand with price increases. Pricing power is not portable to online outlets.
Negative revenue growth expected in 2013 and 2014. Cost controls have maintained healthy EBITDA margins and material (although
lower) FCF. However, further cost controls may be limited given actions taken over the past few years.
Radio Negative With audience slowly eroding, Fitch expects revenue down 1%-2%. Inventory should be flat. Persistent challenge of raising price to offset
ratings pressure. High margins and strong FCF provide cushion, but high operating leverage results in bottom-line volatility when revenue
is down. Proliferation of digital alternatives is a growing threat, but is not going to completely upend the business. Event risk environment
will be heightened until a compelling organic growth story emerges.
Consumer
Magazines
Negative Ad revenues to decline by midsingle digits in 2013 and 2014 as print magazines continue to cede share. National focus and lack of
classifieds make magazine revenue less exposed to secular issues than newspapers. Tablets an emerging opportunity and represent an
opportunity longer term (lower cost, potential digital subscriber growth), but unresolved issues will impede a material near-term benefit.
Portfolio repositioning (sales or closures of titles), cost actions and tablet monetization should be key themes in the next several years.
TV Broadcast
Affiliates
Stable Highly cyclical and outlook dependent on macroeconomic backdrop. Costs are inflexible, but retransmissions provide modest margin
upside (though a significant amount will go to the network). Besides outdoor, affiliates are in the best position to take advertising share in
local markets from weak indirect competitors (newspapers, Yellow Pages, radio).
Outdoor Stable Fitch expects modest growth in 2013 and 2014 and margins to remain solid (generally above 35% domestically). Outdoor is one of the
mediums least affected by secular issues given a captive audience and thus, over the longer term, Fitch expects outdoor to take share from
other forms of local advertising, such as newspaper, yellow pages and lower rated TV and radio stations.
Cable Networks Stable Continues to take share from broadcast, although growth has decelerated. Targeted medium with low price point (CPM) is attractive for
advertisers. Affiliate fee growth likely to moderate and MVPDs getting more difficult in negotiations. Strong brands have the most leverage
with cable MSOs and advertisers. Smaller digital acquisitions could continue. Lower rated properties may struggle longer term. Cord-cutting
an incremental risk, but not expected to be a major issued over the medium term.
Non-Advertising (Pay-Per-Use, Subscription, Other)
Commercial
Printing
Negative Due to the proliferation of tablets and digital media, coupled with industry overcapacity, fragmentation and pricing pressure, Fitch believes
industry growth will not keep pace with GDP. Larger, better capitalized operators (the predominant issuers of debt) are more able to
streamline/realign cost structures to maintain margin levels. They should be able to capture share from smaller printers.
Theme Parks Stable Attendance is growing in the low to midsingle digits, with most regional growth from increased season ticket sales. Discounting and
promotion activity remains low, but would likely return in a recession. In a downturn, attendance could be down 5%10%. Competition
for consumer time and discretionary spending will continue. Sponsorship, events and other ancillary revenue streams could support
growth. Capital preservation and conservatism expected, but portfolio repositioning expected to continue among some players: new rides,
rehabbing properties, sales and purchases.
Music Stable Physical revenue continues to erode, and digital sales are now half of the industrys revenue. Increases in digital sales and the growth in
revenues related to expanded right contracts (360 Deals) and digital music services (Spotify, Pandora and cloud services) will offset some,
if not most, of declining physical revenues, and lead to revenue growth for the labels over time. Companies should be able to continue to
scale their cost structures to help preserve against severe margin contraction. Piracy remains as a key threat, but there has been significant
progress in education and regulation globally.
Movie Exhibitors Stable Fitch expects flat revenues in 2013 and flat to low single-digit revenue growth in 2014. Fitch expects attendance to be flat to slightly down
in 2014 with modest increases in ticket prices due to additional capacity of premium screens and the pricing charged for 3D, IMAX and
premium seating options. Challenges include high operating leverage, collapsing distribution windows, piracy, conversion to digital delivery
and entertainment alternatives. Stable outlooks in context of B category ratings.
Consumer BooksStable Low growth, and some hit-driven volatility, but less secular exposure than advertising-dependent print media. Digital substitution will
accelerate as tablets (both high end and lower priced) are more widely adopted, exacerbating physical declines. Fitch expects revenue
pressures but sees margin upside.
Film Studios Stable Will remain a volatile subsector, but demand should remain solid long term, as studios are focused on tent-pole films and positioned
to attempt to address secular threats. DVD declines less of a secular concern amid higher margin digital rental and sales. Studios will
continue to experiment with various windows as a means of maximizing the home entertainment window. Piracy remains a concern.
Educational
Publishing
Negative Three major players in K-12 benefit from entrenched positions/barriers to entry, although digital adoption minimizes this barrier. Fitchs
cautious view on the risk of federal education cuts and the recovery results in continued pressures on state and local budgets. For K-12
publishers, the adoption of common core standards for the 2014/2015 school year is expected to lead to positive momentum starting in
2014. Digital will be adopted faster at higher education than K-12. In higher ed, digital adoption could drive share gains from the rental/
resale market, but could lower the barriers to entry in content creation.
CPM Cost per thousand. MSOs Multiple-system operators. MVPDs Multichannel video programming distributors. Note: Broadcast networks, TV studios, B-to-B
magazines, online advertising, emerging mediums, video games, trade shows and direct mail are excluded from this table as there are no pure-play participants in these
industries under Fitchs coverage. Continued on next page.
September 19, 2013

Corporates

U.S. Media and Entertainment Subsector Summary (Continued)
Sector
Credit
Outlook Issues/Concerns
Advertising
Agencies
Stable Positive secular trends relate to the fragmenting media landscape and international expansion. Agencies will continue to focus on digital
opportunities, expanding their footprints in emerging markets and better internal divisional coordination. Major trends will include advertiser
consolidation, threat of disintermediation, the shift toward marketing services and acquisitions. Fitch expects bolt-on type acquisitions will
remain the prevalent strategy.
Professional
Publishing
Stable Fitch expects the subsector to grow at or beyond nominal GDP growth in 20132014, as well as over the longer term. Cost cuts taken in the
downturn should drive solid EBITDA growth. Costs are not very scalable. The contractual nature of the industry can provide lead time for
management to make cost cutting and capital deployment decisions in anticipation of declining revenues. Shareholder-friendly activity could
remain a risk in the sector. However, much of this activity can be accommodated without negatively affecting credit fundamentals.
CPM Cost per thousand. MSOs Multiple-system operators. MVPDs Multichannel video programming distributors. Note: Broadcast networks, TV studios, B-to-B
magazines, online advertising, emerging mediums, video games, trade shows and direct mail are excluded from this table as there are no pure-play participants in these
industries under Fitchs coverage.
September 19, 2013

Corporates

B-to-B/Trade Magazines
Subsector Overview
According to Jack Myers U.S. Media Forecast, the business-to-business (B-to-B or trade
magazine) subsector is forecast to generate $5.3 billion in advertising revenues in 2013,
down 6.6% from 2012. Globally, participants include Pearson, International Data Group, Crain
Communications, Penton, Advanstar, SourceMedia, PennWell, Hanley Wood and McGraw Hill.
Barriers to entry exist, to an extent, in the form of brands, editorial talent, marketing budgets,
sales teams and established readership/circulation levels. Fitch does not expect many new
entrants in the print space. However, Fitch does expect further consolidation, and private equity
may look for exits in the coming years. (Investcorp owns SourceMedia; Advanstar is owned by
a consortium led by Veronis Suhler Stevenson; and Hanley Wood is owned by a consortium led
by Oaktree Capital, Strategic Value Partners and Tennenbaum Capital.)
The B-to-B magazine subsector is one of the most cyclical, as its advertisers move quickly to
cut spending in downturns, as seen in 2009 when advertising dropped 26%. Fitch believes trade
magazines are less exposed to secular threats than newspapers and consumer magazines,
because B-to-B content is not as easy or as proftable to replicate online as general interest
consumer news. However, readers have shifted toward some free online content, proliferating
online ad inventory. This has negatively affected pricing and exacerbated cyclical volatility.
B-to-B publishers have continued to build out their online and mobile products and applications.
Fitch believes this expansion of brands into online and mobile devices will be an important step
in maintaining paid subscribers. Fitch does not expect the online/mobile advertising to offset
declines in print advertising in the near or medium term. Fitch expects B-to-B publishers to
continue restructuring operations and capital structures to align more closely to a digital model.
Outlook Negative
B-to-B advertising revenues are forecast (according to Jack Myers) to continue to decline over
the next two years (low to midsingle digits), due to the gradual shift of readership and ad dollars
towards the Internet and mobile devices. As print advertising revenues account for nearly 80%
of advertising revenues for the industry, Fitch believes a material acceleration in digital adoption
could impair proftability. Trade shows and other logical brand extensions should continue to offer
additional offsets to the weakening core print business.

(30)
(15)
0
15
30
Real GDP Growth Total Advertising Business Papers
Source: Magna Global, Fitch Ratings, Kantar Media.
Business Papers Revenue Cyclicality
(%)
Credit Strengths
Targeting capabilities.
Established audiences.
Opportunities to leverage brands
in tradeshows and other
ancillary businesses.
Brand names.
Credit Concerns
Pressured circulation and
advertising trends.
Substitution risk posed by
online competitors.
Difficulty measuring ROI.
Printing and shipping cost inflation.
Potential event risk posed by
prospects of a slow/no-growth,
consolidating industry.
September 19, 2013

Corporates

Consumer Magazines
Subsector Overview
Major U.S. consumer magazine publishers include Time Inc., Meredith Corp., Hearst Corp.,
and Advance Publications, Inc. (owner of Cond Nast Publications). Magazines command a
meaningful amount of advertising dollars (forecast at approximately $12 billion in nondigital
advertising revenue in 2013, according to MAGNAGLOBAL). Although there are more than
7,000 titles, according to MPA The Association of Magazine Media the industry is relatively
concentrated, with the top 100 titles generating the majority of industry revenues. Womens
magazines dominate the industry, selling roughly double the advertising pages as the next most
popular category. Cosmetics are the largest advertising category, followed by similar shares from
the drug, food, apparel, media and retail industries. While economies of scale and barriers to entry
(to the formation of new magazine companies) exist, to an extent, in the form of editorial talent,
marketing budgets, sales teams, printing and shipping fees, and distributor relationships, Fitch
recognizes there are very low barriers for existing magazine companies to develop knockoffs of
popular titles of their competitors. These attempted replications can ultimately increase inventory
and dampen pricing power for even the most popular titles. Fitch believes the major titles will
continue to capture a meaningful portion of magazine advertising. Tablet applications are in
their relatively early stages, with publishers still experimenting with subscription and ad pricing
in an effort to maximize revenue. Although the exact level of tablet proftability cannot yet be
determined, Fitch believes it will be an opportunity for magazines, given the lower cost structure
and ability to drive incremental subscribers.
Outlook Negative
Magazines continue to face the same secular challenges plaguing other traditional print
advertising mediums. Fitch expects print magazines to continue to cede their share of overall
advertising spending. Annual advertising revenues are expected to decline in the midsingle digits
over the next few years. Fitch believes tablets represent an opportunity over the long term, once
issues related to subscription models and standardized digital advertising metrics are resolved.
While widespread tablet adoption will likely drive an acceleration of declines in print, the declines
will be partially offset by digital revenues. Importantly, the lower cost structure will likely result in
improved industry proftability. Consolidation and shutting down less-proftable titles will remain a
means of rationalizing print advertising. The remaining players will have scale through portfolios
of top brands in demographics that are attractive to advertisers.
(30)
(15)
0
15
30
Real GDP Growth Total Advertising Magazines
Magazine Revenue Cyclicality
(%)

Credit Strengths
Efficiency associated with
broad reach.
Shift to national advertising.
Lower CPM than Broadcast TV.
Portability and
geographic diversity.
Valuable brands.
History of competing for
advertising dollars; track record at
redeveloping content/repositioning
product to improve
consumer appeal.
Profitability opportunities in digital.
Credit Concerns
Changes in media consumption
patterns and distribution structure.
Pressured circulation and
advertising trends.
Substitution risk posed by online
competitors.
Difficulty measuring ROI.
Printing and shipping cost inflation.
Potential event risk posed by
prospects of a slow/no-growth,
consolidating industry.
September 19, 2013

Corporates

Direct Mail/Free-Standing Inserts (FSIs)
Subsector Overview
According to the Direct Marketing Association (DMA), direct mail and free-standing inserts (FSI,
also known as preprints, individualized print advertisements or promotions delivered through
print media) represent an approximate $50 billion subsegment of the more than $165 billion
direct marketing industry. News America Marketing (News Corp.) and Valassis Communications,
Inc. comprise more than two thirds of the market. Smaller players include Cox Enterprises, Inc.
(Valpak), Catalina Marketing Corporation and Harte-Hanks, Inc. Barriers to entry come in the
form of advertiser relationships (typically consumer packaged-goods companies), distribution
partner relationships (i.e. newspapers) and carefully maintained databases of address lists used
to target certain ZIP codes and consumer demographics. Participants compete on scale/reach,
testing, design, execution, data management, performance analytics, fulfllment and, ultimately,
promotional response rates. Direct mail is used to expand brand awareness, drive increased trial
by new users, and retain and increase consumption of existing users.
Margins are typically lower than those of most other media subsegments. Pricing pressure
remains amid direct and digital competition. Rising paper and postal costs will likely weigh
negatively on margins. Coupon redemption is somewhat countercyclical, with consumers utilizing
coupons more in downturns and advertisers abandoning brand campaigns in favor of mediums
that directly boost sales. Digital coupons and daily deal websites represent an incremental
source of competition.
Outlook Negative
Fitch believes there are limited catalysts for growth longer term. The medium remains very
susceptible to pressure on print advertising media and the headwinds created by digital
distribution and the proliferation of marketing channels. Digital offerings add incremental
competition and could reduce marketers demand for traditional coupons. Direct mail and FSI
are more measurable than many other mediums. Fitch recognizes that direct mail has benefted
from restrictions in telemarketing, and widespread consumer adoption of online coupons is still
relatively low, albeit accelerating.
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(15)
0
15
30
Real GDP Growth Total Advertising Direct Mail
Direct Mail Revenue Cyclicality
(%)
Credit Strengths
Broad reach.
Measurability: Strong ROI
characteristics for a traditional
print medium.
Relatively low cost (CPM) for
advertisers.
Improving targetability.
Credit Concerns
Pricing pressures.
Declining newspaper circulation.
Paper and postage increases.
Substitution risk by online rivals
given lower barriers to entry.
September 19, 2013

Corporates

Emerging Advertising
Subsector Overview
There have been a number of acquisitions and organic investments made in the video gaming,
online video, out-of-home video, social media, cinema advertising and mobile spaces by
media companies in recent years. Pure plays that derive some or all of their revenue from
advertising include social media market leader Facebook, and online gaming developer Zynga,
along with local coupon providers Groupon and Living Social. Emerging mediums are working
off a small base and represent opportunities for advertisers to address fragmentation going
forward. Experimental budgets are highly cyclical, as advertisers focus limited ad budgets on
more proven mediums in a downturn. Fitch expects emerging media growth only under stable
economic conditions. The growth of tablets brings material incremental opportunities; however,
uncertainties remain regarding pricing, measurement and data usage and transparency. As a
result, advertisers have not yet fully formulated their mobile digital strategies. While still relatively
immaterial to overall ad spending and to the credit profles of media companies, Fitch expects
organic investments and acquisitions to continue to focus on emerging mediums.
Outlook Stable
There are few relevant pure-play companies in this space, and the revenues and costs are
too small to be broken out in larger companies fnancials. Facebook generates solid EBITDA
and free cash fow, although Fitch does not expect this from other players that do not match its
size or scale. Fitch believes none of the players are at scale yet and that margins will remain
weak while they invest in the product and in sales infrastructure. The strategy of companies
operating in these mediums is to develop a rapport with their audience and with their relevant
advertising base. Measurement issues will remain a hindrance to broader advertiser appeal,
as metrics and performance data vary between providers and across mediums. There could
be some consolidation as companies seek to gain critical mass in particular areas, but due
to the size of potential acquisitions (certain large conglomerates could pay multiples of the
entire revenue for certain emerging-media subsegments without negatively affecting their credit
profles), participation in these mediums represents more of an opportunity than a risk for media
companies.
Emerging-Media Ad Expenditures
($ Mil.) 2012 2013E 2014E
Search Marketing (Online/Mobile) 17,254 20,705 24,432
Annual Growth (%) 18.0 20.0 18.0
Social Marketing/WOM/Conversational Marketing 3,300 4,620 6,237
Annual Growth (%) 32.0 40.0 35 .0
Videogame Advertising/Virtual Currency 1,813 2,266 2,764
Annual Growth (%) 40.0 25.0 22.0
Mobile and Apps Advertising 2,303 3,915 5,873
Annual Growth (%) 80.0 70.0 50.0
Point-of-Influence (POI)/GPS (Multi-Platform) 838 875 959
Annual Growth (%) 12.0 4.5 9.6
Online Originated Video Content Advertising 1,180 2,007 3,211
Annual Growth (%) 75.0 70.0 60.0
Online Originated Display Advertising 6,982 7,540 8,159
Annual Growth (%) 11.0 8.0 8.2
E Estimate. GPS Global positioning system. WOM Word of mouth.
Source: Extracted from Jack Myers Midal Business Report 20102020 Marketing/Advertising Investment Data and
Forecast, Fitch Ratings.

Credit Strengths
Immune to technological threats
affecting other media segments.
Relatively low price compared with
other media.
Targeted nature.
Measurability.
Credit Concerns
No proven track record of
monetization. User activity with
media might not be commensurate
with monetization opportunities
(social networking).
Risks for brands
(social networking).
Acquisition risk, as companies try
to consolidate online content to
drive some pricing power.
September 19, 2013

Corporates

Online
Subsector Overview
There are many media, technology and start-up companies participating in the online advertising
industry, attempting to establish competitive positions in a market with limitless advertising
inventory and low barriers to entry. Players struggle to command extended engagement from
consumers, as switching costs for consumers are absent (surfng is free and easy). U.S. digital
advertising spending (including mobile) is a $40 billion market, according to eMarketer.
0
10
20
30
40
Broadcast TV Cable TV
TV (Broadcast and Cable) Internet
Newspapers Magazines
Radio Out of Home
Directories Direct Mail
(%)
Market Share by Advertising Medium
Note: Includes direct marketing, and political and Olympic.
Search comprises approximately half of the total online advertising market. Banners/display
makes up roughly another quarter and the remaining quarter is composed of video, classifed,
mobile, lead generation, rich media, sponsorships and email. The benefts of search, and the
drivers of its rapid growth in recent years, include its directional nature, high ROI, and substantial
consumer penetration. Premium display graphical advertising has also grown rapidly from a
lower base, benefting from low price points, ease of starting/stopping a campaign and advertisers
increased comfort with the medium. Even with positive secular tailwinds, display advertising is
susceptible to cyclical pressures. Video is expected to be the fastest growing going forward,
particularly on mobile devices. Ad networks beneft advertisers by enhancing the effciency of
purchases, giving them a broader reach with a single transaction. This increase in demand
improved remnant ad pricing somewhat. It is unclear how deep demand from major brand
advertisers will be for these remnant spots that are more diffcult to monitor, and it is unclear how
much attractive inventory will be made available to nonmedia company-owned ad networks by
media companies.
Credit Strengths
Relatively low CPMs compared
with other media.
Targeted nature (either behavioral
or contextual).
Measurability.
Credit Concerns
Exposed to cyclical fluctuations.
Potential regulatory issues could
arise, as behavioral targeting
becomes more widespread.
Acquisition risk as companies try
to consolidate online content to
drive some pricing power.
September 19, 2013

Corporates

The online social media industry has exhibited explosive growth since its formation roughly
ffteen years ago (Geocites, Classmate.com). Facebook, Twitter, LinkedIn, Pinterest, Google+
and Tumblr represent some of the industrys more well-known brands in the U.S.
Facebook and other leading social networks have invested in their respective platforms to
accumulate large, loyal user bases. Facebook was launched in 2004 and is now the worlds
largest social network with more than 1.5 billion monthly active users (MAUs) and 700 million
daily active users (DAUs). Given the large number of users, time spent on the site and ability
to target specifc groups, Facebook and other networks can focus on monetization, primarily
through advertising.
However, in order to successfully monetize these large user bases, the deployment of
independent audience measurement standards that can demonstrate the size and demographic
characteristics of the audience delivered will be necessary. Fitch notes that Nielsens Online
Campaign Ratings (OCR) was developed to measure online audience and is in the early stages
of being rolled out. Fitch believes that as measurability improves; social websites will be better
able to demonstrate their ability to aggregate and deliver attractive demographics to advertisers.
Fitch believes CPM growth would follow the adoption of independent measurement standards.
Measurement of ROI will also be a key contributor to advertising volume and pricing growth.
0
3
6
9
12
15
2012 2013 2014 2015 2016 2017
Social Display Social Native
Source: BIA/Kelsey, advisors to companies in the local media space.
U.S. Social Ad Spend: 20122017 Forecast
($ Bil.)
Outlook Stable
Fitch expects strong (mid/high teens) growth to continue, subject to a level of macroeconomic
stability. Online advertising continues to capture share from traditional outlets, which could
offset potential cyclical swings. As the online market evolves and measurement becomes more
reliable, advertisers will begin to view online spending as core and less experimental. Going
forward, growth across search, display and other categories should remain healthy as web
usage continues to increase (fueled by mobile), pricing is generally low, and advertisers are
continuing to gain comfort with the medium. Measurement issues will remain a work in progress
as consistency of reporting among several frms varies and could hinder advertisers comfort
with allocating a larger portion of the budget toward the medium. Additionally, regulatory (FTC)
issues associated with privacy could be an issue as frms attempt to implement more behavioral
targeting.
September 19, 2013

Corporates

(25)
0
25
50
75
100
Real GDP Growth Total Advertising Internet
Note: In the late 1990s, online advertising growth exceeded 100% off a very small base. Shaded area depicts periods
of economic downturn.
Internet Revenue Cyclicality
(%)
Top 25 U.S. Internet Ad
Focus Rankings
(As of July 2013)
Rank Property (000)
% of
U.S.
Total Internet: Total Audience 225,359 100.0
1 Yahoo! Sites 196,564 87.2
2 ShareThis 196,348 87.1
3 Outbrain 192,825 85.6
4 Google 181,529 80.6
5 Facebook.com 138,927 61.6
6 YouTube.com
a
136,344 60.5
7 AOL, Inc. 117,395 52.1
8 MSN 116,201 51.6
9 Amazon.com
a
94,639 42.0
10 Bing 92,801 41.2
11 Glam Media 90,067 40.0
12 Ask Network 75,166 33.4
13 Windows Live 62,055 27.5
14 Blogger 61,151 27.1
15 About 58,313 25.9
16 Demand Media 57,436 25.5
17 Gannett Sites 54,249 24.1
18 LinkedIn 52,900 23.5
19 MTV Music Group 48,195 21.4
20 The Weather Channel 45,024 20.0
21 CNN 44,380 19.7
22 RockYou 44,267 19.6
23 5min Media Platform 43,990 19.5
24 YELP.COM 41,880 19.6
25 Answers.com Sites 40,838 18.1
a
Entity has assigned some portion of traffic to other
syndicated entities. Note: Reach % denotes the percentage
of the total Internet population that viewed a particular
entity at least once in July. For instance, Yahoo! Sites was
seen by 87.2 percent of the 225 million Internet users
in July.
Source: comScore Media Metrix.
Top 25 U.S.
Web Properties
(000, As of July 2013)
Rank Property
Unique
Visitors
Total Internet: Total Audience 225,359
1 Yahoo! Sites 196,564
2 Google Sites 192,251
3 Microsoft Sites 179,595
4 Facebook 142,266
5 AOL Inc. 117,395
6 Amazon Sites 110,028
7 Glam Media 90,067
8 Wikimedia Foundation Sites 83,435
9 CBS Interactive 81,538
10 Turner Digital 77,244
11 Apple Inc. 75,338
12 Ask Network 75,166
13 eBay 71,924
14 Viacom Digital 65,631
15 Comcast NBC Universal 64,043
16 About 58,313
17 Demand Media 57,436
18 VEVO 56,498
19 Gannett Sites 54,249
20 LinkedIn 52,900
21 craigslist, inc. 51,217
22 The Weather Company 50,983
23 Wal-Mart 42,945
24 YELP.COM 41,880
25 Answers.com Sites 40,838
Note: Total U.S. Home, work and university locations.
Source: comScore Media Metrix.
September 19, 2013

Corporates

Net U.S. Digital Ad Revenue Share, by Company
(%, As of August 2013) 2011 2012 2013 2014 2015
Google 40.1 40.9 41.1 42.2 44.0
Yahoo! 9.6 8.6 7.7 7.1 6.6
Facebook 5.4 5.9 7.1 7.7 8.3
Microsoft 5.2 5.1 5.1 4.9 4.7
IAC 2.2 2.5 2.7 2.6 2.6
AOL 2.8 2.5 2.3 2.2 2.1
Amazon 0.8 1.2 1.6 1.9 2.1
Twitter 0.4 0.7 1.1 1.6 1.9
Total Digital ($ Bil.) 31.99 36.80 42.26 47.58 52.49
Note: Includes advertising that appears on desktop and laptop computers as well as mobile phones and tablets, and
includes all the various formats of advertising on those platforms; net ad revenues after companies pay traffic acquisition
costs (TAC) to partner sites.
Source: eMarketer, Company filings.
Global Internet Advertising by Type
($ Bil.) 2012 2013 2014 2015
Paid Search 41.3 47.0 54.7 61.1
Display 34.6 41.1 47.7 57.0
Classified 12.7 13.3 13.7 14.4
Total 88.6 101.4 116.1 132.5
Source: ZenithOptimedia, April 2013

0
5
10
15
20
25
30
2011 2012 2013 2014 2015
Facebook Google Yahoo! Microsoft AOL
Source: eMarketer, August 2013.
Share of Total Digital Display Ad Revenues
(%)
September 19, 2013

Corporates

Mobile
Wireless penetration has reached maturity in developed markets. According to eMarketer,
smartphone adoption has been rapid and surpassed 50% market penetration in the U.S. and
fve additional developed markets in 2012. Tablet ownership should continue to explode as well,
with a new forecast from IDC showing 59% growth in 2013 to 229.3 million units worldwide.
Pew estimated that 34% of the U.S. adult population owned tablet devices in May 2013. Paid
search spending in the U.S. represents roughly one-half of U.S. mobile ad spending. This largely
refects mobile devices importance as a medium that drives online shopping. As the number
of mobile devices and users grows, advertisers will seek out ways to reach these consumers
and optimally market products and services. High-speed 4G networks that enhance the mobile
media experience, particularly with video, further fuel the appeal of this advertising medium,
although data usage plans and associated costs impose some limitations on mobile streaming.
The reach of this medium is growing quickly. eMarketer expects U.S. net mobile advertising
revenues to grow 300% through 2015 to more than $18 billion. Advertising on wireless devices
represents a material contributor to some media companies revenue streams. Google captured
more than 50% market share of worldwide net mobile internet ad revenue in 2012. Other notable
and growing businesses capturing meaningful share in an otherwise fragmented market include
Facebook, Pandora and Twitter.
Location-based (GPS) targeting and the hyper-local nature are key benefts of mobile advertising.
That said, supply growth continues to outpace demand growth, which has led to pricing pressure.
Industry participants will continue to experiment with different formats and delivery options as they
tailor their campaigns for mobile devices and seek the most effective advertising mechanisms.
The mobile advertising industry structure is more complicated than other advertising mediums as
distributors (wireless handset makers/wireless operators) wield meaningful control over access
to content. Mobile operators and mobile ad networks (Google [Ad Mob, DoubleClick], Yahoo!,
Apple Inc. [iAd] and AOL Inc. [Third Screen Media]) generally distribute ad revenue back to the
content owner. Key elements of the mobile value chain include the following: 1) content creators;
2) publishers, aggregators and hosts (bundle and store content from handset makers) and 3)
marketing and delivery (operators, handset makers and retailers). Search, display, video, and
in-app advertising are key mobile advertising opportunities. Media companies are less likely to
beneft from search advertising but should be able to participate in growth in graphical display,
mobile video and paid applications.
Outlook Stable
The small screen size requires publishers to focus on functionality/user experience (readability,
load times). Tablets represent a large opportunity given the larger screen size and superior
experience relative to smartphones. Fitch expects mobile will exhibit double-digit growth rates
and represent a material portion of advertisers experimental budgets, and over time will become
a mainstay. In the short term, however, spending on emerging mediums through experimental
budgets is not likely to expand enough to be a material contributor to many media companies
revenue bases in absolute terms.
Credit Strengths
Good long-term growth prospects.
Targeted nature.
Credit Concerns
No proven track record of
monetization.
Distribution maintains significant
control.
September 19, 2013

Corporates

0
100
200
300
400
E Estimate.
Source: CTIA, Magna Global.
Mobile Phone Subscriptions
(Year End)
(Mil.)
1,568
4,363
8,508
13,086
18,561
0
4,000
8,000
12,000
16,000
20,000
2011 2012 2013 2014 2015
Note: Includes display (banners and other, rich media and video), search and messaging-based advertising; ad
spending on tablets is included; net revenues excluding traffic acquisition cost (TAC).
Source: eMarketer August 2013.
U.S. Net Mobile Advertising Revenues
($ Mil.)

September 19, 2013

Corporates

Newspapers
Subsector Overview
Market share statistics are somewhat irrelevant in the more than $35 billion newspaper industry,
because newspaper groups (Gannett Co., Inc., Tribune Company, The McClatchy Company,
The New York Times Company and others) rarely compete with one another. As the media
landscape has become progressively fragmented, newspapers have increasingly lost their
dominance in local distribution. According to the Newspaper Association of America (NAA)
bundling of digital and print circulation helped the industry to grow circulation revenues modestly
(5% in 2012). For the companies that reported, print only and single copy revenues declined
11%. Print circulation has declined over the past 20 years, and the Internet has progressively
displaced print classifed advertising. Larger markets in which there is a higher penetration of
broadband connections and more competing alternatives for advertising dollars have been
disproportionately negatively affected, but no newspapers have been immune to the weakness.
Classifed (24% of print advertising revenue) and national (18%) advertising are most exposed
to secular shifts. Local advertising (58%) is experiencing economic softness and is also being
pressured by local-market, cross-media competition from radio, local television, outdoor, Internet
and other emerging media.
Fitch believes The New York Times and Wall Street Journal are among the few newspapers
that possess a unique enough content niche and loyal enough audience base to successfully
charge for online content. Local newspaper companies continue to experiment with metered
subscriptions. Fitch believes the level of metered stories has been set at a level that has not
materially impacted the number of page views. However, these subscription revenues (for
local newspapers) are not expected to provide a meaningful offset to secularly driven revenue
declines.
Fitch expects the proliferation of digital tablets to continue to erode print advertising revenues.
The opportunity to provide print subscribers with a mobile digital version may slow the decline
in circulation revenues. However, Fitch does not expect the advertising revenues earned from
tablets and mobile devices will offset the declines in print advertising in the near term. The
transition to digital will continue to drive publishers to cut costs.
Fitch believes it is critical for newspaper publishers to invest in developing, aggregating and
delivering unique local content to the next generation of information consumers. Without this
investment, local newspapers are unlikely to compete effectively with more nimble players that
have lower cost structures and lighter debt loads. Local newspapers will need to deliver this
engaging content using the capabilities of emerging media platforms (tablets and mobile devices).
During the secular and cyclical downturn that newspapers experienced in the past few years,
few have made those types of investments. To the contrary, many companies disinvested to
preserve cash fow and repay debt, putting them further behind in the evolution of the newspaper
business.
The Daily, News Corp.s digital-only national news publication, published its last edition on Dec.
15, 2012. The digital publication was unable to fnd a large enough audience to sustain the
business model in the long term. Fitch believes this demonstrates the challenges newspapers
will face given the numerous sources of news information.
Credit Strengths
Low lead time necessary for
advertisers.
History of content creation
and delivery.
Efficiency associated with broad
reach within local markets.
Credit Concerns
Changes in media
consumption patterns.
Pressured circulation.
High-priced ad medium.
Proliferation of online
advertising inventory.
Pressure on print
classified advertising.
Exposure to rising
commodity costs.
Difficulty for advertisers to
measure ROI.
Unionized workforces.
September 19, 2013

Corporates

Outlook Negative
While the overall advertising industry has rebounded, the newspaper subsector has been left
behind. Fitch expects newspaper industry revenue to continue to decline in 2013 and 2014, off
easy comparable periods. Fitch expects price and volume will be under pressure across all print
components of newspaper companies. Fitch believes online revenues can continue to grow in
the high single digits to low teens. While newspaper company investments in classifed websites
(cars.com, careerbuilder.com, etc.) will provide growth opportunities, the absolute revenues
generated are not expected to offset print revenue declines in the near term. Fitch believes
social websites, such as LinkedIn and Facebook, will create additional headwinds for newspaper
companies print and online classifed offerings. Newsprint costs are volatile, and it could be
diffcult to offset revenue declines with labor-related cost cuts, as unions continue to present
obstacles in some cases.
(30)
(15)
0
15
30
Real GDP Growth Total Advertising Newspaper
Newspaper Revenue Cyclicality
(%)

(80)
(40)
0
40
80
Real Estate Automotive Employment
Note: 19921994 assumes zero advertising growth. Shaded area depicts periods of economic downturn.
Source: Newspaper Association of America, Fitch.
Newspaper Classified Advertising Growth
(%)
September 19, 2013

Corporates

Outdoor
Subsector Overview
The industry is concentrated with Fitch estimating that the largest three players (Clear Channel,
CBS, Lamar Advertising Company) represent more than 60% of industry revenue. The industry
underwent signifcant consolidation in the late 1990s as larger media companies invested
heavily in the business, and Lamar grew signifcantly by rolling up smaller local market players.
Regulation has provided a key barrier to entry by making it very diffcult to get new billboards
permitted in attractive locations, which has kept outdoor advertising inventory from proliferating.
The low relative price point and captive audience make this business attractive to a diverse base
of advertisers. This, coupled with growing digital opportunities and low capital expenditures,
makes outdoor advertising a high EBITDA margin (generally above 35% domestically) and high
free cash fow conversion (more than 40%) business. Therefore, while high operating leverage
from fxed operating leases can drive outsized EBITDA declines (declines reached 75% for one
quarter in 2009), there is room in the operating profle to endure them. This segment tends to
lag in a recovery. Outdoor operators must balance capacity and rates. Outdoor is dependent
on the health of local advertising markets (local is approximately 60% of total), although digital
billboards are an attractive medium for national advertisers. EYES ON Impressions, the new
audience measurement currency for the industry, has improved measurability.
Outlook Stable
Fitch believes the potential negative effects of increased inventory from digital rollouts (i.e. multiple
spots that can be shown on the same billboard) should be tempered by increasing appeal (and
ease) to advertisers, as well as decreases in price per spot. Fitch remains optimistic on digital
billboards, as incremental revenue opportunities and cost reduction mechanisms provide upside
to operators fnancial profles. Price points are moderately lower per customer than traditional,
but the pricing decline is not in line with the incremental number of advertisers, resulting in
increased revenue. Cost structures should also beneft from digital billboards, as displays can
be centrally managed without physical deployment of work crews. Fitch expects modest growth
in 2013 and 2014. Over the longer term, Fitch expects outdoor to take share from other forms of
local advertising that are under secular pressure. Fitch notes that the planned REIT conversion
of billboard subsidiaries may be delayed due to the IRSs review of REIT status. While REIT
conversion, on its own, is not expected to result in a material change in credit profles, additional
leverage following such conversions to fund additional distribution will weigh on credit profles.
(30)
(15)
0
15
30
Real GDP Growth Total Advertising Outdoor
Outdoor Revenue Cyclicality
(%)

Credit Strengths
with other media.
Regulatory barriers to
new inventory.
Digital billboard opportunities.
High margins and free cash
flow conversion.
Credit Concerns
Not as targeted as some
other mediums.
Potential for regulation of digital
billboards in high-traffic areas.
Below capacity.
September 19, 2013

Corporates

Radio
Subsector Overview
There are barriers to entry in the form of Federal Communications Commission (FCC) licenses,
and the three largest station groups (Clear Channel, CBS and Cumulus Media Inc.) represent
almost 40% of local advertising dollars. Other major players include Cox Radio, Inc.; Univision;
Emmis Communications Corporation and Entercom Communications. Nonetheless, many
markets face overcapacity of radio advertising inventory. Additionally, stations face indirect
competition from other forms of media, as well as alternative music platforms and new Internet/
mobile entrants (streamers such as Pandora and on-demand webcasters such as Spotify).
Radio station formats (country, news, classic rock, etc.) provide the opportunity to differentiate
and target audiences. News and talk (including sports) and Spanish-language formats are more
protected from competitive pressures and have performed better in recent years. Meanwhile,
those that are more easily replicable by Internet radio channels or audio device platforms (rock,
adult contemporary, pop) are more at risk. Radio operators face hyper-cyclicality, given 80%
local advertising, and signifcant negative (and positive) operating leverage. Nonetheless, high
margins and low capital-expenditure requirements drive positive free cash fow even in very
stressed scenarios.
Outlook Negative
Fitch expects listenership to remain under moderate secular pressure from competitive
alternatives, and expects annual advertising revenue declines of 1%2% (excluding digital).
Competitive alternatives and new Internet and mobile entrants will reduce time spent listening,
although the audience reach should not decline substantially. This is expected to be partially
offset by modest pricing growth. Advertiser demand will remain, given the large core audience,
the mediums local reach, its targeted nature and its low cost. Benefts from cross-media
competition (share shifts from newspapers and yellow pages) should provide a further offset.
Internet radio streaming services such as Pandora and Spotify are resonating with consumers, and
Fitch expects they will continue to grow audiences. Digital initiatives by terrestrial broadcasters,
such as Clear Channels iHeartRadio, although in their early stages, are legitimate products that
could provide an opportunity to capture a sizeable portion of digital listening over the next few
years. Whether the ability to capture digital audience will translate into incremental revenue will
depend on advertising demand and pricing. Nonetheless, Fitch expects digital to remain only a
small portion of total revenue in the medium term.
(30)
(15)
0
15
30
Real GDP Growth Total Advertising Radio
Radio Revenue Cyclicality
(%)

Credit Strengths
with other local mediums.
Strong margins.
Large audience reach.
Low capital expenditures and high
free cash flow conversion.
Credit Concerns
Low (negative) growth.
Limited catalysts to reverse
negative trends.
Proliferating competitive threats.
High fixed costs provide limited
opportunities to remove costs
under revenue declines.
Dependence on Arbitron
for measurement.
September 19, 2013

Corporates

$
FTC
Regulations
Advertisers
Station
Affiliates
Broadcast
Networks
FCC
Cable MSOs
Viewers
TV Studios/
Production
Companies
(Including
First-Run
Syndications)
Adherence to
Regulations
Viewers
$
Viewers
$
Regulations and
Licenses
Adherence to
Regulations
Content, Advertising Messages
a
Viewers
Retransmission ($), Viewers
a
Viewers
Subscriptions ($)
Content,
Advertising
Messages
a
Syndicated Content
Adherence to Regulations
Regulations
Availability of Free Content (Decency, Diversity, etc.)
Election of Administration
Protection from Misleading Ad Messages and Invasions of Privacy
Election of Administration
TV Broadcasting Eco-System
aIncludes primetime, syndicated and original (primarily local news) content. MSO Multiple-system operator. FCC Federal Communications Commission.
FTC Federal Trade Commission. Note: The FCC also regulates cable MSOs.
September 19, 2013

Corporates

TV Broadcasting Affliates
Subsector Overview
The local TV station landscape includes the large network conglomerates (owned and operated
[O&O] broadcasters such as CBS, Disney, NBC Universal [currently owned by Comcast and
General Electric], and Twenty-First Century Fox) and other players (Gannett, Tribune, etc.) that
own other media assets, as well as pure-play affliate broadcaster station groups such as Hearst
Television; Sinclair Television Group Inc.; LIN TV Corp. and Nexstar Broadcasting Group, Inc.
Barriers to entry exist in the form of FCC licenses and brand loyalty (primarily with local news).
The FCC issues a limited number of licenses for a maximum term of eight years and typically
renews licenses upon being satisfed that the station served the public interest, convenience and
necessity. Stations differentiate themselves based on network affliation, syndicated content and
quality of local news offerings. Advertising revenue is derived from three main sources: original
news programming (estimated by Fitch at approximately 40%), local ads on network shows
(30%) and local ads on syndicated shows (30%). The majority of advertising is from local and
regional businesses; however, affliates also generate 20% or more of revenue from national
spot advertisers.
Broadcast affliates have relatively high fxed-cost structures and do not control a large portion
of the content they broadcast. Investments in local news can reduce margins, but also provide
an audience and ratings draw. Station revenues can fuctuate meaningfully from even to odd
years due to political (and Olympic, in some cases) ad spending. Revenues are also highly
cyclical and can be down more than 20%, and operating leverage can drive EBITDA declines
exceeding 30%. However, affliates high margins (typically more than 25%) and strong free
cash fow conversion provide a material cushion to withstand such declines and enable the more
moderately leveraged station groups to generate cash during a downturn.
Over the top (OTT) television (Netfix, Hulu, networks websites) and time-shifting technologies
such as digital video recorders (DVRs) and video on demand (VOD) continue to alter viewership
patterns for primetime television, which affliates rely on to promote their evening news, thereby
heightening disintermediation risk. However, televised news and sports are not a good ft with
OTT viewing habits, and live airing will continue to draw audiences. Emerging technologies, such
as Aereo and Autohop, are currently unproven, but if allowed to continue to operate, will have
material impacts on the industry.
Automotive Advertising
Fitch acknowledges that the complexity and infexibility of the cost structures of the domestic auto
original equipment manufacturers (OEMs) make ad spending an easy target for near-term cost
cuts to free up room against budgets. Automotive advertising is traditionally grouped into three
categories: 1) OEMs, which predominantly use broadcast and cable networks with a national
reach; 2) dealer associations, which use local broadcast TV to reach a regional audience; and 3)
local dealerships, which use newspapers, radio and local TV to reach a local audience.
Automotive is the second largest category in advertising ($14.8 billion in 2012), and swings in
spending can have an outsized impact on local and national advertising-dependent companies,
particularly local broadcast affliates. This was very evident during the downturn/OEM bankruptcies
and recovery (auto down 23% in 2009 and up 20% in 2010). National advertising is tied to new
product launches and can exhibit volatility in a stable macroeconomic environment, although
there will always be a solid baseline of brand awareness marketing. Dealer advertising has been
Credit Concerns
Highly dependent on cyclical local
advertising, including autos.
OTT television and
time-shifting technologies.
The networks are proactive in
video on demand (VOD).
Credit Strengths
Efficient audience aggregator.
High margins.
Low capital-expenditure
requirements.
September 19, 2013

Corporates

robust over the past three years, although Fitch believes this spending is more cyclically volatile
given the sensitivity of local budgets to the macro environment. Fitch believes mass-market
advertising will remain a critical component of automakers branding activities. However, large-
player strategy shifts, such as GMs previous decision to move a portion of its budget away from
higher cost outlets such as network broadcast and the Superbowl, and towards lower priced
cable networks, can have an outsized impact on individual channels. Fitch expects OEMs and
dealerships to continue to shift ad mix steadily toward more targeted online outlets.
6
8
10
12
14
16
a
Seasonally adjusted annual rate (SAAR) through June 2013.
Source: Bloomberg.
Total U.S. Light Vehicle Unit Sales
(Mil. Units)
Aereo/FilmOn X
Aereo, which is available in fve cities (NYC, Boston, Atlanta, Miami and Salt Lake City) streams
local broadcast TV stations over the internet for a fee. The service intends to expand to 18
additional cities in the near term. Aereo does not pay local broadcasters retransmission consent.
The broadcasters have fled lawsuits (in New York and Boston) and petitioned for injunctions
aimed at stopping Aereos service. The broadcasters claim that Aereos service violates copyright
laws by reformatting and retransmitting their TV signals without consent or compensation. In
July 2012, the motion for an injunction (fled in New York) was denied, but was subsequently
appealed. In July of 2013, the broadcasters appeals were unsuccessful. The broadcasters may
seek a hearing in the U.S. Supreme Court or proceed with a full trial.
While the broadcasters have not been successful in shutting down Aereo, they have found more
success in other federal districts. Cases and injunction motions have also been fled against
Number of U.S. Auto Dealerships
(Units)
Company/Category 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
GM 7,462 7,342 7,123 6,901 6,653 6,273 5,500 4,458 4,407 4,355
Ford 4,459 4,436 4,396 4,270 4,056 3,787 3,553 3,424 3,339 3,286
Chrysler 4,110 3,997 3,883 3,749 3,585 3,250 2,352 2,311 2,336 2,370
Net Detroit 3-Badged
a
15,891 15,635 15,282 14,820 14,199 13,220 11,345 10,163 10,067 10,011
% Change (2) (2) (3) (4) (7) (14) (10) (1) (1)
Import-Badged Exclusives 5,295 5,618 5,904 6,127 6,463 6,544 6,510 6,748 6,996 7,016
Import-Only Duals 991 947 903 814 799 689 752 742 795 733
Imports Subtotal 6,286 6,565 6,807 6,941 7,262 7,233 7,262 7,490 7,791 7,749
% Change 4 4 2 5 0 0 3 4 (1)
Total New Light Vehicle Dealerships 22,177 22,200 22,089 21,761 21,461 20,453 18,607 17,653 17,858 17,760
% Change 0 (1) (1) (1) (5) (9) (5) 1 (1)
a
Does not add. Net Detroit 3-Badged adjusts for intercorporate duals. Note: Fitch estimates figures as of Dec. 31 of each year, though reported by Automotive News as
of Jan. 1 of the subsequent year.
Source: Automotive News Data Center, Fitch Ratings.
September 19, 2013

Corporates

FilmOn X, which provides a similar service. U.S. District Courts in both Washington D.C. and
California have granted the broadcasters injunction in their respective regions. The court
decisions are mixed and it remains to be seen whether Aereos/FilmOn Xs business model will
be ruled legal.
The Aereo/FilmOn X cases calls the retransmission consent model into question. If the case is
ultimately ruled in Aereos/FilmOn Xs favor, Fitch believes other pay-TV providers could leverage
the threat of offering a similar service to end or signifcantly reduce their retransmission payments.
A worst-case scenario for the broadcast networks would be cessation of retransmission payments
altogether, with pay-TV providers establishing similar models. Mitigants to this scenario include
any legal resolution likely being several years out, and uncertainty around the economic benefts
outside of larger cities.
Several broadcasters have made public comments that if Aereo/FilmOn X are found to be
legitimate services, they could potentially move their channels/content on to a cable network.
At a broadcast industry event, Chase Carey, President and COO of Twenty-First Century Fox,
stated that an option could be to convert the Fox network to a pay channel, which would be done
in collaboration with both [Foxs] content partners and affliates. Fitch notes that many of the
broadcast networks own and operate local TV broadcast stations in the large DMAs. There may
be risks to this strategy, as converting to a cable network could raise regulatory concern related
to a broadcasters spectrum, which is licensed by the FCC.
If Aereo/FilmOn X are successful in defending their business, local broadcast affliates are most
at risk. Local affliates depend on the network for prime time programming. Local broadcasters
would need to replace such programming in the event that broadcast networks choose to convert
to a cable network and end affliation with local broadcasters. The potential loss of retransmission
fees and increased programing costs would weaken credit profles.
AutoHop
AutoHop is a service available on Dish Networks Hopper DVRs that enables consumers to
easily and automatically skip commercials on recorded shows that are offered on Dishs Prime
Time Anytime recordings (i.e. all primetime shows from the four major broadcast networks).
Starting at 1 a.m. EST the day after the original primetime airing, a viewer can select the
commercial-free option at the beginning of viewing, and the service will automatically skip the
commercials without the viewer having to manually fast forward.
The Hopper service has survived a preliminary injunction motion brought by Fox Broadcasting
Company; Twentieth Century Fox Film Corp.; and Fox Television Holdings, Inc. (collectively
referred to as Fox), claiming among other things that the Hopper service constitutes copyright
infringement and breach of contract. Additionally, the Ninth U.S. Circuit Court of Appeals upheld
the lower courts decision to deny a preliminary injunction sought by Fox. Central to the appeals
courts decision was its determination that the recordings of Fox television shows through the
Hopper service were made by the user of the Hopper service (the DISH customer) and not by
DISH. This issue (who is making the copies of the programming) was previously considered
by the courts (Cartoon Network LP v. CSC Holdings, Inc., 2008) and it was determined that
Cablevisions customers made the copies to Cablevisions remote-storage DVR system and that
Cablevision did not directly infringe Cartoon Networks copyrights. Further, the appeals court
found that the copying of Fox programming by DISHs customers constitutes a legitimate fair use
of the copyrighted programming.
September 19, 2013

Corporates

Fitch believes the convenience afforded by the Hopper service will materially increase the rate of
commercial skipping. Should the service ultimately be found legal and not in violation of copyright
laws, Fitch believes other MVPDs could roll out similar services to remain competitive. In turn,
this will likely lead the broadcast networks to seek higher retransmission fees from DISH and
other MVPDs that offer similar services to offset the potential erosion of advertising revenues
related to ad-skipping.
Fitch does not expect the Hopper or other ad-skipping services offered by MVPDs will have
a material negative impact on television advertising spending over the near term. Hopper is
positioned as a premium service (Fitch would expect similar services offered by MVPDs would
also be offered as a premium service) and the incremental cost may be a hindrance to widespread
adoption. Fitch believes most viewers would rather be subject to advertising than face higher
payments for pay-television service. Further, a signifcant majority of television is watched live
and cannot utilize the ad-skipping service. Nielsen indicates an average person consumes four
hours 39 minutes of live television per day versus viewing 26 minutes of DVR playback per day.
However, Fitch does acknowledge a growing proportion of television viewing is time-shifted.
Current DVR penetration rates indicate that many households do not see the value of a DVR as
justifying the incremental cost. DVR penetration of television households stood at 46% of U.S.
pay-TV households as of the end of the frst quarter of 2013, marking a 400 basis point increase
from the year-earlier period.
Political
Local television-based political advertising has accelerated in recent years and reached
$2.7 billion in 2012, according to MAGNAGLOBAL. The spending cadence occurs in even
years and is caused by either presidential or nonpresidential elections. In presidential years,
all of the House, less than half of the governors, and one-third of the Senate are elected. In
nonpresidential years, all of the House, most of the governors, and one-third of the Senate are
elected. Spending is typically correlated with how contested a particular race is perceived to
be or the number of high-profle issue-related topics that are on the ballots. According to local
research advertising tracker Borrell Associates, broadcast television continues to capture more
than half of total political spend, although it is expected to cede some market share to online
and cable. The 2010 Supreme Court ruling in Citizens United v. Federal Election Committee
will likely result in elevated levels of political advertising through at least the medium term, as it
enables unlimited contributions to Super PACs, which are restricted from direct donations but
unconstrained in ad spending. The FCCs recent ruling that forces stations affliated with the top
four networks in the top 50 markets to publish their political ad sales online beginning with the
2012 election cycle (for smaller stations/markets compliance begins in 2014) could moderately
impede stations leverage in negotiations with political advertisers, but Fitch does not expect a
material credit impact.
Fitch notes that not all broadcast station groups beneft equally from political advertising, as
certain station owners are positioned in more swing states where there is higher spending. For
example, companies like CBS and Cox can typically take in more political ad dollars as they
operate in many swing states (e.g. Ohio, Pennsylvania and Florida), while Hearst Television not
only operates in swing states but also early primary states (Iowa, New Hampshire and South
Carolina). To the contrary, a company like Belo typically does not generate signifcant amounts
of political advertising since its main presence is in nonswing states (Texas, Arizona and
Washington). Fitch expects political spending to continue to generate volatility in broadcasters
performance. That said, the political effect is relatively predictable and less affected by secular
pressures.
Stations in Key
Political States
(As of Dec. 31, 2012)
Company
Early
Primary
States
a
Swing
States
b
Belo 1 2
CBS 6 4
Cox 3 5
Disney 2
Gannett 7 6
Hearst 6 7
News Corp. 5 4
Sinclair 10 17
Washington Post 2 2
a
Iowa, New Hampshire, South Carolina,
Florida, Nevada, Colorado, Minnesota,
Missouri.
b
Nevada, Colorado, Iowa,
Indiana, Ohio, New Hampshire,
Pennsylvania, Virginia, North Carolina,
Florida. Note: CW Network and MNT
channels are excluded from this analysis.
Source: Company filings, Company
websites, Fitch Ratings.
September 19, 2013

Corporates

TV Broadcast Affliate Outlook Stable
Operating results, which are tied to advertising, will track the sluggish macroeconomic
environment. FCF generation should remain solid given cost reductions taken during the
downturn. Audience fragmentation and alternative forms of media consumption (OTT, digital)
will moderately pressure audiences and ratings. However, Fitch does not expect substantial
revenue declines, given the ability to aggregate large audiences relative to other forms of media,
which can support pricing growth. The broadcast affliates are expected to continue to beneft
from growing high-margin retransmission revenue, though reverse compensation payments to
the networks will likely eat materially into this incremental revenue stream. Fitch believes there
is an overcapacity of premium-priced media outlets in most local markets. This imbalance will
continue to rationalize over the next several years, with dollars fowing out of these outlets and
toward emerging media. However, a share shift from print mediums to TV and healthy political
advertising will continue to offset this through the medium term. Fitch believes the lower rated
stations (The CW Television Network [CW] and My Network-affliated stations, among others)
that are unable to suffciently aggregate local market audiences will bear a disproportionate
share of the outfow. Fitch believes any material beneft of mobile TV is unlikely in the near term.
(30)
(15)
0
15
30
Real GDP Growth Total Advertising Broadcast TV
Broadcast TV Revenue Cyclicality
(%)
September 19, 2013

Corporates

U.S. Broadcast Advertising Revenue
($ Mil., As of May 2013) 0001 0102 0203 0304 0405 0506 0607 0708 0809 0910 1011 1112 1213 1314
Network Broadcast TV
(English-Language,
Excluding Olympics) 12,959.2 12,683.8 13,950.4 14,201.6 14,454.5 14,653.7 14,687.6 13,896.4 12,789.2 12,880.3 13,399.6 13,281.4 12,933.9 12,893.7
Annual Change (%) (1.5) (2.1) 10.0 1.8 1.8 1.4 0.2 (5.4) (8.0) 0.7 4.0 (0.9) (2.2) (0.8)
Network Broadcast TV
(Spanish-Language) 466.6 649.8 746.9 855.5 874.3 952.9 1,041.2 1,074.7 1,013.8 1,065.7 1,130.3 1,252.6 1,347.5 1,467.0
Annual Change (%) 18.2 39.3 14.9 14.5 2.2 9.0 9.3 3.2 (5.7) 5.1 6.1 6.4 7.6 8.9
National Cable TV 10,056.2 11,034.9 12,124.5 13,983.9 15,214.5 16,013.7 17,048.0 18,465.5 18,002.4 19,595.9 21,878.4 22,603.0 24,129.9 25,735.7
Annual Change (%) 3.1 9.7 9.9 15.3 8.8 5.3 6.5 8.3 (2.5) 8.9 11.6 3.4 4.9 6.7
National Syndication 2,266.7 1,605.6 1,888.9 2,219.4 2,172.2 1,983.3 1,975.8 1,983.3 1,802.2 1,824.2 1,926.6 1,942.0 2,032.0 2,073.9
Annual Change (%) 9.1 (29.2) 17.6 17.5 (2.1) (8.7) (0.4) 0.4 (9.1) 1.2 5.6 0.8 2.3 2.1
National TV
Excluding Olympics 25,748.7 25,974.1 28,710.6 31,260.5 32,715.6 33,603.6 34,752.6 35,419.9 33,607.5 35,366.1 38,334.9 39,202.9 40,503.4 42,170.3
Annual Change (%) 1.4 0.9 10.5 8.9 4.7 2.7 3.4 1.9 (5.1) 5.2 8.4 2.3 2.5 4.1
Network TV
(English-Language,
Including Olympics) 12,959.2 13,289.8 13,950.4 14,905.9 14,454.5 15,303.7 14,687.6 14,496.4 12,789.2 13,485.3 13,399.6 14,088.5 12,993.9 13,528.9
Annual Change (%) (7.1) 2.6 5.0 6.8 (3.0) 5.9 (4.0) (1.3) (11.8) 5.4 (0.6) 5.1 (6.7) 4.1
National TV
(Including Olympics) 25,748.7 26,580.2 28,710.6 31,964.7 32,715.6 34,253.6 34,752.6 36,019.9 33,607.5 35,971.1 38,334.0 39,835.9 40,503.4 42,805.5
Annual Change (%) (1.6) 3.2 8.0 11.3 2.3 4.7 1.5 3.6 (6.7) 7.0 6.6 3.9 0.8 5.7
Source: MAGNAGLOBAL.
September 19, 2013

Corporates

Broadcast Network TV
Subsector Overview
The broadcast network TV industry is dominated by large media conglomerates such as CBS
(CBS), Disney (ABC), NBC Universal, Inc. (NBCU) and Twenty-First Century Fox. Univision and
Time Warner (through its 50% ownership of CW; CBS owns the other half) also compete in this
space. Barriers to entry are signifcant, and regulation prohibits mergers among the top four
networks. The high degree of industry concentration has historically granted the networks strong
pricing power, as they have controlled ad inventory levels and have competed on quality and
differentiation of programming. Indirect competition has intensifed in recent years, with relentless
pressure from cable networks, online mediums and, more recently, over the top (OTT) providers
for viewers and/or ad dollars. The impact of time-shifting technologies (DVR) has already been
felt, and the change to C+3 ratings as the measurement standard has generally been neutral,
as the decline in viewership attributable to commercial viewing versus the actual show has been
offset by the increase in viewership due to the three-day playback period. OTT content has
quickly become popular with a large segment of viewers, and represents a source of additional
audience fragmentation. However, the broadcasters are owned by the same conglomerates that
own the TV studios, and Fitch expects these companies to protect their content and not allow
it to proliferate online without frst monetizing it through the networks and syndication streams.
Their size, scale, fnancial fexibility, relationships and marketing capabilities, combined with the
continued consumer demand for high-quality content, ensures that the network television model
will remain intact.
Network viewership continues to decline amid an expansion of alternatives. Despite this
dynamic, broadcast networks remain a formidable aggregator of mass audiences, and CPMs are
expected to continue to increase modestly for at least the next few years. Fitch therefore expects
stability over the medium term, while remaining cautious over the longer term. Fitch is generally
concerned with mediums that are dependent on price increases to compensate for deteriorating
core operating fundamentals and believes there is a point at which pricing increases become
unsustainable. These threats are incremental to the high degree of cyclicality; revenues can
fuctuate in the high single digits/low teens, and profts can vary at least two times that in a
downturn. Networks are typically low-margin vehicles and, therefore, can drop below breakeven
during a downturn in the creative or economic cycle.
Retransmission and Reverse Network Compensation
Retransmission consent was created by the 1992 Cable Television Consumer Protection and
Competition Act (The Cable Act), with the goal of ensuring that broadcast stations receive fair
compensation for the retransmission of their signals. The television and media landscape has
continued to evolve rapidly. However federal regulations have remained relatively stagnant in
the 21 years since the last amendment to the Cable Act. Of particular concern among industry
participants are the fees that broadcasters receive from MVPDs under the current retransmission
consent regime.
An MVPD needs a stations consent to carry its signal. Every three years, the station elects either
must-carry, where an MVPD is required to carry the station, without making a payment; or
retransmission consent, where the station and MVPD negotiate a carriage fee that the MVPD
will pay to broadcast the signal, and if an agreement is not reached, the station will not be
carried. Most stations elect retransmission consent.
Credit Strengths
Track record at developing,
acquiring, and marketing content
to aggregate large audiences.
One of few efficient alternatives to
reaching a mass audience.
Credit Concerns
High CPMs relative to other
comparable media.
Continued audience share loss to
cable networks.
OTT television and time-shifting
technologies.
September 19, 2013

Corporates

Early on, retransmission consent considerations rarely consisted of cash payments. Instead
most MVPDs provided networks with free advertising and carriage of affliated cable networks.
Material cash retransmission payments by cable and telecom carriers frst emerged in 2006.
Broadcasters recognized the retransmission consent payments as a way to establish a more
stable and diverse revenue base and to offset cyclical advertising revenues. CBS was the frst
network to push for and receive cash retransmission, given its lack of cable networks post the
split from Viacom.
Retransmission benefts the broadcasters, as it is contractual and provides upside to limited
advertising revenue growth. Despite fragmenting audiences, Fitch believes broadcasters will be
able to continue to negotiate moderate increases going forward, given the ability of broadcast
television to generate audiences that are large relative to other mediums. The per-subscriber
rates are negotiated privately between the station/station group and the MVPD. Stations that
generate larger audiences (mostly through a highly rated network affliation) will be able to
command higher retransmission payments. Retransmission has grown signifcantly in recent
years as stations multiyear carriage contracts come up for renewal and are renegotiated with
material cash payments. Few nonpay legacy contracts remain; thus future growth will come
largely from rate increases. This could be material for some networks over the next few years as
low retransmission contracts negotiated early in the cycle are reset to market rates. Longer term,
retransmission should rise in the low to midsingle digits.
Reverse compensation, in which the local television broadcast affliate pays the network for the
right to broadcast network programming, is emerging as a material source of revenue growth
among broadcast television networks. This compensation scheme represents a reversal of the
prior model, where the network paid the station an affliate fee as compensation for broadcasting
its signal. The idea is that the local broadcast affliates beneft from and sell advertising against
the content provided by the network, and should pay for its use. These payments offset a
material amount of the retransmission revenue; Fitch estimates it is approximately 40%50%,
and could grow to up to 50%60% over the next several years. Nonetheless, Fitch expects a
moderate net beneft to the television networks. The higher rated networks are able to negotiate
higher reverse compensation. In the event a retransmission agreement is not reached when the
previous agreement ends, the parties can choose to extend the existing agreement.
If an agreement cannot eventually be reached, the MVPD must stop offering the station.
Occasionally agreements are not reached and blackouts occur. Fitch believes blackouts have
a larger near-term negative impact on the broadcaster, due to lower ratings-driven advertising
revenue, and absence of retransmission payments. Longer term, MVPDs are more at risk, given
the potential for subscriber losses. In the event a reverse compensation agreement cannot be
reached, stations have the option of changing their affliations or becoming independent.
Disputes between broadcasters and MVPDs led to over 90 service interruptions during 2012,
marking a 78% increase relative to 2011, and have piqued regulatory interest. In March
2011, the FCC issued a Notice of Proposed Rulemaking (NPRM) on possible changes to
the retransmission rules, given the changes in the video programming marketplace that had
occurred since the Cable Act. The FCC reiterated its view that it does not have the authority
to require broadcast television stations to provide their signals to pay television providers or to
require binding arbitration. However, the agency is seeking to minimize disruptions to consumers
if retransmission agreements are not reached. The NPRM sought commentary on strengthening
the good faith negotiating standards, improving notifcation to customers in advance of potential
service disruptions and elimination of the FCC network nonduplication and syndicated exclusivity

September 19, 2013

Corporates

rules. The FCC has not yet taken further action. Fitch does not currently expect these proposals
to have a signifcant credit impact.
Further, in December 2011, lawmakers introduced The Next Generation Television Marketplace
Act H.R. 3675 and S. 2008 that proposes to eliminate must-carry, to remove the ability of
stations to negotiate for retransmission consent, and to scrap network nonduplication protections
and syndicated exclusivity requirements. As proposed, this legislation would certainly have a
signifcant negative impact on the broadcasters. The proposed legislation is obviously in its very
early stages and it remains to be seen how these proposals develop.
Upfront Market
Primetime advertising inventory is a fxed and scarce resource. To ration this limited supply of
ad space, networks established a mechanism to attempt to presell 70%80% of the available
spots to major advertisers. The networks beneft from the more effcient sales process and the
certainty of knowing the price and volume of sales for the upcoming season for the majority of
their inventory. The advertisers beneft from locking down placement at a set price near shows
that they expect to aggregate audiences to whom they want to expose their brand. Advertisers
also beneft from the fact that they receive rating guarantees from the TV networks protecting
them from ratings underperformance, but they are not obligated to pay more for audience
overdelivery. Advertisers also retain the right to cancel commitments by set dates (typically up
to 25% of commitments in the frst quarter and 50% in the second and third quarters), providing
additional fexibility. Fitch notes that the upfront advertising commitments secured by broadcast
and cable networks represent a reservation for advertising time and these commitments have
yet to be converted into actual revenue for the respective broadcast and cable networks.
Ad space that is not sold upfront is sold closer to air time in the scatter market. Due to a high
number of advertisers and a limited number of available primetime ad spots, over the past
decade, pricing in the scatter market has been higher than the upfront in most years.
The conclusions in the mainstream press regarding the success of the upfront often focus on
the overall dollar amount of upfront spending. It is not clear from an overall spending number
how to judge the success of the upfront and, ultimately, the health of the networks. Fitch does
not assign signifcant value to the overall upfront spending fgures. Fitch focuses on various
components when assessing the upfront including ratings, price (CPMs), inventory sellout (as a
percentage of total) and overall supply of ad space available, as well as competitive mediums
in the marketplace, ancillary offerings and branding efforts. Ratings are the most important
component for Fitch. They obviously represent the currency that most accurately demonstrates
the health of a media companys content creation process and ability to aggregate audiences in
initial and subsequent distribution windows. Ratings have been in steady decline, and there is
always a degree of volatility given the hit-driven nature of programming, but primetime network
Station Affiliates
Broadcast
Networks
Cable MSOs
Retransmission ($), Viewers
a
Viewers and Reverse
Compensation ($)
Prime-Time
Content
TV Broadcasting Retransmission/Reverse Compensation Structure
a
Includes primetime, syndicated and original (primarily local news) content. MSO Multiple-system operator.
September 19, 2013

Corporates

shows still generally have a wide enough reach to make networks valuable partners for mass-
market brand advertisers. In a fragmenting media landscape, low single-digit CPM growth for
networks may be sustainable, given that they still deliver a wide audience. Of the components,
the amount of inventory sold is the least concerning factor in evaluating the upfront.
Ad inventory is perishable, meaning that failure to sell it by the time it runs would obviously be a
negative, but the decision by a network not to sell inventory in the upfront does not necessarily
represent a concern (selling a high amount of inventory at a meaningful CPM discount would be
far more concerning). The structure of the advertising sales/purchase process is likely to evolve
over time in favor of advertisers, with space purchased on a rolling basis closer to a shows run
date, giving advertisers more fexibility at a similar to slightly higher price.
TV Broadcast Network Outlook Stable
Fitch believes 2014 will be characterized by low growth for the networks. Viewership will likely
continue to erode slowly, but relatively stable results at the 20132014 upfront (75%80%
inventory sellout and midsingle-digit CPM growth) provide evidence of the ongoing strength of
the model. The scatter market appears to be holding up, and will likely beneft from the 2014
winter Olympics. However, Fitch acknowledges the risk that scatter prices could be pressured
should the macroeconomic backdrop worsen substantially. An individual networks fortune will
also vary with the audience acceptance and ratings of the programming lineup. The aggregation
characteristics of broadcast networks relative to other mediums are likely to continue to support
stable or slight price increases for at least several years.
0
5
10
15
20
25
30
CPM Cost per thousand.
Source: Nielsen Media Research, Television Bureau of Advertising, February Each Year.
Network TV Primetime CPM Trends
($)
Upfront Estimates
($ Bil.) 20042005 20052006 20062007 20072008 20082009 20092010 20102011 20112012 20122013 20132014
NBC 2.8 1.9 1.6 1.7 1.9 1.5 1.6 1.7 1.8 2.0
ABC 1.6 2.0 2.1 2.3 2.5 2.1 2.2 2.4 2.4 2.2
CBS 2.5 2.4 2.3 2.2 2.5 2.1 2.5 2.7 2.7 2.7
FOX 1.6 1.6 1.7 2.0 2.0 1.7 1.9 2.0 2.0 1.8
Major Four Networks 8.4 7.9 7.7 8.0 8.9 7.5 8.2 8.8 8.8 8.7
CW
a
0.9 0.9 0.6 0.5 0.4 0.3 0.4 0.4 0.4 0.4
Major Five Networks 9.3 8.8 8.3 8.5 9.2 7.8 8.5 9.2 9.2 9.1
Cable Networks 6.2 6.5 6.5 7.0 7.7 6.6 7.9 9.5 9.7 9.8
a
Represents combined UPN and WB through the 20052006 season, and CW beginning in 20062007 season. Note: Figures were derived from different sources for
different networks and for different years, meaning that trends and totals could vary from actuals. In several cases, they represent averages of a variety of sources,
midpoints of ranges, or outright estimates by Fitch. Companies did not provide this information to Fitch.
Source: Cabletelevision Advertising Bureau, industry trade publications, Fitch Ratings estimates.
September 19, 2013

Corporates

TV Studios
Subsector Overview
TV production is dominated by six studios (Time Warner, Twenty-First Century Fox, Disney, Sony
Corporation, Universal and CBS). The studios develop the primetime network shows, as well as
frst-run syndication (talk shows, variety shows, game shows, etc.). For primetime programming,
the studio typically grants a limited number of rebroadcasts to the networks, then looks to recoup
much of its production costs through off-network and international syndications and home video.
Fitch expects the studios to continue to explore and experiment with OTT content, while not
harming their long-term franchise values. The TV studio business is typically characterized
by hit-driven volatility. Most TV shows are coproduced by several studios, which helps to limit
downside risk. Fitch believes barriers to entry are relatively high, as the established studios
are better positioned to sell/monetize content with their scale, marketing capabilities and sales
forces. Demand for high-quality content remains strong across all major end markets (broadcast,
cable networks and subscription video on demand). Large, well-capitalized content providers will
remain crucial to the industry.
Outlook Positive
As the creators and owners of content, Fitch expects TV studios to continue to beneft from
the proliferation of new distribution platforms and methods of consumption (smartphones,
tablets). These online aggregators have created a new distribution window for content that
has been previously monetized through network broadcast and syndication. Television studios
are expected to beneft from the increased demand for programming created by OTT service
providers and Fitch anticipates that these high-margin incremental revenue streams are
sustainable. The short-term and largely non-exclusive deals are designed to maximize the
studios fexibility and proftability without cannibalizing longer term syndication revenue. Fitch
recognizes that execution risk exists in terms of monetizing this demand while maintaining
longer term syndicated revenue streams, but actions taken by studios so far indicate that this is
at the front of their minds and they are remaining rational. This distribution window will also at
least partially offset the continued decline of the DVD market. A multitude of cable networks, as
well as VOD, are also strong sources of demand for syndicated studio content. Although OTT
and DVRs continue to pressure network primetime ratings, there are offsets for TV studios. In
addition to cost structures (talent) that can be scaled to the revenue potential over time, the
studios have the ability to embed shows with product placements to at least partially offset this
effect. The frst-run syndication market could experience some pricing pressures over the next
few years. The frst-run market should be less susceptible to VOD cannibalization, but increasing
entertainment alternatives will remain a risk.
Credit Strengths
Existing studio and
distribution infrastructure.
Limited number of
high-quality competitors.
Consistent level of demand from
TV networks.
Incremental demand from OTT
content aggregators.
Less exposed to
time-shifting technologies.
Credit Concerns
Highly cyclical, hit-driven business.
Dependent on unionized talent.
September 19, 2013

Corporates

105.13
79.59
55.46
0
25
50
75
100
125
Total Multichannel Subscribers VOD-Enabled Subscribers Total DVR Subscribers
VOD/DVR Penetration Forecast
(Mil.)
0.9 1.3
2.7
6.1
10.9
16.2
21.3
25.7
29.9
34.1
36.8
39.2
41.2
42.8
44.1
45.1
46.1
0
15
30
45
60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E2014E2015E2016E2017E
E Estimate.
DVR Penetration: Percent of U.S. TV Households
(%)
September 19, 2013

Corporates

On-Demand Deployment and Subscriber Estimates
(000) 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E
Total U.S. TV
Households 107,670 109,038 109,505 111,264 112,633 114,776 115,538 116,214 115,712 116,123 117,451 118,123 118,536 118,951 119,367 119,785 120,264
YOY Growth (%) 1.3 0.4 1.6 1.2 1.9 0.7 0.6 (0.4) 0.4 1.1 0.6 0.4 0.4 0.4 0.4 0.4
Total Traditional
Multichannel
Subscribers (excl.
OTT) 93,885 94,492 95,751 98,666 100,277 100,207 102,152 103,375 105,061 105,201 105,391 105,841 106,157 106,016 105,697 105,344 105,129
YOY Growth (%) 0.6 1.3 3.0 1.6 (0.1) 1.9 1.2 1.6 0.1 0.2 0.4 0.3 (0.1) (0.3) (0.3) (0.2)
% of TV Households 87.2 86.7 87.4 88.7 89.0 87.3 88.4 89.0 90.8 90.6 89.7 89.6 89.6 89.1 88.5 87.9 87.4
Total OTT Subscribers 2,034 3,061 3,863 5,048 6,481 8,166 10,257 12,897
Total Multichannel
Subscribers (incl.
OTT) 93,885 94,492 95,751 98,666

100,277

100,207

102,152

103,375

105,061

107,235

108,452

109,704 111,205 112,497 113,863 115,601 118,026
YOY Growth (%) 0.6 1.3 3.0 1.6 (0.1) 1.9 1.2 1.6 2.1 1.1 1.1 1.4 1.2 1.2 1.5 2.1
% of TV Households 87.2 86.7 87.4 88.7 89.0 87.3 88.4 89.0 90.8 92.3 92.3 92.9 93.8 94.6 95.4 96.5 98.1
VOD-Enabled
Subscribers 3,321 7,709 12,943 19,341 24,284 30,116 36,342 42,033 47,437 54,281 59,237 63,399 67,213 70,265 73,115 76,194 79,594
YOY Growth (%) 132.7 67.9 49.4 25.6 24.0 20.7 15.7 12.9 14.4 9.1 7.0 6.0 4.5 4.1 4.2 4.5
Penetration as a
% of Multichannel
Households 3.5 8.2 13.5 19.6 24.2 30.1 35.6 40.7 45.2 50.6 54.6 57.8 60.4 62.5 64.2 65.9 67.4
MSO DVR
Subscribers 620 1,018 2,212 5,498 10,643 16,750 22,826 28,191 32,979 38,337 42,126 45,261 47,909 50,031 51,837 53,388 54,907
YOY Growth (%) 64.1 117.3 148.6 93.6 57.4 36.3 23.5 17.0 15.9 9.9 7.4 5.9 4.4 3.6 3.0 2.8
% of Basic
Subscribers with
DVRs 0.7 1.1 2.3 5.6 10.6 16.8 22.6 27.4 31.5 36.4 40.0 42.8 45.1 47.2 49.0 50.7 52.2
Stand-Alone DVR
Subscribers 315 443 704 1,269 1,621 1,851 1,821 1,647 1,479 1,281 1,126 1043 953 853 753 653 553
YOY Growth (%) 40.6 58.9 80.3 27.7 14.2 (1.6) (9.6) (10.2) (13.4) (12.1) (7.4) (8.6) (10.5) (11.7) (13.3) (15.3)
Total DVR Subscribers 935 1,461 2,916 6,767 12,264 18,601 24,647 29,848 34,554 39,618 43,252 46,304 48,862 50,844 52,590 54,041 55,460
YOY Growth (%) 56.2 99.6 132.1 81.2 51.7 32.5 21.1 15.8 14.7 9.2 7.1 5.5 4.1 3.4 2.8 2.6
DVR Subscribers as
% of TV Households 0.9 1.3 2.7 6.1 10.9 16.2 21.3 25.7 29.9 34.1 36.8 39.2 41.2 42.8 44.1 45.1 46.1
Source: MAGNAGLOBAL, Company reports.
September 19, 2013

Corporates

Ad-Supported Cable Networks
Subsector Overview
Participants in the ad-supported cable network subsector include media conglomerates such
as Viacom (MTV, Nickelodeon, Comedy Central), Time Warner (CNN, TNT, TBS), Disney
(ESPN, A&E, Lifetime), NBCU (CNBC, MSNBC, USA), and Twenty-First Century Fox, Inc. (Fox
News, Fox Sports, FX), as well as Discovery, Comcast Corp., Scripps Networks Interactive,
AMC Networks, Hearst Corp., and others. This segment benefts from a dual revenue stream of
national advertising and carriage fees from the cable, telephone and satellite MVPDs, positioning
it as one of the industrys strongest subsectors. The diffculty in gaining carriage from MVPDs
provides a meaningful barrier to entry. Although there will likely be more affliate fee disputes, and
revenue growth may slow, Fitch expects carriage fees to remain fairly predictable and long term
in nature, giving visibility to any credit issues. Companies with compelling, audience-drawing
brands and large portfolios have more leverage in carriage fee negotiations.
While ratings will vary year to year, and each network will experience some volatility, as is common
with any hit-driven content, the majority of this variability should be confned to advertising. Cable
networks generate a smaller audience size relative to broadcast networks, instead relying on
delivering a niche demographic. The ability to target a focused audience has proven attractive
to advertisers, and cable networks have been steadily taking share from broadcast networks,
and narrowing the CPM gap, over the past 20 years. Indirect competition from OTT content and
the risk of cord-cutting are concerns, but should not be major issues over the medium term.
Fitch believes only a small portion of the population is at risk of cutting the cord. The networks
own the content and should be able to control the depth of digital material without affecting
their core businesses and carriage revenues. While piracy could be an issue, Fitch expects it
to be contained, given the continuity required of most TV programming. It would be detrimental
if networks lost the ability to aggregate an audience and, at the same time, could not monetize
emerging outlets. Channel proliferation and saturation could pose a risk to brand recognition,
as multiple channels have programming for the same niche, with some programming drifting
outside the boundaries of a networks initial mission.
Outlook Stable
Cable networks face rising production costs as they seek to differentiate themselves amid an
increasingly fragmented feld. Their ability to grow affliate revenue faster than these expenses is
becoming less certain as MVPDs, faced with additional costs (retransmission), digital alternatives
and a reduced ability to pass those increases on to customers, are becoming increasingly
resistant to higher affliate fees. While near-term growth is largely locked in and should remain
robust, Fitch expects affliate fee growth in the midsingle digits over the next few years. To
the extent that programming cost increases exceed this, modest margin pressure could result.
This risk is mitigated by the high-margin digital distribution deals for library content, as well as
the 35%-plus margins at cable networks. In general, cable remains a targeted medium with
signifcant reach, and should continue to gain share from broadcast, although the growth will
continue to decelerate due to inventory increases and share shift to alternative mediums. Fitch
does not expect cord-cutting to have a material impact on subscriber or ad revenue over the
medium term. The sale of content to digital aggregators will continue to drive revenue growth.
Cable networks that are largely buyers of syndicated content are likely to fare worse over the
longer term than those networks that air original programming, as the former are more at risk of
being disintermediated by OTT alternatives.
Credit Strengths
Efficiency associated with
broad reach.
Not dependent on
local advertising.
Lower cost per thousand (CPM)
than broadcast TV.
Global geographic diversity.
Valuable brands.
International growth opportunities.
Credit Concerns
Changes in media consumption
patterns, OTT, DVR, VOD, online.
Substitution risk posed by online
competitors and outlets.
Saturation of channels
and programming.
Escalating production costs.
September 19, 2013

Corporates

(25)
0
25
50
75
Real GDP Growth Total Advertising Cable TV
Note: In the early 1980s, cable network advertising growth exceeded 100% off a very small base. Shaded area
depicts periods of economic downturn.
Cable TV Advertising Revenue Cyclicality
(%)
Cable Network Revenue by Media Company
($ Bil.)
Company Disney Discovery
Twenty-First
Century Fox Time Warner Viacom
Rating/Outlook A/Stable BBB/Stable BBB+/Stable BBB+/Stable BBB+/Stable
Total Cable Revenue 13.6 4.2 9.9 13.0 8.6
Carriage Fees 9.8 2.2 N.A. 8.7 3.9
% of Total 72 52 67 46
Advertising 3.8 2.0 N.A. 4.3 4.7
% of Total 28 48 33 54
Other Businesses: Parks and Resorts
Pixar
Disney Studio
ABC
Consumer Products
TV Stations
20th Century
Direct Broadcast
Satellite TV
Sky Italia
TV Stations
Warner Bros.
HBO
Paramount
Consumer Prod.
N.A. Not available. Note: Cable network revenue only; excludes other businesses. Time Warner carriage fees include
subscription revenue from the premium channels HBO and Cinemax.
Source: Company filings, Fitch Ratings estimates.
0
25
50
75
100
Total Cable Total Broadcast
Cable Network Versus Broadcast Advertising
(%)
September 19, 2013

Corporates

Fitchs Unscientific Classification of Cable Networks
Company Discovery Disney NBCU
Twenty-First
Century Fox Time Warner Viacom Other
a
Rating/Outlook BBB/Stable A/Stable BBB+/Positive BBB+/Stable BBB+/Stable BBB+/Stable Various
First-Tier Channels
Unique brands; trend setters;
trusted sources; top choice to reach
targeted demographic.
Discovery, TLC ESPN, Disney
Channel
CNBC, MSNBC Fox News CNN, Cartoon
Network
Comedy Central,
MTV, Nickelodeon
E!, Food Network
Second-Tier Channels
Recognizable names; target
broader audiences; specific
programs have loyal fan base,
but viewers may be less loyal to
channels.
Animal Planet ABC Family,
A&E
b
, Lifetime
b
,
History
b
Bravo, USA FX, FSNs, Nat
Geo
TBS, TNT, tru TV BET, CMT, Spike,
VH1
AMC, Travel
Channel
Third-Tier Channels
Small audience; carriage likely due
to parent having leverage with
first-/second-tier channels.
Investigation
Discovery,
Science Channel,
OWN, The Hub
Soap Channel Oxygen, Syfy,
Weather Channel
c
Fuel TV, FS One Logo, TV Land HGTV, Cooking
Channel, Style
a
Other includes channels from Scripps (NR), Cablevision (BB/Negative), Comcast (BBB+/Positive) and Cox Enterprises (BBB+/Stable).
b
Disney owns 50% of A&E and
Lifetime.
c
NBCU owns 25% of Weather Channel. Note: The above chart excludes local sports channels offered by the MSOs; Time Warner excludes premium channels
HBO and Cinemax.
September 19, 2013

Corporates

Premium Cable
Subsector Overview
Premium cable networks provide premium content (i.e. new releases, original programming
and sports) that is not available on broadcast networks or basic cable. These channels are
not advertising supported, instead relying solely on affliate fees paid by MVPDs, which are
supported by additional fees collected from subscribers. The big players include Time Warner
(HBO, Cinemax), CBS (Showtime, The Movie Channel, Flix) and Starz. These networks are
material components of the conglomerates portfolios, generating approximately 10%15% of
overall revenue. There is signifcant competition among the premium networks, which attempt to
differentiate themselves increasingly via their respective slates of original programming. Original
content (series, sports, movies, miniseries) is a means of drawing viewers, and Fitch expects the
networks to continue to increase the level of investment in original programming. The output deals
with studios are also vital, as flm quality is a key driver of the networks ability to draw viewers
and maintain subscribers. Similar to the basic cable networks, Fitch believes the emergence of
OTT alternatives, saturation and similar genres are a risk to the premium channels. Barriers to
entry are fairly high, given the need for both a distribution agreement with a studio and carriage
agreements with MVPDs. A recent entrant into the market is EPIX, which is jointly owned by
Viacom, Lions Gate Entertainment Corp. (Lionsgate) and Metro-Goldwyn-Mayer, Inc. (MGM).
While the channel has built-in access to content via its owners, it has struggled to achieve
widespread linear distribution or a substantial subscriber base, although it has OTT distribution
via its Netfix deal.
Premium Cable Channels
Company Time Warner CBS Starz
Viacom/
MGM/Lionsgate
Premium Channels HBO
Cinemax
Showtime
The Movie Channel
Flix
Starz
Encore
EPIX
Subscribers
a
(Mil.) 41.0 76.0 56.0 (21.2 Starz;
34.8 Encore)
N.A.
2012 Subscriber Growth (%) 5.1 4.1 6.1 N.A.
Major Output Agreements Warner Bros.
20th Century
Fox (2022)
Universal (2022)
Summit
Entertainment (2017)
DreamWorks (2018)
The Weinstein Co.
(2015)
Walt Disney
b
(2015)
Sony (2021)
Anchor Bay
Entertainment (2015)
Paramount
MGM
Lionsgate
a
As of Dec. 31, 2012.
b
Agreement through 2015, after which Walt Disney has signed with Netflix. N.A. Not applicable.
Source: Company filings and press releases, Fitch Ratings.
Outlook Stable
Fitch sees incremental risk to the premium cable model (relative to basic cable) from OTT
alternatives, particularly in a weaker economic environment. These networks are subject to a
higher risk of cancellation, given the incremental monthly cost and the fact that cancellation does
not affect the basic bundle (cord shaving). Much of the flm content is unlikely to be a must
have in the face of the incremental cost, as it can be easily substituted (if not exactly replicated)
or, in the case of a specifc must see flm, rented or purchased. While subscriber performance
in the last downturn was better than Fitch had anticipated, the additional secular pressures from
OTT alternatives would likely lead to subscriber losses in another downturn. There are offsets
to these challenges, including the draw of original content, and authenticated TV Everywhere
online VOD offerings that complement a video subscription (e.g. HBO GO). While the domestic
market is already heavily penetrated by HBO, the most widely subscribed premium channel, in
Credit Strengths
New release films and quality
original programming an
audience draw.
Not dependent on advertising.
Global reach and international
growth opportunities.
High margins and operating
leverage associated with
subscriber growth.
Credit Concerns
Discretionary, end-user can cancel
subscription at any time.
Similarity to OTT alternatives
drives higher threat of cord cutting.
Reliant on studios for a significant
portion of content.
Impact of piracy on new
release viewership.
Saturation of channels.
September 19, 2013

Corporates

nearly 30% of all U.S. cable households, subscriber growth will come from international markets.
Programming costs are the premium networks largest expense item, and Fitch expects them to
continue to grow as the networks seek to draw audiences. The better positioned channels will
likely be able to offset these challenges with higher affliate fees, while the weaker ones will likely
experience margin pressure.
25
30
35
40
45
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Time Warner 10-K filings.
Domestic HBO/Cinemax Subscribers
(Mil.)

September 19, 2013

Corporates

Yellow Pages
Subsector Overview
Directories are a mature business, and penetration of the addressable market is quite high.
Fitch estimates that incumbent directory publishers AT&T Corp./Cerebus and Dex Media, Inc.
represent more than 70% of the directories market. However, like certain other media subsectors,
due to the nature of competition among players in the industry, this level of concentration does
not necessarily provide pricing stability. Based on the geographic nature of the business, key
direct competitors are the independent directory companies.
Incumbent publishers and independent directories have moved their listings online, and are
competing directly with other Internet search engines. The Internet and mobile device searches
have and will continue to pressure print volume and pricing, materially affecting the health of the
traditional print Yellow Pages business. While there is limited margin data on the online products,
Fitch does not believe the pricing power directories possess in print is portable to online outlets
due to inventory supply issues. Directory companies have been expanding their service offerings
to include marketing services such as website development and advertising placement within
the directorys print, online, mobile and search listings (including listings on competing search
engines). While the expansion of services can leverage the existing sales force, Fitch notes that
the marketing industry for small and midsize companies is highly competitive and fragmented.
Fitch does not believe that historically high margins could be supported by these new business
offerings.
Outlook Negative
Revenues have continued to decline in the mid-teens. However, cost controls have maintained
healthy EBITDA margins and FCF (albeit at lower levels). Incumbent publishers are expected
to continue to see erosion in the advertiser base and have diffculty offsetting volume declines
with price increases. The downturn likely affected the weakest local advertisers frst, driving
them out of directories starting in late 20072009, and these contracts have cycled through the
operating numbers. However, the remaining base of advertisers in most markets will have a
number of directory/online/cross-media options to choose from, and this direct and cross-media
competition will continue to pressure print directory revenues and plague local markets for years.
(30)
(15)
0
15
30
Real GDP Growth Total Advertising Yellow Pages
Yellow Pages Revenue Cyclicality
(%)
Credit Strengths
Targeted medium.
High recurring revenue.
Client, category and geographic
diversity.
High margins and FCF conversion.
Credit Concerns
Threat of online and wireless
substitution.
Declining print usage.
September 19, 2013

Corporates

Advertising Agencies
Subsector Overview
Fitch estimates the top six (soon to be fve) advertising agencies (Omnicom Group Inc.; WPP
plc; Publicis, Inc.; Interpublic Group of Companies, Inc.; Dentsu, Inc. and Havas SA) represent
more than 50% of industry revenues. There are a limited number of ad agency networks with
global scale, and competition is based on quality and service differentiation rather than price.
The industry is cyclical due to the discretionary nature of campaign budgets. However, agencies
are able to minimize margin contraction through economic downturns and major client losses by
scaling costs. Negative features include an inherent cyclicality that is highly correlated with the
overall economic cycle, frequent M&A activity and large swings in working capital. Over the last
several years the industry has also taken steps to reduce its exposure to advertising cyclicality
by moving away from traditional advertising and expanding into marketing services, which has
historically been more stable than advertising spending. Currently marketing services account
for around 50% of revenues.
Fitch believes that the secular shift in media consumption will be a long-term positive for the
industry. Advertising agencies, particularly the global holding companies (GHC), are key to
advertisers ability to communicate effectively and attract consumers to their products. For
large multinational advertisers, GHCs continue to be heavily involved with developing creative
campaigns, marketing strategies and advertising/marketing capital allocations. GHCs assist
large advertisers in navigating through the digital, social and mobile advertising mediums.
This shift in media content consumption requires the advertising agencies to invest in their
products, services and databases (either organically or through acquisition) in order to maintain
relevancy and competitiveness. All the GHCs have materially built up their digital products and
services. Fitch recognizes that the Omnicom and Publicis merger may cause several of the other
GHCs to consider larger acquisitions or merge with other GHCs.
Incentive-based compensation structures have also been a growing topic of discussion among
advertisers and agencies. Fitch believes it has been more of an experiment to date and does not
account for a meaningful portion of any agencys overall revenue. Fitch believes more contracts
will likely incorporate some incentive components. However, they will likely remain small due to
challenges in identifying objective ROI measures.
Other major trends in the advertising business will include the continued threat of disintermediation
and advertiser consolidation.
Outlook Stable
The industry is benefting from positive secular trends related to the fragmenting media
landscape and international growth, in part refecting a growing middle class in a number of
emerging markets. Both of these dynamics are expected to drive revenue growth and M&A
activity. Fitch expects ad agencies to grow in line with or slightly exceed MAGNAGLOBALs most
recent global advertising forecast of 2.3% and 2.9% growth in 2014 and 2015 (excluding political
and Olympic). Fitch expects continued bolt-on acquisition activity to enhance digital offerings
and to expand internationally.
Credit Strengths
Continued shift toward national
advertising.
Growth in emerging markets.
Scalability of cost structure/
resiliency of margins.
Credit Concerns
Advertiser consolidation.
Potential for acquisition activity.
Potential threat of
disintermediation.
September 19, 2013

Corporates

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
WPP 8.0 15.0 (3.4) (5.9) 0.7 4.0 5.5 5.4 5.0 5.5 (8.1) 5.3 5.3 2.9
Publicis 12.0 15.0 3.1 (3.9) 2.0 4.0 6.8 5.6 3.1 3.8 (6.5) 8.3 5.7 2.9
Omnicom 14.0 16.6 8.5 2.8 4.6 6.7 7.3 7.6 7.1 2.9 (8.7) 6.4 6.1 4.0
IPG 9.0 9.5 (2.9) (7.7) (3.6) 1.2 (0.7) 1.0 3.8 3.8 (10.8 7.0 6.1 0.7
(20)
(10)
0
10
20
Ad Agencies Organic Growth Trend
(%)
2006 2007 2008 2009 2010 2011 2012
WPP 16.3 16.8 16.2 13.5 14.6 15.7 16.3
Publicis 18.7 19.0 18.9 17.1 17.8 17.8 18.0
Omnicom 15.3 15.3 15.2 14.7 14.2 14.6 15.2
IPG 6.4 9.6 12.6 10.7 11.5 12.7 12.5
0
4
8
12
16
20
Ad Agencies EBITDA Margins
(Constant Currency)
(%)

September 19, 2013

Corporates

Commercial Printing
Subsector Overview
The commercial printing industry is highly competitive with signifcant excess and underutilized
capacity. Due to low barriers to entry, the industry is highly fragmented, with thousands of local
or niche market operators, despite recent consolidation activity. The proliferation in digital media
(including tablet and mobile devices) has curbed the demand for printed services and intensifed
focus on print cost.
The U.S. print market (which accounts for nearly half of the global printing market) is estimated
at approximately $150 billion. Fitch estimates that R.R. Donnelley & Sons Co., the largest
commercial printer, captures approximately 7% of the market. The downturn has exacerbated
already-heightened pricing pressure and Fitch does not expect any material improvement in the
pricing environment. Fitch believes the industry will continue to see volume declines, particularly
in books, directories, magazines, educational materials, catalogs, fnancial printing, variable
printing and commercial printing subsegments as the adoption of tablets and mobile devices
grows. Fitch does not expect organic growth in any of these subsegments.
However, Fitch believes companies with fnancial fexibility, access to capital and the ability to
provide a wide range of print-related, logistical and document management services will be
able to take share from weaker players and acquire competitors at attractive values, better
positioning themselves for the longer term. Fitch believes the number of commercial printers
will continue to decline, as weaker printers exit the market and stronger and better capitalized
printers continue to consolidate.
Outlook Negative
Due to the proliferation of tablets and digital media, coupled with industry overcapacity,
fragmentation and pricing pressure, Fitch believes the industry will not likely keep pace with GDP
growth. However, larger, better capitalized operators (the predominant issuers of debt) should
be able to capture share from smaller printers. Fitch believes that printers with a large footprint
can continue to streamline/realign their cost structures (plant brown-outs or complete shutdown)
to maintain margin levels.
(30)
(20)
(10)
0
10
20
Real GDP Growth Printing (Value of Shipments)
Note: 19781986 data does not include SICs added in 1987. Shaded area depicts periods of economic downturn.
Source: BEA, Fitch Ratings.
Commercial Printing Growth
(%)
Credit Strengths
Very large industry.
Fragmented nature allows for
potential share shifts toward
players with diversity of product
offerings and service capabilities.
Credit Concerns
Substitution risk from
advancements in
digital technology.
Potential for below-GDP
industry growth.
Secular weakness in books,
directories, magazine, educational
materials, financial, variable and
commercial print.
Industry overcapacity,
pricing pressures.
Consolidation of printers,
customers and suppliers.
September 19, 2013

Corporates

Consumer Books
Subsector Overview
U.S. consumer trade-book publishing represents an estimated $15 billion market, according to
the Association of American Publishers (AAP). Fitch estimates the top 10 publishers account
for more than 50% of consumer book sales. Bertelsmann/Pearson (Penguin Random House),
News Corp. (HarperCollins), CBS (Simon & Schuster), Macmillan and Lagardere (which
owns the Hachette Book Group and former Time Warner Book Group, among other assets)
are major players in this space. Barriers to entry exist in the form of scale, marketing budgets
and relationships with distributors and authors, although these barriers have been lowered
moderately with the rapid growth of e-books. According to the AAP, e-book sales now comprise
20% of total industry sales, having risen by nearly 44% in 2012. E-book sales are more proftable,
given the lack of printing and shipping fees, lower author royalties and the absence of costs
associated with returned inventory. The DOJs price fxing and anticompetitive practices lawsuit
severely curtailed the pricing power of those publishers named in the suit, which have all since
settled (Hachette Book Group, HarperCollins, Simon & Schuster, Macmillan and Penguin). The
settlement prevents these publishers from setting the retail price of e-books for two years and
prohibits most favored nation (MFN) clauses. This has enabled Amazon to lower prices yet
again.
The sector faces modest secular pressures. Fitch expects overall core demand to fade gradually,
as the backlist will be negatively affected by the proliferation of entertainment and leisure
alternatives available for teenagers (TV, video games and the Internet), offset somewhat by
demand from retiring baby boomers. The front list is expected to retain its volatile, hit-driven
nature, while neither demand nor pricing are expected to be materially correlated with cyclical
fuctuations. Margins (7%12%) are lower than for other media subsegments and are likely to
exhibit some compression (several hundred basis points) during cyclical downturns.
Outlook Stable
In the intermediate term, core demand and pricing should remain relatively stable. However,
book publishing is expected to be a low-growth industry, absent consistent major hits. E-books
and international expansion could provide some growth opportunities over the longer term. Fitch
does not expect publishers e-revenues, post-DOJ settlement, to be substantially lower than the
net received (after commission revenues) in the agency model. Because there are few pure-play
book publishers, the hit-driven nature of the business is not a particular concern. However, given
its low growth prospects, it is possible that there could be spinoffs or further consolidation within
the industry going forward.
(10)
(5)
0
5
10
15
20
Real GDP Growth Consumer Books
Source: Association of American Publishers, BEA, Fitch Ratings.
Consumer Book Sales Growth
(%)
Credit Strengths
Relatively resilient to economic
downturns.
Increased use of technology to
forecast demand and better utilize
marketing budgets.
Potential growth and margin
opportunities associated with
electronic delivery.
Credit Concerns
Deteriorating fundamentals
(less reading among younger
demographics) and
escalating costs.
Hit-driven nature.
Limitations on agency
model/prices.
Slow growth could lead to
corporate actions in the space
(consolidation, deconsolidation,
partnerships, etc.).
September 19, 2013

Corporates

Educational Publishing
Subsector Overview
K-12 Educational Publishers
Houghton Miffin Harcourt Publishers Inc. (B+/Outlook Stable), Pearson PLC and McGraw Hill
Global Education (B+/Outlook Stable), continue to dominate the K-12 educational publishing
business, with more than 80% of the market. Fitch does not expect further consolidation in the
near term. Economies of scale and signifcant barriers to entry exist in the form of long-term
relationships with a complicated web of state- and school district-level decision makers.
The upfront costs to develop and market an educational program and the uncertainty surrounding
program acceptance also help create barriers to entry. Long term, Fitch believes that the
adoption of digital text books will minimize this barrier. Fitch expects digital text book adoption
at the K-12 education level to be slow due to the required funding for tablets and the supporting
infrastructure. Fitch expects affuent districts to be early adopters.
State budgets, school enrollment, educational funding, state adoption schedules and legislation
infuence the prospects for the industry. Publishers compete primarily via quality and product
differentiation by customizing their offerings through interaction with state/local approval
committees. Due to these factors and heavy industry concentration, Fitch does not expect
players to compete on price during downturns. Revenues can be volatile, refecting variability
within the adoption cycle and state budget constraints. In addition, working-capital swings can be
material, and certain costs and inventory investments can be scaled back in the face of a weak
adoption market.
Higher Education Publishers
In higher education, Pearson, McGraw-Hill Education and Cengage Learning (which fled for
Chapter 11 bankruptcy in July 2013) are the major publishers with around 75% of the market.
Fitch believes the used and rental textbook market makes up approximately 35% of textbooks
sold. College enrollment levels have grown nearly every year for the last 50 years, according to
the National Center for Education Statistics. However, in the last two years college enrollments
have declined after strong growth throughout most of the last decade, weighing on publishers
revenues. Fitch believes that there could be some near-term pressures due to continued
enrollment declines at for-proft universities and the potential for federal student aid cuts. Over
the long term, Fitch believes enrollment will continue to grow in the low single digits, as higher
education degrees continue to be a necessity for many employers.
Publishers have continued to demonstrate pricing power over their products. Fitch believes
this will continue, albeit at lower levels than in previous years. Textbook pricing increases are
expected to slow down materially and will likely be in the low single digits. Fitch believes revenue
growth will primarily come from the continued growth in volume of digital solution products sold
and pricing increases associated with these digital products as they gain traction with professors.
The transition from physical education materials to digital products has been advancing at a
materially faster pace relative to K-12 education levels. Fitch believes that the transition will lead
to a net beneft for publishers over time. Publishers will have the opportunity to disintermediate
used/rental textbook sellers, recapturing market share from these segments. Fitch expects
print/digital margins to remain roughly the same, as both the discount of the digital textbook
(relative to the print textbook) and the investments made in the interactive user experience offset
Credit Strengths
Healthy industry structure.
Long-term enrollment growth.
Credit Concerns
Historical volatility of revenue.
Potential pullback of spending due
to state budget constraints and
delay of federal funding.
Piracy concerns.
Potential effect of used/rental
textbooks on pricing for books in
higher education.
September 19, 2013

Corporates

the elimination of the costs associated with manufacturing, warehousing and shipping printed
textbooks.
Fitch recognizes the risk of digital piracy, given the age demographic of higher education, the
current data speeds available on the Internet and the relative ease of fnding a pirated text
book. A mitigant to piracy risk is the development and selling of digital education solutions. The
digital solutions incorporate homework and other supplemental materials that require a users
authentication. The companys strategy is to sell these products to the professors, who then
adopt this as required material for the course. It will be vital for the industry to steer professors
toward these digital solutions rather than a stand-alone e-book in order to defend against piracy.
Fitch believes that this strategy is sound and can be successful. Fitch notes that adoption will be
slow due to the slow-to-change nature of many professors. Fitch notes that the digital conversion
introduces the potential threat of new competitors that would not have entered the traditional
physical textbook market. Fitch believes that quality content will continue to be a driver in
textbook selection by professors, who are the main decision makers when it comes to textbook
selection. Large publishers are expected to continue to invest in the quality and the interactive
capabilities of digital textbooks in order to defend market share. In addition, it will be important for
publishers to focus on technology/methods of defending against a proliferation of piracy.
Outlook Negative
The negative outlook for the sector refects Fitchs cautious view on the risk of federal education
cuts and the recovery in state and local budgets. For K-12 publishers, the adoption of common
core standards for the 2014/2015 school year is expected to lead to positive momentum starting
in 2014. Educational material purchases may continue to be deferred, but Fitch believes that, at
some point, textbooks and related materials need to be updated or replaced. Fitch believes the
situation is predominantly cyclical and should rebound with the economy, though will lag behind
as state budget recoveries tend to trail the overall economy.
The outlook also refects the risk of reductions to the federal education budget and supporting
programs (i.e. student loans) triggered by the across-the-board federal budget cuts
(sequestration). Cuts to federal student aid may make it diffcult for students to attend higher
education institutions, leading to declines in enrollment, which will impact new textbooks and
digital solution sales. In addition, piracy, the used/rental market and potential for increased
competition are all threats that remain as the industry transitions to a more digital platform.
(20)
(10)
0
10
20
Real GDP Growth College Elementary High School
Source: Association of American Publishers, BEA, Fitch Ratings.
Educational Publishing Sales Growth
(%)
September 19, 2013

Corporates

Movie Exhibitors
Subsector Overview
Fitch estimates that Regal Entertainment Group, AMC Entertainment, Inc. and Cinemark USA,
Inc. represent approximately half of movie tickets sold in the U.S. However, like newspapers,
there are limited benefts to industry concentration. The industry is highly susceptible to top-line
volatility and has limited control over its core revenue stream since theater operators are reliant
on the movie studios for the quality, timing and quantity of movie releases. Additionally, while
there are limited opportunities for differentiation (beyond location and securing flm titles), Fitch
characterizes the level of direct competition to be relatively low as operators have historically not
competed on price (exhibitors have generally raised prices during the past 15 years and through
the downturns). Indirect competition is more intense, as distribution channels such as premium
VOD (PVOD), VOD and the Internet improve, distribution windows collapse, piracy continues to
plague content owners, and other entertainment alternatives vie for consumers time and
disposable income. However, movie-going remains one of the most popular and affordable
forms of entertainment compared with most sporting events, live shows, amusement parks,
casinos and other out-of-home alternatives. Please refer to the Exclusive Preview: Fitchs 2013
Movie Exhibitor Outlook and Analysis special report dated April 12, 2013 for more industry
analysis.
Digital Cinema Implementation Partners LLC
The movie exhibition industry is in the process of transitioning into digital cinema, replacing the
use of celluloid 35mm flm and eliminating the cost of producing and transporting movie flm
reels. According to Regal, 85% of the industry is digital, from an equipment perspective. The
studios have not defnitively stated when they will stop producing 35mm celluloid flms, but Fitch
believes studios could go all digital in 2014.
In March 2007, Digital Cinema Implementation Partners, LLC (DCIP), a joint venture owned
by AMC, Cinemark and Regal, was formed to plan and implement the deployment of digital
technology to theaters. That plan included procuring equipment, arranging fnancing and
negotiating usage agreements with studios and other content providers. DCIP purchased and
Credit Strengths
Relatively inexpensive
entertainment alternative.
Continues to be a profitable
marketing window for studios.
Credit Concerns
Limited control over quality or
quantity of film product.
High fixed costs.
Increasing competition from at-
home entertainment.
Collapsing distribution windows.
Piracy.
Exhibitor Comp Sheet
AMC Regal Cinemark (Worldwide)
(As of June 30, 2013) 3/31/11 3/29/12 12/31/12 LTM 2010 2011 2012 LTM 2010 2011 2012 LTM
Operating Data
Theaters (No.) 360 346 344 343 539 527 540 577 430 456 465 504
Screens (No.) 5,128 5,034 4,988 4,937 6,698 6,614 6,880 7,343 4,945 5,152 5,240 5,794
Screens Per Theater (No.) 14.2 14.5 14.5 14.4 12.4 12.6 12.7 12.7 11.5 11.3 11.3 11.5
Attendance (000) 196,996 199,884 199,034 198,016 224,300 211,900 216,400 220,300 241,200 247,375 263,723 264,151
Ticket Price ($) 8.71 8.89 8.99 9.15 8.72 8.70 8.90 8.91 5.83 5.95 5.99 6.07
Financial Highlights:
Total Revenue ($ Mil.) 2,451 2,601 2,654 2,684 2,808 2,682 2,824 2,901 2,141 2,280 2,474 2,519
Revenue Growth (%) 1.4 6.1 10.8 3.9 (3.0) (4.5) 5.3 4.9 8.3 6.5 8.5 4.8
EBITDA ($ Mil.) 251 321 395 391 456 448 544 544 457 489 561 559
EBITDA Margin (%) 10.2 12.3 14.9 14.6 16.2 16.7 19.3 18.7 21.3 21.4 22.7 22.2
FCF (Minus Dividends, $ Mil.) (37) 58 46 67 (166) 136 (30) 23 24 111 78 19
Total Debt ($ Mil.) 2,378
a
2,209 2,201 2,100 2,073 2,016 1,995 2,314 1,673 1,713 1,914 2,056
Gross Leverage (x) 9.5 6.9 5.6 5.4 4.6 4.5 3.7 4.3 3.7 3.5 3.4 3.7
Gross Adjusted Leverage (x) 6.8 5.9 5.6 5.2 5.3 5.1 4.5 5.8 5.2 5.1 4.8 4.0
Interest Coverage (x) 1.7 1.7 2.5 2.7 3.1 3.0 4.0 4.0 4.1 4.0 4.5 4.0
FCF/Debt (%) (1.6) 2.6 2.1 3.2 (8.0) 6.7 (1.5) 1.0 1.4 6.5 4.1 4.0
a
Includes debt held at AMC Entertainment Holdings, Inc. that was paid off in FY 2012.
Source: Company filings, Fitch.
September 19, 2013

Corporates

owns all assets (including the equipment) and agreements (studio, maintenance and exhibitor).
The studios compensate DCIP for the use of its equipment through payment of virtual print fees
(VPFs). VPFs are estimated to range between $950 and $1,250, while the estimated cost per
35mm flm is estimated to be approximately $2,000 for the studios. To date, all of the major
studios (The Walt Disney Company, Lions Gate Entertainment Corp., Paramount Pictures Corp.,
Sony Pictures, Twentieth Century Fox, Warner Bros. and Universal) have agreed to provide
digital prints of flms and pay VPFs. The movie exhibitors would be responsible for both nominal
equipment leasing fees, installation costs, ongoing maintenance costs which are estimated to
be an additional $1,500$2,000 per screen per year and replacement projectors (according
to the Digital Cinema Report).
Cumulatively between March 2010 and March 2011, DCIP raised $880 million in fnancing. The
fnancing included commitments of $665 million in senior bank debt, $135 million in additional
junior capital and $80 million in equity, which included contributed equipment, from the member
circuits. The funding is intended to be nonrecourse to the three founding members.
Fitch notes that smaller theater chains may have diffculty in securing digital print fees from
studios and may be unable to obtain fnancing to fund their digital rollout. If this were to occur, it
may trigger a period of theater rationalization, as these smaller theaters are forced to either sell
to the larger chains or close down.
Digital Cinema Implementation Partners LLC Structure (DCIP)
Equipment Manufacturers
Investors/Lenders
Studios
(Lionsgate,
Paramount, Sony
Pictures, Twentieth
Century Fox, Walt
Disney, Warner
Bros., Universal)
Digital Cinema
Implementation
Partners LLC
Movie Exhibitors
(AMC, Regal,
Cinemark US)
Equipment
Purchase Price
and Fees
User Agreements
Capital
Financing
Payments
"Virtual Print Fees"
and Commitment
to Distribute Digital
Cost Savings and
Operational
Efficiencies
Top 10 Movies of 2011
($ Mil.)
Rank Movie Title
Total
Gross
1 Harry Potter and the
Deathly Hallows Part 2
381.0
2 Transformers:
Dark of the Moon
352.4
3 The Twilight Saga:
Breaking Dawn Part 1
281.3
4 The Hangover Part II 254.5
5 Pirates of the Caribbean:
On Stranger Tides
241.1
6 Fast Five 209.8
7 Mission: Impossible
Ghost Protocol
209.4
8 Cars 2 191.4
9 Sherlock Holmes: A Game
of Shadows
186.8
10 Thor 181.0
Total 2,488.7
% Change vs 2010 (20.3)
Source: Box Office Mojo.
($ Mil.)
Rank Movie Title
Total
Gross
1 Marvel's The Avengers 623.4
2 The Dark Knight Rises 448.1
3 The Hunger Games 408.0
4 Skyfall 304.4
5 The Hobbit 303.0
6 Twilight:
Breaking Dawn Part 2
292.3
7 The Amazing Spider Man 262.0
8 Brave 237.3
9 Ted 218.8
10 Madagascar 3:
Europe's Most Wanted
216.4
Total 3,313.7
% Change vs 2011 33.2
($ Mil., YTD June 30, 2013)
Rank Movie Title
Total
Gross
1 Iron Man 3 405.4
2 Man of Steel 248.7
3 Oz The Great and Powerful 234.7
4 Fast & Furious 6 233.3
5 Star Trek Into Darkness 220.5
6 The Croods 184.4
7 Monsters University 171.0
8 The Great Gatsby 142.0
9 Identity Thief 134.5
10 World War Z 123.7
Total 2,098.2
% Change vs 2012 FY (36.7)
September 19, 2013

Corporates

Shortening Distribution Window
In an effort to combat declining DVD sales, studios have been experimenting with the flm
distribution window in order to maximize sales over the life of a flm. Fitch believes movie
exhibition will continue to be a key promotion window for the movie studios biggest and most
proftable releases. Therefore, Fitch does not believe a drastic change to the exhibition window
to be likely. However, there is no question that the movie exhibition window length has shortened
for the major studio releases.
According to the National Association of Theatre Owners (NATO), the average flm release
window continues to trend downward. The theatrical release window is generally anywhere from
three to six months but as the graph below depicts, the average has dropped to four months from
roughly 5.5 months in 2000.
0
40
80
120
160
200
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: NATO: The National Association of Theatre Owners.
Average Release Window for Major Studios
(Days)
One distribution change that has been experimented with is a premium VOD window that would
allow movies to be shown on VOD while they are still in theaters. The movie exhibitors strongly
opposed such actions by the studios and even threatened not to show a premium VOD
experimental movie in their theaters. Fitch believes a premium VOD offering that maintains at
least a 90-day exclusivity window for theaters would be suffcient, given that at least 95% of
theatrical receipts are collected by that time. The most notable controversy stemmed from Tower
Heist when the exhibitors threatened not to show the movie in theaters if the studios followed
through with their plan to offer the move via PVOD to select markets three weeks after its
theatrical release. Universal Studios conceded and decided not to go forward with its accelerated
PVOD timetable.
Since the Tower Heist controversy, there has been minimal PVOD experimentation. The PVOD
window remains a threat to the exhibitors but Fitch does not believe it is likely to occur on a
widespread basis. The movie exhibition industry has demonstrated it maintains some leverage in
its negotiations with the studios. In addition, Fitch believes Universals decision to delay the VOD
release of its flm demonstrates the studios commitment to maintaining the exhibition window.
Cinema Advertising Continues to Gain Traction
Fitch believes cinema advertising has gained traction over the past few years due to the increase
in digital technology and nonskip aspect and measurability of cinema advertising. Despite the
high CPM price point, Fitch believes advertisers are getting more comfortable with cinema
advertising placements. The advertising benefts include targeted, engaged audiences that are
Film Release Windows
Distribution
When Window
Begins (After
Initial Release)
Theater
Premium VOD (If Any) 23 months
Home Entertainment
(Both Physical and
Electronic)
a
37 months
(average ~4
months)
Premium TV
(HBO, Showtime, EPIX,
Starz)
915 months
Network TV 2530 months
a
Pay-per-view/VOD release is
simultaneous, or up to two months after
sales/physical rental occurs. VOD Video
on demand. Note: Not every film follows
the same pattern of release schedules.
September 19, 2013

Corporates

easily measurable with no viewer option to skip through the ads. The digital technology allows
greater fexibility to distribute content to specifc theaters, which allows for increased targeting to
a specifc region or flm rating category.
National Cinemedia, Inc. (NCM), which makes up more than half of the U.S. cinema advertising
industry, reported advertising growth of 6.0% in 2012, driven mostly by increased attendance.
Outlook Stable
Fitchs stable outlook for the industry refects Fitchs expectation that full-year 2013 box offce
revenue will fnish roughly fat and that full-year 2014 box offce revenues will likely be fat to up
in the low single digits. Fitch expects attendance to be fat to slightly down in 2014 with modest
increases in ticket prices due to additional capacity of 3D-capable screens and the premium
pricing charged for 3D flms and premium seating options. The flm slate for the remainder of
2013 includes Thor: The Dark World, The Hunger Games: Catching Fire and The Hobbit:
The Desolation of Smaug. The 2014 flm slate includes movies from highly successful franchises
such as The Hunger Games, The Hobbit, X-Men Spider-Man, Transformers, 300 and
Fast & Furious. The large operators maintain high levels of debt. The signifcant degree of
operating leverage means that cash fow can be meaningfully affected by moderate top-line
declines. These factors and fnancial policy decisions will remain the main drivers of credit quality
over the longer term.
(30)
(15)
0
15
30
Regal AMC Cinemark US
(%)
Quarterly Admissions Revenue Growth Rates
Note: 2013 growth rates are adjusted for acquisitions (AMC acquisition of Rave theaters; Regal acquisition of Great
Escape and Hollywood Theatres; Cinemark acquisition of Rave theaters). If pro forma growth was not given, Fitch
estimated using admission revenue per screen growth.
(20)
(10)
0
10
20
0.0
2.5
5.0
7.5
10.0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Ticket Price Attendance Growth
($)
Average Ticket Price and Attendance Growth
(%)
September 19, 2013

Corporates

Movie Studios and Distributors
Subsector Overview
The flm industry is characterized by meaningful volatility of revenue and proft due to its hit-driven
nature. While there are pure-play studios like Lionsgate, MGM, Dreamworks Animation SKG
and Summit Entertainment, LLC, the largest movie studios are housed within conglomerates
(Time Warner, Disney, GE, Sony, Twenty-First Century Fox, Viacom and CBS). Each entity has
different disclosures for their movie studios, and therefore direct comparisons are diffcult. There
are meaningful barriers to entry in the form of access to talent, distribution networks, capital and
fnancing, among others. The high industry concentration leads to limited direct competition, as
demonstrated by the fact that large releases are typically staggered and studios do not compete
on price. Indirect competition is more intense as home entertainment alternatives continue
to proliferate. While the flm studio business is volatile, it is generally uncorrelated with the
macroeconomic environment, and quality of flm product is the main driver of attendance and
revenue. Major studios distribute their own flms, as well as those of third parties, for which they
receive fees as a percentage of gross revenue.
Home entertainment revenues account for approximately 30% of total studio revenues. These
cash fows can often bring a flm near or into positive cash fow, as most flms generate a loss
during the theatrical window. The growth of digital distribution (up $1.1 billion, or 28% in 2012)
has alleviated prior concerns about the continued decline of the DVD market (down $1.1 billion,
or 8% in 2011). OTT VOD platforms and digital rental and sales are expected to have a positive
effect on the studios fnancial profles, as the proliferation of alternative distribution platforms
will drive an overall increase in demand for studio-produced content, more than offsetting any
reduced demand from any one channel. Further, digital rentals and sales are multiple times more
proftable than physical. Studios control the content and can decide where and when it will be
shown. Fitch expects the studios to remain rational and not distribute their content to the degree
that its value or monetization potential is diluted. Revenues associated with online distribution
(rental or sale) are lower, but more proftable, than physical.
Piracy is a larger concern to Fitch. Piracy continues to signifcantly pressure the home
entertainment market, eating into studios revenue, proftability and cash fows. It is not expected
to be a major issue for the theatrical window as quality and destination present some barriers.
However, Fitch believes those issues are less critical when consumers are purchasing or renting
a DVD. Download time is no longer an issue on streaming sites. Recent Congressional efforts to
stem piracy on international websites (The Stop Online Piracy Act [SOPA] and the Protect IP Act
[PIPA]) were abandoned after public backlash and potential censorship concerns. Fitch believes
studios will have to continue to re-evaluate their theatrical business models and existing revenue
sharing and talent agreements in an effort to make the window more proftable. Over the last fve
years, several studios have taken aggressive actions to improve their cost structures by
collapsing subsidiary studios, closing independent studios and reducing the size of the flm slate.
Most labor categories (actors, writers and directors) are unionized, but unions for these
companies are generally less of a concern than for other media subsectors like newspapers.
Credit Concerns
Historical volatility of piracy.
Cyclical hit-driven business.
Decline of DVD sales, but digital
distribution a major mitigant.
Credit Strengths
Significant barriers to entry.
Relative control over
distribution windows.
Digital distribution a new
profitable window.
Filmed Entertainment
Revenue Breakdown
(As of Dec. 31, 2012)
Source (%) Issues
Theatrical 35 Low Risk
TV License
Fees
20 Low Risk
DVD
(Sales and
Rental)
30 Mature Market; Weak
Economic Environment;
Shift to Digital; Piracy
Digital 15 Lower Revenue, Higher
Margin; Piracy
Total 100
Note: DVD figures include Blu-ray.
Home Entertainment
Delivery Methods
($ Bil., As of 1Q13)
FY12
YoY
Change
(%) 1Q13
YoY
Change
(%)
Sell-Thru
Packaged
Goods (DVDs
and Blu-ray)
a
8.5 (5) 2.1 2
Rental
(Excluding
VOD) 4.4 (12) 1.0 (12)
Total Physical
Revenue 12.9 (8) 3.1 (3)
Electronic
Sell-Thru 0.8 35 0.2 52
VOD 2.0 11 0.6 16
Subscription
Streaming 2.3 46 0.7 29
Total Digital
Revenue 5.1 28 1.6 26
Total
Revenues 18.0 0 4.7 5
a
Fitch estimates that Blu-ray accounted for
approx. $2.5 billion to $3.0 billion of sell-
thru packaged goods sales in 2012.
Source: DEG, Fitch Ratings.
September 19, 2013

Corporates

Film Financing
Film studios enter into co-fnancing arrangements as a way to reduce risk and lower costs. The
hit-driven nature of the business means a studio can produce several money-losing flms in a
given year, leading to highly volatile profts and cash fow and low margins. Studios use co-
fnancing agreements to transfer a portion of their risk and costs to a third party.
In recent years, studios responded to declines in DVD sales by shrinking flm slates, focusing
on larger tent pole flms and expanding the international appeal of their flms, all of which imply
higher budgets and more risk, which drives a greater need for co-producers. The downside for
the studios is that in the case of successful flms, which can involve flm rights for decades and
signifcant merchandise sales, potentially outsized profts have to be shared with the co-fnancer.
Fitch believes the risk-mitigation more than offsets the lower upside and views flm fnancing as
a positive for the studio business model.
The industry has increasingly turned to slate fnancing arrangements in recent years. In these
arrangements, a studio partners with an investor or group of investors who provide a signifcant
amount of capital, often in the hundreds of millions of dollars, to produce a portfolio of flms.
Bank consortiums have provided debt fnancing to studios. However, private equity and hedge
funds generally prefer equity fnancing, given the potential for higher returns and the value of
retaining proportional flm rights ownership. The studios prefer equity fnancing that does not
lever the volatile business. Other sources of fnancing include soft money, such as tax shelters,
labor and production credits, subsidies, co-production arrangements and international market
presales.
Groups of hedge funds and private equity funds that have formed studios to invest with the big
conglomerate-owned studios include Relativity Media (partners with Sony and Universal) and
Legendary Pictures (partners with Warner Bros.; Universal Studios starting in 2014).
Outlook Stable
While individual studios can fuctuate within the top six in any given year, material changes
to market share over the long term are unlikely due to the fnite universe of participants. Fitch
expects the studios to maintain smaller flm slates and continue to focus more on tent pole
titles, characters and stories that can generate sequels and be leveraged into other licensing
and ancillary outlets to reduce risk and maximize proftability. Co-fnancing deals have returned,
with major studios co-producing large flms and partnering with equity- and debt-backed funds to
provide a portion of the production costs. Fitch does not expect piracy to increase substantially
from current levels. Despite the volatile revenue streams, Fitch expects the studios to remain
proftable through reduced expenses and slate management.
September 19, 2013

Corporates

0
400
800
1,200
1,600
2,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Digital Entertainment Group.
DVD Unit Shipments
(Mil. Units)
(20)
(10)
0
10
20
Real GDP Growth Domestic Box Office Growth
Home Entertainment Rental and Sell-Through
Source: Box Office Mojo, DEG: The Digital Entertainment Group, BEA.
Domestic Filmed Entertainment Revenue
(%)
September 19, 2013

Corporates

Music
Subsector Overview
The three largest players in the roughly $17 billion recorded music industry are Universal, Sony
and Warner Music Group (WMG), which together account for more than 75% of worldwide
recorded music sales and approximately 85% of the U.S. market. EMI was the fourth-ranked
major player until Sony acquired EMIs publishing business for $2.2 billion in June 2012 and
Universal acquired the recording business in September 2012 (Universal was required to divest
some of the EMI assets for regulatory purposes).
These players operate in both music industry subsegments: recorded music (revenue from
sale of recorded music in physical and digital formats and streaming royalties) and publishing
(revenue from royalties or fees received for use of owned composition). Industry concentration
allows for relatively low supplier power (keeping costs to sign new artists down) and general
pricing stability, but piracy has granted buyers signifcant power and dramatically affected sales
volumes.
The recorded music subsegment continues to undergo signifcant structural changes as
participants evolve their strategies and cost structures to adapt to rapidly evolving music
consumption patterns. According to the Recording Industry Association of America (RIAA), in
2012, digital sales roughly offset the declines in physical sales, making it the second consecutive
year that the industry showed signs of stabilization. Digital sales, which now account for roughly
60% of the industrys revenue, are beneftting from subscription services such as Spotify, Internet
radio services such as Pandora, digital retailers iTunes and Google Play, and cloud services
such as iCloud/iTunes Match. The International Federation of the Phonographic Industry (IFPI)
estimates that in 2012, worldwide, there were 20 million paying subscribers to music subscription
services, an increase of 44% from 2011.
While piracy remains a key threat to the overall industry, there has been some progress made
in terms of education and regulation across the globe. In the U.S., the Center of Copyright
Information (CCI) was formed to educate users about copyright infringement and to implement
some mitigation measures, such as the slowing of broadband connections. CCI is backed by
fve of the largest Internet Service Providers in the U.S. and the major producers and distributors
of music, movies and TV shows. IFPI estimates that roughly one-third of Internet users globally
still regularly access unlicensed sites. Radio broadcasting has historically been viewed as a
promotional vehicle for record labels and their artists, but that view could be changing. In 2012,
for the frst time in the industry, a radio broadcaster (Clear Channel) agreed to pay royalties
to a music record label company (Big Machine) for songs played on over-the-air broadcasts.
The record labels concession was reduced royalties it would receive on digital streaming. The
reduced fees associated with digital streaming may beneft Clear Channel over the long term.
While Fitch does not expect many more deals over the near term, should this one-off deal prove
benefcial, it could set a precedent for Clear Channel and other radio broadcasters.
Fitch believes fragmentation in the artist landscape makes the major labels traditional marketing
services still relevant, as they have the global infrastructure in place to reach radio, legitimate
retail (physical and digital) and video outlets by effcient, high-quality means to a targeted mass
market. Ancillary revenue opportunities exist through the expansion into artist/management
relationships (touring, merchandising, acting, sponsorships and other outlets that artists have
been able to access as the awareness of their music continues to grow). While music recording
has a degree of volatility due to its hit-driven nature and is facing secular issues, it is not an
Credit Strengths
Concentrated market share.
Diversified catalogs (genre and
geographic).
Flexible cost structure.
Credit Concerns
Material decline in physical
unit sales.
Piracy.
Acquisition risk, including
the fragmented artist agent/
management sector.
Reliance on iTunes as major
digital distributor.
September 19, 2013

Corporates

economically cyclical industry, as individuals typically do not spend enough of their discretionary
income on music to scale back purchases in a downturn.
Outlook Stable
Physical volumes will continue to decrease, while pricing should be relatively resilient. Increases
in digital sales and the growth in revenues related to expanded rights contracts (360 Deals) and
digital music services (Spotify, Pandora and cloud services) will offset some, if not most, of the
decline in physical revenues and lead to revenue growth for the labels. Companies should be
able to continue to scale their cost structures to help prevent severe margin contraction.
(30)
(15)
0
15
30
Real GDP Growth Music Sales
Source: Recording Industry Association of America, Bureau of Economic Activity, Fitch.
Music Industry Sales Growth
(%)
September 19, 2013

Corporates

Professional Publishing
Subsector Overview
According to PricewaterhouseCoopers, in 2012 business information comprised an approximately
$47 billion dollar market in North America. Fitch believes players in this sector (including Thomson
Reuters Corp. [TRI], Bloomberg LP, Reed Elsevier PLC, Wolters Kluwer NV, Dun & Bradstreet
Corp., McGraw Hill Financial, Pearson, Dow Jones [owned by News Corp.] and Verisk Analytics),
will continue to beneft from the trend of companies outsourcing certain types of services, the
need for robust databases and supporting analytics and advancements in technology to deliver
information. Players are also focused on delivery in a variety of formats to different platforms
(e.g. online and mobile). By offering products and services that enhance productivity and result
in a competitive advantage for clients, players aim to be at the center of their customers daily
activities, thereby reducing the likelihood that clients would lower spending in a downturn or
switch to a competitor. Fitch expects larger players to continue to acquire smaller companies and
build out their databases, analytics and product offerings. Professional publishing companies
typically beneft from high margins and relatively high conversion of EBITDA to FCF and are
typically conservatively capitalized, affording them the capacity to withstand a downturn.
Outlook Stable
The industry grew modestly in 2012, approximately 4%, with all categories contributing to growth.
Fitch believes this subsector is in a position to grow at or beyond GDP growth over the longer
term. Fitch expects continued growth in 2013 and 2014. Fitch acknowledges that costs are not
very scalable, meaning that companies that endure heavy revenue declines will see even deeper
pressure on EBITDA (TRIs integration of Reuters provided an opportunity to address fxed costs
and maintain strong margins in 2009 despite revenue pressures). The contractual nature of the
industry can provide lead time for management to make cost cutting and capital deployment
decisions in anticipation of declining revenues. Most of the fnancial information companies have
engaged in aggressive restructuring to contain fxed costs through the downturn and should
deliver solid EBITDA growth as revenues grow. Shareholder-friendly activity could remain a risk
in the sector. However, much of this activity can be accommodated without negatively affecting
credit fundamentals (primarily capped at FCF and limited debt-funded activity).

Credit Strengths
Continued shift toward national
advertising.
Growth in emerging markets.
Scalability of cost structure/
resiliency of margins.
Credit Concerns
Advertiser consolidation.
Potential for acquisition activity.
Potential threat of
disintermediation.
Business Information Market by Component North America
Forecast 20132017
($ Mil.) 2008 2009 2010 2011 2012E 2013 2014 2015 2016 2017 CAGR
Financial 17,645.0 15,520.0 16,362.0 17,400.0 18,116.0 18,788.0 19,444.0 20,323.0 21,293.0 22,342.0 4.3%
% Change (12.0) 5.4 6.3 4.1 3.7 3.5 4.5 4.8 4.9
Marketing 13,253.0 11,945.0 12,312.0 12,834.0 13,269.0 13,677.0 14,118.0 14,666.0 15,272.0 15,983.0 3.8%
% Change (9.9) 3.1 4.2 3.4 3.1 3.2 3.9 4.1 4.7
Industry 15,501.0 13,895.0 14,319.0 15,073.0 15,669.0 16,208.0 16,681.0 17,390.0 18,173.0 18,962.0 3.9%
% Change (10.4) 3.1 5.3 4.0 3.4 2.9 4.3 4.5 4.3
Total 46,399.0 41,360.0 42,993.0 45,307.0 47,054.0 48,673.0 50,243.0 52,379.0 54,738.0 57,287.0 4.0%
% Change (10.9) 3.9 5.4 3.9 3.4 3.2 4.3 4.5 4.7
E Estimated. Note: At average 2012 exchange rates.
Sources: PwC Global Entertainment and Media Outlook: 20132017, www.pwc.com/outlook.
September 19, 2013

Corporates

Satellite Radio
Subsector Overview
The satellite radio subsector was reshaped by the July 2008 formation of Sirius XM Radio Inc.
(not rated by Fitch). The company offers more than 300 channels and exclusive content from
high-profle celebrities, with limited advertising. Sirius XM is the only major player in its core
subscription audio domain, though there is meaningful indirect competition in adjacent arenas
(Internet, terrestrial, HD radio and other entertainment alternatives). Subscriber growth stalled
during the downturn, but has since reaccelerated, and the company has nearly 25 million
subscribers. This subscriber base represents substantial scale. Further, demand appears to
be less elastic than Fitch had previously expected, as the 12% subscription fee increase (to
$14.49/month) implemented in January 2012, has not at this point raised churn. That said, the
realistic overall size of the market for its services is unclear. In essence, Fitch believes the
subscription fee will cause it to remain a niche product. The business is cyclical, and economic
downturn pressure on consumer discretionary spending and lower automotive volumes could
weigh on subscriber growth. Cyclicality aside, expiration of factory-installed/OEM-paid trial
subscriptions and saturation of the addressable market could pressure subscriber growth, even
under improving economic conditions. Sirius XM is also burdened with high fxed costs, driven by
substantial programming expenses and royalty payments to publishers and artists/record labels.
However, programming costs have declined as contracts are renewed at lower rates post the
Sirius-XM merger. Subscriber acquisition costs have declined amid technology improvements
and modest declines in OEM subsidies. Additionally, there is positive operating leverage amid
subscriber growth.
Outlook Stable
Fitch believes Sirius XM has a loyal core audience, given the subscription fee amid the plethora
of free alternatives and the stability in churn post price increase. Fitch believes low to midsingle
digit subscriber growth could be achievable over the next few years, absent an economic
downturn. However, Fitch believes there is a limited incremental addressable market, given the
proliferation of free and paid alternative sources of entertainment and the fact that subscriber
growth will slow over the next few years. Digital new entrants are intensifying competitive
pressures, and the expansion of Internet radio into cars will be a source of pressure. Increased
OEM penetration and free trials in used vehicles could provide some upside.
(10)
0
10
20
30
Note: XM and Sirius subscribers combined pre merger.
Satellite Radio Subscriber Growth
(Quarter-over-Quarter % Change)

Credit Strengths
Dominant share of core industry.
Limited competition for key
programming partners.
Large subscriber base.
Credit Concerns
Heavy indirect competition.
High fixed-cost structure.
Reliance on key talent.
September 19, 2013

Corporates

Theme Parks
Subsector Overview
The U.S. theme and amusement park industry is dominated by several key participants including
The Walt Disney Company; Six Flags Inc.; Cedar Fair, L.P.; Universal Studios, Inc. (Comcast
Corp.) and SeaWorld Parks & Entertainment. Theme parks are generally divided into two
categories: regional parks and destination parks. Regional theme parks (Six Flags, Cedar Fair)
rely on the middle- to lower income consumer, with patrons primarily driving to its properties,
unlike a multiday stay at a destination park such as Disneys or Universals parks.
There are relatively high barriers to entry, and each park typically dominates its market area. Six
Flags estimates it would cost $300 million$500 million and take a minimum of two years to build
a regional theme park similar to Six Flags; due to the amount of real estate needed and time/cost
to construct a theme park.
This limited direct competition in theme parks local markets is generally the source of high
prices and high proft margins. Fitch recognizes that other recreational activities (e.g. movies,
sporting events, video games and restaurants) provide meaningful indirect competition for
theme parks, which can be exacerbated by the parks high prices, particularly during periods of
economic stress. Regional operators have attempted to increase their parks value propositions
by focusing on the sale of season passes. An increased mix of season-pass attendees leads to
lower admission revenue per guest since attendees are in the money after only a few visits.
At the same time, attendees are likely to go more often leading to attendance growth, which
provides operators with the opportunity to sell more high-margin concession products (see
recent trend of Cedar Fair and Six Flags on page 114).
Theme parks are highly seasonal, with the vast majority of park attendance (sometimes more
than 80%) occurring in the second and third calendar quarters of each year.
Although the major players enjoy some geographic diversity, all parks are exposed to downturns
in discretionary consumer spending. In the event of a downturn, Fitch would expect industry
attendance to be pressured 5%10% cumulatively. In addition, Fitch would expect pricing to
decline, and EBITDA would likely be down more than 2x the percentage decline in revenue.
Given the industrys solid margins (high-20% to mid-30% range) and low-maintenance capital
expenditures (approximately 5% of revenue), theme parks do not typically drop below EBITDA-
less-maintenance-capital-expenditures breakeven in a downturn. While recognizing that
companies real estate holdings may be relatively illiquid under certain circumstances, Fitch
believes these holdings provide some cushion for creditors, due to their separability from the
portfolio.
Outlook Stable
The Themed Entertainment Association (TEA) reported 2012 attendance up 3.6% for the top
20 theme parks in North America. The key industry participants have reported revenue growth
in the low to midsingle digits though June 2013, driven mostly by per capita increases and, to a
lesser extent, attendance. Fitch expects increased per capita spending due to operators having
reduced the amount of discounting and promotions used to attract attendance post-recession
Fitch also expects modest attendance gains as operators continue to market the seasonal pass
value proposition.
Credit Strengths
Barriers to entry.
Solid margins and low-
maintenance capital expenditures.
Tangible assets.
Credit Concerns
Cyclical nature.
Seasonality-driven
working-capital swings.
Concession and energy
cost inflation.
High fixed-cost base.
September 19, 2013

Corporates

Fitch believes that operators would return to heavy discounting and promotions in the event
of another recession. In addition, operations can be negatively affected by several factors
inherent in the theme parks business that are generally out of managements direct control:
namely, weather, energy prices and virus/illness outbreaks. Future safety problems could affect
attendance or bring about enhanced regulatory scrutiny and incremental costs.
(15)
(10)
(5)
0
5
10
15
2005 2006 2007 2008 2009 2010 2011 2012
Six Flags Cedar Fair Disney (Domestic) SeaWorld
Note: Disney has a 9/30 FYE. Cedar Fair 2006 and 2007 growth rates are calculated on a same-store basis due to
acquisition of Paramount Parks. Disney 2005 revenue growth is a Fitch estimate.
Theme Park Revenue Per Capita Growth
(%)
(15)
(10)
(5)
0
5
10
2005 2006 2007 2008 2009 2010 2011 2012
acquisition of Paramount Parks.
Theme Park Attendance Growth
(%)
Theme Park Attendance Growth
(%)
(10)
(5)
0
5
10
15
2005 2006 2007 2008 2009 2010 2011 2012
Theme Park Total Revenue Growth
(%)
September 19, 2013

Corporates

Trade Shows
Subsector Overview
Trade show organizers include Reed Exhibitions, Advanstar, dmg :: events, Emerald Expositions
(formerly Nielsen Expositions), Hanley Wood and Hall-Erickson, which Fitch estimates together
represent about 25%35% of the top 200 shows (in number and square footage) in the U.S.
Barriers to entry and differentiation exist in the form of venue, service contractor and vendor
relationships; attendee lists; and brand awareness. Trade shows compete within specifc sector
categories.
Trade show performance is correlated with the health of the economy, as attendance is
typically viewed to be a corporate discretionary expense item that can easily be curtailed or
eliminated in a downturn. According to Tradeshow Week, in the early 2000s downturn, net
square feet, exhibiting frms and professional attendance declined approximately 7%, 5% and
9%, cumulatively. Between 2008 and 2009, attendance was down a cumulative 13% and square
footage declined by 14%. Attendance and square footage have been recovering over the last
few years, with attendance up in the low to midsingle digits.
Over the longer term, Fitch acknowledges that even with technological advancements such as
webinars, virtual tradeshows and social media, it is diffcult to replicate the experience of face-to-
face business interaction, meaning trade shows are less exposed to secular threats than certain
other media subsectors. The use of social media before, during and after an event is becoming
increasingly common. This provides branding for the trade show and exhibitors. In addition,
social media fosters greater communication and continued connection between attendees and
exhibitors.
Outlook Stable
Net square footage stabilized and attendance grew in the low single digits in 2012. Fitch believes
that the trade show industry will continue to see modest growth in 2013 and 2014. Given the
fragile recovery, exhibitors are expected to continue to be cautious with exhibition budgets.
(15)
(10)
(5)
0
5
10
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Net Square Feet Professional Attendance
Note: Represents the average annual growth of at least the 120 largest U.S. tradeshows.
Source: Show Management Organizations, Red 7 Media Research & Consulting (surveys of leading convention and
tradeshow producers).
Tradeshow Average Annual Growth by Component
(%)

Credit Strengths
Established brands
and audiences.
Limited threat of digital substitutes.
Credit Concerns
Cyclicality of square footage,
exhibiting firms and
professional attendance.
Discretionary corporate
expense item.
Fragmentation, limited barriers to
entry and risk of oversupply.
September 19, 2013

Corporates

Video Gaming
Subsector Overview
The video gaming industry, whether social, mobile or console gaming, is largely hit-driven and
competitive. While console gaming maintains a large portion of the overall gaming industry,
there has been a marked shift to online and mobile gaming, largely driven by the heavy
adoption of smartphones and tablets, the increasing popularity of social networking and the
free or low-cost offering of online games. Physical hardware and software gaming is roughly
an $18 billion industry, which is a decline from $22 billion in 2011, according to CEA, driven by
aging game consoles and the growth in mobile gaming. The console industry is dominated by
Microsofts Xbox, Sonys PlayStation and Nintendos Wii. Gaming consoles have branched out
from traditional gaming and now also allow users to stream video from YouTube, Netfix and
other streaming apps. The more hit-driven software industry is more competitive and includes
developers Activision Blizzard and Electronic Arts (EA).
Over the past few years, gaming investment/acquisitions have focused on games and gaming
platforms that are accessible online, on mobile devices and through social networking sites.
Social network and mobile gaming are typically free to play and developers rely on mobile
advertising and the purchasing of virtual currency or items as their main sources of revenue.
Outlook Stable
Traditional video gaming will continue to be a signifcant part of the overall gaming segment. In
2014, the sector is expected to beneft from the introduction of next-generation game consoles
by Microsoft and Sony. Long term, Fitch believes that traditional video gaming is a mature market
with industry revenues fuctuating with console introductions and high-profle software releases.
New console editions with increased graphics, and eventually cloud-based gaming, will offset
some of the secular declines.
The major growth in the subsector will be driven by the continued emergence of mobile and social
network gaming. Consumers are expected to continue to gravitate to these forms of games due
to the low cost and change of consumer behavior to seek out a quick form of entertainment with
the click of a mobile phone app. Acquisition and investment activity in the space will continue to
be competitive as many companies have their focus on online/social/mobile gaming, including
traditional gaming developers, pure-play emerging gaming developers and well-capitalized
media conglomerates.
(50)
(25)
0
25
50
75
100
Real GDP Growth Software Hardware
Source: Consumer Electronics Association Market Research.
Video Game Sales Growth
(%)
Credit Strengths
Increasing acceptance/
demand across age and other
demographics.
Attracts a somewhat
elusive audience.
Provides opportunities to leverage
existing intellectual property (IP)
or develop new IP that can be
leveraged into other
media segments.
Potential fit with entertainment
conglomerates core
competencies.
Credit Concerns
Growing investments in hit games
and platforms will heighten risk
associated with hit-driven nature.
Escalating costs of development.
Potential acquisition activity.

September 19, 2013


Key Credit Trends and Issues
Fundamental Analysis and Comparison ................................................................. 117
Liquidity .................................................................................................................. 119
Short-Term Ratings/CP Backup .............................................................................. 122
Pensions ................................................................................................................. 124
Regulation .............................................................................................................. 126
Tax and Accounting ................................................................................................ 138
Event Risk .............................................................................................................. 141
Corporate Governance ........................................................................................... 144
Unions .................................................................................................................... 145
Parent and Subsidiary Rating Linkage ................................................................... 147
Leases/Adjusted Leverage ..................................................................................... 149
Equity Credit for Hybrids and Other Capital Securities........................................... 150
M&A and LBO Risk ................................................................................................. 151
Historical Defaults................................................................................................... 157
Debt Exchanges ..................................................................................................... 161
Recovery and Notching .......................................................................................... 163
Covenants .............................................................................................................. 167
117 Key Credit Trends and Issues
September 19, 2013

Corporates

Fundamental Analysis and Comparison
Fitchs corporate ratings make use of both qualitative and quantitative analyses to assess the
business and fnancial risks of fxed-income issuers and of their individual debt issues. An Issuer
Default Rating (IDR) is an assessment of the issuers relative vulnerability to default on fnancial
obligations and is intended to be comparable across industry groups and countries. Ratings
of individual debt issues incorporate additional information on priority of payment and likely
recovery in the event of default and can be above, below or equal to the IDR. (Please see the
Recovery Ratings and Notching section of this report.)
Fitchs analysis typically covers at least three years of operating history and fnancial data, as
well as Fitchs forecast of future performance. These are used in a comparative analysis, through
which Fitch reviews the strength of an issuers business and fnancial risk profle relative to that
of others in its industry and/or rating category peer group. The weighting between qualitative
and quantitative factors varies between entities in a sector as well as over time. As a general
guideline, where one factor is signifcantly weaker than others, this weakest element tends to
attract a greater weight in the analysis. For more details, please refer to the Corporate Rating
Methodology criteria report, dated August 2013.
Qualitative factors considered by Fitch include the following:
Industry Risk For individual issuers, Fitch looks at the industry fundamentals (decline/
growth, highly competitive/few competitors, capital intensive, cyclical/volatile, high/low
barriers to entry, national/international competition).
Operating Environment Fitch analyzes the risks and opportunities in the environment
resulting from social, demographic, regulatory and technological changes. Key issues
include geographic diversifcation, industry expansion/consolidation, competitive position
and industry life cycle. In rating cyclical companies, Fitch analyzes credit-protection
measures and proftability through the cycle to identify an issuers equilibrium or midcycle
rating.
Company Profle Several factors determine an issuers ability to withstand competitive
pressures, including its position in key markets, its level of product dominance and its
ability to infuence price. Size may be a factor if it confers major advantages in terms
of operating effciency, economies of scale, fnancial fexibility and competitive position.
However, size may not always support higher ratings.
Management Strategy and Corporate Governance Fitchs consideration of management
strategy focuses on operating strategy, risk tolerance, fnancial policies and corporate
governance (see the Corporate Governance section of this report for more information).
Corporate goals are evaluated, focusing upon two main factors: strategy and track record.
Key factors considered are growth strategies, the mix of debt and equity in funding growth,
the issuers ability to support higher levels of debt, and the strategic ft of new assets.
Financial performance over time provides a useful measure of managements ability to
execute its operational and fnancial strategies.
Group Structure Fitch also considers the relationship between parent companies
and their subsidiaries in assigning IDRs and debt issue ratings. In most cases, separate
issuers of debt within a corporate group are typically assigned separate (though potentially
identical) IDRs (see the Parent and Subsidiary Rating Linkage section of this report for
more information).
Fitchs fnancial analysis emphasizes cash fow measures of earnings, coverage and leverage.
Sustainability of cash fow from operations provides an issuer with both internal debt servicing
September 19, 2013

Corporates

resources and a stronger likelihood of achieving and retaining access to external sources of
funding. Quantitative factors considered by Fitch include the following:
Cash Flow and Earnings Key elements in determining an issuers overall fnancial
health are cash fow and profts, which affect the maintenance of operating facilities,
internal growth and expansion, access to capital, and the ability to withstand downturns
in the business environment. Fitchs analysis focuses on the stability of earnings and
continuing cash fows from the issuers major business lines. Sustainable operating cash
fow supports the issuers ability to service debt and fnance its operations and capital
expansion without reliance on external funding.
Capital Structure Fitch analyzes capital structure to determine an issuers level of
dependence on external fnancing. Hybrid fnancial instruments are also factored into the
capital structure. (See the Equity Credit for Hybrids and Other Capital Securities section
and the Leases/Adjusted Leverage section of this report for more information.)
Financial Flexibility Financial fexibility allows an issuer to meet its debt service
obligations and manage periods of volatility without eroding credit quality. A commitment
to maintaining debt within a certain range allows an issuer to cope with the effect of
unexpected events on the balance sheet. Other contributing factors are the ability to
redeploy assets and revise plans for capital spending, the degree of access to a range of
debt and equity markets, and long-dated committed bank lines. A large proportion of short-
term debt in the capital structure can indicate reduced fnancial fexibility, except in cases
where overall gross leverage is very modest.
Metrics Summary
(LTM, As of June 30, 2013)
Company IDR Outlook/Watch Leverage (x) Coverage (x) FCF/Debt (%)
FFO Fixed-Charge
Coverage (x)
Investment Grade
CBS Corp. BBB Stable 1.7 10.2 16.6 3.8
Cox Enterprises, Inc.
a
BBB+ Stable 2.3 7.9 8.2 4.9
Discovery Communications, Inc. BBB Stable 2.8 8.2 16.6 5.1
The Dun & Bradstreet Corp. BBB+ Negative 2.5 13.6 15.4 6.2
McGraw Hill Financial, Inc. BBB+ RWN 0.5 24.0 23.5 4.7
NBCUniversal Media LLC BBB+ Positive 2.5 8.8 19.0 1.9
Pitney Bowes Inc. BBB- Negative 3.8 8.1 3.4 3.2
Thomson Reuters Corp. A Stable 2.2 8.5 6.4 4.9
Time Warner Inc. BBB+ Stable 2.5 5.9 14.1 8.4
Twenty-First Century Fox, Inc. BBB+ Stable 2.5 5.9 10.7 3.6
Verisk Analytics Inc. A Stable 1.9 9.7 30.3 5.7
Viacom Inc. BBB+ Stable 2.2 9.4 23.5 5.9
Walt Disney Company (The) A Stable 1.3 29.3 27.9 8.0
AMC Entertainment Inc. B Stable 5.4 2.7 3.2 1.4
Belo Corp. BB RWP 2.7 4.1 7.8 3.1
Clear Channel Communications, Inc. CCC Stable 11.2 1.2 0.1 1.1
Clear Channel Worldwide Holdings, Inc. B Stable 7.2 1.8 1.4 1.2
Houghton Mifflin Harcourt Publishers, Inc. B+ Stable 1.2 8.2 21.5 3.7
Interpublic Group of Companies, Inc. BBB Stable 2.7 6.1 (7.5) 1.7
Liberty Interactive LLC BB Stable 3.6 4.6 11.8 1.8
Nielsen Holdings N.V. BB Positive 3.9 4.5 7.7 3.4
Regal Entertainment B+ Stable 4.3 4.0 1.1 1.8
Univision Communications, Inc. B Stable 10.7 1.7 (0.4) 1.5
a
Metrics are as of March 31, 2013. IDR Issuer Default Rating. N.A. Not applicable. RWP Rating Watch Positive. RWN Rating Watch Negative.
September 19, 2013

Corporates

Liquidity
In 2012, liquidity remained solid for the media and entertainment companies under Fitchs
coverage. Capital deployment has continued to be directed towards acquisitions, capital
expenditures and shareholder-friendly activities. Most companies have maintained prudent
capital management, although accommodating bond and leveraged loan markets during 2012
allowed certain issuers to fund shareholder returns in excess of free cash fow. Still, for many of
these issuers, the increased shareholder-friendly activities and acquisitions have been managed
within current ratings. Fitch expects that if a second downturn in the economy materializes,
issuers will practice the prudent liquidity management demonstrated in 2008 and 2009, and
reduce the level of shareholder-friendly actions and acquisitions. Given this expectation, Fitch
believes liquidity profles for media and entertainment companies will remain solid for the
remainder of 2013 and 2014.
Fitch focuses on the following fve key issues across the media and entertainment portfolio when
assessing liquidity.
Operating Liquidity
Operating liquidity is typically adequate due to relatively predictable revenue bases, high
margins, low maintenance-capital expenditures and limited working-capital fuctuations. Claims
on cash fows are relatively low for media companies, as working-capital drains can be relatively
immaterial, capital expenditures are generally low (particularly for broadcast radio and TV)
and cash taxes typically beneft from Federal Communications Commission (FCC) license
amortization. This means that these subsectors convert a substantial amount of EBITDA into
free cash fow, providing signifcant internal liquidity.
Capital Intensity
($ Mil., As of Fiscal Year-End 2012)
Company Revenue Capex
Capex %
of Revenue
Cox Enterprises, Inc. 15,285.8 1,593.2 10.4
Clear Channel Worldwide Holdings 2,946.9 275.6 9.4
The Walt Disney Company
a
42,278.0 3,784.0 9.0
Thomson Reuters Corp. 13,278.0 977.0 7.4
AMC Entertainment Inc. 2,552.5 167.2 6.5
Nielsen Holdings N.V. 5,612.0 362.0 6.5
Verisk Analytics, Inc. 1,534.3 74.4 4.8
Dun & Bradstreet Corp. 1,663.0 74.4 4.5
Univision Communications, Inc. 2,442.0 99.5 4.1
Pitney Bowes 4,904.0 176.6 3.6
Clear Channel Communications, Inc. (Excludes Outdoor) 3,300.0 114.7 3.5
Liberty Interactive LLC 10,018.0 339.0 3.4
NBCUniversal Media LLC 23,812.0 763.0 3.2
Regal Entertainment Group 2,824.2 89.2 3.2
Belo Corp. 714.7 21.3 3.0
Twenty-First Century Fox, Inc.
b
27,675.0 622.0 2.3
Interpublic Group of Companies, Inc. 6,956.2 169.2 2.4
Time Warner Inc. 28,729.0 643.0 2.2
McGraw Hill Financial, Inc. 4,450.0 97.0 2.2
Discovery Communications LLC 4,487.0 77.0 1.7
CBS Corp. 14,089.0 254.0 1.8
Viacom Inc.
a
13,887.0 154.0 1.1
a
Fiscal Year Ended Sept. 30, 2012.
b
Fiscal Year Ended June 30, 2013.
September 19, 2013

Corporates

Cash
In evaluating the degree of credit protection represented by cash balances, Fitch is cognizant that
media companies have at times used cash for high-cash-fow-multiple acquisitions (e.g. digital/
Internet properties) and/or shareholder-friendly initiatives. Fitch takes into account a companys
cash position when assessing liquidity and gauges the likelihood a company can remain in line
with its stated net-leverage parameters.
Working Capital
Working capital does not generally pose a material drain on cash, as inventories are generally
modest compared with other industries. Theme parks and educational publishing are seasonal
and must keep fexibility for material working-capital uses in the offseason. Film studios have
meaningful cash outlays well in advance of revenue collection. Two subsectors movie
exhibitors and advertising agencies can beneft from positive working-capital dynamics.
Theater operators carry limited inventory, and sales are settled immediately, making receivables
very short, while payables are extended on traditional business practice terms. Advertising
agencies beneft from positive working-capital dynamics, as there is typically a positive carry
from the time they receive clients cash to when they distribute it for media purchases. Fitch
recognizes that this positive working capital dynamic for advertising agencies is not present
in every international region. As agencies expand their networks internationally, the domestic
positive working capital will be offset somewhat by negative working capital in certain regions.
Secured accounts receivable facilities are not a material fnancing tool within the sector, though
some companies maintain small ones.
Maturity Schedules
Companies continue to successfully access the capital markets to refnance near-term maturities,
and several were able to do so at more attractive rates. Fitch expects the investment-grade
issuers and many of the high-yield issuers in the media and entertainment space to be able to
handle their maturity schedules through available liquidity (cash and revolver availability) and
access to capital markets.
Revolving Credit Facilities
Companies have been actively renewing facilities coming due, and many of these facilities
were for four- or fve-year tenors. No facilities under Fitchs coverage mature in 2013 or 2014,
except for Walt Disneys 364 day credit agreement of $1.5 billion, which matures in March 2014.
However, Walt Disney has suffcient liquidity with its cash balances, FCF generation and $4.5
billion in committed facilities maturing in 2015/2017. On average, investment-grade issuers have
approximately 97% available on their revolving credit facilities versus 85% for the high-yield
issuers.
September 19, 2013

Corporates

U.S. Media and Entertainment Liquidity Profile Summary
($ Mil., For June 30, 2013, Pro Forma for Q3 Activities)
Committed Total Maturities Schedule
a
Company Name LTM FCF Cash Availability
b
Facilities Expiration Liquidity 2013 2014 2015 2016
Diversified Media
CBS Corporation 1,068.0 282.0 1,990.0 2,000.0 March 2018 2,272.0 453.0 99.0 0.0 200.0
c
914.5 704.4 2,167.0 2,400.0 July 2016 and December 2015 2,871.4 600.0 652.3 833.0 600.0
Cox Communications, Inc.
c
(131.7) 607.0 2,000.0 2,000.0 July 2016 2,607.0 600.0 400.0 600.0 600.0
Cox Enterprises, Inc. (Excluding
Cox Communications, Inc.)
c
1,046.3 97.4 2,167.0 2,400.0 July 2016 and December 2015 2,264.4 0.0 252.3 233.0 0.0
Discovery Communications, Inc. 1,073.0 375.0 999.0 1,000.0 October 2017 1,374.0 0.0 0.0 850.0 0.0
Liberty Interactive LLC 714.0 1,448.0 1,010.0 2,000.0 September 2018 2,458.0 0.0 0.0 0.0 0.0
McGraw Hill Financial, Inc. 188.0 1,900.0 1,000.0 1,000.0 July 2017 2,900.0 0.0 0.0 0.0 0.0
NBC Universal Media LLC 2,122.0 909.0 1,250.0 1,350.0 March 2018 2,159.0 0.0 900.0 1,000.0 1,000.0
Thomson Reuters Corp. 514.0 1,613.0 2,500.0 2,500.0 May 2018 4,113.0 0.0 1,400.0 600.0 1,250.0
Time Warner Inc. 2,746.0 2,063.0 5,000.0 5,000.0 December 2017 and September 2016 7,063.0 0.0 0.0 1,000.0 1,150.0
Twenty-First Century Fox, Inc. 1,767.0 6,659.0 2,097.7 2,390.7 May 2017 and January 2018 8,756.7 0.0 887.0 200.0 400.0
Viacom Inc. 2,098.0 1,144.0 2,500.0 2,500.0 November 2017 3,644.0 0.0 600.0 850.0 1,316.0
Walt Disney Company (The) 4,186.0 3,932.0 5,758.0 6,000.0 February 2015, June 2017
and March 2014
9,690.0 1,760.1 1,460.9 1,470.9 1,510.9
High-Yield Publishing, Printing, Radio, TV Broadcasting, Outdoor
Belo Corp. 56.0 7.5 197.1 200.0 August 2016 204.6 0.0 0.0 0.0 275.0
Clear Channel
Communications, Inc.
d
(69.4) 305.5 22.5 269.5 December 2017 328.0 5.3 476.8 261.7 4,191.0
Clear Channel Worldwide
Holdings Inc. (Outdoor)
70.3 398.7 0.0 0.0 N.A. 398.7 0.0 0.0 0.0 0.0
Houghton Mifflin
Harcourt Publishers, Inc.
53.4 105.2 250.0 250.0 May 2017 355.2 2.5 2.5 2.5 2.5
Univision Communications, Inc. (42.8) 111.9 0.0 550.0 March 2018 111.9 23.3 46.5 46.5 46.5
Movie Exhibitors
AMC Entertainment Inc. 67.5 134.2 150.0 150.0 April 2018 284.2 3.9 7.8 7.8 7.8
Regal Entertainment Group 24.5 291.1 82.3 85.0 May 2017 373.4 10.1 10.1 10.1 10.1
Business Products and Services, Ad Agencies
D&B Corporation
(Dun & Bradstreet)
216.7 196.5 442.0 800.0 October 2016 638.5 0.0 0.0 300.0 358.0
Interpublic Group of
Companies, Inc.
(176.8) 1,613.9 985.5 1,000.0 May 2016 2,599.4 186.0 350.0 0.0 0.0
Nielsen Holdings N.V. 481.0 1,157.0 622.0 635.0 April 2016 1,779.0 59.7 351.0 151.3 2,959.5
Pitney Bowes Inc. 125.9 608.6 1,000.0 1,000.0 April 2016 1,608.6 0.0 299.6 324.9 550.9
Verisk Analytics, Inc. 426.2 172.6 850.0 850.0 October 2017 1,022.6 135.0 0.0 170.0 50.0
a
2013 maturities represents the remaining balance for the calendar year. Fitch has estimated these maturities based on fiscal year-end maturity schedules, as reported
in the 10-Ks, and any financing transactions that occurred since the filing.
b
Credit facility availability represents available funds to borrow (the committed balance is
reduced by borrowings, CP outstanding, letters of credit issued and availability reductions from covenants).
c
In November 2011, CEI and CCIs revolving credit facility
was amended to reduce the size from $3.5 billion to $2.0 billion, and to eliminate borrower sublimits so that either CEI or CCI can borrow up to $2.0 billion, so long as the
total amount borrowed does not exceed $2.0 billion. CEI revolving credit facility $400 million related to AutoTrader Group. Figures as of 03/31/2013. On May 2013,
CCI paid dividends of $1.5 billion (not reflected above) using net proceeds and cash on hand.
d
Clear Channel Communications cash excludes Clear Channel Outdoor
cash. The company has an amount equal to the lesser of $535 million or the borrowing base amount available under the receivables-based facility. Fitch assumes that
$269.5 million is the borrowable amount under the accounts receivable facility, which was the same amount drawn during the February 2013 refinancing transactions.
N.A. Not applicable.
September 19, 2013

Corporates

Short-Term Ratings/CP Backup
Fitchs short-term ratings for issuers are denoted as short-term IDRs. Short-term ratings are
assigned on a scale running from F1, F2, and F3 (in investment grade) and B, C and D in
speculative grade. (For more details, please refer to Fitchs criteria report, Short-Term Ratings
Criteria for Non-Financial Corporates, dated August 2013). While there are a large number of
discrete factors that drive short-term ratings, a linkage has always existed between short-term
and long-term ratings. This refects the inherent importance of liquidity and near-term concerns
within a longer term assessment. Additionally, it ensures that the two scales do not contradict
each other for a given issuer.
The time horizon of the short-term rating extends nominally to 13 months, refecting the 397-day
maximum period of short-term instruments. The time horizon does not explicitly relate to the 13
months immediately following a given date but instead refects the continual liquidity profle of
the rated entity that would be expected to endure over the time horizon of the long-term IDR,
typically 35 years. This approach places less emphasis on favorable or unfavorable features,
which may be regarded as temporary, of the liquidity profle.
The immediacy of U.S. commercial paper (CP) settlement makes CP a potent short-term funding
tool and also increases potential liquidity risk for issuers, which must fund their maturing paper
with immediately available funds. To mitigate liquidity risk, Fitch considers liquidity backup for
outstanding CP an important element in assigning instrument-level ratings. Because liquidity
backup exists to protect the issuers overall credit against the risk of default or insolvency caused
by unsuccessful CP market rollovers, the rating of corporate CP is linked to the issuers credit
standing and is not tied to the ratings of liquidity providers.
Fitch typically expects investment-grade commercial paper issuers to have full (100%) liquidity
backup available for outstanding CP and other short-term obligations. Fitch calculates corporate
CP backup coverage as the sum of all unused committed liquidity facilities (primarily committed
bank credit agreements but, under special circumstances, cash balances earmarked to refund
maturing debt instruments) divided by the sum of CP and other short-term fnancial obligations
anticipated to be outstanding.
In differentiating between short-term F2 or F3 ratings applied to BBB rated entities, Fitch
undertakes additional analysis focused on internal liquidity. Externally provided liquidity in the
form of committed bank credit facilities is a secondary consideration. However, Fitch continues
to expect 100% liquidity backup for a CP program. The table below lays out the three internal
ratios calculated by Fitch and the ratio levels that are consistent with either an F2 or F3 rating.
These ratio measures are observed over time (typically three years of historical data and two
years of Fitch projections).
Rating Mapping/
Backup Requirements
Long-
Term
IDR
Short-
Term
IDR CP Tier
Liquidity
Backup (%)
AAA F1+ 1 100
AA+ F1+ 1 100
AA F1+ 1 100
AA F1+ 1 100
A+ F1 1 100
A F1 1 100
A F2 or F1 2 or 1 100
BBB+ F2 2 100
BBB F3 or F2 3 or 2 100
BBB F3 3 100
BB+ B
BB B
BB B
B+ B
B B
B B
CCC C
CC C
C C
RD/D RD/D
IDR Issuer Default Rating. Note: CP
Tier does not apply to speculative-grade
issuers. Liquidity backup is expected from
all CP issuers, regardless of the credit
rating.
September 19, 2013

Corporates

Typical Ratio Observations Averaged Over Time for F2/F3 Cusp
Ratios More Consistent with F2 More Consistent with F3
Internal
Free Cash Flow/EBITDAR >20% <20%
Year-End Available Cash/Short-Term Debt >80% <80%
FFO/Debt Service
a
>1.5x <1.5x
Internal and External Combined
Gross Potential Liquidity
b
/Debt Service >1.1x <1.1x
a
FFO plus interest/short-term debt plus interest due.
b
Free cash flow plus available cash plus undrawn portion of
committed facilities.
Source: Fitch.
Commercial Paper Issuers
($ Mil., As of June 30, 2013)
Company LT IDR ST IDR
CP Program
Capacity
Backup
Facility
Peak CP
Outstanding
a
Backup
Coverage of
Peak (x)
CBS Corporation BBB F2 2,000.0 2,000.0 550.0 3.6
b
BBB+ F2 2,000.0 2,000.0 36.3 55.1
Dun & Bradstreet Corporation BBB+ (N) F2 800.0 800.0 0.0 N.A.
McGraw Hill Financial, Inc. BBB+ (RWN) F2 (RWN) 1,000.0 1,000.0 457.0 2.2
Pitney Bowes, Inc. BBB (N) F3 1,000.0 1,000.0 0.0 N.A.
c
A F2 2,000.0 2,500.0 1,100.0 2.3
Time Warner Inc. BBB+ F2 5,000.0 5,000.0 0.0 N.A.
Viacom Inc.
d
BBB+ F2 2,500.0 2,500.0 423.0 4.7
Walt Disney Company (The)
e
A F1 6,000.0 6,000.0 3,044.0 1.5
a
Highest quarter-end balance for the past eight quarters.
b
On November 2011, CEI and CCIs revolving credit facility was
amended to reduce the size from $3.5 billion to $2.0 billion, and to eliminate borrower sublimits so that either CEI or CCI
can borrow up to $2.0 billion, so long as the total amount borrowed does not exceed $2.0 billion.
c
On May 2013, the credit
facility, which supports the CP program, was increased to $2.5 billion from $2.0 billion. CP program was unchanged and
remained at $2.0 billion. Peak of $1.1 billion in Q3 2011 relates to acquisitions, divestitures and refinancing of maturing
debt.
d
Backup coverage of peak outstanding based on Q3 2011 capacity of $2 billion when $423 million was outstanding.
Facility was increased to $2.5 billion in November 2012 and no commercial paper has been outstanding since.
e
In March
2013, the company entered into an additional $1.5 billion 364-day credit agreement. Backup coverage of peak outstanding
based on Q4 2012 capacity of $4.5 billion when $3.0 billion was outstanding. CP Commercial paper. LT Long term.
ST Short term. IDR Issuer Default Rating. RWN Rating Watch Negative. N Negative Outlook.
N.A. Not Applicable.
Internal and External Liquidity Measures Averaged Over Time
a
(As of June 30, 2013)
Internal
Internal and
External Combined
Company LT IDR ST IDR
FCF/
EBITDAR
(%)
Year-End
Available Cash/
ST Debt (x)
FFO/Debt
Service (x)
Gross Potential
Liquidity
b
/Debt
Service
CBS Corporation BBB F2 27.3 22.0 4.2 6.6
c
BBB+ F2 22.2 2.7 3.6 4.2
Dun & Bradstreet Corporation BBB+ (N) F2 35.9 1,109.7 7.3 17.2
McGraw Hill Financial, Inc.
d
BBB+ (RWN) F2 (RWN) 15.3 N.A. 7.4 24.6
Pitney Bowes, Inc.
d
BBB (N) F3 14.7 N.A. 1.9 6.2
Thomson Reuters Corp. A F2 14.7 1.0 1.9 2.6
Time Warner Inc. BBB+ F2 27.3 5.6 5.7 4.7
Viacom Inc. BBB+ F2 41.0 52.9 6.4 11.8
Walt Disney Company (The) A F1 24.5 0.9 1.8 2.6
a
Metrics are calculated using the average of the last four quarter LTM periods.
b
Free cash flow + available cash + undrawn
portion of committed facilities.
c
As of March 31, 2013.
d
No short-term debt in latest filling. N.A. Not available. CP
Commercial paper. LT Long-term. ST Short-term. IDR Issuer Default Rating. RWN Rating Watch Negative.
N Negative Outlook.
September 19, 2013

Corporates

Pensions
Fitchs analysis of nonfnancial corporate issuers with pension plans incorporates a review
of expected pension-related cash outfows and plan funded status. Fitch analyzes several
supplemental credit metrics for pension liabilities and cash outfows in order to assess any potential
liquidity concerns that may arise due to future funding requirements. All of the defned beneft
pension plans in Fitchs media and entertainment coverage universe are currently underfunded
on a GAAP basis. Cash contributions over the next fve years should be accommodated at
existing rating categories.
Unfunded pension liabilities can vary materially year to year due to changes in investment
returns and actuarial assumptions that are used in calculating such liabilities, as well as
changes in regulatory guidelines. In addition, US GAAP funding status may differ materially from
ERISA/Pension Protection Act funding calculations due to the Moving Ahead for Progress in
the 21st Century Act (MAP-21) legislation, discussed below. This variability makes the liability
less predictable from an obligation standpoint than scheduled amortization, lease obligations,
guarantees, etc. As such, Fitch uses this data as supplemental information to indicate if further
cash fow analysis and discussions with management must take place related to future funding
strategies. For more details, please refer to Fitchs special report, U.S. Corporate Pensions
2013 Overview, dated August 15, 2013.
In 2012, the funded pension positions for U.S. media and entertainment companies under Fitchs
coverage declined for the second consecutive year, driven by declines in discount rates and, to
a lesser extent, declines in cash contributions (driven in part by MAP-21). The median funding
was 72% at fscal year-end 2012, down from 75% at end-2011 and still signifcantly below 2007s
funded level of 94%. This compares to the median U.S.-based plan funded status of Fitch-rated
corporate issuers of 73.8%.
On July 6, 2012, President Obama signed the MAP-21 legislation that, among other elements,
included pension funding relief. The funding stabilization takes the form of smoothing interest
rates out over a 25-year period, with 2012 rates limited to 90% of the 25-year average. This
has provided material funding relief across issuers. Several corporate issuers, including RR
Donnelley, announced reductions in planned 2013 cash contribution levels (RR Donnelley
reduced planned retirement contributions by $125 million). The McClatchy Company stated that
under the new guidelines, its PPA pension plan funded level went from 70% to an estimated 90%
(with 2013 and 2014 combined contributions going from $78 million to $33 million).
In general, Fitch believes such relief only postpones funding. Changing the discount rate, in
the absence of other actions, only changes the present value of the liabilities, as future beneft
payments are not changed. At some point underfunded pension plans will have to be made up by
higher future contributions, as investment returns are unlikely to offset the shortfall. Additionally,
relief does not affect GAAP accounting for pensions, and pension underfunding would actually
expand with the lower contributions on a GAAP basis.
Fitch believes the majority of U.S. media companies will be able to manage their funding
requirements.
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Pensions
(As of Fiscal Year-End)
PBO Funded Status
(Global, $ Mil.)
PBO Funded Status
(U.S., %)
Pension Adjusted
Leverage (x)
Est. Annual Pension
Outflow (U.S.,% of FFO)
Fixed Income as a %
of Portfolio (U.S.)
Company FY 2012 FY 2011 2012 2011 2012 2011 2012 2011 2012 2011
Verisk Analytics, Inc. (39.40) (109.80) 91.4 74.7 2.3 2.0 1.1 5.4 41.0 47.0
AMC Entertainment Inc.
a
(41.50) (32.46) 62.2 66.4 5.4 7.0 2.5 4.1 41.5 30.0
Belo Corp. (106.60) (112.30) 64.3 58.6 3.2 4.1 7.8 12.0 28.4 29.7
Interpublic Group of Companies, Inc. (175.60) (126.70) 73.9 83.1 3.2 2.2 0.5 0.9 44.0 47.0
Nielsen Holdings N.V. (245.00) (169.00) 85.5 77.8 4.1 4.3 6.0 1.0 40.0 39.0
McGraw Hill Financial, Inc. (320.00) (329.00) 85.3 82.1 1.3 0.8 6.2 7.7 28.7 26.9
Pitney Bowes, Inc. (393.30) (423.10) 84.2 83.6 4.7 4.5 8.3 5.9 62.0 50.0
Viacom Inc. (560.00) (441.00) 50.8 52.1 2.0 1.8 5.5 3.4 31.0 37.0
D&B Corporation (Dun & Bradstreet) (653.30) (589.40) 66.9 67.9 3.3 3.1 23.0 23.0 45.0 44.0
The McClatchy Company (714.34) (530.60) 65.5 69.9 7.7 6.4 110.1 38.9 27.0 26.2
Time Warner Inc. (835.00) (610.00) 80.2 83.7 3.0 2.8 4.9 4.4 46.0 46.0
Thomson Reuters Corporation (984.00) (695.00) 84.0 87.8 2.4 2.1 9.1 6.2 58.0 61.0
Twenty-First Century Fox (1,083.00) (1,083.00) 71.9 71.9 2.6 2.4 6.2 7.5 39.0 39.0
R.R. Donnelley & Sons Company (1,153.50) (1,074.00) 73.6 72.6 3.9 4.4 24.1 27.7 25.8 27.3
CBS Corporation (1,290.00) (1,252.00) 76.8 75.9 2.0 2.1 9.4 10.1 71.0 67.5
Cox Enterprises, Inc. (2,100.09) (1,566.30) 58.2 60.8 2.7 2.6 12.5 10.0 31.0 38.0
The Walt Disney Company (3,481.00) (2,930.00) 69.8 69.1 1.5 1.6 11.1 9.1 33.0 41.0
Average Median Median Average Average
(833.9) (710.2) 73.6 72.6 3.0 2.6 14.6 10.4 40.7 41.0
a
AMC changed fiscal year-end from March to December. 2012 figures are annualized based on a 9 month period. PBO Projected benefit obligation. Note: All figures
are not adjusted for any potential tax benefits or nonqualified plans. Does not include Discovery Communications LLC, Liberty Media, Regal Entertainment Group,
Univision Communications, Clear Channel Communications or Houghton Mifflin Harcourt Publishers Inc., since these companies do not have pension obligations.
Source: Company filings and Fitch Ratings.
September 19, 2013

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Regulation
U.S. media companies are subject to legislation and regulation by federal, state and local
government authorities in the U.S. They are also subject to laws and rules in the foreign
jurisdictions in which they operate. This section summarizes key regulation issues predominantly
faced in the U.S.
Federal Communications Commission
The Federal Communications Commission (FCC) is an independent U.S. government agency.
According to www.fcc.gov, the FCC was established by the Communications Act of 1934 and is
charged with regulating interstate and international communications by radio, television, wire,
satellite and cable. The agency is directed by fve commissioners appointed by the president
of the U.S. and confrmed by the Senate for fve-year terms (except when flling an unexpired
term), and its jurisdiction covers the 50 states, the District of Columbia and U.S. possessions.
The president also designates one of the commissioners to serve as chairperson. Only three
commissioners may be members of the same political party. None of them can have a fnancial
interest in any commission-related business.
FCC Commissioners
The nomination of Tom Wheeler to serve as an FCC commissioner was approved by the
Senate Commerce, Science and Transportation Committee (July 2013). Wheeler is the Obama
Administrations selection to be the FCCs next chairman (replacing Julius Genachowski) and
his nomination is pending confrmation by the full Senate. In addition, the administration has
nominated Michael ORielly to fll the second republican seat on the FCC relinquished by former
FCC Commissioner Robert M. McDowell. Currently the FCC is led by interim chairwoman
Mignon Clyburn and consists of three commissioners as highlighted below:
Mignon Clyburn Acting Chairwoman (Democrat); term expires June 2017.
Jessica Rosenworcel (Democrat); term expires June 2015
Ajit Pai (Republican); term expires June 2016.
Although there will be continued regulatory and legislative activity, Fitch expects that the
regulatory environment will remain relatively benign for content companies through at least the
medium term. Although interrelated, Fitch expects the FCCs agenda to continue to focus on
distribution-related, more so than media-related, issues. The FCC has yet to complete its 2010
quadrennial regulatory review as the commission deferred action under a proposal that would
relax cross-ownership rules in the countrys largest media markets until after a report from the
Minority Media and Telecommunications Council has been released. The report, which considers
the effect cross-ownership rules have on minority and female ownership of commercial broadcast
stations, was released on May 30, 2013 and submitted for public commentary. Previous efforts
by the FCC to relax media ownership rules have failed. Fitch does not expect other cross-
ownership rules to be eased.
The FCCs focus on the effective use of spectrum as part of its National Broadband Plan (NBP)
could affect local broadcasters in the media space (see the discussions below for details). Fitch
also expects the FCC to continue fostering diversity of voices in media.
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Media Ownership Regulation Key Issue Summary
Key Issue
Media Subsectors
Affected Description Fitch Commentary
Cross-Media
Ownership Newspaper/
Broadcast, Radio/TV,
Radio/Newspapers
Newspapers,
TV, and Radio
Broadcasting
Since 1976, regulation has prohibited cross-ownership of a
broadcast station and a daily newspaper in the same market.
The FCC adopted a revision to this rule in December 2007
(which the Senate voted against in first-half 2008) that allows
for the cross-ownership of a newspaper and one television or
radio station in the top 20 under certain conditions. A waiver
process was established for markets outside the top 20. The
U.S. Court of Appeals for the Third Circuit vacated this rule
change in July 2011. This decision was appealed; in June 2012
the Supreme Court declined to hear the appeal. As a result
cross-ownership remains prohibited in large markets. After the
Supreme Court decision, the FCC can now complete its 2010
quadrennial review. Fitch expects the FCC will again loosen the
TV/newspaper rule. Common ownership of at least one radio
and one television station in a market is allowed, but ownership
of any additional radio stations are limited depending on the size
of the market.
Secular challenges and access to capital in the
newspaper space will likely temper any major merger
and acquisition activity regardless of cross-media
ownership regulation. New regulatory authorities
are likely to continue to value diversity of ownership
and scrutinize media consolidation. However, some
consolidation activity could occur, largely for certain
players (strategic buyers with scale in particular
markets, and potentially some specialty private
equity firms) to achieve scale and synergies in their
portfolios.
National TV Ownership
Rule
TV Broadcasting Current regulations with regard to national TV ownership prohibit
a broadcaster from owning television stations that would reach
more than 39% of U.S. TV households. The calculation uses a
50% discount to UHF audience reach and does not double-count
households for duopolies. The past FCC members had sought
comment on the 50% UHF discount.
News Corp. and CBS freed up room under the 39%
limit with smaller market divestitures in recent years.
CBS estimates its reach is 38% before considering
the UHF discount. Fitch estimates NWS would be
compliant even if the discount were eliminated. All
other broadcasters are well below the 39% limit
(Disney estimates its reach at 23%).
Local TV Multiple
Ownership (Duopolies)
TV Broadcasting Current regulation allows a station operator to own two TV
stations in the same market (only one can be in the top four)
as long as there are eight independent stations remaining. The
FCC previously proposed that duopolies would be allowed when
only five or more other stations existed in a market, as well as
triopolies in markets with 18 or more TV stations.
Fitch does not anticipate any material changes
to existing rules over the intermediate term. Any
remittance of previous proposals could result in
acquisitions in some of the middle and lower tiered
markets but not likely at a level that would be
concerning.
Local Radio Ownership
Rule
Radio Local radio ownership rules allow an entity to control up to eight
radio stations in the largest markets, as long as no more than
five are AM or FM. An entity cannot control more than 50% of a
market.
No future material changes anticipated.
Dual Television
Network Rule
TV Broadcasting Current regulations prohibit a merger between or among the four
largest networks: ABC, CBS, Fox and NBC.
Foreign Ownership
Rule
Broadcasting The Communication Act limits foreign ownership (voting power
or equity; individuals or entities) of U.S. media companies
to 20% directly, or 25% indirectly (through one or more
subsidiaries).
Attribution of
Ownership
TV Broadcasting,
Cable Networks
Ownership rules could apply in the aggregate to owners/
purchasers of various types of securities in different media
properties. Attributable interest includes: 1) equity/debt interests
which combined exceed 33% of licensees total assets; 2) if
interestholder supplies more than 15% of licensees total weekly
programming or has an attributable same-market media interest;
3) a 5% or greater direct or indirect voting stock interest (20% or
greater for qualified passive investors); 4) any equity interest in
an LLC or partnership; or 5) any position as officer or director of
licensee or its parent.
FCC is reviewing the single majority voting
shareholder attribution exemption, which renders non-
attributable voting interests up to 49% in a licensee
controlled by a single majority voting shareholder.
While National Amusements ownership of interests
in CBS and Viacom could make them attributable to
one another, Fitch does not believe their strategic
alternatives would be limited to the point of causing
credit concerns.
Joint Operating
Agreements (JOA)
Newspaper Current regulations on JOAs, in accordance with the Newspaper
Preservation Act of 1970, allow two newspaper companies
operating in the same market to combine all aspects of their
operations except editorial content to preserve distinct editorial
operations.
No material change expected. Even with JOAs, it is
not clear that any markets other than New York City
can support two papers over the long term.
Source: FCC, company filings, Fitch Ratings.
September 19, 2013

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National Broadband Plan
The NBP, delivered to congress by the FCC in March 2010, seeks to improve access and speeds
for all Americans regardless of geography (urban/rural), income, age or disability. The NBP sets
as a goal that 100 million U.S. homes should have affordable access to download speeds of at
least 100 megabits per second (Mbps) and upload speeds of at least 50 Mbps by 2020. The NBP
also sets as a milestone, by 2015, that 100 million U.S. homes should have affordable access to
actual download speeds of 50 Mbps and upload speeds of 20 Mbps. According to the National
Telecommunications Information Administration (NTIA), nearly 99% of Americans had access to
broadband speeds of 3 Mbps downstream and 768 Kbps upstream using either wireless or wired
facilities as of Dec. 31, 2012.
As part of the NBP, the FCC launched the Broadband Acceleration Initiative to expand the reach
and reduce the cost of broadband by freeing spectrum for broadband to encourage mobile
innovation and investment, including through voluntary incentive auctions; transforming the
Universal Service Fund to help private companies build out networks where there is not an
economic incentive; removing barriers to broadband build-out; and speeding up processes to
lower the cost of deployment.
The NBP recommends making 500 MHz of additional spectrum available for wireless broadband
by 2020, with a target of making 300 MHz available by 2015. The NBP laid out a spectrum
roadmap to begin identifying additional federal and nonfederal spectrum for wireless broadband
use on an exclusive and/or shared basis.
Broadcast Spectrum Reclamation
The FCC has identifed 120 MHz of television (TV) broadcast spectrum to be reallocated to
wireless broadband. This spectrum is a key element of the NBPs goal of freeing up 300 MHz of
spectrum for mobile broadband applications by 2015.
The Job Creation Act of 2012 authorized the FCC to hold incentive auctions that could repurpose
up to 120 MHz of broadcast television spectrum in the 578 MHz698 MHz band for wireless
broadband within the next 10 years. The TV broadcast spectrum is signifcantly more valuable
and, therefore, more desirable than other spectrum the Job Act identifed for auction over the
short to medium term.
The FCC has yet to adopt fnal rules for the Broadcast Television Spectrum Incentive Auction,
and all of the pending changes within the FCC leadership create uncertainty as to the ultimate
timing of the auction. Fitch expects rules to be fnalized sometime during 2014 and for the
auctions to occur during the second half of 2015 or early 2016.
The TV broadcast band is right below the existing 700 MHz band that wireless operators already
use commercially. The auction mechanics are expected to be much more complex, involving
reverse and forward auctions to determine which broadcast television licensees are willing to
accept bids for relinquishing some (channel sharing) or all of their broadcast usage rights. The
FCC must also determine a methodology for channel reassignment and repacking of existing
licensees and for sharing proceeds with licensees that relinquish spectrum. Fitch believes a much
smaller amount of repurposed spectrum, potentially less than half of the 120 MHz, will actually
come to auction due to the voluntary nature of the process. While many broadcasters reportedly
do not presently use their entire allotted spectrum, Fitch believes many will choose to hold on to
their spectrum for future use, including more multiplexed stations and mobile applications. Fitch
does not expect the auctions to be a credit event for broadcasters.
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Broadcasters will have basically four options from which to choose. First, broadcasters could
give up their entire license. This will be the favored option for broadcasters that are struggling
fnancially. Second, broadcasters could essentially channel share with another broadcaster and
split the proceeds from the auction of a 6 MHz channel. Third, a broadcaster could move from
their ultra-high frequency (UHF) spectrum to very high frequency (VHF) spectrum, which would
free up one 6 MHz channel. Lastly, a broadcaster could continue broadcasting and potentially be
reassigned to a new channel after repacking.
One of the other bigger issues that the FCC must address is the amount of spectrum an operator
could win in an auction or use in a given band. The Job Act prohibits the FCC from limiting
an otherwise qualifed bidders participation in the TV broadcast incentive auction. However,
the FCC can and will probably adopt rules of applicability through the rules-making process to
address spectrum aggregation limits and competition concerns.
September 19, 2013

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Distribution and Content Key Issue Summary
Key Issue
Media Subsectors
Key Issue Media Subsectors
Affected
Description Fitch Commentary
TV Spectrum
Reclamation
TV Broadcasters As part of National Broadband Plan, the FCC seeks to take
back 120 MHz of spectrum from U.S. TV stations in the next
five years (to reallocate a total of 500 MHz over the next decade
toward wireless broadband). The intention is for broadcasters
to forfeit the spectrum voluntarily. The FCC was authorized to
conduct incentive auctions with the passage of the Jobs Act in
February 2012.
Fitch does not expect enough broadcasters to
participate in voluntary efforts to meet the 120-MHz
goal, instead choosing to retain their spectrum for
mobile or multiplexed stations. Most broadcasters do
not utilize all of their spectrum, and it may be possible
for some to share a signal; so, it is unlikely that
involuntary forfeit of spectrum would cause operating
disruptions or credit issues.
Retransmission
Consent
TV Broadcasters,
MVPDs
Retransmission consent was created by the 1992 Cable
Television Consumer Protection and Competition Act, to ensure
broadcasters receive fair compensation for the retransmission
of their signals. Every three years, the station elects either 1)
must-carry, where an MVPD is required to carry the station,
without making a payment; or 2) retransmission consent,
where the station and MVPD negotiate a carriage fee that the
MVPD will pay to broadcast the signal, and if an agreement
is not reached, the station will not be carried. The FCC does
not believe it has the authority to require broadcast television
stations to provide their signals to pay television providers or to
require binding arbitration. However, the agency is seeking to
minimize disruptions to consumers if retransmission agreements
are not reached. In March 2011, the FCC issued an NPRM
on possible changes to the retransmission rules. in December
2011, lawmakers introduced The Next Generation Television
Marketplace Act H.R. 3675 and S. 2008 that proposes
to eliminate must-carry, eliminate the ability of stations to
negotiate for retransmission consent, and remove network non-
duplication protections and syndicated exclusivity requirements.
The vast majority of retransmission consent deals
are renegotiated without incident between the two
parties. Fitch does not believe the FCC will look
to start arbitrating or regulating negotiations. If the
congressional legislation were enacted as proposed
this would have a significant negative impact on
broadcasters. However, it remains to be seen how this
proposed legislation develops.
Radio Music Royalties Radio Broadcasters,
Recorded Music
Satellite, Internet and cable TV music channels pay royalties to
musicians. Terrestrial radio broadcasters do not. A congressional
bill that would require radio companies to compensate artists
and music labels for songs played died in 2010, although Fitch
believes similar legislation could appear over the coming years.
Compensation would be incremental to royalties presently paid
to songwriters/music publishers.
Radio broadcasters argue that they are a vehicle
to promote other distribution windows for recorded
music. While these companies have relatively high
margins, their fixed-cost structures and capital
structures are inflexible and material incremental
royalty costs would have an impact. Clear Channel
recently announced the first market-negotiated deal
for terrestrial royalties to one record label, in exchange
for lower royalty payments on digital plays.
Online Music Royalties Recorded Music,
Online
The Copyright Royalty Board allows SoundExchange, which
collects royalties for musicians, to negotiate rates for music
companies. For large webcasters, the rate will be computed on
a per-song basis, while smaller webcasters agree to pay on a
percent of overall sales basis. Rates are set through 2015.
Online broadcasters having to pay on a per-song
basis will have a difficult time building a viable
business model. The agreement improves the viability
of online music companies that only pay as a percent
of revenue. However, Fitch is skeptical regarding
the long-term viability of the revenue-sharing
arrangement. It is detrimental to record labels, as
consumers will continue to cannibalize physical and
digital sales with unlimited streaming.
Copyright Protections TV Broadcasting,
Print, Radio
Copyright term for authored works is the life of the author plus
70 years or if made for hire, the shorter of 95 years from first
publication or 120 years from creation. In 2009, the Obama
Administration appointed the first U.S. Intellectual Property
Enforcement Coordinator, a new role in the executive branch
provided for under the Prioritizing Resources and Organization
for Intellectual Property (PRO-IP) Act of 2008. The act
provides for both civil and criminal penalties for piracy. The
Digital Millennium Copyright Act of 1998 attempted to address
intellectual property rights in the Internet age. In April 2012, an
appeals court revived Viacom Inc.s lawsuit against Google,
Inc.s YouTube. Viacom originally sued Google for $1 billion
in 2007, claiming YouTube violates Viacom Inc.s copyrights.
Google believes safe-harbor clauses protect it from liability. A
judge ruled in favor of Google in 2010, and Viacom appealed in
December 2010. In January 2012, due to public backlash over
fears of censorship, the House postponed consideration of the
Protect IP Act (PIPA) and the Stop Online Piracy Act (SOPA),
which were intended to enable U.S. authorities to fight internet-
based piracy overseas.
Piracy will continue to plague media companies as
they move toward more digital distribution. Content
owners and distribution outlets continue to work out
licensing arrangements. Fitch believes the major
studios/networks push to offer web streaming video
should prevail long term, as Netflix, Hulu (jointly
owned by Universal, Twenty-First Century Fox,
Disney and Providence Equity Partners), CBS.com,
TV.com and ABC.com, among others, offer the viewer
a high-quality experience with limited commercial
interruptions. Subscriptions and premium ad rates
could be possible.
MVPD Multichannel video programming distributor. NPRM Notice of Proposed Rulemaking. Continued on next page.
Source: FCC, FTC, www.whitehouse.gov, The Wall Street Journal, Fitch Ratings.
September 19, 2013

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Distribution and Content Key Issue Summary (Continued)
Key Issue
Media Subsectors
Indecency Rules TV Broadcasting,
Radio
FCC rules prohibit broadcast of obscene material anytime and
indecent/profane material between the hours of 6 a.m.10 p.m.
In June 2006, the Broadcast Decency Enforcement Act was
signed into law and the FCC has adopted a more aggressive
approach toward indecent programming in response to a
rising number of complaints. Maximum fines against radio and
TV broadcasters for airing indecent material have increased
significantly ($325,000 per utterance with maximum of $3
million per single instance). Some members of Congress have
discussed applying indecency rules to cable network and
satellite programming.
Fitch believes broadcasters will continue to face
scrutiny and potential penalties for airing content
deemed to be indecent. Live programming, in
particular, presents challenges in adhering to these
rules. No material effect on credit quality is expected.
Privacy Rules Online Behavioral targeting that uses consumer web tracking without
consent was reviewed by committee in the House in 2009. In
July 2009, the industry released its self-regulatory principles.
In December 2010 the FTC issued a proposal on a framework
to protect consumer privacy. It recommended commercial
entities incorporate privacy protections, simplified choice (such
as a do not track option), and greater transparency. It has
been implemented by web publishers and online advertisers,
and in 2011 was extended to apply to consumer data used
for non-advertising purposes. Republican Senators have
proposed legislation that would require rapid consumer, Secret
Service and FBI notification in the event of a data breach.
The Controlling the Assault of Non-Solicited Pornography and
Marketing Act of 2003 (CAN-SPAM) regulates the distribution of
unsolicited commercial e-mail (spam).
With numerous recent data breaches and growing
concerns regarding privacy, it is possible more
aggressive regulatory or legislative action will be
taken in the next several years. This could have
ramifications for growth of online advertising (ad
networks in particular), as measurement and efficiency
has been a positive attribute for the medium. The
focus appears to be more on behavioral rather
than contextual considerations, and as such any
restrictions would be more likely to affect display and
remnant online advertising than search. This is not
expected to represent a credit issue.
Children Content and
Advertising
Online, Cable Nets,
TV Broadcasting
Federal legislation (1990) and FCC rules limit content and
commercial material shown on TV stations during programming
designed for children 12 years of age or younger. Stations must
broadcast three hours per week of educational/informational
programming targeted at children age 16 or younger. Rules
limit display of web links to commercial material and disallow
program characters from selling products. In December 2009,
the FTC, Center for Disease Control, FDA and Department
of Agriculture published guidelines for food and beverage
marketing to children under the age of 17. In December 2009,
the FTC issued a report calling for stronger industry safeguards
on marketing of violent movies to children. In October 2009, the
FCC initiated a survey of the state of childrens media across
various platforms to evaluate ratings, advertising and media
literacy efforts. The Childrens Online Privacy Protection Act of
1998 is enforced by the FTC and prohibits website operators
from disclosing information related to children under the age
of 13. Despite government efforts in recent years, potential
legislation limiting food and beverage marketing to children
appears to have died.
Continued legislative and regulatory activity in this
area will be relevant to Disney, Viacom, Discovery,
CBS, Twenty-First Century Fox and Time Warner but
is not likely to represent a credit issue.
Drug and Food
Advertising
TV Broadcasting,
Cable Networks,
Magazines
Actions in Congress and the FTC in recent years for more strict
rules targeting pharmaceutical company direct-to-consumer
advertising.
Not likely to represent a credit issue. Could see
some modest share shifts as magazines can include
all disclaimers that a 30-second TV ad may be
challenged to include.
Product Placements TV Broadcasting,
Cable Networks
In June 2008, the FCC initiated an examination of the use of
product placements in TV programming. The commission has
discussed potential rules requiring more disclosure regarding
product placements in TV programming (broadcast and cable
nets). The proceeding sought comment on whether to prohibit
paid product placements in childrens TV programming.
Product placements have grown rapidly and have
offset some concerns related to the time-shifting
impact on advertising effectiveness. However, this is
not likely to be a credit negative.
Distribution of Motion
Pictures
Film Studios,
Exhibitors
Trade practice laws are in effect in 25 states. They require
exhibitors to be invited to screenings prior to licensing of movies
and prohibit exhibitors from paying advances or guarantees to
distributors. Distributors must also offer movies on a picture-by-
picture basis, and studios/distributors cannot own exhibitors.
These rules have been in place for some time, and
Fitch does not expect them to negatively affect
company credit profiles or to change materially.
Highway Beautification
Act of 1965 (HBA)
Outdoor The HBA was originally passed in 1965 to regulate outdoor
advertising along Federal-Aid Primary, Interstate and National
Highway System roads. The law limited construction of
billboards to commercial and industrial areas and called for the
removal of illegal signs.
The HBA provides insulation from the risk of
overbuilding of billboards, which has kept inventory
levels relatively stable. A Federal Highway
Administration study several years ago urged more
research on whether digital billboards distract drivers.
Risks of further oversight are offset by public service
announcement (safety alert) capabilities.
MVPD Multichannel video programming distributor. NPRM Notice of Proposed Rulemaking. Continued on next page.
September 19, 2013

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Distribution and Content Key Issue Summary (Continued)
Key Issue
Media Subsectors
National Do-Not-Call
Registry
Newspapers, Direct
Mail
In 2003, the FTC amended the Telemarketing Sales Rule to
give consumers a choice about whether they want to receive
unsolicited telemarketing calls, defined as any plan, program
or campaign to sell goods or services through interstate calls.
Sellers may call consumers with whom they have an established
relationship for up to 18 months after the consumers last
purchase, delivery or payment.
Some newspaper management teams have stated
that the Do-Not-Call Registry affected their ability
to grow their customer base. Fitch believes growth
prospects are affected by more serious issues,
including the threat of new media. Direct mail has
benefited from restrictions on telemarketing. No
material change is expected.
Digital TV Multicast
Must Carry
TV Broadcasting,
Cable
The Cable TV Consumer Protection Act of 1992 requires each
TV broadcaster to elect at three-year intervals to 1) require
carriage must carry,; or 2) negotiate terms under which they
will allow carriage (retransmission consent). Most broadcasters
forgo must-carry status in order to negotiate carriage fees.
Current regulation requires cable operators to carry only the
primary signals of individual broadcasters.
Future mandatory must-carry legislation for
multicast signals is unlikely. Negotiation between the
broadcasters and MSOs for carriage of multiplexed
channels is likely to be done on a case-by-case basis
as part of broader retransmission discussions.
A La Carte/Tiered
Pay-TV Programming
Pricing
Cable Networks,
MVPDs
In past years, there has been discussion regarding the
feasibility of a la carte and tiered programme pricing for pay-TV
programming. This has arisen again recently amid increased
programming costs, retransmission and escalated affiliate
contract battles/blackouts.
It is unlikely that the FCC will impose new legislation.
On a worst-case basis, Fitch believes the cable
networks would be able to navigate any proposed new
legislation (or push from consumers) by adjusting the
pricing on a la carte channels. Fitch believes it is more
likely that there could be increased packaging tiers
over the next several years, but full a la carte would
not be beneficial to any party and is not viable.
Net Neutrality Music, Filmed
Entertainment, Cable
In December 2010, the FCC issued its Open Internet Rules to
ensure that Internet openness, or net neutrality, will continue and
provide certainty for future usage and investment in the Internet.
The rules addressed transparency, blocking and unreasonable
discrimination. Industry representatives have raised concerns
that this FCC action went beyond its authority. The rules went
into effect in November 2011. In October 2011, Verizon sued to
overturn them, saying the order oversteps the FCCs authority.
The suit is pending.
Tiered pricing may help distribution companies
manage network efficiency and could reduce piracy.
Regulatory and legislative reluctance to monitor usage
of peer-to-peer networks (which can enable piracy)
could continue to hurt some content companies,
particularly the music and filmed entertainment
industries.
Joint Operating
Agreements (JOA)
Newspaper Current regulations on JOAs, in accordance with the Newspaper
Preservation Act of 1970, allow two newspaper companies
operating in the same market to combine all aspects of their
operations except editorial content to preserve distinct editorial
operations.
No material change expected. Even with JOAs, it is
not clear that any markets other than New York City
can support two papers over the long term.
MVPD Multichannel video programming distributor. NPRM Notice of Proposed Rulemaking.
September 19, 2013

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Net Neutrality
The FCCs net neutrality rules went into effect in November 2011. The FCCs goal is to ensure
that Internet openness, or net neutrality, will continue, and to provide certainty for future usage
and investment in the Internet. The order generally has the following three main rules:
Transparency: Broadband Internet access providers will publicly disclose information
regarding their network-management practices, performance and pricing so consumers
can make informed choices related to using these services.
Blocking: Fixed broadband Internet access service providers cannot block lawful content,
applications, services and nonharmful devices. Mobile broadband Internet access service
providers cannot block consumers from accessing lawful websites. Additionally, mobile
broadband providers cannot block applications that compete with the providers voice or
video telephony services. This rule is subject to reasonable network management.
Unreasonable Discrimination: Fixed broadband Internet access service providers cannot
unreasonably discriminate in transmitting lawful network traffc over a consumers
broadband Internet access service. Reasonable network management shall not constitute
unreasonable discrimination.
The order specifcally identifes that a commercial arrangement (i.e. pay for priority) between a
broadband provider and a third party to directly or indirectly favor some traffc over other traffc
in the connection to a subscriber would cause the FCC concern. The order did not reclassify
broadband as a telecommunications service that is subject to Title II, instead relying on a mix of
provisions of the Telecom Act to regulate broadband.
At the release of the order, a variety of industry representatives raised concerns that this
FCC action went beyond the commissions authority. Additionally, congressional Republicans
promised to seek out all methods to overturn the new open Internet rules. Republican leaders
accused the FCC of trying to regulate the Internet when the federal courts have already said the
commission does not have the ability to do this, and that this policy should only be established by
congress. The FCC has responded to these arguments by basing its authority to regulate Internet
practices on section 706 of the 1996 Telecommunications Act, which states that the FCC shall
encourage advanced services deployment on a reasonable and timely basis. There is some
question whether this interpretation by the FCC will withstand court review since an appeals
court in spring 2009 overturned an FCC order preventing a network-management practice and
stated that section 706 was not a grant of authority to regulate Internet practices.
In October 2011, Verizon Communications, Inc. again challenged the FCC open Internet order
in a second appeal fled with the U.S. Court of Appeals for the District of Columbia Circuit,
claiming the FCC order goes beyond the commissions authority, is arbitrary and capricious, and
is contrary to constitutional rights (the frst one was overturned as it was fled before the rules
had become offcial). The federal appeals court has set a court date in September 2013 for oral
arguments.
Program Carriage Dispute Regulation
On Aug. 1, 2011, the FCC released an order to address program carriage disputes between pay-
TV providers, and broadcast and cable networks. The order was in response to several recent
disputes that resulted in carriers pulling networks from the air. The order established procedures
for the commissions consideration of a temporary standstill of the price, terms and other
contract conditions during disputes, during which the provider cannot take the network off the
air. The FCCs goal is to prevent MVPDs from retaliating against a network that has a legitimate
September 19, 2013

Corporates

program carriage complaint, and to prevent harm to viewers who expect to be able to view the
video programming. The FCC has also set defnitive guidelines for timing of its decisions and
resolutions, given the sometimes lengthy timeframes for action on program carriage complaints
that have discouraged networks from fling complaints. To obtain a temporary standstill, the
network must demonstrate to the FCC that it is likely to prevail, it will suffer irreparable harm
absent a stay, a stay will not substantially harm other parties and it is in the public interest. The
FCC has the discretion to end or continue the standstill. The prevailing side will be reimbursed
upon resolution. For disputes over frst-time carriage of new channels, it remains unclear how
the payments would work upon resolution.
Federal Trade Commission
According to www.ftc.gov, when the Federal Trade Commission (FTC) was created in 1914, its
purpose was to prevent unfair methods of competition in commerce. In 1938, Congress passed
a broad prohibition against unfair and deceptive acts or practices. The commission has also
administered a wide variety of other consumer protection laws, including the Telemarketing Sales
Rule and the Pay-Per-Call Rule. In 1975, Congress gave the FTC the authority to adopt industry-
wide trade regulation rules. The FTCs functions are performed principally by its three bureaus:
1) Consumer Protection, 2) Competition and 3) Economics. FTC regulation related to the media
industry predominantly falls under the domain of the Bureau of Consumer Protection (BCP).
The BCP works to protect consumers against unfair, deceptive or fraudulent practices in the
marketplace. The bureau conducts investigations, sues companies and people who violate the
law, develops rules to protect consumers, and educates consumers and businesses about their
rights and responsibilities. The BCP also collects complaints about consumer fraud and identity
theft and makes them available to law enforcement agencies across the country. This bureau
has seven divisions, the frst four of which have authority over advertising- and marketing-related
topics: 1) Advertising Practices; 2) Marketing Practices; 3) Planning and Information; 4) Privacy
and Identity Protection; 5) Consumer and Business Education; 6) Enforcement; and 7) Financial
Practices. In general, FTC regulation of advertising and marketing practices does not represent
a material risk to the credit profles of media companies.
September 19, 2013

Corporates

Key Divisions within the FTCs Bureau of Consumer Protection
Division Description Priorities/Initiatives Key Laws, Policy Statements, Rules and Guides
Advertising
Practices
The Division of Advertising Practices
protects consumers from unfair or deceptive
advertising and marketing practices that
raise health and safety concerns, as well
as those that cause economic injury. It
brings law enforcement actions in federal
district court to stop fraudulent advertising
practices, coordinates FTC actions with
federal and international law enforcement
agencies sharing authority over health and
safety products and services, and monitors
advertising and marketing of alcohol,
tobacco, violent entertainment media and
food to children. The Division also brings
administrative lawsuits to stop unfair and
deceptive advertising.
Combating deceptive advertising of fraudulent
or certain products (weight loss and dietary
supplements); monitoring and stopping
deceptive Internet marketing practices
that develop in response to public health
issues; monitoring and developing effective
enforcement strategies for new advertising
techniques and media, such as word-of-
mouth marketing; monitoring and reporting on
the advertising of food to children, including
the impact of practices by food companies
and the media on childhood obesity;
monitoring and reporting on industry practices
regarding the marketing of violent movies,
music and electronic games to children;
monitoring and reporting on alcohol and
tobacco marketing practices.
The Childrens Online Privacy Protection Act, which is
meant to give parents control over information online
companies can collect about their children and how
such information can be used; The Fairness to Contact
Lens Consumers Act and the Contact Lens Rule, which
increases consumers ability to shop around when
buying contact lenses; The Federal Cigarette and
Smokeless Tobacco Acts, which require the FTC to
review and approve tobacco company plans for rotating
and displaying the statutory health warnings on tobacco
labels and in ads; dietary supplement guides, which
provide businesses with guidance for claims they make
for dietary supplements.
Marketing
Practices
Responds to problems of consumer fraud
in the marketplace. The division enforces
the FTC Act and several other federal
consumer protection laws by filing FTC
actions in federal district court for immediate
and permanent orders to stop scams,
prevent fraudsters from perpetrating scams
in the future, freeze their assets, and get
compensation for scam victims.
Shutting down high-tech Internet and
telephone scams that bilk consumers out
of hundreds of millions of dollars a year;
ending deceptive telemarketing or direct
mail marketing schemes that use false and
misleading information to take consumers
money; stopping fraudulent business
opportunity scams; stopping violations of
the Do-Not-Call and CAN-SPAM consumer
privacy protections.
The Telemarketing Sales Rule, which prohibits deceptive
sales pitches and protects consumers from abusive,
unwanted, and late-night sales calls; The CAN-SPAM
rules, including the Adult Labeling Rule, which requires
warning labels on commercial e-mail containing sexually
oriented material; The 900 Number Rule, which requires
sellers of pay-per-call (900 number) services to clearly
disclose the price of their services, prohibits the targeting
of most of those services to children and creates
procedures to dispute charges for 900 number services
like those available for credit card purchases.
Planning and
Information
The Division of Planning and Information
collects and analyzes data to target law
enforcement and education efforts and
measure the impact of activities related to
the FTCs consumer protection mission.
Collects, analyzes and makes available to law
enforcement consumer fraud, identity theft
and National Do-Not-Call Registry complaints;
assists in the distribution of redress to
consumers; and provides technological
investigative and litigation support.
Consumer Response Center: Counselors respond
to consumer complaints and inquiries received by
telephone, mail and online; Consumer Sentinel: A secure
website accessible to more than 1,900 law enforcement
agencies from across the U.S. and consumer protection
agencies in 12 nations. The site also provides other
information useful for investigations and prosecutions.
Operations: The division administers the core financial,
administrative and litigation support activities of
the bureau. It manages the agencys consumer-
protection redress activities and provides technological
investigative and litigation support.
Privacy
and Identity
Protection
Investigates breaches of data security;
works to prevent identity theft and aids
consumers whose identities have been
stolen; and implements laws and regulations
for the credit reporting industry, including the
Fair Credit Reporting Act.
To safeguard consumers financial privacy. Section 5 of the FTC Act, which prohibits unfair or
deceptive acts or practices, including deceptive
statements and unfair practices involving the use or
protection of consumers personal information; The Fair
Credit Reporting Act, which ensures the accuracy and
privacy of information kept by credit bureaus and other
consumer reporting agencies, and gives consumers
the right to know what information these entities
are distributing about them to creditors, insurance
companies and employers; The Gramm-Leach-Bliley
Act, which requires financial institutions to ensure the
security and confidentiality of customer information,
provide notice to consumers about their information
practices and give consumers an opportunity to direct
that their personal information not be shared with certain
non-affiliated third parties.
Source: www.ftc.gov, Fitch Ratings.
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Corporates

Foreign Corrupt Practices Act
International and emerging markets have been a key engine of growth for many corporations. At
the same time, in some countries bribery and corruption are commonplace. The organizational
structure of multinational companies tends to become complex as they expand globally. These
factors all raise the risk of violating the Foreign Corrupt Practices Act (FCPA). Within Fitchs
media coverage, News Corp. and Dun & Bradstreet are currently subject to FCPA investigations.
News Corp.s relates to potential payments by journalists to U.K. police offcers in exchange for
information used in news stories, as well as potential bribes at its Russian outdoor subsidiary
(since sold). Dun & Bradstreets relates to its China operations. (Note: For a full discussion of
the FCPA, please refer to Fitchs June 1, 2010 report U.S. Foreign Corrupt Practices Act No
Minor Matter, which is heavily excerpted below).
The FCPA, enacted by Congress in 1977, makes it a crime to pay or offer to pay anything
of value, directly or indirectly, to any non-U.S. offcial, non-U.S. political candidate, or anyone
acting on behalf of a public international organization, in order to obtain or retain business or
gain an improper business advantage. It also requires companies to record all transactions fairly
and accurately, to prevent publicly traded companies from concealing bribes and to discourage
fraudulent accounting practices. The DOJ is responsible for all criminal enforcement and for civil
enforcement of the anti-bribery provisions with respect to domestic concerns, foreign companies
and nationals. The SEC is responsible for civil enforcement of the anti-bribery provisions with
respect to issuers.
Violation of the FCPA is a criminal offense. Indictment can trigger onerous reporting requirements,
civil lawsuits, business losses and reputational risks. Legal consequences could include a
person or frm being barred from doing business with the federal government or ruled ineligible
to receive export licenses. Further, a private cause of action for treble damages may arise under
the Racketeer Infuenced and Corrupt Organizations Act (RICO) by a competitor who alleges
that the bribery caused the defendant to win a foreign contract.
Criminal fnes for corporations and other business entities may be up to $2 million per violation,
or twice that if there is a gain derived or loss to another party from the violation. Civil fnes are
up to $10,000 per violation, plus disgorgement of violation-related gains in an SEC enforcement.
Enforcement activity has increased, and average fnes have risen moderately. Total DoJ criminal
and SEC civil fnes for FCPA enforcement imposed on corporations jumped signifcantly in 2010
and 2011 (see chart below), according to Shearman & Sterling, LLP. Average fnes per company
have increased modestly, to $25 million$35 million, still manageable for most issuers. The
largest FCPA fne in history was levied on Siemens AG in 2008, at more than $1.6 billion ($800
million to U.S. authorities, including disgorgement, and $800 million to German authorities).
Other large fnes include KBR/Halliburton ($579 million), BAE ($400 million) and Snamprogetti
Netherlands B.V./ENI S.p.A ($365 million).
Many corporations have historically entered into an agreement to either dismiss a fled criminal
charge or refrain from fling any charges. The company acknowledges and accepts responsibility
for its acts, pays a fne and submits to 23 years of government oversight. Simply put, if the
company fulflls its obligations and does not engage in further misconduct, the pending criminal
claim will be dismissed. However, compliance, and related costs, can be onerous. It can also take
years from the discovery of a violation to the time a plea agreement is reached. In the interim,
corporate credit profles, liquidity and ratings may weaken. Additional risks include an overhang
that could impede future M&A activity, shareholder lawsuits and management distraction.
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Corporates

0
400
800
1,200
1,600
2,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Siemens (2008) and KBR (2009) Fines
($ Mil.)
Total Criminal and Civil Fines Imposed on Corporations
(20022012)
Source: Shearman & Sterling LLP.
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Corporates

Tax and Accounting
Tax
Up to 100% Bonus Depreciation Benefts
On Dec. 17, 2010, President Obama signed into law the Unemployment Insurance Reauthorization
and Job Creation Act of 2010 (2010 Tax Relief Act). The Tax Relief Act allowed 100% and 50%
bonus depreciation through the end of 2011 and 2012, respectively. On Jan. 2, 2013, The
American Taxpayer Relief Act of 2012 extended the 50% bonus depreciation to the full 2013
calendar year (2014 for certain assets). If elected, bonus depreciation will result in a temporary
boost to cash fows by allowing issuers to depreciate 100% and 50% of the cost of eligible, newly
installed equipment placed into service in 2011 and 2012/2013, respectively. This change should
not affect book earnings, as the bonus depreciation only affects tax returns.
Higher bonus depreciation is not likely to drive any rating changes. While there are cash tax
savings in the frst year of implementation, this beneft reverses over time. Fitch believes that any
benefts from the bonus depreciation for media and entertainment issuers will be modest, given
that the media and entertainment sector is not capital intensive.
Tax Holiday Would Beneft U.S. Multinationals
A new tax holiday could be a possibility in the near term, given the continued push by multinational
executives for Washington to re-evaluate the corporate tax code. A tax holiday would allow U.S.
multinationals to repatriate billions of dollars of profts earned overseas at low tax rates.
U.S. companies were given a one-year window to repatriate foreign income for a blended tax
rate of 5.25% in 2004, versus the typical rate of up to 35%. Since the American Jobs Creation
Act of 2004 (2004 Act) allowed foreign subsidiaries to repatriate the amount deemed to be
permanently reinvested foreign earnings, rather than just cash on hand, initial borrowings for
certain companies were material. Approximately 20% of repatriated funds from the 2004 Act
came from third-party debt funding. There is a potential risk of incremental leverage resulting
from any new tax holiday designed to allow multinationals to repatriate overseas earnings at a
reduced tax rate. Fitch would generally expect companies to either issue debt within the context
of its rating tolerances, or use future cash fow to repay any debt incurred within a short time
frame to maintain ratings. The deployment of this cash would also have an infuence on the
ratings, with reinvestment into the company having more leverage tolerance than shareholder-
friendly actions. Restrictions on the use of the repatriated funds, such as a requirement to use
the funds for job creation, may limit borrowings.
Fitch believes a tax holiday is most likely to occur in conjunction with broader tax reform, such as
a lower corporate tax rate combined with the elimination of various deductions and expenditures.
In Fitchs view, the biggest question related to tax reform revolves around whether or not the U.S.
should move to a territorial system or maintain the worldwide system but eliminate the deferral
on overseas earnings. Fitch believes that maintaining a worldwide deferral system will likely
prove to be insuffcient in trying to get companies to repatriate international cash fows more
often.
September 19, 2013

Corporates

Accounting
The ongoing convergence of the Financial Accounting Standards Boards (FASB) U.S. GAAP
and the International Accounting Standards Boards (IASB) International Financial Reporting
Standards (IFRS) has helped spur many updates and new accounting standards to U.S. GAAP
accounting over the last several years (including changes to disclosures). The goal of these
changes is to improve the quality of fnancial information provided by issuers and work toward
converging the standards from each board. A renewed emphasis on issuing converged, high-
quality accounting standards and the need to re-expose updated proposals for comments has
signifcantly slowed the completion of many accounting projects jointly initiated by FASB and
IASB. It is now clear that signifcant differences will remain between the two platforms. However,
cooperation continues on a small number of remaining joint projects.
The convergence of FASB and IASB will improve the comparability of U.S. issuers versus
international issuers who report under IFRS. While some of these changes have had a direct
effect on accounting policies for the companies in Fitchs U.S. media and entertainment portfolio,
the changes have not had a material effect on their credit profles. Some of the more signifcant
proposed changes are discussed in the following sections.
Accounting All Operating Leases as Capital Leases (Eliminating Concept of
Operating Leases)
The IASB and FASB proposed the elimination of operating leases in 2010, effectively bringing
most off-balance-sheet leases onto the balance sheet. FASB and IASB have refned the original
proposals and published exposure drafts in May 2013. As proposed, service contracts and
leases of 12 months or less will remain off balance sheet. Extension options and variable lease
payments can in some cases be excluded from the lease liability. These may also arise with the
split introduced between Type A and Type B assets. See Fitchs special report, New Global
Proposals to Reshape Lease Accounting, dated Aug. 5, 2013, for additional information and
analysis.
While such a change could have a material impact on the balance sheet, Fitchs analysis already
takes this change into consideration when calculating Fitchs adjusted leverage ratio. This ratio
takes into account operating leases as capital leases (as discussed further in the Leases/
Adjusted Leverage section of this report).
The implementation of this proposal is expected to adversely affect the leverage and interest
coverage metrics tied to some debt covenants. To the extent current bank agreements do not
automatically adjust for accounting changes, Fitch expects lenders to renegotiate covenant
levels before fnal implementation of the new lease accounting standard.
Changes to Revenue Recognition
One notable success of the convergence process is the aligned revenue recognition IFRS and
U.S. GAAP standards, which promise greater consistency and are expected to be issued before
the end of the year. They will replace the many and various current rules with a single model
that introduces more rigorous principles and greater disclosure. Entities will need to assess
what exactly it is they are providing to the customer and then split their contracts down into
these elements. Revenue is recognized as control of each element passes to the customer.
It remains to be seen how the principles will be interpreted in sectors where complex, multi-
element contracts are common, or where services are provided over time. For Fitchs rated
media and entertainment portfolio, timing of revenue recognition may be affected and there will
September 19, 2013

Corporates

likely be added costs to implement these standards. However, Fitch does not expect the new
standards to have a material impact on credit profles.
Recent Key Accounting Pronouncements
Standard Brief Description
ASC Topic 740 (ASU 2013-11)
Income Taxes
This update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss
or a tax credit carryforward exists at the reporting date. Current U.S. GAAP does not include explicit guidance on the financial
statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit
carryforward exists. The presentation of this tax item is inconsistent among issuers, and the goal of this update is to create
consistency. The adoption of these standards is not expected to have a material impact on financial results. The amendments
in this update are effective for fiscal years, and interim periods within those years, beginning after Dec. 15, 2013 (2014 for
nonpublic companies).
ASC Topic 715-80
(ASU 2011-09)
Multi-Employer Pension and
Postretirement Benefit Plans (MEPP)
In September 2011, FASB amended the ASC to provide enhanced disclosure about an employers financial obligations to
MEPPs. The new disclosures provide additional quantitative and qualitative information regarding an employers participation
in individually significant plans and the level of the employers participation in the plan. Disclosures include each MEPP name,
employer identification number (EIN), Pension Protection Act (PPA) zone status (red zone is generally less than 65% funded,
yellow zone 65% to less than 80% funded and green zone is at least 80% funded), financial improvement or rehabilitation plan
status, contributions by the company, whether there has been a surcharge to contributions and expiration dates of the collective
bargaining agreements. Adoption requires expanded footnote disclosure but is not likely to immediately affect financial results.
Effective for fiscal years ending after Dec. 15, 2011, and applied retrospectively for prior periods presented.
Intangibles
Goodwill and Others
In September 2011, FASB amended the guidance for intangibles goodwill and others. This guidance provides an option to
perform a qualitative assessment to determine if potential impairment is more likely than not (having a likelihood of more than
50%) before performing the two-step quantitative goodwill impairment test. If goodwill impairment is determined to be unlikely,
the quantitative two-step impairment test is not required. Interim goodwill evaluation has been modified to be consistent with
this annual approach. Adoption provides enhanced footnote disclosure but is not expected to immediately impact consolidated
financial results for corporates. However, it appears that the amendment allows companies more discretion regarding goodwill
and intangibles impairment, which could delay impairment recognition. The amendments are effective for interim and annual
periods beginning after Dec. 15, 2011.
Comprehensive Income
In June 2011, FASB amended the guidance for comprehensive income. The objective of the amendment was primarily to
increase the prominence of items reported in other comprehensive income. The new guidance changes the presentation
of comprehensive income. However, there are no changes to the components that are recognized in net income or other
comprehensive income under GAAP. The adoption of these standards is not expected to have a material impact on corporate
financial results but will change the presentation of future consolidated financial statements for all issuers. The amendments are
effective for interim and annual periods beginning after Dec. 15, 2011.
ASU Accounting Standards Update. ASC Accounting Standards Codification.
Source: FASB, Fitch Ratings
September 19, 2013

Corporates

Event Risk
Event Risk or Extreme Events describe the risk of a typically unforeseen or diffcult to predict
event. While the full realization of the event is excluded from ratings, heightened risk of such
an event occurring can weigh on an issuers ratings. McGraw Hill Financials ratings were
downgraded from A to BBB+ following the announcement of the Department of Justices civil
complaint fling.
Event risks can be externally triggered by regulations, litigation, natural disasters or hostile
takeover bids. They can also be internally triggered by changes in fnancial policy, major
acquisitions or strategic restructuring. For more detail, please refer to Fitchs special report
Addressing Extreme Events, dated July 2011.
Fitch divides risks between known and measurable, and included in ratings; known and
measurable, and not considered likely; and unknown or unquantifable. Fitchs base and
downside scenarios are considered to be known and measurable, and are therefore included
in the rating analysis. Rated entities with high investment-grade ratings are expected to absorb
some known but not explicitly measured or quantifed risks.
Event Risk Assessed in Ratings
Risk When Included Scenario
Known, measurable and included in ratings. Prospectively Base
Known, measurable, considered unlikely
and not included in ratings.
Prospectively: If direct exposure from business strategy or
concentration. Reactively: If secondary risk or unlikely.
Downside
Not measurable (known or unknown). Prospectively: Some cushion for rated entities rated AA
category or higher. Reactively: All others.
Stress or
Extreme Event
A common overhang for corporate issuers, including the media and entertainment sector, are
internally triggered event risks. For issuers in the investment-grade rating category, fnancial
or strategic policy shifts are always possible, and are often diffcult to predict, measure and
incorporate into ratings.
Fitch evaluates the potential for fnancial policy shifts by evaluating discussions with
management, public statements and by analyzing managements track record. Fitch also
incorporates concentration (and risk-seeking behavior) of ownership and historical stock price
performance relative to peers and the market (see the special report titled Lagging Equity
Performance Unveils Potential Risks for Bondholders: Volume III, dated May 2013). Fitch also
takes into account the incentives, willingness and commitment management has in achieving
and maintaining a stated credit rating or leverage target. Fitch believes that the issuers under
its coverage are committed to their current ratings. However, shifts in fnancial or management
policy or actions that demonstrate a shift in policy may trigger a reactive rating change.
Litigation and regulatory risk is also an event risk that is diffcult to measure, both in timing and
fnancial effect. When assessing issuers that have a high risk of litigation exposure (professional
services, rating agencies, etc.), Fitch will take into consideration historical litigation performance,
features in contracts (whether with customers or vendors) that could mitigate litigation risk, the
companys business operating practices and track record, and a companys fnancial fexibility
when assigning a rating. Cash, FCF generation and insurance protection will be factored in,
assessing an issuers fnancial fexibility. External sources of capital (bank facilities) are viewed
as secondary measures given the potential for triggering material adverse change clauses,
judgments exceeding event of default thresholds, the effect that those losses may have on the
Top Jury
Verdicts Analysis
($ Mil.) Amount
Largest Verdict
Tobacco Companies 145,000
Average Top 10 Verdicts 24,058
Average of Nos. 2 to 11
Largest Verdicts 9,895
Source: Bloomberg, Fitch Ratings.
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Corporates

perceived credit quality/leveragability of the issuer, and any effect on its ability to conduct
business with customers or vendors.
Event Risk Dashboard
In the Company Summary section of this report, Fitch has included an Event Risk Dashboard
schedule which lays out a series of event risk categories (noted in the table on the left) and
Fitchs opinion of the relative risk associated with each category. As noted above, these are
primarily event risks that may not be completely factored into existing ratings due to the nature of
the event. As with any event risk, changes in a companys position or events (such as judgments
or changes in regulation) that increase risk to bondholders will likely lead to negative rating
actions.
Event Risk typically describes unforeseen or diffcult to predict events. As part of this analysis, Fitch
separates the assessment of the potential actions a company is able to make from expectations
of what the company will do. As a simple example, most investment-grade companies are not
restricted from substantially increasing leverage, which increases event risk around fnancial
policy. However, in most cases, such an action is not expected.
With regard to the LBO event risk category, Fitch recognizes that LBO risk fuctuates with credit
market conditions. In this analysis, Fitch assumes a benign market for credit and assesses
the underlying cash fow generation, enterprise value size, growth profle and issuer specifc
conditions (when applicable) when determining the risk to bondholders. For example, Fitch
believes event risk of an LBO of The Dun & Bradstreet Corp. (D&B) is heightened relative to
other issuers and will be an overhang on the credit for the near term (see special report titled An
LBO Scenario of the Dun & Bradstreet Corp., dated December 2012).
Top Ten Securities Class Action Settlements
($ Mil., As of Dec. 31, 2012)
Settlement
Year
Total
Settlement
Value
Settlements with Co-Defendants, if Any, that Were:
Financial Institutions Accounting Firms
Ranking Company Value Percent Value Percent
1 Enron Corp. 20032010 7,242 6,903 95.3 73 1.0
2 WorldCom, Inc. 20042005 6,196 6,004 96.9 103 1.7
3 Cendant Corp. 2000 3,692 342 9.2 467 12.6
4 Tyco International, Ltd. 2007 3,200 0 0.0 225 7.0
5 AOL Time Warner Inc. 2006 2,650 0 0.0 100 3.8
6 Bank of America Corp.
a
2012 2,425 0 0.0 0 0.0
7 Nortel Networks (I) 2006 1,143 0 0.0 0 0.0
8 Royal Ahold, NV 2006 1,100 0 0.0 0 0.0
9 Nortel Networks (II) 2006 1,074 0 0.0 0 0.0
10 McKesson HBOC Inc. 20062008 1,043 10 1.0 73 7.0
Total 29,764 13,259 44.5 1,040 3.5
a
Tentative settlement.
Source: NERA Economic Consulting, Recent Trends in Securities Class Action Litigation: 2012 Full-Year Review,
January 2013.
Event Risk Dashboard
Categories
LBO
Secular
Corporate Governance/Ownership
Change in Financial Policies
Acquisition
Divestiture
Structural Subordination
Covenant Breach
Litigation
Regulatory
Contingent Liabilities
September 19, 2013

Corporates

The 10 Largest SEC Settlements Range from $310 Mil. to $800 Mil.
Post SOX
a
to Sept. 30, 2012
Settling Defendant
Year of SEC
Announcement
Total
($ Mil.) Type of Allegation
American International Group, Inc. 2006 800 Public Company Misstatements/Omissions
WorldCom, Inc.
b
2003 750 Public Company Misstatements/Omissions
Goldman, Sachs & Company 2010 550 Misrepresentations to Financial Services
Customers
Citigroup Global Markets Inc.
c
2003 400 Analyst Fraud
Federal National Mortgage Association 2006 400 Public Company Misstatements/Omissions
Banc of America
d
2005 375 Market Timing
Siemens Aktiengesellschaft 2008 350 FCPA
Invesco Funds Group, Inc. 2004 325 Market Timing/Late Trading
State Street Bank and Trust Company
e
2010 314 Misrepresentations to Financial Services
Customers
Milowe Allen Brost & Gary Allen Sorenson
f
2010 310 Ponzi Scheme
a
Sarbanes-Oxley Act.
b
A court judgment imposed a civil penalty of $2.25 billion on WorldCom. However, per a plan of
reorganization of WorldCom reached in bankruptcy court, WorldComs obligations were deemed to be satisfied by the
companys payment of $500 million in cash and by its transfer of common stock in the reorganized company having a
value of $250 million to a distribution agent.
c
Formerly known as Salomon Smith Barney Inc.
d
Banc of America Capital
Management LLC and Banc of America Securities LLC were jointly and severally liable for $375 million on Feb. 9, 2005.
e
Includes $255,240,472 that State Street agreed to pay to compensate harmed investors.
f
Brost and Sorenson were
found jointly and severally liable for $310 million on Nov. 17, 2010. Through administrative proceedings announced on
Jan. 3, 2011, Brost was barred from association with any broker or dealer. Notes: The combined settlement between the
SEC and the United States Attorneys Office for the Southern District of New York with the Rigas family and Adelphia
Communications Corporation has been excluded from this table. The Rigas family agreed to forfeit in excess of $1.5
billion in assets, including certain cable properties, to Adelphia. Adelphia agreed to pay $715 million to a victim fund
established in district court upon receipt of these assets.
Source: NERA Economic Consulting, SEC Settlements Trends: 2H12 Update, January 2013.
September 19, 2013

Corporates

Corporate Governance
Fitchs base assumption is that companies seeking capital from investors will have adequate
corporate governance practices. As such, good governance will not increase a rating. However,
poor governance practices can result in lower ratings than typical quantitative and other
qualitative credit factors may imply. For more detail, please refer to Fitchs corporate governance
criteria report, Evaluating Corporate Governance, dated December 2012.
All of the key characteristics noted in the margin are evaluated with a view to assessing how
they contribute to protecting the interests of bondholders and other creditors. Issuer-specifc
characteristics are divided into three categories: 1) those characteristics that are neutral to
ratings; 2) those characteristics that may constrain ratings; and 3) those characteristics that will
likely have a negative effect on ratings. The degree to which ratings are affected depends on
the extent and pervasiveness of the governance matter(s) identifed, and the relative strength
of the issuers credit factors within its rating category, balanced against/with the absolute level
of its ratings.
Dual-class stock structures have been common among media and entertainment sector issuers,
and continue to be popular with new issuers (Facebook, LinkedIn, Groupon and Zynga). This
dual-stock structure creates ownership concentrations that could create succession issues, and
complicate the evaluation of event risk. Fitch does not believe that this trend will change, and
notes that there are few or no incentives for owners of super voting shares to elect to exchange
these shares for one-vote shares. All of the ownership concentration listed in the table below is
a result of dual-stock structures.
In the past, controlling shareholders and infuential external owners have abruptly changed their
publicly stated positions on capital structure topics to the detriment of bondholders (see Event
Risk discussion in this report). This emphasizes the need to look beyond public statements and
focus on managements incentive to maintain a particular leverage target or rating commitment,
given other pressures they may face.
Closely Held Voting Control
(%)
Company Significant or Controlling Shareholder(s) Voting Economic
Belo Robert W. Decherd 24 4
CBS Sumner Redstone 79 6
Discovery Advance/Newhouse Partnership
a
25 32
Discovery John Malone
b
29 3
Liberty Interactive John Malone 35 5
Regal Anschutz Company 78 47
c
Rupert Murdoch 40 14
Viacom Sumner Redstone 79 9
a
Reflects effective voting control incorporating Advance/Newhouses ability to convert its 100% ownership in preferred
stock into common stock.
b
Includes holdings of his wife, as to which shares he has disclaimed beneficial ownership.
c
Based on proxy filed by News Corp. on April 30, 2013. Note: Represents most recent proxy filing for each company.
Key Characteristics of
Evaluating Governance
Board effectiveness.
Management effectiveness.
Transparency of financial
information.
Related-party transactions.
September 19, 2013

Corporates

Unions
According to the Department of Labor, unionized (nongovernment) U.S. employees are more
expensive to employ than non-union employees, but union issues go beyond costs. After years
of stability, the media industry is in transition. This transition is demanding that cost structures
change in response to the uncertain industry economics. Fitch acknowledges that union
affliations could obstruct the timeliness and magnitude of cost actions. The Writers Guild of
America (WGA) strike, the Screen Actors Guild (SAG) working without a contract in 2008, and
actions by unions at several newspaper companies are evidence that media unions could play a
role in the credit profles of certain companies.
There are various industry positions that can be affliated with unions, including writers and
designers, reporters, editorial assistants, photographers, editors, paginators, editorial artists,
correspondents, typographers, advertising salespeople, marketing personnel, information
systems specialists, commercial artists, technicians, accountants, business staff, customer
service representatives, drivers, maintenance, mail room, pressroom, telephone operators,
circulation and distribution staff, and other positions.
Most of the highly diversifed media conglomerates revenue streams are not dependent on
any particular union, especially over the short term, and they have various alternatives to at
least partially offset down time. Fitch notes that the three major studio union contracts (Screen
Actors Guild [including The American Federation of Television and Radio Artists], Directors
Guild and Writers Guild) are coming up for renewal in 2014. To a lesser extent, but still with
material exposure, pure-play movie exhibitors and TV broadcasters are more exposed to lengthy
disruptions in content creation. Fitch is more concerned with union affliations at newspaper
companies, which face a more acute need to reduce costs.
Professional sports unions have an indirect effect on media credit profles, as sports programming
aired on cable and broadcast networks draws large audiences and substantial (albeit low-
margin) advertising revenue. Work stoppage risks are present in all sports leagues. In 2011,
labor disputes between league owners and the National Football League Players Association
and the National Basketball Players Association and in 2012 with the National Hockey League
Players Association led to work stoppages in their respective sports leagues. Ultimately, all
contracts were negotiated and executed. However, the basketball and hockey stoppages
resulted in shortened seasons for those particular years.
Fitch believes the media conglomerates credit profles would be able to absorb a work stoppage
that resulted in missed games, as any rights fees paid for games that are not played are credited
over the remainder of the contract, resulting in no overall cash fow effect over the life of the
contract. However, missed games would deprive the media conglomerates of the promotional
opportunity associated with sports large audiences.
Fitch generally views a work stoppage in excess of one season in professional sports as a highly
unlikely event, given motivation on both sides to return to play, and the historical track record of
settling labor disputes and resuming play. Long-term labor unrest in professional sports has the
potential to alienate a sports fan base.
Sample of Unionized
Workforce in Sector
Company
%
Unionized
Belo Corporation 21%
The McClatchy Company 6.1%
Clear Channel
Communications, Inc. 3.8%
AMC Entertainment, Inc. < 2.0%
Note: Regal Entertainment has an
unspecified number of unionized workers.
Fitch estimates this number to be a
small percentage of its total workforce,
primarily consisting of video projector
operators. An unspecified number of Dun
& Bradstreets international workforce
(approximately 2,200 in total) is unionized.
At least approximately 1% of Thomson
Reuters workforce is unionized. Univision
and Discovery Communication have a
previously disclosed unionized workforce.
Fitch believes these issuers continue to
have unionized workforce and estimates
this at less than 10% of their total
workforce.
Source: Company filings and reports.
September 19, 2013

Corporates

Union Summary
Union AcronymSubsectors Exposed Members Comment
American Federation of Labor and
Congress of Industrial Organizations
AFL-CIO All with union
exposure
12,200,000 Represents 57 national and
international unions. Includes
CWA, SAG-AFTRA, WGA and
others.
Communication Workers of America CWA All with union
exposure
700,000 Umbrella organization for 1,200
media and telecommunications-
related unions.
Screen Actors Guild American
Federation of Television and Radio
Artists
a
SAG-
AFTRA
Movie/TV Studios, TV
Stations
165,000 SAG and AFTRA merged effective
March 30, 2012. Contract expires
June 2014.
International Alliance of Theatrical
Stage Employees, Moving Picture
Technicians, Artists and Allied Crafts
of the United States
IATSE Movie/TV Studios,
Trade Shows
113,000 Hollywood locals unions (1/3
of total membership) approved
a three-year extension with
Hollywood producers in July 2012.
The Newspaper Guild
a,b
TNG Newspapers 34,000 Merged into CWA in 1997.
Directors Guild of America
a
DGA Movie/TV Studios, TV
Stations
15,000 Contract expires June 2014.
Writers Guild of America (East and
West)
a
WGA Movie/TV Studios, TV
Stations
13,000 Contract expires May 2014.
National Association of Broadcast
Employees and Technicians
a
NABET Movie/TV Studios,
TV Stations, Cable
Networks, Printing
7,000 Merged into CWA in 1994.
a
Affiliate or subsidiary of AFL-CIO.
b
Covers operating engineers, machinists, electricians, paperhandlers, typographers,
pressmen, drivers, garage mechanics, warehouse employees. Source: Union websites, Fitch Ratings.
September 19, 2013

Corporates

Parent and Subsidiary Rating Linkage
In all cases in Fitchs U.S. media and entertainment portfolio, Fitch links the IDR for parents and
subsidiaries. However, for Clear Channel Worldwide Holdings Inc. (CCWW), the linkage is not as
strong as for other issuers in the portfolio. Fitch notches CCWWs IDR (B) two notches higher
than its indirect parent Clear Channel Communication Inc.s (Clear Channel) IDR (CCC).
Understanding the multifaceted relationship between a parent company and its subsidiaries
is crucial for determining each companys respective probabilities of default. For more details,
please refer to Fitchs criteria report, Parent and Subsidiary Rating Linkage, dated August
2013.
The fve basic steps in determining whether or not to link a parent and subsidiary rating are as
follows:
Determine if a parent/subsidiary relationship exists.
Determine whether or not the parent and/or subsidiary operates under special regulatory
restrictions that would dictate the use of other, existing Fitch criteria methodology.
Determine the relative stand-alone credit strengths of the parent and its subsidiary.
Determine the strength of the relationship by assessing any legal (guarantees,
intercompany loan restrictions, cross defaults, different jurisdictions), operational
(management control and commonality, centralized treasury, operational overlap and/or
integration), and strategic ties (strategic importance, tangible support).
Formulate a conclusion to link or not link ratings.
When the parents credit profle is weaker than its subsidiarys and linkage between the two
entities is strong, it is more likely that the IDRs will be assigned at the same level, somewhere
between the two stand-alone ratings (i.e. the consolidated credit profle). If Fitch determines the
linkage is weak, the IDR of the subsidiary could be rated higher than that of its parent company.
In general, the rating guideline is a maximum of two notches higher for the subsidiary, but wider
notching may be warranted in some cases based on specifc circumstances.
For example, when rating CCWW, Fitch evaluates the entity on a stand-alone basis while
factoring in its ties to Clear Channel. Fitch believes that the rating linkage is fairly weak due
to legal provisions that separate the two entities and protect the subsidiary (including dividend
restrictions, lack of guarantee and protection from a Clear Channel default). However, CCWW
has strong operational ties to the weaker parent, and the parent can extract cash from the entity
(with restrictions), which it relies on to service a portion of its debt. Strong operational ties to the
weaker parent also include centralized treasury and senior management overlap. In Fitchs view,
the combination of weak legal ties and strong operational ties creates a level of linkage but not
one that is suffcient to equalize the IDRs.
Alternatively, when the parent is fnancially stronger than the subsidiary and the linkage is strong,
the IDRs will be closely correlated. However, they may not be identical. Fitch may rate the
subsidiary lower than the parent, typically within a range of fve notches. Fitch would expect most
of the following criteria to be met in order to rate both IDRs at the same level:
Comprehensive cross-default provisions affecting parent and subsidiary across all major
lending groups and public debt obligations.
Subsidiary operationally integral to the core business of parent.
Subsidiary strategically important to the future direction of the groups operations,
potentially providing long-term fscal benefts or access to markets that parent could not
otherwise access.
Does Parent/Sub. Relationship Exist?
Sector-
Specific
Criteria?
Stand-Alone
Analysis
Which Entity
Is Relatively
Stronger?
Refer to
Sector-
Specific
Criteria
Conclusions
Same Subsidiary Parent
No Yes
No
Yes/
Uncertain
LCF Summary Flow Chart
LCF Linkage considerations framework.
Path A: Legal
and
Operational
Ties
Path B: Legal,
Operational
and Strategic
Ties
Parent and Subsidiary
Linkage List
Parent Subsidiaries
Investment Grade
CBS Corporation CBS
Broadcasting, Inc.
Comcast Corp. NBC Universal
Media, LLC
Cox Enterprises, Inc. Cox
Communications
Pitney Bowes Inc. Pitney Bowes Intl.
Holdings Inc.
Verisk Analytics, Inc. Insurance Services
Office, Inc. (ISO)
The Walt Disney Co. ABC Inc., Disney
Enterprises Inc.
Liberty
Interactive LLC
QVC Inc.
Clear Channel
Communications,
Inc.
Clear Channel
Worldwide
Holdings, Inc.
September 19, 2013

Corporates

Tangible fnancial support provided by parent to subsidiary in the form of ongoing cash
subsidy or guarantee.
Level of parents investment in subsidiary deemed material relative to scale of the group
and its fnancial resources.
Publicly declared or rating agency-notifed group strategy regarding parents treatment of
its subsidiary and access to its cash fows.
In the situation where the parent is stronger and the linkage is weak, the IDRs of the parent
and the subsidiary should not be linked and should therefore be based on the respective stand-
alone credit profles of the two entities. In cases where Fitch believes support by the parent
will be available in a time of crisis, Fitch will consider notching up the stand-alone rating of the
subsidiary.

September 19, 2013

Corporates

Leases/Adjusted Leverage
Fitch computes adjusted leverage ratios as necessary to account for leases and off-balance-
sheet debt. In certain cases, these metrics are weighted more heavily in Fitchs analysis. Fitch
employs one of two methods to value operating leases and calculate the adjusted leverage ratio
for going concerns. (Please refer to the Operating Leases: Updated Implications for Lessees
Credit special report, dated August 2011.) The frst method applies a multiple (currently, Fitch
uses an 8x multiple) to the most recent years or the last 12 months (LTM) actual rental expense.
The second method calculates the present value (PV) of reported noncancellable future rental
expense. The results of these two approaches may vary considerably, and neither is intrinsically
superior. The multiple method allows for better comparability within a sector, while the PV method
provides a more accurate representation of the companys noncancellable commitments.
Depending on the circumstances and facts, Fitch will determine which method weighs more
when considering adjusted leverage as part of the overall credit review. For Fitchs media and
entertainment sector, Fitch calculates the adjusted leverage ratio using the PV method for all
rated companies and includes the results in the fnancial summary pages for each company.
As described in the Recovery and Notching section, lease treatment is an important component
of Fitchs recovery analysis. Operating leases are considered when allocating distressed
enterprise value to the recovery waterfall. The value of rejected leases (added to unsecured
claims) is computed to be consistent with the bankruptcy code: the greater of one years rent
or 15% of the remaining term of the lease (not to exceed three years). Among U.S. media and
entertainment subsectors with companies for which recovery analysis is relevant, leases are
only a key consideration for movie exhibitors. Fitch estimates that leases would be rejected for
30% of the portfolio to refect the closure of underperforming theaters. This is a lower percentage
than for the corporate sector more broadly, incorporating the importance of the leased space to
the core business prospects as a going concern.
Leverage and Lease Adjusted Leverage Ratios
(x, As of Fiscal Year-End 2012) Leverage Adjusted Leverage
a
Adjusted Leverage
Versus Leverage
Regal Entertainment Group 3.7 4.7 1.0
Liberty Interactive Corporation 3.9 4.7 0.8
McGraw-Hill Financial, Inc. 0.8 1.1 0.3
b
2.5 2.9 0.4
CBS Corporation 1.6 1.8 0.2
Viacom Inc.
c
1.9 2.1 0.2
Verisk Analytics, Inc. 2.0 2.2 0.2
AMC Entertainment Inc. 5.2 5.3 0.1
Interpublic Group of Companies, Inc. 2.9 3.1 0.1
Thomson Reuters Corporation 2.0 2.2 0.1
a
Present value method.
b
Fiscal Year Ended June 30, 2013.
c
Fiscal Year Ended Sept. 30, 2012.
Financial Accounting Standards Board
(FASB) and International Accounting
Standards Board (IASB), published
an exposure draft in August 2010
proposing to change the accounting of
operating leases and place operating
leases on the balance sheet. In May
2013, a joint statement was made
announcing proposed changes to
the accounting of leases in which the
Boards asked relevant stakeholders
to provide feedback by September
2013. Please refer to Fitch special
report on the proposed changes New
Global Proposals to Reshape Lease
Accounting published on Aug. 5,
2013. Fitch will monitor the proposals
and update its methodology as the
standards become clearer.
September 19, 2013

Corporates

Equity Credit for Hybrids and Other Capital Securities
Hybrids and other capital securities refer to a wide range of capital-market instruments and, for
the purposes of Fitchs analysis, are defned by Fitch as all instruments that are neither common
stock nor ordinary debt, such as preferred and preference shares. For a thorough analysis of
this topic, please refer to the criteria report, Treatment and Notching of Hybrids in Nonfnancial
Corporate and REIT Credit Analysis, dated December 2012.
Equity credit is an analytical concept that expresses the extent to which Fitch views a security
as containing debt-like or equity-like qualities when it evaluates an issuers capital structure
and fnancial leverage in support of Fitchs assignment of an IDR to the issuer. The debt-equity
continuum table at left illustrates the categories used to assign equity credit to hybrid instruments.
The amount of adjusted equity that can be derived from hybrid instruments is not subject to a
cap. Fitch makes pro forma adjustments to an issuers fnancial leverage ratios based on the
allocation of hybrid securities into debt and equity components. Instruments that are reported
as debt or as equity on an issuers balance sheet may be reallocated from that category and
classifed as entirely debt, entirely equity, or 50% debt and 50% equity for Fitchs leverage ratio
analysis. Fitch does not make any adjustments to interest or fxed-charge coverage ratios for
deferrable and nondeferrable coupon payments.
In determining equity credit, hybrids are evaluated as to the extent that they contribute to fnancial
fexibility and support the ongoing viability of an organization. To achieve any equity allocation,
the terms of the instrument should avoid mandatory payments, covenant defaults or events of
default (EODs) that could trigger a general corporate default or liquidity need.
Key features needed to achieve some level of equity credit are subordination to senior debt
holders; effective maturity greater than fve years; an unconstrained ability to defer interest/
coupon payments; limited or no covenants; limited or no EODs or acceleration that could trigger
a general corporate default; and no cross-default to senior obligations. Instruments that are
mandatorily convertible to equity or an equity-like hybrid within fve years that can defer interest/
coupon payments may also achieve a level of equity credit.
As depicted in the table below, most hybrids in the U.S. media and entertainment sector are
optionally convertible securities assigned no equity credit and treated as straight debt. This refects
Fitchs view that optional conversion cannot be relied upon during stressful circumstances, and
in many cases, conversion would be viewed as unlikely. In the case of Interpublic Group of
Companies, Inc., the $221 million series B cumulative convertible perpetual preferred stock is
assigned 50% equity credit, given its perpetual nature, deferability features and its subordination
ranking. These features result in Fitch rating the security BB+, two notches below the Interpublic
Groups IDR. Fitch is cautious that hybrid securities with embedded puts like those on the
balance sheets of Interpublic Group and Liberty Interactive LLC could pose a threat to liquidity
or cause the companies to provide incentive interest payments to prevent the bonds from being
put by the bondholders.
Hybrid Summary
Company
Amount
($ Mil.)
Interest
Rate (%) Description Maturity
Equity
Credit (%)
Interpublic Group of Companies, Inc. 221.5 5.250 Series B Cumulative Convertible Perpetual 50
Liberty Interactive LLC 1,128.0 3.125 Senior Exchangeable Debentures 2023 0
Liberty Interactive LLC 469.0 4.000 Senior Exchangeable Debentures 2029 0
Pitney Bowes 300.0 6.125 Preferred Stock Perpetual
a
0
a
Fitch calculates an effective maturity date of October 2016, which is the security call date.

Debt-Equity Continuum
(%)
Equity Classes Equity Debt
Superior Equity Content 100 0
Moderate Equity Content 50 50
Debt; No Equity Content 0 100
September 19, 2013

Corporates

M&A and LBO Risk
Fitchs evaluation of leveraged buyout (LBO) risk within its media and entertainment portfolio
refects the gradually improving U.S. economy (see Global Economic Outlook June 2013),
improved market liquidity, a benign default environment (see page 158), and investors search
for higher yields. Fitch also considers the risk of further weakening in the eurozone economies
(and the resulting impact on credit markets) and legacy LBOs that remain from the pre-crisis era,
including Clear Channel Communications (rated CCC).
U.S. buyout volume is down 55% from the markets peak, according to Pitchbook Data, Inc.
One of the main factors behind the drop in buyout activity over the last two years has been an
increase in buyout multiples (please refer to Fitch special report U.S. Leveraged Finance and
the Credit Cycle, dated June 2013, for more details). Pitchbook also estimates $328 billion
of capital overhang, most of which is held by large buyout funds. Fitch expects private equity
activity in the media and entertainment sector will remain relatively modest in 20132014.
0
100
200
300
400
500
0
300
600
900
1,200
1,500
2006 2007 2008 2009 2010 2011 2012 LTM 1Q13
No. of Deals Deal Value
(No.)
LBO Volumes
LTM Latest 12 months.
Source: Pitchbook Data, Inc.
($ Bil.)
High margins and strong conversion into FCF remain important characteristics of the media and
entertainment sector. However, secular shifts in certain advertising mediums may reduce interest
in certain subsectors. According to PitchBook data, B2B targets continue to be a signifcant focus
of private equity investments, accounting for 34% of private equity transactions in 2012.
Fitch does not see signifcant LBO risk within its rated portfolio. Fitch does not believe that
an LBO of CBS, Discovery Communications, Twenty-First Century Fox Inc., Thomson Reuters
Corp., Time Warner Inc., Viacom or The Walt Disney Company would be possible, given the
market appetite needed to fund these large deals (enterprise values in excess of $20 billion).
Concentrated ownership (CBS and Discovery), and regulatory and litigation risk (McGraw Hill
Financial) provide additional challenges for completing an LBO of these companies.
Fitch has identifed four names in its coverage with enterprise values of a size that, while large,
may not preclude an LBO (less than $20 billion) Dun & Bradstreet, Interpublic Group of
Companies, Pitney Bowes and Verisk Analytics. For various reasons, Interpublic Group and
Pitney Bowes are less likely candidates for an LBO. Fitch notes the existing bonds for most
of these companies contain a change-of-control put provision. This provision would allow
bondholders to put the bonds back to the company at 101%, providing some downside protection.
Fitch notes the industry is still plagued by several boom-era LBOs (20052008), when debt
capital fowed into the sector. Nielsen Holdings N.V. was successful with its IPO and follow-
on share offerings, but other companies, such as Clear Channel Communications, Inc. and
Univision Communications, Inc., are still digging out of the signifcant leverage added on during
September 19, 2013

Corporates

their LBOs. Other LBO transactions in the media and entertainment sector have either entered
bankruptcy or have seen equity stakes wiped out due to asset foreclosures, such as those of
Cengage, Tribune Company, Citadel Broadcasting Corp. and EMI Group Ltd. The media industry
experienced one of the highest default rates during the recession due to the levels of leverage
taken on by certain media companies over the preceding several years, compounded by the
economic downturn (see the Historical Defaults section).
Select U.S. Media LBOs and LBO Firm Investments/Cross Ownership
Date Target Assets Buyers Value ($ Bil.)
7/8/08 Clear Channel Radio, Outdoor Bain, T.H. Lee 26.7
7/1/11 Blackboard Inc. Education Technology and Service Provider Providence Equity Partners 14.6
4/1/07 Tribune Newspapers, TV and Online Investments Zell Group 13.5
3/1/07 Univision TV Networks, TV Stations, Radio and Music Saban, Madison Dearborn, Providence, Texas Pacific,
T.H. Lee
12.1
5/1/06 VNU (Nielsen) Various Media-Rating Services and Publications Blackstone, Carlyle, KKR, T.H. Lee, Alpinvest,
Hellman & Friedman
9.6
7/1/07 Cengage Thomsons Educational Publishing Unit Apax, OMERS Capital Partners 7.8
10/7/09 SeaWorld Parks & Entertainment
(Anheuser-Busch InBev NV)
Theme Parks Blackstone Group LP 6.4
7/29/10 Interactive Data Corporation Financial Data Provider Silver Lake, Warburg Pincus 3.4
11/26/12 McGraw-Hill Education Education Technology and Service Provider Apollo Global Management 2.5
7/1/11 Go Daddy Group Domain Registrar KKR, Silver Lake, Technology Crossover Ventures 2.3
10/22/12 Ancestry.com Web-Based Family History Services Provider Permira Advisors 1.6
10/1/05 Susquehanna 33 Radio Stations Bain, Blackstone, T.H. Lee, Cumulus Media 1.2
2/1/08 TV Stations 56 Clear Channel TV stations Providence 1.1
7/1/08 TV Stations Eight News Corp. TV stations Oak Hill Capital Partners 1.1
5/6/13 Nielsen Expositions B-to-B Trade Shows Onex Corp. 1.0
1/1/07 TV Stations Nine New York Times TV stations Oak Hill Capital Partners 0.6
LBOs Leveraged buyouts. Note: In the case of Blackboard Inc. and Go Daddy Group, the date represents the announcement date. Other instances represent
transaction closing dates.
Source: Company Web sites and press releases, Fitch Ratings.
September 19, 2013

Corporates

Media and Entertainment Potential Acquisition Targets
(As of June 2013)
Acquisition Target Current Owners Most Likely Acquirer
Enterprise
Value ($ Bil.) Note
AMC Networks Dolan Family (66% voting), Public Disney, Time Warner, Twenty-First Century
Fox, Comcast
6.4 Public
Clear Channel Outdoor Clear Channel Comm. (89%), Public JC Decaux 7.5 Public
Discovery Communications Public, John Malone (23% voting), Advance/
Newhouse (26% voting)
Time Warner, Disney, Twenty-First Century
Fox
30.0 Public
Dreamworks Animation Jeffrey Katzenberg (60% voting), Public Time Warner, NBCU, Viacom 2.5 Public
Dun & Bradstreet Corp. Public Private Equity 5.7 10x LTM EBITDA
Electronic Arts Public Microsoft, Sony, Disney, Activision Blizzard 7.3 Public
Factset Public Thomson Reuters, Wolters Kluwer 4.0 Public
HSN Inc. Public, Liberty Interactive (37%) Liberty Interactive 3.0 Public
Havas Public, Vincent Bollore (30%) WPP, merger with IPG 3.0 Public
Hulu Disney, NBCU, Twenty-First Century Fox,
Providence Equity Partners
Google, Yahoo!, Amazon, DirecTV 1.52.0 Based on published
reports/articles
IDC Warburg Pincus, Silverlake Thomson Reuters, Wolters Kluwer,
McGraw Hill Financial
3.4 Purchase price in 2010
Informa PLC Public Reed Elsevier, Thomson Reuters, Pearson 4.9 Public
Lionsgate CEO Mark Rachesky (37.0%), Public Media Conglomerate 2.7 Public
LivingSocial.com Amazon, Lightspeed Venture Partners,
U.S. Venture Partners, Grotech Ventures,
Institutional Venture Partners, T. Rowe Price,
Steve Case
Amazon 1.5 Based on February equity
financing valuation
MGM Studios Group of prebankruptcy creditors
Anchorage Capital Group LLC, Davidson
Kempner Capital Management, Highland
Capital Management, Invesco Inc.,
JPMorgan Chase & Co., Solus Alternative
Asset Management,
Spyglass Entertainment (<1%)
Spyglass, Lionsgate, Sony, Time Warner 1.9 Value in 2010 bankruptcy
Netflix Public Microsoft, Google, Apple, Amazon 13 Public
Scripps Networks Interactive Public Time Warner, Disney, Twenty-First Century
Fox
11.7 Public
Starz Public Twenty-First Century Fox, Disney, Comcast,
Viacom, Verizon
3.8 Public
The Weather Channel
Holding Corp.
NBCU (25%), Bain, Blackstone NBC, Media Conglomerates 3.5 Purchase price in 2008.
THQ Inc. Public Disney, Viacom, Twenty-First Century Fox,
Time Warner, Electronic Arts
0.1 Public
Wolters Kluwer Public Reed Elsevier, Thomson Reuters 10.0 Public
Source: Fitch Ratings, published reports.
September 19, 2013

Corporates

Merger and Acquisition Activity Select Transactions
($ Mil., Unless Noted)
Date Subsector Target (Seller) Acquirer
Transaction
Price
Multiple
(x)
2013
3Q13
a
Radio Agero (Connected Vehicle unit) SiriusXM 530 N.A.
3Q13
a
Newspaper Washington Post, plus six other publications Jeff Bezos 250 N.A.
3Q13
a
Broadcast/Cable Networks Allbritton Sinclair Broadcasting 985 10.9
3Q13
a
Ad Agency Omnicom and Publicis Publicis Omnicom Group 35,118 9.3
3Q13 Education TSL Education
(News Corp./Twenty-First Century Fox)
TPG 595 N.A.
3Q13
a
Broadcast/Cable Networks Local TV Holdings, LLC Tribune Company 2,725 7.0
2Q13
a
Broadcast/Cable Networks Belo Gannett 2,200 9.4
2Q13 Broadcast/Cable Networks Fisher Communications Sinclair Broadcast Group 354 11.0
2Q13
a
Business Services Lender Processing Services Fidelity National Financial 3,900 11.2
2Q13 Business Services Nielsen Expositions
(Nielsen Holdings' tradeshow unit)
Onex Corporation 950 10.1
2Q13 Digital Media Waze Google 1,100 N.A.
2Q13 Digital Media Tumblr Yahoo 1,100 N.A.
2Q13 Marketing Technology ExactTarget Salesforce.com 2,500 159.5
2Q13 Marketing Technology Acquity Group Accenture 316 11.4
2Q13 Software and Information (Cloud) SoftLayer Technologies IBM 2,000 N.A.
2Q13 Software and Information R.L. Polk IHS 1,400 14.0
1Q13 Broadcast/Cable Networks Current TV Al Jazeera Sports 500 N.A.
1Q13
a
Broadcast/Cable Networks Barrington Broadcasting Group Sinclair Broadcast Group 370 N.A.
1Q13 Broadcast/Cable Networks Outdoor Channel Holdings Kroenke Sports Enterprise 227 17.7
1Q13 Broadcast/Cable Networks Cox Media Group (four television stations) Sinclair Broadcast Group 99 N.A.
1Q13 Marketing Technology SurveyMonkey Tiger Global Management/Google 1,350 22.1
1Q13 Movie Exhibitor Hollywood America Cinemas Regal Entertainment Group 238 N.A.
2012
4Q12
a
Business Services Arbitron Nielsen Holdings 1,219 9.7
4Q12 Business Services Thomson Reuters' IR & PR Business NASDAQ 390 N.A.
4Q12 Cable Networks/Radio Portfolio SBS Nordic Operations Discovery Communications 1,700 9.9
4Q12 Commercial Printing Vertis Communications Quad/Graphics 256 4.3
4Q12 Digital Media Ancestry.com Permira Advisors 1,600 10.6
4Q12 Digital Media Kayak Software Priceline.com 1,600 24.3
4Q12 Ad Agency Hyper Marketing Alliance Data Systems 460 N.A.
4Q12 Marketing Technology Eloqua Oracle 810 N.A.
3Q12 Video Gaming Gaikai Sony Computer Entertainment 380 N.A.
3Q12 Ad Agency Aegis Group PLC Dentsu Inc. 4,900 14.9
2Q12 Ad Agency AKQA WPP Group 540 12.9
3Q12 Broadcast/Cable Networks A&E Television Networks LLC Walt Disney Co./The Hearst Corp. 3,025 N.A.
3Q12 Software and Information Wood Mackenzie Hellman & Friedman 1,500 N.A.
2Q12 Digital Media MSNBC.com Comcast 300 N.A.
3Q12 Software and Information FX Alliance Inc. Thomson Reuters Corp. 680 11.8
2Q12 Marketing Technology Yammer Microsoft Corp. 1,200 N.A.
2Q12 Marketing Technology Buddy Media Salesforce.com 690 N.A.
2Q12 Movie Exhibitor AMC Entertainment Dalian Wanda Group 2,600 8.1
2Q12 Newspapers Media General Inc. Berkshire Hathaway Inc. 142 N.A.
2Q12 Digital Media ESPN Star Sports (Disney) News Corp. 450 N.A.
2Q12 Digital Media Slideshare LinkedIn 119 N.A.
2Q12 Digital Media Instagram Facebook 1,000 N.A.
2Q12 Digital Media AT&T's Yellow Pages, Advertising
Solutions and Interactive
Cerebus Capital Management 750 N.A.
2Q12 Software and Information Thomson Reuters Healthcare Veritas Capital 1,250 N.A.
2Q12 Broadcast/Cable Networks Consolidated Media Holdings Ltd. News Corp. 2,070 3.6
2Q12 Broadcast/Cable Networks Newport Television Sinclair Broadcast Group, Inc. 413 N.A.
2Q12 Broadcast/Cable Networks Freedom Communications Sinclair Broadcast Group, Inc. 385 N.A.
1Q12 Broadcast/Cable Networks Astral Media Bell Media 3,400 10.0
1Q12 Software and Information Thomson Reuters Portia Investment Platform SS&C 170 N.A.
1Q12 Software and Information MediConnect Global Inc. Verisk Analytics Inc. 349 N.A.
1Q12 Digital Media OMGPOP Zynga 180 N.A.
1Q12 Radio Cumulus Media Townsquare Media Station swap
plus cash
N.A.
1Q12 Newspapers New York Times (16 regional newspapers) Halifax Media Group 143 N.A.
a
Still pending.
b
British pounds sterling. N.A. Not available. Continued on next page.
September 19, 2013

Corporates

Merger and Acquisition Activity Select Transactions (Continued)
Transaction
Price
Multiple
(x)
2011
4Q11 Marketing Technology interCLICK Inc. Yahoo! Inc. 270 N.A.
4Q11 Broadcast/Cable Networks McGraw-Hill Broadcasting Co. Inc. EW Scripps Co. 212 N.A.
3Q11 Information Services and
Analytics
Bureau Of National Affairs Inc. Bloomberg LP 990 14.6
3Q11 Software and Information Synovate Ipsos Group 862 N.A.
3Q11 Digital Media Popcap Games Electronic Arts 750 N.A.
3Q11 Education Blackboard Inc. Providence Equity Partners 1,640 14.6
2Q11 Music Warner Music Group Corp. Access Industries 3,000 7.6
2Q11 Theme Park Universal City Development Partners NBC Universal 1,025 8.1
2Q11 Ad Agency Rosetta Marketing Group LLC Publicis 575 N.A.
2Q11 Software and Information Lawson Software Infor 2,000 N.A.
2Q11 Software and Information Computech Experian 425 N.A.
2Q11 Software and Information World-Check Reuters 530 N.A.
2Q11 Software and Information Ipreo Kohlberg Kravis Roberts & Company 425 N.A.
1Q11 Digital Media Huffington Post AOL 315 N.A.
1Q11 Radio Citadel Broadcasting Cumulus Media 2,600 10.0
1Q11 Customer Relationship Marketing Radian6 Technologies Salesforce.com 336 N.A.
2010
3Q10 Studio Miramax Film Corp. Filmyard Holdings LLC 660 N.A.
3Q10 Video Gaming Playdom Inc. The Walt Disney Co. 563 N.A.
2Q10 Software and Information Interactive Data Corporation Silver Lake and Warburg Pincus 3,400 10.6
2Q10 Movie Exhibitor Kerasotes Showplace Theaters AMC Entertainment Inc. 277 5.3
1Q10 Business Services Dow Jones Indices (News Corp.) CME Group Inc. 1,288 N.A.
2009
4Q09 Broadcast/Cable Networks NBC Universal Inc. (General Electric Co.) Comcast Corp. 13,750 N.A.
4Q09 Broadcast/Cable Networks NBC Universal Inc. (Vivendi SA) General Electric Co. 5,800 10.4
4Q09 Cable Network Travel Channel Inc. Scripps Networks Interactive Inc. 975 13.3
4Q09 Theme Park SeaWorld Parks & Entertainment
(Anheuser-Busch InBev NV)
Blackstone Group LP 2,300 6.4
3Q09 Ad Agency Razorfish Inc. Publicis Groupe SA 530 N.A.
3Q09 Studio Marvel Entertainment The Walt Disney Company 4,000 12.4
2Q09 Cable Network Discovery Kids Network Hasbro, Inc. 357 14.4
1Q09 Business Services Ticketmaster Entertainment Live Nation Inc. 400 N.A.
2008
3Q08 Radio Clear Channel T.H. Lee, Bain 26,420 11.9
2Q08 Cable Network Weather Channel (Landmark) NBC Universal 3,500 N.A.
2Q08 Online CNET CBS 1,800 N.A.
2Q08 Cable Network Sundance Channel (NBC/CBS/R. Redford) Cablevision/Rainbow 496 N.A.
2Q08 Newspaper Newsday (Tribune) Cablevision 650 N.A.
1Q08 Online Bebo Time Warner 850 N.A.
2007
4Q07 Cable Network Oxygen NBC Universal 925 N.A.
4Q07 TV Stations Eight TV Stations (News Corp.) Oak Hill Capital Partners 1,100 N.A.
4Q07 Educational Publishing College Division (Houghton Mifflin) Cengage Learning 750 N.A.
3Q07 News/Media Dow Jones News Corp. 5,600 20.5
3Q07 Radio Cumulus Media Merrill Lynch Global Private Equity 1,300 11.4
3Q07 Online BlueLithium Yahoo! 300 N.A.
3Q07 Online Zimbra, Inc. Yahoo! 350 N.A.
3Q07 Online Switchboard.com (Infospace Inc.) Idearc, Inc. 225 N.A.
3Q07 Online Club Penguin The Walt Disney Company 350 N.A.
3Q07 Educational Publishing Harcourt U.S. Schools Ed. (Reed Elsevier) Houghton Mifflin 4,000 N.A.
2Q07 Media 40% Equity Stake in Dick Clark Productions Six Flags, Inc. 175 10.3
2Q07 Diversified Reuters Group PLC Thomson Corp. 17,200
b
20.0
2Q07 Online aQuantive Microsoft Corp. 5,857 N.A.
2Q07 Online DoubleClick Google 3,100 N.A.
2Q07 Online Right Media Yahoo! 680 N.A.
2Q07 Online 24/7 Real Media WPP 649 N.A.
2Q07 Newspaper Tribune Zell Group 13,400 11.1
2Q07 Newspaper Dow Jones News Corp. 5,600 N.A.
a
Still pending.
b
British pounds sterling. N.A. Not available. Continued on next page.
September 19, 2013

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Merger and Acquisition Activity Select Transactions (Continued)
Transaction
Price
Multiple
(x)
2007 (Continued)
2Q07 Cable Network Travel Channel (Discovery Communications) Cox Communications 700 N.A.
2Q07 TV Stations 56 TV Stations (Clear Channel) Providence Equity Partners 1,100 N.A.
2Q07 Educational Publishing Education Segment; Renamed Cengage
(Thomson Corp.)
Apax Partners/OMERS Capital (Cengage) 7,750 N.A.
2Q07 Educational Publishing Harcourt Assessment, International Education
(Reed Elsevier)
Pearson 825 N.A.
1Q07 Printing Banta R.R. Donnelley 1,353 N.A.
1Q07 Online Stub Hub eBay 310 N.A.
1Q07 Advertising Agency Advanstar Veronis Suhler 1,140 12.8
1Q07 Theme Park Tussauds Blackstone 1,285.0
b
12.9
1Q07 TV Stations CBS Cerberus Capital Partners 185 10.5
1Q07 Theme Park Eight Six Flags Parks PARC 7F 389 11.1
1Q07 TV Stations New York Times Company (TV Stations) Oak Hill Capital Partners 575 13.1
a
Still pending.
b
British pounds sterling. N.A. Not available.
September 19, 2013

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Historical Defaults
Solid growth prospects, strong cash fow generation, fnanceable business models and
manageable debt levels contributed to below-average defaults for the broadcasting and media
sector from the mid-1980s through 2007. However, these characteristics infuenced some
acquirers and management teams to lever up certain media companies in the boom years. This,
coupled with the economic downturn and secular changes within the media industry, fueled the
above-average default rates for the media and broadcasting subsector in 2008, 2009 and 2010
of 9.9% and 31.7% and 5.5%, respectively.
The media and broadcasting subsector default level declined meaningfully to 0.3% in 2011 and
2.0% in 2012; below the total high-yield market default rates of 1.5% and 1.9%, respectively.
The 1.5% default rate (year to date as at June 2013) for the broadcast and media subsector is
above the market default rate of 0.7%. Bond defaults for the broadcasting and media industry in
2013 include defaults of Readers Digest and Dex One Corp. Fitch notes that Cengage fled for
bankruptcy in July 2013, adding to the industrys 2013 default rate.
Fitch believes recent default performance signals a shift in the future default characteristics
of the industry as a whole; with defaults driven by high leverage and periods of tight credit
conditions rather than operational pressures. That said, Fitch is cognizant that the Internet
and mobile devices have disrupted some advertising media that were historically very stable
(newspapers, radio, magazines, Yellow Pages), further pressuring highly leveraged companies
in those subsectors. There remain several companies facing secular changes (some more than
others) and highly leveraged balance sheets with large maturity walls, including Clear Channel
($10 billion in 2016).
Recovery rates (the market price of the defaulted bonds and loans 30 days after default) for the
media and broadcasting sector were 53.1% in 2012 and 39.9% through June 2013, above the
20002012 average recovery rates for the broadcasting and media industry of 25.1%. However,
the average recovery rate for the sector still trails the corporate average recovery rate since
2000 of 36.5%. The 2011 bankruptcy of Lee Enterprise (the only media and broadcast default
recorded in 2011 under Fitchs analysis) led to an exit plan that maintained pre-petition debt
levels and extended maturities on all debt instruments.
September 19, 2013

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Fitch U.S. High-Yield Default Index Industry Default Rates and Recovery Rates
(%)
Default Rates Recovery Rates
Fitch Industry 2010 2011 2012 20002012 2010 2011 2012 20002012
Automotive 0.5 0.8 8.7 24.6 26.1
Banking and Finance 1.5 0.5 3.3 7.3 43.2 34.2 56.6 60.4
Broadcasting and Media 5.5 0.3 2.0 6.0 35.1 53.1 25.1
Building and Materials 2.2 1.3 3.3 53.8 37.1 35.9
Cable 7.2 42.0
Chemicals 1.0 3.1 47.4 28.6
Computers and Electronics 0.3 2.4 9.6 23.9
Consumer Products 4.7 3.6 74.0 35.5
Energy 1.1 2.6 1.2 1.4 61.3 76.2 26.5 52.6
Food, Beverage and Tobacco 1.5 3.7 24.9
Gaming, Lodging and Restaurants 1.3 1.7 2.8 4.9 69.0 49.3 81.6 37.3
Healthcare and Pharmaceutical 1.8 0.5 1.6 52.6 32.1 43.9
Industrial/Manufacturing 0.8 3.4 62.1 37.4
Insurance 4.4 13.2
Leisure and Entertainment 4.8 31.2
Metals and Mining 1.2 0.3 0.6 3.7 49.5 46.0 30.3
Miscellaneous 0.3 0.8 1.6 98.6 73.1 28.5
Paper and Containers 1.0 10.3 7.7 6.3 86.9 42.9 30.7 33.6
Real Estate 1.6 55.0
Retail 3.0 2.0 1.0 2.6 44.6 58.5 18.6 37.9
Supermarkets and Drug Stores 3.1 2.2 89.5 58.9
Telecommunications 1.2 0.6 0.3 9.8 100.6 78.1 70.1 17.4
Textiles and Furniture 5.8 22.4
Transportation 1.7 7.4 4.4 7.9 80.6 66.6 23.0 35.6
Utilities 5.9 10.5 7.1 64.9 53.1 60.2
Total Market 1.3 1.5 1.9 5.1 56.7 59.4 50.2 36.5
Source: Fitch U.S. High-Yield Default Index, Bloomberg, Advantage Data.
September 19, 2013

Corporates

0
10
20
30
40
50
0
250
500
750
1,000
1,250
Total Market (Left Axis) Broadcasting and Media (Right Axis)
Source: Bloomberg, Fitch U.S. High-Yield Default Index.
Average Par Value of Bonds Outstanding
(19852012)
($ Bil.) ($ Bil.)
0
3
6
9
12
15
0
30
60
90
120
150
Total Market (Left Axis) Broadcasting and Media (Right Axis)
Source: Bloomberg, Fitch U.S. High-Yield Default Index.
Par Value of Bond Defaults
($ Bil., 19852012)
0
10
20
30
40
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Total Market Broadcasting and Media
Source: Fitch U.S. High Yield Default Index.
Default Rate, 19852012
(Par Default Rate)
(%)
September 19, 2013

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U.S. Broadcasting and Media and Leisure and Entertainment
High-Yield Defaults 20082013
($ Mil., As of June 2013)
Issuer Principal Value Affected Default Date Default Source
2013
Readers Digest 525.0 02/17/13 Chapter 11 Filing
Dex One Corp. 212.3 03/18/13 Chapter 11 Filing
2012
Dex One Corp. 98.2 04/19/12 Distressed Exchange
Houghton Mifflin Harcourt Publishers Inc. 300.0 05/21/12 Chapter 11 Filing
LBI Media Holdings Inc. 41.8 11/14/12 Missed Payment
LBI Media Inc. 448.8 11/14/12 Missed Payment
2011
St. Louis Post-Dispatch 126.4 12/12/2011 Chapter 11 Filing
2010
Broadcasting and Media
Truvo Subsidiary Corp. 200.0 07/01/10 Chapter 11 Filing
Network Communications 175.0 07/01/10 Missed Payment
Radio One Inc. 301.5 09/15/10 Missed Payment
American Media Operation 356.1 11/17/10 Chapter 11 Filing
Local Insight Regatta HL 210.5 11/17/10 Chapter 11 Filing
Vertis Inc. 729.9 11/17/10 Chapter 11 Filing
2009
Young Broadcasting Inc. 485.7 02/13/09 Chapter 11 Filing
Morris Publishing 280.9 03/01/09 Missed Payment
Nexstar Broadcasting Inc. 143.6 03/30/09 Distressed Exchange
Idearc Inc. 2,849.9 03/31/09 Chapter 11 Filing
Barrington Broadcasting 67.8 04/01/09 Distressed Exchange
CMP Susquehanna 175.5 04/06/09 Distressed Exchange
Canwest Media Inc. 761.1 04/15/09 Missed Payment
Canwest Mediaworks LP 400.0 04/15/09 Missed Payment
MediaNews Group Inc. 450.0 05/01/09 Missed Payment
R.H. Donnelley Inc.
a
412.9 05/15/09 Missed Payment
R.H. Donnelley Corp.
a
3,259.2 05/15/09 Missed Payment
Dex Media West
a
Dex Media Inc.
a
Ion Media Networks Inc. 848.1 05/19/09 Chapter 11 Filing
McClatchy Company 102.9 06/25/09 Distressed Exchange
Readers Digest 600.0 08/24/09 Chapter 11 Filing
Clear Channel Communications 412.1 08/27/09 Distressed Exchange
Haights Cross Communications 138.8 09/03/09 Missed Payment
Haights Cross Holding 135.0 09/03/09 Missed Payment
Leisure and Entertainment
True Temper Sports Inc. 125.0 04/15/09 Missed Payment
Cap Cana S.A. 236.6 05/08/09 Distressed Exchange
Six Flags Inc. 588.3 06/13/09 Chapter 11 Filing
Six Flags Operations Inc. 400.0 06/13/09 Chapter 11 Filing
2008
Quebecor World Cap. Corp. 1,050.0 01/21/08 Chapter 11 Filing
Quebecor World Inc. 400.0 01/21/08 Chapter 11 Filing
Interep Natl. Radio Sales 100.0 03/30/08 Chapter 11 Filing
Vertis Inc. 993.5 05/01/08 Missed Payment
American Media Operation 550.0 12/01/08 Missed Payment
Tribune Co. 1,263.3 12/08/08 Chapter 11 Filing
Leisure and Entertainment
Six Flags Inc. 530.7 06/11/08 Distressed Exchange
Hrp Myrtle Beach Hldg/ca 63.9 09/24/08 Chapter 11 Filing
Hrp Myrtle Beach Oper/ca 255.0 09/24/08 Chapter 11 Filing
Bally Total Fitness Holding 478.6 12/03/08 Chapter 11 Filing
Lazydays RV Center Inc. 137.8 12/17/08 Missed Payment
a
Subsequently filed for protection under Chapter 11 on May 28, 2009. Dex Media East also filed at this time.
Source: Fitch U.S. High-Yield Default Index from Fitch Credit Market Research.
September 19, 2013

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Debt Exchanges
The absolute number of distressed debt exchanges in the high-yield space in 2012 was fve, with
a par value of $3.3 billion. This is an uptick from 2010 and 2011 but a signifcant decline from
45 debt exchanges in 2009 (par value $19.1 billion). The number of defaults, whether a debt
exchange or not, increased slightly from 29 (par value of $15.9 billion) in 2011 to 32 (par value
of $20.5 billion) in 2012. The percentage of debt exchanges to total defaults (see table on page
162) within Fitchs U.S. High-Yield Default Index was 16% in 2012, compared to 5.4% in 2011.
As of June 2013, Fitch has seen four corporate distressed debt exchanges, none of which were
in the broadcasting and media subsector.
Within the broadcasting and media subsector, Fitch tracked one debt exchange in 2012 (Dex
One Corp.) and, to date, none in 2013. Debt exchange activity is likely to remain selective, given
improvements in capital markets and bond prices, relative to 2009 levels. However, markets
remain volatile and if security prices reach distressed levels again, exchange activity may begin.
A debt exchange may be considered a distressed debt exchange (DDE) based on Fitchs DDE
criteria. In cases in which these transactions are determined to be DDEs, Fitch will refect the
DDE with a Restricted Default (RD) rating. (For details, please refer to Fitchs criteria report,
Distressed Debt Exchange, dated August 2012.) For a bond exchange to be considered a
DDE, the following two key requirements must generally be met:
There must be a material reduction in terms vis--vis the original contract terms. This is
defned by Fitch as an exchange offer that results in holders of a security receiving terms
that, taken in their totality, materially impair the value of the bond. These may include
reduction in principal and/or coupon, extension of maturity, swap of debt for equity,
reduction in seniority, or material changes in terms/covenants for bondholders who do
not accept the offer. When there are signifcant offsetting factors (such as an increase in
coupon, additional security or payment of consent fees), Fitch will review the exchange in
its entirety and make a determination on whether these factors are suffcient to make up
for the reduction in terms.
Any such exchange is considered to be necessary, even if technically voluntary, to avoid
bankruptcy, insolvency or payment default. In making this determination, Fitch would
consider if there is an explicit threat of bankruptcy or a high probability of either bankruptcy
or insolvency over the near term without the exchange. A company tendering for a specifc
bond issue at a price signifcantly below par may have multiple motivations for doing so,
including repurchasing debt thought to be too cheap and/or sending a message to the
market that it believes its securities are underpriced. However, if Fitch felt the action was
being undertaken to stave off bankruptcy or a liquidity crunch, the exchange would be
considered a DDE. At times, this will be clear cut; but at other times, the determination will
be highly subjective and depend upon the specifc facts involved.
September 19, 2013

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Fitch U.S. High-Yield Default Index
20102013 Year-to-Date Defaults and DDEs
(As of June 2013)
Par Value
($ Bil.)
% of
Total Defaults
Number
of Issuers
% of
Total Defaults
2013 YTD
Total Defaults (Incl. Total DDEs) 8.4 19
Total DDEs 2.8 33.5 4 21.1
Broadcasting and Media Defaults
(Incl. Broadcasting and Media DDEs)
0.7 8.8 2 10.5
Broadcasting and Media DDEs
2012
Total DDEs 3.3 16 5 15.6
0.9 4.3 4 12.5
Broadcasting and Media DDEs 0.1 0.5 1 3.1
2011
Total DDEs 0.9 5.4 4 13.8
0.1 0.8 1 3.4
2010
Total DDEs 2.1 17.5 7 20.0
2.0 16.6 6 17.1
DDEs Distressed debt exchanges.
Broadcasting and Media Debt Exchanges Tracked Within Fitchs
U.S. High-Yield Default Index
Year Issuer
Principal Value
Affected ($ Mil.) Default Date Default Source
2013
a
None
2012 Dex One Corp. 98.2 04/19/12 Distressed Exchange
2011 None
2010 None
2009 Nexstar Broadcasting Inc. 143.6 03/30/09 Distressed Exchange
2009 Barrington Broadcasting 67.8 04/01/09 Distressed Exchange
2009 CMP Susquehanna 175.5 04/06/09 Distressed Exchange
2009 McClatchy Company 102.9 06/25/09 Distressed Exchange
2009 Clear Channel Communications 412.1 08/27/09 Distressed Exchange
a
As of June 30, 2013.
September 19, 2013

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Recovery and Notching
The following section contains an overview of the framework and assumptions employed in
Fitchs recovery rating and notching methodology for the U.S. media and entertainment sector.
Fitch explicitly assigns recovery ratings for companies with an IDR of B+ or below. For issuers
whose IDR is in the BB category, Fitch will incorporate broad considerations when determining
if notching up or down from the IDR is appropriate. Rated entities with IDRs of BBB and above
usually have senior unsecured ratings at the same level as the IDR, refecting average rates of
recovery (around 40%). Please refer to Fitchs criteria report Recovery Ratings and Notching
Criteria for Non-Financial Corporate Issuers dated November 2012, for more information
regarding recovery ratings and notching.
Recovery
The media and entertainment recovery estimates are calculated using the going-concern rather
than the liquidation scenario, which is consistent with actual historical results in the overall
market for these sectors.
Under the going-concern analysis, Fitch frst considers what it will take for a company to be in the
position to seek bankruptcy protection or have creditors elect to enforce their rights. Fitch projects
a post-default distressed cash fow that refects both the distress that provoked a default, and
a level of corrective action that Fitch assumes either would have occurred during restructuring,
or would be priced into a purchase price by potential bidders. Currently, the operating EBITDA
haircut for the recovery portfolio is 15%35%.
The second key variable of going-concern valuation, the operating EBITDA multiple, is estimated
using historical acquisition multiples (please see the Merger and Acquisition Activity table),
evaluating market-trading multiples, and reviewing private transactions rated by Fitch. As part of
its policy of rating through the cycle, Fitch typically discounts valuation multiples when market
valuations are at historical peaks, and similarly, Fitch may use recovery multiples higher than
observed market multiples when markets are so depressed or disrupted that they are essentially
illiquid. Multiples in the 5.0x7.0x range are currently applied to the recovery portfolio, which
refects the secular issues affecting the media industry. These ranges will continue to be
evaluated to ensure that they appropriately refect current market trends and the cyclicality of
each sector.
After estimating the enterprise value,
Fitch discounts this value by 10% to
refect priority administrative claims
(claims associated with the bankruptcy
process), resulting in an adjusted
enterprise value (adjusted EV). Before
allocating the adjusted EV, Fitch
considers the following assumptions/
adjustments:
Recovery
Ratings Scale
(%)
Source Description
Recovery
(%)
Notching
from IDR
RR1 Outstanding 91100 +3
(usually
secured
debt only)
RR2 Superior 7190 +2
(usually
capped at
RR2 for
unsecured
debt)
RR3 Good 5170 +1
RR4 Average 3150 +0
RR5 Below
Average
1130 1
RR6 Poor 010 2 or 3
EBITDA Discount and Multiple
Assumptions for Issuers with
IDRs of B+ or Lower
(As of March 31, 2013)
Diversified Media
EBITDA
Discount (%)
Multiple
(x)
AMC Entertainment Inc. 35 5.0
Clear Channel Communications Inc. 20 6.0
Clear Channel Worldwide Holdings Inc. 15 7.0
Houghton Mifflin Harcourt Publishers Inc.
a
N.A. 6.0
Regal Entertainment Group 35 5.0
Univision Communications, Inc. 15 7.0
a
Fitchs recovery analysis for Houghton Mifflin Harcourt Publishers
Inc. assumes a post-restructuring EBITDA of $225 million.
September 19, 2013

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1) Unused Credit Lines and Cash
Fitch assumes unused portions of committed lines of credit are fully drawn to the extent
permitted, and cash balances are not factored into the recovery analysis. Fitch assumes that
prior to entering into a bankruptcy, the company would likely utilize all of its cash balances and
draw on its facility to maximize its liquidity and/or replace evaporating trade credit.
2) Concession Payments
An assumption for concession payments for the cooperation of junior unsecured claims is
typically made when secured lenders have been fully recovered. While Fitch typically allows
concession payments to be up to 5% of the recovery value available to senior unsecured
creditors, any recoveries attributable to concession payments will typically remain in the RR6
range. Additionally, in no case are these recoveries higher than the recoveries achieved by
the senior unsecured creditors. Under Fitchs analysis of the media and entertainment sector,
structurally subordinated debt typically does not receive a concession payment.
3) Operating Leases
While companies may have the ability to rationalize leases in bankruptcy, a certain level must be
maintained. Fitch analysts have discretion over estimating the percentage of leases that would
be rejected. The value of rejected leases is computed to be consistent with the bankruptcy code:
the greater of one years rent or 15% of the remaining term of the lease (not to exceed three
years). Among media and entertainment subsectors with companies where recovery analysis is
relevant, leases are only a key consideration for movie exhibitors. Fitch estimates that leases
would be rejected for 30% of the portfolio to refect the closure of underperforming theaters.
The 30% rejection rate is a lower percentage than for other corporate sectors, incorporating
the importance of the leased space to the movie exhibitors core business prospects as a going
concern.
4) Other Claims
Additional claims may include signifcant non-operating assets or liabilities, such as material
legal liabilities. These additional nondebt claims would be incorporated in their relative position
in the value distribution waterfall.
September 19, 2013

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Distribution of Value
The calculated adjusted EV is then applied to the list of claims based on the priority of each
claim (the distribution waterfall), starting with the secured claims. As a result of the adjusted EV
allocation, a recovery percentage is associated with each debt class in the capital structure. The
recovery percentage for each debt class then fts into a specifc band of recoveries associated
with that Recovery Rating, ranging from RR1 to RR6. Individual Recovery Ratings have a
specifc number of notches that can be added or subtracted from the IDR of the company to
determine the specifc issue rating (with a range of three notches up or down from the IDR). It
is possible in some instances that the full potential notching support may not be used, due to a
changing capital structure, Fitchs view regarding relative bargaining power of different claimants
in a reorganization process, and/or other considerations.
Median Market Enterprise Value Multiples
(LTM EBITDA Multiples
a
, As of April 19, 2013)
10-Year Historical
Fitch-Employed
Multiple for Recovery
Analysis Average
e

Public Market
c
Transaction/Takeout
d
Sector
b
Low High Median Current Low High Median
1 Aerospace and Defense 6.52 11.54 9.20 8.05 5.88 14.25 11.30 6.8
2 Auto and Related 4.47 7.62 5.88 4.80 3.52 19.80 8.80 5.3
3 Chemicals 5.26 11.26 8.09 8.92 7.39 11.01 8.49 5.4
4 Consumer (Durables and Nondurables) 7.58 10.21 8.80 8.70 5.97 9.76 8.24 N.A.
5 Diversified Manufacturing and Capital Goods 5.95 10.20 9.06 8.53 5.91 14.78 9.20 5.6
6 Diversified Services 7.26 11.44 9.47 9.91 6.03 12.87 9.32 5.2
7 Energy 4.14 10.75 6.74 6.52 6.05 10.50 7.88 5.9
f
8 Food, Beverage, Tobacco and Restaurants 6.18 10.59 7.79 7.84 7.80 14.53 8.98 6.4
9 Gaming, Lodging and Leisure 8.16 10.79 9.57 9.90 6.41 15.27 8.94 6.7
10 Healthcare 6.57 10.96 8.62 8.33 9.74 21.35 12.72 6.4
11 Homebuilding, Building Materials and Construction 5.74 21.44 10.93 19.05 5.93 15.72 8.55 6.0
12 Media and Entertainment 6.34 12.80 8.39 6.67 2.92 25.98 9.92 5.4
13 Natural Resources 5.49 9.73 8.29 8.63 6.65 16.05 8.10 5.4
14 Retail 5.33 7.92 7.12 7.14 6.88 10.18 8.62 5.1
15 Technology 5.26 11.37 8.35 5.36 9.73 16.65 14.23 5.4
16 Telecommunications and Cable 6.14 10.07 8.19 8.47 7.88 10.83 9.40 5.8
17 Transportation 6.72 11.85 8.77 6.13 2.44 8.89 7.24 5.1
18 Utilities 7.27 11.59 9.89 13.91 3.02 12.46 8.49 6.0
g
a
LTM EBITDA refers to last 12 months of EBITDA. Multiples represent Fitch estimates.
b
In some instances, sector definitions may not map exactly across the different
categories of enterprise value multiples.
c
Market multiples are assessed specifically for speculative-grade, publicly traded U.S. companies with non-negative LTM
EBITDA. Current values are based on market capitalization as of April 19, 2013.
d
Transaction multiples cover merger and acquisition transactions across the rating
spectrum.
e
Represents the mean distressed multiple assumed by Fitch for purposes of its recovery analysis based on Fitchs explicitly rated and credit opinion portfolio
of U.S. leveraged issuers. The range of multiples assumed by Fitch within each sector is determined by subsector classifications, as well as issuer-specific idiosyncratic
factors. It should be noted that since the Fitch-employed multiple is applied to a distressed EBITDA value, it generates a lower enterprise value than would otherwise
have been obtained in a nondistressed scenario. For companies where the recovery value is maximized under a liquidation scenario, the implied multiple has been
imputed based on liquidation value and distressed EBITDA.
f
Refers to an implied EBITDA multiple derived from Fitchs assumed distressed valuation metric of $10/boe
(enterprise value per barrel of oil equivalent) used in recovery analysis.
g
Refers to an implied EBITDA multiple derived from Fitchs discounted cash flow valuation of
assets of competitive power generation companies. No regulated utilities are rated in the low speculative grade at this time. N.A. Not Applicable.
Source: Worldscope Fundamentals (Thomson Reuters), Bloomberg, Fitch.
September 19, 2013

Corporates

Notching
Notching Guidance for BB and Above Rated Issuers
Notches Investment Grade High Speculative Grade BB+ to BB
from IDR Secured Debt Unsecured Debt Secured Debt Unsecured Debt
+3
Notched by
+0 to +3,
but capped at
BBB
+2
+1
Notched by
+0 to +1
Sector Specific:
+1 Notch
Low Levels of
Secured Debt:
+0 or +1 Notch
0
At Average
Recoveries:
+0 Notch
Unsecured and/or
Subordinated with
Secured Debt:
0 or 2 Notches
1
Subordinated Debt:
0 to 2 Notches 2
Source: Fitch.
Fitchs process of establishing ratings for the obligations of issuers rated between AAA and
BB refers, for the most part, to aggregate recoveries on the defaulted bond market as a whole
and not to issuer-specifc analysis.
For investment-grade issuers in the media and entertainment sector, senior unsecured
obligations will typically be rated at the same level as the issuers IDR. While secured debt
obligations could be notched up one rating level and/or subordinated debt obligations could
be notched down two rating levels, the investment-grade media and entertainment companies
currently under Fitchs coverage do not have any obligations in these debt instrument categories
(excluding preferred stock). Any notching of these instruments categories would be determined
based on the consideration of several factors, including the relative balance of the obligation in
relation to the issuers overall capital structure and the issuers IDR rating level. Fitch expects
these debt categories would be more prevalent in the high-yield and the lowest investment-
grade categories (BBB).
Fitch incorporates broad consideration of relative recoveries to notch issue ratings from BB
category IDRs. Secured issues will not always be notched up, and unsecured issues will not
always be notched down. The move in either direction will depend on the collateral, total leverage,
and the proportions of secured, unsecured and subordinated debt in the overall capital structure.
Issue Ratings for Issuers with IDRs of BB+ to BB
IDR/Outlook Secured Unsecured Subordinated
HoldCo Debt/
Preferred Stock
Belo Corp
a
BB/Positive Watch BB+/BB
Liberty Interactive LLC BB/Stable BB
QVC Inc. BB/Stable BBB
Nielsen Finance LLC/Nielsen Finance Co. BB/Positive BB+ BB
a
Belos credit facility (BB+) benefits from a guarantee, and $275 million notes due 2016 (BB+) benefit from a
subordinated guarantee. The $440 million notes due 2027 (BB) are not guaranteed. IDR Issuer Default Rating.
Source: Company filings and Fitch Ratings.
September 19, 2013

Corporates

Covenants
Covenants are an important aspect of Fitchs analysis. Fitch reviews and summarizes all of the
material underlying credit agreements, bond indentures and other relevant documents (collateral
and guarantee agreements) to evaluate the degree of fnancial fexibility available to a company.
Consistent with the broader corporate universe, the investment-grade companies in Fitchs
coverage have weak covenant packages that permit the increase of debt and disposal of assets
without triggering a default, which provides creditors with limited protections. Speculative-grade
companies under Fitchs coverage have fairly signifcant covenant packages that could reduce
their fnancial fexibility under a stress event in certain cases. Change-of-control repurchase
events in investment-grade bond issuances have become more common features.
September 19, 2013

Corporates

Summary of Material Indenture Covenants Investment Grade
a
Covenant
Issuer Change of Control (CoC) Limitation on Secured Debt
CBS Corporation Recent offerings include CoC repurchase event language at 50% of voting
stock.
Standard carveouts plus up to 15% of total assets.
Cox
Enterprises, Inc.
Private placements include CoC repurchase event language at more than
50% of stock.
Cox Enterprise: Less than 30% of net worth. Cox Communication: The
greater of $200 million or 15% of total Cox Communication debt.
Discovery
Communications
LLC
CoC offer of 101% if (1) a) any person or group obtains 50% or more
of the voting interest, other than significant shareholders; b) liquidation,
dissolution, or sale of all or substantially all the assets; c) individuals who
constituted the board of directors cease to constitute at least a majority of
the board; d) a going-private transaction; e) a liquidation, dissolution, or
winding-up of the guarantor; and (2) if the notes are downgraded below
investment grade.
10% of consolidated assets.
Dun & Bradstreet CoC offer of 101% if: a) any person becomes the beneficial owner, directly
or indirectly, of more than 50% of the then-outstanding number of shares
of the companys voting stock; b) individuals who constituted the board
of directors cease to constitute at least a majority of the board; c) sale
of all or substantially all assets; or d) adoption of a plan of liquidation or
dissolution; and if ratings downgraded below investment-grade following
aforementioned events.
Liens not permitted unless a pari passu lien is granted to the notes.
Standard carveouts exist. There is also a general lien basket that limits
liens the greater of a) 10% of shareholders equity or b) $450 million.
Accounts receivable securitization limit of $200 million.
The Interpublic
Group of
Companies, Inc.
Bondholders for the 10% notes due 2017 have a CoC put offer at 101%.
CoC takes place if: a) any person becomes the beneficial owner, directly
or indirectly, of more than 50% of the then-outstanding number of shares
of directors cease to constitute at least a majority of the board, unless
each new director was approved by the board of directors; and c) sale/
disposition of all or substantially all the assets of the company, or d) the
company adopts a dissolution or liquidation plan.
liens to 15% of consolidated net worth. Fitch estimates the basket at
approximately $370 million as of Dec. 31, 2012.
McGraw Hill
Financial, Inc.
A CoC put offer at 101%. CoC is triggered when: a) any person becomes
the beneficial owner, directly or indirectly, of more than 50% of the
then-outstanding number of shares of the companys voting stock; b)
individuals who constituted the board of directors cease to constitute at
least a majority of the board, unless each new director was approved
by the board of directors; c) sale/disposition of all or substantially all
the assets of the company; or d) the company adopts a dissolution or
liquidation plan; and if ratings are downgraded below investment-grade
following aforementioned events.
liens to 10% of total consolidated assets. Fitch estimates the basket at
$705 million as of Dec. 31, 2012.
NBCUniversal
Media, LLC
No provision noted. NBCU is prohibited from creating or incurring any lien on any current
or future property to secure any indebtedness without effectively
providing that the notes of such series shall be equally and ratably
secured until such time as such indebtedness is no longer secured by
such lien subject to customary exceptions including permitted liens.
Notwithstanding the restriction on liens, NBCU is permitted to create
or incur liens securing debt that does not exceed the greater of i) 15%
of consolidated net worth calculated as of the date of the creation or
incurrence of the lien and ii) 15% of consolidated net worth calculated as
of the date of initial issuance of the notes of such series. Permitted liens
include typical exceptions including among other things, liens securing
sale and lease back transactions and asset securitization transactions
not exceeding $300 million in both cases.
Twenty-First
Century Fox
CoC provision: Allows the bondholders the option of having their notes
purchased in the event that members of the Murdoch family no longer
effectively control the company and a rating decline occurs shortly
thereafter. Under the 1993 indenture a CoC takes place if the Murdoch
family ceases to control at least 30% of voting rights or another party
attains a greater percentage holding than the family. Under the 2009
indenture a CoC takes place if any person other than the Murdoch family
becomes beneficial owner of more than 50%.
Not to exceed 10% of the consolidated tangible assets (as defined).
Certain film financings are permitted.
Pitney Bowes No material provision noted. Less than or equal to 15% Consolidated Net Tangible Assets.
Thomson Reuters
Corporation
There is a CoC put offer at 101%. CoC takes place if: a) any person
(other than Woodbridge) becomes the beneficial owner, directly or
indirectly, of more than 50% of the then-outstanding number of shares of
the companys voting stock; b) individuals who constituted the board of
directors cease to constitute at least a majority of the board; or c) sale of
all or substantially all assets; and if ratings downgraded below investment
grade following aforementioned events.
Up to 10% of shareholders equity, otherwise pari passu; applies to
subsidiary guarantees.
Time Warner Inc.
b
Standard language, which affords limited protection for bondholders,
noted.
Debt principal may be secured up to the greater of 10% of consolidated
net worth or $500 million, as defined. Secured film financings allowed.
a
When a covenant exists in multiple agreements but differs slightly (i.e. different thresholds), the more restrictive covenant has been used for the purpose of this
summary.
b
Representative of indentures governing majority of debt. Continued on next page.
September 19, 2013

Corporates

Summary of Material Indenture Covenants Investment Grade
a
(Continued)
Covenant
Viacom If, among other things, anyone other than a Redstone family member/
trust or the companys affiliates acquire more than 50% of voting power,
or a going-private transaction occurs, and as a result, credit rating is
downgraded to below investment grade by all agencies.
Standard carveouts plus liens representing up to 15% of total assets.
The Walt
Disney Company
No material provision noted. No material provision noted.
Verisk
Analytics Inc.
CoC repurchase event triggers a 101% offer to the bondholders. CoC
repurchase event is when a CoC occurs and the bonds are rated non-
investment grade within 60 days of a CoC. CoC occurs when: when any
person/entity acquires 50% or more of the voting control; the majority
of directors of the board cease to be continuing directors; sale of all or
substantially all the assets of the company; or the adoption of a plan for
liquidation or dissolution.
Liens are not permitted unless the notes are equally and ratably secured.
Standard carveouts exist. There is a general lien and sale-leaseback
basket of 7.5% of total assets.
a
When a covenant exists in multiple agreements but differs slightly (i.e. different thresholds), the more restrictive covenant has been used for the purpose of this
summary.
b
Representative of indentures governing majority of debt.
September 19, 2013

Corporates

Summary of Material Indenture Covenants Non-Investment Grade
a
Covenant
AMC
Entertainment, Inc.
CoC takes place if: (i) 50% or more of either outstanding shares
or of the combined voting power is acquired. (ii) Liquidation or
dissolution of the company occurs. (iii) Sale of all or substantially
all assets. (iv) CoC under the indentures of other existing notes
occurs. (v) In the event of CoC, the company is required to offer to
repurchase notes at 101%.
Restrictions on liens governed by additional debt restrictions. Limitations on
consolidated indebtedness noted, including minimum 2x interest coverage
requirement. Standard carveouts exist. There is a $100 million construction
debt basket. There is also a $350 million general debt basket. Additional debt
that is senior to the notes, but subordinated to the senior notes, is not permitted.
Belo Corp. Event of default if persons other than permitted holders acquire
more than 50% of voting power or a majority of the seats on the
board.
$40 million, plus standard carveouts for bank facility etc. Equivalent security
negative pledge provision with respect to guarantee (if subsidiary guarantor
incurs secured debt) and debt (if parent does).
Clear Channel
Communications
A CoC occurs if persons other than permitted holders acquire more
than 50% of the voting stock of CCU (or its direct/indirect parents),
or if the company is sold to anyone but a permitted holder. There is
a CoC put at 101, but it does not constitute an event of default.
Equivalent security negative pledge provision: CCU and its restricted
subsidiaries are not permitted to create any liens upon (i) stock of any restricted
subsidiary or intercompany notes, and (ii) the principal property (in the U.S.
owned by CCU/subsidiaries) in excess of 15.0% of the total consolidated
stockholders equity of CCU as per latest annual report (principal property
permitted amount), unless the notes are equally and ratably secured with the
secured obligations. (Waived for 7.650% 2010 notes.)
Clear Channel
Worldwide Holdings
CoC defined as (i) CCOH/CCO/CCWW become wholly owned
subsidiaries of CCU; (ii) persons other than permitted holders
acquire more than 50% of the voting stock of CCOH (or its direct/
indirect parents); (iii) majority of board of directors changed within
a two-year period. There is a CoC put at 101, but it does not
constitute an event of default (unless put not honored).
CCOH and its restricted subsidiaries are not permitted to create any liens (other
than permitted liens) unless the notes are equally and ratably secured with
the obligations so secured. Carveouts, existing liens; additional $25 million;
securing credit facilities up to $250 million.
Houghton Mifflin
Harcourt Publishers
A CoC triggers an event of default. A CoC is defined as a sale of
all or substantially all the assets of the borrower and subsidiary
guarantors, taken as a whole; acquisition of 50% of the voting
control by a person who is not a permitted holder; or HMH
Publishing Company (parent holding company) no longer being the
sole owner of Houghton Mifflin Harcourt Publishers, Inc.
Standard carveouts exist. The ABL revolving credit agreement is capped
at $300 million. Capital leases are capped at $50 million; capital leases for
subsidiaries that are not borrowers or guarantors are capped at $10 million,
and this $10 million cap is included in the $50 million cap. Debt of acquired
subsidiaries is permitted (as long as such debt was not created in contemplation
of the acquisition) and capped at $75 million. Restricted subsidiaries that are
not borrowers or guarantors may incur up to $50 million in debt. Subordinated
debt is permitted, up to $100 million.
Liberty Interactive
LLC/QVC Inc.
No material provisions noted. Liens are not permitted under the bonds, unless a pari passu lien is granted to
the notes. Standard carveouts exist (including capital leases and liens existing
prior to an acquisition, as long as the lien was not created in contemplation of
the acquisition). There is also a general lien basket that limits liens (and sale-
leaseback transactions) to 15% of the total consolidated asset value of Liberty
Media and its restricted subsidiaries. The company has material flexibility in
designation of restricted subsidiaries.
The Nielsen
Holdings N.V.
A CoC put offer at 101%. CoC is triggered when a) any person
becomes the beneficial owner, directly or indirectly, of a majority
or more of the total voting power; b) sale/disposition of all or
substantially all the assets of the company to anyone other than a
permitted holder.
Liens not permitted unless a pari passu lien is provided. In the case of secured
subordinated debt, the lien provided to the senior unsecured debt would have
priority over the subordinated debt. Consolidated secured debt ratio no greater
than 4.75x test for secured debt permitted under the debt restrictions may be
issued. Standard carveout exists. There is also a $50 million lien basket that is
not constrained by the previously mentioned constraints.
Regal
Entertainment
Group
CoC offer of 101% if a) any person or group obtains 50% or more
of the voting interest, other than Anschutz Company and any of its
affiliates; b) liquidation, dissolution, or sale of all or substantially
all the assets; c) individuals who constituted the board of directors
cease to constitute at least a majority of the board.
Standard carveout for operating purposes, plus $50 million permitted lien
basket and the greater of $1.85 billion in secured debt or max. 2.75x senior
secured leverage ratio (test includes secured credit facility at Regal Cinemas).
Univision
Communications
Inc.
CoC offer of 101% if any person or group besides the sponsors
obtains 50% or more of the voting interest, or sale, lease, or
transfer of all or substantially all the assets.
a
When a covenant exists in multiple agreements but differs slightly (i.e. different thresholds), the more restrictive covenant has been used for the purpose of
this summary.

September 19, 2013


Company Summaries
Investment Grade
Bertelsmann SE & Co. KGaA ........................................................................... 171
British Sky Broadcasting Group plc.................................................................. 177
CBS Corporation .............................................................................................. 183
Cox Enterprises, Inc. ........................................................................................ 198
Discovery Communications LLC ...................................................................... 208
The Dun & Bradstreet Corporation................................................................... 222
The Interpublic Group of Companies, Inc. ....................................................... 238
McGraw Hill Financial, Inc................................................................................ 253
NBCUniversal Media LLC ................................................................................ 267
Pitney Bowes Inc.............................................................................................. 275
Reed Elsevier PLC ........................................................................................... 288
Thomson Reuters Corporation ......................................................................... 294
Time Warner Inc. .............................................................................................. 307
Twenty-First Century Fox, Inc. (formerly News Corporation) ........................... 321
Verisk Analytics, Inc. ........................................................................................ 334
Viacom Inc. ...................................................................................................... 347
Vivendi SA ........................................................................................................ 363
The Walt Disney Company .............................................................................. 370
WPP plc ........................................................................................................... 386
AMC Entertainment, Inc. .................................................................................. 392
Belo Corp. ........................................................................................................ 403
Clear Channel Communications, Inc.................................................................411
Houghton Miffin Harcourt Publishers Inc. ........................................................ 440
Liberty Interactive LLC/QVC Inc....................................................................... 448
McGraw-Hill Global Education Holding, LLC ................................................... 461
Nielsen Holdings N.V. ...................................................................................... 464
Regal Entertainment Group ............................................................................. 480
Univision Communications, Inc. ....................................................................... 492
171 Company Summaries Bertelsmann SE & Co. KGaA
September 19, 2013

Corporates

Bertelsmann SE & Co. KGaA.
Key Rating Drivers
RTL Underpins Profle: RTL is Europes largest free-to-air TV broadcaster and by far the most
signifcant part of the group (54.5% of 2012 divisional EBITDA). RTL benefts from good geographic
diversifcation with market-leading positions in Germany, France, the Netherlands and Spain. RTLs
successful content production business Freemantle provides a greater degree of revenue visibility
than its peers in an industry characterized by highly cyclical advertising revenues.
Mix of Businesses: Bertelsmann has a unique portfolio of businesses, not easily compared
across the media peer group, with TV broadcasters/producers the most obvious comparable.
The group includes business process outsourcing provider Arvato, leading book publisher
Penguin Random House and magazine publisher Gruner & Jahr. Offering no obvious
synergies or overlap, its businesses are generally well managed, although a number
encountered margin compression in 2012.
Transition to Digital Platforms: Management recognizes the need to focus on digital media and
change the complexion of revenues. The acquisition of Kohlberg Kravis Roberts & Co.s 50%
joint venture stake in BMG in March 2013, and the decision to combine its trade book publishing
operations (Random House) with Pearson (Penguin) underlines this focus. While a 53% stake in the
newly formed Penguin Random House raises questions of proportionate consolidation, Fitch views
Bertelsmann as the driving partner in the venture and does not currently adjust the joint ventures
results.
These acquisitions ft with managements desire to reduce exposure to Europe, move away from
traditional advertising and develop its digital businesses. The BMG acquisition scales up its music
publishing interests. However, Music will not be reported separately, suggesting a high acquisition
multiple while not changing the groups earnings profle materially. The partnership with Penguin
creates economies of scale, a substantially larger business and better pricing leverage with online
distribution platforms like Amazon and iTunes.
M&A and Leverage: The recent EUR3.3 billion sale of Springer Science (previously mooted as a
target for Bertelsmann) to BC Partners reduces the risk of a balance sheet-transforming acquisition.
However, Bertelsmanns sale of its stake in RTL for net cash of EUR1.3 billion along with
managements stated expansion ambitions, increase the likelihood of M&A. Concerns remain that
the reinvestment of the RTL proceeds (in BMG and Arvatos Gothia acquisition) will not materially
change the earnings profle but there is limited disclosure around these deals.
Moderate Refnancing Risk: Maturities are well spread out, with the company funding itself primarily
in the debt capital markets. The company has EUR968 million of debt maturing in 2014. Given its
scale, fnancial metrics and German domicile, Fitch does not foresee issues with this. EUR2.6 billion
of cash and EUR1.2 billion in unused bank lines (maturing 2017) at end-2012 provide good liquidity.
Rating Sensitivities
Profle Constrains Rating Upside: Upward movement in the rating is unlikely given the companys
operational profle despite quite conservative fnancial metrics. Downgrade guidelines include FFO
net leverage adjusted for proft-participation certifcates above 2.0x (1.8x in FY12) and pre-dividend
free cash fow (FCF) conversion consistently below 4% (6.3% in FY12).
Ratings
Security Class
Current
Rating
Bertelsmann SE & Co. KGaA.
Long-Term Foreign-Currency IDR BBB+
Senior Unsecured BBB+
Short-Term IDR F2
Rating Outlook
Long-Term
Foreign-Currency IDR Stable
Analysts
Stuart Reid
+44 20 3530-1127
stuart.reid@ftchratings.com
Michael Dunning
+44 20 3530-1178
michael.dunning@ftchratings.com
September 19, 2013

Corporates

United
States
16%
Germany
36%
France
16%
Other
7%
Rest of
Europe
25%
Revenues by Geographic Region
Bertelsmann
(Dec. 31, 2012)
Services
59% Rights
and
Licenses
13%
Advertisi
ng
7%
Products/
Merchan
dise
21%
Revenues by Segment
Bertelsmann
(Dec. 31, 2012)
Advertising
7%
Products/
Merchandise
21%
Portfolio Summary Bertelsmann SE & Co. KGaA
(As of July 1, 2013)
Source: Company website.
RTL Group
(92% owned)
Leading European entertainment network
TV Channels 53
Radio Stations 28
TV Portfolio RTL Television in Germany, M6 in France, the RTL
channels in the Netherlands, Belgium, Luxembourg,
Croatia and Hungary, and Antena 3 in Spain
Radio RTL France, Germany, Belgium,
Netherlands, Spain, Luxembourg
Joint Venture Big RTL Thrill India
Interests National Media Group Russia
Penguin Random House
(53% Owned)
Publishing houses include Doubleday, Viking and Alfred A. Knopf (U.S.);
Ebury, Hamish Hamilton and Transworld (U.K.); Plaza and Jans (Spain);
and Sudamericana (Argentina).
Independent imprints and publishing houses 250
Annual titles released 15,000
Editorial Independent Imprints 200
Countries 15
New Annual Titles 10,000
Gruner + Jahr Printing/Publishing
(74.9% owned)
Countries 30
Media/Magazine/Digital Offerings 500
Publications Stern, Brigitte, Geo, Capital, Gala, Eltern, P.M., Essen
& Trinken, National Geographic
Interests 59.9% Motor Presse Stuttgart
100% The Brown Printing Company
Arvato-Bertelsmann
(100% owned)
Global BPO services provider
Services: Marketing/CRM, supply chain management/distribution, financial,
IT platforms
Be Printers
Printing: Magazines, catalogs, brochures, books and calendars
Services: Media creation and digital solutions
Printing Tech: Gravure, web and sheet offset and digital
September 19, 2013

Corporates

Event Risk Dashboard Bertelsmann
Event Risk Summary
Level of Risk
LBO L
Secular M
Corporate Governance/Ownership H
Change in Financial Policies M
Acquisition H
Divestiture L
Structural Subordination Risk M
Litigation Risk L
Regulatory Risk M
Contingent Liabilities L
H High. M Medium. L Low.
LBO Risk Low
Bertelsmann is 100% privately owned/controlled by Germanys Mohn family.
Bonds include a change of control put tied to a ratings downgrade a poison
pill or mitigant to a leveraged bid.
Secular Risk Medium
RTL Group pan-European commercial TV broadcasting accounted for 58%
of 2012 divisional EBIT.
Sector exposed to audience fragmentation; increasing pervasion of pay-TV and
OTT content.
RTL though has leading and stable market share in a number of markets
while non-English-speaking OTT content so far appears less prevalent and
therefore a reduced threat to its markets.
Other divisions including Penguin Random House (leading book publisher) and
Gruner & Jahr (magazines) continue to face the online threat and transition to
digital. Bertelsmann seems to be managing these risks and these divisions,
though mature, continue to perform well.
Corporate Governance/Ownership High
Although privately owned, Bertelsmanns legal structure was changed in 2012
to a KGaA (partnership limited by shares) a possible precursor to an IPO
(while not diluting the Mohn familys voting rights). A public listing would increase
transparency and reporting detail.
The company reports under IFRS with a good level of disclosure although
quarterly announcements lack divisional breakdown/detail.
German jurisdiction is regarded as positive from a governance perspective.
Financial Policy Medium
Public policies include a leverage factor test (lease, pension and proft
participation certifcate adjusted debt to EBITDA) below 2.5x and EBITDA to
fnancial expense test of more than 4.0x. Leverage has been allowed to spike in
the past and could again in the event of M&A management is likely to bring
the metric below target within an acceptable timeframe (1824 months).
Debt is mainly raised in the form of public bonds and private placements the
bonds include no fnancial covenants.
Bertelsmann Rating History
BB+
BBB
BBB
BBB+
A
A
0.5
1.0
1.5
2.0
2.5
3.0
2008 2009 2010 2011 2012 2013
Leverage Trend
(x)
September 19, 2013

Corporates

Event Risk Dashboard Bertelsmann (Continued)
Litigation Risk Low
Bertelsmann reported EUR135 mil. of litigation provisions at December 2012.
Of this amount EUR113 mil. related to RTL. While not immaterial, the size of the
provision does not present ratings pressure in the context of annual pre-dividend
free cash fow of EUR1.0 billion.
Penguin part of Penguin Random House was a publisher defendant in the
Apple ebook price fxing case recently found against Apple a provision for
which was taken in Pearsons (former owner of Penguin) 2012 accounts.
Structural Subordination Risk Medium
Debt is managed centrally and almost entirely (95% at December 2012) raised
at the parent level or through U.S. fnance subsidiary Bertelsmann U.S. Finance
LLC guaranteed by the parent. TV group RTL is separately listed and does have
the ability to raise stand-alone fnance gross debt EUR29 million at December
2012. Fitch does not consider this approach to funding to be likely to change.
Contingent Liabilities Low
Reported contingent liabilities mainly relate to RTL and Random House
relating to content supply agreements and payment commitments to authors.
Fitch is not aware of material outstanding ownership contingencies such as put
options against the group.
Regulatory Risk Medium
Bertelsmanns growth strategy includes scaling up its digital media presence
M&A will inevitably involve regulatory/antitrust clearance.
As the leading commercial TV broadcaster in a number of European markets,
RTL is viewed as being under meaningful regulatory scrutiny with its market
position inhibiting any major consolidating M&A.
Penguin now part of Penguin Random House was a publisher defendant in
the recent ebook price fxing case found against Apple by a U.S. federal court.
Acquisition Risk Medium
Divestiture Risk Low
Acquisitions
(EUR Mil.)
Divestitures
(EUR Mil.)
2012 88.0 47
2011 241.0 91
2010 205.0 49
2009 153.0 130
Bertelsmann continues its portfolio restructuring having spun off and closed
a number of low-margin businesses over the past several years, its growth
strategy includes a desire to scale up its digital media activities and push into
emerging markets. Recent transactions include the merger of Random House
with Penguin to form leading book publisher Penguin Random House, and the
buyout from KKR of its 50% share of BMG (music publishing). An estimated
cash pile of EUR4.0 billion is viewed as an M&A war chest and management
seem open to the idea of transformational deals. Ratings pressure would be
viewed on the merits of any deal and actions set out to restore leverage metrics.
Management regarded as prudent and would be expected to address resulting
leverage spikes as in the past.
September 19, 2013

Corporates

Organizational Chart Bertelsmann SE & Co. KGaA Corporate Structure (Fitch Defined)
a
PPC coupon is variable and based on par value of certificate. Note: Bertelsmann SE & Co. KGaA is a privately held Kommanditgesellschaft auf Aktien (KGaA;
partnership limited by shares). 80.9% of the share capital in Bertelsmann SE & Co. KGaA is held indirectly by foundations (Bertelsmann Stiftung, Reinhard Mohn
Stiftung, BVG Stiftung), and 19.1% is held indirectly by the Mohn family. All voting rights at the general meeting of Bertelsmann SE & Co. KGaA and Bertelsmann
Management SE (general partner) are controlled by Bertelsmann Verwaltungsgesellschaft (BVG). Approximately 95% of all debt issued by the group is issued by
Bertelsmann directly or through its U.S. finance subsidiary (Bertelsmann US Finance LLC). RTL, which is majority owned by Bertelsmann, has the capacity to issue its
own debt and arrange its own credit facilities. However, Bertelsmann does not provide any guarantee over that debt. RTL has proved to be a highly cash-generative
business with a policy of financing itself through internally generated cash. Although RTL has its own treasury operations, the company is able to borrow from and
deposit cash with Bertelsmann at commercial rates.
Source: Bertelsmann Annual Report, Fitch.
The Mohn Family
Bertelsmann SE & Co. KGaA
Total Debt FY 2012 (EUR Mil.) 4,289
Total Cash FY 2012 (EUR Mil.) 2,658
Debt Rating Coupon (%) Vol (Mil.) Maturity ISIN
Sr. Unsec. BBB+ 7.875 750 Jan. 16, 2014 XS0408678133
Sr. Unsec . BBB+ 5.050 277 Feb. 01, 2014 PPD
Sr. Unsec . BBB+ 6.000 30 March 01, 2014 PPD
Sr. Unsec . BBB+ 3.625 500 Oct. 06, 2015 XS0230962853
Sr. Unsec . BBB+ 4.750 1,000 Sept. 26, 2016 XS0268583993
Sr. Unsec . BBB+ 2.625 750 Aug. 02, 2022 XS0811690550
Sr. Unsec. BBB+ 3.700 100 Aug. 02, 2032 XS0801079434
Sr. Unsec . BBB+ 4.210 60 May 04, 2019 PPD
RCF
Sr. Unsec BBB+ Libor+ 1,200 Due 2017 Undrawn
PPC
a
Subordinated N.A. 15.000 284 Perpetual DE0005229942
Subordinated N.A. 7.230 17 Perpetual DE0005229900
(53%) (100%) (100%) (75.1%)
(19.1%)
Foundations
Bertelsmann
Verwaltungsgesllschaft (BVG)
(100% Voting Rights)
Bertelsmann Management SE
(Executive Board)
Penguin Random
House Publishing
Arvato Be Printers
Gruner & Jahr
(Jahr Family: 25.1%)
RTL Group Bertelsmann
(Free Float: 24.9%)
FY 2012 Debt (EUR Mil.) 29
FY 2012 Cash (EUR Mil.) 1,080
(74.9%)
Bertelsmann U.S. Finance LLC
(100% Owned by Bertelsmann SE & Co. KGaA)
Debt Rating
Coupon
(%)
Vol
(Mil.) Maturity ISIN
144
a
BBB+ 5.230 200 April 17, 2015 PPD
(80.9%)
September 19, 2013

Corporates

Financial Summary Bertelsmann SE & Co. KGaA
(EUR Mil., Years Ending Dec. 31) 2008 2009 2010 2011 2012
Profitability
Revenue 16,118 15,364 15,786 15,368 16,065
Revenue Growth (%) (14.1) (4.7) 2.7 1.2 4.5
Operating EBIT 1,494 1,378 1,780 1,401 1,385
Operating EBITDA 2,056 1,957 2,328 2,037 2,065
Operating EBITDA Margin (%) 12.8 12.7 14.7 13.3 12.9
FFO Return on Adjusted Capital (%) 15.1 13.6 16.3 16.6 15.2
Free Cash Flow Margin (%) 3.2 5.2 6.2 3.8 4.6
Coverages (x)
FFO Gross Interest Coverage 4.9 4.5 5.8 6.6 6.3
Operating EBITDA/Gross Interest Expense 6.3 4.4 6.0 6.0 6.1
FFO Fixed-Charge Coverage (including Rents) 3.2 2.9 3.6 3.9 3.8
FCF Debt Service Coverage 0.6 0.9 2.6 1.0 1.9
Cash Flow from Operations/Capital Expenditures 2.5 3.4 3.9 3.1 3.6
Debt Leverage of Cash Flow (x)
Total Debt with Equity Credit/Operating EBITDA 2.5 2.5 1.7 1.8 1.9
Total Debt less Unrestricted Cash/Operating EBITDA 1.7 1.4 0.8 0.9 0.6
Debt Leverage Including Rentals (x)
Annual Hire Lease Rent Costs for Long-Term Assets
(Reported and/or Estimate) 281.0 290.0 261.0 242.0 218.0
Gross Lease-Adjusted Debt/Operating EBITDAR 3.1 3.2 2.3 2.4 2.5
Gross Lease-Adjusted Debt /(FFO + Interest + Rentals) 3.4 3.8 2.9 2.8 3.1
FCF/Lease Adjusted Debt (%) 7.0 11.0 16.2 10.7 13.3
Debt Leverage Including Leases and Pension Adjustment (x)
Pension and Lease-Adjusted Debt /(EBITDAR + Pension Cost) 3.2 3.3 2.5 2.6 2.7
Liquidity
(Free Cash Flow + Available Cash + Committed Facilities)/
(ST Debt + Interest) (%) 179.0 242.0 666.0 305.0 703.0
Balance Sheet Summary
Cash and Equivalents (Unrestricted) 1,583 2,085 2,006 1,764 2,658
Restricted Cash and Equivalents N.A. N.A. N.A. N.A. N.A.
Short-Term Debt 1,011 989 181 597 264
Long-Term Senior Debt 4,017 3,889 3,738 2,976 3,612
Subordinated Debt N.A. N.A. N.A. N.A. N.A.
Equity Credit N.A. N.A. N.A. N.A. N.A.
Total Debt with Equity Credit 5,028 4,878 3,919 3,573 3,876
Off-Balance-Sheet Debt 2,248 2,320 2,088 1,936 1,744
Lease-Adjusted Debt 7,276 7,198 6,007 5,509 5,620
Fitch-Identified Pension Deficit 448 438 456 480 680
Pension Adjusted Debt 7,724 7,636 6,436 5,989 6,300
Cash Flow Summary
Gross Cash Interest Expense (365) (339) (313) (262) (257)
Cash Tax (231) (230) (373) (338) (385)
Associate Dividends N.A. N.A. N.A. N.A. N.A.
Other Items Before FFO (Including Interest Receivable) 35 (128) (117) 65 (54)
Funds from Operations 1,495 1,260 1,525 1,502 1,369
Change in Working Capital 92 250 252 47 216
Cash Flow from Operations 1,587 1,510 1,777 1,549 1,585
Total Non-Operating/Nonrecurring Cash Flow (163) 0 0 0 0
Capital Expenditures (627) (448) (458) (507) (447)
Dividends Paid (288) (270) (349) (452) (393)
Free Cash Flow 509 792 970 590 745
Net (Acquisitions)/Divestitures 298 (50) (51) (237) (97)
Net Equity Proceeds/(Buyback) (14) (2) (58) (177) (12)
Other Cash Flow Items 44 (88) 19 (72) (45)
Total Change in Net Debt 837 652 880 104 591
Working Capital
Accounts Receivable Days 66 61 60 68 71
Inventory Days 68 66 58 49 46
Accounts Payable Days 113 101 95 87 87
N.A. Not available.
Source: Fitch.
177 Company Summaries British Sky Broadcasting Group plc
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
Foreign Currency
Long-Term IDR BBB+
Rating Outlook
Long-Term
Foreign-Currency Rating Stable
Key Rating Drivers
Robust Pay-TV Business: British Sky Broadcasting Group plcs (Sky) rating is based on the
robustness of the pay-TV business despite the challenging macroeconomic environment and
continued pressure from other triple-play service operators in the U.K. Fitch Ratings expects
revenue and EBITDA growth to slow over the coming years, partly due to increasing competition,
but the Stable Outlook refects Skys low leverage (reported FY12 net debt/EBITDA of 0.6x) and
solid cash fow.
Competitive Environment: The U.K. market for triple play is one of the most competitive in
Europe, with BT Group (BBB/Stable), Sky and Virgin Media Inc. (B+/Stable) each a market
leader in one of the three segments. Sky has the largest triple-play subscriber base in the U.K.,
with 34% (March 2013) of its customers using triple-play services. BT Group and Virgin Media
have recently strengthened their offerings, with BT rolling out its fber network and moving into
pay-TV and Virgin offering high-speed broadband alongside TiVo, its interactive TV service.
Rising Content Costs: Skys content costs may continue to rise over the medium term as
it faces greater competition for the broadcast rights to attractive content. In June 2012, Sky
successfully bid GBP2.3 billion for the rights to show 116 English Premier League games per
season over the three years starting in August 2013. This represents a 40% increase on Skys
current deal of GBP1.6 billion. This may dent proftability, but the group has some fexibility to
protect margins by reallocating programming expenditure and cutting other costs.
Responding to OTT Threat: Skys launch of its IPTV service (NOW TV) indicates that it is
responding to growing competition from over-the-top (OTT) content providers such as Netfix
and Amazons LoveFilm, which stream content over the Internet at competitive prices relative to
traditional pay-TV subscriptions. Sky will have to balance this potential market against the need
to ensure it does not cannibalize its existing customer base.
Regulatory Risk Subsides: Regulatory risks for Sky have eased recently. In September 2012,
Ofcom (the U.K.s broadcasting, telecoms and postal regulator) concluded that Sky is a ft and
proper company to hold a broadcasting license. Also, in August 2012 two rulings by the Competition
Commission and the Competition Appeal Tribunal, respectively, found no serious threat to competition
in the markets for premium pay-TV movies and the live broadcasting of sporting events.
Ample Liquidity: The groups liquidity profle is robust. Sky had GBP1.4 billion of cash and
short-term deposits (December 2012) and an undrawn revolving credit facility of GBP743 million,
which matures in October 2017. In November 2012, Sky took advantage of the favorable pricing
environment in the U.S. debt markets to issue USD800 million of senior unsecured notes.
Proceeds from the issuance will be used for general purposes including refnancing existing debt
and fnancing any mergers or acquisitions, in line with Skys corporate strategy.
Sustained Increase in Leverage: Fitch considers sustained FFO-adjusted net leverage of 2.0x
as a ceiling for the current rating (0.86x at end-June 2012). However, the rating can tolerate
temporary spikes in leverage above this level after events such as an acquisition, as long as
there is a clear path back to 2.0x. Positive action is unlikely because of Skys concentration of
business in a single country and sector.
Analysts
Damien Chew, CFA
+44 20 3530-1424
damien.chew@ftchratings.com
Michael Dunning
+44 20 3530-1178
September 19, 2013

Corporates

Retail
Subscripti
on
83%
Wholesal
e
Subscripti
on
5%
Advertisin
g
6%
Other
6%
Revenues by Segment
(Dec. 31, 2012)
Retail
Subscription
83%
Wholesale
Subscription
5%
Advertising
6%
Portfolio Summary British Sky Broadcasting Group plc (BSkyB)
(As of Dec. 31, 2012)
Source: Company filings, company website.
TV, Home and Business Services
Television
The Sky Channels and Sky Distributed Channels
Sky+
Sky HD
Sky Multiroom
Sky Anytime
Sky Go
Sky Box Office
Sky Store
NOW TV
Home Communications
Sky Broadband
Sky Talk
The Cloud Wifi
Sky Business
Content
Channel Portfolio
Sky 1
Sky Living
Sky Atlantic
Sky Arts
Sky Movies
Sky Sports
Sky News
Adjacent Businesses
Sky Media
Wholesale Distribution
Sky Betting and Gaming
Infrastructure and Technology
Satellites
Playout and Uplink Facilities
Digital Satellite Reception Equipment
Encryption and Security and Communications Infrastructure
September 19, 2013

Corporates

Event Risk Dashboard British Sky Broadcasting Group plc (Sky)
N.A. Not applicable. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition L
Divestiture L
Covenant Breach N.A.
Litigation Risk L
Regulatory Risk M
LBO Risk Low
News Corps 39% stake provides insulation against this risk.
Secular Risk Medium
Increased competitive pressure from new triple play entrants, such as BT.
OTT providers may also pressure premium-tier pricing.
Increased content costs may pressure margin going forward.
News Corp.s ownership could be perceived to infuence Skys cash
distribution policy.
News Corp participated in share repurchase program, therefore no change to
economic or voting interest.
Group leverage policy is conservative given secular risks.
Recent share buybacks have increased leverage.
BSkyB Rating History
BB+
BBB
BBB
BBB+
A
A
0.5
1.0
1.5
2.0
2.5
3.0
2008 2009 2010 2011 2012 2013
Leverage Trend
(x)
September 19, 2013

Corporates

Event Risk Dashboard British Sky Broadcasting Group plc (Sky) (Continued)
N.A. Not applicable. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a company is
able to take from expectations of what it will actually do.
Acquisition Risk Low
Acquisitions Divestitures
2012 (15)
2011 (222) 32
2010 196
2009 (19)
Note: In November 2006, Sky acquired a 17.9% stake in ITV for GBP946 mil. For
antitrust reasons, Sky sold down this stake to 7.5% in February 2010.
Covenant Breach Risk N.A.
Covenant
Level (x)
Fitch
Estimated
Level (x)
EBITDA
Cushion (%)
Consolidated Leverage N.A. N.A. N.A.
Interest Coverage N.A. N.A. N.A.
Litigation Risk Low
The EDS litigation was settled for GBP318 mil. in Skys favor in 2010.
The group primarily funds itself at holding company level (refer to group
organizational chart).
At June 2012, Sky had minimum TV programing rights commitments
of GBP5.1 Bil.
Minimum pension liabilities as Sky operates a defned contribution scheme for
its employees.
Ofcom imposes wholesale rates for sale of premium content to other
U.K. providers.
Competition Commission forced Sky to reduce its stake in ITV to
7.5% (antitrust).
Stock Repurchase Authorization and Activity
(GBP Mil.)
Starting Authorized
Share Buyback
New Authorized
Share Buyback
Share
Buy Activity
Ending Authorized
Share Buyback
2012 750 (546) 204
2011
2010
2009
Note: The GBP750 mil. authorization was announced in July 2011 following News Corp.s failed attempt to take over Sky.
September 19, 2013

Corporates

Organizational Chart British Sky Broadcasting Group plc
News Corporation International Free Float Market Share
BSkyB Group Plc.
USD750 mil. of 6.100% Guaranteed Notes repayable in February 2018
USD583 mil. of 9.500% Guaranteed Notes repayable in November 2018
USD800 mil. of 3.125% Guaranteed Notes repayable in November 2022
GBP300 mil. of 6.000% Guaranteed Notes repayable in May 2027
GBP743 mil. revolving credit facility with a maturity date of Oct. 31, 2017
BSkyB
Telecommunications
Ltd.
Management of
network assets in the
U.K.
BSkyB
Ltd.
Operation of pay-TV
broadcasting
services in the U.K.
and Ireland.
BSkyB Group Plc.
A special purpose vehicle created to assist in the financing of its
parent company.
USD750 mil. of 5.625% Guaranteed Notes repayable in October 2015
GBP400 mil. of 5.750% Guaranteed Notes repayable in October 2017
USD350 mil. of 6.500% Guaranteed Notes repayable in October 2035
(100%) (100%) (100%)
(39.56% ownership stake) (60.44%)
September 19, 2013

Corporates

Financial Summary British Sky Broadcasting Group plc (Sky)
(GBP Mil., Years Ending Dec. 31) 2008 2009 2010 2011 2012
Profitability
Revenue 4,952 5,359 5,709 6,597 6,791
Revenue Growth (%) 8.8 8.2 6.5 15.5 2.9
Operating EBIT 752 780 872 1,073 1,223
Operating EBITDA 998 1,071 1,185 1,405 1,567
Coverages (x)
Liquidity
(ST Debt + Interest) (%) 215.0 190.0 1,037.0 1,486.0 1,388.0
Cash and Equivalents (Unrestricted) 817 901 1,049 1,351 1,174
Short-Term Debt 338 465 8 8 8
Off-Balance-Sheet Debt 360 440 440 352 400
Fitch-Identified Pension Deficit N.A. N.A. N.A. N.A. N.A.
Cash Flow Summary
Operating EBITDA 998 1,071 1,185 1,405 1,567
Cash Tax (163) (178) (319) (219) (254)
Associate Dividends 5 17 30 29 39
Other Items Before FFO (Including Interest Receivable) 72 131 130 76 103
Funds from Operations 747 824 870 1,167 1,330
Change in Working Capital (9) 53 140 95 84
Cash Flow from Operations 738 877 1,010 1,262 1,414
Total Non-Operating/Nonrecurring Cash Flow (21) (3) 228 0 0
Dividends Paid (280) (298) (314) (353) (410)
Free Cash Flow 98 176 495 486 547
Net (Acquisitions)/Divestitures (75) (19) 195 (194) (21)
Other Cash Flow Items (3) (11) 10 92 45
Total Change in Net Debt (3) 107 660 326 (126)
Working Capital
N.A. Not available.
Source: Fitch.
183 Company Summaries CBS Corporation
September 19, 2013

Corporates

CBS Corporation
Key Rating Drivers
Strong Financial Flexibility: The business risks inherent in CBS Corporations (CBS) operating
profle, along with its conservative fnancial policy, strongly position the companys credit profle
within the current rating category, providing a material amount of fnancial fexibility. Consolidated
leverage of 1.7x as of the LTM ended March 31, 2013 compares favorably to 1.8x as of year-end
2011 as well as Fitchs 2.75x gross leverage target for the current ratings. While the company does
not have a formal leverage target, Fitch expects CBS to have a rational approach to managing
its leverage and to maintain a conservative fnancial policy and credit-positive approach to its
capital structure in the context of capital allocation strategy and participating in mergers and
acquisitions.
Shareholder Returns to Continue: Share repurchases continue to be the centerpiece of
CBS capital allocation strategy as evidenced by the recent expansion of its share repurchase
authorization to $6 billion. With annual free cash fow (defned as cash fow from operations less
capital expenditures and dividends) expected to exceed $1.5 billion, the company has signifcant
fexibility within the current ratings to accommodate its capital allocation policy. Given the
increased size of the share repurchase program, Fitch does not expect any material change to
the pacing of anticipated share repurchases and the increased size of the authorization provides
multiyear capacity.
Outdoor Initiatives Neutral to Credit Profle: Fitch believes that CBS has suffcient capacity
within its current ratings to accommodate a modest increase in its leverage resulting from the
conversion of Outdoor Americas into a REIT as well as the pending divestiture of the international
outdoor business. The outdoor business is purely focused on cyclical advertising revenues and
lacks the more desirable content-related revenues. Completion of these transactions will reduce
CBS exposure to advertising revenues. CBS revenues derived from advertising post Outdoor
will reduce to approximately 55% from 60% as of year-end 2012.
Limited Upside Ratings Momentum: Positive rating action would likely coincide with CBS
adopting a more conservative fnancial policy highlighted with a commitment to a gross leverage
target of 2.25x or lower. Meanwhile CBS will need to demonstrate that its operating profle can
sustain itself amid ongoing competitive pressures, changing media consumption patterns and
evolving technology platforms.
Downside Case: Negative rating actions are more likely to coincide with discretionary actions
of CBS management including, but not limited to, the company adopting a more aggressive
fnancial strategy or event-driven merger and acquisition activity that drives leverage beyond 3.5x
in the absence of a credible deleveraging plan. Additionally, negative rating actions could result
should Fitch begin to observe a negative impact from alternative content distribution platforms
and other forms of entertainment that is signifcantly larger than Fitchs expectations. Other
negative triggers include a weakening of the companys television studios ability to produce
desired television content, or secure programming on its television networks that consistently
delivers viewing audience and related advertising revenues.
Analysts
David Peterson
+1 312 368-3177
Rolando Larrondo
+1 212 908-9189
Ratings
Security Class
Current
Rating
CBS Corp.
Long-Term IDR BBB
Senior Unsecured BBB
Short-Term IDR F2
Commercial Paper F2
CBS Broadcasting
Long-Term IDR BBB
Rating Outlook
Stable
September 19, 2013

Corporates

Portfolio Summary CBS Corporation
(As of June 30, 2013)
a
In 4Q2012, CBS announced plans to divest European operations.
Entertainment Local Broadcasting
CBS Television Network
CBS Entertainment CBS News
CBS Sports The CW (50/50 JV)
CBS Television Studios
CSI: Crime Scene Investigation (CBS), NCIS (CBS), The Good Wife (CBS)
and 90210 (The CW)
Syndication: CSI:, CSI: Miami, CSI: NY, Criminal Minds, NCIS and NCIS:
Los Angeles, Wheel of Fortune, Jeopardy!, Entertainment Tonight, Inside
Edition, The Insider, Dr. Phil, Rachael Ray and Judge Judy
CBS Global Distribution Group
U.K. and Ireland (49% interest in JV with Liberty Global, Inc.)
Europe, Middle East, Africa (30% int. in JV with Liberty Global)
India (50/50 JV with Reliance Broadcast Network Ltd.)
CBS Films
2012 2013
The Woman in Black The Last Exorcism Part II
Salmon Fishing in the Yemen The To Do List
The Words Last Vegas
Seven Psychopaths
CBS Interactive
CBS Audience Network GameSpot and GameFAQs
CBS College Sports Last.fm
CBS Interactive International MaxPreps.com
CBS MoneyWatch.com Metacritic
CBS.com Metrolyrics.com
CBSNews.com MP3.com
CBSSports.com mySimon
CBSwatchmagazine.com Onlylady.com
CHOW PCHome
Clicker radio.com
CNET smartplanet
CNET Content Solutions TechRepublic
CNET News TV.com
Downloads.com UrbanBaby
Comic Vine xcar.com.cn
EcoMedia ZDNet
Gamekult zol.com.cn
30 O&O Stations
Station Location
Market
Rank
WCBS-TV New York, NY 1
WLNY New York, NY 1
KCAL-TV Los Angeles, CA 2
KCBS-TV Los Angeles, CA 2
WBBM-TV Chicago, IL 3
KYW-TV Philadelphia, PA 4
WPSG-TV Philadelphia, PA 4
KTVT-TV Dallas-Fort Worth, TX 5
KTXA-TV Dallas-Fort Worth, TX 5
KPIX-TV San Francisco-Oakland-San Jose, CA 6
KBCW-TV San Francisco-Oakland-San Jose, CA 6
WBZ-TV Boston, MA 7
WSBK-TV Boston, MA 7
WUPA-TV Atlanta, GA 9
WKBD-TV Detroit, MI 11
WWJ-TV Detroit, MI 11
KSTW-TV Seattle-Tacoma, WA 12
WTOG-TV Tampa-St. Petersburg-Sarasota, FL 14
WCCO-TV Minneapolis-St. Paul, MN 15
KCCO-TV (Satellites) Alexandria, MN
KCCW-TV (Satellites) Walker, MN
WFOR-TV Miami-Ft. Lauderdale, FL 16
WBFS-TV Miami-Ft. Lauderdale, FL 16
KCNC-TV Denver, CO 17
KOVR-TV Sacramento-Stockton-Modesto, CA 20
KMAX-TV Sacramento-Stockton-Modesto, CA 20
KDKA-TV Pittsburgh, PA 23
WPCW-TV Pittsburgh, PA 23
WBXI-CA Indianapolis, IN 26
WJZ-TV Baltimore, MD 27
Radio Stations (In Top 25 Markets)
Location No. of Stations Market Rank
New York, NY 7 1
Los Angeles, CA 6 2
Chicago, IL 7 3
San Francisco, CA 6 4
Dallas-Fort Worth, TX 6 5
Houston, TX 6 6
Washington, D.C. 6 7
Philadelphia, PA 5 8
Atlanta, GA 3 9
Boston, MA 5 10
Detroit, MI 6 12
Seattle-Tacoma, WA 4 13
Phoenix, AZ 3 14
Minneapolis, MN 3 16
San Diego, CA 2 17
Tampa-St. Petersburg, FL 6 18
Baltimore, MD 4 21
St. Louis, MO 3 22
Charlotte, NC 7 24
Pittsburgh, PA 4 25
Total Top 25 Markets 99
Total Radio Stations (28 Markets) 127
Outdoor Publishing
CBS Outdoor
a
CBS Outernet Simon & Schuster
Vendor
Cable Networks
Showtime Networks
Smithsonian Networks (90% Owned Venture)
CBS Sports Network
September 19, 2013

Corporates

U.S.
88%
United
Kingdom
2%
Europe
3%
Canada
3%
Asia
1%
Other
3%
CBS Corporation
(As of Dec. 31, 2012)
Entertain
ment
54%
Cable
Networks
12%
Publishin
g
6%
Local
Broadcas
ting
19%
Outdoor
Americas
9%
Revenues by Segment
CBS Corporation
(As of Dec. 31, 2012)
Publishing
6%
Entertainment
54%
Local
Broadcasting
19%
Entertain
ment
41%
Cable
Networks
22%
Publishin
g
2%
Local
Broadcas
ting
25%
Outdoor
10%
EBITDA by Segment
CBS Corporation
(As of Dec. 31, 2012)
Publishing
2%
Entertainment
41%
Local
Broadcasting
25%
September 19, 2013

Corporates

Event Risk Dashboard CBS Corporation
a
CBS completed a $1 billion repurchase of its Class B common shares through an accelerated share repurchase transaction during the first quarter of 2013. On July 25,
2013 the company announced a $5.1 billion increase to the existing share repurchase authorization bringing total availability to $6.0 bil. O&O Owned and operated.
Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a company is able to take from
expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition M
Divestiture H
Covenant Breach L
Litigation Risk M
Regulatory Risk M
Contingent Liabilities M
LBO Risk Low
Current enterprise value (EV) too large for an LBO in current markets; size may
still be a factor if credit markets improve.
Concentrated ownership (Sumner Redstone has 79% voting control, 6%
economic stake) reduces the risk of private equity-led LBO; however Redstone
privatization not out of the question.
Solid free cash fow, but exposed to cyclical factors.
Change of control put provides some risk mitigation for holders of recent issuances.
Strong equity performance reduces incentive to become private.
There is a dual-class stock structure, and Chairman Sumner Redstone has 79%
voting control, through his ownership of Class A shares (Class B, the majority of
shares outstanding, are nonvoting). This concentrated ownership always poses
elevated risk to bondholders.
However, Fitch gained incremental comfort around this risk given Redstones
2009 sale of nonvoting stock and other asset sales, which settled the majority of
his personal debts without harming CBS creditors.
The executive compensation incentive structure reduces event risk, as it is
creditor-friendly, driven by EBITDA and free cash fow (predividend).
Fitch expects the company to have a rational approach to managing its leverage
and maintain a conservative fnancial policy to its capital structure in the context
of capital allocation strategy and participating in merger and acquisition activity.
Like most IG names, there are no limitations on dividends, acquisitions or share
buybacks.
For CBS, this risk is mitigated by the company's consistent fnancial policy since
the Viacom split, and its credit-friendly actions since the downturn.
CBS does not have a publicly stated leverage target, but manages mid BBB
ratings, which implies approximately 2.5x or better.
CBS cut its dividend during the downturn to preserve liquidity, though this was out
of necessity.
Fitch believes the downturn made management more conservative.
Ratings have suffcient capacity to accommodate the expansion of CBS share
repurchase authorization to $6 billion.
The company has reduced debt by $1 billion since 2009.
Bank facility contains a 4.5x leverage covenant.
Fitch believes risk of a change in fnancial policy on succession is mitigated by
expected involvement of current management team.
Note: Ratings represent combined CBS/Viacom before 2006.
CBS Corporation Rating History
BB+
BBB
BBB
BBB+
A
A
1.5
2.0
2.5
3.0
3.5
4.0
2007 2008 2009 2010 2011 2012 LTM
June 2013
Leverage Trend
(x)
0
10
20
30
40
50
60
Source: Bloomberg.
CBS Corporation Stock Price
(July 2007August 2013)
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard CBS Corporation (Continued)
a
CBS completed a $1 billion repurchase of its Class B common shares through an accelerated share repurchase transaction during the first quarter of 2013. On July 25,
2013 the company announced a $5.1 billion increase to the existing share repurchase authorization bringing total availabiilty to $6.0 bil. O&O Owned and operated.
expectations of what it will actually do.
Secular Risk Medium
Risk concentrated in local broadcasting (approx. 26% of EBITDA).
Threat of new technologies (AutoHop, Aereo) to the Network and O&Os.
Showtime at risk of subscriber losses in a digital world.
Syndication model remains intact, digital delivery a beneft.
Moderate growth at Outdoor and Network; retransmission a growth driver.
Risk toward the lower end of medium, but not in low.
Upstream guarantee from CBS Operations Inc.
$52 million of Opco debt at CBS Broadcasting Inc.
No material limitations on subsidiary guarantees.
No restrictions on additional debt.
($ Mil.)
Starting Authorized
Share Buyback
New Authorized
Share Buyback
Share
Buy Activity
Ending Authorized
Share Buyback
YTD June 2013
a
2,510.0 (1,560.0) 950.0
2012 1,980.0 1,700.0 (1,170.0) 2,510.0
2011 1,500.0 1,500.0 (1,020.0) 1,980.0
2010 649.4 1,500.0 1,500.0
2009 649.4 649.4 649.4
2008 649.4 649.4 649.4
2007 579.8 4,069.4 (3,420.0) 649.4
2006 579.8 579.8 579.8
CBS began repurchasing shares in 2011 after a three-year hiatus. The company has funded all buybacks with free cash fow, and Fitch expects this strategy to
continue. The recent moderate increase in pace from $250 million/quarter to $300 million/quarter is coupled with expectations for stronger free cash fow.
Debt-funded buybacks during periods of relative economic stability are factored into ratings to the extent leverage remains below Fitchs 2.75x target for BBB.
Like most IG companies, there are no restrictions on the amount of share buyback activity.
Acquisition Activity Medium
Divestiture Activity High
($ Mil.) Acquisition Divestiture
2012 1,46.0 49.0
2011 75.0 22.0
2010 11.3 18.3
2009 26.1 128.8
2008 2,035.3 198.2
2007 410.0 562.2
No limitations on acquisitions or divestitures.
Company has sold its European and Asian outdoor business and intends to convert its
outdoor Americas business into a REIT.
Potential TV/radio station footprint pruning small acquisitions or divestitures.
Potential to buy smaller cable pure-play (AMC?), although current equity multiples plus
premium a hurdle.
Covenant Threshold Risk Low
(x)
Covenant
Level
Ratio/Test As
of 6/30/13
% EBITDA
Cushion
Consolidated Leverage 4.5 1.7 63
Covenant calculation per definition in companys bank agreement.
Litigation Risk Medium
CBS is a defendant in new and existing cases involving asbestos manufactured
by Westinghouse prior to the 1970s. CBS continues to make payments related to
settled and decided-at-trial cases. The company's payments net of insurance are
expected to be easily managed by free cash fow.
At Dec. 31, 2012, there were approximately 45,900 claims pending (versus
50,090 at Dec. 31, 2011). During 2012, there were 4,350 new claims and 8,540
closed claims.
Total cost for settlement and defense in 2012 was $21 million.
Fitch believes future annual payments should not materially exceed 2012 levels
and believes this is manageable given the company's free cash fow.
Portfolio governed by FCC's media ownership laws.
Relaxation of ownership laws could drive higher M&A.
Tightening of laws could drive forced divestitures.
Fitch expects newspaper/broadcast cross-ownership rules to be eased, but other
ownership regulations not likely to be changed. No impact on CBS.
The passage of stricter antipiracy legislation would be benefcial to content
companies, although piracy would remain an issue.
Congress could revisit performance royalty payments for terrestrial broadcasters,
which could pressure radio margins by 3%4%.
Fitch does not expect the FCC to step in on any future retransmission or reverse
compensation battles with a material impact.
Fitch expects the positive regulatory environment in the outdoor industry
(limitation on new inventory from the Federal Highway Beautifcation Act) to
remain unchanged.
Contingent Liabilities Medium
Union Workforce
Writers, directors and other talent are unionized work stoppage could
materially affect content pipeline.
Directors Guild, Screen Actors Guild, and Writers' Guild collective bargaining
agreements (CBAs) expire in 2014.
The risk of NFL content being interrupted by players strike is pushed until 2022,
when current deal expires.
Pensions
Pension plan was 23% ($1.3 billion) underfunded at 12/31/12.
Contributions will be manageable in context of FCF.
September 19, 2013

Corporates

Corporate Governance Overview CBS Corporation
a
OIBDA Operating income before depreciation and amortization.
b
Most recent filings on Bloomberg as of June 2013. PSU Performance-based stock units.
PRSUs Performance-based restricted stock units. TRSUs Time-based restricted stock units. Continued on next page.
Source: Company filings, Bloomberg, Fitch Ratings.
2012 FYE Management Compensation
($)
Named Executive Officer (NEO) Salary Bonus
Stock
Awards
Option
Awards
Non-Equity
Incentive Plan All Other Total
Sumner M. Redstone Exec. Chairman and Founder 1,756,731 10,000,000 5,672,794 13,885,193 11,997 31,326,715
Leslie Moonves President and CEO 3,513,461 27,500,000 11,499,958 16,329,994 1,903,379 1,410,234 62,157,026
Joseph R. Ianniello Exec. VP and CFO 1,505,769 7,100,000 1,799,962 1,199,997 228,895 403,907 12,238,530
Louis J. Briskman Exec. VP and Gen. Counsel 1,305,000 5,200,000 1,799,962 1,199,997 1,391,736 66,418 10,963,113
Anthony G. Ambrosio Exec. VP and HR and Admin. 752,885 1,402,500 899,980 599,999 256,879 96,255 4,008,498
Board of Directors
Indepen- Compensation Other Current Current
Name Age dence Term Tenure Cash Stock All Others Total Committees Directorships Position
David R.
Andelman
73 N May 2013
May 2014
2000 100,000 170,020 17 270,037 None National Amusements Senior Partner Lourie &
Cutler, P.C. (Law Firm)
Joseph A.
Califano Jr.
81 Y May 2013
May 2014
2003 144,000 170,020 10,586 324,606 Audit (Financial Expert);
Nominating and
(Chair)
Willis Group Hldings PLCFounder and Chairman
Emeritus The National Center
on Addiction and Substance
Abuse at Columbia U.
William S.
Cohen
72 Y May 2013
May 2014
2003 120,000 170,020 25 290,045 Compensation None Chairman and CEO The
Cohen Group (Consulting Firm)
Gary L.
Countryman
73 Y May 2013
May 2014
2007 144,000 170,020 5,464 319,484 Audit (Chair and
Financial Expert);
Nominating and
None Chairman Emeritus of Bank of
America Corporation
Charles K.
Gifford
70 Y May 2013
May 2014
2006 150,000 170,020 9,624 329,644 Compensation (Chair);
Nominating and
Bank of America
Corporation;
Northwest Utilities
Former Chairman and CEO
BankBoston
Leonard
Goldberg
79 N May 2013
May 2014
2007 100,000 170,020 7,000 277,020 None None President Mandy Films, Inc.
and Panda Productions, Inc.
Bruce S.
Gordon
67 Y May 2013
May 2014
2006 120,000 170,020 290,020 Compensation Northrop Grumman
Corporation;
The ADT Corporation
Former President and CEO
The National Association for the
Advancement of Colored People
(NAACP)
Linda M.
Griego
65 Y May 2013
May 2014
2007 112,000 170,020 2,800 284,820 Audit
(Financial Expert)
AECOM
Technology Corporation
President and CEO
Griego Enterprises, Inc.
Arnold
Kopelson
78 Y May 2013
May 2014
2007 100,000 170,020 2 270,022 None Kopelson Entertainment Co-President
Kopelson Entertainment
Leslie
Moonves
63 N May 2013
May 2014
2006 None None President and CEO CBS
Doug
Morris
74 Y May 2013
May 2014
2007 120,000 170,020 18 290,038 Compensation None CEO
Sony Music Entertainment
Shari
Redstone
58 N May 2013
May 2014
1994 100,000 170,020 7,505 277,525 None National Amusements;
Viacom; MovieTickets.
com
President National
Amusements; Co-Founder and
Managing Partner
Advancit Capital
Sumner M.
Redstone
Chairman
89 N May 2013
May 2014
1986 None National Amusements;
Viacom
CEO
National Amusements
Frederic V.
Salerno
69 Y May 2013
May 2014
2007 112,000 170,020 10 282,030 Audit Akami Technologies, Inc.;
Intercontinental-
Exchange, Inc.;
National Fuel Gas
company; Viacom
Retired Vice Chairman and
CFO Verizon
Communications Inc.
Management Compensation Target Breakdown
Base Salary Between 9% and 26% of targeted total compensation.
Annual Incentive Bonus awards tied to individual targets and financial metrics. Targets were: Moonves $12 million, a portion of which is subject to a payment
schedule based on level of achievement ranging from 80%120%; Redstone $5 million; Ianniello and Briskman 200% of base salary;
Ambrosio 85%.
Long Term Incentive Performance-based compensation is typically targeted at 74% to 90% of total compensation with equity awards typically targeted at 30%57% of total
compensation. Awards were: Redstone PSUs (non-restricted); Moonves PRSUs (50%) and TRSUs (50%); Ianniello, Briskman and Ambrosio
options (30%), PRSUs (30%) and TRSUs (30%).
Stock Ownership Requirements CEO 5x base salary; NEOs 2x to 3x base salary.
September 19, 2013

Corporates

Corporate Governance Overview CBS Corporation (Continued)
a
OIBDA Operating income before depreciation and amortization.
b
Most recent filings on Bloomberg as of June 2013. PSU Performance-based stock units.
PRSUs Performance-based restricted stock units. TRSUs Time-based restricted stock units.
Corporate Governance Highlights
Class A are voting shares; Class B are nonvoting shares.
CBS Corporation is a "controlled company" due to National Amusements owning approx. 79.1% of the Class A common stock and approx. 6.6% of the Class A and Class B on a
combined basis.
Sumner Redstone is controlling shareholder of National Amusements.
Despite controlled status, 9 of 14 board members are independent.
National Amusements, the controlling stockholder, is also the controlling stockholder of Viacom, Inc. Redstone, who is the controlling stockholder, chairman, and CEO of National
Amusements, serves as executive chairman for both CBS and Viacom. CBS, as part of its normal course of business, enters into transactions with Viacom and its subsidiaries.
Related-party transactions: 1) Pursuant to an agreement between a subsidiary of the company and Panda Productions, a television and film production company owned 50% by
Leonard Goldberg, who serves as an executive producer of CBS Networks television series, Blue Bloods, in 2012, the company paid Panda Productions fees per episode, which are
consistent with fees paid to other executive producers at Goldbergs level. 2) During 2012, the company, entered into transactions with Viacom and its subsidiaries. The company,
licenses its television products and leases its production facilities to Viacoms media networks businesses. Viacom also distributes certain of the companys television products in
the home entertainment market. The companys total revenues from these transactions were $221 million for the year ended December 31, 2012. As of December 31, 2012, Viacom
owed the company approx. $257 million, and the company owed Viacom approximately $2 million. 3) National Amusements, during 2012, paid to CBS Films, approx. $644,000
for CBS share of revenues from the theatrical exhibition of CBS Films motion pictures in National Amusements theaters. In addition, National Amusements places advertising on
certain CBS radio stations, which amounted to approx. $134,000 in 2012. 4) In November 1995, the company entered into an agreement with Gabelli Asset Management Company
(GAMCO). GAMCO manages certain assets for qualified U.S. pension plans sponsored by the company. For 2012, the company paid GAMCO approx. $203,000 for such investment
management services.
Clawback policy is in place.
Auditor: PricewaterhouseCoopers LLC.
Equity Holdings Non-Employee Directors and NEOs
(000) Class A Class B
Holder Shares % of Total Shares % of Total
Anthony G. Ambrosio <1.0 691 <1.0
David R. Andelman 22 <1.0 105 <1.0
Louis J. Briskman <1.0 1,777 <1.0
Joseph A. Califano 3 <1.0 89 <1.0
William S. Cohen 26 <1.0 74 <1.0
Gary L. Countryman 6 <1.0 76 <1.0
Charles K. Gifford <1.0 89 <1.0
Leonard Goldberg <1.0 80 <1.0
Bruce S. Gordon <1.0 83 <1.0
Linda M. Griego <1.0 76 <1.0
Joseph R. Ianniello <1.0 652 <1.0
Arnold Kopelson 3 <1.0 73 <1.0
Leslie Moonves <1.0 10,002 1.7
Doug Morris 18 <1.0 86 <1.0
Shari Redstone 9 <1.0 86 <1.0
Sumner M. Redstone 34,111 79.9 9,952 1.7
Frederic V. Salerno 25 <1.0 84 <1.0
Current Directors and Executive Officers as a Group, Other
than the Interests of Sumner Redstone (21 Persons) 113 <1.0 15,095 2.6
Note: Directors and NEO holdings include stock options exercisable within 60 days of Feb. 28, 2013. As of proxy filing dated April 2013.
Equity Holdings Top 10 Holders Class A
b
Equity Holdings Top 10 Holders Class B
b
Holder Shares (000) % of Total Holder Shares (000) % of Total
NAIRI Inc. 31,111 79.1 Blackrock 35,062 6.1
GAMCO Asset Management Inc. 3,982 9.6 Capital Group Companies Inc. 33,713 5.9
Gruss Asset Management LP 1,500 3.6 Vanguard Group Inc. 26,690 4.7
Pacific Heights Asset Management 700 1.7 State Street 23,479 4.1
Renaissance Technologies Corp. 262 0.6 Ivy Management Incorporated 19,798 3.5
Sac Capital Advisors LP 150 0.4 Janus Capital Management 17,872 3.1
Dimensional Fund Advisors Plc 128 0.3 Coatue Management LLC 13,976 2.4
Skandia Global Funds Plc 80 0.2 Waddell & Reed Financial Inc. 13,713 2.4
Bank Of New York Mellon Corp 32 0.1 JP Morgan 13,460 2.4
First Manhattan Co. Asset Mgmt. 20 0.1 FMR LLC 8,989 1.6
Total Top 10 37,965 95.6 Total Top 10 206,751 36.1
Management Compensation FYE 2012 Drivers
Annual Incentive OIBDA
a
and FCF
Long-Term Incentives OIBDA and FCF
September 19, 2013

Corporates

Pension Screener
a
CBS Corporation
2013 "At Risk" Shortfall? Yes Estimated Pension Outflow Greater
than 10%?
No
($ Mil., Unless Noted; All Data Represents Worldwide Pensions) 12/31/12 12/31/11
Plan Assets
Fair Value of Plan Assets 4,274.0 3,948.0
Fixed Income as Percent of Portfolio (%) 71.0 67.5
Equity as Percent of Portfolio (%) 23.0 22.1
Cash/ST Investments as Percent of Portfolio (%) 4.0 7.8
Other as Percent of Portfolio (%) 1.0 2.7
Level 3 Plan Assets 56.0 80.0
Actual Return on Plan Assets 476.0 260.0
Employer Contributions 254.0 460.0
Estimated Qualified Contributions Next Year
b
268.0 55.0
Obligations and Costs
Projected Benefit Obligation (PBO) 5,564.0 5,200.0
Discount Rate (%, U.S.) 4.0 4.9
Expected Return on Plan Assets (%) 7.0 6.8
Compensation Increases (%) 3.0 2.8
Benefits Paid (413.0) (427.0)
Net Periodic Cost/(Income) 101.0 112.0
Service Cost 36.0 35.0
Expected Return 250.0 239.0
Interest Cost 243.0 249.0
Leverage Screener
PBO (Under-)/Overfunded Status (1,290.0) (1,252.0)
Pension Funded Status (%) 76.8 75.9
Level 3 Plan Assets/Plan Assets (%) 1.3 2.0
Total Debt/Operating EBITDA (x) 2.0 1.8
(Total Debt + PBO Liability)/EBITDAP (x) 2.0 2.1
(Adjusted Total Debt + PBO Liability)/EBITDARP (x) 2.0 2.3
Cash/PBO Liability (x) 1.0 0.5
Cash Flow Screener
2013 At Risk Shortfall (80%) 177.0 212.0
PBO Underfunded Status/Seven Years 184.0 178.9
Total Estimated Pension Outflows 260.0 258.9
Estimated Pension Outflows/(FFO + Pension Contribution) (%) 9.4 10.1
a
Based on GAAP financial information. GAAP differs from PPA- and ERISA-based calculations, which are used to
determine funding levels and requirements. Amounts above may include nonqualified and/or international plans with
different funding requirements. Does not factor in tax deductibility of contributions. Assumes no election of extended
amortization schedules permitted under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief
Act of 2010 (PRA).
b
Estimated by Fitch based on publicly disclosed information, unless expressly publicly stated.
September 19, 2013

Corporates

Debt Structure
CBS Corporation
($ Mil., As of June 30, 2013)
Debt Instrument Amount
Commercial Paper 453.0
$2 Billion Credit Facility due 2018
8.875% Notes due 2014 98.5
7.625% Senior Debentures due 2016 200.0
4.625% Senior Notes due 2018 300.0
5.750% Debentures due 2020 500.0
7.875% Senior Debentures due 2030 1,250.0
Capital Leases 121.0
Total Debt 6,429.0
Scheduled Debt Maturities
CBS Corporation
($ Mil., As of June 30, 2013)
Amount
Dec. 31, 2013 453.0
Dec. 31, 2014 99.0
Dec. 31, 2015
Dec. 31, 2016 200.0
Dec. 31, 2017 400.0
Thereafter 5,157.0
Total 6,309.0
Note: Excludes $121 million of capital lease obligations.
September 19, 2013

Corporates

The CBS Television Network
CBS Television Studios
CBS Television Distribution
CBS Films
CBS Interactive
Showtime Networks
The Movie Channel
Flix
CBS College Sports Network
127 Radio Stations in 27 Markets
30 O&O TV Stations
Simon & Schuster,
Pocket Books, Scribner
Free Press
Organizational Structure CBS Corporation
($ Mil., As of June 30, 2013)
O&O Owned and operated. IDR Issuer Default Rating.
Sumner M. Redstone Public
CBS Corporation
IDR BBB/Stable Outlook
Short-Term Debt F2
6% Equity/79% Voting 94% Equity/21% Voting
Amount
Outstanding Rating
Senior Unsecured Notes due 20142042 5,809.8 BBB
$2.0 Billion Credit Facility due 2018 BBB
Commercial Paper 453.0 F2
Capital Lease Obligations 121.0
Other Debt and Adjustments (13.0)
Total Debt 6,370.8
Consolidated Debt 6,423.0
EBITDA 3,849.0
Leverage Ratio (x) 1.7
CBS Broadcasting Inc.
CBS Operations Inc. Other Nonguarantor Affiliates
Amount
Outstanding Rating
Senior Unsecured Notes 2023 52.2 BBB
Guarantee 100% 100%
Showtime Networks CBS Television Studios Simon & Schuster
11 Full-Power
Broadcast TV Stations
CW Network Interest
Entertainment Cable Networks Local Broadcasting Publishing CBS Outdoor Americas
Business Segments
Amount
LTM Revenues 8,216.0
EBITDA 1,621.0
EBITDA Margin (%) 19.7
Amount
EBITDA 850.0
Amount
EBITDA 992.0
Amount
LTM Revenues 785.0
EBITDA 103.0
Amount
EBITDA 380.0
September 19, 2013

Corporates

Debt and Covenant Synopsis CBS Corporation
Indenture Indenture Bank Facility
Overview
Document Date Indenture dated May 15, 1995 Indenture dated June 22, 2001, as amended
and restated Nov. 3, 2008, and first
supplemental indenture dated April 5, 2010.
Credit agreement dated Nov. 4, 2009,
amended March 16, 2011. Amended and
restated on March 18, 2013.
Maturity Date Various Various $2 billion due March 2018
Description of Debt 7.625% due 2016; 7.875% due 2030 1.95% due 2017; 4.625% due 2018;
8.875% due 2019; 5.750% due 2020;
4.300% due 2021; 3.375% due 2022;
5.500% due 2033; 5.900% due 2040;
4.85% due 2042.
Financial Covenants
Consolidated Leverage
(Maximum)
4.5x
Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)

Acquisitions/Divestitures
Change-of-Control
Provision
No material provision noted. Recent offerings include change-of-control
repurchase event language at 50% of
voting stock.
No material provision noted.
Sale-of-Assets
Restriction
Company can sell or convey assets that
comprise up to 80% of consolidated revenue.
Company can sell or convey assets that
comprise up to 80% of consolidated revenue.
Limitation on
Acquisitions
No material provision noted. No material provision noted. No material provision noted.
Debt Restrictions
Additional
Debt Restriction
Limitation on
Secured Debt
Standard carveouts plus up to 15% of
total assets.
Standard carveouts plus up to 15% of
total assets.
Standard carveouts plus up to $30 million.
Subsidiary debt up to the greater of 5% of
assets and $500 million.
Restricted Payments No material provision noted. No material provision noted. No material provision noted.
Other
Cross-Default No material provision noted. No material provision noted. Final maturity payments in excess of
$250 million.
Cross-Acceleration With debt in excess of $100 million
($250 million on certain issuances through
supplemental indentures).
No material provision noted. On any debt in excess of $250 million.
Material Adverse
Change
September 19, 2013

Corporates

Financial Policy Transcript Excerpts CBS Corporation
Date of
Filing Filing Section Comment
5/1/2013 1Q2013 Prepared Retrans and reverse comp are also set to grow at a fast clip, and in syndication we have a robust pipeline. Plus, we are moving
forward with our strategic initiatives at CBS Outdoor, and of course continuing through share buybacks and dividends to return even
more value to our shareholders. So Im sure you can see why we are so excited about our future.
5/1/2013 1Q2013 Q&A Q: Could you also talk about your current thoughts on targeted financial leverage?
A: Yeah, look, I think, Bill, that evolves because, as this Outdoor transaction is pretty significant, were looking at our mix of revenue
and how much is advertising related, how much is non-advertising. So, again, we dont have a set target that has to be this target
ratio. Obviously, our investment grade rating is important to us. But, again, I think weve shown our priority is to buy back our stock
and were going to continue to do that.
2/14/2013 4Q2012 Prepared Because of all these factors, and the great confidence we have in our businesses, we announced plans today to immediately
repurchase an additional $1 billion of our stock. This accelerated share repurchase will nearly double our previous commitment for
the year. In addition, when we conclude our outdoor initiatives, we also intend to use that currency to return additional capital to our
shareholders. It should be clear that returning value to investors remains a top priority for us and todays news is further proof of
that. As Les said, we announced plans today to initiate an accelerated share repurchase program of $1 billion during the first quarter.
This is in addition to the $1.2 billion in buybacks that we already planned for this year and nearly doubles the amount of our share
repurchases for 2013. So this gives you indication of the confidence we have in our future. We also ended 2012 with $708 million of
cash on hand.
2/14/2013 4Q2012 Q&A Q: Joe, on the buyback and the outdoor plans, you obviously create a lot of optionality for the company as you move down this REIT
path, so its hard to pin down exactly what you might do with the capital over the next couple of years. But maybe one way to help
us think about it is, whats the right way to think about leverage at the company, your comfort level going forward? And maybe, if you
want to talk about what that might look like in outdoor sale or a spin-off scenario with the core business. I think a year or so ago, you
talked about leverage ranges, but it has been a while since youve update us.
A: Okay. Ben, its Joe. Let me take the first part and then lets Les answer the second part. Look obviously, the outdoor transaction is
unlocking tremendous value and its creating financial flexibility. I think theres no question in that again evidenced our actions today.
The revenue mix I think more importantly in our business is obviously becoming more predictable, steady and recurring. So that
gives us obviously a lot more confidence. So were going to continue to evolve our thinking on leverage but obviously, again, as we
keep our focus is always going to be on returning value to our shareholders, so were going to continue to move that forward but
again theres tremendous amount of financial flexibility being created here. We dont I have a target number, specific exact number
because its always again evolving but again as I said we certainly have more confidence in a steady recurring revenue stream.
11/7/2012 3Q2012 Prepared We see no better use of our excess cash than buying back our stock and increasing our dividend. Going forward, as we continue to
generate cash, I am focused on looking for opportunities to increase both of these.
11/7/2012 3Q2012 Prepared In addition, we remain consistent with the accelerated pace of our share repurchase program in the third quarter, using
$300 million of our authorization to retire 8.6 million shares. We have $2.8 billion remaining on the program as of
Sept. 30th, and also we had $947 million of cash on hand at the end of the third quarter as well.
11/7/2012 3Q2012 Prepared So all three key types of revenue, content licensing and distribution, affiliate and subscription fees and advertising will be strong next
year. At the same time, we will continue to be vigilant about our costs as we always look for ways to improve productivity. And we
will also be improving our bottom line from lower interest expense, lower depreciation and amortization expense and lower shares
outstanding and of course, capital returns to our shareholders in the form of share buyback and dividends will remain our key priority.
So what you can expect from CBS in 2013 is more of the same and then some.
5/1/2012 1Q2012 Prepared Meanwhile, our first quarter free cash flow came in at $607 million, and we continue to use the majority of our excess cash to return
capital to shareholders. Moving forward, using our excess cash to return capital to our shareholders will remain a top priority for CBS.
5/1/2012 1Q2012 Prepared In the first quarter, we repurchased $269 million of our stock, putting us well on our way to reaching our target of $1 billion in share
buybacks this year, along with our recurring dividend as well.
5/1/2012 1Q2012 Prepared Also, during the first quarter, we spent $269 million to retire 9 million shares of our stock at an average price of $30 per share. We
have $1.7 billion remaining on our current stock buyback program, and were committed to aggressively returning this capital to our
shareholders and completing this program by the end of next year.
2/15/2012 4Q2011 Prepared Meanwhile, our focus remains on using our cash to return value to our shareholders
2/15/2012 4Q2011 Prepared During the year, we repurchased more than $1 billion of stock, and we doubled our dividend.
2/15/2012 4Q2011 Prepared First, we expect our Cape spending to remain at current levels for the foreseeable future. However, when you look at our income
statement, depreciation expense is still significantly higher than our capital needs. Over time, our depreciation expense will trend down
in line with our capex levels, giving us more operating leverage on the P&L.
2/15/2012 4Q2011 Q&A We have $2 billion remaining, which right now, where our stock is, its 10% of our market cap. So were focused and committed to
returning capital. And if you just look at our free cash flow for 2011 of $1.5 billion, between the buyback and the dividend, weve
returned over 80% of our cash to our shareholders. So that remains our primary focus.
11/3/2011 3Q2011 Prepared Also, during the quarter, we made the first increased payment of our quarterly dividend that was doubled from a year ago. Going
forward, whether it be share buybacks or dividend payments, returning value to our shareholders will continue to be a top priority.
11/3/2011 3Q2011 Prepared Along these lines, as I mentioned, we have doubled our share repurchase program by another $1.5 billion. This expanded program is
scheduled for 2012 and 2013 and reflects the positive visibility we have in our operations across the company into the future.
11/3/2011 3Q2011 Prepared Free cash flow came in at $29 million for the quarter, which includes a $200 million contribution to our qualified pension plans as we
discussed on our last call. We will continue to opportunistically fund our pension plans, so stay tuned for more on that in the future.
11/3/2011 3Q2011 Prepared Well also continue to be diligent with capital allocation, always focused on our balance sheet and returning capital to our
shareholders, highlighted by our increased share buyback program we announced today.
11/3/2011 3Q2011 Q&A A: And Les, you just mentioned the buyback, that you felt confident enough to announce the buyback. Im just curious about the
timing. You still have $650 million left on the existing buyback. What prompted a renewed -- or what prompted a new buyback?
B: Jess, its Joe. Look, the visibility into the non-advertising cash flows are so strong. As you said, theres only $650 million left, and
that clearly just will run out by Q2 of next year. So we just look at this and just saying is were so confident in our cash flows, were
going to continue to return capital to shareholders and we like our stock at these levels a whole lot
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts CBS Corporation (Continued)
Date of
8/2/2011 2Q2011 Prepared We also continue to manage our cost structure very effectively, and our primary use of excess free cash flow will be to return it to
shareholders via a combination of share buyback and dividend. We believe this strategy will benefit us for many years to come.
8/2/2011 2Q2011 Q&A Q: I noticed were building a big cash balance here, and Im delighted that you spent $200 million after the close of the quarter through
this early prepayment of pensions. But our debt is kind of flat, and Im just thinking, through the use of proceeds here, youre really
very constant in repurchasing shares. Could we see a step-up in share repurchases or prepayment of that pension plan rather than
this cash build? Or theres some reason we want to build all this cash on the books?
A: On the cash balance, yes. I think obviously, its $1.35 billion, and look, well continue to focus on returning capital to shareholders.
I think were on track for 2011 share repurchases of $1 billion plus, plus you add to the dividend of that of a couple of $100 million,
so you could see where were returning our value to our shareholders. So well continue to do that. Obviously, opportunistically, well
relook at the pension funding, and look and make another contribution if the environment is right. So this is obviously giving us a lot of
tremendous flexibility, but our primary use, like I said in my remarks, will be to return it to shareholders.
5/3/2011 1Q2011 Q&A Weve also said we expect to fund our share repurchase program as well as our dividend out of free cash flow, so that gives you some
nice kind of indication. So were feeling pretty good about our free cash flow prospects
2/16/2011 4Q2010 Prepared Weve used this years cash flow primarily to strengthen our balance sheet, reducing debt by $1.4 billion and prefunding our pension
plans.
2/16/2011 4Q2010 Q&A Q: Joe, are you thinking youre going to continue to pay down the tax advantage pension debt?
A: I think we should be thinking about it, its opportunistic. Were looking at that, Laura, all the time. I think again, certainly, there is
some appeal currently right now given where interest rates are and where we borrow and the tax advantage funding of the pension.
Again, in the fourth quarter, we pre-funded $167 million, so clearly we get a tax deduction on that gross number.
11/4/2010 3Q2010 Prepared We have taken a number of steps to greatly improve our balance sheet by paying down debt.
11/4/2010 3Q2010 Prepared These healthy levels of free cash have enabled us to announce today a $1.5 billion share repurchase program beginning January 1.
Returning value to shareholders through dividends and share buybacks has been one of our highest priorities all along, and we are
pleased to deliver on that objective.
11/4/2010 3Q2010 Prepared And as you saw with our announcement today, a share repurchase program that returns additional value to shareholders as our
businesses continue to throw off lots of cash.
11/4/2010 3Q2010 Prepared This week, weve also called the $544 million that was due in May 2011, so total gross debt on the balance sheet as of Sept. 30 will
decrease by $500-plus million before year-end. The net result from all our financing activities this year leaves only $490 million of debt
coming due over the next three years and saves us approximately $90 million per year in interest costs.
11/4/2010 3Q2010 Prepared Weve used this cash primarily to strengthen our balance sheet. Our cash on hand at the end of the quarter was $1.1 billion.
11/4/2010 3Q2010 Prepared The $1.5 billion share buyback program we announced today is expected to be executed over approximately 18 months starting in
January, which will come to about $500 million every six months. At our current share price, this program constitutes about 30% of our
shares outstanding. The combination of this buyback, along with our dividend, provides our shareholders a very attractive total return
yield.
11/4/2010 3Q2010 Q&A Q: And then the second, on the repurchase decision, this certainly isnt a criticism, I think a $1 billion annual repurchase is very strong,
but can you talk a bit about the decision to do a repurchase instead of returning to a dividend? And what your appetite is in the future
once you work through this plan to address the dividend or like an ongoing repurchase, where you want to be?
A: And Michael, on the repurchase, obviously, there was a lot of discussion whats the proper way of returning money to our
shareholders. We already have a dividend in place. We felt that to reduce our shares was the right way to go with this amount of cash.
This does not preclude us, as we look forward, to do something further with the dividend and something that we talk about every week
when we discuss it with our board and we came to the conclusion that the share repurchase was the right thing to do, being that our
cash position was so strong. But once again, we will continue to look at it, and we will continue to see whats the best way to use our
capital and increasing the dividend is certainly not out of the question.
8/3/2010 2Q2010 Prepared Were generating substantial free cash flow and using that cash to help our company going forward by reducing our debt and interest
expense.
8/3/2010 2Q2010 Prepared In Q1, we paid down the entire $400 million asset securitization program. This quarter, we call $415 million of debt, which was due in
July, so we had no other maturities this year. Weve also tendered for some near-term debt and issued a $500 million 10-year bond.
Overall, we have delevered the company by $840 million since the start of the year and have extended our weighted average debt
maturities to 16 years. In fact, our aggregate debt maturities over the next three years is only slightly higher than the free cash flow we
just generated in six months. This deleveraging will save us approximately $40 million a year in annualized interest costs.
8/3/2010 2Q2010 Prepared We remain committed to our investment-grade credit rating and our $2 billion credit facility remains undrawn and we have significant
headroom within our leverage and coverage ratios.
5/6/2010 1Q2010 Prepared We said we were focused on deleveraging the balance sheet, and let me discuss how we delivered on that promise. We paid down
$400 million of our asset securitization as that source of financing became inefficient. Under the new accounting rules, this paydown
is reflected in financing activities on our cash flow statement. We also pulled the $415 million of debt that was due in July of this year
and paid it down with cash on hand in April.
5/6/2010 1Q2010 Prepared Also during the quarter, we were able to buy back $20 million of our longer-dated security at a discount in the open market. So that
brings our total deleveraging to a $835 million already this year, and we ended the quarter with $873 million of cash on hand.
2/18/2010 4Q2009 Prepared We were able to build our cash balances while at the same time deleveraging the company. We will continue focus on deleveraging
throughout 2010 with our credit facility in place and having refinanced $1 billion last year, we are in a much stronger financial position.
2/18/2010 4Q2009 Q&A Q: You talked about the target ratio for debt for you guys in terms of leverage ratio you want. I wonder now given the strength of the
debt markets, have you rethought where you think leverage ratio should be for CBS and or you going to tap the near-term markets at
all for to maybe refinance some of the stuff you got to payoff from you cash flow?
A: I think like we said earlier, I mean we are obviously in a much stronger financial position, so its going to be opportunistic. I think
the ratios are coming down, earnings is grow and the debt is coming down. So the leverage ratios have come down considerably. So
again if the market present itself we will evaluate it, and if it makes sense, we will jump through. Its not again the cash is there on
hand as you see it. And we have plenty of it.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts CBS Corporation (Continued)
Date of
11/5/2009 3Q2009 Q&A Q: I know you are focused on building the company, not breaking it up, but the debt markets are really attractive right now and
who knows how long that might last. So given where Lemar is trading, why not throw a ton of debt on outdoor and spin that off to
shareholders? I know you are a free cash flow junkie but I also know you think your stock should be higher and that would be one way
to get there, so why not do it?
A: In terms of outdoor, this hasnt been the greatest year in outdoor and we expect it to significantly improve in 10 and 11 and get back
to levels that we were at a few years back. So we like the asset.
You are right I do like free cash flow. There is no reason for us to be selling any of these assets except for some of the smaller
market things and I think thats our position on outdoor.
8/6/2009 2Q2009 Prepared You will also note that net debt decreased $246 million from the first quarter, continuing our deleveraging strategy.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary CBS Corporation
($ Mil., Years Ending Dec. 31) 2008 2009 2010 2011 2012
LTM Ended
6/30/13
Profitability
Operating EBITDA 2,828.9 1,962.1 2,594.9 3,263.0 3,641.0 3,849.0
Operating EBITDA Margin (%) 20.3 15.1 18.5 22.9 25.8 26.7
FFO Return on Adjusted Capital (%) 19.3 14.4 16.3 17.5 19.0 18.5
Free Cash Flow Margin (%) 6.9 2.9 9.3 9.0 9.1 7.4
Coverages (x)
FFO Interest Coverage 5.06 3.62 4.18 5.69 7.17 7.39
Operating EBITDA/Gross Interest Expense 5.18 3.62 4.91 7.48 9.06 10.24
FFO Fixed-Charge Coverage 2.86 2.22 2.50 2.97 3.79 3.78
FCF Debt Service Coverage 2.77 0.96 3.46 1.85 4.02 1.70
Cash Flow from Operations/Capital Expenditures 4.63 3.87 5.88 6.60 7.16 6.70
Leverage (x)
Long-Term Secured Debt/Operating EBITDA
Long-Term Secured Debt/FFO
Total Debt with Equity Credit/Operating EBITDA 2.47 3.57 2.31 1.83 1.63 1.67
FFO Adjusted Leverage 2.65 3.43 2.65 2.51 2.25 2.47
Total Adjusted Debt/Operating EBITDAR 2.61 3.43 2.33 2.00 1.83 1.86
FCF/Total Adjusted Debt (%) 10.7 4.3 17.6 16.5 17.0 13.2
Balance Sheet
Short-Term Debt 21.3 443.6 27.3 24.0 18.0 474.0
Long-Term Senior Secured Debt
Long-Term Senior Unsecured Debt 6,974.8 6,553.3 5,973.5 5,958.0 5,904.0 5,949.0
Long-Term Subordinated Debt
Other Debt
Equity Credit
Total Debt with Equity Credit 6,996.1 6,996.9 6,000.8 5,982.0 5,922.0 6,423.0
Off-Balance-Sheet Debt 2,058.2 1,846.9 1,418.7 1,746.0 1,646.0 1,654.0
Total Adjusted Debt with Equity Credit 9,054.3 8,843.8 7,419.5 7,728.0 7,568.0 8,077.0
Cash Flow
Funds From Operations 2,217.8 1,419.0 1,678.7 2,046.0 2,481.0 2,403.0
Change in Working Capital (25.3) (405.9) (6.6) (297.0) (662.0) (769.0)
Cash Flow from Operations 2,192.5 1,013.1 1,672.1 1,749.0 1,819.0 1,634.0
Total Non-Operating/Nonrecurring Cash Flow (46.0) (73.7) 63.0 (4.0) (26.0)
Capital Expenditures (474.1) (261.6) (284.3) (265.0) (254.0) (244.0)
Dividends (705.4) (297.3) (141.7) (206.0) (276.0) (296.0)
Free Cash Flow 967.0 380.5 1,309.1 1,278.0 1,285.0 1,068.0
Net Acquisitions and Divestitures (1,837.1) 102.7 7.0 (53.0) (97.0) (47.0)
Net Debt Proceeds (205.7) (50.2) (1,047.7) (19.0) (36.0) (450.0)
Net Equity Proceeds (15.2) (18.7) (30.3) (940.0) (969.0) (1,957.0)
Other (Investing and Financing) 163.6 (117.1) (474.8) (86.0) (135.0) (220.0)
Total Change in Cash (927.4) 297.2 (236.7) 180.0 48.0 (1,606.0)
Ending Cash and Securities Balance 419.5 716.7 480.0 660.0 708.0 282.0
Short-Term Marketable Securities
Income Statement
Revenue 13,950.4 13,014.6 14,059.8 14,245.0 14,089.0 14,428.0
Revenue Growth (%) (0.9) (6.7) 8.0 1.3 (1.1) (0.8)
Operating EBIT 2,297.3 1,379.8 2,032.6 2,715.0 3,166.0 3,407.0
Gross Interest Expense 546.6 542.0 528.8 436.0 402.0 376.0
198 Company Summaries Cox Enterprises, Inc.
September 19, 2013

Corporates

Key Rating Drivers
Conservative Financial Policy: The ratings incorporate Fitchs expectation that Cox Enterprises,
Inc. (CEI) will maintain its leverage at or near the current level and the companys commitment to a
capital structure refective of strong investment-grade ratings. Fitch believes that acquisitions will
remain a part of the companys growth strategy as it seeks to grow and diversify its businesses.
The ratings also refect Fitchs opinion that any transactions that increase leverage beyond 2.5x
will be followed by a period of focused deleveraging to bring it back in line with expectations for
the current ratings.
Cable Business Anchors Ratings: Ratings refect the size and strong competitive position of
Cox Communications Inc. (CCI), the companys largest business segment and the third largest
cable multiple system operator (MSO) in the U.S. The operating leverage inherent in CCIs cable
business along with stable capital intensity enable the company to generate consistent levels of
FCF before dividends to CEI, and provide CEI with signifcant fnancial fexibility.
Consistent Capital Allocation Policy: CEIs capital allocation strategy places high priority on
investment in its core businesses (CCI, AutoTrader and Manheim). The absence of a formal
dividend policy creates uncertainty and elevates event risk and there is a limited level of fexibility
within the current ratings to accommodate a shift in the companys capital allocation policy to
favor investments outside its core businesses and shareholder-friendly activities. Future dividend
payments will likely be made within the context of the companys current ratings, anticipated FCF
generation and the scale and scope of internal or external investment opportunities.
Cable Competition a Concern: Rating concerns center on CCIs ability to adapt to changing
competitive dynamics and maintain its relative market position given the challenging competitive
environment. In addition, the mature video service product, along with the tepid economic and
housing recovery and to a lesser extent competition from alternative distribution platforms, will
likely hinder CCIs ability to grow its subscriber base. This, together with ongoing programming
cost infation, may thwart margin expansion.
Diverse Businesses, but Challenges Remain: The ratings recognize the diversifcation and
market leading positions of CEIs businesses, while acknowledging that some of these businesses
remain exposed to moderate cyclical and secular pressures. Fitch expects organic growth at
Cox Media Group to remain challenged as stability in television and increasing retransmission
revenue is offset by pressures on newspapers, Valpak and, to a lesser extent, radio.
Upgrade Unlikely: Fitch does not anticipate further ratings upside. An upgrade would only come
with a commitment to, and a credible rationale for, a substantially tighter leverage target, which
is not expected.
Negative Rating Trigger: Negative rating actions would occur in tandem with a change in the
companys capital structure policy or an event such as a debt-fnanced dividend or leveraging
acquisition that would drive leverage towards 3.0x (as calculated by CEI) for a sustained period,
with no credible plan to deleverage back to 2.5x over a 1224-month timeframe.
Analysts
David Peterson
+1 312 368-3177
Rolando Larrondo
+1 212 908-9189
Ratings
Security Class
Current
Rating
Long-Term IDR BBB+
Short-Term IDR F2
Long-Term IDR BBB+
Short-Term IDR F2
Rating Outlook
Stable
September 19, 2013

Corporates

Media
Cox Television Cox Newspapers
Cox Television (14 Broadcast Stations) Daily Newspapers (8)
KICU, San Jose, CA Independent Austin American-Statesman (TX)
KIRO, Seattle, WA CBS Dayton Daily News (OH)
KTVU, San Francisco/Oakland, CA FOX Hamilton News Journal (OH)
WAXN/TV64, Charlotte, NC Independent Palm Beach Daily News (FL)
WSOC-TV, Charlotte, NC ABC Springfield News-Sun (OH)
WFTV, Orlando, FL ABC The Atlanta Journal-Constitution (GA)
WRDQ-TV, Orlando, FL Independent The Middletown Journal (OH)
WHIO-TV, Dayton, OH CBS The Palm Beach Post (FL)
WPXI-TV, Pittsburgh, PA NBC
WSB-TV, Atlanta, GA ABC Weekly Newspapers
WAWS-TV/DT, Jacksonville, FL FOX/MeTV Active Dayton, (OH)
WTEV-TV, Jacksonville, FL CBS ahora s! (TX, Spanish Language)
KOKI-TV, Tulsa. OK FOX Bastrop Advertiser-Statesman (TX)
KMYT-TV, Tulsa. OK myTV Cedar Park-Leander-Statesman (TX)
Florida Pennysaver (West Palm Beach, FL)
Cox Television Cable La Palma (West Palm Beach, FL)
4SD (Channel 4 San Diego) Lake Travis View-Statesman (Austin, TX)
Cox Sports TV (RSN) Mundo Hispnico (GA, Spanish Language)
The Cox Channel (RSN) Oxford Press (OH)
Travel Channel (35% Share) Pflugerville Pflag-Statesman (TX)
Round Rock Leader-Statesman (TX)
Cox Radio (58 of 60 Stations) Smithville Times-Statesman (TX)
Location No. of Stations Todays Pulse of Warren County (OH)
Athens, GA 6 Todays Pulse of Butler County (OH)
Atlanta, GA 5 Westlake Picayune-Statesman
Dayton, OH 4 (Westlake Hills, TX)
Houston, TX 5
Jacksonville, FL 7 Internet
Long Island, NY 2 Cox Digital Solutions
Miami, FL 4 Kudzu.com
Orlando, FL 6 Savings.com
San Antonio, TX 7
Tampa, FL 6 Other/Related Operations
Tulsa, OK 5 COXReps
Total 58 Cox Target Media, Inc.
Valpak
Portfolio Summary Cox Enterprises, Inc.
(As of June 30, 2013)
a
CEIs ownership stake in AutoTrader.com increased to 73% in August 2013 following the repurchase of shares held by Kleiner Perkins Caufield & Byers.
Communications
Cox Communications
Automotive
Manheim
Simulcast
Simulcast Everywhere
Ove.com
NextGear Capital, Inc.
Total Resource Auctions
Manheim Frontline
Ready Auto Transport
AutoTrader.com (68%)
a
Kelley Blue Book
vAuto
HomeNet Automotive
VinSolutions
Bitauto Holdings (22%; China)
Other Equity Ownership
CIBT Investment Holdings, LLC
CIBT Solutions, Inc.
InSite, LLC (45%)
September 19, 2013

Corporates

AutoTrad
er.com
8%
Cox
Media
Group
11%
Manheim
18%
Communi
cations
63%
Revenues by Segment
(As of Dec. 31, 2012)
AutoTrader.com
8%
Communications
63%
AutoTrad
er.com
8%
Cox
Media
Group
6%
Manheim
12%
Communi
cations
74%
EBITDA by Segment
(As of Dec. 31, 2012)
Communications
74%
AutoTrader.com
8%
September 19, 2013

Corporates

Event Risk Dashboard Cox Enterprises, Inc.
MFN Most favored nation. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a
company is able to take from expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition M
Divestiture M
Structural Subordination Risk H
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Already private 2004 LBO
Secular Risk Medium
Stagnating subscriber growth and margin pressure in video offset by growth in HSD.
Cord cutting not expected to have a signifcant impact over the next several years.
Cox Media Group (CMG) secularly challenged, particularly newspapers and Valpak.
Moderate secular pressures at radio; broadcast TV slightly better positioned.
Strong growth at AutoTrader.com.
Privately held company, owned and controlled by founding family.
Forty percent of the board of directors comprises insiders (Cox family, management).
Compensation incentives are not available.
Fitch believes fnancial policy event risk is present at most investment-grade (IG)
rated media names that have control of their balance sheets.
Private ownership adds incremental risk.
For Cox, the risk is mitigated by the owner's (family's) commitment to IG ratings,
and commitment to and execution on deleveraging post the 2004 LBO.
Management committed to capital structure refective of strong IG ratings.
Dividends are limited to $250 million if leverage >5.0x; no limitations on
acquisitions.
Transactions that increase leverage beyond 2.5x will be followed by a period
of focused deleveraging to bring leverage back in line with expectations for the
current ratings.
Fitch expects the companys capital allocation policy will remain consistent with
the current ratings. Fitch acknowledges that the absence of a formal dividend
policy creates uncertainty and elevates event risk.
Bank facility contains a 5x net leverage covenant.
Structural Subordination Risk High
Majority of the debt is already at the operating cable subsidiary, CCI.
No upstream guarantees.
Limitation on dividends from AutoTrader.com.
Issuance not expected at Manheim or CMG as it would likely be at higher
funding costs.
Cox Enterprises Inc. Rating History
BB+
BBB
BBB
BBB+
A
A
2.0
2.5
3.0
3.5
2007 2008 2009 2010 2011 2012 LTM
March
2013
Leverage Trend
(x)
September 19, 2013

Corporates

Event Risk Dashboard Cox Enterprises, Inc. (Continued)
MFN Most favored nation. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a
company is able to take from expectations of what it will actually do.
($ Mil) Share Buyback Activity
Three Months Ended March 2013 0.0
2012 38.5
2011 13.0
2010 21.0
2009 88.0
2008 307.0
The company is private. Share buybacks are related to employee death or
termination, and purchases of remainder interests in certain trusts owned by Cox
family members, which contain shares.
There are no restrictions on share buybacks at current leverage metrics.
DOJ investigation into caps on high-speed data usage, subscriber authentication
on other devices and MFN clauses in cable network contracts.
Fitch does not believe it is a high probability that DoJ or FCC will force a la carte
cable pricing.
CMG subject to FCC's media ownership laws.
ownership regulations not likely to be changed. CEI has shrunk its newspaper
portfolio in recent years and Fitch does not expect signifcant M&A from this.
Divestiture Activity Medium
2012 608.9 63.1
2011 161.8 54.3
2010 819.0 127.1
2009 90.4 118.9
2008 581.4 38.5
Moderate acquisitions and divestitures at CMG as company focuses on
larger markets.
Autotrader registration statement was pulled. Company will remain private.
Small cable acquisitions to fll holes; big transactions not expected.
Covenant Thresholds Risk Low
(x)
Covenant
Level
Ratio/Test as of
3/31/13
EBITDA
Cushion (%)
Note: 2x Interest coverage does not apply if ratings are mid BBB or higher, as
defined. Covenant calculation per definition in companys bank agreement.
Litigation Risk Low
CEI is subject to several lawsuits of various natures. The company is unable to
predict their outcomes.
Pensions
Pension plan was 42% ($2.1 billion) underfunded at Dec. 31, 2012.
CEI contributed $328 million towards its pension plan in 2012. CEI anticipates
contributing approximately $270.6 million to its qualifed pension plans during
2013.
Fitch views this as manageable within the companys free cash fow profle.
Other Contingencies
As part of the 2009 sale of Travel Channel to Scripps, Scripps has guaranteed
the 3.55% 2015 notes issued by Travel Channel. CEI has agreed to indemnify
Scripps for payments made in respect of the guarantee.
September 19, 2013

Corporates

Pension Screener
a
than 10%?
Yes
Plan Assets
Actual Return on Plan Assets 338.0 (26.7)
b
0.0 0.0
Leverage Screener
Cash Flow Screener
2013 At Risk Shortfall (80%) 1,096.4 768.1
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Debt Structure
($ Mil., As of March 31, 2013)
Commercial Paper
CEI Promissory Notes due 2017 103.7
CEI Revolving Credit Facility due 2016
CEI Private Placement Notes due 2027 175.0
Total CEI Debt 278.7
CCI Revolving Credit Facility due 2016
Notes and debentures due 20132039 7,335.3
Medium-term notes due 20182028 199.7
Capitalized Lease Obligations 703.6
Other 4.4
Total CCI Debt 8,243.1
Manheim
Securitized Term Loans 252.3
Securitized Variable Fund Notes 32.0
Manheim Canada Revolver
MAFS Securitized Loans 1,066.3
Total Manheim Debt 1,350.6
AutoTrader.com, Inc.
ATC Revolving Credit Facility 233.0
ATC Term Loan due 12/20154/2017 985.1
Total ATC Debt 1,218.1
Other
Capitalized Lease Obligations 36.1
Payable to Others 43.2
Total Other Debt 79.4
Total Consolidated Debt 11,169.8
($ Mil., As of March 31, 2013)
Maturity Amount
Dec. 31, 2013 701.0
Dec. 31, 2014 740.6
Dec. 31, 2015 984.5
Dec. 31, 2016 1,031.9
Dec. 31, 2017 135.8
Thereafter 6,860.3
Total 10,494.1
Note: Excludes capital leases and other debt obligations.
September 19, 2013

Corporates

Organizational Structure Cox Enterprises, Inc.
($ Mil., LTM as of March 31, 2013)
a
Debt issued by Manheim is securitized.
b
Cox Media Group operations include Television, Cox Radio, Inc., Cox Reps, Newspapers, Cox Target Media and Kudzu. Cox
Target Media includes Valpak and Savings.com. Kudzu was reported within CEIs Other Operations prior to 2012. IDR Issuer Default Rating.
Cox Enterprises, Inc. (CEI)
IDR BBB+/Stable
Manheim
a
Cox Media Group
b
AutoTrader CCI
IDR BBB+/Stable
100% Wholly Owned
Restricted Subsidiaries
Unrestricted
Subsidiaries
No restrictions on dividends,
loans, advances or investments
if entitys leverage is less than or
equal to 5x. Otherwise,
dividends, etc. restricted to $250
million per year.
68% 100%
Restricted CEI Debt (CEI ex. CCI and AutoTrader) 1,705.9
Restricted CEI EBITDA (CEI ex CCI and AutoTrader) 793.5
Consolidated EBITDA 4,770.0
Restricted CEI Stand-Alone Leverage (x) 2.2
Consolidated Leverage (x) 2.3
Amount
Debt 1,350.7
EBITDA 575.9
Leverage (x) 2.3
Amount
Debt
EBITDA 287.3
Amount
Debt 1,218.1
EBITDA 386.3
Leverage (x) 3.2
Amount
Debt 8,243.1
EBITDA 3,603.4
Leverage (x) 2.3
September 19, 2013

Corporates

Debt and Covenant Synopsis Cox Enterprises, Inc.
Bank Facility Private Placements Bank Facility Indenture
Overview
Issue(s) $2.0 billion unsecured revolver
due July 25, 2016
Various $2.0 billion unsecured revolver
due July 25, 2016
Various
Description Either CEI or CCI may borrow up
to $2.0 billion, provided that the
aggregate amount outstanding
under the facility does not exceed
$2.0 billion. CEI and CCI are each
severally, but not jointly, liable for
their respective borrowing.
Either CEI or CCI may borrow up
to $2.0 billion, provided that the
aggregate amount outstanding
under the facility does not exceed
$2.0 billion. CEI and CCI are each
severally, but not jointly, liable for
their respective borrowing.
Financial Covenants
a
Net leverage less than or equal
to 5.0x; coverage greater than
or equal to 2.0x (compliance
with coverage is not necessary if
ratings are mid-BBB or higher,
as defined).
No material provision noted. Leverage less than or equal to
5.0x; coverage greater than or
equal to 2.0x (compliance with
coverage is not necessary if
ratings are mid-BBB or higher,
as defined).
Change of Control Yes, Cox family must have
majority control.
Yes, Cox family must own at least
50.1% of voting stock.
Yes, Cox family must have
majority control.
Limitation on Liens Yes, the greater of $250 million or
15% of consolidated net worth.
Yes, less than 30% of net worth. Yes, the greater of $900 million or
15% of consolidated net worth.
Yes, the greater of $200 million or
15% of total CCI debt.
Cross-Default
b
Yes, with payment defaults on
other CEI debt greater than
$100 million.
other CEI debt greater than
$25 million. Cross-acceleration
provisions exist.
other CCI debt greater than
$200 million.
Yes, with final maturity payment
defaults on other CCI debt greater
than 5% of total CCI debt. Cross-
acceleration provisions exist.
Dividend Restrictions $250 million/year if leverage is
greater than 5.0x, otherwise
no restrictions.
No material provision noted. $250 million per year if leverage is
greater than 5.0x, otherwise
no restrictions.
a
All financial covenants are calculated on a stand-alone basis.
b
Refers only to cross-defaults within each entity. There are no cross-defaults between Cox Enterprises and
Cox Communications.
September 19, 2013

Corporates

Financial Summary Cox Enterprises, Inc.
LTM Ended
3/31/13
Profitability
Operating EBITDA 4,109 3,894 3,917 4,248 4,738 4,770
Coverages (x)
Leverage (x)
Long-Term Secured Debt/Operating EBITDA 0.2 0.2 0.3 0.3
Long-Term Secured Debt/FFO 0.2 0.2 0.4 0.4
Balance Sheet
Short-Term Debt 216 176 207 176 231 214
Long-Term Senior Secured Debt 640 726 1,348 1,351
Long-Term Senior Unsecured Debt 13,522 11,713 9,965 9,283 9,723 9,605
Other Debt
Equity Credit
Total Debt with Equity Credit 13,738 11,888 10,811 10,185 11,302 11,170
Off-Balance-Sheet Debt 1,303 1,223 651 608 603 603
Total Adjusted Debt with Equity Credit 15,041 13,111 11,462 10,792 11,905 11,773
Cash Flow
Funds From Operations 3,162 3,050 3,210 3,272 3,381 3,509
Change in Working Capital 229 302 (108) (261) (366) (253)
Cash Flow from Operations 3,390 3,352 3,102 3,011 3,015 3,256
Total Non-Operating/Nonrecurring Cash Flow
Capital Expenditures (2,192) (1,662) (1,597) (1,378) (1,593) (1,694)
Dividends (30) (32) (77) (62) (658) (648)
Free Cash Flow 1,169 1,658 1,428 1,572 764 915
Net Acquisitions and Divestitures (477) 117 (654) (105) (163) 61
Net Debt Proceeds 185 (2,159) (1,848) (770) 26 (10)
Net Equity Proceeds (307) (88) 500 (199) (43) (41)
Other (Investing and Financing) (617) 890 (42) (116) (635) (615)
Total Change in Cash (48) 418 (617) 381 (50) 310
Ending Cash and Securities Balance 212 629 12 393 343 704
Income Statement
Revenue 15,435 14,750 14,674 14,739 15,286 15,432
Revenue Growth (%) 4.6 (4.4) (0.5) 0.5 3.7 4.0
Operating EBIT 1,851 1,716 1,859 2,234 2,685 2,714
Gross Interest Expense 748 771 725 605 603 603
208 Company Summaries Discovery Communications LLC
September 19, 2013

Corporates

Discovery Communications LLC
Key Rating Drivers
Acquisition and Investment Fit Strategically: Discoverys acquisition of ProSiebenSat.1
Groups SBS Nordic operations as well as its 20% minority interest in TF1s Eurosport Group
is in line with Fitchs expectations for the rating. The transactions complement the companys
global footprint and are consistent with its strategy to grow and improve the performance of
international operations.
Shareholder Returns Continue: Fitch believes Discoverys credit profle has suffcient fexibility
to accommodate share repurchase activity at the current ratings. Debt incurrence to fund share
repurchase activity is incorporated into ratings up to Fitchs 3x leverage threshold for Discoverys
BBB rating. Fitch anticipates that share repurchases during 2013 will be substantially similar to
2012 levels.
Signifcant Financial Flexibility: Discoverys solid FCF generation, strong credit protection
metrics and minimal near-term scheduled maturities afford the company with considerable
fnancial fexibility at the current ratings. Fitch anticipates that Discovery is positioned to generate
over $1 billion of annual FCF given the companys high operating margins, global distribution
platform and low capital intensity associated with the cable programming business.
Rating Strengths: Discoverys ratings are supported by the companys strong core brands in
particular the strength of the companys Discovery and TLC brands, both of which reach nearly
100 million subscribers across the U.S. and continue to generate solid ratings. In addition, the
ratings incorporate the revenue and growth prospects of the companys international business
segment, global carriage, leverageable content, robust free cash fow (FCF) and solid credit
metrics.
Ratings Concerns: Ratings concerns center on the signifcant contribution of cyclical advertising
revenue, a competitive landscape for similar programming, the volatility associated with hit-
driven content and the companys dependence on the Discovery and TLC brands.
Limited Upside Ratings Momentum: An upgrade is unlikely over the medium term, given
the companys stated leverage targets and the limited depth of brands. Factors considered for
an upgrade include an explicit commitment from management and a compelling rationale for
Discovery to operate at a more conservative leverage metric while demonstrating increased
viewership on emerging channels leading to increased advertising and affliate fee revenue and
further diversifcation of revenues.
Downside Case: Negative rating actions are more likely to coincide with discretionary actions
of management including the adoption of a more aggressive fnancial strategy with tolerance
for leverage greater than 3x. However, there is tolerance within the ratings to exceed Fitchs
3.0x leverage threshold for acquisitions with the expectation that the company deleverages its
balance sheet to a level appropriate for the rating category within 12 months. In addition, an
erosion of the companys operating profle stemming from meaningful customer defections to
free viewing platforms or signifcant margin and FCF pressure from higher programming costs
would likely lead to negative rating action.
Analysts
David Peterson
+1 312 368-3177
Rolando Larrondo
+1 212 908-9189
Ratings
Security Class
Current
Rating
Discovery
Communications LLC
IDR BBB
Senior Unsecured Bank Facility BBB
Senior Unsecured Notes BBB
Rating Outlook
Stable
September 19, 2013

Corporates

Cable Networks Commerce
Portfolio Summary Discovery Communications LLC
(As of June 30, 2013)
Source: Company filings and website.
U.S. Networks International Networks
Discovery Channel Discovery Channel
TLC Switchover Media
Animal Planet Animal Planet
Science DMAX
Investigation Discovery Discovery Real Time
Discovery Fit & Health Discovery Travel & Living
Military Channel Discovery Home & Health
Discovery Kids Discovery Shed
Destination America Discovery History
Discovery en Espaol Discovery Turbo
Discovery Familia ID: Investigation Discovery
OWN (50% JV) Discovery HD Showcase
Velocity TLC
The Hub Network (50% JV) Discovery World
3net Discovery Civilization
Discovery Kids
Discovery HD World
Discovery en Espaol
Discovery Familia
Fatafeat
Discovery Historia
DiscoveryStore.com
Domestic Licensing and Merchandising
Discovery Channel Store Catalog
Education
Discovery Education Streaming Plus
Discovery Education Professional Development
Discovery Education Assessment
Discovery Education Techbooks
Discovery Education Network
Discovery Education Higher Ed
Other
Discovery Digital Media (includes Mobile and On Demand)
Revision3
Discovery Studios
September 19, 2013

Corporates

U.S.
63%
Non-U.S.
37%
(As of Dec. 31, 2012)
U.S.
Networks
61%
Inter-
national
Networks
37%
Educa-
tion and
Other
2%
Revenues by Segment
(As of Dec. 31, 2012)
International
Networks
37%
Education
and Other
2%
U.S.
Networks
69%
Internatio
nal
Networks
30%
Educatio
n and
Other
1%
EBITDA by Segment
(As of Dec. 31, 2012)
Education
and Other
1%
International
Networks
30%
September 19, 2013

Corporates

Event Risk Dashboard Discovery Communications LLC
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition M
Divestiture L
Covenant Breach L
Litigation Risk L
Regulatory Risk L
LBO Risk Low
Enterprise value likely too large for an LBO in current markets; size may still be a
factor in improved credit markets.
Concentrated ownership reduces the risk of private equity-led LBO. However,
owner-led privatization not out of the question.
Previously a private company; went public in 2008.
Secular Risk Low
Cable Networks remain the strongest sub-sector in media.
Affliate fee growth likely to moderate, but still solid midsingle-digit growth.
Digital deals create a new window; recurring high-margin cash fow.
Moderate margin risk if programming costs exceed affliate fee growth.
Discovery better positioned given strong margins and lower programming costs
relative to peers.
Ownership is concentrated, with John Malone holding 93% of the companys
super-voting class B shares and controlling 29% of series A and series B
common stock and Advance/Newhouse having 25% voting control and ability to
appoint three board members.
Advance/Newhouse retains consent rights over a variety of corporate actions,
including fundamental changes to the business, stock issuance and certain M&A.
There are three different classes of stock: Class A shares have one vote, Class
B shares (93% owned by John Malone) have 10 votes and Class C shares are
nonvoting.
Advance/Newhouse ownership comes from ownership of Class A and Class C
preferred stock, which can be converted into Class A and Class C common.
creditor friendly, driven by revenue, EBITDA and free cash fow (pre-dividend).
Fitch believes fnancial policy event risk is present at most investment-grade (IG)-
rated media names that have control of their balance sheets.
Concentrated ownership adds incremental risk. However, Fitch believes owners
are satisfed with fnancial policy. Advance/Newhouse is historically conservative
and has consent rights.
Discovery has maintained a 3.0x leverage target in recent years.
Bank facility contains a 4.5x leverage covenant.
Discovery Communications LLC Rating History
BB+
BBB
BBB
BBB+
A
A
1.0
2.0
3.0
4.0
5.0
6.0
2007 2008 2009 2010 2011 2012 LTM
June 2013
Leverage Trend
(x)
0
20
40
60
80
100
Source: Bloomberg.
Discovery Communications Inc. Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Discovery Communications LLC (Continued)
Fitch does not expect Discovery to issue debt at the Holding Company (HoldCo)
level, as the 2010 Operating Company (OpCo) issuance was used to refnance
HoldCo debt. That said, there are no restrictions against it.
Existing debt is all at the OpCo.
2010 issuance of OpCo debt was used to refnance HoldCo debt.
Downstream guarantee from parent HoldCo could be weakened if HoldCo's other
subsidiaries incur debt.
There are no covenant limitations on debt.
There are no upstream guarantees from the OpCo (issuer's) subsidiaries.
No restrictions on additional debt.
No material limitations on subsidiary guarantees.
($ Mil.)
Starting Authorized
Share Buyback
New Authorized
Share Buyback
Share Buy
Activity
Ending Authorized
Share Buyback
Six Months Ended June 30, 2013 1,518.0 (265.0) 1,253.0
2012 898.0 2,000.0 (1,380.0) 1,518.0
2011 895.0 1,000.0 (997.0) 898.0
Fitch anticipates that share repurchases during 2013 will be substantially similar to 2012 levels.
Debt-funded share repurchases are incorporated into ratings to the extent that leverage remains below Fitch's 3.0x threshold for 'BBB' ratings.
Like most IG companies, there are no restrictions on the amount of share buyback activity.
YTD Year to date. Note: No share repurchase activity prior to 2010.
Divestiture Activity Low
Six Months Ended
June 30, 2013 1,832.0
2012 149.0
2011 26.0
2010 38.0
2009
2008 8.0
Fitch believes there is room at the BBB level to absorb some midsized
acquisitions, underscored by Fitchs current belief that the company would
restore leverage to under 3.0x within 12 months.
Recent acquisition and investments are in line with Fitchs expectations and the
companys strategy.
Acquisition of pure-play cable networks (SNI, AMC) unlikely, given hurdle of
current high multiple, plus premium.
(x)
Covenant
Level
Ratio/Test as of
6/30/13
EBITDA
Cushion (%)
Interest Coverage 3.0 8.3 64
Litigation Risk Low
Currently Fitch views litigation event risk as low.
Regulatory Risk Low
DoJ investigation into subscriber authentication to access over-the-top (OTT)
content and caps on high speed data.
Cable companies likely to transition from data caps to usage-based pricing.
This would be a positive for Discovery, as it could decrease the likelihood that
subscribers cancel traditional cable subscriptions in favor of OTT content.
Negative ruling on subscriber authentication could drive increased cord cutting,
although Discovery and other content providers could partially offset this with
growth of digital sales (whether direct or through digital providers).
cable pricing.
Exposure to limitations on advertising to children is minimal.
Union Workforce
Lower exposure to union-based issues given nature of programming.
Earn-Outs
Through Dec. 31, 2015, Discovery has guaranteed a certain level of performance
for The Hub. It will compensate Hasbro to the extent that distribution metrics
decline relative to Discovery Kids Channel levels. The guarantee declines
through the period. At Dec. 31, 2012 the maximum amount potentially due was
less than $110 million and the maximum exposure to loss is expected to decline
to zero during 2014. Given long-term affliate contracts, Discovery believes it is
unlikely that the performance levels will not be achieved.
Harpo Inc. Put Right of OWN Network
Harpo can put all or part of its interest in OWN at fair market value (up to a
maximum amount ranging from $100 million on the frst put exercise date to
$400 million on the fourth exercise date) every 2.5 years beginning Jan. 1, 2016.
Fitch views contingent liabilities as manageable given the companys free cash
fow profle and fnancial fexibility.
September 19, 2013

Corporates

Corporate Governance Overview Discovery Communications LLC
a
Most recent filings on Bloomberg as of June 2013. OIBDA Operating income before depreciation and amortization. PRSUs Performance-based restricted stock units. CS-SAR
Awards consist of a number of units that represent an equivalent number of shares of Discovery Series A common stock. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
David M. Zaslav President and CEO 3,000,000 25,326,916 15,843,215 5,329,750 432,986 49,932,867
Andrew Warren Senior EVP and CFO 657,692 1,011,439 1,019,729 903,691 186,484 3,779,035
Mark G. Hollinger President and CEO, Discovery Networks Int'l 1,000,000 1,498,762 1,585,668 1,943,375 65,206 6,093,011
Bruce L. Campbell Senior EVP, Chief Development Officer and GC 1,028,269 499,619 528,562 1,549,960 58,533 3,664,943
John S. Hendricks Executive Chairman 1,000,000 569,247 263,332 1,832,579
Bradley E. Singer Former Senior EVP and CFO 315,015 13,764 328,779
Board of Directors
S. Decker
Anstrom
63 Y May 2013
May 2016
2012 8,334 28,787 28,585 65,706 Audit None Former President Landmark
Communications
Robert R.
Beck
73 Y May 2012
May 2015
2008 107,500 57,540 66,745 231,785 Compensation None Independent consultant
Robert R.
Bennett
55 Y May 2011
May 2014
2008 80,000 57,540 57,745 195,285 Executive Liberty Media; Sprint
Nextel Corporation;
Demand Media, Inc.
Former President DHC
Paul A. Gould 68 Y May 2013
May 2016
2008 119,375 57,540 77,745 254,660 Compensation;
Nominating and
Ampco-Pittsburgh
Corporation; Liberty
Global, Inc.
Managing Director and EVP
Allen & Company Incorporated
John S.
Hendricks
Chairman
61 N May 2013
May 2016
2008 Executive (Chair) None Executive Chairman, Founder
and former CEO Discovery
Communications, Inc. (1982
to 2004)
John C.
Malone
72 Y May 2011
May 2014
2008 80,000 57,540 57,745 195,285 Executive Liberty Global, Liberty
Media, and Liberty
Interactive; Ascent
Capital Group, Inc.;
Expedia, Inc.; Sirius XM
Radio Inc.
DHC
Robert J.
Miron
76 Y May 2013
May 2016
Executive
None Former CEO Advance/
Newhouse Communications and
Bright House
Steven A.
Miron
47 Y May 2013
May 2016
2008 90,000 57,540 75,245 222,785 Nominating and
None CEO Advance/Newhouse
Communications and Bright
House
M. LaVoy
Robison
78 Y May 2013
May 2016
2008 120,000 57,540 57,745 235,285 Audit (Chair and
Financial Expert);
Nominating and
Liberty Interactive Director The Anschutz
Foundation
J. David
Wargo
60 Y May 2012
May 2015
2008 115,000 57,540 57,745 230,285 Audit; Nominating and
(Chair)
Strayer Education, Inc.;
Liberty Global Inc.
President Wargo & Company,
Inc.
David M.
Zaslav
53 N May 2011
May 2014
2008 Executive Univision
Communications
President and CEO
Discovery Communications, Inc.
Annual Incentive Net Revenue (33.3% weight), adjusted OIBDA (33.3%) and adjusted free cash flow (33.3%)
Long-Term Incentives Revenue (20% weight), adjusted OIBDA (40%) and free cash flow (40%) over a three-year period
Base Salary Maintained base salary for Zaslav, Hendricks and Hollinger. Increased Campbells base salary per employment agreement.
Annual Incentive Targets were: Zaslav 183% of base salary, Hendricks 60%, Hollinger 120%, Warren 100%, Campbell 90%. Each NEO is eligible to
receive bonus award of up to 300% of base salary for Zaslav and 250% all other NEOs.
Long-Term Incentives For Hollinger and Campbell awards consisted of stock options (50%) and PRSUs (50%). Awards of PRSUs and CS-SARs were made to Zaslav, in
amounts as required by his employment agreement. Warrens award consisted of stock options (50%) and RSUs (50%). Stock options Four-year
vesting with equal installments of 25%. PRSU Four-year vesting with 50% installments in the third year and remaining 50% in the fourth year. RSU
Two-year vesting with one-third installments.
Stock Ownership Requirements CEO and founder 5x base salary, NEOs with LTI target grant value greater than 1x base salary have a stock ownership requirement of 2x base
salary and NEOs with LTI target grant value less than 1x of base salary have a stock ownership requirement of 1x base salary.
September 19, 2013

Corporates

Corporate Governance Overview Discovery Communications LLC (Continued)
a
Most recent filings on Bloomberg as of June 2013. PRSUs Performance-based restricted stock units. CS-SAR Awards consist of a number of units that represent an equivalent
number of shares of Discovery Series A common stock. Continued on next page.
(000) Class A Class B Class C
Holder Shares % of Total Shares % of Total Shares % of Total
John S. Hendricks 5,361 3.6
David M. Zaslav 182 <1.0
Andrew C. Warren 14 <1.0
Mark G. Hollinger 221 <1.0 0 <1.0
Bruce L. Campbell 63 <1.0
Bradely E. Singer
John C. Malone 596 <1.0 6,093 93.0 3,860 4.6
S. Decker Anstrom <1.0
Robert R. Bennett 151 <1.0 0 <1.0 124 <1.0
Paul A. Gould 185 <1.0 87 <1.0 232 <1.0
Robert J. Miron 19 <1.0 0 <1.0 0 <1.0
M. LaVoy Robison 33 <1.0 14 <1.0
J. David Wargo 36 <1.0 15 <1.0
Robert R. Beck 41 <1.0 11 <1.0 32 <1.0
Lawrence S. Kramer 9 <1.0
Steven A. Miron 22 <1.0
All Directors and Executive Officers as a
Group (18 Persons) 6,962 4.6 6,192 94.5 4,278 4.6
Note: Directors and NEO holdings include stock options exercisable within 60 days of March 4, 2013.
a
a
FMR LLC 26,351 18.1 Malone John C 6,093 93.1
Blackrock 14,373 9.9 Gould Paul A 87 1.3
Vanguard Group Inc. 10,873 7.5 Beck Robert R 11 0.2
State Street 8,717 6.0 Dimensional Fund Advisors LP 10 0.2
Ameriprise Financial Inc. 5,314 3.6 FIC Capital Inc. 6 0.1
Janus Capital Management LLC 4,254 2.9 USB 4 0.1
ING Investment Management Co. 3,057 2.1 FMR LLC 0.9 0.0
Bank Of New York Mellon Corp. 2,933 2.0 California Public EMP Calpers 0.2 0.0
JP Morgan 2,932 2.0 Miron Robert J 0.1 0.0
Northern Trust Corp. 2,926 2.0 American International Group 0.0 0.0
Equity Holdings Top 10 Holders Class C
a
Holder Shares (000) % of Total
T Rowe Price Associates 16,039 17.4
Harris Associates L P 4,967 5.4
Malone, John C 3,860 4.2
Blackrock 3,840 4.2
Vanguard Group Inc. 3,500 3.8
Principal Financial Group 3,134 3.4
First Manhattan Co. Asset Mgmt. 3,053 3.3
Timesquare Capital Management 2,921 3.2
Meritage Group LP 2,754 3.0
General Electric Company 2,103 2.3
Total Top 10 46,172 50.1
September 19, 2013

Corporates

Corporate Governance Overview Discovery Communications LLC (Continued)
a
Most recent filings on Bloomberg as of June 2013. PRSUs Performance-based restricted stock units. CS-SAR Awards consist of a number of units that represent an equivalent
number of shares of Discovery Series A common stock.
Board of directors includes three preferred stock directors, S. Decker Anstrom, Robert J. Miron and Steven A. Miron. Holders of Series A preferred stock vote on the election of each
of the preferred stock directors, but do not vote on the election of any common stock director. Preferred stock directors are elected to hold office for a term expiring at the following
annual meeting of stockholders. Anstrom was appointed to the board by the holder of all of the outstanding shares of Series A preferred stock, on Dec. 3, 2012, filling the vacancy left
by the resignation of preferred stock director Lawrence Kramer which was effective June 1, 2012.
Bradley Singer, former Senior EVP and CFO resigned in March 2012. He was succeeded by Andrew Warren. Peter Liguori resigned from the company in December 2011.
On Sept. 9, 2009, the company entered into an employment agreement with Zaslav, which extended his employment agreement through Feb. 1, 2015 and provided a salary increase
from $2 Mil. to $3 Mil. as of Jan. 1, 2011.
Steven A. Miron is the son of Robert J. Miron.
John Malone has 29% voting power on corporate matters, and 30% voting power relating to the election of the eight common stock holders.
Advance/Newhouse has 25.2% voting control, and has veto capacity on corporate actions (including acquisitions greater than $250 mil.) and financial policy.
Related-party transactions: 1) Discovery contributed or paid approximately $2.97 Mil. to organizations in which John Hendricks serves as a director or another leadership role. 2)
Discovery uses Gateway Canyons Resort, a retreat owned by the Hendricks family for business retreats. In 2012, Discovery paid Gateway Canyons Resort approximately $422,000
for the use of its facilities. 3) In 2010, Discovery entered into a co-production agreement with HIH for the production of a 60-episode broadcast series titled Curiosity. Production and
promotional costs in connection with this series totaled $8.6 Mil. in 2012. Michael J. Donohue, the brother-in-law of John Hendricks, is employed by Discovery. For 2012, Donohue
received cash compensation of approximately $258,000.
Clawback policy in place.
Auditor: PricewaterhouseCoopers LLP.
September 19, 2013

Corporates

46% Voting/
64% Economic
50%
50%
Organizational Structure Discovery Communications, Inc.
($ Mil., As of June 30, 2013)
a
Reflects effective voting control incorporating Advance/Newhouses ability to convert its 100% ownership in preferred stock into common stock.
b
Excludes unamortized
discount of $17 million. IDR Issuer Default Rating.
Advance/Newhouse
Programming Partnership
Public
(Excluding John Malone)
Discovery Communications, Inc.
John Malone
Hasbro, Inc.
Discovery Communications, LLC
IDR: BBB/Stable Outlook
The Hub (VIE) OWN Network (VIE)
Harpo, Inc.
25% Voting Control
a
/
33% Economic
29% Voting Control/
3% Economic
Amount
LTM EBITDA 2,302.0
Total Debt 6,495.0
Gross Leverage (x) 2.8
Discovery Holding Company (DHC)
Discovery Communications Holding, LLC (DCH)
Amount
Outstanding Rating
$1.0 Billion Revolver due Oct. 2017 BBB
Senior Unsecured Notes
b
6,350.00 BBB
Capital Leases and Other 145
Total 6,495.00
Operating Company Leverage (x) 2.8
100%
67%
100%
33%
Guarantee
50%
50%
Debt Structure Discovery
Communications Inc.
($ Mil., As of June 30, 2013)
$1 Billion Sr. Unsecured Credit Facility due
2017
5.050% Senior Notes due 2020 1,300.0
Capital Lease Obligations 145.0
Total Debt 6,495.0
Discovery Communications Inc.
($ Mil., As of June 30, 2013)
Amount
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2015 850.0
Dec. 31, 2016
Dec. 31, 2017
Thereafter 5,500.0
Total 6,350.0
Note: Excludes capital lease.
September 19, 2013

Corporates

Debt and Covenant Synopsis Discovery Communications LLC
Credit Facility Public Bonds
Overview
Issuer Discovery Communications LLC Discovery Communications LLC
Description of Debt $1.0 billion revolver $850 Million Notes due 2015
$500 Million Notes due 2019
$1.3 Billion Notes due 2020
Document Date Oct. 13, 2010; first amendment dated Aug. 8, 2011, second
amendment dated Sept. 25, 2012.
Aug. 19, 2009; supplemental indentures dated Aug. 19, 2009;
June 3, 2010; June 20, 2011; May 17, 2012; March 19, 2013
Maturity Date 10/12/17 Various
Description of Debt Revolver Public Bonds
Financial Covenants
(Maximum)
4.5x
Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)
3.0x
Change-of-Control
(CoC) Provision
CoC offer of 101% if a) any person or group obtains 50% or more of
the voting interest, other than significant shareholders; b) liquidation,
dissolution or sale of all or substantially all the assets; c) individuals
who constituted the board of directors cease to constitute at least a
majority of the board; d) a going-private transaction; e) a liquidation,
dissolution or winding-up of the guarantor; and if the notes are
downgraded below investment grade.
CoC offer of 101% if (1) a) any person or group obtains 50% or more
of the voting interest, other than significant shareholders, b) liquidation,
dissolution or sale of all or substantially all the assets, c) individuals
who constituted the board of directors cease to constitute at least a
majority of the board, d) a going-private transaction, e) a liquidation,
dissolution or winding-up of the guarantor; and (2) if the notes are
downgraded below investment grade.
Sale of Assets
Restriction
No material provisions. No material provisions.
Limitation on Liens Standard carveouts in addition to 10% of total assets lien basket. 10% of consolidated assets.
Debt Restrictions
Additional Debt
Restriction
Governed by financial covenants. No material provisions.
Limitation on
Secured Debt
Limited to 10% of consolidated assets. No material provisions.
Restricted Payments No material provisions. No material provisions.
Other
Cross-Default Cross-default on payment defaults of debt more than or equal to $100
million.
Cross-default on payment defaults of debt more than or equal to $100
million.
Cross-Acceleration Language noted. Language noted.
Other
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Discovery Communications
Date of
5/7/2013 1Q2013 Prepared As previously discussed, given capital needs associated with the timing on closing the SBS transaction, we did not begin buying back
shares this year into the second quarter, but we still anticipate returning similar amounts of capital to shareholders through buybacks
in 2013 that we did in 2012. Our buyback activity during the second quarter includes $256 million of preferred stock associated with
the Advance/Newhouse transaction that we announced last quarter, which is part of the total anticipated share repurchases this year,
but was not done under the existing $4 billion authorized share repurchase plan. Since we began buying back shares towards the end
of 2010, we have spent over $3 billion buying back shares reducing the outstanding share count, by over 78 million shares or 18%.
5/7/2013 1Q2013 Prepared Turning to our financial position, with a strong balance sheet and continued financial and operating momentum, we remain committed
to further building our core businesses, so that we can drive additional long-term growth and enhance shareholder returns, be it
through investing in existing networks and platforms or through exploring external initiatives. While that is our first priority, given
the strong free cash flow that we are generating, our gross leverage targets and our long-range free cash flow per share growth
assumptions, we have the unique opportunity to both continue returning capital to shareholders and also investing in our businesses.
Yeah. Youre right. Weve laid out three kind of deal criterion that we look at. One is free cash flow and EPS accretive, day one; two
is an unlevered IRR of at least low teens; and three is buy at a multiple thats less than our sales and ideally less than 10 and SBS
clearly meets all of those three criteria. And so look, Ill just add to Davids point, while it is margin dilutive day one, we do very
much believe in our ability to grow margin not only with that business, with the overall amalgamation of DNI in total. So were very,
very bullish on what our margin profile looks like long term. I think this is the right kind of step back in margin year one with a lot of
thoughts around how to gain that through ad sales leverage, top-line leverage, infrastructure in place and then synergies.
2/14/2013 4Q2012 Prepared As we invest in our existing businesses and integrate these new assets into our portfolio, delivering sustained financial results and
operating leverage remains a top priority. Andy will walk you through our 2013 guidance in a moment, but we fully expect another
year of strong organic growth while returning significant capital to shareholders. We have nearly $1.5 billion remaining under our
recently expanded buyback program, and we will continue to return capital to shareholders aggressively if it is the best use of our
balance sheet. In 2012, with a strong balance sheet and continued financial and operating momentum, we returned nearly $1.4 billion
to our shareholders through execution of our share repurchase program. Since August 2010, we have spent nearly $3 billion buying
back shares, reducing the outstanding share count by over 70 million shares or 17%. Our first priority remains investing in our core
businesses to drive sustained, long-term growth through investment in existing networks and platforms or through exploring external
initiatives. But given the free cash flow we are generating, our gross leverage targets, as well as our long-range free cash flow per
share growth expectations, we have a unique opportunity to continue returning capital to shareholders while we also invest in our
businesses. We anticipate returning similar amounts of capital to shareholders through buybacks in 2013 as we did in 2012. However,
as previously highlighted back in December, given capital needs associated with the timing of closing the SBS transaction, we do
not anticipate buying shares till the second quarter of this year. Thanks again for your time this morning. And now David and I will be
happy to answer any questions you may have.
2/14/2013 4Q2012 Q&A Q: On your guidance for fiscal year 2013, it looks from the interest expense as if your debt seems to be more or less keeping flat.
Im just wondering what your thoughts are on leveraging the company going forward and if Im interpreting that correctly, or why you
wouldnt raise the debt level commensurate with the EBITDA growth? Thanks.
A: Todd, regarding your 2013 debt and interest question, as youve heard us say before, were very focused on a gross leverage ratio
of 2.5 to 3 times. So given the EBITDA growth were forecasting for 2013, as well as the SBS transaction, we do think well have about
$1 billion of additional debt year-end 2013 versus year-end 2012, and therefore about $50 million of additional interest expense as
well in 2013 than 2012.
11/6/2012 3Q2012 Q: Good morning. Its Vasily Karasyov from Susquehanna. Andy, what should we expect in terms of pace of buyback, will it change
depending on the stock price, some of your peers made comments recently that it does impact them. And then David you mentioned
when you were discussing how you repurposed a lot of successful networks that you made some mistakes. I would be just curious to
hear some of those lessons learned over the past several years? Thank you.
A: Sure. Vasily, on the stock repurchase, as you saw we did over $450 million in the third quarter. As we look at how we allocate
capital first and foremost is to drive organic growth. Secondly, its about finding perhaps the right acquisition and the right allocation
to capital, preferably internationally, and then thirdly, if we maximize the first two, well continue to look at returning capital to
shareholders through the share repurchase program. So, look, Ive had a bullish view on this. I use free cash flow per share as the
model we use internally to determine kind of the IRR, and to-date thats been a good return for us and we continue to be an active
buyer of our stock. If you look in the October timeframe, we had a predetermined grid going into October, because its a closed
window for us, as the stock performed nicely, went up, buying fewer shares as youd expect from a grid like that, but, look, for us its all
about forward-looking free cash flow per share and buying off that the expectation with again that being the third allocation of capital
relative to organic growth and acquisitions.
7/31/2012 2Q2012 Prepared Given that we have not yet found sufficient investment opportunities with attractive financial returns, weve accelerated utilizing the
cash on our balance sheet, as well as the cash generated from operations, to repurchase shares.
Discovery repurchased over $400 million of stock during the second quarter, including $389 million of Class C shares. Given the
liquidity constraints around repurchasing the Class C shares, we also repurchased $15 million of Class A shares during the quarter.
We still prefer buying the more economical security. But given SEC volume limitations as well as the long-term attractiveness of our
securities, we will continue to repurchase both classes of stock.
7/31/2012 2Q2012 Q&A Q: Thanks. Just on the buyback, I know you guys commented on that, but the pace does seem to be picking up Q2 and into Q3. Can
you just comment; will Q3, it looks like it will be another quarter over $400 million? (Analyst. BofA)
A: Jessica, as you have heard me say before, my number one metric that I look at and I drive is free cash flow per share. And so
when we model out and when David and I, and we talk to the Board about this when we model out buying stock today and
the free cash flow per share going forward and our forecast and creating that IRR, as long as that IRR is strong and double digit,
were a buyer of our stock and actively enthusiastic about that. You saw that momentum in the second quarter, and we do anticipate
continuing that. Ideally, we would continue to put money into growing organically and continue to look at perhaps acquisition
opportunities. But in the meantime, we will continue to allocate capital towards rebuying shares, especially given our free cash flow
per share growth profile.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Discovery Communications (Continued)
Date of
7/31/2012 2Q2012 Prepared Capitalizing on our core growth opportunities is still our first strategic priority, but given our sustained financial momentum, the free
cash flow we are generating, the strength of our balance sheet, and the growth portfolio of our company, we have increased the
pace of our buyback activity to further build shareholder value. We have returned $1.9 billion in capital to our shareholders under our
buyback program, and we will continue to do so aggressively if it is the best use of our balance sheet.
7/31/2012 2Q2012 Prepared Turning to our balance sheet, we further strengthened our financial position this quarter by completing the issuances of a 10-year
$500 million debt offering with a 3% interest rate and a 30-year $500 million offering with a 4.95% rate. These issuances provided us
additional financial flexibility while lowering our average cost of capital, lengthening our average maturity profile, and taking us to a
more appropriate leverage level.
5/8/2012 1Q2012 Prepared Given the successful share repurchase activity to date, we are increasing our share repurchase authorization by an additional $1
billion in order to enable us to continue to thoughtfully repatriate capital to our shareholders. We will continue to operate our buyback
program under a 10b5 plan this quarter, and shares will be purchased according to a predetermined grid with forecasted free cash
flow per share governing our share repurchase activity. This metric, in essence, drive the IRR expectation on all current and future
share repurchases.
2/16/2012 4Q2011 Prepared Our first priority is to invest our capital in our core business to enhance our shareholders returns. To the extent we have not found
opportunities with attractive financial returns, we will likely accelerate utilizing the cash on our balance sheet as well as the cash we
generate from operations to repurchase shares.
2/16/2012 4Q2011 Prepared In 2011, we returned just under $1 billion in capital to our shareholders, and with nearly $900 million still available under our buyback
program, we will continue to return capital to shareholders aggressively if it is the best use of our balance sheet.
11/1/2011 3Q2011 Prepared With our strengthened balance sheet and strong operating performance, we continue to return capital to our shareholders through the
execution of our share repurchase program. Our first priority is to invest our capital in our core business to enhance our shareholders
returns. To the extent we have not found opportunities with attractive financial returns, we are utilizing the cash on our balance sheet
as well as the cash we generate from operations to repurchase our shares.
8/4/2011 2Q2011 Prepared Our first priority is to invest our capital in our core business to enhance our shareholder returns. To the extent we have not found
opportunities with attractive financial returns, we have accelerated utilizing the cash in our balance sheet, as well as the cash we
generate to repurchase our shares.
8/4/2011 2Q2011 Prepared Since last November, we have returned over $1 billion in capital to our shareholders. And with the additional $1 billion buyback just
authorized by our board, we will continue to do so aggressively if it is the best use of our balance sheet.
4/28/2011 1Q2011 Prepared As we consider our current strategic investment initiatives and the potential funding requirements, we will likely increase the rate of our
repurchase activities in the future.
4/28/2011 1Q2011 Q&A Q: And then two, I think youve got about $3.2 billion of net debt at the end of the quarter. Youre talking about nearly $2 billion of
EBITDA for the year. Obviously, that leverage is well south of 2x, and it seems like youve talked to a leverage target longer-term of
3-plus. And so, how do you just bridge that for us? How long do you stay so far below your target leverage? And any color would be
helpful.
A: Sure, Rich. Its Brad. Ill take both questions, and let me take the second one first. With regard to how were looking at our capital
deployments, in my remarks, I highlighted that we will likely be accelerating our stark pay to share repurchase when we take into
consideration what we see right now in the strategic environment. And so we had always taken that into account. And based on where
we are today, you will see us deploy more capital at a higher level as we move through the year than we have in the past. So that will
move us up in terms of deploying the cash we generated potentially, also depending on where or how much we spend, what we do
with increasing our current position of leverage.
2/11/2011 4Q2010 Prepared Our third priority with our balance sheet is to further return capital to shareholders. With free cash flow expected to ramp significantly
in 2011, we will look to continue to buy back shares under our billion dollar buyback program.
2/11/2011 4Q2010 Q&A Q: Hey guys. When you look at the year-end net debt, it was about 3.1 billion. You had 1.7 billion of EBITDA, so your leverage was
right about 1.8 times. Brad, I think you said 1.1 billion at the top end of free cash flow or thereabouts. With the 1.9 of EBITDA, that kind
of implies that by the end of the year, without any share repurchase youd be right around 1 times leverage. Just curious when you
think about target leverage ratio, is 1.8 kind of the bottom end of where youd like to see it? Do you think well get that moving higher,
and is that a way to think about share repurchase, and obviously if you made an acquisition factoring in, to kind of where you want to
get leverage by the end of 2011? Thanks.
A: Our target leverage is slightly higher than where were running now. Wed like to see it more 2.5 times. We have put a lot of
money to work in the fourth quarteryou know, it was over 750 million, so we ate into the cash balances we had at the end of the
third quarter that were over $1 billion, and they were in the mid-400s. So as we move through 2011, wed like to deploy that capital.
As David said, we prioritize it first into operations, second into productive M&A, and then third into thoughtful repatriation. And so we
will be building towards that without a specific number to hit in terms of our financial position by the end of the year, but with a bias
towards moving higher.
11/2/2010 3Q2010 Q&A Q:And what do you think the right leverage is? I mean, if youre targeting going well below 2, where would you like leverage to go over
time?
A: Well I think, Rich, weve promised to maintain an investment-grade rating, where were at, and so that leverage target should be
below 3.25 or so, based on current parameters. Anywhere between 2 and 3 is probably a comfortable leverage. We want to ensure
that we have flexibility, when we want to use it. So you never probably want to be at the edge of your leverage targets. And I think
the best way for us to create value as a company is to take our capital and use it to get good returns, that ultimately benefits the
shareholders. And thats really what how we think about the best way to deploy it when we think of capital structure.
11/2/2010 3Q2010 Prepared We will continue to monitor the most efficient use of our cash, and well evaluate the parameters of our buyback plan within the
context of strategic opportunities, as well as market fluctuations.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Discovery Communications (Continued)
Date of
11/2/2010 3Q2010 Q&A Q: You have a $1 billion buyback out there, and obviously next year, free cash flow will grow significantly faster. Could you give us
some sense, like what are the key parameters that you are looking into in terms of the pace of buyback? I think this quarter you
bought 1.12 million shares. How should we think about the pace of buyback going forward?
A: With regard to your question on share repurchase, I think consistent with our prior comments and the comments I made today is,
our primary focus on utilizing our capital is to invest in our business. And whether its our core operations or strategic opportunities,
thats where were, first and foremost, focused.
Having said that, we do have several things that we are looking at, that will use part of that capital. To the extent that we have excess
capital, wed seek to do a share repurchase. We set up a plan after our last earnings call, under 10b-5, and it had parameters to buy
back stock. Our stock went up 20% during that time. As we mentioned, we were looking to take advantage of the natural volatility of
the stock, and since it was a straight increase, we did not buy as much volume as we probably would have anticipated when we set
up the plan. So well recalibrate the plan in conjunction with our strategic activity, and trying to figure out what makes sense as we
move forward.
8/3/2010 2Q2010 Q&A Q: And if I could just squeeze one more in for Brad on the buyback, Brad, remind where you and David and the manage -- and the
Board think leverage should be for Discovery. I realize thats a dynamic position, not necessarily on a given day, but whats the right
leverage level for this business, and do you have any timeframe, or does the Board have any timeframe for how long before you
actually would achieve that?
A: The way to answer the leverage question is we have a ratings target or a stability of our current ratings, and based on the various
rating agencies, that generally means three times or less leverage, and were about 2.3 times leveraged today under the current
calculations. So, weve room within our leverage parameters. And the way we think about it, whether its timing or absolute leverages,
our goal, as we mentioned, is number one, to further our business by making good strategic investments.
8/3/2010 2Q2010 Q&A And with your question with regard to the buyback emphasizing, the $1 billion program is an initial program. And so its consistent with
my prior remarks, which is we want to be disciplined when we look at our strategic opportunities, we want to maintain our financial
flexibility.
And so well look at things that hopefully will we will deploy capital in those areas first as they will be very beneficial to shareholders
if we do effectuate anything. To the extent that we dont, this is a very good mechanism to deploy our capital back to our shareholders.
With regard to other forms or other mechanisms like a dividend, it doesnt roll out a dividend, but while were still striving to maintain
financial flexibility, the buyback is the best mechanism to do that.
8/3/2010 2Q2010 Prepared With our increased financial flexibility, sustained operating momentum, the Board of Directors has authorized a $1 billion share
repurchase program, so we can return capitol our shareholders. We will be financially prudent in how we buy back shares, and look
forward to delivering additional value to our shareholders.
4/30/2010 1Q2010 Q&A Q: Okay. And having said that just follow-up on use of capital and leverage targets and share repurchases and if you could update us
on your thought process, maybe for the whole team and if you could speak for the Board, I dont know if you can, but how we should
think about that stuff looking out from here?
A: I cannot speak for the board, but the way we think about leverage is that we are within our target ranges and so we are not looking
to delever from where we are today and our first priority of taking our capital that we generate and putting it into our core business and
hopefully you know when we make these investments they will be accretive to our investors and that would be our priority whether its
domestically or internationally, whether its organic or external, all those that uses the capital thats how we think of it. If we cannot put
that the excess capital or the capital we generate to productive use, you will see us return that to shareholders of the course probably
sometime in 2010.
2/10/2010 4Q2009 Q&A Q: Balance sheet then if you might start returning capital or have some deals lined up whats the right long term leverage target?
And then you talked Brad about advertising and didnt mention sellout at all. Can you give us a sense of what the sellout levels were in
the first quarter for 2009 last year so we get a sense if theres upside there as well and then I have a question for David.
A: In terms of balance sheet what weve said in the past and I think were still in the same place is that wed like to maintain an
investment you know great credit rating so that generally will be three times-ish or slightly less is the maximum leverage.
We could go up to three and a quarter if you read what the credit analysts from the agencies say. Right now where were at in our
leverage is about its under two and a half times, so were definitely within the comfort range and I think wed like to maintain a
sensible cost at capital, so we dont want to decline our leverage much more from where we are today either.
2/10/2010 4Q2009 Q&A Q: And then on your comments on use of free cash flow, I just wondered Brad if there are any acquisition or M&A opportunities that
you see globally out there and if not any reason you wouldnt be in there buying your stock back right now?
A: Well, right now we probably have several things that were looking at. Theyre not in the billion dollar range they could potentially
be an aggregate in the several hundred million dollar range. So there are opportunities that we think would be good returns on the
capital wed invest. If we cannot find productive uses that generate good returns you should anticipate it, well be repatriating money
back to our shareholders over the course of this year.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Discovery Communications, Inc.
LTM Ended
6/30/13
Profitability
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 458.0 38.0 20.0 26.0 31.0 23.0
Long-Term Subordinated Debt 1,478.0 1,463.0
Other Debt 1.0
Equity Credit
Off-Balance-Sheet Debt 303.0 263.2 249.7 235.1 227.0 227.0
Cash Flow
Funds From Operations 821.0 700.0 810.0 1,311.0 1,213.0 1,378.0
Cash Flow from Operations 585.0 648.0 669.0 1,100.0 1,099.0 1,180.0
Total Non-Operating/Nonrecurring Cash Flow (16.0) (32.0)
Dividends
Free Cash Flow 467.0 559.0 620.0 1,042.0 1,022.0 1,073.0
Net Acquisitions and Divestitures 131.0 300.0 (14.0) (26.0) (149.0) (1,961.0)
Net Debt Proceeds (411.0) (371.0) 77.0 619.0 959.0 1,158.0
Net Equity Proceeds 28.0 (558.0) (937.0) (1,299.0) (1,164.0)
Other (Investing and Financing) (296.0) 15.0 (281.0) (116.0) (380.0) (429.0)
Total Change in Cash (109.0) 523.0 (157.0) 582.0 153.0 (1,323.0)
Ending Cash and Securities Balance 100.0 623.0 466.0 1,048.0 1,201.0 375.0
Income Statement
Revenue 3,443.0 3,516.0 3,773.0 4,235.0 4,487.0 4,865.0
Revenue Growth (%) 10.1 2.1 7.3 12.3 6.0 9.0
Operating EBIT 1,003.0 1,196.0 1,409.0 1,673.0 2,015.0 2,116.0
222 Company Summaries The Dun & Bradstreet Corporation
September 19, 2013

Corporates

The Dun & Bradstreet Corporation
Key Rating Drivers
Debt-Funded Share Repurchase: In August 2012, Dun & Bradstreet (D&B) announced an
increase in its share repurchase authorization from $500 million to $1 billion. The company
intends to complete these share repurchases by mid-year 2014. Year to date June 2013,
D&B repurchased approximately $725 million in shares under this authorization ($275 million
remains). D&B has partially funded these repurchases with additional debt. Debt balances
are currently at $1.4 billion and Fitch calculates unadjusted gross leverage at approximately
2.5x, as of June 2013. Fitch expects leverage to reach approximately 2.8x by the end of D&Bs
$1 billion share repurchase program. While the 2.8x exceeds Fitchs 2.5x target for the rating,
Fitch expects leverage to be managed at 2.5x or below over the long term.
Solid Credit Protection Measures: D&Bs FCF generation (latest 12 months [LTM] $221 million
after dividends), solid EBITDA margins (LTM 34%) and solid coverage metrics (LTM interest
coverage of approximately 13.7x) provide fexibility in the ratings to endure slightly elevated
leverage for a short period. However, Fitch notes that there is limited room in the ratings for
the company to fall short of Fitchs expectations. Fitch models consolidated revenues to be
approximately fat in 2013 with low single-digit revenue growth in 2014. Fitch expects EBITDA
margins to range from 34% to 35%.
CEO Succession: The outlook also refects the uncertainty of D&Bs fnancial and strategic
policy following the announced CEO succession. Robert Carrigan has been named the new
President, CEO and Director effective Oct. 7, 2013. Sara Mathew will step down from the board
and her executive position the same day, and will continue with D&B to facilitate a transition.
Fitch recognizes that the risk of fnancial and/or strategic policy changes is inherent with all
investment-grade issuers.
Limited Revenue Diversifcation: More than 60% of total revenue is from D&Bs Risk
Management Solutions (RMS) division. The ratings incorporate the recent pressures in North
American RMS (approximately 40% of total revenues), down 2% for the frst two quarters of 2013
(down 4% in 2012). Revenue trends improved in the second quarter (North American RMS down
1%) and Fitch expects the improved trends to continue, with positive revenue growth in 2014.
China Investigation: Ratings refect the ongoing investigation associated with Shanghai
Roadway D&B Marketing Services (Roadway) potential violation of the U.S. Foreign Corrupt
Practices Act (FCPA). The company self-reported the potential violations to the U.S. Securities
and Exchange Commission and U.S. Department of Justice. Currently, the timing and potential
fnes related to these investigations are unknown. D&B has shut down Roadway and the impact
on consolidated operations will be minimal. Given the size of the operations, Fitch believes any
fnes would be manageable within the companys consolidated credit profle and liquidity.
Stable Ratings: A publicly stated fnancial policy (after the announcement of a new CEO), which
includes a commitment to maintain leverage at 2.5x, and traction with the companys turnaround
in its RMS business, could lead Fitch to stabilize the current ratings.
Negative Rating Trigger: The ratings may be downgraded if the company is unable to
demonstrate traction with its revenue turnaround and/or indications that leverage would be
expected to remain above 2.5x beyond 2015.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
Ratings
Security Class
Current
Rating
The Dun & Bradstreet Corp.
IDR BBB+
Short-Term IDR F2
Bank Credit Facility BBB+
Senior Unsecured Notes BBB+
Commercial Paper F2
Rating Outlook
Negative
September 19, 2013

Corporates

Portfolio Summary The Dun & Bradstreet Corporation
(As of June 30, 2013)
Risk Management Solutions Sales and Marketing Solutions
Custom Integration Manager
Data-as-a-Service (DaaS)
D&B Data Exchange
D&B Direct for Sales & Marketing
D&B 360
D&B 360 for Eloqua Marketing Automation Solutions
Hoovers
Hoovers Lead Builder
Market Insight
MDR: Educator Marketing Lists
Optimizer
Prospecting Solutions
Credit Risk
Business Information Report
Comprehensive Report
DNBi
DNBi Professional
DNBi Corporate
DNBi Enterprise
DNBi Risk Management
D&B Direct
Data Integration Toolkit
Enterprise Solutions
Enterprise Risk Compliance Solutions
Eram
Global Decision Maker
Small Business Risk Insight
Supply Chain Management
Supplier Risk Manager
D&B Direct Supply Management
Supply Data Services
Supplier Diversity Data Services
September 19, 2013

Corporates

North
America
74%
Eurpore
& Other
Internat-
ional
Markets
14%
Asia
Pacific
12%
(As of Dec. 31, 2012)
Europe
and Other
International
Markets
14%
Risk
Manage-
ment
Solutions
64%
Sales &
Market-
ing
Solutions
29%
Internet
Solutions
7%
Revenues by Solution
(As of Dec. 31, 2012)
Risk
Management
Solutions
64%
Sales and
Marketing
Solutions
29%
North
America
83%
Asia-
Pacific
4%
Europe
and
Other
13%
EBITDA by Segment
(As of Dec. 31, 2012)
September 19, 2013

Corporates

Event Risk Dashboard The Dun & Bradstreet Corporation
Event Risk Summary
Level of Risk
LBO H
Secular L
Corporate Governance/Ownership M
Change in Financial Policies H
Acquisition H
Divestiture L
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk High
Enterprise value (EV) may be fnanceable in the current credit markets. EV
estimated at $5.5 billion.
Fitch believes that a private equity (PE) sponsor would have to contribute at least
$1 billion in equity to complete an LBO transaction. While this would constitute
a substantial investment, PE frms have suffcient capital to make such a sizable
contribution.
Leverage may be high initially, around 7x. FCF generation should provide
fexibility to reduce leverage meaningfully over time.
Private equity has been active in the business products and services segment.
The change-of-control puts in both notes provide some risk mitigation for D&B
bondholders.
Secular Risk Low
There is no material secular risk associated with D&B. D&B's products are
primarily delivered digitally.
Corp. Governance/Ownership Medium
There are no material corporate governance issues. Nearly all members
of the board of directors are independent. Less than 5% of managements
compensation is based on earnings-per-share targets.
The uncertainty of D&Bs fnancial and strategic policy following the announced
CEO succession is refected in the current ratings and outlook. Robert Carrigan
has been named the new President, CEO and Director effective Oct. 7, 2013.
Sara Mathew will step down from the board and her executive position the same
day, and will continue with D&B to facilitate a transition.
Financial Policy High
D&B announced its intention in August to accelerate share buybacks and its
willingness to increase debt to fund a portion of these share buybacks.
D&B has not provided a leverage target. Fitch expects leverage to reach
approximately 2.8x by the end of the $1 billion share repurchase program. While
2.8x exceeds Fitchs 2.5x target for the rating, Fitch expects leverage to be
managed at or below 2.5x over the long term.
The company has publicly stated that it targets strong investment-grade ratings.
There are no material unsecured debt restrictions.
Per the unsecured note indentures, liens are not permitted unless pari passu
liens are granted. There are standard carveouts including a lien basket of
approximately $450 million.
Dun & Bradstreet Corporation Rating History
BBB
BBB+
A
A
A+
1.3
1.5
1.7
1.9
2.1
2.3
2.5
2.7
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
50
60
70
80
90
100
110
Source: Bloomberg.
Dun & Bradstreet Corp. Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard The Dun & Bradstreet Corporation (Continued)
Acquisition Activity High
YTD June 2013
2012 9.1
2011 13.5 5.1
2010 205.0 9.2
2009 74.6 11.7
2008 69.2 8.8
2007 146.5 2.0
D&B has been an active acquirer, primarily focusing on international expansion
and bolt-on acquisitions to enhance analytical capabilities and increase data.
The 2010 acquisition amount was primarily the acquisition of Dun & Bradstreet
Australia Holdings Limited for $204.5 million net cash outlay (valued at
$209.5 million).
No material limitations on acquisitions or divestitures noted in the indentures.
Union Workforce
There are no unions in the North American segment. Various councils and
unions represent a portion of employees in D&Bs European and Latin American
operations.
Pensions
D&Bs total pension plans were underfunded by approximately USD653 million at
year-end 2012. However, only roughly 72% of the pension obligation is related to
the U.S. qualifed plan, which is approximately USD316 million underfunded and
was frozen in 2007.
Fitch believes the company will have suffcient liquidity to handle its funding
obligations, in accordance with the Pension Protection Act.
D&Bs subsidiary based in China Shanghai Roadway D&B Marketing Services
(Roadway) is under investigation for potential violation of the U.S. Foreign
Corrupt Practices Act (FCPA). The company self-reported the potential FCPA
violations to the U.S. Securities and Exchange Commission and U.S. Department
of Justice. Currently, the timing and potential fnes related to these investigations
are unknown. D&B has shut down Roadway, and the impact on consolidated
operations will be minimal. Reportedly Chinese authorities fned the company
CNY1 million (approximately USD0.2 million) for violation of Chinese consumer
data privacy laws.
Fitch notes that in 2011 the Roadway operations generated approximately
$22 million in revenues and $2 million in operating income. Given the size of the
operations, Fitch believes any fnes would be manageable within the companys
consolidated credit profle and liquidity.
DNB is subject to various data and information regulations in the U.S. and abroad.
Stock Repurchase Activity
($ Mil.) Share Buy Activity
YTD June 2013 283.1
2012 508.0
2011 185.4
2010 134.8
2009 225.6
2008 381.9
D&B has two share buyback authorizations: i) $1 billion share repurchase
authorized by the board in October 2011 (increased in August 2012). As of June
30, 2013, there was $275 million available under the program. ii) In May 2010 the
board authorized a four-year, fve million share repurchase program to mitigate
the dilutive effect of shares issued under D&B compensation plans. The program
expires in October 2014; approximately 2.8 million shares remain under this
program.
Share buybacks and acquisitions are expected to be the primary uses of FCF.
(x)
Covenant
Level
Fitch Estimated
Level as of 6/30/13
EBITDA
Cushion (%)
Net Interest Coverage 3.0 12.6 76
There are no material restrictions in the indentures limiting subsidiary guarantees.
Fitch believes that any future debt would be issued by D&B. However, Fitch
recognizes there is a risk of structural subordination inherent in all holding
company structures.
Fitch believes an LBO of the company would likely include guarantees from
subsidiaries.
September 19, 2013

Corporates

Corporate Governance Overview Dun & Bradstreet Corporation
a
Most recent filings on Bloomberg as of June 2013. RSUs Restricted stock units. PRSUs Performancebased restricted stock units. N.A. Not available. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Sara Mathew Chairman and CEO 825,000 1,725,000 1,383,901 504,075 922,133 5,360,109
Richard H. Veldran SVP and CFO 380,000 737,500 175,996 133,950 782,123 2,209,569
Byron C. Vielehr President, North America 440,000 400,000 320,403 148,896 919,454 2,228,753
Emanuele A. Conti President, International 416,000 225,000 180,509 156,416 842,484 1,820,409
Joshua L. Peirez President, Global Product 450,000 400,000 320,403 179,775 429,029 1,779,207
Bruce R. Sink SVP, Tech and CIO 590,035 488,875 21,714 1,100,624
Board of Directors
Austin A.
Adams
69 Y May 2013
May 2014
2007 70,000 120,002 15,565 205,567 Audit; Innovation and
Technology
FNB United Corp.;
Spectra Energy, Inc.
Retired EVP and Corporate
Chief Information Officer
JPMorgan Chase
John W.
Alden
71 Y May 2013
May 2014
2002 90,000 120,002 7,244 217,246 Board Affairs;
Compensation and
Benefits (Chair)
Arkansas Best
Corporation;
Barnes Group, Inc.;
Silgan Holdings, Inc.
Retired Vice Chairman
United Parcel Service, Inc.
Christopher
J. Coughlin
Lead Director
60 Y May 2013
May 2014
2004 102,912 120,002 30,049 252,963 Board Affairs (Chair);
Compensation and
Benefits
Covidien Ltd.;
Forest Laboratories, Inc.
Retired EVP and CFO
Tyco International Ltd
James N.
Fernandez
57 Y May 2013
May 2014
2004 90,000 120,002 29,472 239,474 Audit(Chair and
Financia Expert);
Board Affairs
None Executive VP and COO
Tiffany & Co.
Paul R. Garcia 60 Y May 2013
May 2014
2012 45,192 96,811 5,403 147,406 Audit; Innovation and
Technology
Global Payments, Inc. Chairman and CEO
Global Payments, Inc.
Sara
Mathew
Chairman
57 N May 2013
May 2014
2010 None Campbell Soup
Company
CEO The Dun & Bradstreet
Corporation
Sandra E.
Peterson
Lead Director
54 Y May 2013
May 2014
2002 90,000 120,002 10,816 220,818 Compensation and
Benefits; Innovation
and Technology (Chair)
Group Worldwide;
Johnson & Johnson
Chairman Group Worldwide
Anastassia
Lauterbach
N.A. N.A. May 2013
May 2014
2013 N.A. N.A. N.A. N.A. Innovation and
Technology; Board
Affairs
Serves on Advisory
and Supervisory
Boards of several U.S.
and European-based
technology companies.
N.A.
Thomas J.
Manning
N.A. N.A. May 2013
May 2014
2013 N.A. N.A. N.A. N.A. Audit; Innovation and
Technology
N.A. N.A.
Judith A.
Reinsdorf
N.A. N.A. May 2013
May 2014
2013 N.A. N.A. N.A. N.A. Audit; Board Affairs N.A. Executive Vice President and
General Counsel
Tyco International Ltd.
Annual Incentive Revenue (45%), adjusted EBITDA less capital expenditures(45%), FCF (10%).
Long-Term Incentives Adjusted EPS (50%), ROIC (50%), stock price.
(%) Fixed Pay Variable Pay Cash Equity
Sara Mathew 15 85 35 65
Richard H. Veldran 34 66 60 40
Joshua L. Peirez 28 72 51 49
Byron C. Vielehr 27 73 51 49
Bruce R. Sink 36 64 64 36
Emanuele A. Conti 35 65 62 38
Base Salary Targeted at the median of companys peer group.
Annual Incentive Targets were: Mathew $1.1 Mil., Veldran $285,000, Vielehr $396,000, Conti $333,000, Peirez $382,500. Potential payout ranges from
0%200%. Actual payout was 47% of target for each NEO.
Long-term Incentive Split between stock options (50%) and PRSUs (50%) 20% vesting in the first year, 30% in the second year and 50% in the third. In FY12 payouts
for RSUs were 81% of target and payouts for PRSUs were 47% of target.
Stock Ownership Requirements CEO 6x base salary, NEOs 4x base salary.
September 19, 2013

Corporates

Corporate Governance Overview Dun & Bradstreet Corporation (Continued)
a
Most recent filings on Bloomberg as of June 2013. RSUs Restricted stock units. PRSUs Performancebased restricted stock units. N.A. Not available.
Michael J. Winkler was not nominated for election to the board due to health concerns.
Anastasios G. Konidaris, former SVP and CFO, resigned from the company in July 2011. He was succeeded by Richard H. Veldran, effective June 2011. Byron C. Vielehr, was
appointed to President, North America effective June 2011. Joshua L. Peirez, was appointed to President, Global Product, Marketing and Innovation effective June 2011. Emanuele A.
Conti, was appointed to President, International effective June 2011 and continues to serve as Chief Administrative Officer. George I. Stoeckert, served as President, North America
resigned from the company in July 31, 2011.
In December 2011 and February 2012 the company entered into consulting agreements with Caribou Technology Consulting, LLC. Bruce Sink, who became the companys senior
vice president, technology and chief information officer effective October 22, 2012, is the founder and sole owner of Caribou. The company has paid Caribou approx. $815,000 for
such services performed in 2012.
None of the executives have an employment agreement and severance benefits (excluding change of control).
Companys stockholders approved the boards proposal to permit holders of at least 40% of outstanding common stock the power to call a special shareowner meeting.
On May 3, 3013, Sara Mathew informed the company of her intention to retire as chairman and chief executive officer by May 2014.
Clawback policy is in place; anti-hedging policy is in place.
Equity Holdings Top 10 Holders
a
FMR LLC 4,755 11.9
Artisan Partners Holdings LP 2,698 6.8
Sun Life Financial Inc. 2,693 6.7
Longview partners LTD 2,472 6.2
Blackrock 2,164 5.4
State Street 2,008 5.0
Chieftain Capital Management 1,720 4.3
Cramer Rosenthal McGlynn LLC 1,700 4.3
Investec Asset Management LTD 1,167 2.9
Total Top 10 24,532 61.4
Austin A. Adams 15 <1.0
John W. Alden 23 <1.0
Christopher J. Coughlin 25 <1.0
James N. Fernandez 26 <1.0
Paul R. Garcia 3 <1.0
Sara Mathew 550 2.4
Sandra E. Peterson 21 <1.0
Michael J. Winkler 20 <1.0
Richard H. Veldran 56 <1.0
Byron C. Vielehr 149 <1.0
Emanuele A. Conti 35 <1.0
Joshua L. Peirez 26 <1.0
Bruce R. Sink <1.0
All Current Directors and Executive Officers as a Group (15 Persons) 967 2.4
Note: Directors and NEO holdings include stock options exercisable within 60 days of February 28,2013 and nonvoting stock units.
September 19, 2013

Corporates

Pension Screener
a
than 10%?
Yes
Plan Assets
b
22.0 26.0
Leverage Screener
PBO (Under-)/Overfunded Status (653.3) (589.4)
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Debt Structure
Dun & Bradstreet Corporation
($ Mil., As of June 30, 2013)
Sr. Unsecured Revolving Credit Facility
due October 2016 358.0
2.875% Sr. Unsecured Notes due Nov. 15, 2015 300.0
3.250% Sr. Unsecured Notes due Dec. 1, 2017 450.0
4.375% Sr. Unsecured Notes due Dec. 1, 2022 300.0
Other 0.1
Total Debt 1,408.1
Dun & Bradstreet Corporation
($ Mil., As of June 30, 2013)
Amount
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2015 300.0
Dec. 31, 2016 358.0
Dec. 31, 2017 450.0
Thereafter 300.0
Total 1,408.0
Note: Excludes capital lease and other debt obligations.
Organizational Structure Dun & Bradstreet Corp.
($ Mil., As of June 30, 2013)
Dun & Bradstreet Corp.
IDR BBB+/Negative Outlook
Short-Term Debt F2
Public
Risk Management Solutions Sales and Marketing Solutions
LTM Revenues 1,045.4 LTM Revenues 598.2
Solution Set
Amount
Outstanding Rating
$800 Million Credit Facility due 2016 358.0 BBB+
Senior Unsecured Notes due 2015 300.0 BBB+
Total Debt 1,408.0
EBITDA 558.6
Total Debt/EBITDA (x) 2.5
100% Equity
September 19, 2013

Corporates

Debt and Covenant Synopsis The Dun & Bradstreet Corporation
Bank Facility Indenture
Overview
Document Date 10/25/11 03-14-06, supplemental indenture dated Dec. 3, 2012
Maturity Date 10/25/16 11-15-15, 12-01-17, 12-01-22
Description of Debt $800 million revolver $300 million 2.875% Senior Note due 2015
$450 million 3.250% Senior Note due 2017
$300 million 4.375% Senior Note due 2022
Financial Covenants
(Maximum)
4.0x
Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)
(Calculated net of interest income) 3.0x
Change-of-Control
(CoC) Provision
Acquisition of more than 35% of the voting rights; majority of the board
of directors elected was not nominated by the board of directors. A
CoC would trigger a default.
The bondholders benefit from a CoC put offer at 101%. CoC takes
place if a) any person becomes the beneficial owner, directly or
indirectly, of more than 50% of the then-outstanding number of shares
of directors cease to constitute at least a majority of the board; c) sale
of all or substantially all assets; or d) adoption of a plan of liquidation
or dissolution; and if ratings are downgraded below investment grade
following aforementioned events.
Sale of Assets
Restriction
May not sell substantially all of the assets of the business, unless the
purchaser assumes all obligations under the credit agreement.
Debt Restrictions
Additional
Debt Restriction
Limit on subsidiary debt of $75 million. Limitation on sale and
leaseback of $250 million.
Limitation on
Secured Debt
Additional secured indebtedness limit of $200 million; accounts
receivable securitization limit of $200 million.
liens to the greater of a) 10% of shareholders equity or b) $450 million.
Fitch estimates the basket at approximately $450 million as of Dec.
31, 2010. There is an accounts receivable securitization limit of $200
million.
Other
Cross-Default Payment default (principal or interest) on any indebtedness that
exceeds $75 million.
Cross-Acceleration Acceleration on any indebtedness that exceeds $75 million. No material provision noted.
Other Event of default if the merger of the company or if acquired (all or
substantially all of the assets) and the surviving company does not
have an investment-grade rating from either Fitch, S&P or Moodys.
Notes due 2017 and 2022; interest rate adjustment if the notes rating
is downgraded below investment grade.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts The Dun & Bradstreet Corporation
Date of
5/3/2013 1Q2013 Prepared North America operating income was down 16%, as most of the investments, including $6 million in deployment costs for the new data
supply chain, are focused in that segment. International improved 4%, primarily as the result of a positive impact from the restructuring
of our Japan business that occurred in the first quarter of 2012. Diluted EPS was up 1% in the first quarter, as a benefit of share
repurchases and a lower tax rate in the quarter offset the decline in operating income. During the quarter, we repurchased $115 million
of stock, bringing our total repurchases under the current authorization to $625 million. We remain committed to completing the full
$1 billion authorization by the middle of 2014.
2/12/2013 4Q2012 Prepared As we invest to return the company to sustainable growth, we intend to continue to reward our shareholders for staying with us on
this journey. We have repurchased $510 million of the $1 billion discretionary repurchase program through 2012, and we intend
to repurchase the remaining by middle of 2014. In addition, weve returned $69 million to shareholders in dividends, and we are
increasing our 2013 quarterly dividend to $0.40 a share, a 5% increase. Of note, we have increased our dividend every year since we
instituted it back in 2007.
10/26/20123Q2012 Prepared Diluted EPS was up 24% during the quarter. This strong performance reflects the higher operating income plus 11 points of accretion
from share repurchases and 6 points from a lower tax rate in the quarter versus last year. Year to date, we have repurchased
$236 million of shares under the discretionary share repurchase program at an average price of $69.29 per share. That leaves $734
million left under our current discretionary authorization, which we expect to complete over the next two years.
10/26/20123Q2012 Q&A Q: Good. Rich, my question is about the share buyback. This is the first quarter of a two-year intention for the company to buy back
25% of its share count. Could you describe the level of share buyback in the third quarter? Should we consider this kind of like a
foundational normal level of share buyback? What would be gating factors as we go over the next two years of quarters, where youll
buy less or more in a given quarter?
A: Sure let me talk about that, Andrew. I mean couple of things is as you may recall, although you havent been covering us as long
as some of the others, we dont comment on our specific strategy within any given quarter; its just not our policy to do so. I can tell
you that we do not blindly buy shares on just a programmatic basis; it wouldnt make sense for us to do that. Thus far, during this year,
weve bought 236 million shares, which is well above the level we said wed do going in and you can be sure that we will finish our full
authorization, so the remaining $730 million over the next couple of years.
10/26/20123Q2012 Q&A Q: Got it, and one last one just on capital allocation again. I just wanted to I guess hear the thoughts in terms of the entire so
leverage, share buybacks, and dividends. It feels like you could easily be a lot more levered, you could easily do a lot more buy
backs. and the dividend could be higher as well. So I just wanted to get what the current thoughts there were, if there are obviously
discussions around that, just thoughts around there?
A: Yeah. Let me talk a little bit about that, so a couple of things. We tend to be relatively conservative. And in this fiscal environment
it is prudent to have some ability to access the capital market, so were not going to crazy out on a limb. That said, this year we did
make the overt decision to increase our level of repurchase, as you well know, and increase to a degree our leverage. We think its
a unique opportunity in terms of interest rates that are out there to go ahead and do that, but were not going to push the envelope in
this world.
8/9/2012 2Q2012 Q&A Q: Good morning, thank you very much. I guess I just need a little bit more clarification on the capital structure questions that have
been asked. If you could please just maybe define for us what you consider is a strong investment grade rating? Because as you
know, thats anywhere from BBB to AAA, that is my first question.
A: Yeah, ultimately the rating agencies decide our rating. I do think that if you look at our history, we tend to be pretty conservative.
Weve always had a very conservative approach and I dont see that fundamentally changing. So, strong the rating agencies will
decide for me but strong investment grade is something thats important to me.
8/9/2012 2Q2012 Q&A Q: And I guess, just while youre looking that up, I mean I know you just responded in terms of being thoughtful about the share
buyback. I mean clearly the $200 million you did exceeds the $150 million to $175 million that you had guided and presumably
baked into that EPS guidance. So, I guess embedded in the high end of the EPS guidance, as Sara mentioned, I mean should we be
expecting more? Like what have you baked in there? Maybe a sense around that.
A: Yeah. I mean I wont share that with you. What I will tell you is obviously the reason we are saying will be at the high end is
because weve done a bunch of extra share repurchase. You will recall that we have a refinancing for $400 million bonds next April
and there is a chance we could go early in that because its got a fixed coupon and it would make some sense to go early and lock in.
If we do that, there would be a bit of a make whole on it. So, were looking at that as we think about our EPS guidance and all thats
factored in there, but I wont give you a specific plan of what well do in the second half for practical shares. Kat, did pull the number.
What do we have 44 million shares?
8/9/2012 2Q2012 Q&A Q: Hey good morning, everybody. Well, firstly just on the share buyback, can you tell us what the, I guess, the current share count is?
I think the 47 million shares you guys report is probably a weighted average, is that right?
A: Yeah, Kat will pull the latest.
8/9/2012 2Q2012 Q&A Q: Okay, great. Thanks and just last thing, how should we think about the pace of the buybacks? Are you going to try to be
opportunistic in terms of buying it or are you just going to lay it out on a more consistent basis?
A: As you know, we and if you look at our history, we tend to be little choppy. We do tend to be opportunistic, although we dont
share our plans in advance certainly. So, I would not expect it to be just some uniform blind repurchase program. It is going to be
something that we analyze and do at our own pace.
8/9/2012 2Q2012 Prepared The actions we took will help drive higher levels of profit in the second half of the year and allow us to deliver our guidance range for
operating income and EPS. Diluted EPS for the quarter increased 11% due to the growth in operating income and the impact of share
repurchases. During the quarter, we repurchased $200 million of our shares, exceeding our 2012 buyback commitment of a
$150 million to $175 million. This contributed about 6 points to second quarter EPS growth. This brings the total amount repurchased
under the current program to $230 million as Sara mentioned earlier.
8/9/2012 2Q2012 Prepared We are obviously a company that is committed to a strong credit rating, so thats our stance on that doesnt change, but we are
willing to get out a little bit in front of our typical just end-year use of cash because for us, the environment makes sense to do so.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts The Dun & Bradstreet Corporation (Continued)
Date of
8/9/2012 2Q2012 Prepared Let me conclude my remarks by reiterating our commitment to create value for shareholders. Yesterday, we announced that our Board
of Directors doubled the size of our discretionary share repurchase program from $500 million to $1 billion, the largest in our history.
Since we have already repurchased $230 million of the original authorization through the second quarter of 2012, that leaves
$770 million available. At the current prices, this would represent roughly 25% of our market Capex, and it is our intent to complete
this program over the next two years. With interest rates at historic lows, a strong balance sheet and our confidence in the future cash
flow generation of our business, this is a very good time to revisit our capital structure. It would also give us the opportunity to reward
our loyal shareholders, as we complete our transformation.
8/9/2012 2Q2012 Q&A Q: Great and then last one from me, just if you can talk about your views around leverage given the increased repurchase
authorization and talking about getting the rest of that $770 million completed fairly quickly, how youre thinking about what the
leverage and capital structure of the business should look like?
A: Sure. Ill take that. A couple things, one we said that we would do the rest of the program over the next two years. So I wont reflect
on whether you consider that relatively quickly or not. I would say that where we are today is were looking at the environment. Interest
rates are at historic lows. We have a very strong balance sheet.
We throw off a lot of cash and we will believe our stock is a good investment. We, in particular, dont believe that all of the growth we
see coming as we finish the end of MaxCV is reflected. So, for us, it just makes some sense to go there. We are obviously a company
that is committed to a strong credit rating, so thats our stance on that doesnt change, but we are willing to get out a little bit in front
of our typical just end-year use of cash because for us, the environment makes sense to do so.
We throw off a lot of cash and we will believe our stock is a good investment. We, in particular, dont believe that all of the growth we
see coming as we finish the end of MaxCV is reflected. So, for us, it just makes some sense to go there. We are obviously a company
that is committed to a strong credit rating, so thats our stance on that doesnt change, but we are willing to get out a little bit in front
of our typical just end-year use of cash because for us, the environment makes sense to do so.
8/9/2012 2Q2012 Q&A Q: Okay. And just finally, I dont if you will be able to give me this, but Ill try. How much above that $1 billion comfort level in gross debt
would you be willing to go in the short to intermediate term?
A: I dont believe were going to go there, but thanks for asking. (Sara Matthew, Chairman, CFO, DNB)
A: Yeah, the one thing I will add is if we go above it, its temporary in the short run. (Richard H. Veldran, DNB)
8/9/2012 2Q2012 Q&A Q: Okay. And may I just ask why you need why maintaining the investment grade rating is important? I mean you generate as you
mentioned a pretty strong free cash flow and the company can sustain significantly more debt.
A: In an uncertain world, access to the capital markets is important. We all lived through the financial crisis, and to me, having a strong
balance sheet and having access is an important to live in that world.
8/9/2012 2Q2012 Q&A Q: I guess, maybe asking another way, like what would be the max leverage you would feel comfortable in running the business with?
I know in the past, you guys have just given sort of the gross debt number, but maybe just in terms of sort of a multiple, like what sort
of leverage do you guys get comfortable with?
A: Yeah, what I would say to you is Im not going to give you a specific multiple target but I will say that it is important to us to be
strong investment grade. Its a very important piece. Were a conservative company; we tend to run a pretty conservative balance
sheet, but right now, there is a unique time out there, again historic low interests. We have extreme confidence in our balance sheet
and our free cash flow generation. So, given that, it makes some sense to buy a little bit ahead of what we would normally do.
8/9/2012 2Q2012 Q&A Q: Okay and just to leverage as well, I mean I think in the past, you guys have talked about keeping gross debt under $1 billion and
you have except I guess this quarter, you just about crept over it. I just want to get a sense of I guess you talked about low interest
rates, et cetera, like what your appetite for that in now, if its changed? (Manav Shiv Patnaik, Analyst, Barclays Capital, Inc.)
A: Yeah, what we what we typically do is we look at our free cash flow generation for the year and we plan our repurchases with
that. What weve said, the only philosophically somewhat different thing now is given the low interest rate environment and given what
I would say is a very robust investment opportunity in the stock, we may buy a little bit ahead of our free cash flow generation. In the
long run, well get back to sort of the normal levels of just spending our free cash flow. But, yes, there is a period of time it could pop
up.
5/8/2012 1Q2012 Prepared We did not repurchase shares during the quarter but expect to buy aggressively going forward and remain fully committed to
completing our plan to buy between $150 million and $175 million of shares during 2012.
5/8/2012 1Q2012 Q&A Q: And then on the buyback. I know we didnt see any in the first quarter, but could you guys give us a sense of how youre looking at
executing that throughout the other three quarters? Is it more even, or how are you guys looking at it?
A: Yes, so a couple of things. Well, first, Ill start with saying that we are firmly committed to the $150 million to $175 million. We do not
give guidance around the specific buying patterns, so I wont share any of that today.
2/7/2012 4Q2011 Prepared We remain comfortable with our gross debt level in about a $1 billion range.
2/7/2012 4Q2011 Prepared In 2011, we returned approximately $200 million in cash to shareholders through dividends and share buybacks. For the full year, we
paid dividends totaling $70 million and repurchased $126 million in stock under our discretionary share repurchase program, which
was about $50 million more than our original plan going into the year. During 2012, we expect to return a higher level of cash to
shareholders. Weve increased our Q1 quarterly dividend from $0.36 per share to $0.38 per share, and we expect to repurchase about
$150 million to $175 million of shares through our discretionary share repurchase program. As in the past, we will be opportunistic
about the actual repurchases.
10/28/2011 3Q2011 Prepared In addition, we announced a $500 million discretionary share repurchase program, the largest in recent history. We believe that our
stock represents a great investment opportunity at this time. As we enter 2012, we will begin to reap the benefits of our Strategic
Technology Investment, which will translate into more rapid product innovation and sustained top line growth in North America. We
dont believe this upside is reflected in our stock and are creating the flexibility to take advantage of the current pricing.
Source: FactSet.
September 19, 2013

Corporates

Date of
10/28/2011 3Q2011 Q&A Q: Okay. On the buyback authorization, can you just clarify for us its a big number, but that doesnt necessarily mean that youre
going to use it near term. Can you talk about is there any expectation that youll deviate from the $100 million or so target that you
have for discretionary repurchase?
A: Well, the reason weve announced it, and we have a track record of completing all the share repurchases weve announced in the
10 years that Ive been here, is if you look at our share price today, we expect to buy ahead of excess cash because we want to take
advantage of the current prices. So that is actually our intention because we believe its the best investment for our investors at this
point in time. So we will buy ahead of excess cash, which has typically been the principle weve used in the past.
7/29/2011 2Q2011 Q&A As we sit here and as we look at the economic environment, were comfortable with our debt levels.
7/29/2011 2Q2011 Q&A Our capital structures fairly conservative. Were not over-levered. And it looks like its the right place to be given everything going on
around us.
7/29/2011 2Q2011 Q&A A couple of things and let me just step back and talk about our principal uses of cash. As I think weve talked about in the past, we
first invest in the business with our cash. The second thing we do is look for value-creating acquisitions, primarily tuck-ins where
they make sense for us; and third is we return excess cash to shareholders via both dividend and share repurchase. Weve said we
do a range, I think of about $60 million to $80 million this year. As we sit here and as we look at the economic environment, were
comfortable with our debt levels. And were comfortable with returning essentially in that same ballpark. So hopefully, that helps.
2/3/2011 4Q2010 Prepared As we look ahead, were comfortable with our current level of debt, and we expect to end 2011 with approximately the same level of
debt as we have today.
2/3/2011 4Q2010 Q&A Our thinking, one of the things we laid out was that our expectation was that were going to grow the dividend in line with operating
income growth. So I know $0.01 is $0.01 not, it could have been $0.02. but that was the thinking. Thats number one. But beyond
the $0.01 increase, we continue to stay focused on returning all excess cash to shareholders. So that looks at the dividend, which
is going to return to shareholders about $71 million, $72 million next year, but those includes our thoughts about share buybacks
continuing to be a part of returning cost to shareholders. So we look at it broader than the $0.01 increase on dividend.
5/10/2010 1Q2010 Prepared Finally, we expect to maintain a conservative balance sheet. Historically, our balance sheet has been conservative with a gross debt-
to-EBITDA ratio of 1.8x, which is lower than the S&P 500 average, excluding financials of about 2.4x. In addition, that composes about
20% of our capital structure when utilizing the market value of our equity.
In the near future, we expect our gross debt levels to remain in the $1 billion range and feel this amount of leverage is appropriate
at this time. Maintaining a conservative balance sheet will ensure we can efficiently refinance our debt as it matures over the next
few years. While we believe our maturities are very manageable, thanks to our strong A credit rating and strong free cash flow
generation, were mindful of future credit conditions. Specifically, we plan to be conservative, given the significant amount of non-
financial corporate bonds and bank debt maturing between now and the end of 2012.
5/10/2010 1Q2010 Prepared Moving on to our uses of cash, they remain unchanged. Specifically, we will maintain three key priorities. First, as discussed earlier
in the presentation, we will continue to invest to drive organic revenue growth. Second, well maintain our disciplined approach to
acquisitions. As you may know, over the past three years, we have averaged about $100 million annually for tuck-in acquisitions.
Going forward, well continue to look for opportunities for strategic tuck-in that will drive future growth and increase the long-term value
of the company. Third, well continue to repurchase shares to offset the effect of option dilution. And finally, we will return excess cash
to our shareholders in the form of dividends and discretionary share repurchases.
5/10/2010 1Q2010 Prepared Regarding dividends, we would expect them to grow in line with operating income growth. Regarding our share repurchases, we are
targeting about $100 million annually, considering our upcoming maturities. In addition, well continue to be flexible and opportunistic
as we monitor the overall credit and market conditions.
5/10/2010 1Q2010 Q&A Q: The gross debt number has increased over the past four to five years. And you mentioned that you want to keep it stable around
$1 billion, just the rationale behind it, and is that the 1.8 leverage target is your long-term leverage target that you want to stick to, or is
this a short-term goal?
A: Number one, there is no point over the last few years, we increased leverage and we brought our gross to about $1 billions. Theres
nothing really kind of magical about that. We are not sitting here today kind of looking at our uses of cash, looking to kind of make sure
we continue to invest in the business, continue to secure an organic growth and also looking at our long maturities that are coming
up. So $300 million bond are coming due next year. Our $650 million revolver is due in 2011. Our $400 million bond, 2012. So look at
all of those things and well say, "Okay, now is not the right time, we dont think its the right time to start any higher." We see how the
credit uncertainty is playing out in the next couple of years. In terms of that is going to work through in our thinking right now to say
kind of $1 billion. We feel comfortable at this level for the next couple of years. In terms of the growth rate to EBITDA ratio, right now,
we are at 1.8. We expect our free cash flow to grow over time. So the 1.8 at the end of year 2012 should come down slightly. Okay?
So to that point in time call once were done with all the refinancing of making sure that gets refinanced efficiently, we will continue to
look at that.
2/5/2010 4Q2009 Prepared We ended the year with $223 million of cash and cross debt of $964 million. As we look ahead, were comfortable with our current
level of debt and were targeting ending 2010 with approximately the same level of debt as we have today.
2/5/2010 4Q2009 Q&A Right now the principal we are using is we want to be prudent in terms of debt levels, we want to retain access to capital markets, and
we want to retain what I would call a conservative position on the balance sheet.
2/5/2010 4Q2009 Q&A Let me give you our principals for the use of excess cash, you have heard this before so bear with me. Number one we want to
make sure that we make investments to drive the business to improve our organic growth trajectory. I firmly believe that is the best
investment we can make for our investors. Thats the $110 to 130 million. Then we look at acquisitions then we return all excess cash
to shareholders in the form of dividends and share repurchase.
Source: FactSet.
September 19, 2013

Corporates

Date of
10/29/20093Q2009 Prepared Let me know move onto our uses of cash. As you know, we have three priorities in deploying our cash. First, we continue to invest to
drive organic growth to improve our value proposition and Sara discussed what some of those investments are.
Second, we continued to look for acquisitions to improve our long-term competitive position and growth prospects. Our acquisition
strategy is unchanged. We are focusing on investing in high growth markets like international as well as, investments in new
capabilities where we may have product gaps in our Q end offerings.
In addition, over the last year, we have increased our required rates of return and reduced our tolerance for dilution.
Third, we remain committed to returning excess cash to shareholders through a combination of cash dividends and share
repurchases. In the third quarter, we returned a total of $82 million to shareholders through dividends and share buybacks
7/31/2009 2Q2009 Prepared Let me now move on to our uses of cash. As you know, we have three priorities in deploying our cash. First, we continue to invest to
drive organic growth. So far this year we have made investments in data quality and new product innovations like D&BI enterprise
version, Optimizer 2.0 and market edge, as Sara mentioned. We believe these investments will drive organic growth when the
economy recovers. Second, we continued to look for acquisitions or divestments to improve our long term competitive position and
growth prospects.
In the second quarter we invested $28 million in China for the acquisition of Roadway and signed an agreement to acquire ICC in the
UK for $16 million. From a revenue perspective, these transactions will have a small favorable impact this year and add about seven
points of growth to international next year. From an earnings per share perspective, these transactions will have approximately $0.05
of dilution this year but will be accretive next year.
In addition, as you saw from our 8K in May, we sold our Italian domestic operations to CRIF. From a top line perspective, our 2009
annual international revenue will be reduced by approximately $48 million. However, we kept the cross border business which was the
most profitable and we will incur operating income neutrality this year and secure future bottom line growth. We are very pleased with
these transactions as they position our international business for continued top line and bottom line growth and higher profitability.
Third, we remain committed to return excess cash to shareholders through a combination of cash dividends and share repurchases.
In the second quarter we returned a total of $55 million to shareholders. We paid $18 million in dividends and we also bought back
shares valued at $37 million, $28 million of which was under our discretionary program and the balance was used to mitigate dilution
from equity awards. Looking ahead, we continue to target a total of $100 to $150 million in discretionary share buybacks in 2009 and
as such expect a higher level of repurchases in the second half of the year.
7/31/2009 2Q2009 Q&A Q: My final question Steve, you mentioned the commitment to total shareholder return, so in the context of your EBIT expectations
arent going to be where you would like them to be, why arent you lifting your repurchase activity? I appreciate you want to keep
leverage or Tasios at that leverage but given the stocks performance today you could easily double or triple what youre saying youre
going to do on repurchase and it wouldnt change your leverage materially. Can you talk about if youre not going to buy back stock
aggressively close to $70, when are you?
A: Let me just say two things, one I think Tasios said this, I think in the range of $100 to $150 which is our share repurchase range
for the year I think weve used about $45 million of that roughly so we have a lot more if you will room in the second half. Thats the
first thing I would say and thats quite consistent with Tasios. Second, as you know from your history with us, weve always been
opportunistic. At times we thought it was going to be this and then its been higher and you know that from your history with us as do
the rest of our investors.
So, you should assume that were always mindful of all of the factors that you mentioned including how were performing relative to
the market, relative to our own expectations, keeping track of capital ratios as you mentioned. So, you should assume that the way
weve behaved in the past and all the criteria that you mentioned are in our heads as we move forward. We watch that every week,
every month, every quarter.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary The Dun & Bradstreet Corporation
LTM Ended
6/30/13
Profitability
Operating EBITDA 587.2 568.0 530.7 540.4 578.9 558.6
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 0.5 1.7 1.5 1.1 0.2 0.1
Long-Term Senior Unsecured Debt 903.1 959.2 969.6 963.0 1,290.5 1,407.9
Other Debt 1.2 2.6 2.4 0.9 0.2 0.1
Equity Credit
Total Debt with Equity Credit 904.8 963.5 973.5 965.0 1,290.9 1,408.1
Cash Flow
Funds From Operations 475.9 431.3 370.0 345.1 399.0 364.3
Cash Flow from Operations 448.4 400.0 339.3 312.9 357.8 348.9
Total Non-Operating/Nonrecurring Cash Flow (11.9) (30.5) (19.9)
Dividends (65.6) (71.5) (70.0) (70.4) (69.0) (65.3)
Free Cash Flow 311.4 232.7 183.5 189.1 214.4 216.7
Net Acquisitions and Divestitures (60.4) (62.9) (195.8) (8.4) 9.1 1.2
Net Debt Proceeds 178.1 56.0 3.1 (17.4) 320.4 390.0
Net Equity Proceeds (358.1) (204.4) (126.7) (155.8) (487.9) (528.3)
Other (Investing and Financing) (96.5) 37.3 (8.5) (1.6) 8.7 (1.7)
Total Change in Cash (25.5) 58.7 (144.4) 5.9 64.7 77.9
Income Statement
Revenue 1,726.3 1,687.0 1,676.6 1,758.5 1,663.0 1,643.7
Revenue Growth (%) 8.0 (2.3) (0.6) 4.9 (5.4) (4.7)
Operating EBIT 528.7 509.9 462.6 459.3 500.6 484.0
September 19, 2013

Corporates

238 Company Summaries The Interpublic Group of Companies, Inc.
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
The Interpublic Group
of Companies, Inc.
IDR BBB
Bank Credit Facility BBB
Senior Unsecured Notes BBB
Cumulative Perpetual
Preferred Stock BB+
Rating Outlook
Stable
The Interpublic Group of Companies, Inc.
Key Rating Drivers
One of the Largest GHCs: Interpublic Group of Companies, Inc.s (IPG) rating refects its
position in the industry as one of the largest global advertising holding companies (GHC), its
diverse client base and the companys ample liquidity.
Leverage to Remain Below 2.5x: The ratings refect Fitchs expectation that IPG will manage
unadjusted gross leverage at a level below 2.5x. For the last twelve months ended June 2013,
Fitch calculates pro forma unadjusted gross leverage at 2x.
Geographic and Service Diversifcation: The ratings incorporate the cyclicality of the
advertising industry and potential top-line volatility due to client wins or losses in any given year.
IPG has reduced its exposure to U.S. advertising cycles by diversifying into international markets
and marketing services businesses. Roughly 45% of IPGs revenue is generated outside the
U.S. In 2012, IPG faced organic revenue headwind challenges of roughly 3% due to the loss of
clients in 2011. Fitch expects 2013 headwinds to be minimal and is projecting organic growth of
2%3%, slightly above Fitchs current U.S. GDP growth forecast of 1.9%.
Scalable Cost Structure: The risk of revenue cyclicality is balanced by the scalable cost
structures of IPG and the other GHCs. However, IPG still lags its peers in consolidated EBITDA
margin. As of June 30, 2013, Fitch calculates EBITDA margin of 12.3%, which compares to
15.3% for Omnicom Group, Inc. Fitch expects EBITDA margin of roughly 13% by year-end 2013.
Fitch also expects IPG to achieve peer-level margins over the next four to fve years, assuming
low to midsingle-digit organic revenue growth over this timeframe.
Positive Rating Triggers: A public commitment by the company to maintain gross unadjusted
leverage below 2.0x, coupled with peer-level EBITDA margins, could warrant upgrade
consideration.
Negative Rating Trigger: Fitch is comfortable with managements willingness and ability to
maintain its BBB rating. However, a change in the companys posture toward maintaining
adequate bondholder protection over the near and long term could affect the rating negatively.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
September 19, 2013

Corporates

McCann Worldgroup DraftFCB Marketing Specialists (CMG)
Portfolio Summary The Interpublic Group of Companies, Inc.
(As of June 30, 2013)
Lowe & Partners Media Brands Independents
McCann Erickson Worldwide
McCann Health
Momentum Worldwide
MRM
MCN/Fortune Promoseven
Marketel
Avrett Free Ginsberg
Fitzgerald+CO
TM Advertising
Draftfcb
Draftfcb Healthcare
Hacker Group
Tierney
R/GA
Campbell Mithun
Carmichael Lynch
Dailey
Gotham Inc.
Hill Holliday
IW Group
The Martin Agency
Mullen
Lowe & Partners Worldwide
Lowe Campbell-Ewald
ICC Lowe
Deutsch Inc., a Lowe & Partners Company
HUGE
UM
Initiative
ID Media
NSA Media
Wahlstrom
Reprise Media
IPG Media Lab
MAGNA GLOBAL
ORION Trading
Weber Shandwick
Jack Morton Worldwide
Octagon
GolinHarris
FutureBrand
Cassidy & Associates
DeVries Global
Rogers & Cowan
KRC Research
September 19, 2013

Corporates

U.S.
55%
U.K.
8%
Continent
al Europe
12%
Asia
Pacific
12%
Latin
America
6%
Other
7%
Interpublic Group of Companies, Inc.
(As of Dec. 31, 2012)
Continental
Europe
12%
Integrate
d Agency
Network,
3074.6,
86%
Constitue
ncy
Manage
ment
Group,
14%
Revenues by Segment
(As of Dec. 31, 2012)
Integrated
Agency
Network
86%
Constituency
Management
Group
14%
Integrate
d Agency
Network
86%
Constitue
ncy
Manage
ment
Group
14%
EBITDA by Segment
(As of Dec. 31, 2012)
Integrated
Agency
Network
86%
Constituency
Management
Group
14%
September 19, 2013

Corporates

Event Risk Dashboard Interpublic Group of Companies, Inc.
a
Figures in millions. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a company is
able to take from expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular L
Corporate Governance/Ownership L
Acquisition M
Divestiture L
Covenant Breach M
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Strong FCF generation and an enterprise value of approximately $7 billion to $8
billion could make Interpublic Group (IPG) an attractive LBO candidate.
No material restrictions limiting subsidiary guarantees in the bond indentures.
Lack of tangible assets may make an LBO less appealing to lenders.
Global ad agency holding companies (GHCs) are generally highly rated and
being highly leveraged could be a competitive disadvantage as clients typically
provide GHCs with cash up front for media purchases.
Secular Risk Low
IPG is a large, diverse global advertising agency that can compete in nearly all
advertising and marketing services.
The fragmentation of the media landscape due to the proliferation of digital and
mobile advertising media has increased the importance of well-diversifed GHCs.
IPG has developed its digital capabilities, both organically and through
acquisitions.
Corporate Governance/Ownership Low
There are no material corporate governance issues.
Nearly all members of the board of directors are independent. Michael Roth, who
is the chairman and CEO, is the sole non-independent director.
IPG management has demonstrated its conservatism by deleveraging through
both EBITDA expansion and absolute debt reduction. Total debt balance
(excluding preferred stock) has been reduced from $2.3 billion at year-end 2007
to current levels of $1.6 billion.
As mentioned above, Fitch believes it would be a competitive disadvantage for a
GHC to be highly leveraged.
Fitch believes capital allocation will be focused on share repurchases and
acquisitions, but that it will be done in a disciplined manner.
Fitch believes IPG is committed to its current rating. However, similar to other
highly rated entities, the potential for fnancial policy revisions is an inherent risk.
No material restrictions limiting subsidiary guarantees in the bond indentures.
Fitch believes that any future debt would be issued by IPG. However, Fitch
company structures.
Litigation Risk Low
Rating History
B
B+
BB
BBB
BBB+
A
B
BB
BB+
BBB
A
A+
1.5
2.0
2.5
3.0
3.5
4.0
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
4
8
12
16
20
Source: Bloomberg.
Interpublic Group of Companies, Inc. Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Interpublic Group of Companies, Inc. (Continued)
a
Figures in millions. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a company is
Contingent Acquisition Payments
IPG has contingent earnout commitments that are paid out when an IPG-acquired
agency meets certain operating metrics that were agreed to at the acquisition
close. IPG estimates these payments to total roughly $115 million through 2016.
With certain acquisitions, IPG has the option to redeem noncontrolling interests in the
future; these potential cash outfows amount to roughly $116 million through 2016.
The advertising industry is subject to regulation to ensure that the advertising is
not false or deceptive. In the U.S., advertising is regulated by the authority of the
Federal Trade Commission.
IPG is subject to international regulations, which are different in each jurisdiction.
Fitch believes damage to IPG's reputation could be potentially more costly than any
monetary fne imposed by a regulatory body.
YTD June 2013 180.6
2012 350.5
2011 400.8
Note: No share repurchase activity prior to 2011.
Covenant Breach Risk Medium
(x)
Covenant
Level
Ratio/Test as
of 6/30/13
EBITDA
Cushion (%)
Consolidated Interest Coverage 5.0 7.8 36
Minimum EBITDA 600
a
868.0
a
31
YTD June 2013 48.2
2012 145.5 94.8
2011 63.1 133.5
2010 61.9 53.6
2009 72.4 11.1
2008 106.0 27.9
2007 151.4 69.6
Fitch expects IPG will continue to make a number of small acquisitions
internationally and to expand its digital capabilities.
Fitch does not expect any divestitures from its core businesses (Facebook sale
accounts for $134 million of 2011 divestiture amount and $95 million in 2012).
September 19, 2013

Corporates

Corporate Governance Overview Interpublic Group of Companies, Inc.
a
Most recent filings on Bloomberg as of June 2013. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Michael I. Roth Chairman and CEO 1,400,000 3,362,388 2,331,191 2,100,000 439,715 9,633,294
Frank Mergenthaler EVP and CFO 908,333 249,470 1,455,769 1,000,530 215,560 3,829,662
Philippe Krakowsky EVP Chief Strategy and Talent Officer 754,167 166,225 1,132,262 833,775 404,063 3,290,492
Christopher Carroll SVP Controller and CAO 478,958 850,000 388,196 400,000 5,702 2,122,856
Andrew Bonzani SVP, GC and Secretary 543,375 291,147 350,000 63,060 1,247,582
Board of Directors
Jocelyn
Carter-Miller
55 Y May 2013
May 2014
2007 100,000 100,000 200,000 Audit, Corporate
Governance
The Principal Financial
Group, Inc.; Netgear, Inc.
President
TechEdVentures, Inc.
Jill M.
Considine
68 Y May 2013
May 2014
Leadership Talent;
Ambac Financial Group,
Inc.; Atlantic Mutual
Insurance Companies;
Mizuho Securities, USA;
InfraHedge, Ltd.
Former Chairman
and CEO Depository Trust &
Clearing Corporation
Richard A.
Goldstein
Presiding
Director
71 Y May 2013
May 2014
Leadership Talent;
Fortune Brands, Inc.;
Fiduciary Trust company
International;
Beam Inc.
Retired Chairman
and CEO International
Flavors & Fragrances Inc.
H. John
Greeniaus
68 Y May 2013
May 2014
Leadership Talent;
Bessemer Trust
Investment Services
company; CCLIndustries
Inc.; Nabisco Inc.;
Penzoil Inc.; Primedia
Inc.; True North
Communications Inc.
Retired Chairman and CEO
Nabisco Inc.
Mary J. Steele
Guilfoile
59 Y May 2013
May 2014
2007 120,000 100,000 10,000 230,000 Audit (Chair); Executive Valley National
Bancorp; C.H. Robinson
Worldwide, Inc.
Chairman
MG Advisors, Inc.
Dawn Hudson 55 Y May 2013
May 2014
2011 100,000 100,000 200,000 Audit Allergan, Inc; Lowes
Companies, Inc.
Vice Chairman The
Parthenon Group
WillaimT. Kerr 71 Y May 2013
May 2014
2006 100,000 100,000 200,000 Compensation and
Leadership Talent
(Chair); Executive
Arbitron Inc.; Whirlpool
Corporation
Retired President and CEO
Arbitron Inc.,
Michael I.
Roth
Chairman
67 N May 2013
May 2014
2002 Executive (Chair) Pitney Bowes Inc.;
Ryman Hospitality
Properties Inc.
CEO Interpublic
David M.
Thomas
Presiding
Director
64 Y May
2013May
2014
2004 100,000 100,000 20,000 220,000 Audit; Corporate
Governance (Chair);
Executive
Fortune Brands Home &
Security, Inc.
Retired Chairman and CEO
IMS
(%) Base Salary Annual Incentives Long-Term Incentives
NEOs Pay Mix 25 25 50
Base Salary Subject to individual employment agreements, which give the company the ability to increase, but not decrease, base salary. For FY2012, base
salary for Mergenthaler increased 11% and Krakowsky increased 7%.
Annual Incentive Targets were: Roth 160% of base salary, Mergenthaler 100%, Krakowsky 100%, Carroll 60% and Bonzani 75%. Potential payout
ranges from 0%200%. Payouts were: Roth 94% of target, Mergenthaler 139%, Krakowsky 133%, Carroll 107% and Bonzani 97%.
Long-Term Incentives Stock options vest 33%, 33% and 34% in the second, third and fourth year. Performance cash and performance shares 3-year vesting. Payout
potential for awards tied to performance ranges from 0% to 300% of target. Payouts achieved were 125.8% of the target for all NEOs.
September 19, 2013

Corporates

Corporate Governance Overview Interpublic Group of Companies, Inc. (Continued)
a
Most recent filings on Bloomberg as of June 2013.
Reginald K. Brack retired from the board effective May 24, 2012. In August 2011, Dawn Hudson was elected to become a member of the board.
Christopher Carroll became a named SVP, controller and chief accounting officer in 2011. Andrew Bonzani was hired as SVP, general counsel and secretary effective February 2012.
In addition to the common stock, there are shares of Series B Cumulative Convertible Stock that are not entitled to vote.
There were no related-party transactions; clawback policy is in place; anti-hedging policy is in place.
a
Various 28,114 6.6
Bank of New York Mellon Corp. 23,957 5.6
Hotchkis and Wiley 21,437 5.0
Ariel Investments LLC 17,805 4.2
Various 17,449 4.1
Lord Abbett & Co. LLC 15,050 3.5
Iridian Asset Management LLC 14,258 3.3
Cramer Rosenthal McGlynn LLC 10,916 2.6
Pzena Investment Management LLC 10,896 2.5
Total Top 10 185,894 43.4
Andrew Bonzani 4 <1.0
Christopher Carroll 235 <1.0
Jocelyn Carter-Miller 44 <1.0
Jill M. Considine 80 <1.0
Richard A. Goldstein 88 <1.0
H. John Greeniaus 223 <1.0
Mary J. Steele Guilfoile 54 <1.0
Dawn Hudson 10 <1.0
William T. Kerr 95 <1.0
Philippe Krakowsky 463 <1.0
Frank Mergenthaler 969 <1.0
Michael I. Roth 4,409 <1.0
David M. Thomas 67 <1.0
All Directors and Executive Officers as a Group (14 Persons) 6,748 1.6
Note: Directors and NEO holdings include stock options exercisable within 60 days of April 2, 2013.
Annual Incentive Organic revenue growth (20% weight), operating income after incentives margin (50%) and various qualitative factors (30%).
Long-Term Incentives Organic revenue growth (30% weight), operating income after incentives margin (70%) over two years.
September 19, 2013

Corporates

Pension Screener
a
2013 "At Risk" Shortfall? No Estimated Pension Outflow
Greater than 10%?
No
Plan Assets
Fair Value of Plan Assets (U.S.) 115.7 107.2
Fixed Income as Percent of Portfolio (U.S., %) 44.0 47.0
Equity as percent of Portfolio (U.S., %) 22.0 25.0
Cash/ST Investments As percent of Portfolio (U.S., %) 0.0 0.0
Other as percent of Portfolio (U.S., %) 34.0 28.0
Level 3 Plan Assets (Worldwide) 88.3 85.0
Fair Value of Plan Assets (Non-U.S.) 381.7 363.6
Actual Return on Plan Assets (U.S.) 13.7 9.7
Actual Return on Plan Assets (Non-U.S.) 17.6 9.0
Employer Contributions (U.S.) 5.6 14.1
Employer Contributions (Non-U.S.) 17.7 65.0
Estimated Qualified Contributions Next Year (U.S.)
b
1.0 5.6
Projected Benefit Obligation (PBO, U.S.) 140.6 129.0
Projected Benefit Obligation (Non-U.S.) 532.4 456.6
Expected Return on plan assets (%, U.S.) 7.3 7.5
Compensation Increases (%, U.S.) 0.0 0.0
Benefits Paid (U.S.) (10.8) (11.9)
Net Periodic Cost/Income (Worldwide) 20.8 20.7
Service Cost (U.S.) 0.0 0.0
Service Cost (Non-U.S.) 10.2 9.6
Expected Return (U.S.) 7.7 7.5
Interest Cost (U.S.) 6.3 6.8
Leverage Screener
PBO (Under-)/Overfunded Status (Worldwide) (175.6) (114.8)
Pension Funded Status (%, Worldwide) 73.9 80.4
Pension Funded Status (%, U.S.) 82.3 83.1
Level 3 Plan Assets/Plan Assets (%, Worldwide) 17.8 18.1
Cash Flow Screener
2012 At Risk Shortfall (80%) (U.S.) 0.0 0.0
U.S. PBO Underfunded Status/Seven Years 3.6 3.1
Total Estimated Pension Outflows (U.S.) 3.6 3.1
Estimated Pension Outflows (U.S.)/(FFO + Pension Contribution) (%) 0.5 0.5
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Debt Structure
Companies, Inc.
($ Mil., As of June 30, 2013 Proforma for Q3 Activity)
$1 Billion Sr. Unsecured Credit Facility
due May 2016

6.25% Unsecured Notes due 2014 350.0
10.00% Senior Unsecured Notes due 2017
a

2.25% Senior Unsecured Notes due 2017 300.0
4.00% Senior Unsecured Notes due 2022 250.0
Short-Term Borrowings
(Uncommitted Credit Facilities)
186.0
Other Notes and Capitalized Leases 83.5
Total Debt 1,669.5
5.25% Series B Cumulative Convertible
Perpetual Preferred Shares
221.5
Fitch Hybrid Equity Credit (110.8)
Total Debt with Equity Credit 1,780.2
a
In July 2013 the company redeemed all $600 million
principal amount of the 10.0% Notes due 2017.
Companies, Inc.
($ Mil., As of June 30, 2013 Proforma for Q3 Activity)
Amount
Dec. 31, 2013 186.0
Dec. 31, 2014 350.0
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2017
a
300.0
Thereafter 750.0
Total 1,586.0
a
Redemption of 10.0% Notes due 2023 reflected in 2017
maturities. Note: Excludes $83.5 million of other notes
payable and capitalized leases.
Organizational Structure The Interpublic Group of Companies, Inc.
($ Mil., As of June 30, 2013 Pro Forma for July Redemption)
IDR Issuer Default Rating. Note: IAN and CMG EBITDA do not include corporate expense.
Public
Integrated Agency Network (IAN)
LTM
Constituency Management Group (CMG)
LTM
Amount
Outstanding Rating
Senior Unsecured Notes due 2014 to 2022 1,400.0 BBB
$1,000 Million Revolving Facility due 2016 0.0 BBB
$221.5 Million Preferred Stock (with Equity Credit) 110.8 BB+
$320.1 Million Uncommitted Lines of Credit 186.0
Other Debt and Capital Leases 83.5
Total Debt 1,780.2
EBITDA 867.4
Amount
Revenues 5,738.1
EBITDA 809.6
Rating
Revenues 1,294.8
EBITDA 139.8
Business Segments
100% Equity
Provides global communication and marketing services.
McCann Worldgroup
Draftfcb
Lowe & Partners
Stand-alone agencies include:
Hill Holliday;
Mullen.
Provides diversified services, including public relations; meeting
and event production; sports and entertainment marketing;
corporate and brand identity; and strategic marketing
consulting.
Specialist marketing service firms include:
FutureBrand (corporate branding);
Jack Morton (experiential marketing);
Octagon (sports marketing);
WeberShandwick (public relations).
September 19, 2013

Corporates

Debt and Covenant Synopsis The Interpublic Group of Companies, Inc.
Credit Facility Indenture Indenture
Overview
Description of Debt $1 billion credit agreement $350 million 6.25% Senior Unsecured due 2014 $300 million 2.25% Senior Unsecured due 2017
$250 million 4.00% Senior Unsecured due 2022
$500 million 3.75% Senior Unsecured due 2023
Document Date May 31, 2011 (amended and restated);
amended on Nov. 6, 2012
Nov. 12, 2004; supplemental indenture dated Jun.
15, 2009
March 2, 2012; supplemental indenture dated
Nov. 8, 2012.
Maturity 5/31/16 11/15/14 03/15/22, 11/15/17, 02/15/23
Financial Covenants
Consolidated
Leverage (Maximum)
3.25x, stepping down on Sept. 30, 2011
to 3.0x; and to 2.75x on Dec. 31, 2011
and thereafter.

Latest 12 Months
EBITDA (Minimum)
$550 million, stepping up to $600 million
on Dec. 31, 2011. The company satisfies
the agreements definition of investment
grade, therefore there is no EBITDA
covenant.

Interest Coverage
(Minimum)
4.5x, stepping up on Sept. 30, 2011, to
5.0x.

Change of Control
(CoC) Provision
CoC triggers an event of default. CoC
takes place if a) any person becomes
the beneficial owner, directly or
indirectly, of more than 30% of the then-
outstanding number of shares of the
companys voting stock; or b) individuals
who constituted the board of directors
cease to constitute at least a majority
of the board over a 24-month period,
unless each director was approved by
two-thirds of directors in office at the
beginning of the period.
Bondholders for the 10% notes due 2017 have
a CoC put offer at 101%. CoC takes place if
a) any person becomes the beneficial owner,
directly or indirectly, of more than 50% of the then-
outstanding number of shares of the companys
voting stock; b) individuals who constituted the
board of directors cease to constitute at least a
majority of the board, unless each new director
was approved by the board of directors; c) sale/
disposition of all or substantially all the assets
of the company; or d) the company adopts a
dissolution or liquidation plan.
CoC put offer at 101%, triggered if a CoC occurs
and the notes are not rated investment grade by
at least two of three rating agencies. CoC takes
place if a) any person becomes the beneficial
owner, directly or indirectly, of more than 50%
of the then-outstanding number of shares of
the companys voting stock; b) individuals who
constituted the board of directors cease to
constitute at least a majority of the board, unless
each new director was approved by the board of
directors; c) sale/disposition of all or substantially
all the assets of the company; or d) the company
adopts a dissolution or liquidation plan.
Limitations on
Acquisitions
Debt Restrictions
Limitation on
Subsidiary Debt
Standard carveouts exist. Also, non-
U.S. subsidiaries may incur debt
in the ordinary course of business.
Other unsecured debt of consolidated
subsidiaries may not exceed $50 million.
Limitation on
Secured Debt
Permitted lien carveouts, including a
basket for liens not otherwise permitted,
which may not exceed $50 million.
Liens not permitted unless a pari passu lien is
granted to the notes. Standard carveouts exist.
There is also a general lien basket that limits
liens and sale-lease back transactions to 15% of
consolidated net worth. Fitch estimates the basket
at approximately $400 million as of Dec. 31, 2012.
Liens not permitted unless a pari passu lien is
granted to the notes. Standard carveouts exist.
There is also a general lien basket that limits
liens and sale-lease back transactions to 15%
of consolidated net worth. Fitch estimates the
basket at approximately $400 million as of Dec.
31, 2012.
Restricted Payments The company satisfies the agreements
definition of investment grade, therefore
there are no restricted payments. In the
event the company was not investment
grade, there would be standard
carveouts and a restricted payment
basket of $800 million in any fiscal year,
plus cumulative (starting on May 18,
2011) asset dispositions.
Other
Cross-Default Payment default on debt greater than
$50 million.
Cross-Acceleration Default that could permit the acceleration
of debt that is greater than $50 million.
Cross-acceleration on any debt greater than $20
million on all securities except 10% Senior Notes,
where threshold is $50 million.
Cross-acceleration on any debt greater than $50
million.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Interpublic Group of Companies, Inc.
Date of
4/19/2013 1Q20113 Prepared Were pleased to report a first quarter that represents a solid beginning to 2013. This includes revenue growth consistent with targeted
range for the full year, continuing discipline on expenses and further return of capital to shareholders, including an additional share
repurchase authorization and a higher dividend, as previously reported. On top of that, during the quarter, we won a number of new
business assignments in highly competitive circumstances. Year-to-date, we are solidly net new business positive, and our pipeline of
opportunities is promising.
4/19/2013 1Q20113 Q&A Q: Two for Frank on some of the numbers. On the cash flow side, Frank, should we assume the buyback this year is sort of paced
with your cash flow generation? I think certainly from a working cap perspective, Q1 is usually a low quarter. So any color on that
would be helpful. And then maybe another sort of housekeeping one, just on the Olympics. Can you just remind us of the Olympic
headwinds this year, the timing? Are they all in Q3? Or is it more spread out? And any way to sort of size those as we think about the
rest of the year?
A: On the share buybacks, if you just take a look at the first quarter, our average price was a little bit over $12.00$12.25. So we dont
look at it as certain price targets. And the way to do this is over a period of time, do it on a program basis. We do have some flexibility
to move on blips of our share price, but the right way to do this is consistent with our cash flow and over a reasonable period of time.
Otherwise, it distorts the marketplace and its not its consistent with what the way weve done it in the past and its worked well
for us.
4/19/2013 1Q20113 Prepared The significant deleveraging that we have accomplished and the strength of our balance sheet provide additional levers that allow
us to support the needs of the business by investing in talent and targeted M&A while simultaneously returning capital to our owners.
This combination of factors, outstanding agency brands with strong capabilities in high-growth areas, such as digital and emerging
markets, plus the focus on cost management and strong financial foundation positions us well to create significant shareholder
value this year and beyond. Were pleased to report a first quarter that represents a solid beginning to 2013. This includes revenue
growth consistent with targeted range for the full-year, continuing discipline on expenses and further return of capital to shareholders,
including an additional share repurchase authorization and a higher dividend, as previously reported. On top of that, during the
quarter, we won a number of new business assignments in highly competitive circumstances. Year-to-date, we are solidly net new
business positive, and our pipeline of opportunities is promising. Another Q1 highlight was continued share repurchases. During the
quarter, we bought back 6.2 million shares using $76 million, and our board has increased our authorization by $200 million to a total
of $500 million. And in February, as reported, our board also increased our quarterly dividend by 25%.
4/19/2013 1Q20113 Q&A Q: Good morning. Was wondering if you could just talk about your credit. What has S&P laid out as the requirement to get pushed up
to investment grade?
A: We think that were there, and the issue continues to be consistency in terms of our performance. And if you just look at the
percentages and debt to equity and all the metrics that are typically used, as evidenced by the other rating agencies that do have us
as investment grade, we think that they should be there. But again, frankly, last years results, which had a bit of a hiccup if you look
at it from our stated objective that goes to the issue of consistency. So our goal is to continue to deliver as we promise, show it on a
consistency basis, and we would expect to see that reflected.
4/19/2013 1Q20113 Prepared Since initiating our return of capital programs two years ago, we have returned a total of $1.1 billion to shareholders in dividends and
through the repurchase of 81 million shares. We retired an additional 33 million dilutive share equivalents through the redemption of a
convertible debt.
2/22/2013 4Q2012 Prepared We also sold our remaining investment in Facebook and, in so doing, increased our existing share repurchase authorization by
$100 million. We are pleased to announce today two additional measures: an increase of 25% to the quarterly dividend and additional
share repurchase authorization in the amount of $300 million on top of the $100 million remaining on a repurchase authorization as of
Jan. 1. These are further signs of the strength of our financial condition and our confidence in the operating trajectory of our business.
2/22/2013 4Q2012 Q&A Yeah, David, we look at our leverage constantly. Right now, were very comfortable with where we are. We think that weve de-
leveraged at an appropriate level. We constantly look at maturities when they come due. I think youve seen us be very opportunistic
in the capital markets to continue to strengthen our balance sheet. But right now, were very comfortable with where we are from a
leverage perspective.
2/22/2013 4Q2012 Q&A Q: Hey, thanks. A couple of questions on the sort of balance sheet generally. The first is, if you look at the combined retirement of the
debt thats going to be funded by the $800 million you prefunded, can you give us a general sense of how much interest expense,
annual interest expense, reduction we should expect from that? The second question is you re-upped the buyback authorization.
But could you give us a little bit better sense of timing as to when you expect to complete that $300 million? I guess the last question
is when you look at your slide on sort of bank covenant leverage and youre below 1.9 times slightly, and youve got another kind of
almost full turn of capacity and at very low leverage, how did you kind of how do you arrive at capital return decisions at this point?
Because it seems like you have a little bit more dry powder than suggested by the current authorization. Thanks.
A: Well, first of all, what we said when we did the debt refinancing, that in 2013 it would have a slight positive effect. In 2014, it
should be about $0.05. And Frank and the team are shaking their heads. So, that should be $0.05 a share for us in 2014. When we
embarked on the, quote, turnaround of IPG, we said we were going to bolster our balance sheet, build up our cash reserves to secure
any company thats going through a turnaround. We wanted to make sure we were well positioned. And what we said was that its a
point in time when we felt we had sufficient visibility into the trajectory of where we were heading, we would start returning any excess
cash that we had on our balance sheet to our shareholders. So, when we instituted the dividend and started the share buyback
program, that was us making good on the promise that we had excess cash on our balance sheet; we view shareholder buybacks and
dividends as a critical component of enhancing shareholder value; and I think the $1 billion that weve returned to the shareholders
is a pretty good indication that we meant it when we said it. Obviously, as you go forward, the timing of when we buy in our shares
is we like to use it on an orderly basis according to a program as we roll it out. But its always a lever that you have in terms of
share buyback, whether it be opportunistic or whether you wait as the visibility into the year goes on. And I think thats the way any
normal company handles share buybacks. So, I think the key here is weve indicated how we view returning capital in the form of
dividends and buybacks and we will continue to do that. But were not going to go out and say exactly when were going to buy it and
when were going to increase it or not. I mean but I think you should get a pretty good indication of our boards view in enhancing
shareholder value.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Interpublic Group of Companies, Inc. (Continued)
Date of
2/22/2013 4Q2012 Prepared On slide 11 is our total debt at year end from 2007 through 2012. You can see our trend of deleveraging over this period. The increase
at our year-end 2012 was temporary, due to the double carry of $800 million we issued in November to finance the redemption of
two debt calls in March and July. Excluding the redundant $800 million, the pro forma year-end debt level was $1.652 billion. As
weve pointed out, with our boards action this week, the total of our repurchase authorizations is $400 million, and we are addressing
these shares in our remaining convertible debt. Our credit profile was recognized by our extremely successful debt issuance during
the fourth quarter. Most important, though, was our ability to respond to a volatile economy and our revenue headwinds by closely
managing costs, also evident in our aligning incentives to the reality of our performance.
2/22/2013 4Q2012 Prepared We continue to be very active in using the strength of our balance sheet to drive value creation. In Q4 we repurchased 14 million
shares, bringing our activity for the year to 33 million shares and $351 million. In addition, we were opportunistic in the capital
markets, with the issuance of $800 million of debt at the lowest rates in IPG history. The funds will be used to finance two debt calls
in March and July of this year. We also sold our remaining investment in Facebook and, in so doing, increased our existing share
repurchase authorization by $100 million. We are pleased to announce today two additional measures: an increase of 25% to the
quarterly dividend and additional share repurchase authorization in the amount of $300 million on top of the$100 million remaining on
a repurchase authorization as of January 1. These are further signs of the strength of our financial condition and our confidence in the
operating trajectory of our business. Over the past two years since initiating our return of capital programs, weve put nearly $1 billion
to work for shareholders in dividends and the repurchase of 75 million common shares. Weve also retired an additional 33 million
dilutive share equivalents in convertible debt.
10/25/2012 Prepared We ended the quarter with $1.2 billion of cash and short-term marketable securities in the balance sheet. That total does not include
our ownership interest in Facebook and reflects our share repurchase, dividends and deleveraging activity over the past 12 months. In
that time, we also invested $190 million in acquisitions, focused on high-growth digital, marketing services, and specialty disciplines as
well as high-growth markets around the world.
7/26/2012 2Q2012 Prepared Acquisitions in Q2 reflect our emphasis on high-growth disciplines and expanding our digital capabilities. They include a London-
based European digital search specialist group, a full service digital agency in France, and a healthcare market research access
agency in the U.K. Our financing activities used $112 million, the largest component of which was $65 million for share repurchases,
$26 million on our quarterly stock dividend and $35 million to acquire additional interest and consolidate subsidiaries. The net
decrease in cash and marketable securities in the quarter was $72 million.
7/26/2012 2Q2012 Prepared Q2 diluted earnings per share were $0.22, an improvement of 16% from a year ago. Dilutive shares decreased 13% as a result of
our share repurchase program and the elimination of the convertible notes retired earlier this year. We continue to place a priority on
returning capital to shareholders in the quarter. During the second quarter we repurchased another 6 million shares bringing our first
half total to 11 million shares. Along with our quarterly common stock dividend, we returned over $170 million to shareholders in the
first half of 2012. Given the seasonality of our cash flows, we are planning to increase our share repurchase activity in the second half
of 2012.
7/26/2012 2Q2012 Q&A Q: You indicated its [share buyback] going to pick up in the back half of the year. Is there any should we have any expectation as
to whether it ought to be proportional to your cash flow? I know its kind of hard for that to be since the first half of the cash flow is
negative and it should be positive in the second half.
A: Well thats why we say we were a little bit less in the first half and we expect to ramp it up in the second half. We have a
$300 million authorization for our board. We havent said that were going to take the whole $300 million and do it all in one year. But it
looks like were spending a fair amount of it, and if you read into my statement that well be a little more aggressive in the second half
of the year, thats exactly what it means. So if we spent $118 million to $120 million in the first half of the year, and I indicate that were
going to be a little more aggressive in the second half, then our intention is to be more aggressive. So I think you can interpolate from
that.
7/26/2012 2Q2012 Q&A Q: Whens the next opportunity that the board can discuss revisiting or upping that allocation?
A: Well the board can do it any time they want, okay. But we like to do this on a regular basis. So come next year we will take a look
at our authorizations, obviously on the dividend as well as the buyback. Weve had some healthy discussions with our investor base
as to their preference as to whether dividends make more sense than buybacks. At that point in time well make a presentation to our
board and they will make a determination of what we do with our cash flow and any excess cash we have on our balance sheet. And
well be responsive to what the marketplace is looking at. Of course we ought to be sensitive to any potential changes in tax law as to
whether dividends are preferable to buybacks. All of that gets factored in.
We also have a little thing called Facebook investment. If you recall, the last time when we did have an opportunity to sell our
Facebook shares we used that as an opportunity to use the entire proceeds from that transaction to increase our authorization. In
November our restrictions on our Facebook shares come off and were free to do with whatever we decide to do. Weve indicated
that our Facebook investment is not strategic, and well be opportunistic in the marketplace. And what we do with the proceeds if and
when we sell will be up to our board and the market conditions. So thats another avenue we have in terms of returning money to our
shareholders.
7/26/2012 2Q2012 Prepared On slide 11 you see our total debt outstanding at quarter-end 2012 and at year-end from 2007 through 2011. This depicts our
reduction of total debt over the last several years. Since the end of 2007 we have reduced total debt by over $700 million. The net
decrease of long-term debt of $150 million during 2012 took place during the first quarter with retirement of our 400 million 4.25%
convertible notes, net [indiscernible] of 200 million, 4% notes. Looking ahead over the next 12 months we will have additional
opportunities to further improve our balance sheet and reduce our effective cost of debt.
4/26/2012 1Q2012 Prepared On Slide 11, you see our total debt outstanding at quarter-end and at year-end from 2007 through Q1 2012. This depicts our reduction
of total debt which has seen us take total debt from $2.35 billion at the end of 2007 to $1.62 billion at the end of March 2012, a
decrease of $730 million.
Source: FactSet.
September 19, 2013

Corporates

Date of
4/26/2012 1Q2012 Q&A Q: Frank, can you sort of lay out your thoughts as to deleveraging further from this point in time? I mean, the way that you handled the
transactions in the quarter are somewhat indicative of a at least its a current desire to deleverage a bit so far this year but Im
really not clear what your thoughts are beyond that point.
A: I mean, Matt, you can expect to see further deleveraging for us. I wont put a number on it. And weve got material opportunity a
year from now when weve got some more converts on there, depending on what share price is. And we also have some expensive
securities that mature in 2017 with a coupon of 10% that can we can buy in or refinance at a slight premium. So those are things
you can expect this management team to be aggressive in looking at options and driving the cost of our funding down plus probably
deleveraging along with it.
4/26/2012 1Q2012 Q&A Q: I guess the deleveraging happened a little bit less aggressively than maybe I would have thought given how much cash you have
on the balance sheet. So just can you walk me through the your thinking for both you guys of I know the rates are low, you took
advantage of that, but why even go the debt market when you have so much cash on your books? Is there just a level of cash you
want to always have just in case? So walk me through why you didnt tap into that market until this point.
A: When we evaluated our options, the two things we concluded on were we wanted to deleverage and we will continue to deleverage
and we wanted to do it in a way that was thoughtful and take advantage of very, very attractive markets. So I think the transactions we
did, deleveraging by $150 million and also tapping a very attractive debt market, I think was a very well balanced, thought out strategy.
And I think going forward youll continue to see us in a similar path. Well look at all options and I think well be fairly thoughtful around
what were going to do with respect to deleveraging further and also tapping a very attractive capital market.
4/26/2012 1Q2012 Q&A A: Same kind of conversation we had on whether we do share buybacks versus dividends. And, frankly, one of the issues that we
have to address is whether the tax law is going to change and what impact that will be. So we want to make sure were flexible in
terms of our cash and basically to meet the objectives of our shareholders. I mean certainly theres an argument, aside from not
tapping the debt market at all, theres an argument that giving rates being so low, we shouldve borrowed as much as we could and be
opportunistic and then figure out what to do with the money in terms of whether it be share buyback or whatever. We dont want to be
a knee-jerk reaction to that, but we want to make sure were participating.
So I think the message you should take away from what we did in the debt offering is we were opportunistic, we saw some good rates
and we took advantage of it. We were conscious of our investment-grade rating and we still have one more to go. And we want to
make sure by the end of the year, were positioned so that we finally get them to move on that and were hopeful that they will. And so
all of our various constituencies are affected by whatever decision we make and by our dividend policy, by our share buyback policy,
by deleveraging. All of that rolls up into how we enhance shareholder value. And we will continue to make those calls as they come up
and as we see opportunities. I think thats what you want us to do in terms of our management team.
2/24/2012 4Q2011 Q&A Q: And then on the buyback authorization extension and the convertible bond you mentioned that Q1 is usually a working cap outflow,
so should we assume not much in the way of buybacks in the fourth quarter outside of the redemption and any comment on how
the $300 million sort of fits into the full year. Do you expect to exhaust that in the year or its something thats just sort of out there
depending on what the stock does?
A: Let me talk about the buyback and Frank will talk about working capital. We have a yearly program for buybacks, okay. Some of it
is open market, some of it is program buybacks. So we will continue throughout the first quarter in the buyback. Obviously were out of
the market as certain things come up but its a full year program.
2/24/2012 4Q2011 Prepared Our capital return programs have also been a significant area of sustainable value creation. At this time last year we initiated our share
repurchase program and common stock dividend. These were important milestones for our company. Were pleased to report that
during 2011 via buybacks and dividends we returned a total over $500 million to our shareholders.
10/28/2011 3Q2011 Q&A Q: And then any comment on the buyback pace? Or maybe a better way to ask the question is are there things in the third versus the
fourth quarter that we should be keeping in mind around cash flow and, obviously, of the Facebook proceeds this quarter, that factor
into how you guys think about the buyback that we should just keep in mind?
A: One of the questions that always comes up is during this past quarter weve seen a depressed stock price which, if this was a pure
opportunistic buyback, when we were below $8 a share or even below, we would have taken all our cash and bought in our shares. I
understand that some people are of that view. We view the share buyback program as a program and, that is over a period of time, to
return cash to our shareholders in a very thoughtful way.
That said, you can see weve accelerated our share buyback program and use of it, A, by the Facebook shares, but the other
authorization that we had prior to the Facebook transaction, and that was an indication that we did believe that our shares were
oversold and there was an opportunity for us to buy in shares at what we viewed as an attractive price.
But were not going to use our share buyback program as a vehicle to pick the right stock price for us to buy in our shares. So, I
think the tone of us accelerating at the rate we did puts us on track to complete the share buyback program before it was originally
contemplated when we instituted the plan. But again, its not going to cause us to accelerate in a dramatic pace if the share price
declines."
10/28/2011 3Q2011 Q&A Q: And on the buyback program, is it your intention to have buybacks mirror cash flow as you figure out how to deploy intra-year?
A: Clearly, cash flow is a factor that goes into buybacks. Remember, we had built up an excess cash position on our balance sheet
as we were going through our turnaround period, and given the confidence level that management and the board has in our business
offerings and the future of IPG, that certainly added to the fact that we implemented a dividend, as well as the share buyback program.
But you have to keep sight of your cash flow before you go out and continue, particularly the share buyback. The dividend, we believe,
you dont institute a dividend if youre not highly confident that it will continue out into the out-years. So, we will be very conscious of
our cash flows, which continue to support the buyback program and the dividend that you see.
Source: FactSet.
September 19, 2013

Corporates

Date of
7/28/2011 2Q2011 Q&A Q: I wanted to not ask about margins, so Ill ask about your, Frank, about your cash balance and just how generally we should think
about new IPG now that youve got the rating agencies a little bit in a better position and your free cash flow ramping nicely. I know
youve given long-term free cash flow guidance. Cash moves around quarter to quarter a lot in your business. But just is there a way
for us to look at the cash balance and sort of think about where that should normalize to now, looking back at IPG over the last three
years where you were carrying well above $2 billion, typically? And Im thinking about it in the context of return of capital, obviously,
and what the potential is there. So if you could talk about how youre funding the business and how you think about that stuff that
would be helpful.
A: Were pleased at the rating agency actions we saw this quarter. So investment grade is with two to three agencies, with we hope
the third to get there sooner rather than later, which helps in financial flexibility. We were pleased with the bank deal we did in the
quarter, which again added financial flexibility. Weve been relatively aggressive in our share buyback and right now were going to
execute against that plan. We expect free cash flow to continue to seasonal patterns that it has. So from a deployment of that cash,
nothing has changed other than the scenario continues to improve.
7/28/2011 2Q2011 Q&A Q: Then just a last question, should we assume the rate of the buyback continues sort of the pace you saw in the quarter?
A: Well, one of the questions in our last quarter was everyone was disappointed in the fact that we had three weeks of buyback, and
we hadnt used it all up. I think what youve seen is an indication that we believe in the shareholder value of returning cash to our
shareholders, and we view this as an opportunity. So I think you can assume we will continue to be active in the marketplace.
7/28/2011 2Q2011 Prepared In terms of share repurchase program, the second quarter was the first full quarter under the authorization granted by our Board in
late February and we repurchased approximately 11 million common shares using approximately $130 million during the quarter. That
brings us up to 12 million shares and $139 million since the inception of the program. This activity underscores that we believe that
IPG represents a long-term opportunity for significant value creation and are therefore moving to deploy our capital to increase returns
for our shareholders. At this point, let me turn things over to Frank for an in-depth review of the quarter and the year to date.
4/28/2011 1Q2011 Q&A Q: And just maybe one quick one for Frank. Frank, is there any kind of target for the buyback, at least for the second quarter? I mean
should we look at that 11 or so million and triple that to give you like a quarterly number or no?
A: No. John, look, were into the program one month. The way we work it is we have daily and weekly targets; those targets are tied
to our cash flow projections. Q1 is our weakest cash flow quarter, so you can expect as cash flow generation increases, well be more
aggressive on our buyback...I think the key to know about the share buyback is that, you know, we announced that were authorized to
implement a program; were committed to making that program work and return capital to our shareholders as we said; and well do it
in a thoughtful and effective way and thats the way well move forward. The fact that, as Frank said, were only in it one month, so that
should not be an indication of anything other than we started."
2/25/2011 4Q2010 Prepared Second, our board has authorized a common share repurchase program of up to $300 million which will go into effect immediately.
These programs will not prevent us from investing in the many growth areas that are required to continue providing leading-edge
solutions to our clients. They do, however, represent significant milestones for our company, which demonstrate the great progress
weve made in recent years and our confidence that we can continue to build on this success.
2/25/2011 4Q2010 Prepared First, our board has declared a cash dividend on our common stock in the amount of $0.06 per share, payable on March 25th to
holders of record at the close of business on March 11th. We expect to continue with this dividend on a quarterly basis.
2/25/2011 4Q2010 Q&A Q: Frank, at this point, after youve gone to the market with your cap call on the converts, how are you feeling about any further
opportunities to address the share count?
A: Matt, were constantly looking at it. I think that the buyback program that we announced is a big step for us. Weve got some
converts that are out there, and weve got the cap call in place. So were constantly looking at dilution and multiple factors will
contribute if we decide to do more. But for where we are today, were pretty set on the actions weve announced. Yes. And I think all
these actions, when we undertake decisions like this, were looking at the long-term financial position of the company, not the short-
term. And as that improves, then we look at what other opportunities we have out there, whether it is buying in some of our debt if
possible, repositioning the share buyback. I mean, thats all the same. Frankly, this is great conversation for us to have. I know many
of you have been waiting for us to be in this position and weve always said we like to keep a conservative balance sheet. And the
answer is we do. We like to keep a conservative balance sheet. But at this point in time, we think this is the appropriate move at these
levels. And as we see our performance towards achieving our goals get closer, then well take a harder look at that.
10/29/20103Q2010 Q&A Q: And you mentioned, always looking at use of cash, any sense in terms of timing of maybe a possible announcement on that front?
A: As weve always mentioned, what we wanted to see was a sustainable pattern in terms of the economic recovery and as we get
closer to that and the confidence level in the fact that were not going to be seeing this large double dip that everyone was concerned
about and obviously, the likelihood of that becomes greater for us. But were we constantly have to look at that as a possibility.
10/29/20103Q2010 Prepared Recent performance, including the impressive results announced thus far this year, give us confidence that the strength of our cash
flows will allow us to meet the needs for disciplined reinvestment in the business, including talent acquisition, targeted M&A in high-
growth competencies and geographies, and furthermore, we will continue to explore additional options for the return to capital to our
owners, including share buyback and dividends.
7/29/2010 2Q2010 Q&A We will use our cash to invest in our businesses, do strategic acquisitions, and as Frank indicated, focus on our ratings and our
balance sheet.
7/29/2010 2Q2010 Prepared In April, we repurchased $21 million of our November 10 floating rate notes, as we mentioned on our last call. That transaction means
$193 million of the November maturity remains outstanding. Our plan is to pay those notes from cash on hand. And as a reminder, we
repurchased approximately $200 million of debt in both 2008 and 2009.
7/29/2010 2Q2010 Prepared Another area in which our focus and hard work is bearing fruit is our long-standing commitment to conservative balance sheet
management. Financial strength and flexibility have been key to our success, initially, as we retooled our company, and more recently,
as we moved through last years severe economic problems. This approach has once again been validated, as weve seen upgrades
from major credit rating agencies during the past few months.
4/29/2010 1Q2010 Prepared We plan to use cash currently on our balance sheet to pay for any preferred shares that are tendered. Its also our intention to use the
cash on our balance sheet to meet our November debt maturity as we have stated previously.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Interpublic Group of Companies, Inc.
($ Mil., Years Ending Dec. 31) 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12
LTM Ended
6/30/13
Profitability
Free Cash Flow Margin (%) 10.04 7.40 10.80 0.15 1.05 (2.51)
Coverages (x)
FFO Fixed Charge Coverage 1.99 1.78 2.03 2.12 2.28 1.73
FCF Debt-Service Coverage 1.64 1.57 2.79 0.23 0.69 (0.02)
Leverage (x)
FCF/Total Adjusted Debt (%) 18.82 13.02 24.05 0.35 1.93 (4.91)
Balance Sheet
Short-Term Debt 332.8 308.6 153.7 558.3 388.7 780.8
Other Debt 525.0 525.0 221.5 221.5 221.5 221.5
Equity Credit 393.8 393.8 166.1 110.8 110.8 110.8
Off-Balance Sheet Debt 1,464.3 1,348.8 1,141.3 1,120.0 1,231.5 1,231.5
Cash Flow
Change in Working Capital 212.7 65.8 263.4 (317.4) (296.7) (274.7)
Total Non-Operating/Non-Recurring Cash Flow
Dividends - - - (111.1) (103.4) (113.8)
Free Cash Flow 699.3 446.1 705.4 10.5 73.0 (176.8)
Net Acquisitions and Divestitures (78.1) (61.3) (8.3) 70.4 (50.7) (56.8)
Net Debt Proceeds (236.8) (210.2) (209.7) 3.6 655.7 798.8
Net Equity Proceeds (265.9) (400.8) (350.5) (389.2)
Total Change in Cash 92.3 388.0 180.5 (373.0) 272.1 111.9
Ending Cash and Securities Balance 2,107.2 2,495.2 2,675.7 2,302.7 2,574.8 1,613.9
Short-Term Marketable Securities 167.7 10.9 13.7 12.9 16.0 4.6
Income Statement
Revenue 6,962.7 6,027.6 6,531.9 7,014.6 6,956.2 7,032.9
Revenue Growth (%) 6.23 (13.43) 8.37 7.39 (0.83) 0.16
Operating EBIT 703.3 475.3 602.6 739.9 722.8 713.7
253 Company Summaries McGraw Hill Financial, Inc.
September 19, 2013

Corporates

Key Rating Drivers
Diversifcation: The ratings refect McGraw Hill Financials (McGraw Hill) prominent business
franchises, the companys conservative balance sheet, strong margins and strong free cash fow
characteristics. Fitch recognizes the diversifcation of McGraw Hill Financial, with approximately
55% of revenues and 45% of EBITDA coming from the Capital IQ, S&P Dow Jones Indices,
Commercial and Commodities business segments. S&P makes up the remaining revenue and
EBITDA components. This diversifcation provides McGraw Hill with the fexibility to absorb any
potential negative performance or changes within the S&P business.
Rating Watch Negative: The ratings and Rating Watch Negative refect: The civil complaint fled
by the Department of Justice (DOJ) against McGraw Hill and its S&P subsidiary; the related state
attorney generals suits and the risk of additional suits; and the potential impact these suits may
have on the operations of the S&P business. Fitch makes no assumption regarding the timing,
course of litigation or potential for settlement. Fitch expects McGraw Hill to continue to deploy
FCF towards acquisitions and share repurchases. Continued share repurchases during a period
of heightened risk of a material legal or regulatory payment could pressure the ratings.
Financial Flexibility: Fitch believes that the company maintains signifcant fnancial fexibility
to absorb a material negative fnancial outcome from the DOJ suit or from other suits, and
maintain investment-grade ratings. As of June 2013, unadjusted gross leverage was 0.5x,
providing balance sheet fexibility. Fitch believes that the company does not intend to materially
increase leverage for shareholder-friendly actions. Fitch expects unadjusted gross leverage to
be managed below 1.5x.
Strong Liquidity: The company has historically maintained and is expected to continue to
maintain strong liquidity. As of June 30, 2013, liquidity consisted of cash and cash equivalents
of $1.9 billion ($1.3 billion held in the U.S.) and full availability under its $1 billion commercial
paper (CP) program (backed by McGraw Hills $1 billion bank credit facility due July 2017). The
company has ample cushion inside of the credit facilities 3.25x indebtedness-to-cash fow ratio.
Negative Rating Triggers: Ratings may be downgraded if Fitch believes that the risk of
monetary penalties would drive leverage over 2.5x. Also, ratings would be pressured in the
event of a material disruption, negative operating results or business model changes at the S&P
business that materially impacted margins and FCF.
Positive Rating Triggers: If the DOJ lawsuit and other potential lawsuits are resolved, the
companys business profle is unchanged and Fitch expects fnancial leverage to run below 1.5x,
the rating could be considered for an upgrade.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
Ratings
Security Class
Current
Rating
IDR BBB+
Short-Term IDR F2
Commercial Paper F2
Rating Outlook
Negative Watch
September 19, 2013

Corporates

Commodities & Commercial S&P Capital IQ
Standard & Poors Ratings Services S&P Dow Jones Indices
Portfolio Summary McGraw Hill Financial, Inc.
(As of June 30, 2013)
Enterprise Solutions
Global Credit Portal
MarketScope Advisor
S&P Capital IQ
S&P Capital IQ for Wealth Management
Credit Ratings, Research and Analytics Maintains a Variety of Investable and Benchmark
Indices 73% Owned by McGraw Hill Financial
J.D. Power and Associates
Platts
Real-Time News and Price Assessment Services
Database and Geospatial Tools
Global Conferences
Media
McGraw-Hill Construction
September 19, 2013

Corporates

U.S.
60%
Europe
24%
Asia
10%
Other
6%
(As of Dec. 31, 2012)
S&P
Ratings
45%
S&P
Capital
IQ/S&P
Indices
25%
S&P DJ
Indices
9%
Commodi
ties &
Commerc
ial
21%
Revenues by Segment
(As of Dec. 31, 2012)
Commodities
and Commercial
21%
S&P
Capital IQ/
S&P Indices
25%
S&P
Ratings
54%
S&P
Capital
IQ/S&P
Indices
16%
S&P DJ
Indices
13%
Commodi
ties &
Commerc
ial
17%
EBITDA by Segment
(As of Dec. 31, 2012)
Commodities
and Commercial
17%
S&P
Capital IQ/
S&P Indices
17%
September 19, 2013

Corporates

Event Risk Dashboard McGraw Hill Financial, Inc.
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition H
Divestiture M
Covenant Breach L
Litigation Risk H
Regulatory Risk H
LBO Risk Low
Regulatory and litigation event risk, related to the S&P business, may make this
an unattractive LBO candidate.
FCF generation would provide fexibility to reduce leverage over time.
Private equity has been active in the businesses products and services segment.
Secular Risk Low
There is no material secular risk associated with McGraw Hill Financials products
as they are primarily delivered digitally.
Nearly all members of the board of directors are independent. Harold McGraw
III, who is the chairman, Douglas Peterson, who is the president and CEO, and
Robert P. McGraw are the only non-independent directors.
McGraw Hill has not committed to any leverage targets, but has publicly stated its
commitment to a strong investment-grade rating.
Fitch believes McGraw Hill is committed to its current rating. However, similar to other
highly rated entities, the potential for fnancial policy revisions is an inherent risk.
Liens are not permitted unless pari passu liens are granted. There are standard
carveouts including a lien basket set at 10% of total consolidated assets.
The S&P Ratings domestic operations subsidiary provides a guarantee to the notes.
Fitch believes that any future debt would be issued by MHFI. However, Fitch
company structures.
Covenant Breach Risk Low
(x)
Covenant
Level
Ratio/Test as
of 6/30/13
EBITDA
Cushion (%)
McGraw Hill Financial, Inc. Rating History
BBB+
A
A
A+
AA
0.4
0.5
0.6
0.7
0.8
0.9
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
20
40
60
80
Source: Bloomberg.
McGraw Hill Financial, Inc. Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard McGraw Hill Financial, Inc. (Continued)
YTD June 2013 2,400
2012 177.0
2011 200.0 238.0
2010 364.4 31.0
2009 15.0
2008 48.3 0.4
2007 86.7 62.3
Fitch expects McGraw Hill Financial to be an active acquirer.
Fitch expects most acquisitions to be small to midsize bolt-on acquisitions.
CME Group Put Right The CME Group has the right to put its 27% ownership
of the S&P/Dow Jones Indices joint venture to McGraw Hill. This option starts
in 2018 (earlier if McGraw Hill is sold to a competitor of the CME Group). As of
June 2013, the put right is estimated at approximately $810 million. Fitch believes
McGraw Hill has suffcient liquidity (including access to credit markets) to address
this potential put.
Regulatory Risk High
McGraw Hills S&P Ratings Service operates in a highly regulated environment.
Regulators in the U.S. and European Union continue to review regulations
relating to rating agencies.
In September 2011, McGraw Hill received a Wells Notice from the U.S.
Securities and Exchange Commission (SEC). The Wells Notice relates to the
ratings of the collateralized debt obligation (CDO) known as Delphinus CDO
2007-1. The company is cooperating with the SEC.
Litigation Risk High
The Department of Justice (DOJ) fled a suit against McGraw Hill and its S&P
subsidiary in February of 2013, which was followed by related state attorney
general suits. Fitch subsequently downgraded the ratings one notch and placed
the ratings on Rating Watch Negative. Fitch believes that the company maintains
signifcant fnancial fexibility to absorb a material negative fnancial outcome from
the DOJ suit or from other suits. Fitch makes no assumption regarding the timing,
course of litigation or potential for settlement.
McGraw Hill and its S&P Ratings business have been named in numerous
lawsuits in U.S. state and federal courts, as well as in foreign jurisdictions,
relating to the ratings of structured securities. The company has also received
numerous subpoenas and other government inquiries.
Fitch believes McGraw Hill carries a meaningful level of liquidity providing
fnancial fexibility to address regulatory and/or litigation risk.
In addition, given the time it takes for legal and regulatory matters to be
processed (case can takes years before any settlement is reached), McGraw Hill
can preserve additional liquidity in the event it believes that a case may result in a
material cash payment.
YTD June 6, 2013 500.0
2012 295.0
2011 1,500.0
2010 256.0
2009
2008 447.2
2007 2,212.7
September 19, 2013

Corporates

Corporate Governance Overview McGraw Hill Financial Inc.
a
Most recent filings on Bloomberg as of June 2013. PSUs Performance share units. Note: On July 11, 2013, it was announced that Douglas Peterson had been elected president
and CEO effective Nov. 1, 2013. Harold McGraw III will continue to serve as chairman. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
H. McGraw III Chairman, President and CEO 1,432,200 4,710,000 2,078,480 2,622,451 10,843,131
J. F. Callahan, Jr. EVP and CFO 750,000 1,000,000 742,500 186,597 2,679,097
C. L. Teschner, Jr. EVP, Global Strategy 676,000 840,000 548,191 161,856 2,226,047
K. M. Vittor EVP and General Counsel 610,000 863,000 578,738 256,338 2,308,076
J. L. Berisford EVP, Human Resources 550,000 850,000 645,000 137,350 2,182,350
Board of Directors
Pedro Aspe 62 Y May 2013
May 2014
1996 84,500 90,000 221 174,721 Financial Policy Televisa (Mexico);
Protego Casa de Bolsa;
Evercore Partners, Inc.
Managing Director
Protego Asesores
Sir Winfried
Bischoff
71 Y May 2013
May 2014
1999 108,500 90,000 221 198,721 Financial Policy
(Chair); Compensation
and Leadership
Development;
Executive
Lloyds Banking
Group plc;
Eli Lilly and company
Chairman Lloyds Banking
Group plc
William D.
Green
59 Y May 2013
May 2014
2011 93,500 90,000 92 183,592 Compensation
and Leadership
Development;
Nominating and
None Former Chairman and CEO
Accenture
Charles E.
Haldeman, Jr
64 Y May 2013
May 2014
2012 45,250 45,000 74 90,324 Audit; Compensation
and Leadership
Development
None Former CEO
Federal Home Loan Mortgage
Corporation (Freddie Mac)
Linda Koch
Lorimer
61 Y May 2013
May 2014
1994 95,000 90,000 221 185,221 Compensation
and Leadership
Development;
Nominating and
None VP and Secretary
Yale University
Harold
McGraw III
Chairman
64 N May 2013
May 2014
1987 Executive (Chair) None President and CEO
McGraw-Hill Companies Inc.
Robert P.
McGraw
58 N May 2013
May 2014
1995 84,500 90,000 221 174,721 Financial Policy None Chairman and CEO
Averdale Holdings, LLC
Hilda
Ochoa-
Brillembourg
68 Y May 2013
May 2014
2004 96,500 90,000 221 186,721 Audit; Financial Policy General Mills, Inc.;
Cementos Pacasmayo
S.A.A.
President and CEO
Strategic Investment Group
Sir Michael
Rake
65 Y May 2013
May 2014
2007 108,500 90,000 221 198,721 Audit (Chair);
Executive; Financial
Policy
BT Group plc; Chairman BT Group plc
Edward B.
Rust
Presiding
Director
62 Y May 2013
May 2014
2001 132,000 90,000 3,221 225,221 Audit; Compensation
and Leadership
Development;
Executive; Nominating
and Corporate
Governance (Chair)
Helmerich & Payne;
Caterpillar Inc.
CEO State Farm Mutual
Automobile Insurance Company
Kurt L.
Schmoke
63 Y May 2013
May 2014
2003 93,500 90,000 221 183,721 Financial Policy;
Nominating and
Legg Mason Inc. VP and General Counsel
Howard University
Sidney Taurel 64 Y May 2013
May 2014
1996 110,000 90,000 3,221 203,221 Compensation
and Leadership
Development (Chair);
Executive; Nominating
and Corporate
Governance
IBM Corporation;
BioCrossroads;
Capital Royalty, LLC
Former Chairman,
President and CEO
Eli Lilly and Company
Richard E.
Thornburgh
60 Y May 2013
May 2014
2011 89,000 90,000 3,202 182,202 Audit; Financial Policy Corsair Capital LLC;
Credit Suisse Group AG;
Reynolds American Inc.;
NewStar Financial, Inc.
Vice Chairman
Corsair Capital LLC
Doug Peterson 54 N May 2013-
May 2014
2013 N.A. Federal Deposit
Insurance Corporation
and the Institute of
International Finances
Market Monitoring Group.
President of Standard &
Poors Ratings Services. He
will succeed Harold (Terry)
McGraw III as President and
CEO of McGraw-Hill Companies
effecitve Nov. 2013.
September 19, 2013

Corporates

Corporate Governance Overview McGraw Hill Financial Inc. (Continued)
a
Most recent filings on Bloomberg as of June 2013. PSUs Performance share units. Note: On July 11, 2013, it was announced that Douglas Peterson had been elected president
and CEO effective Nov. 1, 2013. Harold McGraw III will continue to serve as chairman.
William D. Green and Richard Thornburgh joined the board in 2011. Charles E. Haldeman, Jr. joined the board in July 2012.
Approximately 80% of CEOs target compensation was variable, of which 21% was cash based and 79% was equity based.
Whit McGraw, the son of Harold McGraw III, is employed by the company. During 2012, he received compensation of $310,000.
Auditor: Ernst & Young LLP.
a
Capital Group Companies 24,779 9.0
Blackrock 18,341 6.7
Oppenheimerfunds Incorporated 10,487 3.8
Dodge & Cox 8,373 3.1
Morgan Stanley 7,877 2.9
Higherfields Capital Management 7,582 2.8
Manning & Napier Advisors Inc. 5,948 2.2
Total Top 10 120,527 44.0
Pedro Aspe 14 <1.0
John L. Berisford 49 <1.0
Sir Winfried Bischoff 4 <1.0
Jack F. Callahan, Jr. 63 <1.0
William D. Green 1 <1.0
Charles E. Haldeman, Jr. 3 <1.0
Linda Koch Lorimer 8 <1.0
Harold McGraw III 10,063 3.6
Robert P. McGraw 1,113 <1.0
Hilda Ochoa-Brillembourg 2 <1.0
Sir Michael Rake 0 <1.0
Edward B. Rust, Jr. 2 <1.0
Kurt L. Schmoke 1 <1.0
Sidney Taurel 4 <1.0
Charles L. Teschner, Jr. 158 <1.0
Richard E. Thornburgh 5 <1.0
Kenneth M. Vittor 451 <1.0
All Directors and Executive Officers of the Company as a Group ( A Total of 19 People) 11,482 4.1
Note: Directors and NEO holdings include stock options exercisable within 60 days of Feb. 1, 2013.
Annual Incentive Net income (75% weight) and revenue (25%).
Long-Term Incentives Cumulative compound EPS growth over three years.
Base Salary Salary is set around the median of the companys peer group.
Annual Incentive Payout potential ranges from 0% to 200%. FY12 actual payouts were at 168.75% of the target level.
Long-Term Incentives Performance share unit (PSU) awards tied to EPS metric. Payout potential ranges from 0% to 200%.
September 19, 2013

Corporates

Pension Screener
a
2013 "At Risk" Shortfall? No Estimated Pension Outflow Greater
than 10%?
No
Plan Assets
b
30.0 44.0
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
Debt Structure
($ Mil., As of June 30, 2013)
$1 Billion Sr. Unsecured Credit Facility
due June 2017
$1 Billion Commercial Paper Program
a

Total Debt 800.0
a
Backed by the $1 billion credit facility.
($ Mil., As of June 30, 2013)
Amount
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2017 400.0
Thereafter 400.0
Total 800.0
September 19, 2013

Corporates

Guarantee
S&P Dow Jones Indices Credit Ratings and Credit
Risk Analysis
Capital IQ
Equity Research
Valuation and Risk Strategies
Platts
McGraw-Hill Construction
JD Power and Associates
Organizational Structure McGraw Hill Financial, Inc.
($ Mil., As of June 30, 2013)
IDR Issuer Default Rating. Note: Debt is listed at face value.
IDR BBB+/Watch Negative
Short-Term Debt F2
Harold McGraw Jr. and H. McGraw III Public
Standard & Poors Financial Services LLC Other Nonguarantor Subsidiaries
S&P Ratings S&P Capital IQ Commodities & Commercial S&P Indices
4% Equity 96% Equity
Amount Rating
Senior Unsecured Notes 800 BBB+
$1.0 Billion Committed Credit Facility due 2017 BBB+
Commercial Paper 0 F2
Other Debt 0
Total Debt 800
EBITDA 1,704.00
Business Segments
Amount
EBITDA 1,038.4
Amount
EBITDA 267.2
Amount
LTM Revenues 458.0
EBITDA 277.0
Amount
LTM Revenues 994.0
EBITDA 284.0
September 19, 2013

Corporates

Debt and Covenant Synopsis McGraw Hill Financial, Inc.
Bonds/Bank Agreement Covered
Overview
Document Date 6/19/2013 Nov. 2, 2007 Indenture
Description of Debt $1.0 billion four-year Revolving Credit Facility due June 19, 2017 5.375% Note due 2012, 5.9% Note due 2017, 6.55% Note due 2037
Financial Covenants
(Maximum)
3.25x indebtedness-to-cash flow Ratio
Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)

Change-of-Control
(CoC) Provision
CoC is an event of default. CoC takes place if a) 35% or more of either
outstanding shares or of the combined voting power is acquired, or b)
individuals who constituted the board of directors cease to constitute at
least a majority of the board.
A CoC put offer at 101%. CoC is triggered when a) any person
becomes the beneficial owner, directly or indirectly, of more than 50%
of the then-outstanding number of shares of the companys voting
stock; b) individuals who constituted the board of directors cease to
constitute at least a majority of the board, unless each new director
was approved by the board of directors; c) sale/disposition of all or
substantially all the assets of the company; or d) the company adopts
a dissolution or liquidation plan; and if ratings are downgraded below
investment-grade following aforementioned events.
Sale of Assets
Restriction
Fundamental change provision noted. No material provision noted.
Limitation on
Acquisitions
Debt Restrictions
Additional Debt
Restriction
Limitation on Secured
Debt
Restrictions on liens noted. Standard operating carveouts exist, plus a
lien basket that may not exceed $300 million.
liens to 10% of total consolidated assets. Fitch estimates the basket at
$640 million as of Dec. 31, 2011.
Restricted Payments No material provision noted. No material provision noted.
Other
Cross-Default/
Acceleration
Payment defaults of debt greater than or equal to $75 million;
acceleration of any debt greater than or equal to $75 million.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts McGraw Hill Financial, Inc.
Date of
4/30/2013 1Q2013 Q&A A: I think the message that were sending is that were very excited about these businesses and were doing well and were off to a
good start in 2013 and were investing in those businesses. And when we got into December of last year, the $700 million special
dividend was a sign that youre not hoarding cash or setting up reserves and all of those kind of things. Were running the business to
run the businesses. We were very pleased with the $500 million accelerated share repurchase that we announced recently and well
see as the year progresses on that part.
4/30/2013 1Q2013 Prepared Upon receipt of the cash, we immediately took two actions. First, we repaid approximately $450 million of commercial paper that was
originally issued in the fourth quarter to fund the $700 million special dividend. Secondly, we entered into a $500 million accelerated
share repurchase transaction. I do want to review the impact of the accelerated share repurchase transaction. As it was executed
in late March, the shares received had little impact on shares outstanding during the first quarter. The transaction will reduce diluted
average shares outstanding in the second quarter by approximately 8.6 million shares. In addition, when the ASR is concluded we will
receive a modest number of additional shares. Fully diluted share count in the second quarter should be approximately 276 million
shares, although it could be impacted a bit by ongoing option exercise activity.
4/30/2013 1Q2013 Prepared As of the end of the quarter, we had an exceptional balance sheet with $1.9 billion of cash and only $800 million of long-term debt.
Our overall debt is now reduced by one-third. We intend to maintain a strong balance sheet going forward to both build the business
and, as appropriate, return cash to shareholders. Look, were going to manage this balance sheet like were running and building
this business. So were lucky enough we have a fair amount of cash. We have a tremendous amount of debt flexibility in our balance
sheet. And the reality is with the margins and the return on invested capital we have in our businesses, were going to continue to
generate a lot of cash. So I think were pretty confident that we have a lot of flexibility to deal with any of the opportunities or issues
that we have in the coming years ahead.
2/12/2013 4Q2012 Q&A Q: Good morning. I was wondering if you could talk about the amount of buybacks assumed in the outlook and also whether a
component of it is accelerated. Thank you.
A: Bill, right now were just affirming that today share repurchase is part of the 2013 program. In terms of the specific amounts, we
want to retain some flexibility as the year transpires. Your question about will we consider it an accelerated action, thats a possibility
but we havent made any definitive conclusion on that. But again, were not we dont intend to be back into the market until we
actually receive the proceeds from Education, which will be towards the end of the first quarter. But well give you more complete
update as we get through the year.
Q: And as a follow on, would you be willing to add leverage to buy back more stock?
A: I dont really feel a need to do that over the near term, Bill, right now. But I certainly understand the opportunity from a longer term
point of view.
2/12/2013 4Q2012 Q&A Q: Got it. And then, the last question, just to understand obviously in terms of use of cash going forward, just on your M&A strategy,
should we be expecting more sort of tuck-ins like weve seen at Cap IQ and then I guess, Kingsman at C&C, or I guess can you
maybe just help us understand your pipeline and maybe appetite for larger deals?
A: Well, again, the four uses of cash, we have focused on dividend and share repurchases. Both of those, no change, and were going
to be very active in both. In terms of transactions and organic growth, we like to focus more on the organic growth and thats why we
break it out. And so what we are looking for is more specific capabilities in terms of transactions that can help some of our platforms,
and some of our data and analytic platforms in our businesses. So to that extent, tuck-ins is probably a good word. But what were
looking for is added skills and capabilities to enhance the platforms that we have.
11/2/2012 3Q2012 Prepared One, we are an extremely dividend-friendly company, and we have been since we created a dividend in 1936 and been increasing it
every year since 1974. And so theres going to be no letup on that side. Number two, in terms of share repurchase, I think our track
record is out there and is pretty solid. Were a very share repurchase-friendly company. And we do anticipate we were back in
the market in the third quarter. We bought back $295 million. We did the accelerated share repurchase of $1.5 billion last year. And
I expect to have a strong share repurchase program going forward. But I think its a little premature to talk about what level or all of
those kind of things. But from a financial engineering standpoint, I think our track record is pretty solid.
11/2/2012 3Q2012 Prepared One additional point on our balance sheet. This month, about one-third of our debt is coming due. As a result, over the near term, it
is likely that we will access the commercial paper market, as the repayment of the $400 million of debt and the funding of our fourth
quarter share repurchase program require domestic cash availability. We will re-evaluate further actions related to the balance sheet
once the choice of sale versus spin options for McGraw-Hill Education are clear.
7/26/2012 2Q2012 Q&A This, along with the $100 million of newly raised cash, should provide McGraw-Hill Education with ample liquidity to meet its business
needs. Along with receiving the one-time dividend of up to $500 million, McGraw Hill Financial will retain all of the pension liabilities,
which are now largely frozen plans for both companies, as well as other selected liabilities to simplify separation. In the spin, our goal
is to provide the Education business with balance sheet flexibility to support its long-term growth potential.
7/26/2012 2Q2012 Prepared As we now look to the back half of the year, there are a couple items that I want to point out. First, as I mentioned earlier, we plan
on resuming share repurchases. Our plan is to repurchase up to $500 million in the second half of the year. As always, share
repurchases are subject to appropriate market conditions.
7/26/2012 2Q2012 Prepared The share-repurchase program remains an important aspect of the Growth and Value Plan, and the impact was evident again this
quarter. Year over year, we reduced shares outstanding by 24 million shares. This amplified a 15% increase in adjusted net income
to a 25% increase in adjusted diluted earnings per share, or $0.85 per share. Since the beginning of 2011 through the second quarter
2012, the company has repurchased nearly 36 million shares at a weighted average price of $42.05. This reduced shares outstanding
by approximately 12%. Apart from the completion of the accelerated share repurchase program in April, no other shares were
repurchased in the quarter. However, we do anticipate resuming share repurchases over the back half of the year, which will provide
continued EPS leverage into next year.
7/26/2012 2Q2012 Prepared Overall, the Growth and Value Plan is a comprehensive set of integrated initiatives, which includes separation, cost reduction, share
repurchases, as well as funding both organic growth and tuck-in acquisitions. I am pleased with the progress so far this year, and Im
excited about the prospects for the future of both companies as we complete this process.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts McGraw Hill Financial, Inc. (Continued)
Date of
7/26/2012 2Q2012 Prepared During the second quarter, despite revenue that was modestly below a year ago, we delivered adjusted operating profit growth of
14% from both increased revenue in Commodities & Commercial, S&P Capital IQ, S&P indices, as well as an acceleration of cost
reductions that were realized during the quarter. Our recent aggressive share repurchase program amplified this growth, and we
delivered 25% adjusted diluted earnings per share growth. And Jack will provide additional detail on that in just a moment.
7/26/2012 2Q2012 Q&A Q: And then question two, unrelated to that, Jack, you also mentioned the exploring the possible sale of the Education business.
If you went that route, obviously, youd be left with considerable cash balances. How should we think about the potential use of that
cash?
A: And then Ill be honest, were very focused on trying to determine the right strategic path for the Education business spin or
potentially sale or other options. If obviously in its sale we would have a fairly significant cash infusion. We havent spent a lot of
time, quite honestly, trying to sort out what we would do with that. Obviously its a high-class issue for us to consider. We think you
should expect some part of that would be consistent with our return-of-capital policy that we have as part of the Growth and Value
Plan.
7/26/2012 2Q2012 Q&A Q: First, on a GAAP basis, how much of the $100 million in cost savings do you expect to fall in 2012? And second, about how much
leverage are you comfortable with for McGraw Hill Financial post-spin? Thanks.
A:Well, good morning, Bill. First of all, in terms of the cost savings and in terms of being able to realize those savings, we will realize
those cost savings in 2012. And again, not to be nebulous about it, but were saying at least $100 million. We believe as we go
through all of the reductions in shared costs and all of those things as we go through the separation process, that therell be more. But
I think its safe to say at this point at least $100 million of save is a good way to do it.
A: Terry, excuse me. On a run-rate basis, absolutely, at least $100 million by the fourth quarter. In terms of actual flow through the P&L
within 2012, I would say about two-thirds would flow within the P&L this year, and obviously the full $100 million would benefit both
businesses as we go into next year. And again, that excludes the one-time impact of the costs that we highlighted today around the
separation expenses.
A: Thats right, and again, at least $100 million. And also in terms of leverage, its way too early to tell at this point. I mean, obviously
weve got a very clean balance sheet, and relative to organic growth projects, transactions, shares repurchased, and things like that,
we will have ample capability to do whatever we need to do on that part. So we have a very clean balance sheet.
7/26/2012 2Q2012 Prepared Apart from the completion of the accelerated share repurchase program in April, no other shares were repurchased in the quarter.
However, we do anticipate resuming share repurchases over the back half of the year, which will provide continued EPS leverage into
next year.
4/24/2012 1Q2012 Prepared As we prepare to file the Form-10 necessary for a tax-free spin of the Education business, I want to update you with some high-level
thoughts with regards to the capital structure of the two new companies. We expect that McGraw Hill Financial will carry a strong
investment-grade rating and continue to be committed to a strong dividend. With McGraw-Hill Education we are targeting a more
flexible investment-grade rating and a modest dividend. We will ensure that at the time of the spin-off that there is adequate liquidity to
meet business needs and to manage the seasonal fluctuations in working capital.
4/24/2012 1Q2012 Q&A Q: I appreciate the commentary on the leverage profile of the two companies. I dont know what the S&P vernacular is, but can you
what does strong investment grade and flexible investment grade what does that mean in terms of actual leverage numbers? Debt-
to-EBITDA? How should we think about that?
A: Well, I mean in terms of McGraw Hill Financial in terms of McGraw-Hill Education, because thats really where were signaling
obviously a change in terms of a rating, probably BBB would be a potential way to think about it. And then effectively no change
from McGraw Hill Financial, relative to that. Maybe better over time.
4/24/2012 1Q2012 Q&A Q: Just curious on the share buyback, why did you stop? I guess in the first quarter the share buyback is on hold it sounds like until
youre closer to the spin is my first question.
A: Well, look we went to an accelerated program through 2011 completing one and a half million shares one and a half billion in
terms of a buyback. And so coming into this year and seeing how the Growth and Value Plan was progressing we just slowed that part
down and we are dedicated to it and we will get back to it.
A: And just seasonally were I wouldnt use the word limited, but it is the low point in terms of domestic cash availability and well
start to accumulate as we go through the year and as we get closer to separation, well be back to evaluate that.
1/31/2012 4Q2011 Prepared Turning now to capital allocation. We spent $1.7 billion on acquisitions and share repurchases in 2011, $200 million for acquisitions,
$1.5 billion for share repurchases. The most notable acquisitions were BENTEK Energy and Steel Business Briefing Group. Both
acquisitions added to Platts growing platform, adding critical capability in the natural gas and iron ore markets. Share repurchases
were $845 million in the fourth quarter, including $500 million through an accelerated share repurchase program. Excluding the
accelerated share program, we spent $1 billion on share repurchases in 2011, acquiring 24.7 million shares at an average price of
$40.48 per share.
1/31/2012 4Q2011 Q&A Q: Whats a reasonable range to think about for 2012 buybacks?
A: In terms of share repurchases, well, we did $1.5 billion in 2011, and were still completing a little bit more of the accelerated
share repurchase of the $500 million. We have a little left to go on that. We have 23 million shares authorized left in the current
authorization, and well be watching market activity levels and the like. You know were very strong on share repurchase and believe in
it. And therefore were just going to complete the $500 million accelerated portion, and then well gauge market conditions early on in
the year, and well make an assessment on that. But were very favorable towards it.
10/20/2011 3Q2011 Prepared We continue to actively repurchase shares. In Q3, we repurchased 9 million shares for $355 million, a significant step-up from the
4.4 million shares repurchased in Q2. Year-to-date, weve repurchased 16.7 million shares for approximately $655 million, averaging
$39.20 per share. 19 million share repurchases remain unsettled at quarter end. Looking forward, we are well positioned to meet our
$1 billion target for 2011 subject to market conditions.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts McGraw Hill Financial, Inc. (Continued)
Date of
7/28/2011 2Q2011 Q&A Q: Okay, and does it also besides the portfolio review, its I think at the end of the quarter you had net cash of over $1 billion. Are
you reassessing your comfort level with the balance sheet and maybe having a set leverage target or of some sort?
A: Yeah. I mean, again, depending upon conditions and the like, I mean, those things are constant review on this part. Making sure
that going back to our first premise, always. As we came out of 2010 and a lot of the external market factors that were influencing
things and moving beyond that. The question is, how do you allocate more capital to your high-growth global brands? One. And two,
in doing so, how do you define core, and where are you going to make those investments? The nice situation, Michael, is that weve
got the wherewithal, weve got the flexibility, weve got the capacity, and we just want to make sure those allocations are going to
those that are going to give us the best returns.
4/26/2011 1Q2011 Prepared We also actively repurchased shares in the quarter. We repurchased 3.3 million shares for approximately $124 million, averaging
$37.44 per share. A step-up in share repurchases this year versus our initial guidance is under consideration given our cash position
and a reduced cash commitment for acquisitions now that the previously announced OPIS transaction has been withdrawn.
2/1/2011 4Q2010 Q&A Q: What would move you beyond the measured pace on buybacks?
A: Well, I think weve got to take a look, Bill, at the environment overall and how things are progressing and best uses of cash. I think
Jack said it well; we are very excited about share repurchase and we want to come into the year, given the competition for the cash,
that this is a really good position to start with. Well see as we get into the year.
We still have if we complete the 4.2 million shares sooner and all of that, and we think thats extremely helpful to the overall picture,
could we go into the remaining 4.2 million shares? Sure, on that one. But I think, coming into the year, we have high expectations for
2011. We want to build off of 2010. That this is a good posture for us to take at this point, and well see.
2/1/2011 4Q2010 Q&A Q: The less active share repurchase expectations for 2011 -- should we read into that that perhaps youre going to be a little more
active from an acquisition standpoint? And any particular focus you could point us to?
A: Yeah. I mean the cash that Jack talked about is pretty good, and so weve got very high levels there and very low debt. And we
just want to at this point going into the year, make sure that we maintain flexibility. Were looking at some transactions. We will be also
looking at organic growth projects, things like the Blackboard, things like the Wipro mobile learning platform, but lots of examples of
that way.
So between dividends and share repurchase, we are very excited about the 6.4% increase in the dividend. And we just want to make
sure its understood that we have a very strong penchant for share repurchase and were just going to go into the year a little bit more
measured. But, stay tuned. Everybody competes for the cash, and we will see what makes sense as we go.
10/26/2010 3Q2010 Q&A Q: Can you talk about your priorities in terms of M&A versus repurchase, please?
A: Both are very viable in all of that. And in fact also in terms of organic growth, a lot of the digital components like McGraw Hill Create
and Connect and those kind of things, those are very strong organic programs. And you can count on the fact that we of the four
uses, dividends, share repurchase, organic and acquisition, all are active and continue.
Now, again, when you go through the latter part of 2008 and into 2009, activity levels in terms of acquisitions and some of those
projects were softer in all of that. And obviously, the focus then was on share repurchase and dividend in all of that. Now, given the
strength of the free cash flow and improved markets and the like, you can see activity in all four areas."
7/23/2010 2Q2010 Q&A Q: Could you clarify what level of stock buybacks are in guidance, and can you just maybe give us your point of view on whether youd
consider borrowing to buy back stock?
A: The guidance really reflects only what we have done, the 6.5 million shares, Bill, that I indicated in response to a question earlier.
Were not forecasting how much we will repurchase, simply that we have 10.1 million shares remaining under the program, and the
original statement that we made at the beginning of the year was that we would repurchase the shares over time.
So were not forecasting how much were going to buy back this year or next year, Bill, but clearly we started off the program with a
pretty good bite at it in the second quarter at 6.5 million shares. Were in a just a modest, as you know, net debt position. Our cash
flow forecast is much stronger in the second half of the year. So were clearly in a position where, if we elect to continue to repurchase
shares, were in a very good position to do that."
4/27/2010 1Q2010 Q&A Q: Just a question on capital allocation, and we heard some color on the rationale on share repurchases, but is there a certain is it
that financial reform that youre working to get through to either look at putting more capital to work for share repurchases or potential
acquisitions?
A: Yes, again, were balancing all aspects of organic acquisition, share repurchase and so forth. We have been obviously very
committed to share repurchase. We announced that were going to resume it and well be into that very shortly. Were excited about
the share repurchase component.
1/26/2010 4Q2009 Prepared Last week the board of directors underscored its confidence in our financial strength and growth prospects by increasing the dividend
by 4.4% and announcing the corporations intention to resume share repurchases this year. We will buy back over time the
17.1 million shares remaining in the program that was authorized by the board in 2007.
We have now increased the dividend annually for 37 consecutive years. Since 1974 the dividend has grown at an average compound
annual rate of 9.9%. Since 1996 we have returned approximately $9.4 billion to shareholders and thats through dividends as well as
stock buybacks.
10/26/2009 3Q2009 Q&A Q: Whats your current thought on share repurchases just given you bought back a few billion dollars of stock back in 2006, 2007, but,
I think, given your stock is here, whats your current thoughts on that?
A: Craig, as regards to share repurchase, as you know, weve been very, very strong on a share repurchase program. Obviously,
given the current environment, we suspended that at this point and we look forward to getting back to it and we need to continue to
see this stability in the recovery, and but given our cash flow projections now and, as you said, some of the cash on the balance
sheet, well be giving that hard consideration.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary McGraw Hill Financial, Inc.
LTM Ended
6/30/13
Profitability
Free Cash Flow Margin (%) 7.9 12.9 14.6 12.3 (0.3) 4.7
Coverages (x)
Leverage (x)
FCF/Total Adjusted Debt (%) 23.2 37.6 42.7 38.0 (0.6) 12.1
Balance Sheet
Short-Term Debt 70.0 400.0 457.0
Long-Term Senior Unsecured Debt 1,197.6 1,197.8 1,198.0 798.0 799.0 799.0
Other Debt
Equity Credit
Total Debt with Equity Credit 1,267.6 1,197.8 1,198.0 1,198.0 1,256.0 799.0
Cash Flow
Funds From Operations 1,142.3 1,080.1 1,183.5 1,295.0 926.0 876.0
Change in Working Capital (173.7) 118.0 123.9 (109.0) (179.0) 21.0
Cash Flow from Operations 968.6 1,198.1 1,307.4 1,186.0 747.0 897.0
Total Non-Operating/Nonrecurring Cash Flow (53.9) (54.4) 322.0 422.0
Dividends (280.5) (281.6) (292.3) (296.0) (984.0) (1,033.0)
Free Cash Flow 502.9 769.8 899.7 771.0 (12.0) 188.0
Net Acquisitions and Divestitures (47.9) 15.2 (333.7) 38.0 (177.0) (29.0)
Net Debt Proceeds 70.0 (70.0) 57.0 (400.0)
Net Equity Proceeds (405.8) 25.2 (205.9) (1,361.0) 4.0 (523.0)
Other (Investing and Financing) (43.6) (2.0) (44.4) (30.0) 53.0 1,937.0
Total Change in Cash 75.6 738.2 315.7 (582.0) (75.0) 1,173.0
Ending Cash and Securities Balance 471.7 1,209.9 1,525.6 944.0 760.0 1,900.0
Short-Term Marketable Securities 24.6 22.2 29.0 1.0
Income Statement
Revenue 6,355.1 5,951.8 6,168.3 6,246.0 4,450.0 4,003.0
Revenue Growth (%) (6.2) (6.4) 3.6 1.3 (28.8) (36.1)
Operating EBIT 1,426.4 1,296.5 1,476.5 1,506.0 1,478.0 1,585.0
267 Company Summaries NBCUniversal Media LLC
September 19, 2013

Corporates

NBCUniversal Media LLC
Key Rating Drivers
Leading Cable Networks: NBCUniversal Media LLCs (NBCUniversal) portfolio of cable
networks is a key consideration supporting the ratings and a strength of the companys credit
profle. Fitch believes that the top-tier channels will continue to be a must-carry for the distributors
and are likely to retain pricing power. NBCUniversals operating profle benefts from the stability,
recurring dual-stream revenue profle, high operating margin and free cash fow generation
characteristics attributable to its cable network business.
Ratings Linked to Comcast: NBCUniversals ratings are linked to Comcast Corporation
following the inclusion of NBCUniversal in Comcasts cross-guaranty structure, which effectively
ranks NBCUniversals indebtedness pari passu with the debt currently included in the cross
guaranty. The addition of NBCUniversal to the cross-guaranty structure together with the strong
strategic tie and ownership consolidation provide a sound rationale to link the ratings.
Positive Outlook: The positive outlook refects the expected improvement of Comcasts credit
protection metrics over the near term along with managements more conservative leverage
target ranging between 2x and 1.5x. In Fitchs opinion, the companys strong cable operating
profle along with the margin improvement opportunities within NBCUniversals broadcasting
segment and modest debt reduction will enable Comcast to reduce leverage within its target
during the current ratings horizon.
Rating Concerns: Rating concerns center on the secular issues challenging NBCUniversals
Broadcast Television segment, including time-shifting technologies and internet-based content,
as well as the exposure to cyclical advertising revenues. Fitch believes the company derives less
than half of its revenues from advertising in line with its media peer group.
Volatile Studio Business: NBCUniversals Filmed Entertainment business, similar to that of
its peers, will remain volatile and low margin, given its hit-driven nature. The emergence of new
digital distribution platforms and methods of consumption will continue to drive demand for the
companys content providing potential stability and upside for this business segment.
Positive: A positive rating action would likely coincide with Comcast achieving leverage below 2x
on a sustained basis. Additionally, Fitch would expect no material erosion of Comcasts operating
profle in the face of competition and changing dynamics of video service and for NBCUniversals
operating profle to continue to strengthen.
Negative: Negative rating actions are more likely to coincide with discretionary actions of
Comcasts management, including, but not limited to, the company adopting a more aggressive
fnancial strategy or an event-driven merger and acquisition action that drove leverage beyond
2.75x in the absence of a credible deleveraging plan.
Analysts
David Peterson
+1 312 368-3177
John Culver, CFA
+1 312 368-3216
john.culver@ftchratings.com
Ratings
Security Class
Current
Rating
NBCUniversal Enterprises, Inc.
Long-Term IDR BBB+
Series A Preferred Stock BBB
NBCUniversal Media, LLC
Long-Term IDR BBB+
Rating Outlook
Positive
September 19, 2013

Corporates

United
States
81%
Foreign
19%
NBCUniversal Media
(As of June 2012)
Cable
Networks
36%
Broadcas
t
Televisio
n
34%
Filmed
Entertain
ment
21%
Theme
Parks
9%
Revenue by Segment
NBCUniversal Media
(As of June 2012)
Broadcast
Television
34%
Filmed
Entertainment
21%
Cable
Networks
70%
Broadcas
t
Televisio
n
8%
Filmed
Entertain
ment
2%
Theme
Parks
20%
EBITDA by Segment
NBCUniversal Media
(As of June 2012)
Broadcast
Television
8%
Filmed
Entertainment
2%
September 19, 2013

Corporates

Segments/Major Assets/Investments NBCUniversal Media LLC
(As of Dec. 31, 2012)
Cable Networks
National News and
Information Networks Cable Sports Networks Broadcast Television
USA Network MSNBC Golf Channel NBC
Syfy CNBC NBC Sports Network (Formerly VERSUS) Telemundo
E! CNBC World Comcast RSN (13)
Bravo CNBC Europe Comcast SportsNet Philadelphia
Oxygen CNBC Asia Comcast SportsNet Mid-Atlantic
Style Universal Networks International Cable Sports Southeast
G4 Comcast SportsNet Chicago
Chiller MountainWest Sports Network
Cloo (Formerly Sleuth) Comcast SportsNet California
Universal HD Comcast SportsNet New England
Comcast SportsNet Northwest
Comcast Sports Southwest
Comcast SportsNet Bay Area
New England Cable News
Comcast Network Philadelphia
Comcast Network Mid-Atlantic
Filmed Entertainment Theme Parks Digital Media
Universal Pictures Universal Studios Hollywood DailyCandy
Focus Features Wet 'n Wild Fandango
Universal Studios Home Entertainment Universal Studios Japan iVillage
Universal Studios Singapore Hulu
Universal City Development Partners
a
Universal Studios Florida
a
Universal Islands of Adventure
a
Universal CityWalk Orlando
a
Local Broadcasting Owned and Operated
NBC Local Television Stations DMA General Market Rank % of U.S. TV Households
WNBC New, York 1 6
KNBC Los Angeles, CA 2 5
WMAQ Chicago, IL 3 3
WCAU Philadelphia, PA 4 3
KXAS
b
Dallas/Fort Worth, TX 5 2
KNTV San Francisco/Oakland/San Jose, CA 6 2
WRC Washington, D.C. 8 2
WTVJ Miami/Ft. Lauderdale, FL 16 1
KNSD
b
San Diego, CA 28 1
WVIT Hartford, CT 30 1
Telemundo DMA Hispanic Market Rank
c
% of U.S. Hispanic TV Households
KVEA Los Angeles, CA 1 14
WNJU New York, NY 2 10
WSCV Miami, FL 3 5
KTMD Houston, TX 4 4
KXTX Dallas/Fort Worth, TX 5 4
WSNS-TV Chicago, IL 6 4
KSTS San Francisco/Oakland/San Jose, CA 7 3
KVDA San Antonio, TX 8 3
KTAZ Phoenix, AZ 9 3
KNSO Fresno, CA 14 2
KDEN Denver, CO 16 2
KBLR Las Vegas, NV 23 1
WNEU Boston, MA 24 1
KHRR Tucson, AZ 25 1
WKAQ Puerto Rico
a
NBCU owns a 100% equity interest in, and receives special and other fees from, Universal City Development Partners, which owns Universal Studios Florida and
Universal Islands of Adventure.
b
Owned through a joint venture with LIN TV Corp.
c
Hispanic market rank is based on the relative size of the DMA among approximately
14 million U.S. Hispanic households as of Dec. 31, 2012. DMA Designated market area.
September 19, 2013

Corporates

Debt Structure
($ Mil., As of June 30, 2013)
2.100% Senior Unsecured Notes due 2014 900
3.650% Senior Unsecured Notes due 2015 1,000
Other Debt and Capital Leases 43
Total Debt 11,143
($ Mil., As of June 30, 2013)
Amount
Dec. 31, 2013
Dec. 31, 2014 900
Dec. 31, 2015 1,000
Dec. 31, 2016 1,000
Dec. 31, 2017
Thereafter 8,200
Total 11,100
September 19, 2013

Corporates

100% Series A Preferred Stock / 21% voting power
96%
Common
Units
4% Common Units
Capital Structure NBCUniversal Media LLC
($ Mil., As of June 30, 2013)
a
As of June 30, 2013 the amount available for borrowing under the credit facility totaled $100 million.
IDR Issuer Default Rating. Note: Cable Guarantors: Comcast Cable Communications, LLC; Comcast MO Group, Inc.;
Comcast Holdings, LLC; Comcast MO of Delaware, LLC.
Comcast GE
Comcast Entertainment
Holdings Subsidiaries
GE Subsidiaries
NBCUniversal Media, LLC
IDR: BBB+/F2
NBCUniversal Enterprises, Inc.
IDR: BBB+
Debt Issue Amount Rating
Senior Unsecured Revolver
a
1,250.00 BBB+
Senior Unsecured Notes due 2016 700 BBB+
Senior Unsecured Notes due 2018 1,100.00 BBB+
Series A Cumulative Preferred Stock 725 BBB
Note: The senior unsecured notes and revolver are guaranteed by Comcast Corporation and
the Cable Guarantors (defined below). NBCUniversal Enterprises, Inc. holds preferred units
issued by NBCUniversal, LLC with a $9.4 billion aggregate liquidation preference.
Debt Issue Amount Rating
Total 11,100.00
Note: NBCUniversal Media, LLC is party to Comcast Corporations cross-guaranty structure. As
party to the cross-guaranty, Comcast, along with the Cable Guarantors, guarantees the senior
unsecured notes issued by NBCUniversal Media, LLC (described above). Conversely,
NBCUniversal Media, LLC guarantees all of Comcasts and the Cable Guarantors existing and
outstanding senior unsecured notes and Comcasts $6.25 billion revolving credit facility.
NBCUniversal, LLC
100% Common Units / 79% voting power
NBCUniversal Subsidiaries
September 19, 2013

Corporates

Bank Agreement Covenant Summary NBCUniversal Media LLC
Covenant
Overview
Borrower NBCUniversal Enterprise
Document Date
and Location
First amendment dated June 28, 2011; amendment dated March 19, 2013.
Maturity Date Facility Type Maturity Date
Unsecured Revolver 3/2018
Description of Debt Senior Unsecured Credit Facility
Facility Type Commitment ($ Mil.)
Revolver 1,350
Ranking Senior Unsecured
Security None
Guarantee None
Change of Control (CoC) Prior to an IPO, CoC means that GE and Comcast fail to own more than 50% of the aggregate voting power of the borrower or any person
or group (other than GE or Comcast) that shall own a greater percentage of the voting power in the borrower than both GE and Comcast,
individually. After an IPO, CoC means ownership by any person or group (other than GE or Comcast) of equity interests representing more
than the greater of 35% of the voting power of the borrower or the percentage of the aggregate voting power represented by the equity
interests then held by GE and Comcast. CoC can also occur if a majority of the seats on the borrowers board of directors were neither
nominated by the board of directors of the borrower nor appointed by directors so nominated.
Mergers and Acquisitions,
Investments Restriction
Borrower is prohibited from merging or consolidating with or into any person; agreeing to liquidate, wind up, or dissolve itself; or sell,
transfer, or dispose of all or substantially all of its assets, unless either NBCU shall be the surviving entity with substantially the same assets
immediately following the reincorporation or reorganization, or have substantially all of the assets of the borrower immediately preceding the
merger or transfer, or the surviving entity assume all borrower obligations under the revolver, and have investment-grade credit ratings, and
after giving effect to the transaction no default or event of default shall have occurred and be continuing. The occurrence of a CoC constitutes
an event of default.
Sale of Assets Restriction No provision noted.
Debt Restrictions
Debt Incurrence Subject to certain exceptions, borrowers restricted subsidiaries are not permitted to incur any indebtedness. Borrowers restricted
subsidiaries that are not guarantors of the credit facility can incur indebtedness, provided that the aggregate principal amount does not
exceed $1.5 billion less the about of indebtedness (if any) secured by liens.
Limitation on Liens Incurrence of liens is not permitted except for, among other exceptions, existing liens, liens under sale-lease back transactions that does
not exceed $300 million, liens in connection with asset securitization transactions not exceeding $300 million and other liens as long as the
aggregate outstanding principal amount of the obligations secured thereby does not exceed at any time an amount equal to $1.5 billion less
the amount, if any, of any unsecured indebtedness incurred by the restricted subsidiary.
Limitation on Guarantees No provision noted.
Restricted
Payments (RP)
The borrower shall not, nor shall it permit any restricted subsidiary to, directly or indirectly, agree to any restriction or limitation on the
making of dividends, distributions, loans, or advances, the repaying of loans or advances or the transferring of assets from any restricted
subsidiary to the borrower or any other restricted subsidiary, except (i) restrictions and limitations imposed by law or by the loan documents,
(ii) customary restrictions and limitations contained in agreements relating to the sale of a subsidiary or its assets that is permitted hereunder,
(iii) restrictions set forth in the bridge facility, (iv) restrictions in the master agreement, (v) restrictions contained in any agreements governing
secured Indebtedness , (vi) restrictions existing under or by reason of any agreement or other instrument of a person acquired by the
borrower or any restricted subsidiary in existence at the time of such acquisition, (vii) anti-assignment provisions in contracts restricting
the assignment thereof, and (viii) any other restrictions that could not reasonably be expected to impair the borrowers ability to repay the
obligations as and when due.
Other
Cross-Default A cross-default can be triggered in the event the borrower or its restricted subsidiaries defaults in the observance or performance related to
any indebtedness in excess of $200 million, and such default results in the acceleration of the indebtedness prior to its stated maturity.
Cross-Acceleration No provision noted.
MAC Clause No provision noted.
Equity Clawback No provision noted.
Covenant Suspension No provision noted.
Required Lenders/
Voting Rights Required lenders is 50%.
MAC Material adverse change.
September 19, 2013

Corporates

Bond Covenant Summary NBCUniversal Media LLC
Bond Indenture
Overview
Covenant Description
Issuer NBCUniversal Media, LLC
Document Date 4/30/10
03/27/13 First Supplemental Indenture
Maturity Date 04/01/14
04/30/15
04/01/16
04/30/20
04/01/21
01/15/23
04/30/40
04/01/41
01/15/43
Description of Debt $900 million 2.100% Senior Notes due 2014
$1,000 million 3.650% Senior Notes due 2015
Ranking The notes are unsecured and unsubordinated obligations, and will rank equally with other unsecured and unsubordinated indebtedness.
Security Unsecured
Guarantee Comcast Corporation
Comcast Cable Holdings, LLC
Comcast Cable Communications, LLC
Comcast MO Group, Inc.
Comcast MO of Delaware, LLC
Change of Control
(CoC) No provision noted.
M&A,
Investments Restriction
[8.01 Consolidation,
Merger or Sale of Assets
by the Issuer]
Subject to certain customary exceptions, NBCU is prohibited from consolidating or merging with, into, or, directly or indirectly, selling or
otherwise disposing of all or substantially all assets unless NBCU is the surviving entity, or if this is not the case the surviving entity expressly
assumes all of NBCUs obligations under the notes. Any transaction is subject to the absence of default on a pro forma basis.
Sale of Assets
Restriction No provision noted, except for the restriction on selling all or substantially all of assets noted above.
Debt Restrictions
Debt Incurrence No provision noted.
Limitation on Liens
[3.06 Limitation
on Liens]
NBCU is prohibited from creating or incurring any lien on any current or future property to secure any indebtedness without effectively
providing that the notes of such series shall be equally and ratably secured until such time as such indebtedness is no longer secured by such
lien, subject to customary exceptions including permitted liens. Notwithstanding the restriction on liens, NBCU is permitted to create or incur
liens securing debt that does not exceed the greater of i) 15% of consolidated net worth calculated as of the date of the creation or incurrence
of the lien, and ii) 15% of consolidated net worth calculated as of the date of initial issuance of the notes of such series. Permitted liens include
typical exceptions, including among other things, liens securing sale and lease back transactions and asset securitization transactions not
exceeding $300 million in both cases.
Limitation on
Guarantees No provision noted.
Restricted
Payments (RP) No provision noted.
Other
Cross-Default No provision noted.
Cross-Acceleration No provision noted.
MAC Clause No provision noted.
Equity Clawback No provision noted.
Covenant Suspension No provision noted.
September 19, 2013

Corporates

Financial Summary NBCUniversal Media LLC
($ Mil., Years Ending Dec. 31) 2009 2010 2011 2012
LTM Ended
6/30/13
Profitability
Operating EBITDA 2,215.0 2,553.0 3,446.0 4,114.0 4,463.0
Coverages (x)
FFO Interest Coverage 41.31 8.84 9.36 8.69 9.26
FFO Fixed-Charge Coverage 9.51 5.40 5.96 5.63 5.97
Leverage (x)
Long-Term Secured Debt/Operating EBITDA 0.76
Long-Term Secured Debt/FFO 0.85
FFO Adjusted Leverage 1.43 4.06 3.15 3.07 2.73
Total Adjusted Debt/Operating EBITDAR 1.31 3.91 3.31 3.11 2.85
FCF/Total Adjusted Debt (%) 11.6 1.3 17.3 11.7 15.5
Balance Sheet
Short-Term Debt 554.0 10.0 907.0
Long-Term Senior Secured Debt 1,685.0
Long-Term Senior Unsecured Debt 9,090.0 9,614.0 11,231.0 10,236.0
Other Debt
Equity Credit
Total Debt with Equity Credit 1,685.0 9,090.0 10,168.0 11,241.0 11,143.0
Off-Balance-Sheet Debt 1,464.0 1,736.0 2,136.0 2,536.0 2,536.0
Total Adjusted Debt with Equity Credit 3,149.0 10,826.0 12,304.0 13,777.0 13,679.0
Cash Flow
Funds From Operations 1,975.0 2,172.0 3,253.0 3,693.0 4,177.0
Change in Working Capital 647.0 (161.0) (384.0) (360.0) (72.0)
Cash Flow from Operations 2,622.0 2,011.0 2,869.0 3,333.0 4,105.0
Capital Expenditures (308.0) (286.0) (432.0) (763.0) (1,019.0)
Dividends (1,950.0) (1,589.0) (315.0) (964.0) (964.0)
Free Cash Flow 364.0 136.0 2,122.0 1,606.0 2,122.0
Net Acquisitions and Divestitures 53.0 3.0 (629.0) 2,936.0 1,625.0
Net Debt Proceeds (21.0) 7,419.0 (494.0) 1,032.0 1,495.0
Net Equity Proceeds
Other (Investing and Financing) (518.0) (6,671.0) (699.0) (461.0) (5,573.0)
Total Change in Cash (122.0) 887.0 300.0 5,113.0 (331.0)
Ending Cash and Securities Balance 197.0 1,084.0 808.0 5,921.0 909.0
Income Statement
Revenue 15,085.0 16,590.0 19,028.0 23,812.0 24,171.0
Revenue Growth (%) 10.0 14.7 25.1 10.3
Operating EBIT 1,868.0 2,204.0 2,333.0 2,788.0 3,076.0
Gross Interest Expense 49.0 277.0 389.0 480.0 506.0
275 Company Summaries Pitney Bowes Inc.
September 19, 2013

Corporates

Pitney Bowes Inc.
Key Rating Drivers
Market Share: Pitney Bowes Inc. (PBI) maintains a signifcant and entrenched market position
in the core mailing business, characterized by an approximate 80% share of the U.S. postage
meter market and limited competition. More than 70% contractual revenue and a diverse
customer base are further strengths.
Top Line a Concern: Fitchs primary concern is the top-line declines, driven by weakness in
both small and medium-sized businesses (SMBs). The declines in equipment sales, which drive
future fnancing, rental and supplies revenue, is also concerning.
Cyclical Pressures Compound Secular: Fitch believes cyclical pressures accelerate the well-
documented secular challenges, as customers could look to digital mailing as a cost-reduction
mechanism, and choose to keep existing equipment. The acceleration of digital substitution
for physical transaction mail results in reduced need for PBIs mailing equipment. Although the
majority of PBIs revenue is not directly tied to mail volume, Fitch believes continued mail volume
declines could drive reduced equipment needs, whether in terms of size, number or functionality.
Other Segments Less Proftable: Fitch sees risk of pressure in overall proftability, as PBI
continues to invest in its lower margin services, software, international and production mail
businesses to grow its top-line and offset declines in the core U.S. mailing business.
Transition Underway: PBIs initiatives to position itself more as a digital and services company
could gain traction and generate EBITDA and FCF in the coming years. That said, Fitch does not
expect these initiatives to offset the declines in the high-margin North American mailing space.
These products could cannibalize existing physical business, but Fitch believes such a strategy
is unavoidable, given ongoing digital substitution.
Conservative Financial Policy: Fitch expects a conservative fnancial profle over the medium
term. The ratings incorporate the potential for moderate acquisition and share buyback activity
that is limited to free cash fow. Any debt-funded activity would be outside current ratings. Fitch
acknowledges the risk faced by bondholders of all companies with challenged growth and
underperforming equity of a potentially more aggressive fnancial policy.
Potential Downgrade Drivers: A downgrade could result from a sustained increase in total
leverage, whether the result of incremental debt or lower EBITDA. Lack of traction in the growth
and digital initiatives, indications that they will not be enough to offset declines in physical
business, or indications of a more aggressive fnancial policy may also result in a downgrade.
Rating Stabilization: Ratings may be stabilized if the company articulates a conservative
fnancial policy, including a consolidated leverage target of less than 4.0x. The ratings could
stabilize if over the next one to two years Fitch has higher conviction that a successful rollout of
the digital and customer communications initiatives, in combination with growth in its enterprise
services businesses, will offset declines in its physical business.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
Ratings
Security Class
Current
Rating
Pitney Bowes Inc.
Long-Term IDR BBB
Senior Unsecured Debt BBB
Short-Term IDR F3
Commercial Paper F3
Pitney Bowes
International Holdings Inc.
IDR BBB
Preferred Stock BB
Rating Outlook
Negative
September 19, 2013

Corporates

Equipment Software Services
Portfolio Summary Pitney Bowes Inc.
(As of June 30, 2013)
Postage Meters and Scales
Mailing Systems Small Volume
Mailing Systems Mid Volume
Mailing Systems High Volume
Postage Scales
Postal Kiosks
Shipping Equipment
Folders, Inserters, and Tabbers
Feeders
Folders
Inserters Low/Mid Volume
Inserters High Volume
Tabbers
Mail Sorters
Flats Sorters
Letter Sorters
Sorter Operations Platforms
Office Products
Document Binders
Furniture Solutions
Visitor Tracking Systems
Shredders
Mail Openers
Printers
Document Printers
Envelope and Address Printers
Inkjet Printers, Transport and Accessories
Production Printing Systems
Address Management
Address and Deliverability Validation
Change of Address Management
Campaign Management
Contact Strategy
Email and Marketing Automation
Communications Management
Content Author
DOC1
EngageOne e-Messaging
EngageOne Interactive
EngageOne Liason
PlantPress
PrintShop Mail Suite and Direct Smile
StreamWeaver
Customer and Marketing Analytics
BankAccel
Portrait Explorer
Portrait Miner
Portrait Uplift
Data Management
Enterprise Data Management
Data Integration
Data Quality
Master Data Management
Data Products
Location Intelligence
Enterprise Location Intelligence
Geocoding
International Geocoding
MapInfo Suite
Market Analytics
Mailing and Postal Compliance
CASS Certification
Mail Barcoding and Tracking
Mail Presort
Online Postage
Postal and Carrier Expense Accounting
Print and Mail Production
Automated Document Factory
Output Management
Hybrid Mail
Secure Tracking Software
Exam Tracking
Visitor Tracking
Shipping
Global Ecommerce
Package Management
Customer Communications & Marketing
Print Management
Transactional Documents
Marketing Intelligence Portal
Marketing Supply Chain
Operational Mailstream Efficiency
Volly
Consulting Services
Customer Relationship Management Marketing
Postal & Return Mail
Managed Output
Legal Document Management & eDiscovery
Implementation
Domestic Mail Presort
First Class Mail Presort
Standard Mail Presort
PresortXtra for Low-Volume Mailers
Global Ecommerce
Global Checkout
Global Fulfillment
Data Quality
Parcel Insurance
Mail and Office
Mail and Package Management
Digital Mail and Interoffice Communications
Secure Mail
Employee Self Service
Business Efficiency and Specialized Services
Office Operations and Facilities Management
Document Management
Document Processing
Managed Output
eDiscovery and Litigation Support
Postal, Shipping and Permit Payments
Purchase Power
Reserve Account
Shipping Payment Solutions
EasyPermitPostage
Postage By Phone
September 19, 2013

Corporates

U.S.
68%
Non-U.S.
32%
Pitney Bowes Inc.
(As of Dec. 31, 2012)
North
American
Mailing
37%
Internatio
nal
Mailing
14%
Productio
n Mail
10%
Software
8%
Manage
ment
Services
19%
Mail
Services
9%
Marketin
g
Services
3%
Revenues by Segment
Pitney Bowes Inc.
(As of Dec. 31, 2012)
International
Mailing
14%
Production
Mail
10%
Marketing
Services
3%
Management
Services
19%
North
America
Mailing
63%
Internatio
nal
Mailing
8%
Productio
n Mail
3%
Software
5%
Manage
ment
Services
7%
Mail
Services
11%
Marketin
g
Services
3%
EBITDA by Segment
Pitney Bowes Inc.
(As of Dec. 31, 2012)
International
Mailing
8%
Production
Mail
3%
Marketing
Services
3%
Management
Services
7%
September 19, 2013

Corporates

Event Risk Dashboard Pitney Bowes Inc.
expectations of what it will actually do. N.A. Not available. Continued on next page.
Event Risk Summary
Level of Risk
LBO M
Secular H
Corporate Governance/Ownership M
Acquisition H
Divestiture M
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk Medium
Biggest hurdle is the highly proftable captive fnance business, which requires
low cost of funding and secular challenges.
$6 billion$7 billion enterprise value (EV) is manageable.
Solid, stable FCF generation; receivables throw off cash amid secular declines.
Equity underperformance; stock under sustained pressure.
Secular Risk High
Core SMB mailing business expected to continue to shrink as mail volumes decline.
Growth businesses are lower margin.
Digital business not yet proven.
A mitigant is that business throws off cash as fnance receivables decline.
Corporate Governance/Ownership Medium
The board structure and stock ownership are not concerning, as there is only
one class of stock and no concentrated ownership. One minor risk is the dual
chairman/CEO role.
Shareholders signaled unhappiness when the advisory vote on executive
compensation was not approved at the shareholders' meeting in May 2012.
The executive compensation incentive structure moderately increases risk.
Shareholder-friendly components include EPS and total shareholder return.
Creditor-friendly components include FCF (pre-dividend) and revenue growth.
The company has publicly stated its goal to maintain investment-grade metrics.
However, the company has not provided metric targets.
Recent and upcoming maturities addressed with a mix of repayment and
refnancing.
Risk of aggressive fnancial policy mitigated by fnancing business, which relies
on low-cost funding.
Pitney Bowes Inc. Rating History
BBB
BBB
BBB+
A
A
3.0
3.2
3.4
3.6
3.8
4.0
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
10
20
30
40
50
60
Source: Bloomberg.
Pitney Bowes Inc. Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Pitney Bowes Inc. (Continued)
expectations of what it will actually do. N.A. Not available.
PBI may, subject to certain conditions, designate one domestic or foreign
subsidiary as an additional borrower under the facility. Such borrowing would be
guaranteed by the parent.
Maximum adjusted leverage of 3.5x under the new credit agreement.
No limitations on guarantees.
($ Mil.)
Starting Authorized
Share Buyback
Incremental
Authorization
Authorized
Share Buyback
Share
Buy Activity
Ending Authorized
Share Buyback
YTD June 2013 50.0 50.0 50.0
2012 50.0 50.0 50.0
2011 50.0 100.0 150.0 (100.0) 50.0
2010 73.4 76.6 150.00 (100.0) 50.0
2009 73.4 73.4 73.4
2008 406.6 406.6 (333.2) 73.4
2007 141.2 665.4 806.6 (400.0) 406.6
A moderate amount of share buybacks funded with FCF are incorporated into current ratings, assuming there is debt reduction over the next several years as well.
Like most investment-grade (IG) companies, there are no restrictions on the amount of share buyback activity.
YTD June 2013
2012
2011 0.7
2010 (77.5) 12.6
2009
2008 (67.7)
2007 (594.1) 29.6
Digital acquisitions to boost declining legacy businesses a higher possibility amid
top line declines.
Certain business lines (PBMS, Mailing Services, Marketing Services) could be
easily divested.
(x)
Covenant
Level Ratio/Test
EBITDA
Cushion (%)
Adjusted Leverage 3.5 N.A. N.A.
Note: the company has not disclosed the adjustments made. However, Fitch
believes there is material room under the covenant.
Litigation Risk Low
The U.S. Postal Service remaining a going concern is a key driver of PBI's viability.
Fitch does not believe there is a scenario where the U.S. Postal Service is no
longer a going concern.
Fitch believes the proposed changes to the post offce would be neutral to
positive for PBI. Cutting Saturday delivery will not impact the number of pieces of
mail sent. Closing rural post offces could beneft PBI's retail kiosk business. An
increased emphasis on workshare mail to reduce delivery costs would beneft the
companys presort services.
PBIs international business is subject to postal authorities across the globe. This
increases the risk of adverse regulatory decisions by one of these international
regulatory bodies.
Union Workforce
The large majority of PBIs employees are not represented by any union.
Pensions
U.S. pension plan was 13% ($239 million) underfunded, and foreign plan was
25% ($154 million) underfunded at Dec. 31, 2012.
$131 million contribution made to the U.S. plan in 2011, and $94 million in 2012.
PBI expects to contribute $10 million in 2013 to the U.S. plan and $20 million to
foreign plans.
Other
Certain derivative instruments contain provisions that would require PBI to post
collateral should ratings fall below BB/Ba3.
September 19, 2013

Corporates

Corporate Governance Overview Pitney Bowes Inc.
a
Most recent filings on Bloomberg as of June 2013. TSR Total shareholder return. CIUs Cash incentive units. MSUs Market stock units. PRSUs Performancebased restricted
stock units. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Marc B. Lautenbach President and CEO 70,833 289,300 360,133
Michael Monahan EVP and CFO 575,600 650,000 1,840,141 214,362 3,280,103
Leslie Abi-Karam EVP and President, Comms Solutions 553,800 650,000 728,365 158,536 2,090,701
Vicki A. OMeara EVP and President, Services Solutions 522,500 450,000 508,788 42,727 1,524,015
John E. OHara EVP and President, Software Solutions 450,000 750,000 217,533 70,680 1,488,213
Murray D. Martin Former Chairman, President and CEO 966,667 2,625,000 2,589,500 1,574,714 7,755,881
Board of Directors
Linda G.
Alvarado
61 Y May 2013
May 2014
1992 92,000 31,933 26,678 150,611 Finance; Governance 3M company President and CEO
Alvarado Construction, Inc.
Anne M.
Busquet
63 Y May 2013
May 2014
2007 95,000 31,933 5,000 131,933 Finance; Governance Meetic S.A. Principal
AMB Advisors, LLC
Roger
Fradin
59 Y May 2013
May 2014
2012 88,083 43,360 5,000 136,443 Audit; Finance MSC Industrial Direct
Co., Inc.
President and CEO
Honeywell Automation and
Control Solutions, Honeywell
International, Inc.
Anne
Sutherland
Fuchs
65 Y May 2013
May 2014
2005 105,500 31,933 5,000 142,433 Audit; Executive
Compensation
Gartner, Inc. Consultant to private equity
firms
S. Douglas
Hutcheson
57 Y May 2013
May 2014
2012 49,000 26,355 75,355 Audit; Finance Leap Wireless
International, Inc.
CEO
Leap Wireless International, Inc.
Marc B.
Lautenbach
51 N May 2013
May 2014
2012 Executive None President and CEO
Pitney Bowes Inc.
Eduardo R.
Menasc
67 Y May 2013
May 2014
2001 113,000 31,933 144,933 Executive; Executive
Compensation (Chair);
Governance
John Wiley & Sons, Inc.;
Hill-Rom Holdings, Inc.;
Hillenbrand, Inc.
Retired President , Enterprise
Solutions Group
Verizon Communications Inc.
Michael I.
Roth
Chairman
67 Y May 2013
May 2014
Executive (Chair);
Finance (Chair);
Ryman Hospitality
Properties Inc.; The
Companies, Inc.
Chairman and CEO
The Interpublic Group of
Companies, Inc.
David L.
Shedlarz
64 Y May 2013
May 2014
2001 102,500 31,933 5,000 139,433 Audit (Chair and
Financial Expert);
Executive ; Finance
Teachers Insurance and
Annuity Association, The
Hershey Company
Pfizer Inc.
David B.
Snow
58 Y May 2013
May 2014
2006 105,500 31,933 137,433 Executive ; Executive
Compensation;
Governance (Chair)
None Former Chairman and CEO
Medco Health Solutions, Inc.
Annual Incentive EBIT, Revenue Growth, Adjusted FCF and Strategic Objectives
Long-Term Incentives Adjusted EPS, Adjusted FCF and TSR relative to TSR of companies in the S&P 500 Index over 3 years.
(%) Base Salary Annual Incentive Long-Term Incentives Total
CEO 14 19 67 100
Other NEO 27 20 53 100
Base salary is benchmarked +/ 10% to the competitive market median.
Annual incentive targets were: Martin 130% base salary and 75% for remaining NEOs . Potential payout is up to a max. of $4 Mil. per NEO. Payout may be modified by 0% to
15% based on the achievement of pre-determined customer and employee objectives, TSR and the quality of earnings. For FY 2012, modifier was not applied on the achievement of
those objectives. Actual payout was 64% of target.
Long-term incentive mix comprises two awards: CIUs (60%) Award value can be modified by up to +/ 25% based on TSR. Potential payout is up to a max. of $8 Mil. per NEO;
PRSUs (40%) 4-year vesting, up to a max of 600,000 shares per NEO. MSU awards were eliminated from the long-term incentive mix.
Stock ownership requirements: CEO 5x base salary; NEO 2x base salary.
September 19, 2013

Corporates

Corporate Governance Overview Pitney Bowes Inc. (Continued)
a
Most recent filings on Bloomberg as of June 2013. TSR Total shareholder return. CIUs Cash incentive units. MSUs Market stock units. PRSUs Performancebased restricted
stock units.
Roger Fradin and S. Douglas Hutcheson were nominated as directors in 2012. As of Dec. 3, 2012, Murray D. Martin resigned from the company and the board of directors. In
December 2012, the board elected Marc B. Lautenbach as president, CEO and director of the company. Michael I. Roth was nominated as chairman of the board. Adkins did not
stand for re-election, Keyes and Weissman retired from the board on May 13, 2013.
There were no related-party transactions in FY 2012; clawback policy is in place.
a
State Street Corp. 35,028 17.4
Bank Of New York Mellon Corp. 6,735 3.3
Invesco LTD 5,025 2.5
NWQ Investment Management Co. 4,346 2.2
PGGM Vermogensbeheer BV 3,134 1.6
FMR LLC 3,104 1.5
ING Groep NV 2,803 1.4
Capital Group Companies 2,715 1.4
Total Top 10 96,396 47.9
Rodney C. Adkins 13 <1.0
Linda G. Alvarado 35 <1.0
Anne M. Busquet 14 <1.0
Roger Fradin 8 <1.0
Anne Sutherland Fuchs 17 <1.0
S. Douglas Hutcheson 2.056 <1.0
James H. Keyes 28 <1.0
Eduardo R. Menasc 22 <1.0
Michael I. Roth 37 <1.0
David L. Shedlarz 24 <1.0
David B. Snow, Jr. 16 <1.0
Robert E. Weissman 35 <1.0
Marc B. Lautenbach <1.0
Murray D. Martin 5,157 1.3
Michael Monahan 1,095 <1.0
Leslie Abi-Karam 1,061 <1.0
Vicki A. OMeara 432 <1.0
John E. OHara 749 <1.0
All Executive Officers and Directors as a Group (20) 9,735 2.5
September 19, 2013

Corporates

Pension Screener
a
Pitney Bowes Inc.
2013 "At Risk" Shortfall? No Estimated Pension Outflow
Greater than 10%?
No
Plan Assets
Fair Value of Plan Assets (U.S.) 1,583.9 1,426.5
Fair Value of Plan Assets (Non-U.S.) 509.3 435.7
Actual Return on Plan Assets (Non-U.S.) 44.9 (7.5)
b
10.0 100.0
Projected Benefit Obligation (PBO, U.S.) 1,822.7 1,705.7
Projected Benefit Obligation (Non-U.S.) 663.8 579.6
Benefits Paid (U.S.) (130.3) (131.0)
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Organizational Structure Pitney Bowes Inc.
($ Mil., As of June 30, 2013)
Pitney Bowes Inc.
(USA)
IDR BBB/Negative Outlook
Short-Term IDR F3
Public
Pitney Bowes Bank
(Utah)
Domestic Operating
Subsidiaries
PB Forms, Inc.
PitneyWorks.com L.L.C
International Operating Subsidiaries
(Excluding Canada)
Institutional Preferred
Stockholders
Amount Outstanding
Term Debt 3,610.4
Commercial Paper
Bank Debt
Other 43.7
Total 3,654.0
100% Common Stock 75% Voting Control
25% Voting
Control
1% Membership Interest 99% Membership Interest
60%
(100% Class A Shares)
40%
(100%
Class B
Shares)
100% Voting Common Stock
100% Nonvoting Common Stock
Pitney Bowes
of Canada Ltd.
(Canada)
100% Preferred Stock
Pitney Bowes International Holdings, Inc.
(Delaware)
IDR BBB/Negative Outlook
PitneyWorks.com Inc.
B. Williams
Holding Corp.
Debt Structure
Pitney Bowes, Inc.
($ Mil., As of June 30, 2013)
$1 Billion Credit Facility due 2016
Commercial Paper Program
a

Term Loans due 2015 and 2016 230.0
4.875% Notes due August 2014 299.6
5.000% Notes due March 2015 274.9
4.750% Notes due January 2016 370.9
5.750% Notes due September 2017 500.0
5.600% Notes due March 2018 250.0
4.750% Notes due May 2018 350.0
6.250% Notes due March 2019 300.0
5.250% Notes due October 2022 110.0
5.250% Notes due January 2037 500.0
6.700% Notes due July 2043 425.0
Other 43.7
Total Debt 3,654.1
a
Backed by the $1 billion credit facility.
Pitney Bowes, Inc.
($ Mil., As of June 30, 2013)
Amount
Dec. 31, 2013
Dec. 31, 2014 299.6
Dec. 31, 2015 324.9
Dec. 31, 2016 550.9
Dec. 31, 2017 500.0
Thereafter 1,935.0
Total 3,610.4
Note: Excludes other debt obligations.
September 19, 2013

Corporates

Debt and Covenant Synopsis Pitney Bowes Inc.
Bank Agreement/Indentures
Overview
Description of Debt Credit agreement Unsecured notes MTN program
Document Date 4/24/12 2/14/05, amended Oct. 23, 2007 2/15/2002
Summary $1.0 billion revolving credit facility Indenture Indenture
Maturity April 24, 2016 5.00% due 2015
4.75% due 2016
5.75% due 2017
5.60% due 2018
6.25% due 2019
5.25% due 2037
6.70% due 2043
4.875% due 2014
4.750% due 2018
Security Package
Financial Covenants
Adjusted Leverage
(Maximum)
3.5x
Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)

Change of Control
Provision

Sale of
Assets Restriction

Limitation
on Acquisitions

Debt Restrictions
Additional
Debt Restriction

Limitation on
Secured Debt
N.A. Less than or equal to 15% consolidated net
tangible assets.
Restricted Payments
Other
Cross-Default N.A. Other securities issued under the indenture
Cross-Acceleration
with Facility

N.A. Not available.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Pitney Bowes Inc.
Date of
4/30/2013 1Q2013 Q&A Q: Hi, guys. Thanks for taking the follow-up. This is certainly going to be a topic at the Analyst Day that Im going to ask you about,
but I want to take a cut at it now. How should we view the context of whats been, to this point, a pretty firm commitment to investment
grade rating, I suppose, now that theres, sounds like theres this commitment to revenue growth as well? If you guys find yourself
I appreciate Marc, your comments around fighting for capital. To what extent does the balance sheet you have to fight for capital
going forward, when we think about commitments in investment grade rating, relative to what sounds like a commitment to growth
initiatives? Thanks.
A: We have a commitment to investment grade ratios. And we consider the balance sheet a very important tool, to not only finance our
business, but to provide us the flexibility going forward. So the notion of having investment grade ratios continues to be a cornerstone
of our corporate financial strategy.
4/30/2013 1Q2013 Prepared Today, we announced another action designed to unlock the value of the company. In order to provide financial flexibility to invest in
what I believe to be compelling opportunities and to enhance our capital structure, the Board of Directors has reduced the dividend
on our common stock to $0.1875 per share. As I described on our last earnings call, any decision regarding the dividend would be
made in the context of our overall strategy, with the objective to improve total shareholder return and that is precisely what we have
done today. I believe that todays action is a critical component in our goal of providing competitive and sustained returns to our
shareholders.
4/30/2013 1Q2013 Q&A Q: Thanks for taking the question. I realize you may tackle this on Friday, but Ill give it a shot. On the dividend cut and the expected
savings you guys are going to generate, do you have an outline, or something you can share with us maybe, about how much you
expect to allocate to investment versus M&A or improving the balance sheet?
A:Yeah. In terms of the dividend change, its about $150 million of capital that we will have available. We dont have a specific formula
for allocating capital. Itll really be based on the specific opportunities in the business for organic investment. We look at acquisition, or
inorganic investment, as something that, as Marc described, it really has to add value to the overall portfolio.
And then, we will talk on Friday about the balance sheet and our ongoing focus on making sure that we maintain investment grade
ratios around the business. So it will be a balanced approach that will continue to provide us flexibility for investment in the business,
but we dont have a specific formula on how well apply that.
4/30/2013 1Q2013 Prepared On the balance sheet and cash flow, free cash flow during the quarter was $107 million and on a GAAP basis, we generated
$132 million in cash from operations for the quarter. We returned $75 million of cash to our common shareholders in the form of
dividends and had $16 million of restructuring payments related to our previous restructuring programs. During the quarter, we issued
$425 million of 30-year retail debt thats callable at par after five years. We used the proceeds of these bonds to retire approximately
$405 million of debt that was scheduled to mature in 2014 through 2016. By extending our debt maturities and reducing the amount of
debt thats coming due over the next several years, we have enhanced our financial flexibility. These actions, along with the dividend
change, provide the capital balance investment in the business, the return of capital to shareholders and the ability to retire and
refinance future debt maturities, which combined, will drive shareholder value creation.
4/30/2013 1Q2013 Q&A Q: Great. And then, just my last question, because Id been remiss if I dont ask. In the release, you dont mention share repurchase.
Is that something thats still on the table, in dont want to steal the thunder for Friday, but Im just curious as to how youre thinking
about a restart of that program?
A: Shannon, it is on the table. It is one of the tools that we have at our disposal to drive shareholder value. So we will use it
opportunistically going forward.
1/31/2012 4Q2012 Q&A Q: Perfect. And then Marc, I was hoping to pin you down a little bit further on capital allocation. Your predecessor sort of gave the
impression that a dividend cut was really unlikely or not something that was on the table. So, I was just curious if you could tell us for
the May meeting after your 100 days, if it was possible or potential that you would actually cut the dividend?
A:Im not going to preview where I come out on May. Obviously, as Mike said, the dividend is a decision thats the Boards decision.
Its made on a quarter-by-quarter basis, and its made in the context of delivering great shareholder value. And well conclude the
review and well talk more about it in May.
1/31/2012 4Q2012 Q&A Yeah, Blaine, in terms of capital allocation, obviously, we look at the needs of the business, we look at the balance of returning cash
to shareholders as well as looking at the debt ratings and our access to the capital markets and have taken an approach there to
balance those over time and use a different mix as appropriate for the opportunities and all in the business. So, as Marc said, well
continue to evolve that as the strategy of business evolves and obviously keep people posted on that. Yeah, as weve said in the past,
the board reviews and approves the dividend each quarter, and we kept it flat in the first quarter in part to allow Marc to complete his
strategic review of the business, and we expect to make capital allocation recommendations in line with that strategy and in line with
opportunities in business as we go forward.
1/31/2012 4Q2012 Prepared We are committed to a prudent use of cash that will enhance long-term shareholder value. We had $4 billion of debt on the balance
sheet at the end of the quarter, which was $217 million less than the amount of debt at the end of 2011. Our debt is lower than 2011
even though we obtained $230 million of term bank loans during the quarter and issued $110 million of retail debt. We expect to use
the proceeds of both of these borrowings to pay down debt that is maturing later this year.
8/2/2012 2Q2012 Q&A Q: Okay. And I wanted to follow up on some of the earlier cash flow questions and specifically ask you about your credit rating, and
where do you place maintaining your credit rating versus all other priorities for use of cash? In other words, would you sacrifice the
dividend to maintain a credit rating? Or achieve a certain credit rating?
A: Yeah, in terms of our credit rating, its obviously important to us. I think a number of the actions that weve taken including reducing
the debt outstanding are consistent with maintaining investment grade credit rating. In terms of the dividend, when we look at our
free cash flow, our dividend is in the neighborhood of about 40% of our free cash flow. So we dont see this as a choice between the
two. We believe we generate sufficient free cash flow to support the dividend and we think were taking the right actions to maintain a
healthy credit rating and we think we can achieve a good balance between the two in the way we manage the business.
8/2/20112 2Q2012 Q&A The other is we have been evolving to a model that requires less capital in terms of capital expenditures back into the business. And
thats come down substantially over the last several years as weve moved to more digitally-based products and lower cost in terms of
delivering our products to our customers.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Pitney Bowes Inc. (Continued)
Date of
8/2/2012 2Q2012 Q&A Q: Can you talk through the decision to redeem, or call it note early with cash versus refinance? What Im specifically trying to get is
where you think the right debt structure for the company is over the next couple of years? Do you continue to strengthen the balance
sheet with revenue or do you grow it, because theres [ph] sheet (30:20) financing or hold it in place?
A: Yeah. In terms of redeeming the debt, we looked at the opportunity to with that debt coming due in October, we obviously
monitor the markets. We were in a situation where we had sufficient free cash flow and cash on the balance sheet that we were able
to redeem that debt, give ourselves some flexibility. Obviously, were focused on our ratings and given the contraction in the revenue
or in the finance receivables space, we wanted to make sure that our debt portfolio was in line as well. And so we chose to redeem
that debt.
As we go forward, obviously, what we will do from a debt perspective is dependent upon the growth in our business. Obviously
finance receivables is one of the biggest reasons why we have the debt on our balance sheet. And obviously if we grow those finance
receivables in the future, we would look at providing financing for that. And that obviously has a good return on it. So it would be a
good use of debt. If we dont have uses for the debt, we will look at continuing to manage the balance sheet, keeping in mind both
whats available in the markets, the cash we have available to us, and what investments we have or need to make in the business.
8/2/2012 2Q2012 Q&A Q: My first question is just on sort of cash generation, cash usage, clearly youre using it to pay down debt. You didnt buy any stock
this quarter. Im sure youre painfully aware of where your stock price is at right now. So Im just kind of curious near-term and even
longer term, how youre thinking about cash flow generation and use of cash given all the different things that you can invest it in?
A: Yeah, thanks for the question, Shannon. In terms of the use of cash, obviously, weve taken a balanced approach to how we use
the cash we generate. Obviously, we provide a healthy dividend which consumes about $300 million of cash on an annual basis and
provides a good foundational return to the shareholder. Weve been investing back into the business both through increased R&D
and investments in things like Volly as well as using some cash for paying out on our strategic transformation program. So as we go
forward, well continue to look at a balanced use of our cash, both for return to shareholders as well as to manage our overall
debt portfolio.
5/7/2012 1Q2012 Prepared As of the end of the quarter we had $178 million of commercial paper outstanding, primarily as a result of retiring $150 million of
our term debt during the quarter. Its our expectation that well pay down a portion of this commercial paper balance during the year.
We have $400 million of additional debt scheduled to mature in October. We are currently evaluating our alternatives on how best
to manage our debt portfolio, including refinancing through new term debt, commercial paper, cash or a combination of these three
options.
11/1/2011 3Q2011 Q&A Q: How are you thinking about share repurchase going forward? And what was your ending share count or the average for the quarter
and then the ending share count?
A: The average for the quarter on a fully diluted basis was I think $203 million, and we were I think just below $200 million on an
actual count basis. In terms of share repurchase, we look at that as the option on the end with our cash flow. Actually in the quarter
was $202 million, not $203 million. But in terms of the cash flow at the end of the day we look at share repurchase as one of those
variables. We have bought $100 million this year, we have $50 million remaining and consistent with what our original authorization
was we look at whether we would acquire that over the next three to nine months.
8/4/2011 2Q2011 Q&A Q: How are you thinking about the capital structure? Use of cash clearly remains dividends and share repurchase. But just any more
color you can give on sort of how youre thinking about it, especially from a debt standpoint.
A: Yeah. From a debt standpoint obviously at the end of the quarter we didnt have any commercial paper outstanding. That tends
to fluctuate during the period, but at the end of the period we were able to eliminate that. We dont have any debt coming due until
September of next year. So were kind of locked it really wouldnt be cost effective to buy that out early. So were kind of set on that.
So we will have free cash flow to obviously reinvest in the business.
We will spend about $100 million in cash this year on principally severance payments related to our Strategic Transformation Program
so thats one other use as well. I think the good news is going forward in 2012 as we see some of those programs come to conclusion,
that usage going forward should be somewhat less. And as we get into 2012, well look at our refinancing or paydown options related
to the debt thats maturing in 12.
8/4/2011 2Q2011 Q&A Q: Many of the analysts out there are suggesting that your dividends may be reduced or eliminated but from what Ive heard, it
appears your free cash flow will more than cover adequately any dividend matching previous dividend declarations. Am I correct
there?
A: We have a long history of generating very solid free cash flow. Our guidance for this year projects solid free cash flow and we
have a track record of increasing our dividend for 29 consecutive years, thats been an important part of the total mix of return to
shareholders
4/29/2011 1Q2011 Q&A Q: have your thoughts on what the appropriate balance sheet leverage changed at all, or the potential for maybe for increased
shareholder returns in some form?
A: Well, I think in terms of shareholder returns, obviously we provide a very good dividend return. So we think thats an important part.
We think actually the return to growth will hopefully have a positive impact on the equity return.
In terms of leverage in the balance sheet, thats something that we are managing as we go along. We have, over the last few years,
brought our debt levels down in line with some of the reduction in our finance receivable base. As that stabilizes and as we see it
return to growth, obviously therell be a little bit more leverage associated to that.
We also have certain cash usages that well apply our excess cash to. Obviously we have the payments from our Transformation
program, which we estimate to be about $100 million. We do plan some pension contributions this year for both our U.S. and
international plans in the neighborhood of about $145 million. And we also have share authorization outstanding from the Board that
we have available to us. Thats about $150 million of authorization that weve said we will look at utilizing over 12 to 18 months, so,
and then obviously other investment potentials in the business to help drive that growth.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Pitney Bowes Inc.
LTM Ended
6/30/13
Profitability
Operating EBITDA 1,425.3 1,209.6 1,153.6 1,073.1 1,009.9 951.3
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 770.5 226.0 53.5 550.0 375.0
Long-Term Subordinated Debt 374.2 296.4 296.4 296.4
Other Debt 1.0 0.9 0.8 0.7 53.1 44.3
Equity Credit 281.4 74.1 74.1
Cash Flow
Funds From Operations 1,085.7 833.4 873.8 868.5 545.3 493.7
Change in Working Capital (95.3) (30.9) 60.1 33.3 96.5 57.0
Dividends (291.6) (297.6) (301.5) (299.6) (300.5) (263.6)
Free Cash Flow 461.5 338.2 512.6 446.2 164.7 125.9
Net Acquisitions and Divestitures (67.7) (64.9) 102.5 105.5
Net Debt Proceeds (125.4) (242.2) (170.8) (50.0) (210.0) (28.0)
Net Equity Proceeds (313.0) (66.6) (88.6) (87.1) 9.3 8.6
Other (Investing and Financing) 44.1 4.6 (134.9) (58.1) (30.8) (16.0)
Total Change in Cash (0.5) 36.0 71.7 371.9 57.1 108.9
Income Statement
Revenue 6,262.3 5,569.1 5,425.2 5,278.0 4,904.0 4,727.8
Revenue Growth (%) 2.2 (11.1) (2.6) (2.7) (7.1) (8.1)
Operating EBIT 1,046.2 870.7 849.9 801.0 754.3 713.6
288 Company Summaries Reed Elsevier PLC
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
Reed Elsevier PLC/Reed Elsevier NV
Long-Term
Foreign-Currency IDR A
Short-Term
Foreign-Currency IDR F2
Elsevier Finance SA, Reed Elsevier
Capital Inc., Reed Elsevier Inc., Reed
Elsevier (Investments) plc
Senior Unsecured A
Elsevier Finance SA, Reed Elsevier
Properties SA, Reed Elsevier Inc., Reed
Elsevier (Investments) plc
Commercial Paper F2
IDR Issuer Default Rating. Note: The
senior unsecured rating also applies to
notes issued by ELM BV, secured on the
guaranteed loan notes of Elsevier
Finance SA.
Rating Outlook
Long-Term
Reed Elsevier PLC
Key Rating Drivers
Good Financial Headroom: Reed Elsevier PLCs (Reed) rating refects its strong cash fow
generation, sound balance sheet and consistent and conservative fnancial policies. Reed has
good fnancial headroom, ending 2012 with an FFO-adjusted net leverage of 2.2x (2.5x at end-
2011). Management is targeting leverage consistent with a solid investment-grade credit rating.
Resilient Operating Performance: Reeds 2012 underlying revenue growth was 4% (3%
excluding the effect of biennial exhibition cycling) with all fve business areas contributing to
underlying growth. This underlines the resilience of the companys operations in the face of weak
macroeconomic conditions. Fitch expects that steady underlying revenue and proft growth will
continue in 2013.
Sustainable Competitive Position: Reed has a diverse mix of market-leading businesses in
segments with good long-term growth prospects, despite continued competitive pressure in the U.S.
legal services market. Fitch recognizes that there are signifcant barriers to entry in Reeds core
businesses. Reed benefts from selling a high proportion of subscription-based must have products,
which are constantly being further integrated into clients businesses as embedded IT solutions.
Better Prepared: Reed as a whole is better prepared for the current uncertain economic
environment than it was going into the 200809 downturn. Leverage is lower now than at the
end of 2008 and most of the underperforming businesses (especially in the Reed Business
Information division) have been either improved or sold.
Pricing Risks: There have been recent debates in the academic community, the principal
customers for scientifc, technical and medical publications, over different pricing models and free
access to research. A change in pricing models could negatively affect Reeds proft margins with
Elsevier, Reeds science, medical and publishing business, accounting for 45% of fscal 2012
group operating profts. The fact that publicly funded research makes up a small percentage of
university budgets somewhat mitigates this risk.
Limited Acquisition Risk: We expect Reed to continue to make smaller bolt-on acquisitions to
accelerate the companys strategy in data and content assets, or businesses in high-growth markets
and geographies. Fitch does not anticipate future acquisition spend to signifcantly exceed the annual
acquisition spend of around GBP300 million per year over the last three years.
Strong Liquidity Position: Reed has a strong liquidity position with cash and equivalents of
GBP641 million at end-2012. An undrawn USD2 billion credit facility, which expires June 2015,
is used to backstop USD193 million of commercial paper (at end-2012). Fitch expects Reed to
remain FCF positive under most downturn scenarios modeled by the agency.
Positive Action Unlikely: Further positive rating action is currently unlikely, unless Reed
adopts more restrictive fnancial policies with respect to fnancial leverage and shareholder
remuneration. A negative rating action could occur if FFO-adjusted net leverage exceeds 2.5x
(2.2x at end-2012) over a sustained period, or if there is a marked deterioration in Reeds
operating environment.
Analysts
Damien Chew, CFA
+44 20 3530-1424
Michael Dunning
+44 20 3530-1178
September 19, 2013

Corporates

North
America
52%
United
Kingdom
7%
The
Netherlan
ds
3%
Rest of
Europe
19%
Rest of
World
19%
Reed Elsevier PLC
(Dec. 31, 2012)
The
Netherlands
3%
Scientific,
Technical
and
Medical
34%
Risk
Solutions
15%
Business
Informati
on
11%
Legal
26%
Exhibition
s
14%
Revenues by Segment
Reed Elsevier PLC
(Dec. 31, 2012)
Business
Information
11%
Exhibitions
14%
Portfolio Summary Reed Elsevier
(As of Dec. 31, 2012)
Scientific, Technical and Medical
Elsevier
ScienceDirect
Scopus
Legal
LexisNexis: Legal and Professional
Lexis Advance
Shepards
Exhibitions
Exhibitions
Mipim
World Travel Market
Risk Solutions and Business Information
LexisNexis: Risk Solutions
C.L.U.E.
BankersAccuity
Reed Business
September 19, 2013

Corporates

Event Risk Dashboard Reed Elsevier PLC
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition L
Divestiture L
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Enterprise value of GBP13 Bil. is larger than the typcial European LBO
transaction size.
Change of control put provides some risk mitigation for bondholders.
Secular Risk Medium
Around 20% of Reed Elseviers revenue, and a lower proportion of profts,
comes from Print/Other formats (including advertising).
Restructuring and reshaping of the Reed Business Information unit reduces this
secular risk.
The board structure and stock ownership are not concerning as there is no
concentrated ownership.
The Reed Elsevier group is a dual-listed company consisting of Reed Elsevier
PLC and Reed Elsevier NV. Fitch does not view this as a credit concern.
Reed Elsevier has not committed to any leverage targets, but has publicly stated
its commitment to a solid investment-grade rating.
Fitch expects Reed Elsevier to use cash to support a progressive dividend policy,
selective acquisitions and share buybacks when conditions are appropriate.
Like most investment-grade names, there are no limitations on dividends,
acquisitions or share buybacks.
Fitch believes the recent global economic downturn has made management
more conservative.
Reed Elsevier Rating History
BB+
BBB
BBB
BBB+
A
A
0.0
1.0
2.0
3.0
4.0
5.0
2008 2009 2010 2011 2012
Leverage Trend
(x)
September 19, 2013

Corporates

Event Risk Dashboard Reed Elsevier PLC (Continued)
(GBP Mil.)
Starting Authorized
Share Buyback
New Authorized
Share Buyback
Share
Buy Activity
Ending Authorized
Share Buyback
2012 350 (250) 100
2011
2010
2009
2008 94 (94)
Note: Share buyback activity in 2012 and 2013 broadly funded by gross proceeds from the disposal of the Reed Business Information units noncore activities. Over the
past few years, there have been press reports that the Reed Exhibitions unit might be sold, but Fitch believes that such a sale is a low-probability event.
(GBP Mil.) Acquisitions Divestitures
2012 (316) 153.0
2011 (481) 80.0
2010 (50) 6.0
2009 (94) (2.0)
2008 (2,161) 8.0
Note: Ongoing acquisition activity expected to be smaller bolt-ons. Disposal
process related to the reshaping of the Business Information division is now
mainly complete, exiting areas not core to its paid content strategy.
Covenant
Level (x)
Fitch Estimated
Level as of
6/30/13 (x)
EBITDA
Cushion (%)
Litigation Risk Low
Fitch has not identifed any material risks.
Almost all of the groups debt is jointly guaranteed by the two parent companies,
Reed Elsevier PLC and Reed Elsevier NV.
Cross-guarantee structure assures all debt is pari passu.
Fitch has not identifed any material contingent liabilities.
Reed Elsevier operates a number of pension schemes, the largest defned
beneft schemes are in the U.K., the U.S. and the Netherlands. Net pension
obligations at end-2012 were GBP466 Mil., fairly insignifcant given Reed
Elsevier's size.
Almost half of group profts come from its Scientifc, Technical and Medical
division. Antitrust or regulatory intervention on journal pricing seems unlikely, but
such a move could damage the companys proftability and credit profle.
September 19, 2013

Corporates

Organizational Structure Reed Elsevier PLC
(GBP Mil., As of Oct. 22, 2012)
a
Reed Elsevier Group plc is a U.K.-registered company that owns the publishing and information businesses.
b
RCF also available to a fifth borrower: Reed Elsevier
Overseas B.V. (not on chart).
c
$250 Mil. debt originally issued by Harcourt General is not guaranteed by Reed Elsevier PLC and Reed Elsevier NV. Harcourt General
was merged into RE Inc. but no longer exists itself.
d
ERF provides treasury, finance, intellectual property and reinsurance services to the Reed Elsevier Group plc
businesses through its three Swiss subsidiaries (EFSA, REPSA and ERSA).
e
Dutch intermediate issuing company used by EFSA to avoid Swiss withholding tax on
interest and dividends. Note: Reed Elsevier PLC and Reed Elsevier NV have retained their separate legal and national identities and are publicly held companies.
Under the equalization arrangements, Reed Elsevier PLC owns 52.9% of the Reed Elsevier combined businesses, leaving 47.1% for Real Elsevier NV shareholders
(excluding Reed Elsevier PLC). Reed Elsevier PLCs securities are listed in London and New York, and Reed Elsevier NVs securities are listed in Amsterdam and New
York. All Instruments are bonds unless otherwise stated.
Source: Company filings, Fitch Ratings..
The Guarantors
Reed Elsevier PLC Reed Elsevier NV
EUR7 Mil. employee convertible debentures
Weighted average interest rate 3.13% in 2011.
(Reed Elsevier PLC has a
5.8% indirect interest in
Reed Elsevier NV)
Reed Elsevier Group plc
a
(50%) (50%)
Elsevier Reed Finance BV
The Dutch parent of ERF and
owner of the Swiss holding company.
Elsevier LexisNexis Risk
Solutions
LexisNexis Legal &
Professional
Reed Exhibitions Reed Business
Information
Revenue 707
Adj. Op. Profit 167
Margin (%) 23.6
Revenue 695
Adj. Op. Profit 110
Margin (%) 15.8
Revenue 1,634
Adj. Op. Profit 229
Margin (%) 14.0
Revenue 908
Adj. Op. Profit 362
Margin (%) 39.8
Revenue 2,058
Adj. Op. Profit 768
Margin (%) 37.3
(39%) (61%)
Reed Elsevier Capital
Rating
7.500%, 05/25, USD150 Mil. A
8.625%, 01/19, USD950 Mil. A
7.750%, 01/14, USD539 Mil. A
3.125%, 10/22, USD250 Mil. A
Reed Elsevier (UK) Ltd
Reed Elsevier (Investments) plc
Rating
5.625%, GBP400 Mil., 10/16 A
(100%)
(100%)
(100%)
(50%)
Reed Elsevier Inc.
Rating
Reed Elsevier, Inc
6.625%, USD150 Mil., 10/23 A
CP Outstanding USD391 Mil.,
CP Authorized USD205 Mil. F2
Harcourt General
c
8.875%, USD43 Mil., 06/22
7.200% USD200 Mil., 08/27
7.300%, USD150 Mil., 08/97
USD2 Bil., RCF,
June 2015
b
USD8.6 Bil. and EUR0.6 Bil. of Loans
(As of Dec. 31, 2011)
Swiss Subsidiaries of ERF
Elsevier Finance SA (EFSA)
Reed Elsevier Properties SA (REPSA)
Elsevier Risks SA (ERSA)
EFSA, 3.250%, 05/14, CHF350 Mil.
EFSA, 4.125%, 06/13 CHF150 Mil.
EFSA, 6.500%, 04/13, EUR600 Mil. (Issued by ELM BV)
e
EFSA, 2.500%, 09/20, EUR550 Mil. (Issued by ELM BV)
EFSA; REPSA: CP Outstanding USD227 Mil.
CP Authorized USD3 Bil.
EFSA, CP Outstanding USD391 Mil.,
CP Authorized USD3 Bil., Rated F2
EFSA, Private Placements and
Bank Bilaterals
Floating Rate, $75 Mil., 11/12
5.050%, $185 Mil., 01/14
5.190% $186.5 Mil. 02/15
Floating Rate, $100 Mil., 08/15
5.29%, $35m, 02/17
Elsevier Swiss Holdings SA
Elsevier Reed Finance BV Group
(ERF)
d
September 19, 2013

Corporates

Financial Summary Reed Elsevier PLC
Profitability
Revenue 4,584 6,071 6,055 6,002 6,116
Revenue Growth (%) (15.1) 13.8 (0.3) (0.9) 1.9
Operating EBIT 1,111 1,471 1,463 1,582 1,683
Coverages (x)
Liquidity
(ST Debt + Interest) (%) 387.5 329.2 410.1 221.5 278.4
Cash and Equivalents (Unrestricted) 2,467 734 742 726 641
Short-Term Debt 957 637 411 982 730
Off-Balance-Sheet Debt 840 1,056 984 928 896
Cash Flow Summary
Gross Cash Interest Expense 174 302 295 247 231
Cash Tax 239 120 9 218 216
Other Items Before FFO (Including Interest Receivable) 44 (16) 50 39 42
Funds from Operations 902 1,279 1,470 1,396 1,525
Change in Working Capital (59) 59 6 (29) (73)
Cash Flow from Operations 843 1,338 1,476 1,367 1,452
Total Non-Operating/Nonrecurring Cash Flow 0 (124) (99) (52) (25)
Capital Expenditures 145 242 311 350 333
Dividends Paid 416 460 491 506 525
Free Cash Flow 282 512 575 459 569
Net (Acquisitions)/Divestitures (245) (95) (42) (452) (156)
Net Equity Proceeds/(Buyback) (96) 834 11 9 (202)
Other Cash Flow Items 1,885 548 (61) 13 102
Total Change in Net Debt 1,822 1,795 476 22 306
Working Capital
N.A. Not available.
Source: Fitch.
294 Company Summaries Thomson Reuters Corporation
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
IDR A
Short-Term IDR F2
Bank Credit Facility A
Commercial Paper F2
Rating Outlook
Stable
Thomson Reuters Corporation
Key Rating Drivers
Consistent and Conservative Financial Policy: The ratings refect Thomson Reuters
Corporations (TRI) cash fow generating ability, geographic and product diversifcation, sound
balance sheet, and consistent and conservative fnancial policies. Fitch expects the company will
continue to target 2.0x net unadjusted leverage.
Meaningful Barriers to Entry: Fitch recognizes that there are meaningful barriers to entry in
TRIs core businesses and that there are a limited number of well-capitalized competitors that
compete predominantly on product differentiation, quality and delivery.
Capital Deployment: Fitch believes management will continue to be disciplined in its approach
to divestments and acquisitions. Fitch expects proceeds from divestitures and cash generated
by operations to be used for investments in its core businesses, acquisitions and the return of
capital to shareholders (via dividends and/or share buybacks).
Cyclicality at F&R Segment: Rating concerns include cyclicality of the Financial and Risk
(F&R) segment. The segment was down 1% (down 3% organically) in the frst six months of
2013. However, TRIs overall revenue/product diversifcation creates a cushion to absorb some
pressures within a particular segment. Organic growth in TRIs other divisions mitigated most of
the F&R organic decline, resulting in consolidated revenues up 1% (organic revenue down 1%)
from ongoing businesses.
Margins Susceptible to Future Downturns: Fitch recognizes that, in the near term, TRI
continues to have some opportunity to reduce cost, particularly with elimination of legacy
products, benefting EBITDA margins. However, the ratings refect the predominantly fxed-
cost business and high operating leverage. Fitch expects that, long term, EBITDA margins will
be more susceptible to downturns. During the recent downturn, the F&R segment generally
exhibited less operating leverage (on an EBITDA basis) than Fitch would have anticipated. Cost
reductions in connection with the integration of Reuters provided a signifcant offset to declines
in revenues. Conversely, EBITDA margins would be expected to rebound meaningfully upon the
return of revenue growth.
Subscription Business: Fitch notes that the subscription nature of the business provides a lag
that gives management visibility on the need for fxed-cost actions to preserve margins.
Other Rating Concerns: As with other highly rated media companies, the potential threat of
fnancial policy revisions is an inherent concern.
More Conservative Metrics for Upgrade: An explicit commitment to and sustained track record
of more conservative balance sheet metrics could merit upgrade consideration.
Downgrade Trigger: Fitch believes TRI is committed to its balance-sheet parameters. However,
a signifcant acquisition or heavy repurchases that could lead to TRI operating materially outside
its 2x net leverage target for several sequential periods, without a publicly stated plan to
deleverage, could result in a negative rating action.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
September 19, 2013

Corporates

Financial & Risk Legal
Tax and Accounting
Intellectual Property and Science
Portfolio Summary Thomson Reuters Corporation
(As of Dec. 31, 2012)
Trading Investors
Eikon ASSET4
Elektron BETA Systems
Thomson Reuters Enterprise Platform Eikon
Reuters News Extel
FirstCall
Governance, Risk and Compliance I/B/E/S
AutoAudit IFR
BoardLink Lipper
Capital Watch LPXpert
Compliance Complete Products Reuters News
Disclosure Solution Products StarMine Products
EDGARforms StockReports+
Enterprise GRC Products Thomson ONE Products
Thomson Reuters Accelus Thomson Reuters Datastream Professional
World-Check Thomson Reuters DataScope
Thomson Reuters Deal Analytics
Marketplaces Thomson Reuters Deals Business Intelligence
Thomson Reuters Dealing
Thomson Reuters Matching
Tradeweb
Corporate Knowledge Solutions
ONESOURCE Products Checkpoint Products
Professional Government
CS Professional Suite Government Revenue Management (GRM)
Enterprise Suite
Litigator Monitor CLEAR
West Books Court Express
West LegalEdcenter Elite
Westlaw Elite 3E
WestlawNext Elite Enterprise
West Case Notebook FindLaw
Sweet & Maxwell (U.K.) Hildebrandt Institute
Aranzadi (Spain) Hubbard One
La Ley (Argentina) Pangea 3
Lawtel (U.K. and E.U.) ProLaw
Revista dos Tribunais (Brazil) Serengeti
Intellectual Property Solutions Life Sciences
Aureka BIOSIS
IP Services IDRAC
SERION Life Sciences
Thomson IP Manager Professional Services
Thomson Innovation Newport Premium
Thomson Reuters Cortellis
Scientific and Scholarly Research Thomson Reuters Integrity
EndNote ScholarOne
Essential Science Indicators Thomson Reuters
InCites Web of Knowledge
ScholarOne
Thomson Reuters
Web of Knowledge
September 19, 2013

Corporates

Americas
(North,
South,
Latin)
58%
EMEA
30%
Asia
12%
(As of Dec. 31, 2012)
EMEA Europe, Middle East and Africa.
Trading
21%
Investors
18%
Marketpl
aces
14%
Governa
nce Risk
and
Complian
ce (GRC)
2%
Legal
26%
Tax and
Accounti
ng
9%
Intellectu
al
Property
and
Science
7%
Corporat
e and
Other
3%
Revenues by Segment
(As of Dec. 31, 2012)
Note: Reflects ongoing business.
Governance
Risk and
Compliance
(GRC)
2%
Marketplaces
14%
Corporate
and Other
3%
Intellectual
Property
and Science
7%
Tax and
Accounting
9%
Legal
35%
Tax and
Accounti
ng
10%
Intellectu
al
Property
and
Science
8%
Financial
and Risk
47%
EBITDA by Segment
(As of Dec. 31, 2012)
Intellectual
Property
and Science
8%
Tax and
Accounting
10%
September 19, 2013

Corporates

Event Risk Dashboard Thomson Reuters Corp.
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition H
Divestiture M
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk Low
LBO unlikely given enterprise value of more than $30 billion.
Concentrated ownership by Woodbridge may pose a challenge for an LBO.
While leverage may be more manageable under a management buyout (MBO),
Woodbridge has historically demonstrated its conservative fnancial and
management policy. Fitch does not believe an MBO scenario is likely.
FCF generation should provide fexibility to reduce leverage over time.
Secular Risk Low
There is no material secular risk associated with Thomson Reuters (TRI).
Products are primarily delivered digitally.
Concentrated ownership Woodbridge has a 55% stake.
Historically Woodbridge has been conservative. In 2008 (post the Reuters
acquisition), Woodbridge participated in a dividend reinvestment program
(DRIP) for around 50% of its dividend. While this was a negotiated short-term
arrangement, Fitch believes it demonstrated the conservative, cooperative nature
of Woodbridge to reduce the drain on cash fow from dividends.
TRI targets an unadjusted net leverage target of 2.0x.
Fitch expects cash fows to be dedicated towards acquisitions and
share repurchases.
Fitch believes TRI is committed to its balance sheet parameters. However, similar
to other highly rated entities, the potential for fnancial policy revisions is an
inherent risk.
carveouts including a lien basket set at 7.5% of total assets.
TRI is subject to various data and information regulations in the US and abroad.
New York attorney general is investigating the early release of the University
of Michigan index of consumer sentiment. The data was provided to certain
subscribers two seconds earlier than other subscribers for an additional fee. The
investigation is ongoing and it is too early to determine the potential size of fnes/
settlements, if any. TRI has voluntarily ceased to provide this data two seconds
earlier. Fitch does not believe this will have a material impact on consolidated
revenues.
Thomson Reuters Corp. Rating History
BBB
A
A
1.8
1.9
2.0
2.1
2.2
2.3
2.4
2.5
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
10
20
30
40
50
Source: Bloomberg.
Thomson Reuters Company (USA) Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Thomson Reuters Corp. (Continued)
Fitch believes that any future debt would be issued by TRI. However, Fitch
recognizes there is a risk of structural subordination inherent in all holding company
structures.
YTD June 2013 848.0 352.0
2012 1,301.0 1,901.0
2011 1,286.0 415.0
2010 612.0 26.0
2009 349.0
2008 8,502.0
Fitch expects TRI to be an active acquirer.
Litigation Risk Low
YTD June 2013
2012 168.0
2011 326.0
2010
2009
2008 522.0
2007 2,212.7
(x)
Covenant
Level
Ratio/Test as of
6/30/13
EBITDA
Cushion (%)
Consolidated Net Leverage 4.5 1.6 64
September 19, 2013

Corporates

Corporate Governance Overview Thomson Reuters Corporation
a
The board has determined that each member of the Audit Committee is a financial expert as defined by SEC rules.
b
N.A. Not available. DSUs Deferred share units. PRSUs Performance-restricted stock units. Continued on next page.
(USD)
Stock
Awards
Option
Awards
Non-Equity
James C. Smith President and CEO 1,550,000 7,815,315 1,937,539 7,507,464 18,810,318
Stephane Bello EVP and CFO 837,500 3,525,977 600,030 1,334,812 6,298,319
David W. Craig President, Financial and Risk Business 871,800 4,927,889 551,026 1,105,548 7,456,263
Michael E. Suchsland President, Legal Business 550,000 4,642,268 275,045 698,988 6,166,301
Shanker Ramamurthy President, Global Growth and Operations Org 825,000 1,062,897 600,030 1,115,613 3,603,540
Board of Directors
Name Age dence Term Tenure Cash Stock All Others Total Committees
a
Directorships Position
Manvinder S.
Banga
58 Y April 2013
April 2014
2009 150,000 150,000 Human Resources Hindustan Unilever Ltd. Operating Partner
Clayton, Dubilier & Rice, LLC
David W.
Binet
55 N April 2013
April 2014
2013 Human Resources;
The Globe and Mail Inc. President and CEO
Woodbridge
Mary
Cirillo
65 Y April 2013
April 2014
2005 160,000 160,000 Human Resources (Chair);
None Former Chair and CEO
Opcenter, LLC
Steven A.
Denning
64 Y April 2013
April 2014
2000 160,000 160,000 Human Resource General Atlantic LLC Chairman
General Atlantic LLC
Lawton W.
Fitt
Lead Director
59 Y April 2013
April 2014
2008 160,000 160,000 Corporate Governance
(Chair); Audit
None Former Secretary (CEO)
The Royal Academy of Arts in
London
Sir Deryck
Maughan
65 Y April 2013
April 2014
2008 150,000 150,000 Corporate Governance Kohlberg Kravis Roberts
(Asia)
Senior Advisor Kohlberg
Kravis Roberts & Co. (KKR)
Ken
Olisa, OBE
61 Y April 2013
April 2014
2008 120,000 30,000 150,000 Audit None Founder and Chairman
Restoration Partners
Vance K.
Opperman
70 Y April 2013
April 2014
1996 170,000 170,000 Audit (Chair); Corporate
Governance
Blue Cross and Blue
Shield
President and CEO
Key Investment, Inc.
John M.
Thompson
70 Y April 2013
April 2014
2003 75,000 75,000 150,000 Audit; Corporate
Governance
The Toronto-Dominion
Bank
Non-executive Chairman The
Toronto-Dominion Bank
David
Thomson
Chairman
55 N April 2013
April 2014
1988 600,000 None Woodbridge; Globe and
Mail Inc.
Chairman Woodbridge;
Chairman
Globe and Mail Inc.
Peter J.
Thomson
47 N April 2013
April 2014
1995 150,000 150,000 None Woodbridge Chairman Woodbridge
Wulf von
Schimmelmann
66 Y April 2013
April 2014
2011 150,000 150,000 Audit None Former CEO
Deutsche Postbank AG
James C.
Smith
53 N April 2013
April 2014
2012 None None President and CEO
Thomson Reuters Corp
Annual Incentive Revenue (45%), adjusted EBITDA less capital expenditures(45%), FCF (10%).
Long-Term Incentives Adjusted EPS (50%), ROIC (50%), stock price.
(%) Base Salary Annual Incentive Long-Term Incentives Total
James C. Smith 18 36 46 100
Stephane Bello 27 33 40 100
David W. Craig 28 36 36 100
Michael E. Suchsland 31 38 31 100
Shanker Ramamurthy 27 33 40 100
Base Salary Relative to companys peer group.
Annual Incentive Targets were: Smith 200% of base salary; Bello 125%; Craig 125%; Suchsland 125%; Ramamurthy 125%. Potential payouts range
from 0%200%. Actual payouts were 93% of target.
Long-term Incentives Consists of PRSUs (50%) and stock options (50%). Targets were: Smith 250% of base salary; Bello 150%; Craig 125%; Suchsland
100%; Shanker Ramamurthy 150%. For 2012, most NEOs only received PRSUs 3-year vesting. Actual payouts were 134% of target.
Stock Ownership Requirements Smith 5x base salary; Bello 4x; Craig 3x; Suchsland 3x; Ramamurthy 3x.
September 19, 2013

Corporates

Corporate Governance Overview Thomson Reuters Corporation (Continued)
a
The Board has determined that each member of the Audit Committee is a financial expert as defined by SEC rules.
b
N.A. Not available. DSUs Deferred share units. PRSUs Performance restricted stock units.
b
Woodbridge Company Limited 455,193 55.0
Royal Bank of Canada 44,785 5.4
IG Investment Management LTD 21,609 2.6
Franklin Sources 17,367 2.1
Jarislowsky Fraser Limited 16,616 2.0
Invesco LTD 12,117 1.5
TD Asset Management Inc. 10,152 1.2
BMO Financial Corp. 10,065 1.2
Wellington Management Co. LLP 9,746 1.2
Trimark Investment Management 9,328 1.1
Total Top 10 606,979 73.4
David Thomson and Peter Thomson, are brothers. David Thomson and Peter Thomson are members of the family of the late first Lord Thomson of Fleet.
David Binet was appointed to the board effective Jan. 1, 2013, coincident with his appointment as president of Woodbridge, the Thomson family holding company and the principal
shareholder of the company.
James C. Smith has been president and CEO since January 2012. Mr. Smith was COO of Thomson Reuters from September 2011 to December 2011, and CEO of Thomson Reuters
professional division from April 2008 to September 2011.
Majority voting policy; clawback policy in place.
James C. Smith 326 N.A.
Manvinder S. Banga 13 N.A.
David W. Binet 159 N.A.
Mary Cirillo 26 N.A.
Steven A. Denning 58 N.A.
Lawton W. Fitt 5 N.A.
Sir Deryck Maughan 18 N.A.
Ken Olisa, OBE 4 N.A.
Vance K. Opperman 108 N.A.
John M. Thompson 56 N.A.
Peter J. Thomson 2 N.A.
Wulf von Schimmelmann 9 N.A.
September 19, 2013

Corporates

Pension Screener
a
Thomson Reuters
than 10%?
No
Plan Assets
b
70.0 98.0
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Debt Structure
(As of June 30, 2013, Pro Forma for Q3 Repayments)
Debt Instrument
Amount
($ Mil.)
a

$2.5 Billion Sr. Unsecured Credit Facility
due May 2018
Bank and Other 18.0
5.200% Notes due 2014 (CAD600 Mil.)
b
570.4
b
570.4
b
713.0
b
713.0
5.950% Notes due Jul. 2013
c

5.250% Notes due Aug. 2013
c

5.700% Notes due 2014 800.0
0.875% Notes due 2016 500.0
6.500% Notes due 2018 1,000.0
4.700% Notes due 2019 500.0
3.950% Notes due 2021 350.0
4.500% Notes due 2043 350.0
5.850% Notes due 2040 500.0
Other
d
(115.2)
Total Debt 7,118.0
a
Backed by the $2.5 billion credit facility.
b
Fitch has
converted the CAD-denominated instruments at the
June 30, 2013 exchange rate of USD1.0519/CAD. As of
June 30, 2013, the company had cross-currency hedges
with a total asset value of $96 million.
c
5.95% $750 million and 5.25% $250 million notes were
repaid in July and August 2013 respectively.
d
Other
consists mostly of discounts and currency related.
(As of June 30, 2013, Pro Forma for Q3 Repayments)
Amount
($ Mil.)
Dec. 31, 2013
a

Dec. 31, 2014 1,400.0
Dec. 31, 2015 600.0
Dec. 31, 2016 1,250.0
Dec. 31, 2017
Thereafter 3,850.0
Total 7,100.0
a
Reflects maturity of 5.95% $750 million and 5.25%
$250 million notes. Note: Excludes bank and other debt
obligations.
Organizational Structure Thomson Reuters Corporation
($ Mil., As of June 30, 2013)
Woodbridge Public
IDR A/Stable Outlook
Short-Term IDR F2
Amount
Outstanding Rating
$2.5 Billion Credit Facility due 2018 A
Commercial Paper F2
Senior Unsecured Notes 7,910.0 A
Bank and Other 18.0
Perpetual Preference Shares (with Equity Credit) 75.0
Total Debt 8,033.0
LTM EBITDA 3,604.0
Total Net Debt/EBITDA (x) 1.8
Operations
55% 45%
September 19, 2013

Corporates

Debt and Covenant Synopsis Thomson Reuters Corporation
Bank Facility Indenture Indenture
Overview
Issuer Thomson Reuters Corp. The Thomson Corp. The Thomson Corp./Thomson Reuters Corp.
Document Date Credit agreement dated as of Aug. 16, 2011,
amended and restated May 16th, 2013.
11/20/01 Nov. 20, 2001 (amended and restated on Dec.
21, 2010)/supplemental indentures dated Oct.
2, 2007; June 25, 2008; March 31, 2009; Sept.
29, 2009; March 30, 2010; Sept. 30, 2010;
Oct. 5, 2011 and May 23, 2013.
Description of Debt $2.5 billion credit facility due May 16, 2018. 5.25% Notes due 2013
5.20% Notes due 2014
0.875% Note due 2016
4.50% Note due 2043
Financial Covenants
(Maximum)
4.5x (Calculated on a net basis)
Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)

Change-of-Control
(CoC) Provision
If anyone other than Woodbridge acquires
more than 50% of voting power.
No material provision. There is a CoC put offer at 101%. CoC
takes place if: a) any person (other than
Woodbridge) becomes the beneficial owner,
directly or indirectly, of more than 50% of the
then-outstanding number of shares of the
companys voting stock; b) individuals who
constituted the board of directors cease to
constitute at least a majority of the board; or
c) sale of all or substantially all assets; and
if the issue ratings are downgraded below
investment grade following aforementioned
events.
Sale of Assets
Restriction
No material provision. No material provision. No material provision.
Debt Restrictions
Additional
Debt Restriction
Subsidiary debt limitations include standard
carveouts plus $4 billion of incremental debt
at subsidiaries. $1 billion of this debt may be
secured.
No material provision. No material provision.
Limitation on
Secured Debt
Standard carveouts plus $1 billion basket. This
basket would be reduced by any subsidiary
debt that exceeded $3 billion. Otherwise
pari passu security must be provided to the
lenders.
Up to 10% of shareholders equity, otherwise
pari passu; applies to subsidiary guarantees.
Up to 10% of shareholders equity, otherwise
pari passu; applies to subsidiary guarantees.
Restricted Payments No material provision. No material provision. No material provision.
Other
Cross-Default Payment default on greater than or equal to
$150 million.
No material provision. Failure to pay principal greater than 3% of
consolidated shareholders equity.
Cross-Acceleration Cross-acceleration on any accelerated debt
greater than or equal to $150 million.
No material provision. No material provision.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Thomson Reuters Corporation
Date of
2/13/2013 4Q2012 Prepared Fourth, we forecast free cash flow to range between $1.7 billion and $1.8 billion, despite the $100 million severance charge and
the loss of about $140 million in free cash flow from disposed businesses in 2012. Lastly, given our strong capital position and our
confidence in the cash generating capacity of the company, this morning we announced the dividend increase of $0.02 per share to
$1.30 per share. This marks the 20th consecutive annual increase. Before I turn it over to Stephane, let me point out weve scheduled
an Investor Day on March 22nd in Toronto that will focus exclusively on F&R, and will highlight the progress weve been making there.
I hope to see many of you at that event.
2/13/2013 4Q2012 Prepared Today, there is also greater transparency into the financial business. About 75% of its costs are now controllable and visible to the
segment managers who have the authority and accountability to make the day-to-day decisions required to help drive F&R forward.
Collaboration has also improved. Where we see opportunities, we are more effectively leveraging assets across the company to
drive growth. This is best reflected in the success of our Global Growth organization working closely with each of our four business
segments it grew 19%, 10% organic last year. Restarting our growth engine in F&R has been our number one priority. We have made
tangible progress by driving a more focused organic and inorganic capital allocation process. Now, on the prior slide, I spoke about
how we have been diversifying our Legal business over the past four years from what used to be a very research-centric business
towards what we refer to as a true solutions business in which our legal content is enhanced through broader software and service
offerings. This strategy rested on a deliberate capital allocation process which saw fairly significant shift over the last few years, and
this slide speaks to that point.
7/31/2012 2Q2012 Prepared As discussed during our Q1 earnings call, the proceeds, plus our free cash flow will be used for tactical acquisitions, organic
investment, and for share buybacks on an opportunistic basis. Lastly, and importantly, we are reaffirming our full-year 2012 outlook.
5/1/2012 1Q2012 Prepared Overall, we ended up the first quarter with $6.8 billion in net debt and a net debt-to-EBITDA ratio of 1.8. Having a strong balance sheet
and a solid capital structure is of paramount importance to us. It gives us the flexibility to execute our business strategy and the ability
to generate a consistent and attractive return of capital to our shareholders.
5/1/2012 1Q2012 Prepared We expect to use the proceeds for tactical acquisitions, organic investment and for share buybacks on an opportunistic basis.
5/1/2012 1Q2012 Prepared So in summary, we will seek to redeploy the proceeds of our recent disposals in the highest areas of growth across our business and
we will continue to focus on driving long-term value creation for our shareholders within the parameters of a strong capital structure.
As always, we will also consider returning cash to shareholders by way of share buyback. And let me remind you that we have
repurchased just under 12 million shares under our existing NCIB program and that therefore you should expect us to see board
approval to renew this program in May, as we do every year.
2/9/2012 4Q2011 Prepared Last year, we also repurchased 11 million shares for an aggregate purchase price of $326 million. We had returned approximately
$7 billion to shareholders since 2005 through a combination of dividends and share repurchases. As we progress with our dispositions
in 2012, we will continue to consider the best use of proceeds, including reinvesting in our businesses and share repurchases.
11/1/2011 3Q2011 Q&A Q: Yeah. Thanks very much. Wondering if you can give us an update on the divestiture of Healthcare. Is that process still going well?
And if it does conclude in the next few months, any signal on the use of those funds, given the aggressive share buybacks recently?
Should we cue from that that youd be looking to do even more if Healthcare closes?
A: Vince, were still in the middle of that process, and so I dont really want to comment on where we are. We do expect to sell the
business.
And as far as the proceeds go, I think that were always looking for the right opportunity to deploy our cash in the most effective way.
And if we feel that our stock is continues to be undervalued, and as we and we continue to feel that that is good use of cash,
well use it there. We also have, as you know, a lot of opportunities inside the business. So its always that balance between internal
use of capital versus returning cash to shareholders, and were not shy, certainly, doing either of them.
11/1/2011 3Q2011 Prepared This past year, we increased the dividend 7%, and we remain committed to maintaining growing dividends as an important component
of overall shareholder return.
With integration programs coming to an end, we expect to return to our target dividend payout ratio, which is 40% to 50% of free cash
flow, and to grow dividends with free cash flow.
7/28/2011 2Q2011 Q&A A: Let me just say about buyback in general. We always look as a matter of capital discipline at what is the hurdle rate we think we
can achieve in an organic investment, in an acquisition, and we compare that with what would an investment in buying back our own
shares be. And I naturally would feel that way, I suppose, but I feel very good about our business, and we have capacity. Were just
not going to signal exactly when youre going to see us where in the market.
A: Sure. First of all, Tim, to answer your question, we would expect to complete all these divestitures by the end of this year, sometime
in the fourth quarter. And you also know, Tim, that our capital strategy is an integral part of how we run the business. And so, we
have built the capability and capacity in the business to drive any actions that we need. And so these are long-term divestitures
were making; doesnt impact our ability to enter the market. We have a strong capacity today. We have lines of credit. We have
every capability, and we are generating significant cash. So that will not, we are not determining whether we do a buyback based
upon whether we have the cash from these disposals; theyre not linked. Theyre more determined based upon, as Tom said, our
opportunities internally and how we view the value of our stock vis--vis our own internal perceptions of the value, so we can act
anytime we want.
2/10/2011 4Q2010 Prepared From a capital structure perspective we continue to strengthen our position. We took advantage of favorable capital markets to
refinance $2 billion of debt, over the past 15 months, resulting in an average rate average interest rate below 6% and an average
duration of maturity of eight years.
We have untapped credit lines totaling $2.5 billion and our net debt to EBITDA ratio is at 2.1 times. And we continue to have a solid
liquidity position with $850 million of cash on hand after having spent $850 million on acquisitions and paid down $200 million in debt.
5/4/2010 1Q2010 Prepared We were again proactive, and since September of 2009 we have replaced $1.3 billion in near term maturities with $1 billion of longer
term debt at attractive rates. Our capital structure and balance sheet remain strong, and our net debt-to-EBITDA ratio is approximately
two times.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Thomson Reuters Corporation (Continued)
Date of
5/4/2010 1Q2010 Q&A Q: What sort of criteria are you really looking for in order to become active with that buyback program?
A: Well, the buyback -- first of all the reason why we renewed it primarily was because it expired. And the NCIB is like a its like a
shelf offering for debt. And so I think we all think and board agrees that having a standard ability for the company to enter the market
to buy back shares is a good part, a prudent part of our long term capital strategy.
2/24/2010 4Q2009 Prepared Our 2009 debt-to-EBITDA figure was two times on our stated, long-term target. And last but not least, our strong financial position
enables us not only to continue to make substantial investments in the business to drive growth and further solidify our position, but
also enables us to increase our dividend by $0.04 again this year. And as Tom has noted, this is the 17th consecutive year of dividend
increases. And I might note, this is through two recessions.
8/6/2009 2Q2009 Prepared Now Ill remind you this increased level of spending is consistent with our guidance we gave where capex would run between 8.5 to
9% of revenue for this year. The underlying strength and cash generative nature of our businesses allows us to fund these important
investments that will position us for growth on the upswing of the cycle.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Thomson Reuters Corporation
LTM Ended
6/30/13
Profitability
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 685.0 782.0 645.0 434.0 1,008.0 1,021.0
Other Debt 150.0 150.0 150.0 150.0 150.0 150.0
Equity Credit 75.0 75.0 75.0 75.0 75.0 75.0
Cash Flow
Change in Working Capital 1,128.0 (16.0) 206.0 (424.0) 107.0 (488.0)
Total Non-Operating/Nonrecurring Cash Flow (22.0) 2.0 (6.0) (18.0)
Capital Expenditures (906.0) (1,097.0) (1,097.0) (1,041.0) (977.0) (1,021.0)
Dividends (842.0) (905.0) (898.0) (960.0) (1,021.0) (1,028.0)
Free Cash Flow 1,008.0 664.0 660.0 596.0 706.0 514.0
Net Acquisitions and Divestitures (8,258.0) (293.0) (586.0) (871.0) 600.0 (1,619.0)
Net Debt Proceeds 1,048.0 (138.0) (311.0) 101.0 (424.0) 855.0
Net Equity Proceeds (522.0) (326.0) (168.0)
Other (Investing and Financing) 68.0 39.0 (7.0) 61.0 168.0 65.0
Total Change in Cash (6,656.0) 270.0 (247.0) (442.0) 879.0 (188.0)
Ending Cash and Securities Balance 841.0 1,111.0 864.0 422.0 1,301.0 1,613.0
Income Statement
Revenue 11,707.0 12,997.0 13,070.0 13,807.0 13,278.0 12,953.0
Revenue Growth (%) 60.5 11.0 0.6 5.6 (3.8) (5.4)
Operating EBIT 1,847.0 1,671.0 1,540.0 2,188.0 1,869.0 1,816.0
Note: Financial information is based on IFRS.
307 Company Summaries Time Warner Inc.
September 19, 2013

Corporates

Time Warner Inc.
Key Rating Drivers
Publishing Spinoff Not Material: Fitch believes Time Warner Inc.s (Time Warner) decision
to spin off Time Inc. to its shareholders will beneft the companys operating profle but is not
expected to have a material impact on the companys credit profle. The transaction enables
Time Warner to de-risk its business profle moderately while increasing strategic focus on its
Networks and Film and TV Entertainment segments.
Strong Portfolio of Cable Networks: The stability, recurring revenue and free cash fow
generation of the Turner and HBO cable networks underpin Time Warners ratings. Fitch expects
midsingle-digit top-line growth, stable margins and high free cash fow conversion over the next
several years, driven by domestic affliate fee growth and international expansion.
Consistent Financial Policy: Time Warners capital allocation strategy continues to revolve
around investing in its business to strengthen its product portfolio, maintaining a strong balance
sheet (2.5x net leverage target) and returning excess capital to its shareholders. Fitch does not
anticipate any change to Time Warners fnancial policy, namely its 2.5x net leverage target or its
capital allocation strategy.
Strong Business Position: Fitchs ratings incorporate the strong competitive position of Time
Warners flm and television studios at Warner Bros. The size and scale of the television studio
enables the company to capitalize on strong demand for television content while providing
meaningful diversifcation of revenue sources. The companys lower exposure to cyclical
advertising revenues relative to its peer group, and lack of exposure to the hyper-cyclical local
advertising markets, provides incremental support to the ratings.
Credible Strategy to Address Threats: Fitch continues to believe that Time Warner is well
positioned to address the threats and opportunities presented by emerging alternative distribution
platforms. Fitch believes Time Warner will continue to distribute its owned content rationally and
with the goal of maximizing its long-term proftability and franchise value. In Fitchs opinion the
proliferation of new distribution platforms and methods of consumption will continue to drive
more demand for Time Warners content, providing upside to the companys operating and credit
profle.
Upgrade Unlikely: Given the rating upgrade in April 2013, further positive rating actions are not
contemplated over the current ratings horizon. That notwithstanding, positive rating action would
likely coincide with Time Warner adopting a more conservative fnancial policy highlighted by
gross leverage below 2.0x.
Negative Rating Trigger: Negative rating actions are likely to coincide with discretionary actions
of Time Warners management, including the adoption of a more aggressive fnancial strategy or
event-driven merger and acquisition activity, that drives leverage beyond 3.5x in the absence of
a credible deleveraging plan. Additionally, negative rating actions could result should Fitch begin
to observe a weakening of the companys ability to produce desired flm and television content,
or secure programming on its cable networks that consistently delivers viewing audience ratings,
leading to lower subscription or advertising revenues.
Analysts
David Peterson
+1 312 368-3177
Rolando Larrondo
+1 212 908-9189
Ratings
Security Class
Current
Rating
Time Warner Inc.
IDR BBB+
Short-Term IDR F2
Commercial Paper F2
Time Warner
International Finance Limited
IDR BBB+
Short-Term IDR F2
Commercial Paper F2
Rating Outlook
Stable
September 19, 2013

Corporates

Portfolio Summary Time Warner Inc.
(As of June 30, 2013)
a
Percentages as of December 2012.
Turner Networks Film and TV Entertainment
Warner Bros. Pictures Group Warner Bros. Home Entertainment Group
Warner Bros. Pictures Warner Home Video
Warner Bros. Pictures Warner Bros. Digital Distribution
International Warner Bros. Interactive Entertainment
New Line Cinema (Warner Bros. Games)
Warner Bros. Television Group
Warner Bros. Television Warner Bros. Technical Operations
Warner Bros. Domestic Warner Bros. Anti-Piracy Operations
Television Distribution Warner Bros. Advanced Digital Services
Warner Bros. International Warner Bros. Consumer Products
Television Distribution Warner Bros. International Cinemas
Warner Bros. International
Television Production
Warner Bros. Studio Facilities
Warner Bros. International
Branded Services
Warner Bros. Theatre Ventures
Warner Bros. Animation DC Entertainment
Telepictures Production DC Comics
The CW (JV) MAD
Studio 2.0 Vertigo
Warner Horizon Television
United States Europe, Middle East, Africa
Adult Swim Adult Swim TNT
Boomerang Boing truTV
Cartoon Network Boomberand Turner Media
CNN Worldwide Cartoonito Innovations
HLN CNTOO
Inside CNN Tour & Store CNN International
TBS Glitz*
TCM Lazytown
TheSmokingGun.com Showtime
TNT Silver and Silver HD
truTV Star!
Turner Sports TCM
Asia Pacific Latin America
Boomerang Amo El Cine Tooncast
Cartoonito Boomberang TruTV
Cartoon Network Cartoon Network
CNN Chilevision
Mondo TV CNN International
Pogo Glitz*
QTV HTV
Tabi I.Sat
TCM Infinito
Toonami MuchMusic
truTV Space
Turner Content Solutions TCM
Turner Media Solutions TNT
Film and TV Entertainment
HBO Cinemax
HBO/Cinemax
International:
No. Of Countries/
Territoires Joint Ventures
a
HBO On Demand HBO Comedy CinemaxOn Demand Thriller Max Asia/South Asia 22 HBO Asia (80%)
HBO GO HBO Zone Cinemax 2 5 Star Max Europe 19 HBO South Asia (75%)
HBO Signature HBO2 Max GO Outer Max Latin America 31 HBO Latin America Group (LAG) (88%)
HBO Family HBO Latino More Max Max Latino HBO Nederland (50%)
Action Max Movie Max
Magazine Publishing
All You Grupo Editorial Expansion IPC Media Livingetc Wallpaper*
CNNMoney.com balance 25 Beautiful Homes Look What Digital Camera
Coastal Living Chilango Amateur Gardening Marie Claire What's on TV
Cooking Light Chilango.com Amateur Photographer Motor Boat & Yachting Woman
Entertainment Weekly CNNExpansin.com Anglers Mail Motor Boats Monthly Woman Special Series
Essence CNN Mexico Beautiful Kitchens Mountain Bike Rider woman&home
FanNation Cronos. Chat NME woman&home Feel Good Food
Fortune Dinero Inteligente Chat Its Fate Now woman&home Feel Good You
Golf ELLE Country Homes & Interiors Nuts Womans Own
Health Endless Vacation Country Life Pick Me Up! Womans Own Lifestyle Series
InStyle Expansin Cycle Sport Magazine Practical Boat Owner Womans Weekly
Money IDC Asesor Juridicio y Fiscal Cycling Active Rugby World Womans Weekly Fiction Series
LIFE IDC Online Cycling Fitness Shooting Gazette Womans Weekly Home Series
My Home Ideas InStyle Cycling Weekly Shooting Times Womans Weekly Living Series
My Recipes Life and Style Decanter ShootingUK World Soccer
People Loop Essentials Soaplife Yachting Monthly
People en Espaol Manufactura Feelgood Games Sporting Gun Yachting World
People Style Watch mediotiempo.com Eventing Style at Home YBW.com
Real Simple metroscubicos.com Feelgood Games Superyacht Business Time Inc. Business Units
Sports Illustrated Obras Golf Monthly Superyacht World Media Networks, Inc.
Sports Illustrated For Kids Quin goodtoknow Teen Now Synapse Group, Inc.
Southern Living Quin.com goodtoknow Recipes The Field Targeted Media, Inc.
Sunset Quo Homes & Gardens Trusted Reviews Time Customer Service, Inc.
This Old House Revolution Horse TV & Satellite Week Time Inc. Licensing & Syndication
TIME Travel & Leisure, Mexico Horse & Hound TVeasy Time Home Entertainment Inc.
Time For Kids Vuelo HousetoHome TVTimes Time Inc. Studios
Ideal Home Uncut Time Warner Retail Sales & Marketing Inc.
InStyle (U.K.) VolksWorld
International Boat Industry VW Camper & Bus
September 19, 2013

Corporates

U.S. and
Canada
72%
Europe
16%
Asia/Paci
fic Rim
6%
Latin
America
5%
All Other
1%
Time Warner Inc.
(As of Dec. 31, 2012)
Asia/
Pacific
Rim
6% Networks
48%
Film and
TV
Entertain
ment
40%
Publishin
g
12%
Revenues by Segment
Time Warner Inc.
(As of Dec. 31, 2012)
Film and TV
Entertainment
40%
Publishing
12%
Networks
70%
Film and
TV
Entertain
ment
22%
Publishin
g
8%
EBITDA by Segment
Time Warner Inc.
(As of Dec. 31, 2012)
Note: Calculations derived from company filings by Fitch.
Source: Fitch, company filings.
Film and TV
Entertainment
22%
Publishing
8%
September 19, 2013

Corporates

Event Risk Dashboard Time Warner Inc.
a
Includes starting authorized share buyback. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential
actions a company is able to take from expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition M
Divestiture L
Structural Subordination Risk L
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Large enterprise value precludes LBO.
Secular Risk Medium
Secular challenges concentrated in publishing business (8% of EBITDA). Time
Inc. is expected to be spun out by early 2014.
Benefit from transition to digital/tablet magazines uncertain and several
quarters away at best.
HBO at some risk of subscriber loss in a digital world, but original programming
a mitigant.
TV studio benefiting from new digital window.
Cable and syndication models remain robust.
The board structure and stock ownership are not concerning, as there is only
one class of stock and no concentrated ownership. One minor risk is the dual
chairman/CEO role.
The only insider board member is chairman and CEO Jeffrey Bewkes.
The executive compensation incentive structure moderately increases risk.
The annual incentive is creditor friendly, driven by earnings and FCF (pre-
dividend). However, the long-term incentives pose more risk to bondholders as
they could incentivize share buybacks and other equity valuation methods
total shareholder return and adjusted EPS.
The business risks attributable to Time Warners operating profile are consistent
with other large media companies and are reflective of the BBB+ rating.
Fitch does not anticipate any change to Time Warners financial policy, namely
its 2.5x net leverage target and its capital allocation strategy.
Substantial share repurchases in recent years, partially debt financed, with the
goal of reaching the net leverage target (net leverage was below target post
downturn). Fitch expects TWX to continue to repurchase shares, and keep
leverage at current target levels.
Fitch sees moderate risk of an increase in the leverage target, though any such
increase would be within IG ratings and possibly within the current ratings.
Acquisition activity not expected to be a ratings driver.
Structural Subordination Risk Low
Cross-guarantee structure assures all debt is pari passu.
Any debt at a guarantor subsidiary would become guaranteed.
No material limitations on guarantee amounts, except for fraudulent
conveyance.
Subsidiary debt limited to $2.5 billion by credit agreement.
Time Warner Inc. Rating History
BBB
BBB
BBB+
A
2.3
2.5
2.7
2.9
3.1
2007 2008 2009 2010 2011 2012 LTM
June 2013
Leverage Trend
(x)
0
20
40
60
80
Source: Bloomberg.
Time Warner Inc. Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Time Warner Inc. (Continued)
a
Includes starting authorized share buyback. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential
actions a company is able to take from expectations of what it will actually do.
($ Mil.)
Starting Authorized
Share Buyback
New Authorized
Share Buyback
Share Buy
Activity
Ending Authorized
Share Buyback
Six Months Ended June 30, 2013 1,081.3 4,000.0
a
(1,507.0) 2,493.1
2012 384.2 4,000.0
a
(3,302.0) 1,081.3
2011 1,002.5 5,000.0 (4,618.0) 384.2
2010 1,005.0 3,000.0 (1,999.0) 1,002.5
TWX used debt-funded share buybacks to bring leverage up to its 2.5x net leverage target in 2011.
With net leverage as its target, Fitch expects future debt-funded buybacks to be done solely to keep net leverage at 2.5x amid EBITDA growth.
Debt-funded share buybacks are incorporated into TWXs BBB+ ratings to the extent that leverage remains below Fitchs target, which is 0.5x0.75x above the 2.5x
net leverage target.
Like most investment-grade companies, there are no restrictions on the amount of share buyback activity.
In February 2013, TWX authorized $4 billion in share repurchases, beginning 1/1/13, including the $1.1 billion remaining at 12/31/12.
Six Months Ended June 30, 2013 420.0
2012 668.0
2011 348.0
2010 919.0
2009 745.0
2008 729.0
Ongoing acquisition activity expected, focused largely on international and
digital. Substantial financial flexibility mitigates event risk. Transaction size likely
to remain moderate (below $1 billion), although several could be executed in
a given year. All acquisition activity likely to be done with net leverage target in
mind.
Fitch believes Time Warners decision to spin off Time Inc. to its shareholders
will benefit the companys operating profile but is not expected to have a
material impact on the companys credit profile.
(x)
Covenant
Level
Ratio/Test as of
6/30/13
EBITDA
Cushion (%)
Litigation Risk Low
Ongoing lawsuit with heirs of Superman creator Joel Siegel and Joseph
Shuster, for what the plaintiffs claim is their fair share of profits generated from
Superman. Fitch believes any negative outcome will be easily manageable.
In January 2013, the company won its appeal, overturning the lower courts
decision and returning the case to the lower court.
DoJ investigation into subscriber authentication to access OTT content, and
caps on high-speed data.
This would be a positive for Time Warner as it could decrease the likelihood
that subscribers cancel traditional cable subscriptions in favor of OTT content.
although Time Warner and other content providers could partially offset this with
Fitch does not believe it is a high probability that DoJ or FCC will force a la
carte cable pricing.
Ending Saturday postal delivery could disrupt some weekly magazine
deliveries, pressuring publishing segment.
Union Workforce
Some (% not disclosed, but likely material) of the writers, directors, actors,
athletes, technicians, trade employees and others involved in the creation
of TWXs content across all platforms are covered by collective bargaining
agreements.
Pensions
Pension plans were 20% ($835 million) underfunded at Dec. 31, 2012. TWX
contributed $47 million to the plan in 2012. There are no required contributions
in 2013.
Other
In connection with TWXs former investment in Six Flags theme parks in
Georgia and Texas, TWX has guaranteed certain obligations of the partnerships
that hold the parks for the benefit of the limited partners of the parks, including
annual payments made at the parks or at the end of the partnerships in 2027
and 2028. The total estimated undiscounted future cash flow requirement
through 2028 is approximately $966 million ($414 million NPV). Six Flags
has agreed to guarantee these obligations and to indemnify Time Warner if
payments are made. TWX can acquire control of the managing partner of the
parks if Six Flags defaults. Six Flags obligations to Historic TW are further
secured by its interest in all limited partnership units held by Six Flags. No
payments have been made pursuant to the guarantee through June 30, 2013.
September 19, 2013

Corporates

Corporate Governance Overview Time Warner Inc.
a
b
As of Jan. 31, 2013. RSUs Restricted stock units. PSUs Performance stock units. TSR Total shareholder return.
($)
Stock
Awards
Option
Awards
Non-Equity
Jeffrey L. Bewkes Chairman and CEO 2,000,000 6,941,751 2,960,569 13,600,000 387,503 25,889,823
John K. Martin, Jr. Chief Financial and Administrative Officer 1,600,000 2,984,975 1,256,095 6,625,000 153,572 12,619,642
Paul T. Cappuccio EVP and General Counsel 1,285,385 1,908,988 803,317 3,475,000 133,612 7,606,302
Gary L. Ginsberg EVP, Corporate Marketing and Comm. 822,115 520,629 219,083 2,250,000 73,245 3,885,072
Olaf Olafsson EVP and International and Corporate Strategy 835,385 902,418 379,745 1,700,000 154,852 3,972,400
Board of Directors
James L.
Barksdale
70 Y May 2013
May 2014
2001 125,000 85,001 39,991 249,992 Nominating FedEx Corporation Chairman and
President Barksdale
Management Corporation
William P. Barr 62 Y May 2013
May 2014
2009 125,000 85,001 39,991 249,992 Compensation (Chair) Dominion Resources,
Inc.
Former Attorney
General of the U.S.
Jeffrey L.
Bewkes
Chairman
60 N May 2013
May 2014
2007 None None CEO Time Warner Inc.
Stephen F.
Bollenbach
Lead Director
70 Y May 2013
May 2014
2001 125,000 85,001 40,035 250,036 Nominating;
Compensation
KB Home; Macys, Inc.;
Mondelz International,
Inc.
Former Co-Chairman
and CEO
Hilton Hotels Corporation
Robert C. Clark 69 Y May 2013
May 2014
2004 125,000 85,001 39,991 249,992 Audit; Nominating
(Chair)
Omnicom Group, Inc. Distinguished Service Professor
at Harvard University
Mathias Dpfner50 Y May 2013
May 2014
2006 125,000 85,001 39,991 249,992 Compensation RHJ International SA. Chairman and CEO
Axel Springer AG
Jessica P.
Einhorn
65 Y May 2013
May 2014
2005 125,000 85,001 39,991 249,992 Audit; Nominating BlackRock Inc. Former Dean of the Paul H.
Nitze School of Advanced
International Studies (SAIS) at
The Johns Hopkins University
Fred Hassan 67 Y May 2013
May 2014
2009 125,000 85,001 39,991 249,992 Audit; Compensation Avon Products Inc. Partner Warburg Pincus
Kenneth J.
Novack
71 Y May 2013
May 2014
2001 125,000 85,001 43,175 253,176 Nominating Appleton Partners, Inc.;
Leerink Swann Holdings
LLC
Former Partner of Mintz, Levin,
Cohn, Ferris, Glovsky and
Popeo, PC.
Paul D. Wachter56 Y May 2013
May 2014
2010 125,000 85,001 39,991 249,992 Audit; Compensation Haworth Marketing
and Media Company;
Oak Productions, Inc.;
Content Partners LLC
Founder and CEO Main
Street Advisors, Inc.
Deborah C.
Wright
55 Y May 2013
May 2014
2005 125,000 85,001 39,991 249,992 Audit (Chair) Carver Bancorp, Inc. Chairman and CEO Carver
Bancorp, Inc.
Note: The board has determined that each member of the audit committee (other than Jessica P. Einhorn) is an audit committee financial expert as defined by SEC rules.
Annual Incentive Adjusted Divisional Pretax Income, Free Cash Flow
Long-Term Incentives TSR relative to TSR of companies in the S&P 500 Index over 3-year period, and 3-year adjusted EPS compared against a target established by the
compensation committee.
Base Salary CEO 9% of total compensation is fixed pay, NEOs 19%
Annual Incentive Financial performance represents 70% of the bonus determination and the individuals performance was used to represent the remaining 30%.
Targets were: Bewkes $10 Mil. (5x base salary), Martin $4.8 Mil., Cappuccio $2.6 Mil., Ginsberg $1.7 Mil., and Olafsson $1.3 Mil.
Long-Term Incentives Stock options (30% of long-term incentive); RSUs and PSUs (70%). Target annual value of long-term equity was similar to the annual bonus targets.
Bewkes $10 Mil., Martin $4.3 Mil., Cappuccio $2.75 Mil., Ginsberg $750,000 and Olafsson $1.3 Mil.
Stock Ownership Requirements Chairman and CEO 5x base salary, division CEO 3x, EVPs, Chief Financial and Administrative Officer 2x
September 19, 2013

Corporates

Corporate Governance Overview Time Warner Inc. (Continued)
a
b
As of Jan. 31, 2013. RSUs Restricted stock units. PSUs Performance stock units. TSR Total shareholder return.
There were no material related-party transactions for FY 2012.
Change in control provision: commencing in 2013, none of the employment agreements for the NEOs provide for
any tax gross-up payments to them.
Clawback and anti-hedging policies are in place.
a
Capital Group Companies Inc. 75,885 8.1
JP Morgan 47,465 5.1
Dodge & Cox 41,332 4.4
Wellington Management Co LLP 31,421 3.4
FMR LLC 28,114 3.0
Viking Global Investors LP 22,364 2.4
Total Top 10 394,890 42.4
b
James L. Barksdale 80,784 <1.0
William P. Barr 37,602 <1.0
Jeffrey L. Bewkes 4,517,318 <1.0
Stephen F. Bollenbach 57,244 <1.0
Paul T. Cappuccio 695,032 <1.0
Robert C. Clark 49,705 <1.0
Mathias Dpfner 33,760 <1.0
Jessica P. Einhorn 43,189 <1.0
Gary L. Ginsberg 50,017 <1.0
Fred Hassan 52,178 <1.0
John K. Martin, Jr. 829,741 <1.0
Kenneth J. Novack 26,053 <1.0
Olaf Olafsson 536,850 <1.0
Paul D. Wachter 14,487 <1.0
Deborah C. Wright 43,522 <1.0
All Current Directors and Executive Officers (18 Persons) 7,332,571 <1.0
Note: Directors and NEO holdings include stock options exercisable within 60 days of Jan. 31, 2013.
September 19, 2013

Corporates

Pension Screener
a
Time Warner Inc.
than 10%?
No
Plan Assets
b
0.0 0.0
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
Debt Structure
Time Warner Inc.
($ Mil., As of June 30, 2013 Pro Forma for Q3 Activity)
$5 Billion Credit Facilities due 2016 and 2017
a

Fixed-Rate Public Debt
b
18,896.0
Other
c
250.0
Total Debt 19,146.0
a
Backed by the $5 billion credit facilities.
b
Reflects maturity
and payment of 8.375% $300 Million Notes due July 2013
issued under Turner Broadcasting System, Inc.
c
Other
consists of nonrecourse debt and capital lease and other
obligations.
Time Warner Inc.
($ Mil., As of June 30, 2013 Pro Forma for Q3 Activity)
Amount
Dec. 31, 2013
a

Dec. 31, 2014
Dec. 31, 2015 1,000.0
Dec. 31, 2016 1,150.0
Dec. 31, 2017 500.0
Thereafter 16,246.0
Total 18,896.0
a
Reflects payment of 8.375% $300 Million Notes due
July 2013.
September 19, 2013

Corporates

Organizational Structure Time Warner Inc.
($ Mil., As of June 30, 2013)
a
Subsidiary guarantors have unconditionally, directly and indirectly guaranteed one another, with the exception that HBO
is not a guarantor for debt issued in November 2006.
b
Historic TW Inc. assumed the obligations of Time Warner
Companies, Inc. following the merger of Time Warner Companies, Inc. into Historic TW Inc. in 2009.
Source: Company filings and website, Fitch Ratings.
Time Warner Inc.
BBB+/Outlook Stable
$2.5 billion facility due 9/27/16
$2.5 billion facility due 12/14/17
(Supports $5.0 Billion CP Program)
Time Warner International Finance Limited
(Permitted Borrower; Borrowings are Guaranteed
by Time Warner Inc.)
Historic TW Inc.
(Including as Successor to
TW Companies Inc.)
b
Turner Broadcasting System, Inc.
WCI
Home Box Office
(HBO)
Warner Bros.
Entertainment
5.875% due 11/15/16
a
1,000
3.150% due 7/15/15 1,000
4.875% due 3/15/20 1,400
4.700% due 1/15/21 1,000
4.750% due 3/29/21 1,000
4.000% due 1/15/22 500
3.400% due 6/15/22 500
7.625% due 4/15/31 2,000
7.700% due 5/01/32 2,000
6.500% due 11/15/36
a
1,000
6.200% due 3/15/40 600
6.100% due 7/15/40 1,000
6.250% due 3/29/41 1,000
5.375% due 10/15/41 500
4.900% due 6/15/42 500
8.050% due 1/15/16 150
7.250% due 10/15/17 500
6.875% due 6/15/18 600
9.150% due 2/01/23 602
7.570% due 2/01/24 450
6.850% due 1/15/26 28
6.950% due 1/15/28 500
6.625% due 5/15/29 1,000
8.300% due 1/15/36 200
Guarantee
Represents subsidiary guarantors for all debt other than that issued in November 2006. Subsidiary guarantors have
unconditionally, directly and indirectly guaranteed one another. For public debt issued in November 2006 (indicated
with an "a"), the guarantee structure is the same, with the exception that HBO is not a guarantor.
September 19, 2013

Corporates

Key Indenture and Credit Facility Features Time Warner Inc.
Original Issuer Time Warner Companies, Inc. Time Warner Companies, Inc. Historic TW Inc. Time Warner Inc.
Description of Debt Senior unsecured debentures Senior unsecured debentures Senior unsecured debentures Senior unsecured notes and
debentures
Document Date 10/15/92 01/15/93 06/01/98 04/19/01
Maturity Various Various Various Various
Financial Covenants Minimum cash flow coverage ratio,
as defined, of 1.5x with respect to
senior debt.
Minimum cash flow coverage ratio,
as defined, of 1.5x with respect to
senior debt.
None noted. None noted.
Change-of-Control
Provision
Standard language that affords
limited protection for bondholders
noted.
noted.
noted.
noted.
Sale of
Assets Restriction
noted.
noted.
noted.
noted.
Additional
Debt Restriction
See Financial Covenants above
and Limitation on Secured Debt
below.
See Financial Covenants above
and Limitation on Secured Debt
below.
See Limitation on Secured Debt
below.
See Limitation on Secured Debt
below.
Limitation on
Secured Debt
Restriction on liens noted. Debt
principal may be secured up to the
greater of 10% of consolidated net
worth or $500 million, as defined.
Secured film financings allowed.
worth or $500 million, as defined.
worth and $500 million. Secured
film financings allowed.
worth and $500 million. Secured
film financings allowed.
Cross-Default Cross-default (on payment)
language noted.
Cross-default (on payment)
language noted.
Cross-default (on payment)
language noted.
No material provision noted
Cross-Acceleration
with Credit Facility
Cross-acceleration provision for
other defaults noted.
Other No other material protections
noted.
No other material protections
noted.
noted.
noted.
September 19, 2013

Corporates

Key Indenture and Credit Facility Features Time Warner Inc. (Continued)
Original Issuer Time Warner Inc.
Time Warner Inc./
Time Warner Intl. Finance LTD Time Warner Inc.
Description of Debt Senior unsecured notes $2.5 billion revolving credit facility due 2017;
$2.5 billion revolving credit facility due 2016
Senior unsecured notes and debentures
Document Date 11/13/06 01/19/11, amended and restated 12/14/12 03/11/10
Maturity Various 12/14/2017, 09/27/2016 3.150% due 2015
4.875% due 2020
4.750% due 2021
4.700% due 2021
3.400% due 2022
6.200% due 2040
6.100% due 2040
6.250% due 2041
4.900% due 2042.
Financial Covenants None noted. Max 4.5x consolidated debt/EBITDA None noted.
Change-of-Control
Provision
Standard language that offers limited
protection for bondholders noted.
Acquisition of majority of voting power
by a group other than TWX or if directors
designated or approved by TWX cease to
constitute a majority of the board.
Sale of
Assets Restriction
Standard language noted. Standard language that offers limited
Additional
Debt Restriction
See Limitation on Secured Debt below. Restrictions on additional debt of restricted
subsidiaries (greater than $2.5 billion) noted.
Also see Financial Covenants above.
See Limitation on Secured Debt below.
Limitation on
Secured Debt
Restriction on liens noted. Debt principal
may be secured up to the greater of 15%
of consolidated net worth and $500 million.
Restriction on liens noted. Among other
provisions, debt principal may be secured up
to a maximum 5% of consolidated total assets,
as defined. Secured film financings allowed.
Restriction on liens noted. Among other
provisions, debt principal may be secured
up to the greater of 15% of consolidated net
worth and $500 million. Secured $6.1 million
financing allowed.
Cross-Default No material provision noted. Yes, greater than $200 million. No material provision noted.
Cross-Acceleration
with Credit Facility
No material provision noted. Cross-acceleration to other material
indebtedness noted.
Other No other material protections noted. N.A. No other material protections noted.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Time Warner Inc.
Date of
5/1/2013 1Q2013 Prepared Our leverage ratio is now 2.4 times, in line with where we ended 2012. We remain comfortable that a target leverage ratio of 2.5
times strikes the right balance of maintaining balance sheet strength while allowing us to continue to invest in our businesses, making
acquisitions and returning capital to our stockholders. So well continue to manage our balance sheet to stay in that range over the
course of the year.
2/6/2013 4Q2012 Prepared For the full year 2012, we also deployed about $1 billion in dividends and over $3 billion in share repurchases. And as evidenced by
the dividend increase and new repurchase authorization we announced this morning, we remain committed to delivering attractive
shareholder returns. So were very pleased with how the year ended, and we feel great about how were positioned going into 2013
and beyond.
2/6/2013 4Q2012 Prepared Since 2008, we have generated over $11 billion in free cash flow, and weve paid out close to $4 billion in dividends. Weve
repurchased over $11 billion of our shares or 27% of the base, and weve spent a little under $3 billion on acquisitions. In 2013, our
philosophy of capital deployment will not change. Well continue to aim for the appropriate balance between maintaining a strong
balance sheet, providing us access to the capital markets and strategic flexibility as well as actively deploying our capital. We still think
a target leverage ratio of 2.5 times is the best level that balances all of these goals. This will enable us to invest in our businesses,
make strategic acquisitions and return a substantial amount of capital to stockholders.
11/7/2012 3Q2012 Q&A Q: So, John, it would appear to me that the pace of your share buyback program accelerated after the end of the quarter. But even if
thats the case, it also appears that, between buybacks and dividends, you are significantly running behind the last years pace, even
as your free cash flow for this year is significantly up.
So Im wondering how much of that is kind of a deliberate policy to slow down your buybacks, and potentially, now that we have
certainty on the presidential elections, how this could skew your capital return program potentially on the dividends by next year. If you
can give us physically some peek into your program for next year, that would be helpful. And I have a question for Jeff.
A: Look, I think our capital program and our capital plan has been very, very consistent now for a long time, and we have no intention
of straying away from that. Last year you made a comment that the pace of the buyback this year was behind last years pace.
Id ask you to remember, last year we were in the process of increasing leverage on the balance sheet to try to get to the long-term
leverage target of 2.5 times. We achieved that, and now, for the foreseeable future, were using that 2.5 times leverage as a guidepost
in figuring out how were going to deploy capital.
I would also say because you said it looks like this pace of the buyback sped up a little bit recently I would acknowledge that
to be true. I think, as I mentioned on my proactive comments, weve seen a significant amount of cash proceeds coming in from
stock option exercises, so thats given us some excess capacity to deploy, and we still view the stock as being extremely attractive at
current levels. And weve been trying to deploy the capital in a way where its sensitive to shareholder returns and its staying within
the constraints of our 2.5 times leverage target. So I think, going forward, thats probably the best benchmark to look to in terms of
determining what were going to do.
8/1/2012 2Q2012 Q&A Q: And then the second topic is, the buyback slowed down a bit. Is this the pace that we should expect for the second half?
A: Yeah, on the buyback, year-to-date, our pace through the first half of the year is probably a good indication of what were likely
to do for the rest of this year because were really being governed now largely by a combination of earnings growth, free cash flow
generation, all within the construct of our balance sheet management, and were right, sitting on top of our long-term target ratio of net
debt to EBITDA of about 2.5 times.
5/2/2012 1Q2012 Prepared Then on the final slide, which looks at our net debt, we ended the first quarter with a $16.6 billion in net debt. Thats up about
$600 million compared to just the end of last year, and thats due almost entirely to our continued returns to shareholders. We returned
almost $1 billion during the quarter including, as I mentioned earlier, around $730 million in share repurchases. Weve maintained our
leverage ratio at around 2.4 times and thats close to our target of 2.5 times, so no changes there. And we still believe that
2.5 times strikes the right balance of maintaining balance sheet strength while allowing us to continue to invest in our businesses,
make acquisitions, and return capital to shareholders.
2/8/2012 4Q2011 Prepared So let me end with the final slide, which shows a reconciliation of our net debt balance. We ended 2011 with $16 billion in net debt,
and that was up about $3.2 billion compared to the end of 2010 and it was up about $750 million compared to the third quarter. Our
leverage ratio is now close to our target of 2.5 times. Thats up from around 2 times at the end of 2010, and it was the result of an
effort to improve our capital structure.
We achieved that by spending $5.6 billion on share repurchases and dividends, and thats up 80% from 2010 levels, and was more
than double our free cash flow generation in 2011. And we also spent a little under $400 million on M&A actions. In addition, we took
advantage of market conditions last year to strengthen our balance sheet by raising long-term debt and amending our $5 billion
revolving bank credit facility, which reduced annual cost and extended terms.
2/8/2012 4Q2011 Prepared We continue to believe that a target leverage of 2.5 times is the level that best balances all of these aims and goals. So you can
see from our continued commitment to direct returns and the boards decision to increase the dividend and authorize the new share
repurchase program. But now that we have reached the target leverage, the excess capital that were going to deploy will be primarily
determined by the growth in our businesses and our free cash flow generation, so as of now, we expect buyback levels in 2012 to be
lower than they were in 2011.
2/8/2012 4Q2011 Prepared At the same time, we significantly increased our returns to shareholders. We directed $5.6 billion to dividends and to stock
repurchases, buying back 12% of our shares in just one year. And in 2012, we plan to keep the momentum going. Well drive to deliver
double-digit growth in adjusted EPS again, and we also just raised our dividend by 11% and announced a new $4 billion repurchase
authorization.
11/2/2011 3Q2011 Prepared Im not going to get into the specifics as to what our plans are going to be beyond this year. Weve got an existing authorization, which
we still have a ways to go. And then I would say were going to be looking at the 2.5-times leverage ratio and evaluating all of our
alternative cost of capital against that backdrop.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Time Warner Inc. (Continued)
Date of
11/2/2011 3Q2011 Prepared On your second question, which is thoughts on the buyback, we think weve been very
opportunistic this year in accelerating the pace of the buyback in light of the dislocation in the equity markets coupled with the very,
very attractive interest rate environment that the debt markets have been providing. And thats been we think its been smart to
sort of use this year to somewhat alter our capital structure, move it more towards optimization, and weve kept in mind the 2.5-times
leverage target that weve been talking about all year. Im not going to get into the specifics as to what our plans are going to be
beyond this year. Weve got an existing authorization, which we still have a ways to go. And then I would say were going to be looking
at the 2.5-times leverage ratio and evaluating all of our alternative cost of capital against that backdrop.
8/3/2011 2Q2011 Prepared Our debt leverage ratio is now 2.4 times and thats up from around two times at the end of 2010. Thats consistent with our plan to
move closer to our target leverage of two and a half times in an effort to better optimize our capital structure. As you know, we manage
our capital structure with the goal of finding the right balance between maintaining a strong balance sheet and actively deploying our
capital to invest in our businesses, make acquisitions and return capital to shareholders. So, with half the year completed, we feel very
comfortable with the progress weve made, and the path were on.
5/4/2011 1Q2011 Prepared One last thing to note, last month we issued about $2 billion of public debt. We were able to access the markets at very attractive
dates while further extending the average length of our debt maturities. As you know, we manage our capital structure with a goal of
striking the right balance between maintaining a strong liquid balance sheet with solid credit ratings and actively deploying our capital
to invest in our businesses, make acquisitions, and return capital to our shareholders. So were quite pleased with our progress that
we made on our capital plan so far this year.
2/2/2011 4Q2010 Q&A Q: John, thanks for all the data points around return of capital, a couple of just clarifications. I think to get towards 2.5 times, the
buyback would have to be pretty significant this year. And in general, buyback and dividends would again be over 100% of free cash
flow. I dont want to put words in your mouth. I just want to throw that out there.
A: Ill start, and I think you had two questions in there that Id probably take. The first is, as a quick answer to your question, without
putting words in my mouth, is yes. If you look at the math that it would require in order to lift the leverage ratio from around 2 to
2.5 times, we have excess capacity that would be in the billions of dollars and would indicate that utilization of that capacity would
be higher this year versus last. And as I said in my proactive remarks, that would be some combination of direct returns. And if
opportunities arise and were applying the same discipline and filters that we have over the last few years as it relates to M&A, but
if opportunities arise, we would reduce the target of M&A then as well. But absent those opportunities arising, you would expect the
pace of our repurchases to go up.
Our capital intensity in the businesses are not changing. We have very low capex. Thats not going to change.
And this morning, as you saw, we announced that we are raising our dividend 11%, and were increasing our repurchase authorization
to $5 billion. That paves the way for us to return even more capital to our shareholders this year.
5/5/2010 1Q2010 Q&A We ended the quarter with $11.5 billion of net debt. Thats around two times. I think from an absolute net debt level, as I said, weve
closed in considerably towards our stated target. But if you look at the capital structure breakout between debt and cash, I would say
all other things being equal, we probably have more cash than we need at this moment in time, roughly about $5 billion at the end
of March. That is substantially down, however, from the nearly $10 billion that we had just about a year ago when we completed the
Time Warner Cable spin. So I dont want you to think that we havent already been working hard on it. And were going to continue to
evaluate the alternative uses of cash relative to opportunities that may present themselves over time.
2/3/2010 4Q2009 Prepared We also believe its important to maintain strategic flexibility and now that we have completed the AOL separation, our leverage ratio is
about two times, and thats closer to our long-term target of about 2.5 times. We plan to maintain this long-term leverage target at the
2.5 times level, as we believe a strong balance sheet is a competitive advantage.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Time Warner Inc.
LTM Ended
6/30/13
Profitability
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 2,067.0 59.0 26.0 23.0 749.0 317.0
Other Debt
Equity Credit
Cash Flow
Change in Working Capital 925.0 (890.0) (830.0) (1,038.0) (782.0) (901.0)
Total Non-Operating/Nonrecurring Cash Flow (35.0) 1,324.0 (24.0) (16.0) (34.0) (27.0)
Capital Expenditures (4,377.0) (561.0) (631.0) (772.0) (643.0) (544.0)
Dividends (901.0) (897.0) (971.0) (997.0) (1,011.0) (1,045.0)
Free Cash Flow 5,054.0 3,251.0 1,688.0 1,663.0 1,788.0 2,746.0
Net Acquisitions and Divestitures (2,435.0) (745.0) (919.0) (348.0) (668.0) (826.0)
Net Debt Proceeds 2,515.0 (6,488.0) 319.0 2,945.0 342.0 (443.0)
Net Equity Proceeds (198.0) (1,102.0) (1,895.0) (4,407.0) (2,165.0) (2,143.0)
Other (Investing and Financing) 230.0 8,785.0 (263.0) (40.0) 68.0 259.0
Total Change in Cash 5,166.0 3,701.0 (1,070.0) (187.0) (635.0) (407.0)
Income Statement
Revenue 46,984.0 25,785.0 26,888.0 28,974.0 28,729.0 29,380.0
Revenue Growth (%) 1.1 (45.1) 4.3 7.8 (0.9) 1.4
Operating EBIT 9,038.0 5,050.0 5,674.0 6,180.0 6,448.0 6,934.0
Gross Interest Expense 2,463.0 1,293.0 1,277.0 1,321.0 1,360.0 1,319.0
321 Company Summaries Twenty-First Century Fox, Inc.
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
IDR BBB+
Senior Unsecured Debt BBB+
News America Inc.
IDR BBB+
Senior Unsecured Debt BBB+
Rating Outlook
Stable
Key Rating Drivers
Separation Transaction Neutral: Given the strength of Twenty-First Century Fox, Inc.s (FOX)
underlying businesses, strong liquidity position and Fitchs FCF expectations, Fitch believes that
suffcient capacity exists at the current rating level to accommodate a slight increase in leverage
resulting from the separation transaction and to fund the $2.6 billion initial cash capitalization of
the new News Corp.
Strong Business Profle: FOXs businesses consist of a strong portfolio of cable networks,
leading television and movie studios, a national television network, local television broadcast
assets, and an international direct satellite broadcast business, each of which have the scale
characteristics necessary to operate at high margins. These businesses position the company
with solid growth prospects and the ability to generate meaningful levels of FCF.
Solid Financial Flexibility: FOXs liquidity position and fnancial fexibility remains strong for the
rating, although the separation transaction lowered cash balance and modestly diminished FCF
generation. Fitch anticipates FOX will generate annual FCF ranging between $2.5 billion and $3
billion during the rating horizon.
Consistent Financial Policy: Fitch does not expect any material changes to the companys
fnancial strategies or capital allocation policies. FOX remains committed to its share repurchase
program. However, the pace of share repurchases has diminished during fscal 2013. Shareholder
returns (dividends and stock repurchases) that exceed FCF generation are incorporated into
current ratings, to the extent that leverage remains below Fitchs 3x total leverage threshold.
Credible Strategy to Address Threats: Fitch continues to believe that FOX is well positioned
to address the secular threats and opportunities presented by emerging alternative distribution
platforms and continued audience fragmentation across the media and entertainment landscape.
Fitch also believes demand for high quality content remains strong across all major end markets.
Rating Concerns: Exposure to cyclical advertising revenues within the companys local television
and Fox Network ad sales as well as the companys capacity to adapt to ever-changing media
consumption patterns and technology platforms highlight rating concerns.
Positive Rating Triggers: Positive rating action would likely coincide with FOX adopting a more
conservative fnancial policy highlighted by a gross leverage target of 2x or lower. Meanwhile, FOX
will need to demonstrate that its operating profle can sustain itself amidst ongoing competitive
pressures, changing media consumption patterns and evolving technology platforms.
Negative Rating Triggers: Negative rating actions are more likely to coincide with a material
shift in fnancial policy including, but not limited to, the company adopting a more aggressive
fnancial strategy or event-driven merger and acquisition activity that drive leverage beyond 3x in
the absence of a credible deleveraging plan while exhausting excess cash balances. A negative
rating action based solely on operational performance is unlikely over the short term.
Analysts
David Peterson
+1 312 368-3177
Rolando Larrondo
+1 212 908-9189
September 19, 2013

Corporates

Portfolio Summary Twenty-First Century Fox, Inc.
a
BSkyB had a market value of $8,492 million at March 31, 2013.
b
In March 2013, the company sold its 44% investment in SKY Network Television Ltd.
c
In January
2013, the company acquired additional shares of Sky Deutschland increasing its ownership to 55% (Sky Deutschlands results will be consolidated into companys
statements).
d
In July 2012, the company sold its interest in NDS. Note: June 28, 2013 Twenty-First Century Fox, Inc., formerly News Corporation, completed the
previously announced separation of its business into two independent publicly traded companies. Twenty-First Century Fox, Inc. has retained the media and
entertainment businesses and the new News Corporation retained the publishing and education businesses and Foxtel.
Investments Book Value Summary
Ownership (%) Book Value (USD Mil.)
Foxtel (Australian Pay-TV Operator) 50 2,207
a
39 1,944
Yankees Entertainment and Sports Network 49 830
Sky Network Television Ltd. (New Zealand Media Company)
b
0
Sky Deutschland AG
c
55
NDS Group Limited
d
0
Other Equity-Method Investments Various 447
Fair Value of Available-for-Sale Investments Various 305
Other Investments Various 889
Total Investments 6,622
Television Cable Filmed Entertainment
United States
Fox Broadcasting Company
FoxSports
MyNetworkTV (MNT)
Fox Television Stations
WNYW New York, NY (FOX)
WWOR New Jersey, NJ (MNT)
KTTV Los Angeles, CA (FOX)
KCOP Los Angeles, CA (MNT)
WFLD Chicago, IL (FOX)
WPWR Chicago, IL (MNT)
WTXF Philadelphia, PA (FOX)
WFXT Boston, MA (FOX)
KDFW Dallas, TX (FOX)
KDFI Dallas, TX (MNT)
WTTG Washington, DC (FOX)
WDCA Washington, DC (MNT)
WAGA Atlanta, GA (FOX)
WJBK Detroit, MI (FOX)
KRIV Houston, TX (FOX)
KTXH Houston, TX (MNT)
WTVT Tampa, FL (FOX)
KMSP Minneapolis, MN (FOX)
WFTC Minneapolis, MN (MNT)
KSAZ Phoenix, AZ (FOX)
KUTP Phoenix, AZ (MNT)
WOFL Orlando, FL (FOX)
WRBW Orlando, FL (MNT)
WUTB Baltimore, MD (MNT)
WHBQ Memphis, TN (FOX)
KTBC Austin, TX (FOX)
WOGX Ocala, FL (FOX)
FOX News Channel
FOX Business Network
Fox Cable Networks
FX
Fox Movie Channel
Fox College Sports
Fox Sports Net (FSN)
Fox Regional Sports Network
YES Network (49%)
Fox International Channels
Fox Pan American Sports LLC (33%)
Fox Soccer Channel
Fox Soccer Plus
Fox Deportes
FUEL TV
SPEED Channel
National Geographic (70% U.S.)
NAT GEO Wild
NAT GEO Mundo
Big Ten Network (51%)
Stats, Inc. (50%)
STAR India
MundoFox (50/50 JV)
United States
Fox Filmed Entertainment
20th Century Fox
20th Century Fox Espaol
Fox 2000 Pictures
Fox Searchlight Pictures
20th Century Fox International
Fox Music
20th Century Fox Home Entertainment
20th Century Fox Television
Fox Television Studios
Fox21
Blue Sky Studios
20
th
Century Fox Licensing and Merchandising
International
Fox International Productions, Inc.
Shine Limited
Other Assets
United States
Americanidol.com
National Rugby League
Fox Audience Network
Fox Mobile Group
Fox Interactive Media
FoxSports.com
Scout.com
Whatifsports
Various Other Websites
Hulu (34%)
Direct Broadcast and Satellite TV
Europe
SKY Italia
British Sky Broadcasting (39%)
Sky Deutschland AG (55%)
Asia
TATA SKY (30.0%)
September 19, 2013

Corporates

U.S. and
Canada
58%
Europe
28%
Other
14%
(As of June 2013)
Cable
Network
Program
ming
38%
Filmed
Entertain
ment
30%
Televisio
n
17%
Direct
Broadcas
t Satellite
Televisio
n
15%
Revenues by Segment
(As of June 2013)
Television
17%
Direct
Broadcast
Satellite
Television
15%
Filmed
Entertainment
30%
Cable Network
Programming
38%
Cable
Network
Program
ming
62%
Filmed
Entertain
ment
19%
Televisio
n
13%
Direct
Broadcas
t Satellite
Televisio
n
6%
EBITDA by Segment
(As of June 2013)
Television
13%
Direct
Broadcast
Satellite
Television
6%
Filmed
Entertainment
19%
Cable Network
Programming
62%
September 19, 2013

Corporates

Event Risk Dashboard Twenty-First Century Fox
FCPA Foreign Corrupt Practices Act. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions
a company is able to take from expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition H
Divestiture H
Covenant Breach L
Litigation Risk H
Regulatory Risk H
LBO Risk Low
Large enterprise value (EV) precludes LBO.
Low risk of private equity ownership, given concentrated ownership (Murdoch has 40%
voting control, 13% economic stake). However, owner buy-in not out of the question.
Secular Risk Medium
Publishing spinoff signifcantly reduces secular risk.
Limited organic growth at broadcast television (14% of FY2013 pro forma
EBITDA), though retransmission revenue a beneft.
Strong portfolio of cable networks.
Film studio performing well; remains inherently risky and volatile.
Digital delivery of home entertainment offsetting DVD declines.
Ownership is concentrated, with Rupert Murdoch having 40% voting control
through his ownership of 40% of Class B shares.
Further, Saudi Prince Alwaleed Bin Talal owns 7% of the Class B shares and has
publicly pledged support for Rupert Murdoch.
Rupert Murdoch is the chairman and CEO. Additionally, his two sons are directors.
Seven of the 12 board members are considered insiders, including Rupert
Murdochs two sons.
The executive compensation incentive structure is mixed. The annual incentive
is creditor friendly, driven by operating proft. However, the long-term incentives
pose more risk to bondholders as they could incentivize share buybacks and
other equity valuation methods: EPS growth, FCF growth and total shareholder
return.
Fitch believes fnancial policy event risk is present at most investment-grade
(IG)-rated media names that have control of their balance sheets.
Controlling shareholder adds incremental risk.
Financial diffculties from too much debt in the early 1990s have made
Murdoch conservative.
Fitch expects FOXA will maintain a conservative fnancial policy including a
leverage target ranging between 2.5x and 3x while maintaining between $2 billion
and $3 billion of cash on its balance sheet.
Twenty-First Century Fox Rating History
BB+
BBB
BBB
BBB+
A
2.0
2.2
2.4
2.6
2.8
3.0
2007 2008 2009 2010 2011 2012 LTM
March
2013
Leverage Trend
(x)
0
5
10
15
20
25
30
Source: Bloomberg.
Twenty-First Century Fox Stock Price
(June 2007Nov. 2012)
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Twenty-First Century Fox (Continued)
FCPA Foreign Corrupt Practices Act. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions
a company is able to take from expectations of what it will actually do.
($ Mil.)
Starting Authorized
Share Buyback
New Authorized
Share Buyback
Share Buy
Activity
Ending Authorized
Share Buyback
Nine Months Ended March 31, 2013 5,370.0 (1,834.0) 3,536.0
2012 1,759.0 8,200.0 (4,589.0) 5,370.0
2011 1,759.0 1,759.0
2010 1,759.0 1,759.0
2009 1,759.0 1,759.0
2008 2,148.0 (389.0) 1,759.0
2007 3,442.0 (1,294.0) 2,148.0
FOXA ceased share repurchase activity in the downturn and post downturn was building cash to bid for BSkyB.
FOXAs intention to repurchase $4 billion of its stock during fscal year 2014 is factored within current ratings, given the substantial cash balance and FCF generation.
Like most investment-grade companies, there are no restrictions on the amount of share buyback activity.
Nine Months Ended
March 31, 2013 2,746.0 2,670.0
2012 542.0 475.0
2011 831.0 403.0
2010 143.0 1,257.0
2009 847.0 1,762.0
2008 5,567.0 1,580.0
FOXA will likely look to either buy in/consolidate or divest equity stakes.
Final capitalization of publishing spinoff not yet disclosed, but will be manageable
within ratings.
Fitch does not expect material acquisition activity. However substantial fnancial
fexibility mitigates event risk.
(x)
Covenant
Level
Ratio/Test as of
3/31/13
EBITDA
Cushion (%)
FOXA has agreed to indemnify News Corporation for payments made after the
completion of the separation transaction related to civil claims and investigations.
The indemnifcation extends to legal and professional fees paid in connection
with criminal matters provided the fees and costs are related to employees that
are directors, offcers or certain designated employees of News Corporation.
Through June 30, 2012, the company has spent $224 million on phone hacking-
related legal fees, internal investigations and legal settlements.
News Corp. could potentially face fnes related to the ongoing DOJ investigation
into whether it violated the FCPA. Fitch expects the fnes to be manageable given
the companys liquidity position.
Members of the companys senior management team along with members of its
board of directors have agreed to settle certain derivative shareholder lawsuits.
In accordance with the settlement, the company agreed to, among other things,
implement certain compliance policies.
Portfolio governed by FCC's media ownership laws. Relaxation of ownership laws
could drive higher M&A. Tightening of laws could drive forced divestitures.
Fitch expects newspaper/broadcast cross-ownership rules to be eased, but
other ownership regulations not likely to be changed. No impact on FOXA post
publishing spinoff.
The passage of stricter anti-piracy legislation would be benefcial to content
compensation battles in a way that would have a material fnancial impact.
No additional debt restriction.
No upstream guarantee.
Guarantee from parent News Corp. put in place to make all existing debt pari
passu.
However downstream guarantee from parent HoldCo could be weakened if
HoldCo incurs secured debt or HoldCos other subsidiaries incur debt.
If a nonguarantor subsidiary guarantees any public debt more than $100 million,
it will become a guarantor of the News America Inc. debt.
Union Workforce
Writers, directors, actors and other talent, trade employees and others in the
flm studio, TV studio and newspapers are subject to collective bargaining
agreements (numbers not disclosed).
Work stoppage could materially affect content pipeline.
Directors Guild, Screen Actors Guild and Writers Guild CBAs expire in 2014.
Pensions
Pension plan was 28% ($1.1 billion) underfunded at 6/30/12.
$255 million contribution made in fscal 2012.
FOXA has contributed $65 million to its pension fund during the frst nine months
of fscal year 2013.
Earn-Outs
In connection with the Dow Jones index transaction, News Corp. agreed to
indemnify CME for any payments of principal, premiums and interest CME makes
under its guarantee of the venture fnancing.
September 19, 2013

Corporates

Corporate Governance Overview Twenty-First Century Fox, Inc. (formerly News Corp.)
a
Most recent filings on Bloomberg as of June 2013. PSUs Performance stock units. TSR Total shareholder return. N.A. Not available. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
K. Rupert Murdoch Chairman and CEO 8,100,000 10,425,000 3,508,681 22,033,681
Chase Carey Deputy Chairman, President, and COO 4,050,000 8,340,000 8,771,717 21,161,717
James R. Murdoch Chairman and CEO, International, Deputy COO 3,000,000 5,000,000 5,263,021 13,263,021
David F. DeVoe SEVP and CFO 2,853,750 4,170,000 2,192,926 9,216,676
Roger Ailes Chairman and CEO Fox News, FOX Business Network 5,000,000 1,500,000 - 9,000,000 15,500,000
Gerson Zweifach SEVP, President and Group, General Counsel 1,250,000 1,500,000 4,503,856 7,253,856
Board of Directors
James W.
Breyer
51 Y Oct 2012
Oct 2013
2011 84,722 97,222 181,944 Compensation;
Nominating and
Wal-Mart Stores Inc.;
Dell Inc.; Facebook;
Brightcove
Partner Accel Partners
Chase
Carey
58 N Oct 2012
Oct 2013
2009 None Sky Deutschland AG Deputy Chairman, President
and COO News Corporation
David F.
DeVoe
65 N Oct 2012
Oct 2013
1990 None BSkyB Senior EVP and CFO News
Corporation
Viet
Dinh
44 Y Oct 2012
Oct 2013
2004 141,472 140,000 281,472 Nominating and
(Chair); Audit
Revlon Inc. Professor Law at
Georgetown University Law
Center
Sir Roderick
I. Eddington
Lead Director
62 Y Oct 2012
Oct 2013
1999 154,000 140,000 294,000 Audit (Chair and
Financial Expert);
Compensation
John Swire & Sons
Pty. Ltd.; CLP Holdings
Limited; Lion Pty Ltd.
Non-Executive Chairman
Australia and New Zealand J.P.
Morgan
James R.
Murdoch
39 N Oct 2012
Oct 2013
2007 None None Deputy Chief Operating Officer,
CEO, Chairman International,
News Corporation
Lachlan K.
Murdoch
40 N Oct 2012
Oct 2013
1996 100,000 140,000 2,420,000 2,660,000 None Illyria Pty. Ltd.,
Ten Network
Holdings Limited
Former Deputy Chief Operating
Officer News Corporation
K. Rupert
Murdoch
Chairman
81 N Oct 2012
Oct 2013
1979 None None CEO News Corporation
Alvaro Uribe 60 Y Oct 2012
Oct 2013
2012 None None Former President of Colombia
Delphine
Arnault
N.A. N.A. Jun. 2013
Oct 2013
2013 N.A. N.A. N.A. N.A. N.A. LVMH Mot
Hennessy Louis
Vuitton SA, Havas,
Christian Dior SA
VP of Louis Vuitton
Jacques
Nasser
N.A. N.A. Jun. 2013
Oct 2013
2013 N.A. N.A. N.A. N.A. N.A. Director of BHP Billiton
Limited and BHP Billiton
Plc since 2006 and the
Chairman of each since
2010
Non-Executive Advisory Partner
of One Equity Partners LLP
Robert
Silberman
N.A. N.A. Jun. 2013
Oct 2013
2013 N.A. N.A. N.A. N.A. N.A. Strayer Education,
Inc. Chairman of the
Board since 2003
Executive Chairman of Strayer
Education, Inc.
Arthur
Siskind
Director
Emeritus
N.A. N.A. Not
applicable
2012 N.A. N.A. N.A. N.A. N.A. None Senior Advisor to the Chairman
of 21st Century Fox since 2005
Annual Incentive Total segment operating profit.
Long-Term Incentives EPS growth (40% weight) , FCF growth (40%), three-year TSR measured against three-year TSR of the companies in the S&P 500 Index (20%).
Base Salary There have been no base salary changes for K.R. Murdoch, DeVoe or Ailes since FY07. In FY11, portions of total compensation that are linked to
performance were increased.
Annual Incentive Targets were: K. Rupert Murdoch $12.5 million, Chase Carey $10 million, James Murdoch $6 million, David DeVoe $5 million
Max. bonus opportunity for each is twice that of its target. Ailes is responsible for FOX News Channels operating results. His financial performance
measure was FOX News Channels EBITDA.
Long-Term Incentives Target PSU bonus opportunities for: K. Rupert Murdoch $4 million, Chase Carey $10 million, James Murdoch $6 million,
David DeVoe $2.5 million, Zweifach $4 million.
September 19, 2013

Corporates

Corporate Governance Overview
Twenty-First Century Fox, Inc. (formerly News Corp.) (Continued)
a
Most recent filings on Bloomberg as of June 2013. PSUs Performance stock units. TSR Total shareholder return. N.A. Not available.
Rupert Murdoch controls approximately 40% of the voting rights; 6 of 14 board members are not independent.
Two classes of stock: Stock A no voting power; Stock B one vote per share.
In Feb. 2012, James Murdoch stepped down from his position as executive chairman of News International, its U.K. publishing unit. In April 2012, James also stepped down as
Chairman of BSkyB.
Andrew S.B. Knight and John L. Thornton retired from the board at the annual meeting in October 2012. Elaine L. Chao and Alvaro Uribe were elected to the board at the
annual meeting.
Viet Dinh reports to the board on the work of the management and standards committee that was created to have oversight of, and take responsibility for, all matters related to the
News of the World phone hacking case.
Related-party transactions: 1) The company has an approximately 19% interest in Rotana Holding FZ-LLC. Rotana is controlled by HRH Prince Alwaleed Bin Talal Bin Abdulaziz
Alsaud, who is a more than 5% stockholder of the company. The company purchased half of this investment in FY10 for approx. $70 Mil. and then purchased the other half of the
investment for two equal payments of $35 Mil. made in FY11 and FY12. The company also has an option to sell its interest in Rotana in February 2015. 2) Freud Communications,
which is controlled by Matthew Freud, Mr. K.R. Murdochs son-in-law, provided external support to certain press and publicity activities of the company during FY12. The fees paid by
the company to Freud Communications were approx. $195,000 for FY12.
Clawback policy and anti-hedging policy in place.
a
a
Blackrock 106,118 7.0 Murdoch Family Trust 306,623 38.4
Capital Group Companies Inc. 99,937 6.6 Al Saud Alwaleed Bin T 56,238 7.0
Vanguard Group Inc. 87,699 5.8 Franklin Resources Incorporated 25,208 3.2
Yacktman Asset Management Co 75,774 5.0 Invesco LTD 10,550 1.3
State Street 73,889 4.9 Elliot Management Corporation 10,096 1.3
Dodge & Cox 65,428 4.3 JP Morgan 8,785 1.1
Janus Capital Management LLC 55,423 3.7 Murdoch Keith Rupert 8,250 1.0
FMR LLC 42,536 2.8 Waddel & Reed Financial Inc. 5,840 0.7
Franklin Resources 32,254 2.1 UBS 5,053 0.6
Bank Of New York Mellon Corp 28,811 1.9 Deutsche Bank AG 4,899 0.6
K. Rupert Murdoch 9,210 <1.0 317,291 39.7
Roger Ailes 175
Jos Mara Aznar 4 <1.0
Natalie Bancroft 3 <1.0
Peter L. Barnes 8 <1.0
James W. Breyer
Chase Carey 86 <1.0
David F. DeVoe 8 <1.0
Viet Dinh 1 <1.0
Sir Roderick I. Eddington 135 <1.0
Joel Klein
Andrew S.B. Knight 26 <1.0 79 <1.0
James R. Murdoch 3,999 <1.0 2 <1.0
Lachlan K. Murdoch <1,000 <1.0 6 <1.0
Stanley S. Shuman 339 <1.0 61 <1.0
Arthur M. Siskind 30 <1.0 8 <1.0
John L. Thornton
Gerson Zweifach
All Current directors Executive
Officers as a Group (19 Members) 14,019 <1.0 317,449 39.8
Note: Directors and NEO holdings include stock options exercisable within 60 days of Aug. 17, 2012.
September 19, 2013

Corporates

Debt Structure
(USD Mil., As of June 30, 2013)
USD2 Billion Revolving Credit Facility due 2017
EUR300 Million Credit Facility due January 2018
a
293.0
Senior Unsecured Notes 16,167.0
Others
Total 16,460.0
a
As of June 30, 2013, EUR225 million or USD293 million
was outstanding.
Source: Company filings, Fitch estimates.
($ Mil., As of June 30, 2013)
Maturity Amount
June 30, 2014 137.0
June 30, 2015 750.0
June 30, 2016 200.0
June 30, 2017 400.0
June 30, 2018 643.0
Thereafter 14,330.0
Total 16,460.0
Note: Excludes capital leases.
Pension Screener
a
than 10%?
No
Plan Assets
b
0.0 50.0
Leverage Screener
PBO (Under-)/Overfunded Status (438.0) (1,083.0)
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

a
Former name of News America, Inc.
b
AUD150 million, approximately USD137million as of June 30, 2013.
c
Guaranteed by Twenty-First Century Fox. As of June 30,
2013, EUR225 million or USD293 million outstanding. IDR Issuer Default Rating. O&O Owned and operated.
Fox Entertainment Group, Inc.
Assets: TV (Fox Network, O&O
Stations), Cable TV, Filmed
Entertainment
STAR and Other Int'l Channels
Assets: Asian and
European Cable Channels
Sky Italia
Wholly Owned
Sky Deutschland
EUR300 Mil. Revolver due January
2018, EUR225 Mil. Outstanding
Assets: 55% stake in the leading pay
TV operator in Germany and Austria
Hulu
33% Interest
Yes Network
49% Interest
Organization Structure Twenty-First Century Fox, Inc.
News America, Inc.
News America Holdings, Inc.
a
Murdoch
(40% Voting/14% Equity)
Public
(60% Voting/86% Equity)
(Delaware)
Amount
5.300% Senior Debentures 2014 750
4.500% Senior Debentures 2021 1,000
Total 12,400
Amount
8.630% Senior Debentures 2014
b
137
Total 3,767
Amount
USD2.0 Billion Revolver due May 2017
Term Debt 16,167
EUR300 Revolver due January 2018
c
293
Other/Adjustments (2)
Total 16,458
News America Incorporated
(Delaware)
IDR BBB+/Stable Outlook
Guarantee
Amount
USD2.0 Billion Revolver due May 2017
Term Debt 16,167
EUR300 Mil. Revolver due January 2018
c
293
Other/Adjustments (2)
Total 16,458
Guarantee on
Revolver
BSkyB Holdco, Inc.
Assets: 39% Stake in British Sky
Broadcasting Group, PLC
September 19, 2013

Corporates

Debt and Covenant Synopsis Twenty-First Century Fox, Inc.
Overview
Issuers News America Inc. News America Inc. News America Inc.
Date 5/02/12 03/24/93 8/25/09, amended and restated on 2/16/11
Description $2.0 billion senior unsecured revolving credit
facility
Unsecured notes and debentures Unsecured notes and debentures
Maturity 5/2/17 Various 5.65% due 2020
4.50% due 2021
6.90% due 2039
6.15% due 2041
3.00% due 2022
Financial Covenants
(Maximum)
4.5x
Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)

Change-of-Control
(CoC) Provision
CoC is an event of default. Occurs when
Murdoch family ceases to control at least
20% of voting rights or another party attains a
greater percentage holding than the
Murdoch family.
CoC provision: Allows the bondholders the
option of having their notes purchased in the
event that members of the Murdoch family no
longer effectively control the company and a
rating decline occurs shortly thereafter. CoC
takes place if the Murdoch family ceases to
control at least 30% of voting rights or another
party attains a greater percentage holding than
the family.
Repurchase at 101% if 1) any person other
than the Murdoch family becomes the
beneficial owner of 50% or more of the voting
stock; and 2) ratings are downgraded below
investment grade (or downgraded at least one
notch if already below investment grade.
Sale of Assets
Restriction
Limitation on
Acquisitions
Debt Restrictions
Additional
Debt Restriction
Subsidiary debt is limited to $1.25 billion. No material provision noted. No material provision noted.
Limitation on
Secured Debt
Not to exceed 10% of the consolidated
tangible assets (as defined). Certain film
financings are permitted.
Other
Cross-Default Payment defaults of debt greater than or equal
to $250 million.
Payment defaults of debt greater than or equal
to $100 million.
Cross-Acceleration Language noted. Language noted. No material provision noted.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Twenty-First Century Fox
Date of
5/8/2013 3Q2013 Q&A Q: And the second question is, I was hoping somebody would comment on 21st Century Fox, what your balance sheet objectives will
be and how you guys are going to think about capital returns versus acquisitions? Thanks.
A: Not going to say a lot about it. I think on the balance sheet, we are as far as the 21st Century Fox balance sheet, those are really
things, I think were going to look to that April I mean that August Investor Day. We still again have not put the board in place for
the company and I think wed looked to provide really appropriate visibility to plans for the business, operating plans for the business,
priorities, but equally on issues around the balance sheet, return of capital to shareholders and the like. We certainly plan to continue
to finish the buyback. We bought back as I said, it was better done sort of with re-energizing that post the split. But I think clarity
in terms of looking forward, what are the philosophies and plans around return of capital to shareholders, whether its dividends or
buybacks as well as plans for the business, I think we really want to do that more holistically and with appropriate bodies in place like
the board. So I think well look to the August Investor Day to do that.
5/8/2013 3Q2013 Prepared Finally we continue to improve the efficiency of our balance sheet. Although, we have continued to repurchase our stock over the
course of this fiscal year, and remain fully committed to the buyback, we determined that it is more appropriate to complete the
repurchase after the separation. In closing, we believe were in an incredibly strong position on multiple fronts.
5/8/2013 3Q2013 Prepared Before I turn to guidance, let me comment on our buyback program. As youve seen, we have continued to purchase shares while
we work through the details of the separation process and through May 7, we have spent approximately $1.972 billion repurchasing
approximately 79 million shares during this fiscal year. While this pace is a little slower than originally anticipated, we still intend to
complete the full $10 billion authorized program in a timely manner.
2/6/2013 2Q2013 Q&A Q: And the second, I guess for all of you guys theres been reasons why youve probably been a little bit less active on the buyback
front but could you kind of update us with your long-term perspective in terms of return of capital and capital allocation? Thank you.
A: In terms of that capital question, again, in some ways as we head towards the split, which is what weve said, you obviously have
two companies that probably are each going to have to have their own, so its a little difficult to get too long-term on capital allocation
because youre again, youre going to have two businesses and with different outlooks and at different places and I think each has
to sort of determine its own path and then come forward and set out a vision for what it intends to do. Were committed to finishing
the buyback we have announced so that weve said were going to buyback $3 billion to $4 billion this year. We will do that. We will
finish the $5 billion that weve talked about. But I think the company has to get split to then come out with an appropriate sort of
each company then has to come out with its own vision for how it deals with it. We think its an important part of how we manage the
business for shareholders. I mean I think we certainly know the importance of returning capital returning capital to shareholders.
We want to make sure we continue to fulfill opportunities to grow the business but we believe fully hopefully our actions recently in
the last year plus have indicated that. The return of capital to shareholders is an important part of it. But again, I dont want to get too
specific because I think youve got to get each company to sort of provide its own vision.
11/6/2012 1Q2013 Q&A Q: Thanks so much. Sorry about the technical difficulties. So I had one and a half questions if I would. So what about the cash? So
you ended the quarter with $12 billion of cash from the balance sheet, some of thats from NDS and I think a new note you issued. I
know, Chase, I believe youve said before that you I think you need about $3 billion sort of liquidity at steady state. So I dont know
if theres any if theres blanks you can fill in between the $12 billion and the $3 billion that you might help us sort of run it out. And
the half a question that Id like to accompany that is just if you can be so kind as to talk about the role of the dividend in that answer. I
think its yielding less than 1% now. And I know you have a preference for buy-backs at share price but it seems like you could argue
you could have room for both and. So love to hear your thoughts on that. Thanks.
A: Yes, and so weve got events in place. You know, that being said, I think we said before, recognize it doesnt get us to where I said,
which was $2 billion to $3 billion of cash and up 2 to 2.5 times leverage. So I would say yes there are clearly there there are events
that are on the short-term, on a very short-term horizon against that $12 billion.
I dont want to get too again, more recently what we said, with the split coming, we dont want to get too far down the road ahead
of having those two companies in place, balance sheets established, Boards in place for each, that enable each to come out with
an appropriate picture. Obviously were splitting the businesses because theyre going to be businesses with different profiles and
different needs and I think until we get there, I think its probably better for us to describe where we go from there once those things
are achieved. And I think that would include the dividend statement. I mean I think the dividends dividends should be a part of the
mix of our discussions, they have been with buybacks. I think weve with our stock undervalued, I think we have looked at buybacks
as a better path to returning cash to shareholders than dividends, but they should be a part of the conversation. But I think before
we but I think with the split becoming more and more imminent, I think its more appropriate for us to get the split and have the
discipline to get the split done and then address where we go from there with the two separate balance sheets.
8/8/2012 4Q2012 Prepared Although, the repurchase pacing will initially moderate to a $3 billion to $4 billion annual rate as we work through the details of the
separation process. As always, our objective is to buy back our shares in a disciplined manner without artificially pushing on share
price up.
8/8/2012 4Q2012 Prepared Weve pursued a balanced approach of buybacks and investments to achieve this goal, and that continues to be our plan. Our
undervalued stock continues to support our buyback plans. At the same time, we believe there may be strategic investment
opportunities to exceed our target returns and strengthen our businesses for growth.
8/8/2012 4Q2012 Prepared Before I turn to our guidance for fiscal 2013, Id also like to update you on our buyback program. And through August 7, the company
spent $5.1 billion, repurchasing nearly 280 million shares, reducing News Corporations total outstanding by more than 10% compared
to 12 months ago.
As you may recall, three months ago, we increased our original $5 billion buyback authorization by another $5 billion, with a target
of completing the total authorized buyback by the end of fiscal 2013. Even with the June announcement that we intend to pursue a
separation of the Publishing and Entertainment businesses, we are fully committed to completing the $10 billion buyback program.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Twenty-First Century Fox (Continued)
Date of
5/9/2012 3Q2012 Q&A Q: I have a question for Dave on the balance sheet. I think that youve historically said that your goal for the balance sheet is to have
two to two and a half times gross leverage, and I think youre at roughly two times now. When you think about your cash position over
the next year between free cash flow and the NDS proceeds, cash should be roughly $15 billion before this buyback, which is very
welcome. Im just wondering if you could address what youll do with those cash proceeds. And do you expect to have more proceeds
from BSkyB? Do you think youll have to sell that down? Can you address any other acquisitions, whether its education or something
else?
A: Well, just told you what were going to do with $5 billion of the $15 billion is to buy back our stock.
Q: Right, so theres $10 billion left.
A: And you are right with respect I think the gross leverage at two to two and a half times is basically is probably a
reasonable leverage for us. And if you were to strip out all the cash we get, I think everything you said is correct. And I think we just
opportunistically are going to have to look at how we access our how we utilize our capital.
2/8/2012 2Q2012 Prepared In terms of capital, I dont think were in a that different place than and Id sort of say what I said in the past I think continues
to be sort of pretty much the where were at today. I mean we continue to have we recognize an overly liquid balance sheet. We
recognize well still have an overly liquid balance sheet when we finish this buyback.
I think we are trying to work towards a place where weve got an appropriate level of leverage. Enough cash in the balance sheet for
flexibility, but not that excess liquidity weve got now.
Wed rather be building businesses than acquiring businesses, but I think if we can find businesses to acquire, that or buy that
meet our thresholds and thats the threshold to me that is sort of a mid-teens return we think those are investments to make.
2/8/2012 2Q2012 Q&A Q: Not sure if you mentioned dividend as part of your considerations there. If you look other U.S. media companies their dividend
yields are a bit higher. And I just wonder is dividend growth or higher dividend yield a consideration at the board level when you go
through that conversation?
A: For sure. I think dividends we did increase it just a bit.
11/2/2011 1Q2012 Q&A Q: And then just, Dave, your buyback, youre probably going to get this question from now on forever, but the buyback has been way
faster than I think most of us thought so far. So, could you just give us your current thinking on once you run through this, which at this
pace will be January or February, and given the incredible cash position, how should we think about ongoing capital returns?
A: Just weve been aggressive with it. Its going to basically were going to continue to buy back the stock based on the conditions
that are in the market, which mean price and a lot of different things. And I just think we first got to get through the $5 billion buyback,
and then we will address it when its through. I think Chase was pretty elaborate with respect to our explanation for our use of capital
in December, or excuse me in August rather, and we intend to continue to work towards those financial goals.
8/10/2011 4Q2011 Prepared With regard to capital structure and allocation, we fully recognize that our $5 billion buyback only begins to address these issues. On
capital structure, we believe we should work toward a balance sheet with 2 to 2.5 times leverage and about $2 billion to $3 billion of
available cash for flexibility. We obviously will not get there in 12 months, but were targeting to do so in two to three years.
8/10/2011 4Q2011 Prepared We plan to use this cash to continue to pursue additional buybacks beyond the $5 billion one recently announced if our stock
continues to be undervalued, and today it is woefully undervalued.
I want to be clear that these are strategies and plans by which we will manage our business. However, these guidelines do not
preclude our decision to consider unexpected opportunities or to modify our views based on changes in the broader market or
competitive dynamic.
2/2/2010 2Q2010 Prepared We reported a cash balance at quarter-end of nearly $7.3 billion. A portion of this balance will be used to reduce debt in the current
quarter, as we have a $150 million senior note maturity which comes due in March. And today, we committed to satisfy in cash the
put if exercised by holders on the $1.7 billion of debt that is convertible to shares that we owe to BSkyB. Investors have until March
10th to notify the company of their decision. And also, today we announced a 25% increase in the companys dividend from 6 cents a
share, to 7.5 cents a share.
11/4/2009 1Q2010 Q&A Q: First, with Rupert. Now that you seem more confident in underlying business trends, I was wondering if you could update us on
your thoughts of returning capital to shareholders?
A: We dont have any thoughts about doing that. We are growing strongly. We are nervous about the future. Our businesses are doing
well. But thats really an economic question. And I think that were right to be sitting on this cash. We do have a $2 billion repayment
schedule next year of debt so its not as huge as it looks.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Twenty-First Century Fox, Inc.
($ Mil.) 6/30/08 6/30/09 6/30/10 6/30/11 6/30/12

6/30/13
Profitability
Operating EBITDA 6,714 4,940 5,377 6,308 6,874 6,502
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 281 2,085 129 32 273 137
Long-Term Senior Unsecured Debt 13,230 12,204 13,191 15,463 15,182 16,321
Other Debt
Equity Credit
Total Debt with Equity Credit 13,511 14,289 13,320 15,495 15,455 16,458
Off-Balance-Sheet Debt 2,826 3,015 2,716 2,942 2,864 3,191
Total Adjusted Debt with Equity Credit 16,337 17,304 16,036 18,437 18,319 19,649
Cash Flow
Funds From Operations 4,535 4,532 3,990 4,429 4,771 3,876
Change in Working Capital (610) (2,208) (40) 42 (981) (874)
Cash Flow from Operations 3,925 2,324 3,950 4,471 3,790 3,002
Total Non-Operating/Nonrecurring Cash Flow (76) (96)
Capital Expenditures (1,443) (1,101) (914) (1,171) (939) (622)
Dividends (373) (366) (418) (500) (593) (613)
Free Cash Flow 2,109 781 2,522 2,800 2,258 1,767
Net Acquisitions and Divestitures (3,987) 915 1,114 (428) (67) 1,362
Net Debt Proceeds 564 697 (1,053) 1,914 (35) 523
Net Equity Proceeds (849) 4 24 12 (4,422) (1,823)
Other (Investing and Financing) (829) (519) (438) (327) (788) (4,796)
Total Change in Cash (2,992) 1,878 2,169 3,971 (3,054) (2,967)
Ending Cash and Securities Balance 4,662 6,540 8,709 12,680 9,626 6,659
Income Statement
Revenue 32,996 30,423 32,778 33,405 33,706 27,675
Revenue Growth (%) 15.2 (7.8) 7.7 1.9 0.9 (17.9)
Operating EBIT 5,427 3,714 4,108 5,025 5,607 5,616
Gross Interest Expense 970 982 1,035 1,010 1,076 1,104
334 Company Summaries Verisk Analytics Inc.
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
Verisk Analytics, Inc.
Long-Term IDR A
Senior Unsecured Notes A
Short-Term IDR F2
Insurance Services Office, Inc.
Long-Term IDR A
Short-Term IDR F2
Revolving Credit Facility A
Private Placement Notes A
Rating Outlook
Stable
Key Rating Drivers
Dominant Market Position: The ratings refect Verisk Analytics, Inc.s (Verisk) dominant market
position within its Property and Casualty (P&C) insurance-related businesses. Any competition
for its industry-standard programs and specifc property information primarily comes from internal
P&C insurance company departments.
Organic Growth in Downturn: Verisk has delivered consistent organic revenue growth, despite
economic conditions. The companys core products are largely a nondiscretionary purchase
for most if not all of its clients. Fitch believes that the company has the ability to grow revenues
organically in the low single digits during an economic downturn.
Steep Barriers to Entry: Fitch believes there are very steep barriers to entry associated with
Verisks core insurance service businesses. The capital needed and operational disruption
caused would make it challenging to replace Verisk.
Data Concerns: While not highly likely, potential disruptions to Verisks future access to its core
insurance-related data and the potential for increased data cost is a concern for Fitch. This risk is
mitigated by the points discussed above and by the companys track record and long relationship
with insurance companies and regulators. This relationship dates back to 1971 and extends
even further back when including its history with the insurance bureaus.
Concentration Risk: The company has diversifed its customer group, reducing its exposure to
P&C primary insurers to around 48% in 2012 (in 2003 it was 82%). The diversifcation was driven
primarily by growth in new business lines through acquisition and leveraging the companys
database and analytical know how. The company continues to grow its non-P&C businesses
organically and through acquisitions. Fitch recognizes that by growing its other businesses,
EBITDA margins may decline over time. However, Verisks margin is high relative to its peers
and Fitch expects margins to remain in the mid-40% range. Fitch calculates Verisks EBITDA
margin at 47% as of Dec. 31, 2012.
Leverage Target: Fitch expects the company to maintain gross unadjusted leverage at or below
2.0x. There is tolerance in the ratings for leverage to go above this level for an acquisition, with
the expectation that debt would be reduced in order to bring leverage back to 2.0x within a 12 to
18 month time frame. Verisk demonstrated this commitment after it acquired Argus in the third
quarter of 2012. After the acquisition, gross unadjusted leverage increased to 2.4x, and was
reduced to 2.0x by Dec. 31, 2012.
Positive Rating Triggers: An explicit commitment to and sustained track record of more
conservative balance sheet metrics could merit upgrade consideration.
Negative Rating Triggers: The ratings might be downgraded if the company were to pursue
a more aggressive fnancial policy that included engaging in a series of debt-funded share
buybacks that pushed unadjusted gross leverage beyond 2.0x for an extended period. As
previously mentioned, there is tolerance in the rating for Verisk to temporarily exceed leverage
of 2.0x for an acquisition.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
September 19, 2013

Corporates

Portfolio Summary Verisk Analytics, Inc.
(As of June 30, 2013)
Risk Assessment Decision Analytics
Insurance Services Office Inc. (ISO) and
Quality Planning (QPC) Products
Statistical Agent and Data Services
Actuarial Services
Industry Standard Insurance Program (Policy and Endorsement Language)
Property-Specific Rating and Underwriting Information
Insurance
AIR Worldwide and A-PLUS for Property/Casualty Insurance
ISO ClaimSearch for Property/Casualty Insurance
Verisks Xactware and ISOs Property Claim Services (PCS) for
Property/Casualty Insurance
Healthcare
Verisk Health
MediConnect
Financial Service
Verisks Interthinx
Argus Information & Advisory Services, LLC
Specialized Markets
Aspect Loss Prevention
Industry-
standard
Insuranc
e
Programs
29%
Property-
specific
Rating
and
Underwrit
ing
Informati
on
8%
Insuranc
e
32%
Financial
Services
10%
Healthcar
e
15%
Specializ
ed
Markets
6%
Revenues by Segment
(As of Dec. 31, 2012)
Note: Statistical agency and data services and actuarial
services combined into industry-standard insurance
programs.
Property-
Specific
Rating and
Underwriting
Information
8%
Industry-
standard
Insurance
Programs
29% Specialized
Markets
6%
Insurance
32%
Healthcare
15%
Decision
Analytics
55%
Risk
Assess-
ment
45%
EBITDA by Segment
(As of Dec. 31, 2012)
Risk
Assessment
45%
September 19, 2013

Corporates

Event Risk Dashboard Verisk Analytics, Inc.
a
Includes the repurchase of Series B shares ($210 million).
b
Redemption of ISO Class A common stock. Note: Event risk describes typically unforeseen or difficult to
predict events. Fitch separates the assessment of the potential actions a company is able to take from expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO M
Secular L
Acquisition H
Divestiture L
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk Medium
Enterprise value (EV) that may be fnanceable in the current credit markets.
Market EV estimated at $11 billion$12 billion.
Leverage would initially be high. FCF generation should provide fexibility to
reduce leverage over time.
Private equity has been active in the business products and services segment.
The change-of-control puts in notes provide some risk mitigation for Verisk
bondholders.
Secular Risk Low
There is no material secular risk associated with Verisk. Verisks products are
primarily delivered digitally.
Nearly all members of the board of directors are independent. Frank Coyne
stepped down as CEO on April 1, 2013. Scott Stephenson is the new CEO and is
a member of the board.
Verisk targets unadjusted gross leverage of 2x. The company is willing to
exceed this target for unique acquisition opportunities. Verisk demonstrated
this commitment after it acquired Argus in the third quarter of 2012. After the
acquisition, gross unadjusted leverage increased to 2.4x, and was reduced to
2.0x by Dec. 31, 2012.
Fitch expects cash fows to be dedicated to acquisitions and share repurchases.
Fitch believes Verisk is committed to its balance sheet parameters. However,
similar to other highly rated entities, the potential for fnancial policy revisions is
an inherent risk.
carveouts including a lien basket set at 7.5% of total assets.
There are no material restrictions in the indentures limiting subsidiary debt.
Verisks senior unsecured notes are guaranteed by ISO and subsidiaries that
generate a material portion of Verisks consolidated revenues (approximately
84% as of end-2012).
Fitch believes that any future debt would be issued by Verisk. However, there is a
risk of structural subordination inherent in all holding company structures.
Verisk is subject to various data and information regulations in the U.S. and abroad.
Verisk Analytics, Inc. Rating History
BBB+
A
A
A+
1.2
1.4
1.6
1.8
2.0
2.2
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
15
30
45
60
75
Source: Bloomberg.
Verisk Analytics, Inc. Stock Price
(Oct 2009August 2013)
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Verisk Analytics, Inc.
a
Includes the repurchase of Series B shares ($210 million).
b
Redemption of ISO Class A common stock. Note: Event risk describes typically unforeseen or difficult to
predict events. Fitch separates the assessment of the potential actions a company is able to take from expectations of what it will actually do.
Litigation Risk Low
YTD June 2013 1.0
2012 769.5
2011 121.7
2010 189.6
2009 61.3
2008 19.0
Fitch expects Verisk to be an active acquirer.
Fitch expects most acquisitions will continue to be in non-P&C, insurance-related
businesses.
In June 2012, Verisk purchased MediConnect Global, Inc. for $350 million. In the
third quarter of 2012, it purchased Argus Information and Advisory Services, LLC
for $425 million.
YTD June 2013 135.6
2012 162.3
2011 381.8
2010
a
420.1
2009
b
46.7
2008
b
387.6
(x)
Covenant
Level
Fitch Estimated
Level as of 6/30/13
EBITDA
Cushion (%)
September 19, 2013

Corporates

Corporate Governance Overview Verisk Analytics, Inc.
a
Most recent filings on Bloomberg as of June 2013. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Frank J. Coyne Chairman and Former CEO 1,000,000 1,530,001 1,530,002 3,000,000 403,893 7,463,896
Mark V. Anquillare EVP and CFO 443,077 599,995 600,005 615,000 104,429 2,362,506
Scott G. Stephenson President and CEO 515,385 750,017 749,993 1,000,000 47,007 3,062,401
Kenneth E. Thompson EVP, GC and Corp. Secretary 421,538 475,008 474,993 520,000 22,567 1,914,106
Vincent de P. McCarthy SVP, Corp. Development and Strategy 402,692 387,503 387,505 445,000 11,885 1,634,584
Board of Directors
J. Hyatt Brown 75 Y May 2012
May 2015
2003 43,500 37,546 125,000 206,046 Compensation;
Nominating and
Brown & Brown, Inc.;
International Speedway
Corporation
Chairman
Brown & Brown, Inc.
Frank J. Coyne
Chairman
64 N May 2011
May 2014
1999 None Former CEO Verisk
Analytics, Inc.
Glen A. Dell 77 Y May 2012
May 2015
1995 55,500 45,039 125,000 225,539 Audit ( Chair
and Financial
Expert);Executive
None Retired Partner
MapleWood Equity Partners LP
Christopher M.
Foskett
55 Y May 2011
May 2014
1999 6,000 74,994 125,000 205,994 Audit; Compensation None Managing Director
Global Head of Sales for
Treasury Services at
JPMorgan Chase Bank
Constantine P.
Iordanou
62 Y May 2013
May 2016
2001 7,500 210,000 217,500 Executive; Nominating
and Corporate
Governance (Chair)
Arch Capital Group
Limited
President and CEO
Arch Capital Group Limited
John F.
Lehman, Jr.
Presiding
Director
70 Y May 2013
May 2016
1992 7,500 230,000 237,500 Executive;
Compensation (Chair);
Nominating and
J. F. Lehman & Co.;
Ball Corp.; EnerSys, Inc.
Founder and Chairman
J. F. Lehman & Co.
Samuel G. Liss 56 Y May 2012
May 2015
2005 7,500 210,000 217,500 Audit None Principal
WhiteGate Partners LLC
Andrew G. Mills 60 Y May 2013
May 2016
2002 7,500 200,000 207,500 Audit; Compensation None President
The Kings College in New York
Thomas F.
Motamed
64 Y May 2011
May 2014
2009 7,500 37,546 162,500 207,546 Audit; Compensation CNA Financial
Corporation
Chairman and CEO
CNA Financial Corporation
Scott G.
Stephenson
55 N May 2013
May 2016
2013 None CEO Verisk Analytics, Inc.
David B. Wright 63 Y May 2011
May 2014
1999 10,500 200,000 210,500 Audit ClearEdge Power;
GeekNet, Inc.;
GridIron Systems
CEO ClearEdge Power
Therese M.
Vaughan
56 Y May 2011
May 2014
2013 None Former CEO National
Association of Insurance
Commissioners
Annual Incentive Revenue growth and EBITDA margin
Long-Term Incentives Revenue growth and EBITDA margin
Annual Incentive Pursuant to Coynes employment agreement, he is eligible for awards ranging from 100% to 300% of base salary. In 2012, compensation committee
determined an annual bonus of 300%. The rest of the NEOs received annual bonuses ranging from approximately 110% to 149%.
Long-Term Incentives Pursuant to Coynes employment agreement, he is eligible for option grants ranging from 150% to 450% of base salary. In 2012, compensation
committee determined option grants of 300%. The rest of the NEOs received option grants ranging from approximately 190% to 290%.
Stock Ownership Requirements CEO 6x base salary; NEOs 3x base salary
September 19, 2013

Corporates

Corporate Governance Overview Verisk Analytics, Inc. (Continued)
a
Related-party transactions: 1) In 2012, company received fees from Arch Capital Group Limited of $2.2 Mil. Constantine P. Iordanou is the president and CEO of Arch Capital Group
Limited. 2) In 2012 company paid fees to Brown & Brown, Inc. of $690,000 and CNA Financial Corporation of $250,000. J. Hyatt Brown is the Chairman and former CEO of Brown &
Brown, Inc. Thomas F. Motamed, is the chairman and CEO of CAN Financial Corporation.
Frank Coyne retired from his role as CEO effective April 1, 2013. Scott Stephenson was appointed to the role of CEO from the same date. Therese M. Vaughan was elected to the
board in February 2013
Auditor: Deloitte and Touche LLP.
a
GreatBanc Trust Co. 16,784 10.0
Morgan Stanley 10,078 6.0
Blackrock 8,341 5.0
FMR LLC 8,309 4.9
Artisan Partners Holdings LP 6,050 3.6
Capital Research Global Investor 5,494 3.3
Bamco Inc. 4,550 2.7
Neuberger Berman LLC 4,194 2.5
Total Top 10 75,927 45.1
Frank J. Coyne 2,119 1.3
Scott G. Stephenson 1,664 <1.0
Mark V. Anquillare 847 <1.0
Kenneth E. Thompson 663 <1.0
Vincent de P. McCarthy 157 <1.0
J. Hyatt Brown 97 <1.0
Glen A. Dell 202 <1.0
Christopher M. Foskett 85 <1.0
Constantine P. Iordanou 435 <1.0
John F. Lehman, Jr 461 <1.0
Samuel G. Liss 90 <1.0
Thomas F. Motamed 75 <1.0
Andrew G. Mills 161 <1.0
Arthur J. Rothkopf 153 <1.0
Therese M. Vaughan
David B. Wright 22 <1.0
September 19, 2013

Corporates

Pension Screener
a
than 10%?
No
Plan Assets
Fair Value of Plan Assets 421.1 324.9
b
0.0 28.2
Projected Benefit Obligation (PBO) 460.5 434.7
Net Periodic Cost/(Income) (6.0) 7.1
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Debt Structure
($ Mil., As of June 30, 2013)
Sr. Unsecured $850 Million Credit Facility
due October 2017
5.800% Senior Notes due May 2021 449.2
4.875% Senior Notes due January 2019 248.1
4.125% Senior Notes due January 2022 347.4
6.130% Prudential Series G Sr. Notes
due August 2013 75.0
5.840% Prudential Series H Sr. Notes
5.840% Prudential Series H Sr. Notes
6.280% Prudential Series I Sr. Notes
due April 2015 85.0
6.850% Prudential Series J Sr. Notes
due June 2016 50.0
6.160% Principal Series B Sr. Notes
due August 2013 25.0
5.870% New York Life Series A Sr. Notes
5.870% New York Life Series A Sr. Notes
6.350% New York Life Series B Sr. Notes
due April 2015 50.0
Capital Lease Obligations and Other 5.0
Total Debt 1,404.7
($ Mil., As of June 30, 2013)
Amount
Dec. 31, 2013 135.0
Dec. 31, 2014
Dec. 31, 2015 170.0
Dec. 31, 2016 50.0
Dec. 31, 2017
Thereafter 1,044.7
Total 1,399.7
Note: Excludes $5 million of capital lease obligations
and other.
September 19, 2013

Corporates

Provider of Statistical, Actuarial, and Underwriting Data for the U.S.
P&C Insurance Industry.
Provides Solutions for Customers to Analyze Processes Around
Prediction of Loss, Detection, Prevention of Fraud,
and Quantification of Loss.
Recently Acquired Businesses:
Argus Information and Advisory Services LLC (2012)
Aspect Loss Prevention, LLC (2012)
MediConnect Global, Inc (2012)
Health Risk Partners, LLC (2011)
Bloodhound Technologies, Inc. (2011)
3E Company (2010)
Crowe Paradis Services Corporation (2010)
Strategic Analytics, Inc. (2010)
Organizational Structure Verisk Analytics, Inc.
($ Mil., As of June 30, 2013)
Insurance Services Office Inc.
Risk Assessment Decision Analytics
Amount
Outstanding Rating
Senior Unsecured Notes due 20192022 1,044.8 A
LTM EBITDA 760.1
Guarantee
Amount
Outstanding Rating
$850 Million Revolving Credit Facility due 2017 A
Private Placement Notes due 20132016 355 A
Capital Lease and Other 5
Total Debt 360
Revenues 597.2
EBITDA 332.2
Revenues 1,042.0
EBITDA 405.6
September 19, 2013

Corporates

Bank Agreement Covenant Summary Verisk Analytics, Inc.
Bank Agreement Indenture
Overview
Borrower Verisk Analytics Inc. and Insurance Services Office Inc. Verisk Analytics Inc.
Document Date
and Location
10-25-11, amended and restated on 09-28-12 Indenture and supplemental indenture dated April 6, 2011; 2nd
supplemental indenture dated Dec. 8, 2011.
Maturity Date Revolver maturity Oct. 24, 2017 1/15/19; 5/1/21
Description of Debt $850 million senior unsecured credit facility. (There is an uncommitted
accordian feature, which can increase the facility to $1 billion.)
$250 million 4.875% Senior Unsecured Notes due 2019
$450 million 5.8% Senior Unsecured Notes due 2021.
Guarantee Guaranteed by: ISO Staff Services Inc.; ISO Claims Services, Inc.; AIR
Worldwide Corp.; ISO Services Inc.; Xactware Solutions Inc.; Verisk
Health Inc.; Interthinx Inc.; and Verisk Health Solutions Inc.
The bank agreement is pari passu with the notes.
Guaranteed by: Insurance Services Office, Inc.; ISO Staff Services
Inc.; ISO Claims Services, Inc.; AIR Worldwide Corp.; ISO Services
Inc.; Xactware Solutions Inc.; Verisk Health Inc.; Interthinx Inc.; and
Verisk Health Solutions Inc.
The notes are pari passu with the bank agreement.
Financial Covenants
Consolidated Interest
Coverage
3x minimum
Consolidated Funded
Debt Leverage
3.5x maximum
Change of Control
(CoC)
CoC is an event of default. CoC occurs when any person/entity
acquires 35% or more of the voting control or over a 12-month
period, or the majority of directors of the board cease to be continuing
directors.
CoC repurchase event triggers a 101% offer to the bondholders. CoC
repurchase event is when a CoC occurs and the bonds are rated non-
investment grade within 60 days of a CoC. CoC occurs: when any
person/entity acquires 50% or more of the voting control; when the
majority of directors of the board cease to be continuing directors; on
the sale of all or substantially all the assets of the company; or on the
adoption of a plan for liquidation or dissolution.
M&A, Investments
Restriction
No material provisions noted. No material provisions noted.
Sale of
Assets Restriction
Sale of assets in the ordinary course of business permitted. Other
asset sales permitted as long as (1) assets sold in a calendar year,
in aggregate, do not account for more than 20% of consolidated
EBITDA or more than 20% of consolidated revenues (based on the
prior year results) and (2) the aggregate amount of assets sold (for
the term of the credit agreement) do not account for more than 40%
of consolidated EBITDA or 40% of consolidated revenues, on a
cumulative basis from June 1, 2011.
No material provisions noted.
Debt Restrictions
Debt Incurrence Governed under the financial covenants above and lien restrictions. No material provisions noted.
Limitation on Liens Liens not permitted, unless a similar security interest is granted to the
lenders. Standard carveouts exist. Other exceptions include priority
debt limited to 7.5% of assets and any permitted subsidiary acquisition
debt may not exceed $500 million at any time. Account receivable
financing permitted up to $150 million. Sale and leaseback transaction
permitted up to 7.5% of assets.
Liens are not permitted unless the notes are equally and ratably
secured. Standard carveouts exist. There is a general lien and sale
leaseback basket of 7.5% of total assets.
Restricted Payments No material provisions noted. No material provisions noted.
Other
Cross-Default/
Cross-Acceleration
Payment default or cross-acceleration on debt of $25 million or more. Payment default or cross-acceleration on debt of $25 million or more.
Most Favored
Nation Clause
MFN relating to the terms of consolidated interest coverage ratio,
consolidated funded debt ratio, limitations on liens, guarantees in the
private placement facilities.

September 19, 2013

Corporates

Financial Policy Transcript Excerpts Verisk Analytics, Inc.
Date of
5/1/2013 1Q2013 Management
Discussion
On March 31, 2013, our diluted share count was 173.1 million shares. In the quarter, we purchased about 382,000 shares for about
$21.5 million. At quarter end, we had about $122.7 million left under our authorization. Our share repurchase program has been
successful to date, generalizing annualized IRRs of over 20%. For 2013, we continue to anticipate at a minimum buying shares to
offset dilution.
Discussion
Our investments are in the combination of people, data, hardware and software, some of which flow through the P&L but some
through the balance sheet as Capex. As you know, our forecast is about $115 million in capex for 2013, including about $20 million
related to these investments initiatives.
Discussion
Our debt to pro forma EBITDA at March 31 was two times at our steady-state target. As we have stated before, were willing to
temporarily go above our long-term target of two times debt to EBITDA to take advantage of the unique opportunities, because our
free cash flow is strong and allows us to de-lever quickly, as weve demonstrated since our acquisition of Argus in third quarter of
2012.
Discussion
Our debt to pro forma EBITDA at March 31 was two times at our steady-state target. As we have stated before, were willing to
temporarily go above our long-term target of two times debt to EBITDA to take advantage of the unique opportunities, because our
free cash flow is strong and allows us to de-lever quickly, as weve demonstrated since our acquisition of Argus in third quarter of
2012.
Discussion
Weve remained disciplined in our use of capital and are focused on delivering shareholder returns. In 2012, we spent about
$800 million on acquisitions, primarily MediConnect and Argus. We find the results of our acquisitions encouraging and believe our
shareholders should be pleased by this use of capital, as evidenced by strong initial results and strategic fit. Our share repurchases
remained moderated in the quarter at $35 million as we continue on the path to meet our commitments to our debt-holders. Total
repurchase activity in 2012 was $163 million. We continue to be active in looking at M&A but also continue to maintain our discipline,
focusing on assets with a true strategic fit, a strong financial model, and an appropriate valuation in relation to future growth
prospects.
Discussion
As we think about capital spending for 2013, were expecting $115 million for the full year. This includes the capital related some of
the initiatives I discussed earlier, as well as the consolidation of our data centers into two primary locations. The special projects are
approximately $20 million of that total capital spend, so you would see the steady state capex closer to $95 million in 2013.
Discussion
Im pleased to report that our debt to pro forma EBITDA at December 31 was 2 times, reaching our steady-state leverage rate well
ahead of our stated of second half of 2013. This is down from the pro forma ratio of 2.35 times at the time of the Argus acquisition.
As weve stated before, we are willing to temporarily go above our long-term target of 2 times debt to EBITDA to take advantage of
unique opportunities, because of our free cash flow is strong and allows us to de-lever quickly.
11/2/2012 3Q2012 Q&A Q: One last question for you was on the your, how do you balance the your goal of taking leverage from 2.2 to 2 and then also
the share repurchase and the M&A opportunities?
A: Good question. I think what weve tried to do is really be very thoughtful about our capital management program. So at the time
Argus came along, we were in talks and knew about Argus for a long time, it was a unique opportunity, and we said we want to
continue to be very growth-oriented. That is our primary focus. And at that point, weve been telling everybody that we would go
above that two times target.
I think once that happened, and we jumped above the two times, we now have been thoughtful about the cash that goes out the
door, and that comes in the form of acquisitions. We will do the right acquisitions. Theyll probably be, for a bit of a time, a little bit
smaller. At the same time, weve also dialed back our buyback program, so that hopefully in the near term, well be back towards
that two times level, and we have a little greater flexibility around acquisitions, as we kind of go into the future towards the latter part
of and the middle of 2013.
11/2/2012 3Q2012 Prepared As we have indicated previously, we moderated our share buyback program as we de-lever following the solid acquisitions we made
this year. We would anticipate that the share count in 4Q may be up about 1%.
11/2/2012 3Q2012 Prepared As we discussed last quarter, we have moderated our buyback program after acquiring Argus to ensure that we meet our de-
leveraging commitments. Our share repurchase program has been successful to date, generating annualized IRRs of over 25%.
11/2/2012 3Q2012 Prepared Our pro-forma debt-to-EBITDA ratio at Sept. 30, including the full year of historical results for both MediConnect and Argus, was 2.2
times, down from the pro-forma ratio of 2.35 times we cited at the time of the acquisition. As weve stated before, we are willing to
temporarily go above our long-term target of two times debt-to-EBITDA to take advantage of the unique opportunity, because our
free cash flow is strong and allows us to de-lever quickly.
11/2/2012 3Q2012 Prepared Turning to the balance sheet. As of Sept. 30, our cash and cash equivalents were $98 million. Total debt, both short-term and
long-term, totaled about $1.6 billion, reflecting the borrowed funds to acquire Argus, which closed on Aug. 31. Post-Argus, our debt
capacity is over $850 million and will grow with our EBITDA and free cash flow.
11/2/2012 3Q2012 Prepared As we have previously communicated, we moderated our share repurchase in the quarter to about $21 million. We continue to be
active in looking at M&A, but also continue to maintain our discipline, focusing on assets with a true strategic fit, a strong financial
model, and an appropriate valuation in relation to future growth. We also remain focused on meeting our commitments to our debt
holders as it relates to de-levering back to our target ratios.
8/1/2012 2Q2012 Prepared In the quarter, we purchased approximately 1.4 million shares for about $68 million. At quarter-end, we had about $200 million
left under our authorization. Our approach to share repurchases remains focused on limiting dilution and only going beyond that
when we believe the share repurchase will deliver appropriate internal rates of returns and not crowd out acquisitions. Our share
repurchase program has been successful to date, generating annualized IRRs of over 25%.
8/1/2012 2Q2012 Q&A Q: Okay, great. And then just a quick one share buybacks, youve done a great job of returning capital to shareholders. Do you think
this will continue at a similar pace going forward?
A: Well, as I think weve always said, I mean we have a view that were really trying to create shareholder returns. Our first and
primary focus is to invest in the business. So to the extent that we have opportunities on the acquisition front, that would be our
primary and first use of capital, and then we would continue to do buybacks to limit dilution. Extending beyond dilution and returning
additional capital beyond that is really a balancing act. We try to take a look at a little bit about the pipeline. We want to make sure
we have enough capacity to continue to execute on that growth strategy. So I think what youve seen over the last couple of quarters
is a little bit of a dialing back because of the extra acquisition activity that weve had.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Verisk Analytics, Inc.
Date of
8/1/2012 2Q2012 Prepared Post MediConnect and pension funding, our debt capacity is about $650 million and will continue to grow with our EBITDA and free
cash flow. As we have stated before, we are willing to temporarily go beyond our long-term target of 2 times debt-to-EBITDA to take
advantage of unique opportunities particularly on the acquisition side. With that debt capacity available, we continue to look for the
right opportunities.
5/2/2012 1Q2012 Prepared As weve stated before, we are willing to temporarily go above our long-term target of 2 times debt-to-EBITDA to take advantage
of a unique opportunity, particularly on the acquisition front. With that debt capacity available, we continue to look for the right
opportunities.
5/2/2012 1Q2012 Prepared Our approach to share repurchase remains focused on limiting dilution. And well only going forward, when we believe we can
purchase, we can deliver appropriate IRRs and not crowd out our acquisitions.
2/29/2012 4Q2011 Prepared We ended fourth quarter with total debt of $1.1 billion and a debt-to-EBITDA ratio of 1.87 times, leaving us a bit below our target
capital structure of two times.
2/29/2012 4Q2011 Q&A Q: Just a final question, if I might, for Mark. Could you talk about capital allocation priorities for 2012? You highlighted the
$307 million left in your share repurchase authorization. I mean how do you compare value of your current stock versus acquisition
in your pipeline?
A: Well, first of all, I think we tried to highlight that we did go to a larger authorization in January that does not change our approach
in any way. We remain committed to investing our business, first and foremost. That is with either internal investment which typically
takes the form of expense inside of our P&L. But acquisition would will be at top of that list. Weve committed to buying back
shares to limit dilution. And to the extent that we have the ability to buy more, its probably because we are trying to for the most part
balance between acquisition and buybacks. Our continued commitment is to make sure we deploy that in a disciplined way. And I
think weve been successful in trying to make sure we think about it in the right economic way before we deploy capital.
11/2/2011 3Q2011 Prepared Our debt-to-EBITDA ratio was about 1.8 debt to trailing 12-months EBITDA at quarter end, well within our covenants and in the zone
of our target leverage level of two times.
8/3/2011 2Q2011 Prepared Our debt to EBITDA ratio was about 1.89 times debt to trailing 12-month EBITDA at year-end as well as our covenant well within
our covenant levels of three times, and approaching our target debt leverage of about two times.
8/5/2010 2Q2010 Prepared Our debt ratio of 1.1 times debt to trailing 12-month EBITDA was flat versus first quarter 2010. We had ample capacity to execute
our acquisition strategy as our current covenants allow debt-to-EBITDA of up to three times, creating over a 900 million of additional
borrowing capacity in addition to our free cash flow generation. Over the long term, we expect to maintain investment grade type
ratios, although we do believe that debt-to-EBITDA of close to two times will be optimal for the long term.
5/7/2010 1Q2010 Prepared We also announced last night the $150 million share repurchase program approved by our board of directors. As we have
discussed, modest share buybacks are an intended use of our cash behind investing in our business. Given our current financial
capacity this modest program will leave us plenty of room to continue to acquire companies and otherwise invest in our business.
This program will allow us to limit dilution from our options and benefit programs, and we expect that any use of this buyback
program will be accretive to shareholders. This is another instance of following through on our plans.
3/10/2010 4Q2009 Prepared And Id like to highlight that our debt ratio of 1.3 times debt to trailing 12-month EBITDA is down from a year ago. We are
comfortable with this level and we believe over the long-term we will maintain investment grade type leverage. We also believe that
we have room to finance acquisitions with debt while maintaining that discipline.
3/10/2010 4Q2009 Prepared We continue to expect to deploy free cash flow first, through our disciplined program of acquisitions; second, for share purchases to
limited shareholder dilution from options and other share issuances; and third, for potential future dividends.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Verisk Analytics, Inc.
LTM Ended
6/30/13
Profitability
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 219.4 66.7 437.7 5.6 195.3 137.9
Long-Term Senior Unsecured Debt 450.4 527.5 401.8 1,100.3 1,266.2 1,266.9
Other Debt
Equity Credit
Total Debt with Equity Credit 669.8 594.2 839.5 1,105.9 1,461.5 1,404.8
Total Adjusted Debt with Equity Credit 840.2 778.2 1,030.7 1,263.6 1,652.3 1,595.6
Cash Flow
Change in Working Capital 6.7 1.0 (20.3) (10.4) 4.9 21.1
Dividends
Free Cash Flow 217.3 287.7 297.4 315.9 393.9 426.2
Net Acquisitions and Divestitures (19.0) (61.3) (189.6) (121.7) (769.5) (439.0)
Net Debt Proceeds 228.7 (79.2) 250.0 261.6 357.2 152.2
Net Equity Proceeds (391.7) (39.0) (384.6) (338.5) (93.9) (126.2)
Other (Investing and Financing) (26.1) (69.9) 10.3 19.3 10.5 62.0
Total Change in Cash 9.2 38.3 (16.5) 136.6 (101.8) 75.2
Income Statement
Revenue 893.6 1,027.1 1,138.3 1,331.8 1,534.3 1,639.2
Revenue Growth (%) 11.4 14.9 10.8 17.0 15.2 16.2
Operating EBIT 320.5 382.0 461.7 532.7 616.2 635.0
347 Company Summaries Viacom Inc.
September 19, 2013

Corporates

Viacom Inc.
Key Rating Drivers
Leverage Target Incorporated into Ratings: Viacoms operating profle and its position to
address the business risks associated with the companys credit profle provide fexibility within
the current ratings to accommodate the companys new leverage target ranging between 2.75x
and 3x.
Managing to Target Takes Precedence: Fitch believes that Viacom would place a greater
priority on managing its balance sheet to its new target and curtail its share repurchase plan in
the event that the operating environment began to deteriorate.
Free Cash Flow Generation Provides Flexibility: Viacoms operating profle positions the
company to generate in excess of $1.5 billion of free cash fow annually during the ratings
horizon. The free cash fow generation affords the company with noteworthy fnancial fexibility.
Fitch acknowledges that the contemplated level of share repurchases is expected to exceed
annual FCF generation, however the company maintains the ability to reduce share repurchases
to maximize fnancial fexibility should the need occur.
Strong Cable Network Portfolio: The dual stream, recurring, high-margin revenue base
of the cable networks remains the foundation for Viacoms ratings. The revenue and margin
characteristics coupled with low capital intensity yields high free cash fow conversion.
Asset Portfolio Addresses Risks: Fitch continues to believe that Viacom is well positioned
to address the secular threats and opportunities presented by emerging alternative distribution
platforms and continued audience fragmentation across the media and entertainment landscape.
Advertising Revenue Exposure Highlights Risks: Rating concerns include exposure to
cyclical advertising revenues and the companys capacity to adapt to ever-changing media
consumption patterns and technology platforms. Fitchs ratings recognize the inherent volatility
of hit-driven content within the companys Filmed Entertainment segment.
Positive: Upward ratings momentum is unlikely during the current ratings horizon. Positive
rating action would likely coincide with Viacom adopting a more conservative fnancial policy
highlighted by a gross leverage target below 2x. Meanwhile, Viacom will need to demonstrate
that its operating profle can sustain itself amid ongoing competitive pressures, changing media
consumption patterns and evolving technology platforms.
Viacoms management including, but not limited to, the company adopting a more aggressive
fnancial strategy or event-driven merger and acquisition activity, that drive leverage beyond
3.0x in the absence of a credible deleveraging plan. Additionally, negative rating actions could
result should Fitch begin to observe a negative impact from alternative content distribution
platforms and other forms of entertainment that is signifcantly larger than Fitchs expectations
or if a material weakness in network ratings were to result in sustained revenue and EBITDA
deterioration.
Analysts
David Peterson
+1 312 368-3177
Rolando Larrondo
+1 212 908-9189
Ratings
Security Class
Current
Rating
Viacom Inc.
IDR BBB+
Senior Unsecured
Notes and Debentures BBB+
Senior Unsecured Bank Facility BBB+
Rating Outlook
Stable
September 19, 2013

Corporates

Portfolio Summary Viacom Inc.
(As of June 30, 2013)
Media Networks Filmed Entertainment
Music & Logo Nickelodeon BET Networks
MTV nick@nite BET
MTV2 Nick.com BET Gospel
MTV.com Nick Jr. and NickJr.com BET Hip Hop
mtvU NickMom and NickMom.com BET Digital Networks
RateMyProfessors.com TeenNick and TeenNick.com BET Event Productions
PalladiaHD Nicktoons BET.com
VH1 ParentsConnect.com BET Home Entertainment
VH1 Classic Nickelodeon Games Group BET Mobile
VH1 Digital Shockwave.com Centric
VH1.com AddictingGames.com
VH1Classic.com Monkey Quest Others
m.VH1.com NeoPets Tr3s
CMT and CMT Digital petpetpark Tr3s.com
CMT Pure Country Quizilla Tr3s Blogamole Network
CMT Loaded Insight Tr3s
CMT Mobile Entertainment Viacom International Media Network
CMT Radio Comedy Central TMF (The Music Factory)
CMT On Demand South Park Studios Game One
Logo and Logo Digital TheDailyShow.com Flux
LogoTV.com CCstudios VIVA
AfterEllen.com Spike
AfterElton.com GameTrailers.com
Downelink.com Bellator MMA
NewNowNext.com TV Land
TV Land Classic
Paramount Pictures Corporation
Paramount Pictures
Paramount Vantage
Paramount Classic
Insurge
MTV Films
Nickelodeon Movies
EPIX (Joint Venture)
September 19, 2013

Corporates

U.S.
71%
Europe
17%
Other
12%
Viacom Inc.
(As of Sept. 30, 2012)
Media
Networks
66%
Filmed
Entertain
ment
34%
Revenues by Segment
Viacom Inc.
(As of Sept. 30, 2012)
Filmed
Entertainment
34%
Media
Networks
91%
Filmed
Entertain
ment
9%
EBITDA by Segment
Viacom Inc.
(As of Sept. 30, 2012)
Filmed
Entertainment
9%
September 19, 2013

Corporates

Event Risk Dashboard Viacom Inc.
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition M
Divestiture L
Covenant Breach L
Litigation Risk L
Regulatory Risk L
LBO Risk Low
Approximately $33 billion EV too large for an LBO in current markets; size may
still be a factor if credit markets improve.
Concentrated ownership (Sumner Redstone has 80% voting control, 7%
economic stake) reduces the risk of private equity led LBO. However, Redstone
privatization not out of the question.
Robust free cash fow.
Change-of-control put provides some risk mitigation for holders of recent
issuances.
Secular Risk Low
Despite near-term ratings volatility, cable business remains intact.
Content owners not likely to air content digitally that cannibalizes traditional
revenue.
Ratings incorporate inherent volatility of the companys Filmed Entertainment
business segment.
There is a dual-class stock structure, and Chairman Sumner Redstone has 80%
voting control, through his ownership of Class A shares (Class B, the majority of
shares outstanding, are nonvoting). This concentrated ownership always poses
elevated risk to bondholders. Fitch gained incremental comfort around this risk
given Redstone's 2009 sale of nonvoting stock and other asset sales which
settled the majority of his personal debts without harming Viacom creditors.
The annual compensation incentives for executives are bondholder-friendly, as they
are driven by operating income and FCF. However long-term incentives are driven by
shareholder return and EPS growth, which incentivizes share buybacks.
Business and fnancial risks are comparable with BBB+ rated media peers. The
ratings incorporate Viacoms track record of conservative fnancial policies and
strategies.
Like most investment-grade names, there are no limitations on dividends,
acquisitions or share buybacks.
Shareholder returns that exceed free cash fow generation are incorporated into
current ratings to the extent that leverage remains below Fitchs 3x total leverage
threshold.
Fitch expects that Viacom will manage its share repurchase program within the
context of its 2.75x to 3x leverage target. Fitch believes that Viacom will place a
priority on managing its balance sheet to its leverage target and curtail the level
of share repurchases in the event the macroeconomic environment weakens or
Viacoms operating profle begins to deteriorate.
Bank facility contains a 3x interest coverage covenant.
Fitch believes risk of a change in fnancial policy upon succession is mitigated by
expected involvement of current management team.
Viacom Inc. Rating History
BBB
BBB
BBB+
A
1.5
1.7
1.9
2.1
2.3
2.5
2007 2008 2009 2010 2011 2012 LTM
June
2013
Leverage Trend
(x)
0
20
40
60
80
100
Source: Bloomberg.
Viacom, Inc. Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Viacom Inc. (Continued)
Subsidiary debt is limited to $800 million by credit agreement.
Subsidiary borrowings would be guaranteed by parent.
No limitations on guarantees. No upstream guarantees.
($ Mil.)
Starting Authorized
Share Buyback
Incremental
Authorization
New Authorized
Share Buyback
Share Buy
Activity
Ending Authorized
Share Buyback
Nine Months Ended 6/30/13 4,741.0 4,741.0 (2,141.0) 2,600.0
Fiscal Year Ended 09/30/12 1,550.0 6,000.0 7,550.0 (2,809.0) 4,741.0
Fiscal Year Ended 09/30/11 4,000.0 4,000.0 (2,450.0) 1,550.0
Nine Months Ended 09/30/10 1,275.0 2,725.0 4,000.0 4,000.0
Fiscal Year Ended 12/31/09 1,275.0 1,275.0 1,275.0
Fiscal Year Ended 12/31/08 2,495.0 2,495.0 (1,223.0) 1,275.0
On August 1, 2013 Viacom increased the size of its share repurchase authorization from $10 billion to $20 billion.
With leverage as its target, Fitch expects future debt-funded buybacks to be done solely to keep leverage at 2.0x amid EBITDA growth.
Debt-funded share buybacks are incorporated into Viacoms ratings to the extent that leverage remains below Fitchs 2.25x target. Like most investment-grade
companies, there are no restrictions on the amount of share buyback activity.
Nine Months Ended 6/30/13 11.0
Fiscal Year Ended 09/30/12 19.0
Nine Months Ended 9/30/10 63.0
Acquisition activity likely to focus on international, moderate size.
Potential acquirer of smaller pure-play cable networks business (AMC Network,
Starz), but equity premium a likely hurdle.
Not a business that lends itself to small, piecemeal divestitures.
(x)
Covenant
Level
Ratio/Test as of
6/30/13
EBITDA
Cushion (%)
Litigation Risk Low
Delaware Supreme Court affrmed a previous Chancery Court decision in July
2013 related to incremental earn-out payments in connection with VIAs 2006
acquisition of Harmonix Music Systems, Inc. As a result VIA will pay $327 million
to the former Harmonix shareholders. VIAs reserve was $325 million as of June
30, 2013.
2007 lawsuit alleging that Google and YouTube violated VIAs copyrights. VIA is
seeking both damages (reportedly exceeding $1 billion) and injunctive relief. In June
2010, the U.S. district judge ruled in favor of Google. VIA appealed in October 2011.
In April 2012, the Second U.S. Circuit Court of Appeals reversed the decision and
remanded the case to the district court. However, the district court again granted
Googles motion for summary judgment during April 2013. VIA has appealed the
courts decision.
Regulatory Risk Low
Portfolio governed by FCCs media ownership laws.
This would be a positive for Viacom as it could decrease the likelihood that
although Viacom and other content providers could partially offset this with
cable pricing.
Union Workforce
Some (% not disclosed, but likely material) of the writers, directors, actors, athletes,
technicians, trade employees, and others involved in the creation of VIAs content
across all platforms are covered by collective bargaining agreements.
Pensions
Pension plan was 49% ($560 million) underfunded at 9/30/12. VIA expects
to contribute $20 million to the pension fund in FY2013. Contributions will be
manageable in context of FCF.
Earn-Outs
Harmonix litigation could force incremental earnout related to Harmonix
acquisition of $299 million. Manageable within context of FCF.
Other
At 06/30/13, indemnifcations of leases for Famous Players totaled $500 million.
September 19, 2013

Corporates

Corporate Governance Overview Viacom Inc.
a
Most recent filings on Bloomberg as of June 2013. PSUs Performance stock units. RSUs Restricted stock units. PRSUs Performancebased restricted stock units.
TSR Total shareholder return. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Sumner M. Redstone Exec. Chairman and Founder 1,750,000 5,750,000 12,917,466 20,417,466
Philippe P. Dauman President and CEO 3,500,000 12,126,745 5,999,996 11,500,000 324,083 33,450,824
Thomas E. Dooley Senior EVP and COO 2,500,000 9,701,426 4,799,997 9,200,000 96,823 26,298,246
Michael D. Fricklas EVP, GC and Secretary 1,278,125 1,800,023 1,199,999 2,153,250 348,479 6,779,876
James W. Barge EVP and CFO 978,500 479,984 320,005 851,300 48,240 2,678,029
Board of Directors
George S.
Abrams
80 N March 2013
March 2014
2006 89,149 139,996 120,232 349,377 None NAI Attorney
Law firm of Winer and Abrams
Philippe P.
Dauman
58 N March 2013
March 2014
2006 7,190 7,190 None NAI; Lafarge S.A. President and CEO
Viacom Inc.
Thomas E.
Dooley
56 N March 2013
March 2014
2006 None None Senior EVP and COO
Viacom Inc.
Alan C.
Greenberg
85 Y March 2013
March 2014
2006 89,149 139,996 229,145 None None Vice Chairman Emeritus
JPMorgan Chase & Co.
Robert K.
Kraft
71 Y March 2013
March 2014
2006 89,149 139,996 144 229,289 None Kraft Group Chairman and CEO
The Kraft Group
Blythe J.
McGarvine
56 Y March 2013
March 2014
2007 147,149 139,996 12 287,157 Audit (Chair and
Financial Expert),
Compensation,
Governance and
Nominating
Accenture Ltd.; LKQ Faculty
Harvard Business School
Charles E.
Phillips, Jr.
53 Y March 2013
March 2014
2006 121,149 139,996 3,043 264,188 Audit (Financial Expert),
Compensation
None CEO Infor Global Solutions
Shari
Redstone
Vice Chair
58 N March 2013
March 2014
2006 200,000 139,996 274 340,270 None CBS Corporation; NAI;
MovieTickets.com
President NAI
Sumner M.
Redstone
Exec. Chairman
89 N March 2013
March 2014
2006 None CBS Corporation; NAI Chairman and CEO NAI
Frederic V.
Salerno
69 Y March 2013
March 2014
2006 148,649 139,996 423 289,068 Audit (Financial Expert),
Compensation (Chair),
Governance and
Nominating
Akamai Technologies,
Inc.; Intercontinental-
Exchange, Inc.; CBS
Corporation; National
Fuel Gas Company
and CFO
Verizon Communications Inc.
(2000 to 2002)
William
Schwartz
79 Y March 2013
March 2014
2006 127,649 139,996 385 268,030 Compensation;
Governance and
Nominating (Chair)
None Counsel Law firm of
Cadwalader, Wickersham & Taft
Christiana
Falcone Sorrell
N.A. N.A. March 2013
March 2014
2013 N.A. N.A. N.A. N.A. Audit Internews; advisory
board of RyTV; Tufts
Universitys Friedman
School of Nutrition
Science and Policy
Senior Advisor to Chairman of
the World Economic Forum
Deborah
Norville
N.A. N.A. March 2013
March 2014
2013 N.A. N.A. N.A. N.A. Compensation Broadcasters Foundation
of America and National
Co-Chair of the Duke
University Parents
Committee
Anchor of Inside Edition
Annual Incentive Operating income (weight 60%), FCF (20%), qualitative factors (20%).
Long-Term Incentives TSR relative to S&P 500 companies and CAGR of EPS.
Annual Incentive Potential payout ranges from 0% to 200% of target. Target payouts were: Redstone $6.0 Mil., Dauman $12 Mil., Dooley $9.6 Mil., Fricklas
$2.475 Mil. and Barge $978,000.
Long-Term Incentives Redstone, Dauman and Dooley: Stock options (50% of long term-incentive) Four-year vesting and PSUs (50%) Three performance periods.
Fricklas and Barge: stock options (40%) and RSUs (60%) Four-year vesting. PRSUs granted to Dauman and Dooley as per employment contract
Four-year vesting.
September 19, 2013

Corporates

Corporate Governance Overview Viacom Inc. (Continued)
a
Most recent filings on Bloomberg as of June 2013. PSUs Performance stock units. RSUs Restricted stock units. PRSUs Performancebased restricted stock units.
TSR Total shareholder return.
Class A are voting shares; Class B are nonvoting shares.
Sumner M. Redstone is controlling shareholder with 79.4% voting power as of March 2013.
Three NEOs also have a seat on the board ( Sumner Redstone, Philippe Dauman and Thomas Dooley).
The daughter of Sumner Redstone, Shari Redstone, serves as a non-executive vice chair of the board.
No stock ownership requirements; clawback policy in place.
No formal lead independent director, committee chairs play leading roles.
Related-party transactions: In 2012, NAI paid the company $20 Mil. for the licensing of Paramount movies. Viacom believes the terms between NAI and Paramount were no more or
less favorable than between unaffiliated companies.
George S. Abrams <1.0 57 <1.0
James W. Barge <1.0 1 <1.0
Philippe P. Dauman <1.0 5,467 <1.0
Thomas E. Dooley 2 <1.0 4,350 <1.0
Michael D. Fricklas 0 <1.0 323 <1.0
Alan C. Greenberg <1.0 57 <1.0
Robert K. Kraft <1.0 104 <1.0
Blythe J. McGarvie <1.0 31 <1.0
Charles E. Phillips, Jr. <1.0 36 <1.0
Shari Redstone <1.0 28 <1.0
Sumner M. Redstone 40,608 79.4 2,418 <1.0
Frederic V. Salerno <1.0 19 <1.0
William Schwartz <1.0 34 <1.0
Directors, NEOs and Executive
Officers as a Group, Other Than
Sumner M. Redstone (16 Persons) 2 <1.0 10,552 <1.0
Note: Directors & NEO Holdings include stock options exercisable within 60 days of Jan. 1, 2013.
a
a
Nairi Inc. 40,608 79.4 Blackrock 31,419 7.2
Gamco Asset Management Inc. 5,372 10.5 Invesco LTD 21,155 4.9
Neuberger Berman LLC 1,157 2.3 Vanguard Group Inc. 20,628 4.8
Pacific Heights Asset Management 1,010 2.0 State Street 18,667 4.3
James Investment Research Inc. 189 0.4 Sun Life Financial Inc. 16,762 3.9
Skandia Global Funds PLC 129 0.3 Lazard Asset Management 13,274 3.1
Invesco LTD 119 0.2 Yacktman Asset Management Co. 11,199 2.6
Stifel Nicolaus & Company Inc. 73 0.1 Institutional Capital LLC 11,177 2.6
Renaissance Technologies Corp. 58 0.1 Bank Of New York Mellon Corp. 8,653 2.0
Cos Cayman LP 52 0.1 Alliance Bernstein 8,330 1.9
September 19, 2013

Corporates

Pension Screener
a
Viacom Inc.
than 10%?
No
Plan Assets
b
20.0 45.0
Projected Benefit Obligation (PBO) 1,139.0 920.0
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Viacom Inc.
($ Mil., As of June 30, 2013; Pro Forma for Q3 Activity)
Amount
Dec. 31, 2013
Dec. 31, 2014 600.0
Dec. 31, 2015 850.0
Dec. 31, 2016 1,316.0
Dec. 31, 2017 1,000.0
Thereafter 7,982.0
Total 11,748.0
Note: Excludes capital lease and other obligations.
Debt Structure
Viacom Inc.
($ Mil.; As of June 30, 2013; Pro Forma for Q3 Activity)
a

$2.5 Billion Credit Facilities due November 2017
2.500% Senior Notes due 2018 (Q3 Issuance) 500.00
4.250% Senior Notes due 2023 (Q3 Issuance) 1,250.00
5.850% Senior Debentures due 2043
(Q3 Issuance) 1,250.00
Capital Lease and Other Obligations 197.0
Total Debt 11,945.0
a
Backed by the $2.5 billion credit facility.
September 19, 2013

Corporates

Business Segments
Approximately 170 Channels in more than 160 countries.
Channels include MTV, VH1, Comedy Central, Nickelodeon,
Spike, CMT, Logo, TV Land and BET among others.
Paramount Pictures
Library consists of over 3,300 motion pictures and programs.
Organizational Structure Viacom Inc.
($ Mil., As of June 30, 2013 Pro Forma for Q3 Debt Issuance)
Viacom Inc.
IDR BBB+/Stable Outlook
Short-Term Debt F2
Sumner M. Redstone Public
Amount Rating
Senior Unsecured Notes/Debentures 11,716.0 BBB+
$2.5 Billion Credit Facility due 2017 BBB+
Commercial Paper F2
Capital Leases and Other 197.0
Total Debt 11,913.0
EBITDA 4,137.0
Media Networks Filmed Entertainment
Amount
EBITDA 4,093.0
Amount
EBITDA 199.0
September 19, 2013

Corporates

Debt and Covenant Synopsis Viacom Inc.
Overview
Issuer Viacom Inc. Viacom Inc. Viacom Inc.
Document Date 10/8/10; amended 12/2/11 and 11/9/12
Description of Debt $2.5 billion facility Indenture dated April 12, 2006 Indenture dated April 12, 2006
(as supplemented)
Maturity Nov. 9, 2017 $917 Million 6.25% Notes due April 2016
$1.75 Billion 6.875% Notes due April 2036
$600 Mil. 4.375% Notes due September 2014
$500 Mil. 1.25% Notes due February 2015
$400 Mil. 2.5% Notes due December 2016
$500 Mil. 3.5% Notes due April 2017
$500 Mil. 6.125% Notes due October 2017
$550 Mil. 5.625% Notes due March 2019
$600 Mil. 3.875% Notes due December 2021
$300 Mil. 3.125% Notes due June 2022
$1.25 Bil. 4.250% Notes due September 2023
$1.4 Bil. 4.375% Note due March 2043
$250 Mil. 4.875% Notes due June 2043
$1.25 Bil. 5.85% Notes due September 2043
Financial Covenants
(Maximum)

Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)
3.0x
Change of Control
(CoC) Provision
No material provision noted. No material provision noted. If, among other things, anyone other than
a Redstone family member/trust or the
companys affiliates acquire more than 50%
of voting power, or a going-private transaction
occurs, and as a result, credit rating is
downgraded to below investment grade by all
agencies.
Sale of Assets
Restriction
Debt Restrictions
Additional Debt
Restriction
Subsidiary debt not exceeding the greater of
(in aggregate) 5% of tangible assets and $800
million.
Limitation on
Secured Debt
Standard carveouts plus $30 million. Standard carveouts plus liens representing up
to 15% of total assets.
Standard carveouts plus liens representing up
to 15% of total assets.
Other
Cross-Default On final maturity payments in excess of
$250 million.
Cross-Acceleration On all missed payments regardless of amount
and on default of all other covenants on debt in
excess of $250 million.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Viacom Inc.
Date of
8/2/2013 3Q2013 Q&A Q: Thanks. Good morning, guys. I have a couple questions going back to figuring out the financial firepower of the balance sheet here.
Tom, can you just remind us specifically the leverage calculation? Are you talking gross debt? And what are the contingent liabilities
that the agencies include that we need to be mindful of as we think about that new leverage level going forward?
A: Yes, different rating agencies have different leverage calculations what they include. We include our commitments that are visible
in our disclosure in our 10-K and 10-Q. We use gross debt, not net debt, and we feel thats somewhere in between some of the
traditional textbook definitions of leverage and some of the rating agencies. So each rating agency has a different one, and youll have
to go to them. Weve been working and chatting with the rating agencies on this construct, and theyll be issuing their commentary on
it after this call.
8/2/2013 3Q2013 Q&A Q: Okay. And then I think post the $2 billion add-on, youll be within that 2.7 to 3 times, so maybe you can just verify that or if you
agree or not. And going forward beyond that, as you said, you had returned to the $700 million a quarter run rate. Do you plan to stay
within that new range fairly strictly? And if so, should we think about using any additional capacity for more buybacks as you grow the
business, or should we also be thinking about leaving some room for things like M&A and stuff?
A: Ben, let me take that. Our target is the leverage ratio, so we are managing to that leverage ratio which we will stick with. And as
we do that, we continue to invest in our business. Our M&A continues to be very limited and very targeted. It tends to be small-bore
and very additive, and it still gives us a lot of capacity. We expect, as we said, to continue at a comparable pace as we look forward.
But what we will continue to do is to evaluate it each quarter. And then we announce, as we always have, what we intend to do in the
following quarter when we have these earnings calls. But our current expectation is to continue at a comparable pace, which could be
at the $700 million range or it could be a different number, it could be more as our business expands.
Or less. It really depends on what its really matching to our investment-grade leverage ratio.
Ben, its critical to note that we continue to manage this with a very keen eye on the cash flow generation capability of Viacom. As
weve demonstrated in the past, in the last downturn we dramatically deleveraged the company within 12 months by tapping into the
share buyback program and diverting those resources to deleverage the company. So we understand very much how we can use the
accordion of the free cash flow of the company, which is very strong, to mitigate any financial uncertainty that we see coming down the
road.
8/2/2013 3Q2013 Q&A Q: Thanks, I have two. Obviously, the increase in your target leverage ratio and the buyback is clearly a sign of your and the Boards
confidence in improving trends. What is giving you this confidence now? Is it due to the personnel changes? Is there anything else?
Thats the first question.
And then the second thing is how should we think about the mix of reality versus scripted programming at MTV? Any color on what the
mix is now and how this might look over time?
A: Sure, Marci. Our confidence is informed by the fact that yes, we have added a lot of programming talent in our ranks. And as we
look at the lineup today and going forward, we have real programming momentum across really all of our networks. That gives us
confidence. Weve just been through a very successful upfront season, and that certainly gives us confidence as we look forward into
next year. And we see good underlying dynamics. Even though many would like the growth to accelerate in the U.S. economy, we do
see good dynamics there. So that gave us confidence in going back to our traditional leverage ratio.
As far as MTV goes, we will continue to have a mix of reality and scripted programming. Weve had really good success with the
scripted programming which we introduced just a few years ago with shows like Teen Wolf and Awkward. And as you look into next
year, you will see additional scripted and reality. And as you know, at MTV, we also have a revamped programming and development
team, and from what I have seen so far, theres a lot of exciting development ahead in both genres.
8/2/2013 3Q2013 Q&A Q: And then just a clarification. The July repurchases pace was a little bit slower and you gave a lot of details around increasing the
buyback, but just timing-wise, does that mean that $700 million pace isnt the right number for the September quarter in terms of the
I was trying to figure out, is it $700 million a quarter plus $2 billion, or is it a little less than $700 million this quarter because July
was less?
A: We have a blackout period ahead of the earnings, so that accounts for the what appears to be a slower pace at the beginning
of the quarter. We as we discussed the last earnings call, we had budgeted for $700 million of buyback in this quarter. Obviously,
today, with the announcement of the augmented buyback program, we will add $2 billion over the next several months to our normal
$700 million pace for this quarter and next quarter.
8/2/2013 3Q2013 Prepared Now turning to our debt; for the most part, it is fixed rate with an average cost at quarter-end of 4.6%. In terms of our short-term
funding, to the extent we have incremental borrowings; we are funding this in the commercial paper marketplace at an annual rate
of approximately 25 basis points. We had no variable rate borrowings outstanding at quarter-end. As for our leverage, we ended the
quarter with $8.9 billion of debt in capital leases outstanding and $1.1 billion of cash and cash equivalents on the balance sheet. Our
leverage ratio at the end of the quarter was 2.3 times. At June 30th, our $2.5 billion bank revolver was undrawn.
Our commitment to return capital to shareholders continued in the June quarter as we returned a total of $834 million of capital back to
our shareholders between our buyback and dividend programs. Philippe has already addressed our increased buyback authorization
and our continued aggressive capital return going forward.
8/2/2013 3Q2013 Prepared We also repurchased $700 million of stock in the quarter under what was our $10 billion share repurchase program. We are today
announcing an increase in the size of our buyback program from $10 billion to $20 billion. Given our improving operational and ad
sales performance, the improving U.S. macroeconomic environment, and the attractive interest rate environment, we are comfortable
returning to our target leverage ratio prior to the recession. As a result, we are increasing our target ratio to 2.75 to 3.0 range.
Viacoms stock is a very good value. Our share buyback remains very accretive, and we will continue to aggressively return capital
to our shareholders. Accordingly, given the added balance sheet capacity from our new leverage target, we will augment our current
buyback pace with the purchase of an additional $2 billion of our stock over the next several months. The pace of our open-market
purchases, which are part of the $20 billion program, will be subject to regulatory limits on trading volumes. After December 31, we
anticipate that our buybacks will return to a pace comparable to our most recent quarters.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Viacom Inc. (Continued)
Date of
5/1/2013 2Q2013 Q&A Q: And just to follow up with Tom on the leverage. You know, your leverage I think you said is down to 2.4 times. It sounds like from
your commentary in terms of the pickup in distribution fees and accelerating ad sales that you are going to end up with far more rapid
growth in EBITDA in the back half of the fiscal year and into 2013 and sorry into 2014. And just at what point do you start to get
more comfortable to move your leverage target up a little bit. Because it just seems like you are generating a good amount of cash,
growth is accelerating and you are ending up kind of deleveraging.
A: Rich, we continue to kind of target like 2 to 2.25 leverage ratio. We will continue to do that for the foreseeable future. We think the
strong cash flow that we generate as a company and the excess free cash flow that we talked about, over $8 billion return in a little
over three years is pretty impressive. If you go back to when we started this, its over almost 25% to 30% of the market cap at that
point in time. So we think that model serves us well and provides us with great access to capital markets. We are going to stick at that.
5/1/2013 2Q2013 Prepared Then starting with the current share buyback and dividend program in September of 2010, we have returned over $8 billion to our
shareholders and over 75% of that return was from excess cash flows from operations.
5/1/2013 2Q2013 Prepared Looking ahead, we are on pace to purchase approximately $700 million of our stock in the June quarter, which means that in the first
nine months of the year, we will have returned a total of approximately $2.5 billion to shareholders through our share buyback and
dividend programs.
5/1/2013 2Q2013 Prepared In terms of our short-term funding, to the extent we had incremental borrowings; we are funding this in the commercial paper
marketplace at an annual rate of approximately 35 basis points. We had no variable rate borrowings outstanding at the quarter-end.
As for our leverage, we ended the quarter with $8.9 billion of debt and capital leases outstanding and $1.3 billion of cash and cash
equivalents. Our leverage ratio at the end of the quarter was 2.4 times. At March 31, our $2.5 billion bank revolver was undrawn. Our
commitment to return capital to shareholders continued in the March quarter as we returned a total of $700 million of capital back to
our shareholders.
5/1/2013 2Q2013 Prepared Now, turning to our debt. For the most part, it is fixed rate with an average cost at quarter-end of 4.6%. During the quarter, we issued
$300 million of 3.25% senior notes due in 2023, and $250 million of 4.875% senior debentures due in 2043. Given our strong balance
sheet and free cash flow generation, we have been able to access the capital markets to secure long-term funding at very attractive
rates. Over the past couple of years, we have issued approximately $5 billion of public debt at an average rate of 3.6% with an
average maturity of approximately 16 years. Additionally, we either call or tended for approximately $2 billion of previously outstanding
notes. These transactions taken together have lowered our overall average cost of debt by approximately 150 basis points.
1/31/2013 1Q2013 Prepared We continue to be opportunistic in the capital markets, taking advantage of the current attractive rate environment to lower our
average cost of debt, while at the same time, extending our average maturity. And we continue to use the capacity from our balance
sheet and our free cash flow to aggressively return capital to our shareholders by both shrinking our equity base and providing a
dividend.
1/31/2013 1Q2013 Prepared Our commitment to return capital to shareholders continued in the December quarter. Between our buyback and dividend programs,
we returned a total of approximately $977 million of capital back to our shareholders. Looking ahead, we are on pace to purchase
approximately $700 million of our stock in the March quarter, which means that in the first six months of the year, we will have returned
a total of approximately $1.7 billion to our shareholders.
1/31/2013 1Q2013 Prepared We continue to generate significant free cash flow, which we used to repurchase $700 million in stock in the quarter, under our
$10 billion share repurchase program. We expect to repurchase an additional $700 million in stock in this quarter.
1/31/2013 1Q2013 Prepared In terms of leverage, we ended the quarter with $8.4 billion of debt and capital leases outstanding, and $671 million of cash and cash
equivalents. Our leverage ratio at quarter-end was 2.2 times. At Dec. 31, our $2.5 billion bank revolver was undrawn.
1/31/2013 1Q2013 Prepared In total, $844 million in principal amounts of these higher-coupon debentures were tendered and exchanged for additional 4.375%
debentures. These transactions, together with our other actions over the past year, have lowered the average cost of our fixed-rate
debt by 80 basis points since December 31, 2011.
1/31/2013 1Q2013 Prepared Now turning to our debt, for the most part, it is fixed rate with an average cost at quarter-end of 4.7%. This past quarter, we continued
to take advantage of the favorable rate environment by issuing $250 million of new 30-year debentures with a very attractive coupon
of 4.375%. We also executed an exchange offer for our 6.875% debentures due 2036 and our 6.75% debentures due 2037.
11/12/2012 4Q2012 Prepared Technology has begun to benefit us in that regard in terms of cost savings, in terms of the number of folks we have to do it. Weve
made some significant investments, both on the financial side and the distribution side to basically drive cost efficiencies there. Those
have happened over the last several years and theyre beginning to pay dividends, and I expect them to pay dividends into the next
couple of years. So were pretty excited about that, and that gives us confidence that well be able to save money in other areas of
the company.
11/12/2012 4Q2012 Prepared Also we continue to be aggressive in returning capital to our shareholders. For the full year, we repurchased 60 million of our shares
for an aggregate purchase price of $2.8 billion. Between our buyback and dividend programs, we returned a total of approximately
$3.4 billion of capital back to our shareholders, which is a return on market capitalization of approximately 14%. If you look back to
when we started our buyback program two years ago, we had 609 million shares outstanding. Since then, we have repurchased
a total of 121 million of our shares in the open market for an aggregate purchase price of $5.6 billion, which brings our shares
outstanding to 502 million as of Nov. 7.
11/12/2012 4Q2012 Prepared Fueled by our cash generation, we repurchased $700 million in stock in the September quarter under our $10 billion share repurchase
program. The company repurchased a total of $2.8 billion in the stock for the full fiscal year. In fiscal 2012, Viacom also increased
its quarterly dividend 10% to $0.275 per share. As we begin fiscal 2013, we are on track to buy back at least $2.5 billion of stock this
year. In the current quarter, we plan to purchase $700 million of our stock. We have consistently ranked among the top of our peers in
returning capital to shareholders.
11/12/2012 4Q2012 Q&A Q: And then my second question, just addressing another fear, is that there may be a possibility that your share buyback falls below
$2.5 billion if ratings trends dont improve, specifically at MTV.
A: We will buy at least $2.5 billion of our stock in 2013.
Source: FactSet.
September 19, 2013

Corporates

Date of
11/12/2012 4Q2012 Q&A Q: Okay. Separately, with regards to your ad revenue, youve talked about how youre striving to mitigate that in all of the programs
investments and like some of them starting to pay off, but there has been some concerns about the level of your ad loads across your
channels which are trending higher. It seem like most of your peers -- wondering how much of a concern that could be in terms of is
that a short-term measure? Or do you view that as a temporary lever that you can pull or are we pretty much should expect that thats
pretty much going to be the normalized level even when your ratings start to improve? Is there any color on that and what you hear
now would be helpful. Thank you.
A:It is just one of the many tools that any network has and we look at ad loads, we look at how much promotional in total we put on
and we try to optimize it all. You have to promote your new shows and we look at it network by network and its a decision that our
network leaders look at and you try to get to the optimal mix. So youll see that vary from year-to-year and from network-to-network
any given year.
11/12/2012 4Q2012 Prepared In terms of leverage, we ended the quarter with $8.1 billion of debt and capital leases outstanding, and $848 million of cash and cash
equivalents. Our leverage ratio at the end of the quarter was two times. At Sept. 30, our $2.1 billion bank revolver was undrawn. Last
week, we completed an amendment to our revolving credit facility that increased the size from $2.1 billion to $2.5 billion and extended
the maturity two years to November of 2017. This action reflects the strength of our balance sheet and provides us with significant
financial flexibility for the next five years.
11/12/2012 4Q2012 Prepared Now, moving on to our debt. For the most part, its fixed rate with an average cost at quarter end of 5%. This compares to an average
cost of 5.8% 12 months ago, so we continue to make great progress in lowering our average cost of debt. To the extent, we have
incremental borrowings, we are funding this in the commercial paper marketplace at an annual rate of approximately 40 basis points.
We had no variable rate borrowings at quarter end.
8/3/2012 3Q2012 Prepared And as far as the repurchase program, we are committed to it. We have been able, despite these issues that you point out to
purchase at the pace that we talked about earlier in the year. The $2.8 billion in repurchase, as Tom pointed out when you add that to
the dividend, thats a 14% return on our capitalization. And we continue to generate strong free cash flow.
8/3/2012 3Q2012 Prepared During the quarter, Viacom announced a 10% increase in our quarterly dividend to $0.275 per share. Last week, our Board of
Directors declared our next quarterly cash dividend to be paid Oct. 1.
8/3/2012 3Q2012 Prepared The company also repurchased $700 million in stock on our share repurchase program in the third quarter, and we expect to buy back
$700 million in stock this quarter for a total of $2.8 billion in stock for the full fiscal year.
8/3/2012 3Q2012 Prepared For 2012, we continue to forecast a book tax rate of 34.5%. As for our stock buyback program, we are on track to repurchase
$2.8 billion for fiscal 2012.
8/3/2012 3Q2012 Prepared In terms of our commitment to return capital to shareholders, between our buyback and our dividend programs, we returned a
total of $833 million of capital back to our shareholders in June in the June quarter. Looking ahead, we are on pace to purchase
approximately $700 million of our stock in the September quarter. So for our fiscal year, we will have returned a total of approximately
$3.4 billion to our shareholders, which is a return on market cap of 14%.
8/3/2012 3Q2012 Prepared During the quarter, we took advantage of attractive rate in the public markets to maintain our leverage and our target level. We
issued $300 million of 3.125% senior notes due in 2022 and an additional $100 million of 1.25% senior notes due in 2015. In terms of
leverage, we ended the quarter with $8.2 billion of debt and cap leases outstanding and $774 million of cash and cash equivalents.
At June 30, our $2.1 billion bank revolver was undrawn. Our leverage ratio at the end of the quarter was two times. The only financial
covenant in our bank revolver requires that interest coverage for the most recent four fiscal quarters be at three times. At the end of
the quarter, our interest coverage was approximately 11 times.
8/3/2012 3Q2912 Prepared As for our debt, for the most part, it is fixed rate with an average cost at quarter end of 5%. This compares to an average cost of 5.8%
12 months ago. So we continue to make great progress on lowering our average cost of debt. To the extent, we have incremental
borrowings. We are funding this in the commercial paper marketplace at an annual rate of approximately 40 basis points. We had no
variable rate borrowings at quarter end.
5/3/2012 2Q2012 Prepared As we noted in our last call on January 9, we redeemed at par the $750 million outstanding of our 6.85% senior notes due in 2055.
During the quarter, we also took advantage of the attractive rates in the public markets to maintain our leverage at our target level. We
issued $500 million of 1.25% senior notes that are due in 2015 and $250 million of 4.5% senior notes due in 2042.
5/3/2012 2Q2012 Prepared In terms of our commitment to return capital to shareholders, between our buyback and dividend programs we returned a total of $837
million of capital back to our shareholders in the March quarter. Looking ahead, we are on pace to purchase approximately
$700 million of our stock in the June quarter. So for the first nine months of the year, we will have returned a total of approximately
$2.5 billion to our shareholders.
11/10/2011 4Q2011 Q&A Q: I just have a question on the buyback to make sure Im doing the math right. Free cash assuming no working capital swings, free
cash flow after the dividend payments is about $2 billion a year. You said youre doing about youre targeting about $7.2 billion of
this buyback over the next two years. Are you essentially saying youre going to be taking on debt of about 1.5 billion a year over the
next two years, or do you think free cash flow is going to grow because of some, you know, swing in working capital?
A: Our leverage ratio, as Tom indicated, closed out the year at 1.8, below our two times target. We are going to have to increase our
leverages to stay up to that 2.0 target given our operating momentum, so the the buybacks will be funded both by our free cash
flow and our borrowing back up to that two times leverage point, you know, as our operating growth takes down our leverage ratio
without that additional debt.
Q: Okay, you dont anticipate going above two times temporarily even?
A: No, we set that as a target and were going to hold ourselves to that.
Source: FactSet.
September 19, 2013

Corporates

Date of
8/5/2011 3Q2011 Q&A Q: And then kind of a bigger-picture question for Tom, when you talk about capital strategy, you talked about a 1.8 times leverage
ratio; given what I think is going to be robust growth in Q4, it looks like youre going to end the year even with that $900 million at just
1.5 times leverage. It seems with the increasing growth rate of your business that you should be levered closer to 2.5 if not 3 times.
Just curious how you kind of what do you with the cash? It seems like youre outgrowing your leverage strategy given how good the
business is doing. And is there a point where you think about something to reset leverage at a higher
level whether it be a special dividend or your ramp in buyback, et cetera?
A: Let Tom talk a little more about our capital strategy but it is good news that we are continuing to generate free cash flow. Were able
to ramp up our return of capital to shareholders. Weve managed to increase our dividend. Were increasing the pace of our buybacks
and yeah were doing it in a progressive, measured way and we expect to continue to provide great returns to our shareholders for
quite some time.
The leverage ratio of two times is a target that we have sent set for ourselves. Its a leverage ratio that were going to stick to and
weve committed to from a capital markets point of view. We think its very important for us to run the company with that and we also
think given the cash flow generation capabilities of Viacom, well be able to buy a significant amount of shares back well within
while maintaining that leverage ratio. So given how we see the cash flow dynamics of Viacom on a go-forward basis were going to
buy back a lot of shares at these bargain prices.
11/11/2010 4Q2010 Prepared We will continue to target a leverage ratio of two times. As we progress through 2011 and our earnings grow, we will consider
additional debt in order to maintain the two times leverage ratio.
11/11/2010 4Q2010 Q&A And to your point, Rich, on deleveraging, the company will naturally de-lever as, one, as it generates the free cash flow, but it will
de-lever as we generate incremental operating income levels. And as I said in my remarks, we will be considering adding additional
debt to re-lever the company and we will continue to deploy that incremental capital that we raise as we have done in the past where
were going to either make some select small investments, or we will return that capital to the shareholders and youll see our buyback
program and other vehicles to return capital to shareholders reflect that.
4/29/2010 1Q2010 Q&A A: Our target leverage ratio, its based on gross debt, and we work with all the different rating agencies as to how they define
the leverage ratios and weve been working very hard to get the leverage ratio down in any way that it can be defined, including
by working to eliminate guarantees that we had provided on the book such as the guarantees that we had provided under the
Blockbuster leases. Theyre all but eliminated on our books. So in every way you can define it were working to drive that leverage
ratio down.
2/11/2010 4Q2009 Prepared At this point virtually all of our debt is fixed rate. The fixed rate debt has an average cost of 6%. The only short-term variable rate
borrowings outstanding at quarter end was $16 million of commercial paper. Our leverage ratio at the end of the quarter was 2.1
times, which is within our targeted range of two to 2.5 times. The only financial covenant in our bank revolver requires that interest
coverage for the most recent four fiscal quarters be at least three times. At the end of the quarter our interest coverage was
approximately eight times.
In terms of our debt profile we began 2009 as a split-rated company with the triple within the BBB category with near-term
maturities and leverage of three time. During the course of the year we termed out our debt so that we have no substantive
maturities until 2014. We reduced our leverage and improved our rate of free cash flow conversion. Our strong cash position and our
strengthened balance sheet enabled us to go from a split-rated company to a solid BBB by both Moodys and Standard & Poors. We
exit 2009 with an improved capital structure and leverage profile.
2/11/2010 4Q2009 Q&A Q: But is there any reason to let leverage fall below two times?
A: As Tom mentioned in his remarks, our targeted range is two to 2.5 times. So I think that answers your question. But we just have
to evaluate the uses. We just took in the DreamWorks library and well just have to see where we sit as the cash flow comes in at a
heavier rate as the year progresses.
11/3/2009 3Q2009 Prepared In terms of leverage, we have 6.9 billion of debt and capital leases outstanding, and approximately 250 million of cash and cash
equivalents at September 30. At the end of the quarter, our $3.2 billion bank revolver was undrawn. Of the 6.9 billion in total debt,
approximately 6.6 billion, or 96%, is fixed rate. The fixed-rate debt has an average cost of 6%. The only short-term variable rate
borrowings outstanding at quarter-end were approximately 200 million of commercial paper. Our leverage ratio at the end of the
quarter was 2.5 times, which is within our targeted range of two times to 2.5 times. The only financial covenant in our bank revolver
requires that interest coverage for the most recent four fiscal quarters be at least three times. At the end of the quarter, our interest
coverage was 7.1 times.
11/3/2009 3Q2009 Q&A Just on the leverage question, weve announced the target leverage range of 2 to 2.5 at the end of this quarter. Were at the higher
end of that range. We anticipate moving down into the lower end of that range, and a comfort zone for us is obviously very much, very
comfortable at the lower end of the range, and I think thats kind of where were going to run the business for the foreseeable future.
6/28/2009 2Q2009 Prepared Our leverage ratio at the end of the quarter was 2.8 times. The only financial covenant in our bank revolver requires that interest
coverage for the most recent four fiscal quarters be at least 3.0 times. At the end of the quarter, our interest coverage was 6.7 times.
While the credit markets have improved noticeably in recent months, events over the past few quarters have shown that companies
need to operate at prudent leverage levels to ensure uninterrupted access to the capital markets. Given these considerations, we are
now targeting a leverage ratio of 2 to 2.25 times.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Viacom Inc.
($ Mil.) 12/31/2008 12/31/2009 12/31/2010 9/30/2011 9/30/2012
LTM Ended
6/30/13
Profitability
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 105.0 139.0 31.0 23.0 18.0 20.0
Other Debt
Equity Credit
Off-Balance-Sheet Debt 2,238.3 1,205.1 1,001.2 910.8 1,230.0 1,230.0
Cash Flow
Change in Working Capital 78.0 (964.0) (48.0) (148.0) (209.0) (337.0)
Total Non-Operating/Nonrecurring Cash Flow (32.0) (90.0) 5.0 (21.0) 1.0 4.0
Dividends (273.0) (417.0) (554.0) (554.0)
Free Cash Flow 1,748.0 1,010.0 1,465.0 2,072.0 1,790.0 2,098.0
Net Acquisitions and Divestitures (225.0) (133.0) (122.0) (72.0) (18.0) 12.0
Net Debt Proceeds (280.0) (1,368.0) (292.0) 629.0 801.0 784.0
Net Equity Proceeds (1,266.0) (7.0) (379.0) (2,286.0) (2,541.0) (2,293.0)
Total Change in Cash (128.0) (494.0) 613.0 184.0 (173.0) 370.0
Ending Cash and Securities Balance 792.0 298.0 911.0 1,021.0 848.0 1,144.0
Income Statement
Revenue 14,625.0 13,619.0 13,165.0 14,914.0 13,887.0 13,505.0
Revenue Growth (%) 9.0 (6.9) (3.3) 0.0 (6.9) (7.4)
Operating EBIT 3,076.0 3,039.0 3,357.0 3,982.0 4,023.0 3,904.0
363 Company Summaries Vivendi SA
September 19, 2013

Corporates

Vivendi SA
Key Rating Drivers
Scale and Diversity: Vivendi SAs long-term Issuer Default Rating (IDR) of BBB refects the
scale and diversity of its operating assets. The companys focus on subscription-based business
models has helped it weather periods of economic uncertainty.
Focus on Media Assets: Vivendi is currently undergoing a strategic review. Management has
indicated a desire to shift the groups focus away from the more capital-intensive telecoms industry
and focus more on media-based business models. The company is currently entertaining bids
for its 53% stake in Maroc Telecom and evaluating various options, including a spinoff or an IPO
of its French telecoms unit, SFR.
Competitive French Mobile Market: Iliads Free Mobile has increased competitive pressure in
the French telecoms market with its value-based model of low monthly fees and nonsubsidised
handsets. Vivendis SFR (accounting for 39% of Vivendis 2012 EBITDA) has been forced to
respond with price cuts that have had a negative impact on EBITDA (minus 13.2% in 2012).
Fitch Ratings believes that this downward trend in EBITDA generation and margins is likely to
continue in 2013.
Limited Headroom Following Acquisitions: Declining EBITDA at SFR and increased leverage
from the EMI Recorded Music transaction left Vivendi with a structurally adjusted net debt to
EBITDA of 2.8x at the end of the frst quarter of 2013 (1Q13), which could worsen further. It
has reiterated its desire to maintain its current credit rating and Fitch would expect to see the
proceeds of any asset disposals, such as its 53% stake in Maroc Telecom, used to bring leverage
back towards Fitchs structurally adjusted 2.5x range.
Legal Liabilities Persist: On Jan. 10, 2013 a U.S. court upheld Liberty Medias lawsuit against
Vivendi regarding the companys 2001 purchase of Liberty Medias stake in USA Networks.
Liberty Media won a judges order for EUR765 million plus interest, which Vivendi plans to
appeal. The possible outcomes of this case are complex and uncertain.
Fitch Methodology: As Vivendi cannot freely circulate cash between certain subsidiaries (Maroc
Telecom and Activision Blizzard), Fitch makes adjustments to key metrics to refect the groups
structure, such as structurally adjusted net debt to EBITDA, which for the purposes of calculating
leverage, deconsolidates Activision Blizzard and Maroc Telecom.
Maturity Profle Being Adjusted: Vivendi ended frst-quarter 2013 with EUR1.3 billion of cash
and equivalents. As of March 31, 2013, the company had EUR6.3 billion of undrawn committed
bank facilities, which is also used to backstop EUR3.0 billion of outstanding commercial paper.
Deleveraging Expected in 2013: Fitch recognizes Vivendis track record in acquisitions and its
disciplined fnancial management. Vivendis rating will come under pressure if there is no sign of
deleveraging in 2013. Fitch will be looking for a clear sign that medium-term leverage is heading
back to below 2.5x on Fitchs structurally adjusted net debt to EBITDA measure. Positive rating
action requires a more conservative fnancial policy.
Ratings
Security Class
Current
Rating
Foreign Currency
Long-Term IDR BBB
Rating Outlook
Long-Term
Analysts
Damien Chew, CFA
+44 20 3530-1424
Michael Dunning
+44 20 3530-1178
September 19, 2013

Corporates

Portfolio Summary Vivendi SA
(As of Dec. 31, 2012)
Media and Content
Vote/
Own (%)
Universal Music Group 100/100
Polygram Holding, Inc. 100/100
UMG Recording, Inc. 100/100
VEVO 50/50
SIG 104 100/100
Artists
Jay Z Lady Gaga Taylor Swift
Justin Bieber Rihanna Lana Del Rey
Rod Stewart Lil Wayne Maroon 5
Amy Winehouse Madonna Drake
Gotye Kanye West Lionel Richie
Nicki Minaj LMFAO
Labels
Interscope Geffen A&M The Island Def Jam Music Group
Republic Records Universal Music Group Nashville
Decca Label Group Verve Music Group
Show Dog Universal Music Universal Music Enterprise
Universal Music Latin Entertainment A&M/Octone
Decca Music Group, Decca Records Deutsche Grammophon
+38 Universal Music International Labels
Activision Blizzard 61.5/61.5
Activision Publishing, Inc. 100/61.5
Blizzard Entertainment, Inc. 100/61.5
ATVI C.V. 100/61.5
Console and Handheld Video Games
Call of Duty Prototype Tony Hawks Pro Skater
Skylanders Spiderman Fast and Furious
Black Ops Nascar
PC Games
Diablo
Warcraft, World of Warcraft
Starcraft
Canal+ Group 100/100
Canal+ France S.A. 80/80
D8 100/100
StudioCanal S.A. 100/100
TVN (Poland) 40/21
Canal+ Cyfrowy S.A. (Poland) 51/51
VSTV Vietnam Satellite Digital Television Co. Ltd. 49/49
Telecommunications
Vote/
Own (%)
SFR Socit Franaise du Radiotlphone S.A. 100/100
Socit Runionnaise du Radiotlphone S.C.S. 100/100
Socit Financire de Distribution S.A. 100/100
5 sur 5 S.A. 100/100
La Poste Telecom 49/49
Numergy 47/47
Maroc Telecom (Morocco) 53/53
Mauritel S.A. 51/22
Onatel S.A. 51/27
Gabon Telecom S.A. 51/27
Sotelma S.A. 51/27
GVT Global Village Telecom S.A. (Brazil) 100/100
Global Village Telecom Ltda 100/100
POP Internet Ltda 100/100
Innoweb Ltda 100/100
Other Subsidiaries
Vote/
Own (%)
Digitick (Event Ticketing) 100/100
See Tickets (Event Ticketing) 100/100
Wengo (Phone Counseling) 100/95
Watchever (Subscription Video-on-Demand) 100/100
September 19, 2013

Corporates

France
55%
Rest of
Europe
12%
United
States
12%
Morocco
7%
Brazil
6%
Rest of
World
8%
Vivendi SA
(As of Dec. 31, 2012)
Activision
Blizzard
13%
Universal
Music
Group
16%
SFR
39%
Maroc
Telecom
Group
9%
GVT
6%
Canal+
Group
17%
Revenues by Segment
Vivendi SA
(As of Dec. 31, 2012)
September 19, 2013

Corporates

Event Risk Dashboard Vivendi SA
able to take from expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition M
Divestiture H
Litigation Risk H
Regulatory Risk M
LBO Risk Low
Approximately EUR35 billion of enterprise value likely too large for a European
LBO.
Secular Risk Medium
Around 35% of EBITDA comes from satellite pay-TV, music and
computer games.
Unbundling of content packages and the OTT threat in content distribution are
signifcant risks, as are rising content costs.
The rest of the groups EBITDA comes from its telecoms businesses, which are
subject to continued regulatory and competitive pressures.
Vivendis share ownership is not concentrated.
Vincent Bollor, through his investment vehicle, owns 5% of Vivendi and is the
companys largest single shareholder. His presence on the board may point to
further acquisitions and disposals as Vivendi refnes its strategic focus.
Management has said that it is committed to maintaining its BBB rating.
Fitch believes that deleveraging during 2013 is necessary, which may depend on
asset disposals.
Vivendi SA Rating History
BB+
BBB
BBB
BBB+
A
A
1.0
1.3
1.6
1.9
2.2
2.5
2008 2009 2010 2011 2012 LTM
June 2013
LTM Last 12 months.
Leverage Trend
(x)
September 19, 2013

Corporates

Event Risk Dashboard Vivendi SA (Continued)
(GBP Mil.)
Starting Authorized
Share Buyback
New Authorized
Share Buyback
Share
Buy Activity
Ending Authorized
Share Buyback
2012 (18)
2011 (37)
2010
2009
Note: With the pressure on profitability at SFR, and the recent EMI acquisition, Vivendis current focus is on reducing leverage. Fitch does not anticipate any significant
buyback activity until the companys credit profile has stabilized.
Divestiture Risk High
2012 (1,696) 13
2011 (8,209) 30
2010 (757) (43)
2009 (2,691) 15
Note: Vivendi has an active approach to acquisitions and disposals as part of its
strategy, which is now more focused on media-related businesses. It is currently in
the process of disposing of Maroc Telecom after failing to find a buyer for GVT, its
Brazilian telecoms operations. Vivendi has said it may consider an IPO of SFR, its
French telecoms business.
Covenant
Level (x)
Fitch Estimated
Level (x)
EBITDA
Cushion (%)
Liberty Media fled a claim against Vivendi relating to the formation of Vivendi
Universal Entertainment. A U.S. ruling against Vivendi has meant that the
company has taken a EUR945 mil. provision.
Vivendi is subject to a US class action lawsuit, relating to alleged violations
of U.S. fnancial regulations. Vivendi made a provision in December 2009 for
EUR550 mil., which has been reduced to EUR100 mil. as of December 2010
given how legal proceedings have unfolded.
Vivendi is also involved in various other outstanding legal cases that Fitch
believes are relatively small in potential liability.
Vivendis subsidiaries have some debt, but the companys fnancial strategy has
been borrowing at the parent company.
Funds are usually pushed down to operating subsidies using
intercompany loans.
Vivendi has various contingent liabilities associated with guarantees linked to the
acquisition of the Bollore Groups free-to-air TV channels, the merger of Cyfra+
and "n" platforms in the Polish pay-TV business, and previous M&A transactions.
Fitch believes that the potential liabilities from all of these guarantees are
relatively small given Vivendis size.
Vivendis pension liabilities are small, with a defned beneft plan liability of
EUR499 mil. on the balance sheet at the end of 2012.
Vivendi is exposed to regulatory risks associated with the telecommunications
and pay-TV businesses.
September 19, 2013

Corporates

Organizational Chart Vivendi SA
RCF Revolving credit facility.
Bonds
EUR500 Mil. 4.500% FRNs due October 2013
EUR200 Mil. 4.500% FRNs due October 2013
EUR1,000 Mil. 7.750% Bonds due January 2014
EUR120 Mil. 7.750% Bonds due January 2014
EUR550 Mil. 2.400% FRNs due April 2014
EUR1,000 Mil. 3.500% Bonds due July 2015
EUR500 Mil. 3.875% Bonds due November 2015
EUR500 Mil. 4.250% Bonds due December 2016
EUR750 Mil. 4.000% Bonds due March 2017
EUR1,250 Mil. 4.125% Bonds July 2017
USD700 Mil. 6.625% 10-Year Notes due April 2018
USD650 Mil. 3.450% FRNs due January 2018
EUR500 Mil. 4.875% Bonds due November 2018
EUR700 Mil. 4.875% Bonds due December 2019
EUR700 Mil. 2.500% Bonds due January 2020
EUR750 Mil. 4.750% Bonds due July 2021
EUR300 Mil. 4.750% Bonds due July 2021
USD800 Mil. 4.750% FRNs due April 2022
Total: EUR10,734 Mil. of Bond Debt
RCF
EUR2,000 Mil. RCF
EUR2,000 Mil. RCF
EUR1,500 Mil. RCF due May 2017
EUR1,100 Mil. RCF due January 2017
EUR40 Mil. RCF due January 2015
EUR1,500 Mil. RCF (Tranche B) due May 2014
EUR2,000 Mil. RCF (Tranche C) due May 2016
EUR1,000 Mil. RCF due September 2016
Total: EUR9,058 Mil. Bank Facilities
Vivendi SA
Universal Music Group
(UMG)
Activision Blizzard Maroc Telecom
MAD3,000 Mil. Loan
GVT
BNDES EUR590 Mil.
RCF
Canal Plus Group
EUR20 Mil. RCF
Vietnam
SFR
EUR1,200 Mil. RCF
Canal Plus France
Cyfra Plus
Studiocanal
i>Tele
(80%)
(75%)
(100%)
(100%)
(100%) (61.5%) (53%) (100%) (100%) (100%)
September 19, 2013

Corporates

Financial Summary Vivendi SA
(EUR Mil., Years Ending Dec. 31) 2008 2009 2010 2011 2012
Profitability
Revenue 25,392 27,132 28,878 28,813 28,994
Revenue Growth (%) 17.2 6.9 6.4 (0.2) 0.6
Operating EBIT 5,170 5,437 5,826 5,959 5,671
Coverages (x)
Gross Lease-Adjusted Debt/(FFO + Interest + Rentals) 2.4 2.2 2.2 2.6 2.9
Pension and Lease-Adjusted Debt/(EBITDAR + Pension Cost) 2.0 2.1 1.9 2.2 2.5
Liquidity
(ST Debt + Interest) (%) 239.1 132.4 326.1 299.6 205.8
Short-Term Debt 1,655 4,907 3,430 3,301 5,090
Cash Flow Summary
Cash Tax (1,015) (137) (1,365) (1,090) (762)
Other Items Before FFO (Including Interest Receivable) (496) (481) (336) (186) (544)
Funds from Operations 5,446 6,889 6,325 6,770 6,452
Change in Working Capital 241 315 387 (307) 90
Cash Flow from Operations 5,687 7,204 6,712 6,463 6,542
Total Non-Operating/Nonrecurring Cash Flow N.A. N.A. N.A. N.A. N.A.
Capital Expenditures (2,105) (2,648) (3,437) (3,367) (4,516)
Dividends Paid (2,151) (1,521) (2,674) (2,885) (1,728)
Free Cash Flow 1,431 3,035 601 211 298
Net (Acquisitions)/Divestitures (3,837) (2,676) 658 (5,259) (1,672)
Net Equity Proceeds/(Buyback) 16 (1,442) (970) 155 (116)
Other Cash Flow Items (870) (84) 1,171 938 131
Total Change in Net Debt (3,260) (1,167) 1,460 (3,955) (1,359)
Working Capital
N.A. Not available.
Source: Fitch.
370 Company Summaries The Walt Disney Company
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
Long-Term IDR A
Senior Unsecured A
Short-Term IDR F1
Commercial Paper F1
ABC Inc.
IDR A
Senior Unsecured A
Disney Enterprises Inc.
IDR A
Senior Unsecured A
Rating Outlook
Stable
Key Rating Drivers
Signifcant Financial Flexibility: Disneys operating profle positions the company to generate
free cash fow (FCF) in excess of $3.5 billion annually beginning in fscal year 2013, which
coupled with strong liquidity and solid credit metrics provides the company with considerable
fnancial fexibility at the current ratings. Fitch expects the company to deploy cash for share
repurchase and moderate M&A activity.
Leading Market Positions and Leveragability: Ratings refect the companys leading market
positions in its core businesses. Further, Disney benefts signifcantly from its consistent ability,
surpassing that of its peers, to leverage and monetize its unique brand franchises across all
aspects of its business, including TV, movies, music, theme parks, consumer products and other
licensing opportunities.
Strength of Cable Networks: Disneys strong portfolio of cable networks, ESPN in particular,
underlines the companys ratings. Fitch believes that the top-tier channels will continue to be a
must-carry for the distributors and are likely to retain pricing power. Disneys operating profle
benefts from the stability, recurring dual-stream revenue profle, high operating margin and free
cash fow generation characteristics attributable to its cable network business. Fitch expects this
segment will continue to generate a signifcant amount of Disneys cash fow.
Consistent Financial Policy: Ratings incorporate Fitchs expectations that the companys
share repurchases and M&A activity will likely exceed FCF generation given strong liquidity and
the current credit profle.
Credible Strategy to Address Threats: Disney is well positioned to address the secular
threats and opportunities presented by emerging alternative distribution platforms and continued
audience fragmentation across the media and entertainment landscape.
Rating Concerns: The ratings incorporate the cyclicality of Disneys businesses, particularly
Parks & Resorts, Consumer Products and the advertising portion of Broadcast and Cable
Networks revenues. Should macroeconomic volatility return, Fitch expects these cyclical
businesses to be under renewed pressure but the companys credit and fnancial profle will
likely remain within current ratings.
Volatile Studio Business: Disneys Studio Entertainment business, similar to that of its peers,
will remain volatile and low margin, given the hit-driven nature of the sector. The emergence of
new digital distribution platforms and methods of consumption will continue to drive demand for
Disneys content providing potential stability and upside for this business segment.
Positive: Upward momentum to the ratings is unlikely over the intermediate term. However,
a compelling rationale for, and an explicit public commitment to, more conservative leverage
thresholds could result in upgrade consideration.
Disneys management rather than with operating performance, refecting the companys
signifcant fnancial fexibility.
Analysts
David Peterson
+1 312 368-3177
Rolando Larrondo
+1 212 908-9189
September 19, 2013

Corporates

Portfolio Summary The Walt Disney Company
(As of June 30, 2013)
a
Dec. 21, 2012 Disney acquired Lucasfilm Ltd. LLC and rights to use Lucasfilms content.
b
Oct. 5, 2012 Hulu redeemed Providence Equity Partners 10% equity
interest in Hulu for $200 million, increasing Disneys ownership interest in Hulu from 29% to 32%.
c
Feb. 2, 2012 Disney purchased all shares held by UTV founder as
part of UTVs delisting process, resulting in 93% ownership.
Media Networks Consumer Products
Disney Merchandise Licensing
Disney Publishing Worldwide
The Disney Store
DisneyStore.com
Parks and Resorts
Disneyland Resort
Walt Disney World Resort
Aulani
Disneyland Resort Paris (51%)
Hong Kong Disneyland (48%)
Disney Cruise Line
Walt Disney Imagineering
Disney Vacation Club
Adventures by Disney
Tokyo Disney Resort (no equity interest; earns royalties)
Shanghai Disney Resort (43%)
ESPN Wide World of Sports
The ABC Television Network
ABC Owned Television Stations TV Market Rank
WABCTV New York, NY 1
KABCTV Los Angeles, CA 2
WLSTV Chicago, IL 3
WPVITV Philadelphia, PA 4
KGOTV San Francisco, CA 6
KTRKTV Houston, TX 10
WTVDTV Raleigh-Durham, NC 24
KFSNTV Fresno, CA 55
Cable/Satellite Networks
ESPN (80%)
ESPN2 (80%)
ESPN Classic (80%)
ESPNEWS (80%)
ESPN Deportes (80%)
ESPNU (80%)
The Active Network, Inc. (10%)
Disney Channel (100%)
Disney Junior (100%)
Disney XD/Toon Disney (100%)
Disney Cinemagic (100%)
Seven TV network (49%)
Hungama (100%)
ABC Family (100%)
SOAPnet (100%)
A&E Channel (50%)
Lifetime (50%)
History (50%)
LMN (50%)
BIO (50%)
H2 (50%)
Lifetime Real Women (50%)
Radio Networks
ESPN Radio Network (owns and operates 4 stations)
Radio Disney (owns and operates 31 stations)
ABC Studios
ABC Family Productions
Disney-ABC Domestic Television
Disney-ABC-ESPN Television International
UTV Software Communications LTD (93%)
c
Studio Entertainment
Marvel Studios Disney Theatrical Group
Pixar Disney Theatrical Productions
Walt Disney Pictures
Touchstone Pictures
Hollywood Pictures Disney on Ice
Walt Disney Animation Studios
Disneynature Disney Musicals Licensing
Disney Music Group Lucasfilm Limited, LLC
a
Walt Disney Records
Hollywood Records
Lyric Street Records
Buena Vista Concerts
Interactive Media
Disney Interactive Studios
Disney Online
Playdom
Hulu (32% equity interest)
b
September 19, 2013

Corporates

U.S.
75%
Europe
15%
Asia
7%
Latin
America
and
Other
3%
(As of Sept. 30, 2012)
Cable
Networks
32%
Broadcas
ting
14%
Parks
and
Resorts
30%
Studio
Entertain
ment
14%
Consume
r
Products
8%
Interactiv
e Media
2%
Revenues by Segment
(As of Sept. 30, 2012)
Studio
Entertainment
14%
Interactive
Media
2%
Consumer
Products
8%
Broadcasting
14%
Media
Networks
56%
Parks
and
Resorts
28%
Studio
Entertain
ment
7%
Consume
r
Products
9%
EBITDA by Segment
(As of Sept. 30, 2012)
Note: Interactive Media is excluded as it does not
generate positive EBITDA.
Studio
Entertainment
7%
Consumer
Products
9%
September 19, 2013

Corporates

Event Risk Dashboard The Walt Disney Company
Event Risk Summary
Level of Risk
LBO L
Secular L
Change in Financial Policies L
Acquisition M
Divestiture M
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Large enterprise value precludes LBO.
Secular Risk Low
Limited organic growth at broadcast television (10% of EBITDA), though
retransmission revenue a beneft.
Strong growth at cable networks.
Film studio remains inherently risky and volatile.
Digital delivery of home entertainment offsetting DVD declines.
Continued ability to exploit content/characters across multiple segments.
The board structure and stock ownership are not concerning, as there is only one
class of stock and no concentrated ownership. (Steven P. Jobs Trust holds 7%,
from Pixar acquisitions.) One minor risk is the dual chairman/CEO role.
The only insider board member is Chairman and CEO Robert Iger.
The executive compensation incentive structure moderately increases risk,
as parts of it are shareholder friendly, driven by operating income, ROIC, FCF
(pre dividend), EPS for the annual incentive, and total shareholder return and
EPS for the long-term incentive. This could incentivize share buybacks or other
shareholder-friendly activities at the expense of bondholders.
Financial Policy Low
Fitch sees lower event risk at Disney relative to other investment-grade (IG)
media names.
The company's long-held fnancial policy has been to maintain 'A' ratings, and tier
1 CP access.
Disney's goal is to be the premiere entertainment company, and to compete
against the world's best brands. It considers a high-quality balance sheet and
high ratings as drivers of a high-quality brand.
Like most IG names, there are no limitations on dividends, acquisitions or share
buybacks.
Bank facilities contain a 3x interest coverage covenant.
Debt outstanding at Disney Enterprises Inc. ($201 million), ABC Inc. ($112 million)
and Hong Kong Disneyland ($273 million) as of June 30, 2013.
Fitch does not expect Disney to issue subsidiary debt going forward, given parent
issuance ability/pricing, except at parks joint ventures.
Disney refnanced Euro Disneys external debt with intercompany loans in
September 2012.
No guarantee structure in place.
No limitations on subsidiary debt or subsidiary guarantees.
The Walt Disney Company Rating History
BBB
BBB+
A
A
A+
1.0
1.2
1.4
1.6
1.8
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
20
40
60
80
Source: Bloomberg.
The Walt Disney Company Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard The Walt Disney Company (Continued)
Stock Repurchase Authorization
and Activity
Share Buy Activity ($ Mil.)
Nine Months Ended June 30, 2013 2,694.0
2012 3,015.0
2011 4,993.0
2010 2,669.0
2009 138.0
2008 4,500.0
2007 6,900.0
Share repurchase activity is manageable given Disneys FCF and leverage
metrics.
Fitch expects share repurchases to be conducted in context of maintaining an A
rating.
Like most investment-grade companies, there are no restrictions on the amount
of share buyback activity.
Note: Disney repurchase authorizations are for a given number of shares instead
of a dollar amount. At Dec. 31, 2012, Disney had 211 million shares remaining on
its authorization.
Nine Months Ended
June 30, 2013 2,310.0 345.0
2012 1,088.0 15.0
2011 184.0 564.0
2010 2,493.0 170.0
2009 517.0
2008 660.0
Acquisition activity likely to focus on digital.
Potential acquirer of pure-play cable networks business (SNI, AMC, DISCA), but
equity premium and high price a likely hurdle.
Would likely sell ABC Network for the right price.
A potential Hulu transaction could resurface.
Ongoing acquisition activity expected; substantial fnancial fexibility mitigates
event risk.
Disney could buy in the 60% of Euro Disney SCA that it does not already own
(less likely post refnancing). Based on current stock price, this stake is worth
approximately $110 million.
(x)
Covenant
Level
Ratio/Test as of
3/31/13
EBITDA
Cushion (%)
Interest Coverage 3.0 53.0 94.0
Note: Covenant calculation per definition contained in companys bank agreement.
ownership regulations not likely to be changed. No impact on Walt Disney.
DOJ investigation into subscriber authentication to access OTT content, and caps
on high-speed data.
This would be a positive for Walt Disney as it could decrease the likelihood that
although Walt Disney and other content providers could partially offset this with
cable pricing.
Opening of Shanghai Disney Park introduces risk of Chinese government
involvement.
Union Workforce
A signifcant number of employees in Disneys businesses are covered by
collective bargaining agreements, including employees at parks and resorts as
well as writers, directors, actors, production personnel and others employed in the
networks and studio operations.
Pensions
Pension plan is 30% underfunded ($3.5 billion funding gap) as of Sept. 29, 2012.
Disney contributed $382 million during the nine-month period ended June 30, 2013
to its pension and post-retirement medical plans, and continues to expect FY2013
contributions to total $425 million$475 million.
Fitch views this funding as manageable within the context of Disneys ratings and
FCF.
Earn-Outs
Disney will pay up to $200 million of additional consideration for Playdom
(acquired 2010) if it achieves certain revenue and earnings targets for calendar
year 2012. As of September 2012, Disney did not anticipate making any
signifcant payments in respect of the additional consideration.
Fitch views this funding as manageable within the context of Disneys ratings
and FCF.
Litigation Risk Low
A court of appeals affrmed a lower courts $321 million judgment against Disney
related to its litigation with Celador International, Ltd., an affliate of the creators
of Who Wants to be a Millionaire, during December 2012. Disney recorded
a $321 million reserve during the quarter ended Dec. 31, 2012 and paid $321
million during the third quarter of fscal 2013.
September 19, 2013

Corporates

Corporate Governance Overview The Walt Disney Company
a
Most recent filings on Bloomberg as of June 2013. PRSUs Performance-restricted stock units. RSUs Restricted stock units. TSR Total shareholder return.
($)
Stock
Awards
Option
Awards
Non-Equity
Robert A. Iger President and CEO 2,500,000 9,532,500 7,750,008 16,520,000 3,925,340 40,227,848
James A. Rasulo SEVP and CFO 1,487,500 3,010,525 1,800,010 4,075,000 1,828,081 12,201,116
Alan N. Braverman SEVP, GC and Secretary 1,230,000 1,672,514 1,000,003 3,370,000 1,027,241 8,299,758
Kevin A. Mayer EVP, Corp. Strat. and Bus. Devel. 763,552 1,010,249 604,001 1,307,000 522,338 4,207,140
M. Jayne Parker EVP and Chief HR Officer 643,750 936,625 560,005 1,105,000 743,737 3,989,117
Board of Directors
Susan E. Arnold58 Y March 2013
March 2014
2007 118,242 151,589 13,378 283,209 Compensation (Chair) McDonalds Corporation Retired President
Global Business Units of
Procter & Gamble
John S. Chen 57 Y March 2013
March 2014
2004 110,000 151,589 2,862 264,451 Compensation Wells Fargo & Company Senior Advisor
Silver Lake (private investment
firm)
Judith L. Estrin 58 Y March 2013
March 2014
1998 110,000 151,589 3,859 265,448 Governance and
Nominating
None CEO JLABS, LLC
Robert A. Iger
Chairman
61 N March 2013
March 2014
2000 Executive Apple Inc. President and CEO
Walt Disney
Fred H.
Langhammer
68 Y March 2013
March 2014
2005 116,758 151,589 15,850 284,197 Compensation The Este Lauder
Companies Inc.;
Central European Media
Enterprises, Ltd.
Retired CEO
The Este Lauder
Companies Inc.
Aylwin B. Lewis 58 Y March 2013
March 2014
2004 135,000 151,589 5,416 292,005 Governance and
Nominating (Chair);
Compensation
Starwood Hotels &
Resorts Worldwide
President and CEO
Potbelly Sandwich Works
Monica C.
Lozano
56 Y March 2013
March 2014
2000 110,000 151,589 17,753 279,342 Audit Bank of America
Corporation
CEO Impremedia, LLC
(publisher)
Robert W.
Matschullat
65 Y March 2013
March 2014
2002 130,989 151,589 12,076 294,654 Audit (Chair and
Financial Expert);
Governance and
Nominating
The Clorox Company;
Visa Inc.
Private equity investor
Sheryl
Sandberg
43 Y March 2013
March 2014
2010 110,000 151,589 13,409 274,998 Governance and
Nominating
None COO Facebook
Orin C. Smith
Lead director
70 Y March 2013
March 2014
Executive (Chair)
Nike, Inc. Retired President and CEO
Starbucks Corporation
Annual Incentive Financial performance (70%): Operating Income, ROIC, FCF, EPS and individual performance (30%)
Long-Term Incentives Three-year TSR compared to three-year TSR of companies in the S&P 500 Index and EPS for 12 quarters compared to EPS of companies in the
S&P 500 Index over same period.
(%) Base Salary Annual Incentive LongTerm Incentives Total
CEO 7 46 47 100
NEO 18 39 43 100
Base salary Does not maintain a specific target percentile in determining compensation.
Annual Incentive Targets for NEOs were: Iger $12 Mil., Rasulo and Braverman 200% of base salary, Mayer and Parker 125%. Potential payout ranges from
35% to 200%. The multiple based on the financial measure was 132%; 150% for the CEO and 145% for NEOs on individual performance in
FY2012.
Long-Term Incentives Number of units vesting ranges from 0% to 150% of the target. Stock options (40% of long-term incentive) Four-year vesting; RSUs and PRSUs
(60%) half vests 25% per year and remaining vests in three years.
Stock Ownership Requirements CEO 5x base salary, NEO 3x base salary
September 19, 2013

Corporates

Corporate Governance Overview The Walt Disney Company (Continued)
a
Most recent filings on Bloomberg as of June 2013. PRSUs Performance-restricted stock units. RSUs Restricted stock units. TSR Total shareholder return.
As part of the company succession plan, Igers employment contracts were extended through June 2016. He was also named chairman in March 2012, succeeding retiring John
Pepper. A successor CEO will be named during Igers extended tenure. In addition, the company appointed Orin Smith as lead director.
No related-party transactions for FY 2012.
Eliminated tax gross up provision; no clawback policy.
a
Laurene Powell Jobs Trust 130,845 7.3
FMR LLC 60,949 3.4
Sun Life Financial Inc. 57,140 3.2
State Farm Mutual Auto Insurance 42,206 2.3
Lucas George 37,077 2.1
Total Top 10 636,061 35.3
Susan E. Arnold 21 <1.0
Alan N. Braverman 704 <1.0
John S. Chen 88 <1.0
Judith L. Estrin 116 <1.0
Robert A. Iger 3,574 <1.0
Fred H. Langhammer 76 <1.0
Aylwin B. Lewis 85 <1.0
Monica C. Lozano 101 <1.0
Robert W. Matschullat 95 <1.0
Kevin A. Mayer 171 <1.0
M. Jayne Parker 145 <1.0
James A. Rasulo 674 <1.0
Sheryl Sandberg 13 <1.0
Orin C. Smith 56 <1.0
All Directors and Executive Officers as a Group (15 Persons) 6,189 <1.0
Note: Directors and NEO holdings include stock options exercisable within 60 days of Jan. 7, 2013.
September 19, 2013

Corporates

Pension Screener
a
than 10%?
Yes
Plan Assets
Level 3 Plan Assets 1,324.0 1,229.0
b
450.0 350.0
Leverage Screener
Cash Flow Screener
2013 At Risk Shortfall (80%) 1,175.0 1,033.8
Total Estimated Pension Outflows 1,006.3 916.6
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Debt Structure
($ Mil., As of June 30, 2013)
Commercial Paper 50.0
U.S. Medium-Term Notes 13,152.0
European Medium-Term Notes 70.2
Other Foreign-Currency-Denominated Debt 1,090.8
Capital Cities/ABC Debt 112.0
Other 255.0
Hong Kong Disneyland Borrowings 273.0
Total Debt 15,003.0
Source: Company filings, Fitch estimates.
($ Mil., As of June 30, 2013)
Amount
Dec. 31, 2013 1,608.9
Dec. 31, 2014 1,460.9
Dec. 31, 2015 1,589.9
Dec. 31, 2016 1,510.9
Dec. 31, 2017 2,994.9
Thereafter 5,763.5
Total 14,929.0
September 19, 2013

Corporates

100.0%
100.0% 48.0%
51.0%
100.0%
100.0%
100.0%
80.0%
50.0%
20.0%
50.0%
Public
100% Equity
100%
100.0%
100.0%
Pixar
ABC Family
Worldwide, Inc.
Hong Kong
Disneyland
Disney Enterprises, Inc.
Jetix
Europe
EDL
Holding
Company
Walt Disney
World Co.
ABC
Enterprises,
Inc.
Euro Disney (EUDSF) ABC, Inc.
Other Media
Subsidiaries
Hearst Corp.
ESPN
(Includes Related
Channels)
A&E Television
Networks LLC
100.0%
Shanghai
Disney
Resort
43.0%
UTV Software
Comm. Ltd
93.0%
Lucasfilm
Ltd.
100.0%
Marvel
Entertainment, Inc.
100.0%
Organizational Structure The Walt Disney Company
($ Mil., As of June 30, 2013)
Amount
Outstanding Rating
Senior Unsecured Notes/Debentures 12,951.00 A
Commercial Paper 50 F1
$6.5 Billion in Credit Facilities; $2.25 Billion due in 2015,
$2.25 Billion due in 2017 and $1.5 Billion due in 2014
A
European Notes 70.2
Other Foreign-Currency-Denominated Debt 811.8
Other 255
Total Debt 14,250
Consolidated Debt 15,003
LTM EBITDA 11,842
Total Debt 0
Total Debt 279
Capital Cities/ABC Assumed Debt 112
Senior Unsecured Notes 201
September 19, 2013

Corporates

Debt and Covenant Synopsis The Walt Disney Company
Credit Facility Credit Facility Credit Facility
Overview
Document Date 2/22/11 8/8/12 3/25/13
Maturity Date Feb. 22, 2015 June 8, 2017 June 8, 2017
Description of Debt $2.25 billion four-year credit agreement $2.25 billion five-year credit agreement $1.5 billion 364-day credit agreement
Financial Covenants
(Maximum)

Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)
3.0x 3.0x 3.0x
Change-of-Control
Provision
Disney must be surviving entity. Disney must be surviving entity. Disney must be surviving entity.
Sale of Assets
Restriction
Limitation on
Acquisitions
Debt Restrictions
Additional Debt
Restriction
Limitation on
Secured Debt
Other
Cross-Default Language noted with respect to other DIS Co.
and subsidiary indebtedness.
Payment default on debt greater than $250
million.
million.
Cross-Acceleration Cross-acceleration on any accelerated debt. Cross-acceleration on any accelerated debt. Cross-acceleration on any accelerated debt.
September 19, 2013

Corporates

Debt and Covenant Synopsis The Walt Disney Company (Continued)
Indenture Indenture Indenture
Overview
Document Date 9/24/01 3/7/96 11/30/90
Maturity Date Various Various Disney Enterprises issuance: 7.55% due 2093
Description of Debt Senior unsecured notes Senior unsecured notes Senior unsecured notes
Financial Covenants
(Maximum)

Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)

Change-of-Control
Provision
Sale of Assets
Restriction
Limitation on
Acquisitions
Debt Restrictions
Additional Debt
Restriction
Limitation on
Secured Debt
Other
Cross-Default No material provision noted. No material provision noted. No material provision noted.
Cross-Acceleration No material provision noted. No material provision noted. No material provision noted.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts The Walt Disney Company
Date of
5/7/2013 2Q2013 Q&A I think, Michael, in terms of the capital allocation, I mean almost because its a given, Bob didnt mention that, you know, first and
foremost, we look for internal opportunities to invest our capital in projects like you have seen us do over the last five years. In addition
to acquisitions, you know, the work we have done in Parks and Resorts, the joint ventures on free to air television stations, I mean we
constantly look for ways that we can get superior returns through investment in organic growth and we continue to want to grow the
company organically. Whats left after that Bob just handled.
5/7/2013 2Q2013 Q&A We have also never really been a hoarder of cash. I think you can expect that philosophy to continue. And we have been pleased with
our credit rating. And I doubt youll see us going to the market in a way that would necessarily that would impact our rating. For
more debt that is.
5/7/2013 2Q2013 Q&A Q: Okay, and then, Bob, for you, Jay has laid out kind of the big-picture story on all your drivers kind of kicking in the next couple
of years. You spent the past few years investing in your franchises, investing in your parks. A lot of your competitors have focused
on buying back stock. Looking out the next couple of years your drivers are all unknown to you. Would you consider at this point
increasing the capital returns levels, dividends, buybacks or even adding some incremental debt to the company? How do you think
about that knowing all you have done is kind of now paying dividends?
A: Well, we feel good about our ability to deliver more FCF. And dont have much to say specifically about how we will allocate it,
except that as you look back we obviously made three pretty important and large acquisitions in Pixar, Marvel and Lucasfilm, which we
think delivered great has already delivered and will continue to deliver great growth and value to our shareholders. But Im not sure
that we, as we see ahead, we see opportunities that are of like size, not to preclude that from occurring completely, but it is just not
obvious to us. That will then leave us with the opportunity, if we continue to grow our cash flow, to, you know, increase our dividend or
buy back more shares, but we have not made that decision yet. I think it will be a good problem for us to have.
11/8/2012 4Q2012 Q&A Q: How you doing? Just a couple of questions in regard to capex. You guys have mentioned that you expect it to ramp down in 2013.
Just in sizing that, should we attach some capital expenses to these enhancement projects in the incremental costs and investments
that youve articulated for next year? And then also, you mentioned this being the peak capex year but looking ahead with the
Shanghai consolidation, should we be expecting reacceleration back up to these peak levels during that time?
A: Yeah, Im happy to answer that. So let me just set the table. So, we said that 2012 would be our peak capex year for some time to
come, and that we would be ramping down significantly in Parks capital thereafter, all while Shanghai was ramping up. So let me talk
to that. If you look on the domestic side, domestic Parks side, were probably down well be down at the end of fiscal 2013 about
$1 billion from where we were in fiscal 2012 in terms of capital expenditures. A lot of the capital expenditures that is behind what Bob
talked about as guest enhancing technologies is behind us.
On a consolidated basis, though, its only going to look like a $500 million decrease. And in fact, the difference has to do with
investment in Shanghai Disneyland. But remember, as only 43% owners of that project, we only spend 43% of the capital. So 57%
of the capital spent on Shanghai Disneyland will make its way back to us in a financing line. So if you look at it that way, even on a
consolidated basis, were going to be down about $800 million for the year.
8/7/2012 3Q2012 Q&A Sure. Todd, youre right. We had a very strong kids upfront driven by Disney XD primarily because weve got real growth in ratings
and the strength of the programming in that channel as well as Disney Junior is enabling us to monetize at a faster pace, at a robust
pace and to take market share. That said, our position in the marketplace is relatively small because as weve said earlier in this call,
we dont sell advertising on the Disney Channel so were driving advertising in relatively smaller channels but weve definitely seen
strength there and real growth and we look forward to continuing to grow these channels both in terms of subscription fees from
increased distribution but also from increased advertising which is due to the popularity of the programs and the channels themselves.
8/7/2012 3Q2012 Prepared Our Parks and Resorts segment delivered another strong quarter with revenue up 9% and operating income up 21%. The increase
in operating income was due to growth at Tokyo Disney Resort, Disney Cruise Line and our domestic resorts. We saw continued
improvement in segment margins during the quarter, up more than 190 basis points compared to last year.
8/7/2012 3Q2012 Prepared Ad revenue at the ABC Network was down modestly as higher CPMs were more than offset by lower ratings in the quarter. Ad
revenue at the stations was comparable to prior year. Quarter-to-date scatter pricing at the ABC Network is running midteens above
upfront levels. At ESPN ad sales are pacing down modestly. Our advertising business has been impacted in the last couple of weeks
by the Olympics. However, we were very pleased with the strong demand ABC and ESPN enjoyed in the upfront, which is evidence
that advertiser demand for our networks remains strong.
8/7/2012 3Q2012 Prepared ESPN ad revenue was up mid-teen percentage points compared to last year driven by higher rates, unit sales and ratings. Viewership
of the ESPN Network continued to grow during the quarter as ratings were up over 16% due to our coverage of the UEFA 2012
Championship, more NBA games and increased viewership of SportsCenter and U.S. Open Golf.
8/7/2012 3Q2012 Prepared We continue to repurchase our stock during the third quarter with 8.6 million shares repurchased for about $373 million. Fiscal year-
to-date, we have repurchased 55 million shares for $2.1 billion. While our pace of repurchase in the third quarter was slower than in
recent quarters, its probably more useful to look at our buybacks over the longer term than in any individual quarter. Returning capital
to our shareholders through dividends and share repurchase continues to be a key component of our capital allocation strategy,
and we intend to continue repurchasing our stock. We have not altered our thinking about the amount of capital allocated to share
repurchase.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts The Walt Disney Company (Continued)
Date of
8/7/2012 3Q2012 Q&A Q: First for Jay, in the context of capital return and specifically share buybacks. So Im wondering given the average price that you
bought back your shares so far and the current trading price of your shares by my calculation is probably like 38%, 39% above
your share buyback average repurchase price. So Im wondering if you can educate us on your parameters for these open market
purchases and at what point do you kind of feel that some of this capital may be better put to use somewhere else, potentially M&A
opportunities or stuff like that? So Im just trying to understand where do you kind of draw the line and say that it doesnt seem like the
best use of capital?
A: Thanks, Tina. We obviously we want to be cognizant of our intrinsic value and be sure that we believe that its far in excess of
the market price, and we think weve got a lot of room. Were not worried about bumping up against that. If you look at the history of
this, its probably wise for a company to leave a little gap between their intrinsic value and the price at which theyre willing to purchase
because of inefficiencies in the market. But were not up against that. Were not bumping against it. Were very happy with the concept
and allocation of capital to this activity, and we dont think it eclipses other fantastic growth opportunities for the company.
If you look over the last five years, we have allocated 60% to 65% of the cash generated by the company to the incredible products
that you see coming forth. And whether its Avengers, whether its a theme park product, cruise ships, these are the kind of things that
we know we can get high returns on and well continue to seek those out.
The history of our company has been growth through acquisitions. If you look at the acquisitions weve made from Marvel and back,
Playdom and the others, we feel very, very strong about the returns in that. We allocate, we think, enough the right amount of
money to invest in our television networks. The Disney Channel is proof of that. Some of the great series you see coming out of ABC
last year and I hope again this year will show that this is first and foremost what we want to do, but it does leave us the opportunity to
return capital to shareholders and we are determined to allocate a sizable portion of the cash we generate to that. If you look over the
last few years, its been 20% to 25%. No reason to think differently about that.
8/7/2012 3Q2012 Q&A Q: Okay. And then just on the buyback, I mean you had mentioned, Jay, that it is there was quite a slowdown in the quarter. Could
you just give us your current views on capital allocation? If capex peaks this year, free cash flow growth should be at least for the
domestic Parks, should be fairly significant. Why was there a slowdown? And how should we think about capital allocation in coming
years?
A: Well, let me take the bits of your statement in order. Certainly on an equity method basis and even on a consolidated basis for the
next couple of years, our capex will drop. In fact, 2012 at least into the foreseeable future on an equity basis because a lot of the big
capital bumps youll see in the future will be in Shanghai, only 43% of which is our money, you will see the reported number start to
look higher as we get into the opening, pre-opening of that park but on the equity basis, the actual cash outflow will not reach the 2012
number. So youre right about that. There will be more cash flow, at least the netting will be less.
If you look at buyback in particular, I would say this: we havent changed our point of view at all about buying back our stock. We still
believe that we trade below our intrinsic value, that it is a very useful and strategic way for us to return capital to shareholders. So I
just wouldnt read too much into what happened this quarter versus the same quarter last year. Not important. We havent changed
our focus on this, on the amount of capital or how we think about allocating capital to buybacks in the future.
8/7/2012 3Q2012 Prepared We continue to repurchase our stock during the third quarter with 8.6 million shares repurchased for about $373 million. Fiscal year-
to-date, we have repurchased 55 million shares for $2.1 billion. While our pace of repurchase in the third quarter was slower than in
recent quarters, its probably more useful to look at our buybacks over the longer term than in any individual quarter. Returning capital
to our shareholders through dividends and share repurchase continues to be a key component of our capital allocation strategy,
and we intend to continue repurchasing our stock. We have not altered our thinking about the amount of capital allocated to share
repurchase.
5/8/2012 2Q2012 Q&A Q: If you take a step back and look at the last few years, its been a pretty heavy investment cycle, right? So Marvel, Parks, capex,
Disney Channel international, more sports, ESPN and plenty of others. When you look forward, would you say the company is shifting
to more of a harvesting stage at this point, or do you see or want to undertake another round of investment? And obviously Im
thinking outside of the Shanghai park, which were well aware of.
A: I think youre likely to see relatively prudent behavior over the next number of years. Well obviously continue to look
opportunistically, but we do have some commitments that will continue to be reflected in increased capital spending. The one that is
most notable is Shanghai Disneyland and the completion of the Fantasyland redo or buildout in Florida. But I think youre likely to see
a fairly prudent period for the company. Not to suggest that we wont take advantage of what we think is a great opportunity, but Ill
leave it at that.
5/8/2012 Q&A Q: if you could just update us here, thinking about use of cash, given the expected pickup in free cash flow in the back half of this year
and into 2013?
A: Your second question was about cash. I presume that you are asking about returns to shareholders, which we of course always
talk about aggressively as part of our overall strategy. And as I said in my prepared remarks, we are pacing at the same level, with
now about $2 billion worth of buybacks in the first half of the fiscal year. Youll remember last year, we ended up buying back about $5
billion in the year. And thats not to be predictive, but we are always out there and opportunistically looking to make good investment in
our own stock. And we will continue to do so as part of our fundamental strategy.
I dont need to remind you that we increased our dividend significantly last year or the board did. And of course we will they will
look at that again as we near the end of this year, our goal being to stay in the pack in terms of the yield that we pay against our stock.
Were quite conscious of that and had fallen behind, and dont want to fall behind again.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts The Walt Disney Company (Continued)
Date of
2/7/2012 1Q2012 Q&A Q: A topic weve discussed in the past, but any update on your sort of position toward the use of leverage? Obviously, last fall you
were able to borrow incredibly cheaply, youre still relatively have a low level of debt financing relative to your peers and given
some of your capex and the fact that you have such great subscription fees coming in whats the philosophy there?
A: Relative to your leverage question, so, youre absolutely right in stating that we have been to the market multiple times in the past
year. I want to add, because Im very proud of it and proud of our team, but for what we borrowed in both the amounts and our rating,
we really almost always in the past year saw historically low coupon rates on that debt. And whereas, you know, a couple have been
better since then, I think weve timed our steps into the debt marketplace very carefully and put a lot of time into picking what we think
will be a low entry points and weve been very successful in doing that.
In doing so, weve obviously increased our debt because of the availability of money at these great rates. But I think that one of the
reasons why we kind of, you know, punch beyond our weight in the debt market is because we have been so strategic and so public
and so consistent in wanting to keep a single-A rating on our balance sheet and go to the market with that consistent message, we
have no intention at the current time to change that.
There is some we could continue to leverage up somewhat and stay below that sort of, you know, 2.0 gross debt ratio that will
keep us at that single-A and we wont push ourselves beyond that. I think theres a little more capacity. When we see opportunities to
step out, again, weve got a couple of maturities that wed like to fill in and when we see the opportunity to step in at great rates I think
youll see us doing that. Of course, you know, as time passes well have some maturities that well refill but dont expect us to back the
truck up to the point where we have to give up that great debt that great balance sheet and great Standard & Poors rating that has
I think saved served us incredibly well over the past decade including when liquidity dried up for most companies in 2008.
11/10/2011 4Q2011 Q&A Let me start with your capex question, and this is one that I get asked often, and Ill try to give you some perspective on it. Five years
ago or so, we used to be pretty demonstrative about $1 billion number being sort of an ongoing level without special projects added
to it. You have to remember, though, that in those five years in the capital projects that weve put in the ground, which each have their
own growth strategy, each is filling in different parts of the portfolio, when theyre back on board, they all need sort of ongoing FF&E
and maintenance capital to keep them going.
So I would say that that $1 billion number is low, but certainly, weve been pretty clear about the levels were spending in fiscal 2011
and 12 being at the other end of the spectrum, being very high because of the addition of the two cruise ships, the Aulani hotel, the
work were doing at DCA, all the work were doing at Walt Disney World, has really kind of created a bubble for us that is not our long-
term plan.
I think that you will hear about longer-term projects. Shanghai, we talked a little bit about as a contributor to 2012 capital expenditures,
and that will sort of ramp up over time. Remember that only 43% of that capital is ours, so even though its a big contributor, the
Chinese government contributes 57% of that, and we back that cash out of a lower financing line in our P&L. So, I cant give you
exact specificity on our ongoing capital level, but lets say itll be higher than $1 billion, but much lower than the $2.5 billion to $3 billion
weve been at.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Walt Disney Company (The)
($ Mil.) 9/27/08 10/03/09 10/02/10 10/01/11 9/29/12
LTM Ended
6/30/13
Profitability
Coverages (x)
Leverage (x)
Balance Sheet
Short-Term Debt 3,529.0 1,206.0 3,540.0 4,638.0 5,664.0 2,219.0
Other Debt
Equity Credit
Cash Flow
Change in Working Capital (736.0) (17.0) 74.0 (1,084.0) (698.0) (801.0)
Total Non-Operating/Nonrecurring Cash Flow 476.0 505.0 473.0 608.0 663.0 162.0
Capital Expenditures (1,586.0) (1,753.0) (2,110.0) (3,559.0) (3,784.0) (2,742.0)
Dividends (664.0) (648.0) (653.0) (756.0) (1,076.0) (1,324.0)
Free Cash Flow 3,196.0 2,663.0 3,815.0 2,679.0 3,106.0 4,186.0
Net Acquisitions and Divestitures (646.0) (517.0) (2,323.0) 380.0 (1,073.0) (2,316.0)
Net Debt Proceeds 528.0 (1,852.0) (181.0) 1,647.0 424.0 486.0
Net Equity Proceeds (3,817.0) (52.0) (1,916.0) (3,865.0) (2,007.0) (2,985.0)
Other (Investing and Financing) 70.0 174.0 (90.0) (378.0) (248.0) 187.0
Total Change in Cash (669.0) 416.0 (695.0) 463.0 202.0 (442.0)
Income Statement
Revenue 37,843.0 36,149.0 38,063.0 40,893.0 42,278.0 44,255.0
Revenue Growth (%) 6.6 (4.5) 5.3 7.4 3.4 5.6
Operating EBIT 7,845.0 6,154.0 7,248.0 8,204.0 9,271.0 9,717.0
386 Company Summaries WPP plc
September 19, 2013

Corporates

WPP plc
Key Rating Drivers
Scale, Breadth and Diversity: As the industrys largest global advertising holding company
(GHC), WPP plcs ratings are supported by its scale, breadth of business and geographical
diversity. The company has a balanced mix of creative (advertising and media investment) and
so-called noncreative (brand management, consultancy, market research and measurement)
businesses.
Growth of Digital: The company has built a strong position in digital media through both
acquisition and organic investment an important strategy for any GHC in light of the importance
of, and growth expectations for, online advertising. Currently accounting for 33% (at end-2012,
pro forma for the AKQA acquisition) of overall sales, the company has a medium-term target for
new media revenues to reach 35%40%.
Emerging Markets: Equally signifcant is an established presence and focus on emerging
markets, in light of the maturity of western European (36% of 2012 sales) and North American
(34%) markets. The company raised its target for revenue in its faster growing markets in 2011,
to 35%40% from 30% of group sales.
Acquisition Strategy: The AKQA acquisition (announced June 2012, closed in the second half of
2012, cash proceeds of GBP348 million) is estimated to have added around 1.5% of incremental
advertising and media investment revenues in 2012 and is a business that is growing much
faster than the wider advertising market. The deal pushed WPPs acquisition spending above a
guidance budget of GBP400 million, and added 0.1x to the 2012 average net leverage metric;
towards the top end the companys 1.5x2.0x target range.
Fitch Ratings expects ongoing acquisition activity along with earn-out payments to be in in the
region of GBP550 million, with most deals relatively small and bolt-on in nature.
Leverage Profle: Financial discipline has been good since the TNS acquisition in 2008 for
GBP1.6 billion, which, along with the downturn in the global economy, resulted in leverage
spiking and the ratings being downgraded to BBB.
Average net debt to EBITDA was 1.9x in 2012 (including Fitch adjustments for associate income),
marginally up on 2011. The metric is being managed within a target range of 1.5x2.0x and is
expected by Fitch to improve moderately in 2013. Management has identifed M&A, dividends
and buybacks as its priority uses of free cash fow. Fitch believes management understands
the need to preserve balance sheet metrics, while more balance-sheet-transforming deals are
diffcult to identify given the current level of market consolidation.
Further Upgrade Unlikely: A strong industry position, diversifcation and a fexible cost base
support the rating. The companys fnancial policy and M&A strategy are thought likely to keep
ratings at the current level.
Events leading to average net debt/EBITDA trending consistently and materially above 2.0x
would put pressure on the ratings. Trends that were driven by a weakened operating profle or
a change in fnancial policy would be particularly concerning more so than M&A or cyclically
driven trends.
Ratings
Security Class
Current
Rating
Long-Term IDR BBB+
WPP Finance S.A
WPP 2008 Ltd
WPP (Finance) UK
WPP Finance 2010
Rating Outlook
Long-Term
Analysts
Stuart Reid
+44 203 530-1085
stuart.reid@ftchratings.com
Owen Fenton
+44 203 530-1423
owen.fenton@ftchratings.com
September 19, 2013

Corporates

North
America
34%
United
Kingdom
12%
Western
Continent
al Europe
24%
Middle
East
30%
WPP plc
(As of Dec. 31, 2012)
Western
Continental
Europe
14%
Asia Pacific,
Latin America,
Central and
Eastern Europe,
Africa and Middle East
30%
Advertisin
g
41%
Consume
r Insight
24%
Public
Relations
9%
Branding
and
Identity
26%
Revenues by Segment
WPP plc
(As of Dec. 31, 2012)
Advertising
41%
Consumer
Insight
24%
Portfolio Summary WPP
(As of Dec. 31, 2012)
Advertising
Bates CHI & Partners
Grey
JWT
Ogilvy & Mather
United Network
Y&R
Branding & Identity
Addison
The Brand Union
FITCH
Lambie-Nairn
Lander Associates
The Partners
Media Investment Management
GroupM
MediaCom
MindShare
Maxus
tenthavenue
Direct, Promotion and Relationship Marketing
AKQA
G2
OgilvyOne
Ogilvy Action
RTCRM
VML
Wunderman
Consumer Insight
TNS
Millard Brown
The Futures Company
Healthcare Communications
Ogilvy CommonHealth Worldwide
GCI Health
ghg
Sudler & Hennessey
WPP Digital
24/7 Media
Blue State Digital
POSSIBLE
September 19, 2013

Corporates

Event Risk Dashboard WPP
a
YTD June 2012. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a company is able
to take from expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition M
Divestiture L
Litigation Risk L
Regulatory Risk L
LBO Risk Low
A market capitalization of approx. GBP17.0 billion (mid-July 2013) makes WPP
a sizeable and unlikely target; gross debt of GBP4.4 billion (December 2012)
adds further scale barriers. There is no ownership concentration while the global
advertising agency business model offers limited wholesale cost synergies or
disposal opportunities. Agencies acquired through bolt-on deals are typically
maintained as separate businesses within a wider portfolio due to client conficts
and need to preserve creative independence.
WPPs bond provisions include a change of control put tied to a ratings
downgrade, ensuring protection to bondholders in the event of a leveraging bid.
Secular Risk Low
41% of 2012 revenues directly from advertising; good balance of brand
management, market research and public relations businesses.
Top line strongly correlated to global economy although mitigated by good cost
management and focus on growth in emerging markets and digital media.
Rapid growth of online advertisers, although a threat as a disintermediating
medium, has also provided the opportunity to develop agency-run digital
businesses.
Listed in New York and London; no ownership concentration.
One class of ordinary voting share.
Largest shareholder at December 2012: Blackrock with 5.12%.
No material reported related-party transactions.
Operational targets revenue and margin gains clearly stated.
Stated fnancial policy includes a commitment to a 1.5x2.0x average net debt/
EBITDA range (2012: 1.9x). Management has identifed small to midsized M&A,
dividends and buybacks as uses of available free cash fow.
Bank facilities include undisclosed fnancial covenants; bonds do not.
WPP Rating History
BB+
BBB
BBB
BBB+
A
A
0.0
1.0
2.0
3.0
4.0
5.0
2008 2009 2010 2011 2012 2013
Leverage Trend
(x)
September 19, 2013

Corporates

Event Risk Dashboard WPP (Continued)
a
YTD June 2012. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a company is able
to take from expectations of what it will actually do.
(GBP Mil.) Share Buy Activity
Authorized at
Beginning of Period
(No. of shares)
Shares
Outstanding
Authorized % of
Share Base
Average Share
Price in Year
Authorization
in Estimated
Equivalent Value
Terms (GBP Mil.)
2012 134.5 126,006,600 1,266,373,821 10 821 1,035
2011 182.2 125,615,840 1,264,391,221 10 702 882
2010 46.4 125,496,212 1,256,491,314 10 693 870
2009 9.5 125,294,634 1,255,343,263 10 485 608
2008 105.3 117,155,289 1,191,491,263 10 511 599
2012 519.5 47.0
a

2011 467.2 2.6
2010 176.4 23.7
2009 67.9 50.5
Stated budget of GBP300 millionGBP400 million for 2013; manageable within
context of WPPs cash fow generation and leverage target.
Last big acquisition Taylor Nelson for GBP1.3 billion in 2008 saw leverage
spike but recover to 2.2x by 2010, one year ahead of plan, due to buyback
suspension and limits imposed on further M&A.
Litigation Risk Low
Fitch is not aware of material outstanding litigation or contingent liabilities.
Public debt is issued either at the top holding company or in fnance subsidiaries.
Guaranteed by the top holding company. There are no upstream guarantees.
Fitch is not aware of material outstanding litigation or contingent liabilities.
Regulatory Risk Low
The areas that WPP is involved in advertising, market research, brand
management and public relations are not subject to a high degree
of regulation.
The stated acquisition strategy is unlikely to run into antitrust or competition
scrutiny.
WPP is the largest global advertising holding company transformational
M&A would run into a high degree of competition scrutiny and for this reason is
deemed unlikely (as well as being outside stated policy).
September 19, 2013

Corporates

Organizational Chart WPP plc
Joint and Several Guarantors
WPP plc
WPPJubilee Ltd
WPP 2012 Ltd
WPP Air 1 Ltd
WPP 2008 Ltd
WPP 2005 Ltd
EUR750 Mil. Notes 2016
GBP400 Mil. Notes 2017
BBB+
WPP plc
BBB+/Stable
WPP
Jubilee Ltd
WPP
2012 Ltd
WPP
Air 1 Ltd
WPP
2008 Ltd
Lexington
International BV
WPP
2005 Ltd
WPP
UK Holdings Ltd
WPP
Finance SA
WPP
Ireland Holdings Ltd
WPP
Finance 2010
UK
Operating
Subsidiaries
WPP
Finance UK
USD600 Mil. Notes 2014
BBB+
BBB+
GBP200 Mil. Notes 2020
BBB+
Note: Documentation includes a change of control provision tied to a ratings downgrade to speculative grade in all bonds
except the GBP 5.75% notes due 2014 (at WPP plc). The bank facility includes financial covenants.
September 19, 2013

Corporates

Financial Summary WPP plc
Profitability
Revenue 7,477 8,684 9,331 10,022 10,073
Revenue Growth (%) 20.9 16.2 7.5 7.4 3.5
Operating EBIT 967 775 985 1,191 1,273
Coverages (x)
(Reported and/or Estimate) 325 435 417 431 442
Liquidity
(ST Debt + Interest) (%) 225.1 341.0 885.4 433.2 259.8
Short-Term Debt 1,641 721 255 518 1,086
Cash Flow Summary
Cash Tax (183) (217) (207) (248) (257)
Other Items Before FFO (Including Interest Receivable) 296 274 143 144 67
Funds from Operations 1,032 921 1,136 1,286 1,297
Change in Working Capital (109) (102) 226 (621) (388)
Cash Flow from Operations 923 819 1,361 665 908
Total Non-Operating/Nonrecurring Cash Flow N.A. N.A. N.A. N.A. N.A.
Dividends Paid (225) (253) (267) (281) (359)
Free Cash Flow 477 313 877 131 220
Net (Acquisitions)/Divestitures (1,049) (145) (215) (532) (587)
Other Cash Flow Items (1,115) 265 94 (22) 89
Total Change in Net Debt (1,782) 427 752 (576) (356)
Working Capital
N.A. Not available.
Source: Fitch.
392 Company Summaries AMC Entertainment, Inc.
September 19, 2013

Corporates

AMC Entertainment, Inc.
Key Rating Drivers
Key Promotion Window for Studios: AMC Entertainment Inc.s (AMC) ratings refect Fitchs
belief that movie exhibition will continue to be a key promotional window for the movie studios
biggest/most proftable releases.
Stable Industry Outlook: Industry fundamentals have beneftted from a strong flm slate that
produced midsingle-digit growth in 2012 and roughly fat performance to date in 2013. The 2013
flm slate has been solid and has included some highly anticipated movies such as Iron Man
3, Despicable Me 2, Man of Steel (Superman) and Monsters University. The flm slate
for the remainder of 2013 includes Thor: The Dark World, The Hunger Games: Catching
Fire, and The Hobbit: The Desolation of Smaug. The 2014 flm slate includes movies from
highly successful franchises such as The Hunger Games, The Hobbit, X-Men, Spider-Man,
Transformers, 300, and Fast & Furious. Fitchs base case projects industry box offce revenues
to be fat to up in the low single digits in 2014. Fitch recognizes the hit-cyclical nature of the
industry that could infuence attendance growth year-over-year.
Wanda Group: Fitch views the acquisition of AMC by Dalian Wanda Group (Wanda) as a credit
positive. Wanda is a strategic investor that has indicated its intention to invest $500 million in
additional capital ($100 million has been contributed), which Fitch expects to be used over the
next 35 years. Of the contribution made in 2012, $50 million was used to reduce debt. Fitch
expects the remaining funds to go toward theater circuit improvements.
Competitive Threats: The ratings factor in the intermediate/long-term risks associated with
increased competition from at-home entertainment media, limited control over revenue trends,
pressure on flm distribution windows and increasing indirect competition from other distribution
channels (such as VOD and other OTT services).
High Fixed Cost Structure: A signifcant portion of exhibitors operating expenses are
considered fxed, primarily rent, labor and utility costs. The high operating leverage could make
theater operators FCF negative during periods of reduced attendance.
No Control Over Movie Product: AMC and its peers rely on the quality, quantity and timing of
movie product, all of which are factors out of managements control.
Challenged Attendance Growth: For the long term, Fitch continues to expect that the movie
exhibitor industry will be challenged in growing attendance, and any attendance declines will
offset some of the growth in average ticket prices.
Positive Triggers: Positive momentum in the rating could be triggered if AMC reduced debt
levels further and demonstrated sustained interest coverage above 3.0x and leverage below
4.5x. In strong-performing box offce years, metrics may be higher in order to provide a cushion
for weaker box offce years.
Negative Triggers: Secular events that lead Fitch to believe there would be a signifcant long-
term downward trend in the industry. In the shorter term, interest coverage below 2.0x could lead
to a negative rating action.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
Ratings
Security Class
Current
Rating
IDR B
Sr. Secured Bank Facility BB/RR1
Senior Unsecured Notes B/RR4
Senior Subordinated Notes CCC+/RR6
RR Recovery rating.
Rating Outlook
Stable
September 19, 2013

Corporates

U.S.
99.7%
Canada
0.1%
Europe
0.3%
(As of Dec. 31, 2012)
Admissio
ns
68%
Concessi
ons
28%
Other
4%
Revenues by Segment
(As of Dec. 31, 2012)
Concessions
28%
Admissions
68%
Portfolio Summary AMC Entertainment, Inc.
(As of Dec. 31, 2012)
a
The above table includes seven theatres and 90 screens that AMC has a partial interest in.
b
In Hong Kong, AMC maintains a partial interest represented by a license
agreement for use of AMCs trademark.
Location Theaters
a
Screens
a
Location Theaters
a
Screens
a
California 44 659 Minnesota 6 96
Illinois 39 478 North Carolina 4 77
Texas 20 389 Oklahoma 4 70
Florida 21 380 Wisconsin 4 63
New Jersey 23 304 Kansas 2 48
New York 24 266 Nebraska 2 38
Indiana 21 258 Connecticut 2 36
Colorado 12 166 Iowa 2 31
Georgia 11 167 Nevada 2 28
Washington 11 137 District of Columbia 3 22
Pennsylvania 10 126 Kentucky 1 20
Maryland 10 113 Alabama 1 16
Michigan 9 178 Arkansas 1 16
Arizona 9 160 South Carolina 1 14
Massachusetts 9 124 Utah 1 9
Missouri 9 119 Canada 1 13
Ohio 8 126 China (Hong Kong)
b
2 13
Virginia 7 113 United Kingdom 1 16
Louisiana 7 99 Total 344 4,988
Screen Format Theaters Screens
Planned Deployed Screens
Fiscal Year-End 2012
Digital 337 4,428 4,698
3D Enabled 337 2,234 2,305
IMAX (3D Enabled) 134 134 139
ETX (3D Enabled) 15 15 35
Dine-In Theaters 11 111 145160
Premium Seating 8 77 377
September 19, 2013

Corporates

Event Risk Dashboard AMC Entertainment, Inc.
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition M
Divestiture L
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Acquired in 2012 by Dalian Wanda Group.
Current leverage levels mitigate LBO event risk.
The movie exhibition industry has volatile cash fows and has a fairly signifcant
fxed cost structure.
Secular Risk Medium
Increased competition from at-home entertainment media and indirect
competition from other distribution channels, such as VOD and the Internet, pose
threats to the long-term growth of the business.
Fitch believes that movie exhibition will continue to be the key promotional
window for the studios. However, Fitch expects long-term attendance growth to
be challenging.
The acquisition by Wanda eliminates some of the risks associated with the
previous private equity ownership, as Wanda is a strategic owner.
Concentrated ownership Wanda owns 100% of the company. The
concentrated ownership risk is somewhat mitigated by Wanda's intention to invest
$500 million to fund AMC's strategic and operating initiatives.
The risk of fnancial policy revision is inherent in issuers with concentrated ownership.
AMC has historically carried high levels of debt with leverage in the mid to high
single digits.
A portion ($50 million) of the $500 million investment Dalian Wanda Group Co.
intends to make was used to reduce debt. Additional debt reduction is expected to
be limited as Fitch expects cash fows and Wanda investments to be dedicated to
expansion of theaters and expansion/new in-theater innovations and products.
Not a material risk since all current indebtedness is guaranteed by almost all
operating subsidiaries.
Given AMC's large market share in the U.S., any sizable acquisition will be
reviewed by the Antitrust Division of the DOJ and may result in a disposal of assets
in order to complete an acquisition.
When AMC acquired Kerasotes (92 theaters) in 2010, AMC was required to
dispose of 11 theaters across the U.S.
As part of the Americans with Disabilities Act (ADA), theaters must reasonably
accommodate individuals with disabilities.
AMC Entertainment Inc. Rating History
B
B
B+
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
September 19, 2013

Corporates

Event Risk Dashboard AMC Entertainment, Inc. (Continued)
Lease Obligations
AMC currently has roughly $4 billion of undiscounted future minimum lease
payments, which could be barriers if the company needed to terminate
underperforming theaters.
Union Workforce
Not material. Fewer than 2% of employees are unionized.
Litigation Risk Low
None and not expected. AMC is 100% owned by Wanda.
(x)
Covenant
Level
Estimated
Ratio/Test as
of 6/30/13
EBITDA
Cushion (%)
Net Senior Secured Leverage 3.25 1.63 50.0
2012 87.6 7.4
2011 280.6 1.8
2010 4.3
2009 226.8
2008 46.7
2007
Fitch believes AMC will continue to look for expansion opportunities in the U.S.
The industry is expected to experience some consolidation as smaller operators
may not be able to fund digital conversion.
Fitch expects AMC, along with the other major exhibitors, to add theaters to its
portfolio in a disciplined manner.
Fitch also believes the company will continue to evaluate its portfolio and divest any
underperforming theaters. However, Fitch does not expect this to be material.
There are no material acquisition restrictions in the indentures.
In 2009, the company divested its Mexican theater circuit.
September 19, 2013

Corporates

Corporate Governance Overview AMC Entertainment, Inc.
($)
Stock
Awards
Option
Awards
Non-Equity
Gerardo I. Lopez CEO and President 567,150 1,750,000 1,520,698 265,180 4,103,028
Craig R. Ramsey EVP and CFO 325,192 1,500,000 734,298 196,453 2,755,943
Elizabeth Frank EVP and Chief Content and Programming Officer 328,846 1,000,000 655,678 60,286 2,044,810
John D. McDonald EVP, North American Operations 317,885 350,000 722,338 293,193 1,683,416
Mark A. McDonald EVP, Global Development 237,500 350,000 529,678 146,814 1,263,992
Board of Directors
Lin Zhang
Chairman
40 N February
2013
February
2014
2012 Audit (Chair) AMC Entertainment
Holdings, Inc.; Dalian
Wanda Group Co., Ltd.
General Manager
Nanjing Wanda
Project company
Gerardo I.
Lopez
53 N February
2013
February
2014
2009 None AMC Entertainment
Holdings, Inc.; American
Multi-Cinema, Inc.;
Recreational Equipment,
Inc., NCM and Open
Road Films.
CEO and President
Anthony J.
Saich
59 N February
2013
February
2014
2012 91,666 91,666 Audit; Compensation AMC Entertainment
Holdings, Inc.
Director Ash Center for
Democratic Governance and
Innovation;
Daewoo Professor
International Affairs at Harvard
University
Chaohui Liu 40 N February
2013
February
2014
2012 Audit; Compensation
(Chair)
AMC Entertainment
Holdings, Inc.
General Manager
Investment & Securities
Department of Wanda and
Assistant President
Ning Ye 39 N February
2013
February
2014
2012 Compensation AMC Entertainment
Holdings, Inc.
General Manager
Wanda Cinemas Company
Annual Incentive Net income target of at least $1,000,000 during the twelve months ended Dec. 31, 2012.
Long-Term Incentives Net income target of $10,000,000 during the twelve months ended Dec. 31, 2012.
Base Salary Comparable to companys peer group.
Annual Incentive The company obtained a net income of over 200% of target for calendar 2012, which is equivalent to a 200% payout of the assigned bonus target
for the company component. Targets for company component were: Lopez $435,000, Ramsey $231,400, Frank $162,000, John McDonald
$226,200, Mark McDonald 117,000. Targets for individual component were: Lopez and Frank $108,000, Mark McDonald $78,000, Ramsey
and John McDonald approximately $60,000.
Long-Term Incentives Pursuant to the merger agreement, Wanda and parent entered into a management profit sharing plan. Awards are payable in cash on an annual basis
and subject to the company achieving a predetermined adjusted net income target. Incentive bonus would not be paid below attainment of 100% of
targeted adjusted net income. If the adjusted net income is equal to or exceeds 100% of targeted adjusted net income, the company will pay 10% of
the adjusted net income. Targets were: Lopez $204,000, Ramsey, Frank, John and Mark McDonald $79,200 each.
September 19, 2013

Corporates

Corporate Governance Overview AMC Entertainment, Inc. (Continued)
On Aug. 30, 2012, in connection with the consummation of the merger, Aaron J. Stone, Dana B. Ardi, Stephen P. Murray, Philip H. Loughlin, Eliot P.S. Merrill, Brion B. Applegate and
Lee Solomon resigned as members of the board. Lin Zhang, Chaohui Liu, Ning Ye and Anthony J. Saich were elected as members of the companys board. The company does not
have equity securities listed for trading on a national securities exchange which has requirements that a majority of the board be independent.
Wanda America Investment Holding Co. Ltd., a wholly owned indirect subsidiary of Dalian Wanda Group Co., Ltd. owns 99.88% of the company (Class A Common Stock).
Related-party transactions: As a result of the merger, the company ceased paying the annual management fee of $5,000,000 to the sponsors. Wanda has the ability to control the
companys affairs and policies and the election of directors and appointment of management.
John D. McDonald and Mark A. McDonald are brothers.
No clawback policy.
Auditor: KPMG LLP.
Gerardo I. Lopez 1.64 <1.0
Craig R. Ramsey 0.06 <1.0
Elizabeth Frank <1.0
John D. McDonald 0.03 <1.0
Mark A. McDonald 0.03 <1.0
All Directors and Executive Officers as a Group (18 Persons) 1.19 <1.0
Note: Directors and NEO holdings include stock options exercisable within 60 days of Feb.17, 2013.
September 19, 2013

Corporates

Pension Screener
a
than 10%?
No
Plan Assets
b
2.5 3.6
Expected Return (4.3) (4.5)
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Detailed Maturities Schedule AMC Entertainment, Inc.
($ Mil., As of June 30, 2013) Amount Maturities 2013 2014 2015 2016 2017 Thereafter
Senior Secured Debt
Senior Secured Term Loan 773.1 2020 5.8 7.8 7.8 7.8 7.8 736.1
Senior Unsecured Debt
8.75% Senior Fixed Rate Notes 600.0 2019 600.0
Subordinated Debt
9.75% Senior Subordinated Notes 600.0 2020 600.0
Total Debt 1,973.1 5.8 7.8 7.8 7.8 7.8 1,936.1
Note: Excludes $126.8 million of capital lease and other debt obligations.
National CineMedia, LLC
Digital Cinema Implementation Partners LLC
Movietickets.com
Two U.S. Motion Picture Theatres
Organizational Structure AMC Entertainment, Inc.
($ Mil., As of June 30, 2013)
IDR Issuer Default Rating. RR Recovery Rating. Note: Debt includes unamortized premium on the unsecured and subordinated notes.
Dalian Wanda Group Corporation, Ltd.
IDR B/Stable Outlook
100.0%
AMC Entertainment Holdings Inc.
Amount
Outstanding Rating
Secured Term Loan due 2020 773.1 BB/RR1
$150.0 Million Secured Revolver due 2018 BB/RR1
Senior Unsecured Notes due 2019 600.0 B/RR4
Senior Subordinated Notes due 2020 600.0 CCC+/RR6
Other Debt 126.8
Total Debt 2,099.9
LTM EBITDA 390.8
Leverage (x) 5.4
Cash 134.2
Net Leverage (x) 5.0
15.5%
29.0%
26.2%
50.0%
Nonguarantor Subsidiaries Guarantor Subsidiaries
Amount
LTM Revenues 4.6
EBITDA (1.7)
Amount
EBITDA 392.5
Guarantees All Debt
Consolidated Business Assets:
343 Theatres; 4,937 Screens (U.S. and International)
September 19, 2013

Corporates

Debt and Covenant Synopsis AMC Entertainment, Inc.
Issuer AMC Entertainment Inc. AMC Entertainment Inc. AMC Entertainment Inc.
Document Date 04/30/13 6/9/09 $600 million 9.75% Senior Subordinated notes
due 2020.
Maturity Date Term loans due 2020. Revolver due 2018. 6/1/19 12/15/10
Description of Debt $775 million term loan facility
$150 million revolving credit facility
$600 million 8.75% senior notes due 2019. 12/1/20
Financial Covenants
(Maximum)

Net Senior Secured
Leverage (Maximum)
3.25x
Senior Leverage
(Maximum)

Interest Coverage
(Minimum)

Change-of-Control
(CoC) Provision
A CoC is an event of default. In the event
that the permitted holders (Apollo, JP Morgan
Partners, Bain Capital, Carlyle Group,
Spectrum Group; Wanda Group effective
upon completion of AMC acquisition by
Wanda) do not hold the majority of the voting
control. Post an IPO, the permitted holders
must maintain 40% of the voting control, or
the ability to elect a majority of the board
of directors, or no person (other than the
permitted holders) may hold more than 35%
of the voting control, and the majority of the
board continue to be board members over a
12-month period. Any other CoC as defined in
any AMC indenture with outstanding principal
amount more than or equal to $25 million
occurs.
50% of the combined voting power is
acquired. Liquidation or dissolution of the
company occurs. All assets are sold, leased or
transferred.
CoC takes place if:
50% or more of either outstanding shares or
of the combined voting power is acquired.
Liquidation or dissolution of the company
occurs.
Sale of all or substantially all assets.
CoC under the indentures of other existing
notes occurs.
In the event of CoC, the company is required
to offer to repurchase notes at 101%.
Sale of Assets
Restriction
Language noted, mandatory prepayments
required for net cash proceeds in excess of
$300 million.
CoC under the indentures of other existing
notes occurs. No material provision noted.
See CoC. All or substantially all limitations
noted, unless the surviving entity expressly
assumes the debt and is able to incur $1 of
additional debt under the debt limitations
noted on next page (other than debt items
permitted under the definition of permitted
indebtedness).
Limitation on
Acquisitions
No material provision noted. No material provision noted. Language noted.
Debt Restrictions
Additional Debt
Restriction
Limitations on indebtedness noted. Standard
carveouts exist. Subordinated debt permitted,
as long as the company is in compliance
with the net senior secured leverage ratio.
Additional debt permitted as long as the net
senior secured leverage ratio is less than
3.25x.
Limitations on consolidated indebtedness
noted, including minimum 2x interest coverage
requirement and 3.5x senior debt leverage
limitation. Incurrence test carveouts noted.
Limitations on consolidated indebtedness
noted, including minimum 2x interest coverage
requirement. Standard carveouts exist. There
is a $100 million construction debt basket.
There is also a $350 million general debt
basket. Additional debt that is senior to the
notes, but subordinated to the senior notes, is
not permitted.
Limitation on
Secured Debt
(Negative Pledge)
Additional liens are not permitted. Standard
carveouts exist. There is also a general lien
basket of $40 million and 1% of Consolidated
Total Assets.
Restriction on liens noted. Restrictions on liens governed by additional
debt restrictions.
Restricted Payments Restricted payments are not permitted,
standard carveouts exist. Cash dividends
to AMC Entertainment Holdings to cover
ordinary operating expenses of up to $4 million
annually and tax payments. General restricted
payment basket of $200 million (less certain
investments) plus Available Amount.
Generally governed by additional debt
restriction test of 2x interest coverage and
limited to cumulative EBITDA less cumulative
1.70x interest expense basket test; other
carveouts noted, including an aggregate $350
million in restricted payments basket.
Generally governed by additional debt
restriction test of 2x interest coverage and
limited to cumulative EBITDA, less cumulative
1.70x interest expense basket test; other
carveouts noted, including an aggregate $350
million in restricted payments basket.
September 19, 2013

Corporates

Debt and Covenant Synopsis AMC Entertainment, Inc. (Continued)
Issuer AMC Entertainment Inc. AMC Entertainment Inc. AMC Entertainment Inc.
Other
Cross-Default Cross-default on payment defaults of debt
more than or equal to $25 million.
Cross-default on payment defaults of debt
Cross-Acceleration Cross-acceleration on debt more than or equal
to $25 million.
Cross-acceleration on debt more than or equal
to $5 million.
Cross-acceleration on debt more than or equal
to $5 million.
Other Guaranteed on a joint and several basis by all
existing and future direct and indirect wholly
owned domestic subsidiaries.
Mandatory prepayments required in
conjunction with asset sales and property loss
insurance recoveries in excess of $300 million,
upon any debt issuance, and from 50% annual
excess cash recapture as long as senior
secured leverage exceeds 2.5x and excess
cash flow exceeds $20 million.
The borrower can issue certain equity
securities to an amount that will bring the
borrower back to compliance as it relates
to the financial covenant. This option may
not be exercised more than twice within four
quarters and five times during the term of the
agreement.
Callable in whole or in part, at any time on or
after June 1, 2014, at 104.375% , declining
ratably to 100% on or after June 1, 2017.
Guaranteed on a joint and several basis by all
subsidiary guarantors.
Noncall until Dec. 1, 2015, at 104.875%,
declining ratably to par on or after Dec. 1,
2018. Guaranteed on a joint and several basis
by all subsidiary guarantors. Equity claw-back:
Prior to Dec. 1, 2013, the company may on
any one or more occasions redeem up to 35%
of the original aggregate principal amount of
the notes with the net cash proceeds of one or
more equity offerings at a redemption price of
109.75%.
September 19, 2013

Corporates

Financial Summary AMC Entertainment, Inc.
12
Months
12
Months
12
Months Three Months
12
Months Three Months
12
Months Three Months
LTM
Ended
($ Mil.) 4/2/09 3/31/10 3/31/11 9/29/11 12/29/11 3/29/12 3/29/12 6/28/12 9/27/12 12/31/12 12/31/12 3/31/13 6/30/13 6/30/13
Profitability
Operating EBITDA 271.8 300.8 255.8 81.8 31.8 112.0 320.7 104.6 94.4 94.1 405.0 70.4 131.9 390.8
Operating EBITDA Margin (%) 12.00 12.44 10.56 11.97 5.71 16.73 12.33 15.52 14.52 13.56 15.07 12.18 17.30 14.56
FFO Return on Adjusted Capital (%) 14.52 15.54 14.56 14.86 14.97 17.04 17.04 17.18 15.33 13.44 15.99 15.61 16.01 16.01
Free Cash Flow Margin (%) 1.91 5.18 (1.54) 1.16 0.14 0.89 2.23 0.27 (0.80) 6.32 1.73 (0.60) 4.23 2.51
Coverages (x)
FFO Interest Coverage 2.07 2.09 1.79 2.34 1.10 1.95 1.90 2.36 2.63 2.76 2.36 1.97 3.65 2.74
Operating EBITDA/
Gross Interest Expense 1.79 1.86 1.71 1.96 0.76 1.85 1.73 2.54 2.39 2.58 2.28 1.96 3.78 2.66
FFO Fixed Charge Coverage 1.27 1.29 1.19 1.35 1.03 1.32 1.26 1.36 1.43 1.44 1.39 1.23 1.62 1.43
FCF Debt-Service Coverage 1.23 1.72 0.73 1.31 0.96 0.98 1.27 1.07 1.01 1.17 1.17 1.20 1.33 1.33
Cash Flow from Operations/
Capital Expenditures 1.38 2.21 0.71 1.32 1.03 1.11 1.42 1.10 0.84 1.71 1.28 0.91 1.49 1.34
Leverage (x)
Long-Term Secured Debt/
Long-Term Secured Debt/FFO 4.95 3.45 5.12 4.63 5.52 4.60 4.60 4.44 4.18 3.12 3.12 3.43 3.02 3.02
Total Debt with Equity Credit/
FFO Adjusted Leverage 5.80 5.74 6.39 6.29 6.45 5.68 5.68 5.60 5.60 6.41 5.23 5.33 5.15 5.15
Total Adjusted Debt/
Operating EBITDAR 6.15 6.03 6.49 6.51 6.74 5.91 5.91 5.80 5.75 6.52 5.32 5.39 5.23 5.23
FCF/Total Adjusted Debt (%) 0.01 2.80 (0.78) 1.06 (0.03) 1.24 1.24 0.36 0.07 0.83 1.02 0.85 1.54 1.54
Balance Sheet
Short-Term Debt 9.9 10.5 10.0 9.5 9.4 61.9 61.9 10.8 10.8 14.3 14.3 14.5 14.4 14.4
Long-Term Senior Secured Debt 804 611.9 605.9 604.8 603.2 767.4 767.4 768.3 758.3 754.9 754.9 752.9 773.1 773.1
Long-Term Senior Unsecured Debt 310.7 643.6 652.9 651.6 651.2 588.7 588.7 636.3 636.5 715.8 715.8 714.1 712.4 712.4
Long-Term Subordinated Debt 864.9 865.0 899.4 899.4 899.4 790.8 790.8 740.0 741.0 600.0 600.0 600.0 600.0 600.0
Other Debt
Equity Credit
Total Debt with Equity Credit 1,989.5 2,131.0 2,168.2 2,165.3 2,163.2 2,208.8 2,208.8 2,155.4 2,146.7 2,085.0 2,085.0 2,081.5 2,099.9 2,099.9
Off-Balance Sheet Debt 2,440.1 2,342.5 2,581.3 2,581.3 2,581.3 2,454.1 2,454.1 2,454.1 2,454.0 3,484.5 2,454.5 2,279.1 2,279.1 2,279.1
Total Adjusted Debt
with Equity Credit 4,429.6 4,473.5 4,749.5 4,746.6 4,744.5 4,662.9 4,662.9 4,609.5 4,600.7 5,569.5 4,539.5 4,360.6 4,379.0 4,379.0
Cash Flow
Funds From Operations 162.5 177.2 118.3 55.7 4.1 57.2 166.9 56.0 64.3 64.1 241.7 34.8 92.6 255.9
Change in Working Capital 5.6 51.8 (26.7) (23.3) 25.3 3.0 30.4 (35.1) (37.9) 41.9 (28.0) 1.1 5.0 10.1
Cash Flow from Operations 168.1 229.0 91.6 32.4 29.4 60.2 197.3 20.9 26.5 106.0 213.6 35.9 97.6 266.0
Total Non-Operating/
Non-Recurring Cash Flow 0.5
Capital Expenditures (121.5) (103.8) (129.3) (24.5) (28.6) (54.3) (139.4) (19.1) (31.7) (62.1) (167.2) (39.4) (65.3) (198.5)
Dividends (3.3) - - - - - - - - - - - - -
Free Cash Flow 43.3 125.2 (37.2) 7.9 0.8 6.0 58.0 1.8 (5.2) 43.9 46.5 (3.5) 32.3 67.5
Net Acquisitions and Divestitures 224.4 10.9 (215.5) 0.9 0.3 0.3 2.4 1.1 9.4 (90.7) (79.8) 4.7 (0.9) (77.5)
Net Debt Proceeds 175.0 140.6 258.5 (0.8) (2.4) (64.6) (70.5) (53.8) (142.7) (4.7) (265.8) (3.5) 9.2 (141.7)
Net Equity Proceeds 100.0 100.0 100.0
Other (Investing and Financing) (14.8) (315.4) (199.9) 2.2 (110.2) 117.4 (18.7) (19.3) (6.9) 25.7 116.9 (24.4) (10.6) (16.2)
Total Change in Cash 427.9 (38.7) (194.1) 10.2 (111.5) 59.1 (28.8) (70.3) (45.4) (25.8) (82.3) (26.7) 29.9 (67.9)
Ending Cash and Securities Balance 536.6 497.9 301.2 324.8 213.5 272.3 272.3 202.1 156.7 130.9 130.9 104.2 134.2 134.2
Income Statement
Revenue 2,265.5 2,417.8 2,423.0 683.4 557.2 669.8 2,600.6 673.6 650.2 693.8 2,687.4 577.8 762.7 2,684.4
Revenue Growth (%) (0.10) 6.72 0.22 4.56 (7.58) 27.46 7.33 (2.41) (4.86) 24.51 0.00 (13.74) 13.22 3.89
Operating EBIT 70.4 112.5 43.4 30.4 (21.9) 54.9 106.7 57.0 45.1 38.0 195.0 21.9 81.6 186.6
403 Company Summaries Belo Corp.
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
Belo Corp.
IDR BB
Guaranteed Bank Credit Facility BB+
Guaranteed Unsecured Notes BB+
Senior Unsecured Notes BB
Rating Outlook
Positive Watch
Belo Corp.
Key Rating Drivers
Acquisition by Gannett: Gannett Co. Inc. (Gannett) intends to acquire Belo Corporation
(Belo) at an enterprise value of $2.2 billion (a 9.4x two-year average EBITDA multiple; 5.4x
with Gannetts $175 million guided synergies). Gannett intends to pay $1.5 billion in cash for
Belos equity and will assume Belos $715 million in senior unsecured notes (Gannett intends to
become the obligor under the Belo bonds). The transaction is expected to close by the end of
the year. Fitch believes that the consolidated credit profle would be stronger than Belos current
credit profle (already strong for its current ratings).
Scale in Retransmission Negotiations: The transaction makes strategic and operational
sense for both companies. The combined station group will provide the consolidated company
with increased scale that will be a beneft during retransmission negotiations with multichannel
video programming distributors (MVPDs). This is expected to support continued growth in high-
margin retransmission revenues for the consolidated company. Fitch recognizes the leverage
that broadcast networks retain over the local affliates, and expects increases in retransmission
revenues will be partially offset by increases in reverse compensation fees to the networks.
Guaranteed Note Redemption: The senior unsecured (guaranteed) notes contain a 101%
change-of-control put provision. However, given the 8% coupon on the notes and Belos
credit profle (and the consolidated Gannett credit profle), Fitch does not expect the put to be
exercised by bondholders. The publicly fled merger agreement makes reference to distributing
redemption notices. While this clause may make reference to the change-of-control provisions,
notes become callable in November 2013 at 104%. If current liquidity and pricing levels within
the credit markets for BB category credits continue, Fitch believes it is more likely that these
notes will be redeemed early.
Stable Operating Environment: Fitch expects a stable operating environment in 2013, with
Belos core advertising revenue growth in the low single digits, supported by auto advertising (the
companys largest vertical). Political advertising revenue was robust and totaled approximately
$60 million in 2012. Although the ratings do not give a material amount of credit to political
revenue, given its temporary and volatile nature, it does provide a strong free cash fow (FCF)
boost in even years. Fitch recognizes that the lack of material political advertising in 2013 will
result in total revenues declining in the low to midsingle digits.
Secular Risk: Secular risks relate primarily to declining audiences amid increasing entertainment
alternatives, with further pressures from the proliferation of OTT Internet-based television
services. However, it is Fitchs expectation that local broadcasters, particularly the higher rated
stations, will remain relevant and capture the material audiences that local, regional and national
spot advertisers will demand.
Positive Rating Triggers: The ratings may be upgraded one notch upon the completion of the
acquisition.
Negative Rating Triggers: The ratings are on a Positive Watch. As a result, Fitchs sensitivities
do not currently anticipate a rating downgrade.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
September 19, 2013

Corporates

Portfolio Summary Belo Corp.
(As of June 30, 2013)
Television Group
Location Affiliate Market Rank Location Affiliate Market Rank
WFAA Dallas/Fort Worth ABC 5 WVEC Hampton/Norfolk ABC 44
KHOU Houston CBS 10 KVUE Austin ABC 45
KING Seattle/Tacoma NBC 12 WHAS Louisville ABC 48
KONG Seattle/Tacoma IND 12 WWL New Orleans CBS 51
KTVK Phoenix IND 13 WUPL New Orleans MNTV 51
KASW Phoenix CW 13 KMSB Tucson FOX 70
KMOV St. Louis CBS 21 KTTU Tucson MNTV 70
KGW Portland NBC 22 KREM Spokane CBS 73
WCNC Charlotte NBC 25 KSKN Spokane CW 73
KENS San Antonio CBS 36 KTVB Boise NBC 111
Regional Cable News Channels Local Cable News
TXCN Dallas/Fort Worth
NWCN Seattle/Tacoma
24/7 NewsChannel/Boise
NewsWatch/New Orleans
Local/Nat
ional
Spot
73%
Political
9%
Internet/
Retransm
ission/Ot
her
18%
Revenues by Segment
Belo Corp.
(As of Dec. 31, 2012)
Internet/
Retransmission/
Other
18%
Local/
National
Spot
73%
September 19, 2013

Corporates

Corporate Governance Overview Belo Corp.
a
Most recent filings on Bloomberg as of July 2013. LTI Long-term equity incentive grants. TBRSUs Time-based restricted stock units. PRSUs Performancebased restricted
stock units. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Dunia A. Shive President and CEO 808,750 1,375,410 1,189,000 186,865 3,560,025
Carey P. Hendrickson SVP, CFO and Treasurer 387,500 471,466 290,000 68,757 1,217,723
Peter L. Diaz President/Media Operations 543,750 594,206 438,625 223,965 1,800,546
Guy H. Kerr EVP/Law and Government and Secretary 526,625 573,268 423,074 141,722 1,664,689
Board of Directors
Peter A. Altabef 53 Y May 2012
May 2015
2011 70,000 70,002 5,493 145,495 Audit; Compensation
; Nominating and
Merit Energy Company;
MICROS Systems, Inc.
President and CEO
MICROS Systems, Inc.
Henry P.
Becton, Jr.
Lead Director
69 Y May 2012
May 2015
1997
110,000
70,002 9,908 189,910 Nominating and
(Chair); Audit;
Compensation
Becton Dickinson and
Company
Former President
WGBH Educational Foundation
Judith L.
Craven, M.D.,
M.P.H.
67 Y May 2013
May 2016
1992 70,000 70,002 16,504 156,506 Audit; Compensation;
Nominating and
SYSCO Corporation;
Lubys, Inc.
Retired President
United Way of the
Texas Gulf Coast
Robert W,
Decherd
Chairman
61 N May 2011
May 2014
1976
130,000
70,002 5,549 205,551 None Kimberly-Clark
Corporation; A. H. Belo
Corporation
Chairman, President
and CEO A. H. Belo
Corporation
Dealey D.
Herndon
66 N May 2013
May 2016
1986 70,000 70,002 5,549 145,551 None A. H. Belo Project Manager
State Preservation Board of the
State of Texas
James M.
Moroney III
56 N May 2012
May 2015
2008 70,000 70,002 5,549 145,551 None None EVP A. H. Belo Corporation
Wayne R.
Sanders
65 Y May 2013
May 2016
2003 80,000 70,002 5,549 155,551 Audit (Chair and
Financial Expert);
Compensation;
Nominating and
Dr Pepper Snapple
Group, Inc.; Texas
Instruments Incorporated
Kimberly-Clark Corporation
Dunia A. Shive 52 N May 2011
May 2014
2008 None None President and CEO
Belo Corporation
M. Anne
Szostak
62 Y May 2011
May 2014
Audit; Nominating and
Tupperware Brands
Corporation; Dr Pepper
Snapple Group, Inc.
President and CEO
Szostak Partners, LLC
McHenry
T.Tichenor, Jr.
57 Y May 2013
May 2016
Nominating and
NGM
Biopharmaceuticals, Inc.
Private Investor and
Executive Director
WWWW Foundation, Inc.
Lloyd D. Ward 64 Y May 2012
May 2015
Nominating and
CleanTech Solutions
Worldwide, LLC;
BodyBlocks Nutrition
Systems, Inc.
Chairman and CEO
CleanTech Solutions
Worldwide, LLC
Annual Incentive EPS (75% weight) and various qualitative factors (25%)
Long-Term Incentives Two-year adjusted consolidated EBITDA target.
Base Salary Shive, Diaz and Hendrickson base salaries were below the market median and the base salary for Kerr was above the market median.
Annual Incentive Targets were: Shive 100% of base salary; Hendrickson 50%; Diaz 55%; and Kerr 55%. Potential payout ranges from 0% to
200%. Payouts were at 160% of target for financial performance and 100% of target for nonfinancial performance.
Long-Term Incentives Stock options 40% vesting in the first year and 30% vesting in the second and third years. TBRSUs 3-year vesting and PRSUs
2 year vesting. The company granted both PBRSUs and TBRSUs in 2012, with an LTI mix of 60% and 40%. No stock options were
awarded in 2012.
Stock Ownership Requirements CEO 75,000 shares and NEOs 25,000 shares.
September 19, 2013

Corporates

Corporate Governance Overview Belo Corp. (Continued)
a
Most recent filings on Bloomberg as of July 2013. LTI Long-term equity incentive grants. TBRSUs Time-based restricted stock units. PRSUs Performancebased restricted
stock units.
On June 13, 2013, Gannett Co., Inc. and Belo Corp. announced that they have entered into a definitive merger agreement under which Gannett will acquire all outstanding shares of
Belo for approximately $1.5 Bil.
Peter Altabef joined the board in July 2011. Four of the 10 directors are not independent.
Series A shares are entitled to one vote and Series B shares are entitled to 10 votes.
As of March 15, 2012, Robert Dechard had approximately 23.5% voting control. His sister, Dealey Herndon, has 9.6%, and his second cousin, James Moroney, had 12.4%.
Robert Decherd is chairman, president and CEO of A. H. Belo, and non-executive chairman of Belo. Jim Moroney, EVP of A. H. Belo, is an executive officer of A. H. Belo and a
director of Belo. Dealey Herndon is a director of both Belo and A. H. Belo.
A.H. Belo was spun off from Belo Corp. on Feb. 8, 2008. As per agreements, Belo and A. H. Belo, provide each other with various services and/or support. Payments made in
connection with all continuing transactions between Belo and A. H. Belo are on an arms-length basis.
In October 2010, Belo and A. H. Belo entered into a pension plan transfer agreement, to split the pension plan into separately sponsored plans effective Jan. 1, 2011. The split of the
pension plan does not change the amount of the benefits any participant has accrued or is currently receiving. For plan years starting on and after Jan. 1, 2011, Belo and A. H. Belo
are each solely responsible for making contributions to their respective plans.
Clawback policy not in place.
Dunia A. Shive 289 <1.0 551 6.3
Carey P. Hendrickson 16 <1.0 79 <1.0
Peter L. Diaz 97 <1.0 160 1.9
Guy H. Kerr 172 <1.0 276 3.3
Peter A. Altabef 11 <1.0 <1.0
Henry P. Becton, Jr 45 <1.0 54 <1.0
Judith L. Craven, M.D, M.P.H. 36 <1.0 54 <1.0
Robert W. Decherd 108 <1.0 4,333 48.3
Dealey D. Herndon 42 <1.0 1,720 20.6
James M. Moroney III 188 <1.0 2,226 26.2
Wayne R. Sanders 67 <1.0 54 <1.0
M. Anne Szostak 52 <1.0 44 <1.0
McHenry T. Tichenor, Jr. 41,176 <1.0 <1.0
Lloyd D. Ward 13 <1.0 54 <1.0
All Directors, Director Nominees and Executive
Officers as a Group (14 Persons) 1,177 1.2 9,605 92.2
a
a
Fairepointe Capital LLC 7,605 8.0 Gannett Co. Inc. 7,470 90.3
Blackrock 5,843 6.1 Decherd, Robert W 2,741 33.1
Vanguard Group Inc. 5,337 5.6 Moroney III, James M 2,019 24.4
Penn Capital Management Co Inc. 4,654 4.9 Herndon, Dealey Decherd 1,666 20.2
Royce And Associates Inc. 3,564 3.7 Crimson Capital LLC 641 7.8
Dimensional Funds Advisors 3,500 3.7 Friends Of Fall Roads 634 7.7
Pinnacle Associates Limited 3,472 3.6 Kerr, Guy H 90 1.1
LVS Asset Management 2,713 2.9 Shive, Dunia A 50 0.6
Keeley Asset Management Corp. 2,709 2.8 Ray Gerald L & Associates 12 0.2
FMR LLC 2,600 2.7 N.A. 0.0
September 19, 2013

Corporates

Pension Screener
a
Belo Corp.
than 10%?
No
Plan Assets
b
20.0 19.3
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Organizational Structure Belo Corp.
($ Mil., As of June 30, 2013)
a
Notes benefit from a subordinate guarantee (subordinate to the guarantee provided to the banks). IDR Issuer Default Rating.
Belo Corp.
IDR BB/Watch Positive
R.W. Decherd Public
D.D. Herndon
(Sister of R.W. Decherd)
J.M. Moroney III
(Second Cousin of R.W. Decherd and D.D. Herndon)
4% Equity/24% Voting 92% Equity/54% Voting 2% Equity/10% Voting 2% Equity/12% Voting
Amount
Outstanding Rating
$200 Million Committed Credit Facility due 2016 2.9 BB+
Senior Guaranteed Notes due 2016
a
272.4 BB+
Senior Unsecured Notes due 2027 440.0 BB
Total Debt 715.3
LTM EBITDA 261.4
Business Assets:
20 TV Stations (nine in the Top 25 U.S. markets), five CBS, four ABC and four NBC.
Two regional, two local, and ownership interest in two other cable news channels.
Detailed Maturities Schedule Belo Corp.
Credit Facility 2.9 2016 2.9
8.00% Senior Notes (Guaranteed) 275.0 2016 275.0
7.75% Senior Debentures 200.0 2027 200.0
Total 717.9 277.9 440.0
Note: Amounts reflect face value.
September 19, 2013

Corporates

Debt and Covenant Synopsis Belo Corp.
Supplemental Indenture Base Indenture Bank Facility
Overview
Document Date 11/16/09 06/01/97 2/26/09; amended Nov. 16, 2009; Aug. 11,
2010; Dec. 31, 2011.
Maturity Date 11/01/16 Various 8/15/2016
Description of Debt Senior notes guaranteed jointly and severally
on an unsecured basis by subsidiaries (with
guarantee contractually subordinated to all
senior indebtedness of the subs).
All currently outstanding unsecured notes
and debentures
$200 million revolver due August 2016.
Financial Covenants
(Maximum)
6.0x through December 2012; 5.5x through
December 2013; 5.0x thereafter.
Senior Secured
Leverage (Maximum)
1.0x
Interest Coverage
(Minimum)
2.0x
Change-of-Control
Provision
Event of default if persons other than permitted
holders acquire more than 50% of voting
power or a majority of the seats on the board.
No material provision noted. Event of default if persons other than existing
insiders acquire more than 50% of voting
power or a majority of the seats on the board.
Sale of Assets
Restriction
Asset sale at fair market value permitted
provided 75% of consideration in cash. 100%
of proceeds must be applied to repay debt or
acquire additional assets within one year (if
aggregate unapplied proceeds exceed
$25 million).
No material provision noted. Language noted. Limited to 20% of the
borrowers consolidated tangible assets; if
the leverage ratio is below 4.0x, then there
are no material restrictions. Sale leaseback
transactions are limited to $40 million, 4.0x
leverage ratio level test does not apply to sale
leasebacks.
Limitation on
Investments/
Acquisitions
Acquisition of capital stock of other businesses
is permitted provided it is a similar line of
business, but capped to availability under
restricted payments (or general $25 million
carveout under permitted investments).
No material provision noted. 1) Permitted if pro forma leverage is less
than 5.0; 2) Limited to $50 million if leverage
is between 5.00x and 5.75x; 3) $15 million
general carveout.
Debt Restrictions
Additional
Debt Restriction
Incurrence test: 8x (consolidated leverage)
and 3x (subsidiary guarantor leverage).
Carveouts: bank debt $500 million by June
7, 2011 ($300 million thereafter); film contracts
debt $40 million; other $50 million.
No material provision noted. Limitation on subsidiary debt noted.
Limitation on Liens/
Secured Debt
$40 million, plus standard carveouts for
bank facility. Equivalent security negative
pledge provision with respect to guarantee (if
subsidiary guarantor incurs secured debt) and
debt (if parent does).
Liens limited to 15% of net tangible assets. $40 million, plus standard carveouts.
Restricted Payments Only if: consolidated leverage is greater than
8x; adjusted leverage is less than 4x general
carveout: $50 million (notwithstanding below).
Cumulative availability (from quarter after
issuance): (a) Operating cash flow less 1.4x
consolidated interest expense plus (b) 100%
of equity proceeds plus (c) debt reduction
from exchange of convertible or exchangeable
capital stock plus (d) reduction in investments
via sales etc. less (e) restricted payments
made since issuance.
No material provision noted. 1) With respect to dividends and share
buybacks: a) $100 million if leverage is less
than 4.5x and pro forma cash plus revolver
availability exceeds $75 million; b) $50 million
if leverage is greater than 4.5x and pro forma
cash plus revolver availability exceeds $75
million. 50% carryover from prior years
unused basket beginning 2013. 2013 notes
may be repurchased. Other notes may be
repurchased if pro forma cash plus revolver
availability exceeds $75 million. All baskets
subject to financial covenants.
Other
Cross-Default Payment default on debt greater than
$35 million.
million.
Payment default on debt greater than
$20 million individually or $35 million in
aggregate.
Cross-Acceleration Cross-acceleration on debt greater than
$35 million.
Yes Cross-acceleration on debt greater than
$20 million.
Covenant Suspension Provided notes have investment-grade ratings
and no event of default, covenants relating
to indebtedness, restricted payments and
asset sales will cease to apply and subsidiary
guarantees shall also be suspended. (If rating
reverts to below investment grade, covenants/
guarantees to be reinstated.)

September 19, 2013

Corporates

Financial Summary Belo Corp.
12
Months
12
Months
12
Months Three Months
12
Months Three Months
12
Months Three Months
12
Months
($ Mil.) 12/31/08 12/31/09 12/31/10 9/30/11 12/31/11 12/31/11 3/31/12 6/30/12 9/30/12 12/31/12 12/31/12 3/31/13 6/30/13 6/30/13
Profitability
Free Cash Flow Margin (%) 8.9 9.4 18.7 19.6 7.3 8.5 37.9 6.7 23.0 0.3 15.7 4.9 4.1 7.8
Coverages (x)
Operating EBITDA/Gross Interest
Expense 3.00 2.68 3.20 2.40 4.90 2.87 2.71 3.69 3.73 5.17 3.81 3.38 4.12 4.12
FFO Fixed-Charge Coverage 2.41 2.44 2.56 2.67 3.09 2.38 4.10 2.27 3.35 3.83 3.38 2.85 2.39 3.13
FCF Debt Service Coverage 1.78 1.87 2.65 2.16 1.76 1.76 2.38 2.59 2.74 2.61 2.61 1.91 1.88 1.88
Cash Flow from Operations/Capital
Expenditures 5.69 8.69 9.57 11.00 4.29 5.15 17.46 3.93 11.38 7.05 8.90 4.45 3.41 6.35
Leverage (x)
Long-Term Secured Debt/Operating
EBITDA 2.41 1.13 2.32 1.30 1.30 1.16 1.10 1.01 1.11 1.11 1.02 1.04 1.04
Long-Term Secured Debt/FFO 4.08 2.18 4.29 2.54 2.54 1.89 1.74 1.61 1.67 1.67 1.86 1.90 1.90
Total Adjusted Debt/Operating
EBITDAR 4.30 5.85 3.56 4.26 4.20 4.20 3.74 3.56 3.26 2.76 2.76 2.70 2.74 2.74
FCF/Total Adjusted Debt (%) 5.9 5.3 14.2 9.3 6.2 6.2 11.1 12.7 13.9 15.1 15.1 8.3 7.7 7.7
Balance Sheet
Short-Term Debt 175.8 175.8
Long-Term Senior Secured Debt 412.7 281.5 476.1 271.3 271.3 271.4 271.6 271.8 293.0 293.0 272.2 272.4 272.4
Long-Term Senior Unsecured Debt 1,092.8 615.5 615.6 410.7 615.7 615.7 615.8 440.0 440.0 440.0 440.0 447.8 442.9 442.9
Other Debt
Equity Credit
Total Debt with Equity Credit 1,092.8 1,028.2 897.1 886.8 887.0 887.0 887.2 887.4 887.6 733.0 733.0 720.0 715.3 715.3
Off-Balance-Sheet Debt 13.1 10.5 8.7 8.7 9.0 9.0 9.0 9.0 9.0 10.3 10.3 10.3 10.3 10.3
Total Adjusted Debt with
Equity Credit 1,105.9 1,038.7 905.8 895.5 896.0 896.0 896.2 896.4 896.6 743.3 743.3 730.3 725.6 725.6
Cash Flow
Change in Working Capital 15.8 (21.3) 14.1 6.6 (17.2) (25.5) 9.2 3.0 8.8 (7.2) 13.8 (8.2) (6.6)
Cash Flow from Operations 144.6 79.9 143.5 38.5 24.0 81.4 68.1 27.1 53.5 40.9 189.6 20.9 21.8 137.1
Total Non-Operating/Nonrecurring
Cash Flow (18.3)
Dividends (35.8) (15.4) - (5.2) (5.2) (10.4) (5.2) (8.3) (8.3) (34.5) (56.3) (8.4) (8.3) (59.5)
Free Cash Flow 65.1 55.3 128.5 29.8 13.2 55.2 59.0 11.9 40.5 0.6 112.0 7.8 7.1 56.0
Net Acquisitions and Divestitures 5.9
Net Debt Proceeds (75.7) (59.5) (132.0) (11.0) 21.0 21.0 (13.2) (4.8) 3.0
Net Equity Proceeds (2.2) 0.1 0.1 0.2 0.3 (5.9) 0.3 (5.6) 0.6 0.2 1.1
Other (Investing and Financing) (0.4) 3.1 6.9 (0.5) 2.3 2.4 0.1 (0.5) (0.3) (178.4) (179.1) 0.4 (0.1) (178.4)
Total Change in Cash (13.2) (1.0) 3.5 29.3 15.7 52.8 59.1 5.5 40.2 (156.5) (51.7) (4.4) 2.4 (118.3)
Income Statement
Revenue 733.5 590.3 687.4 152.0 180.2 650.1 155.9 177.6 176.3 204.9 714.7 160.3 173.5 715.0
Revenue Growth (%) (51.6) (19.5) 16.5 (7.3) (12.6) (5.4) 2.9 6.7 16.0 13.7 9.9 2.8 (2.3) 7.4
Operating EBIT 206.3 129.6 214.2 35.1 83.1 177.3 40.5 57.9 58.5 78.2 235.1 42.4 53.0 232.1
411 Company Summaries Clear Channel Communications, Inc.
September 19, 2013

Corporates

Clear Channel Communications, Inc.
Key Rating Drivers
Leveraged Capital Structure: Ratings refect Clear Channel Communications, Inc.s (Clear
Channel) highly leveraged capital structure. Fitch estimates current total and secured leverage of
11.2x and 7.0x, respectively. Total leverage exceeds levels at the leveraged buyout, as minimal
FCF has prevented debt reduction and EBITDA has not returned to pre-downturn levels.
Limited Room for Deterioration: Clear Channel has completed a number of fnancing
transactions that have enabled it to extend a material amount of its secured maturities to 2019
and beyond. While these transactions materially reduced the 2016 maturities, it has come at the
cost of higher interest burden, which will materially reduce the already limited FCF generated by
the company. Fitch expects FCF to be break-even to slightly negative over the next two years.
There is no room in the ratings for material deterioration in operations.
2016 Maturities Reduced: Approximately $4.3 billion in maturities remain in 2016 ($3.2 billion
secured, $800 million in unsecured guaranteed notes and $250 million in legacy notes). The
various levers at the companys disposal (discussed below) will still fall short of this amount, and
Clear Channel will require a maturity extension to address this debt.
Lender Flexibility is Key: The companys ability to remain a going concern will depend on the
amount of fexibility provided by the 2016 term loan holders, by way of maturity extension. Recent
credit markets have been accommodating to Clear Channel and other highly leveraged issuers.
However, in Fitchs view, absent a robust credit market, fexibility will depend on Clear Channels
ability to reduce secured leverage to a level where lenders would be willing to recommit capital,
which is likely below the 6x level at which the banks originally lent.
Other Levers to Address Debt: Clear Channel could repay term loans with secured high-yield
issuance, if the credit markets remain robust, and further dividends from its outdoor subsidiary.
FCF and noncore asset sales could provide very limited cash repayment. A distressed debt
exchange (DDE) could aid in reducing the legacy unsecured obligations.
Outdoor Subsidiary Ratings: Clear Channel Worldwide Holdings, Inc.s (CCWW) IDR considers
its stand-alone credit and operating profle, as well as its legal and operational relationship with
Clear Channel. Although there is material protection for CCWW, the parent can extract cash from
the entity
Downgrade Drivers: A downgrade could result from prolonged consolidated cash burn, which
would reduce Clear Channels ability to fund debt service and near-term maturities. Additionally,
cyclical or secular pressures on operating results that further weaken credit metrics, reducing the
potential for refnancing/extension, could result in negative rating pressure. Lastly, indications
that a DDE is probable in the near term would also drive a downgrade.
Deleveraging and Extension for Upgrade: Positive rating actions could result from a material
reduction in secured leverage, as well as agreements with the term loan holders to extend its
term loan maturities long enough that Fitch believes the company will be better able to address
them via a combination of cash payments, public debt and refnancing of bank loans.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
Ratings
Security Class
Current
Rating
(Clear Channel)
IDR CCC
Senior Secured Bank Debt CCC/
RR4
Senior Secured Notes CCC/
RR4
Senior Unsecured LBO Notes CC/RR6
Senior Unsecured Legacy Notes C/RR6
Clear Channel Worldwide Holdings, Inc.
(CCWW)
IDR B
Senior Unsecured Notes BB/
RR2
Senior Subordinated Notes B/RR4
Rating Outlook
Stable
September 19, 2013

Corporates

Portfolio Summary Clear Channel Communications, Inc.
(As of Dec. 31, 2012)
a
Per Arbitron Rankings as of Fall 2012.
Source: Company filing 2012 10-K.
Radio Stations by Market
(From 2012 10-K)
Market
Market
Rank
a
Number of
Stations
New York, NY 1 6
Los Angeles, CA 2 8
Chicago, IL 3 7
San Francisco, CA 4 7
Dallas-Ft. Worth, TX 5 6
Houston-Galveston, TX 6 6
Washington, DC 7 5
Philadelphia, PA 8 6
Atlanta, GA 9 7
Boston, MA 10 5
Miami-Ft. Lauderdale-Hollywood, FL 11 7
Detroit, MI 12 7
Seattle-Tacoma, WA 13 7
Phoenix, AZ 14 8
Puerto Rico 15
Minneapolis-St. Paul, MN 16 6
San Diego, CA 17 7
Tampa-St. Petersburg-Clearwater, FL 18 8
Nassau-Suffolk (Long Island), NY 19
Denver-Boulder, CO 20 8
Baltimore, MD 21 4
St. Louis, MO 22 6
Portland, OR 23 7
Charlotte-Gastonia-Rock Hill, NC-SC 24 5
Pittsburgh, PA 25 6
Total: Top 25 Markets 149
Total: All Markets 840
Service 44 of the top 50 and 85 of the top 100 markets
Americas Outdoor Advertising
(From 2012 10-K)
Market
Number of
Displays
Americas Segment
Including 48 of 50 largest
markets in the U.S. 108,000
International Outdoor Advertising
International Markets
Total
Displays
International Segment 650,000
International Segment
Includes operations in 28
countries across Asia,
Australia, Europe and
Latin America.
Approximately one-third of
revenue is derived from
France and the U.K.
Equity Investments
Markets Company Equity (%)
Australia Australian
Radio Network
50.00
Outdoor
Italy Alessi 36.75
Hong Kong Buspak 50.00
Other Businesses
Katz Media Group
Clear Channel Total Traffic Network
Clear Channel Satellite Services
Clear Channel Communications
News Networks
Critical Mass Media
VIERO Revenue Management Solutions
RCS
Premiere Network
iHeartRadio
September 19, 2013

Corporates

Americas
(U.S. and
Canada)
72%
Internatio
nal
28%
(As of Dec. 31, 2012)
International
28%
Media
and
Entertain
ment
(CCME)
49%
Americas
Outdoor
Advertisi
ng
20%
Internatio
nal
Outdoor
Advertisi
ng
26%
Other
5%
Revenues by Segment
(As of Dec. 31, 2012)
Americas
Outdoor
Advertising
20%
Media and
Entertainment
(CCME)
49%
International
Outdoor
Advertising
26%
Media
and
Entertain
ment
(CCME)
58%
Americas
Outdoor
Advertisin
g
23%
Internatio
nal
Outdoor
Advertisin
g
14%
Other
5%
EBITDA by Segment
(As of Dec. 31, 2012)
Americas
Outdoor
Advertising
23%
Media and
Entertainment
(CCME)
58%
International
Outdoor
Advertising
14%
Americas
(U.S. and
Canada)
43%
Internatio
nal
57%
Clear Channel Outdoor Holdings, Inc.
(As of Dec. 31, 2012)
International
57%
September 19, 2013

Corporates

Event Risk Dashboard Clear Channel Communications Inc.
CBA Collective bargaining agreement. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential
actions a company is able to take from expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular H
Acquisition L
Divestiture L
Covenant Breach M
Litigation Risk M
Regulatory Risk M
LBO Risk Low
Already private: 2008 LBO.
Secular Risk High
Fitch expects 1%2% revenue declines going forward.
Audience declines partially offset by increased pricing power.
Will beneft from share shifts away from newspapers and yellow pages.
Oversaturation of stations in a given market.
Monetization of digital business not yet realized.
Parent CCM is 70% owned by a consortium of PE frms (30% public foat), after
the 2008 LBO. However, given current debt and leverage levels, the company is
restricted from transforming corporate activities without lender approval.
The board is composed almost entirely of insiders (10 of 12 directors), including
management and private equity owner representatives.
The chairman and CEO roles are combined.
creditor friendly, driven by EBITDA for annual incentive (no long-term incentive).
By default, fnancial policy is debt reduction, given current leverage and absolute
levels of debt.
Share repurchases are very modest and used to capitalize on times of low
share price.
Dividends to owners prohibited by restricted payment basket.
Upstream guarantee from U.S. subsidiaries; downstream guarantee from parent.
More secured debt subordinates the unsecured guarantee.
Foreign subsidiary can guarantee up to $50 million of CCU debt without having to
guarantee PGNs. After $50 million, PGNs have to be guaranteed.
Per the bank agreement, a restricted subsidiary that guarantees debt will have to
guarantee the bank facility.
Per the LBO notes, foreign subsidiaries can guarantee debt without guaranteeing
the notes.
Clear Channel's share repurchase program authorizes the company or its
subsidiaries to repurchase up to $100 million of CCMO or CCOH stock.
There is no room for dividends or share buybacks in the restricted payment
basket contained in the credit agreement.
However, CCU's unrestricted subsidiaries can repurchase stock. CC Finco
repurchased $16.4 million shares of CCOH stock under the program in 2011 and
$0.7 million of CCMH stock in 2012. There is $82.9 million remaining under board
authorization.
Clear Channel Communications Rating History
CC
CCC
B
0.0
3.0
6.0
9.0
12.0
15.0
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
September 19, 2013

Corporates

Event Risk Dashboard Clear Channel Communications Inc. (Continued)
CBA Collective bargaining agreement. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential
actions a company is able to take from expectations of what it will actually do.
Station ownership in individual markets governed by FCC's media ownership
laws.
Relaxation of ownership laws could drive higher M&A; tightening of laws could
drive forced divestitures.
Fitch does not currently expect change in ownership laws regarding radio
stations.
Congress could revisit performance royalty payments for terrestrial broadcasters,
which could pressure radio margins by 3% to 4%.
Statutory rates paid to SoundExchange for digital performance royalty fees
are set through 2015. CCU could possibly negotiate lower rates outside the
SoundExchange structure.
Fitch expects the positive regulatory environment in the Outdoor industry
(limitation on new inventory from the Federal Highway Beautifcation Act) to
remain unchanged.
Acquisition Activity Low
YTD June 2013 2.0 26.7
2012 50.1 59.7
2011 46.0 54.0
2010 16.1 29.0
2009 8.0 49.0
2008 177.0 90.0
2007 122.0 26.0
Lack of fnancial fexibility limits large acquisitions.
Acquisition activity subject to pro forma compliance. Small digital acquisitions a
possibility.
Divestitures limited to $900 million by credit agreement; likely limited to small
noncore radio stations.
Covenant Thresholds Risk Medium
(x)
Covenant
Level
Ratio/Test as of
6/30/13
EBITDA
Cushion (%)
Secured Net Leverage 9.25 6.20 30
Regarding the shareholder lawsuit on transfer of funds between CCOH and CCU,
on March 28, 2013, without admitting the validity of any allegations made in the
complaint, legal counsel for the defendants entered into a binding memorandum
of understanding (the MOU) to settle the litigation with legal counsel for the
special litigation committee consisting of independent directors (SLC) and the
plaintiffs. The MOU obligates the parties to use their best efforts to prepare
a stipulation of settlement refecting the terms of the MOU and present such
stipulation to the Delaware Chancery Court for approval. The settlement was
approved by the Delaware Chancery Court on Sept. 9, 2013.
Union Workforce
Around 800 employees (approximately 4% of total) were subject to CBAs at Dec.
31, 2012. No single CBA represents a signifcant number of employees.
September 19, 2013

Corporates

Event Risk Dashboard Clear Channel Worldwide Holdings Inc.
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition L
Divestiture L
Litigation Risk L
Regulatory Risk L
H High. M Medium. L Low. N.A. Not applicable.
LBO Risk Low
11% public foat; 89% owned by Clear Channel Communications. Buy-in of
remainder would not result in incremental leverage at CCWW.
Buy-in of remainder by Clear Channel Comm. would trigger a change of control in
outstanding bonds, limiting downside risk.
Secular Risk Low
Outdoor industry immune from audience fragmentation.
Regulatory requirements rationalize inventory.
Digital to beneft top line and margins. Incremental demand should meet
increased digital inventory.
89% owned by Clear Channel Communications (11% public foat).
Three of nine directors are also directors of Clear Channel Comm. Five directors
are insiders.
Chairman and CEO roles are separate.
creditor friendly, driven by EBITDA for annual incentive (no long-term incentive).
Financial policy governed by limitations in bond indentures.
Additional debt limited by 7x indenture incurrence test.
89% of any dividends accrue to Clear Channel Comm.
Share repurchases are very modest and used to capitalize on times of low
share price.
Clear Channels share repurchase program authorizes the company or its
subsidiaries to repurchase up to $100 million of CCMO or CCOH stock.
There is no room for dividends or share buybacks in the RP basket contained in
the credit agreement.
However, CCUs unrestricted subsidiaries can repurchase stock. CC Finco
repurchased $16.4 million shares of stock under the program in 2011 and $0.7
million of CCMH stock in 2012. There is $82.9 million remaining under board
authorization.
Clear Channel Worldwide Holdings Inc.
Rating History
B
B
B+
0.0
2.0
4.0
6.0
8.0
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
4
8
12
16
20
Source: Bloomberg.
Clear Channel Outdoor Holdings, Inc. Stock Price
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Clear Channel Worldwide Holdings Inc. (Continued)
If a restricted subsidiary (including International) guarantees CCOH debt of more
than $10 million, it must guarantee the unsecured bonds ($25 million for the
subordinated bonds). However, there is no limitation on subsidiaries guaranteeing
CCU debt.
Additional guarantees are currently limited by the 7.0x incurrence test in the
outstanding notes.
Asset sale proceeds must go toward debt repayment or acquisition of other
properties.
Clear Channel Comm. bank agreement prohibits asset sales exceeding
$900 million in aggregate.
Not a business that lends itself to small, piecemeal divestitures.
Acquisitions limited by bond indentures to $500 million in similar businesses and
other acquisitions of $250 million ($350 million in subordinated notes).
Financial fexibility for acquisitions further limited by 6.5x debt incurrence covenant
(7.0x in subordinated notes).
Covenant Thresholds Not applicable
There are no fnancial covenants in the CCWW bonds. The covenants are
incurrence tests, but a breach of them is not an event of default.
Litigation Risk Low
Regarding the shareholder lawsuit on transfer of funds between CCOH and CCU,
on March 28, 2013, without admitting the validity of any allegations made in the
complaint, legal counsel for the defendants entered into a binding memorandum
of understanding (the MOU) to settle the litigation with legal counsel for the
special litigation committee consisting of independent directors (SLC) and the
plaintiffs. The MOU obligates the parties to use their best efforts to prepare
a stipulation of settlement refecting the terms of the MOU and present such
stipulation to the Delaware Chancery Court for approval. The settlement was
approved by the Delaware Chancery Court on Sept. 9, 2013.
Regulatory Risk Low
Outdoor inventory limited by Federal Highway Beautifcation Act. Fitch expects
this positive regulatory environment to remain unchanged.
Union Workforce
140 domestic employees and 260 international employees (approximately 5% of
total) were subject to collective bargaining agreements (CBAs) at Dec. 31, 2012.
No single CBA represents a signifcant number of employees.
September 19, 2013

Corporates

Corporate Governance Overview CC Media Holdings, Inc.
a
Clear Channel does not give compensation to directors beyond covering costs to attend meetings.
b
OIBDAN is defined as: consolidated net income (loss) adjusted to exclude
noncash compensation expense and the following line items presented in the statement of operations: income tax benefit (expense); other income (expense) net; equity in
earnings (loss) of nonconsolidated affiliates; gain (loss) on marketable securities; interest expense; other operating income (expense) net; depreciation & amortization; and
impairment charges.
c
Most recent filings on Bloomberg as of July 2013.
d
Company filings, as of March 2013.
e
% of total on an as-converted basis. RSUs Restricted stock units.
N.A. Not available. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Robert W. Pittman CEO 1,000,000 597,200 260,000 902,800 885,145 3,645,145
Mark P. Mays Chairman and Former CEO 1,000,000 500,000 438,604 1,938,604
Thomas W. Casey EVP and CFO 791,667 230,000 2,675,187 562,152 6,250 4,265,256
C. William Eccleshare CEO, CCOH 1,057,296 405,096 1,860,760 374,094 540,186 1,191,919 5,429,351
John E. Hogan Chairman and CEO, Clear Channel Media & Ent. 1,000,000 655,013 804,602 685,323 190,386 3,335,324
Robert H. Walls, Jr. EVP, GC and Secretary 750,000 115,250 2,422,983 523,474 10,279 3,821,986
Board of Directors
Indepen- Compensation
a
Other Current Current
Name Age dence Term Tenure Cash StockAll Others Total Committees Directorships Position
David C.
Abrams
52 Y May 2013
May 2014
2008 Audit (Chair and
Financial Expert);
Compensation
Crown Castle
International, Inc.; USA
Mobility, Inc.
Managing partner
Abrams Capital
Irving L.
Azoff
65 N May 2013
May 2014
2010 None None Former CEO
Front Line Management
Group Inc.
Richard J.
Bressler
55 N May 2013
May 2014
2007 Audit; Compensation Gartner, Inc.;
The Nielsen Company
CFO Clear Channel
James C.
Carlisle
37 N May 2013
May 2014
2013 Compensation;
Nominating and
Univision
Communications, Inc.;
CCOH; Agencyport
Software Ltd.
Managing Director THL
John P.
Connaughton
Co-Presiding
Director
47 N May 2013
May 2014
2007 Compensation (Chair) HCA Holdings, Inc.;
Quintiles Transnational
Corp.; Warner Chilcott
plc; Air Medical Holdings,
Inc.
Managing Director
Bain Capital
Matthew J.
Freeman
43 N May 2013
May 2014
2012 None None Operating Partner
Bain Capital
Blair E.
Hendrix
48 N May 2013
May 2014
2008 Audit; Compensation TWCC Holdings Corp;
CCOH
Managing Director
Bain Capital
Jonathon S.
Jacobson
51 Y May 2013
May 2014
2008 Compensation;
Nominating and
None Founder and
Chief Investment Officer
Highfields Capital Management
Ian K.
Loring
Co-Presiding
Director
49 N May 2013
May 2014
2007 Nominating and
TWCC Holdings Corp.;
NXP Semiconductors
N.V.; Denon & Marantz
Managing Director Bain
Capital
Mark P.
Mays
Chairman
49 N May 2013
May 2014
1998 None None Retired President and CEO
Clear Channel
(20042011)
Robert W.
Pittman
59 N May 2013
May 2014
2011 None None CEO
Clear Channel
Scott M.
Sperling
Co-Presiding
Director
55 N May 2013
May 2014
2007 Nominating and
(Chair)
Thermo Fisher Scientific
Inc.
Co-President THL
Julia Brau N.A. N.A. Sept 2013
May 2014
2013 None Agencyport
Software Ltd.
VP THL
Base Salary NEOs employment agreements at minimum level base salary.
Annual Incentive Annual incentive targets were: Pittman $1.65 million, Casey $1.0 million, Walls $750,000, Hogan $1.2 million, Eccleshare $1.0 million
Long-Term Incentives Awards generally consist of stock options and RSUs vesting varies on a case by case basis. Stock options were not provided to NEO for
FY 2012. Long-term incentives are based on evaluation of competitive factors and total compensation provided, within the boundaries of the
compensation program.
September 19, 2013

Corporates

Corporate Governance Overview CC Media Holdings, Inc. (Continued)
a
b
impairment charges.
c
d
e
N.A. Not available. Continued on next page.
c
Highfields Capital Management 9,951 36.7
Abrams Capital Management LLC 6,811 25.1
Marathon Asset Management LLP 1,010 3.7
Pittman CC LLC 706 2.6
Mays Randall T 698 2.6
LLM Partners 542 2.0
Mays Mark Pitman 497 1.8
Hogan John E 205 0.8
Walls JR Robert H 120 0.4
Pittman Robert W 100 0.4
Total Top 10 20,640 76.1
d
Holder Class A Shares (000) % of Total
e

David C. Abrams 6,811 7.9
Irving L. Azoff
Richard J. Bressler
James C. Carlisle
Thomas W. Casey 188 <1.0
John P. Connaughton
C. William Eccleshare
Matthew J. Freeman
Blair E. Hendrix
John E. Hogan 242 <1.0
Jonathon S. Jacobson 9,951 11.6
Ian K. Loring
Mark P. Mays 1,074 1.2
Randall T. Mays 1,100 1.3
Robert W. Pittman 1,072 1.3
Scott M. Sperling
Robert H. Walls, Jr. 150 <1.0
All Directors and Executive Officers as a Group (18 Individuals) 20,614 23.7
Equity Holdings Holders Class A, B and Class C
d
(000)
Holder Class A Shares Class B Shares Class C Shares % of Total
e

Bain Capital Investors, LLC 278 29,484 34.7
Thomas H. Lee Partners, L.P. 278 29,484 34.7
Highfields Capital Management LP and managed investment funds 9,951 11.6
Abrams Capital Management, L.P. and affiliates 6,811 7.9
Total 556 58,968 88.9
Annual Incentive Targeted OIBDAN
b
on either a segment-specific or consolidated basis, depending on the role of the executive and various qualitative factors.
Long-Term Incentives N.A.
September 19, 2013

Corporates

Corporate Governance Overview CC Media Holdings, Inc. (Continued)
a
b
impairment charges.
c
d
e
N.A. Not available.
Carlisle has been a director since March 20, 2013; Matthew J. Freeman has been director since Dec. 14, 2012. Randall T. Mays is not standing for re-election. Jonathon S. Jacobson
was selected as director by Highfields Capital Management LP.
Mark Mays retired as president and CEO in March 2011, but continues to serve as a director of the board. Mays was succeeded by Bob Pittman, who was named CEO of Clear
Channel in October 2011, member of the board of CC Media Holdings, Inc. and Clear Channel Communications, Inc., and the executive chairman of the board at Clear Channel
Outdoor Holdings, Inc.
Holders of Class A common stock are entitled to elect two of the 12 members of the board, who are also the only independent members. Both class A and B common stock vote
together as a single class on all other matters.
Each share of Class B and C common stock is convertible, at the election of the holder, into one share of Class A common stock at any time.
CC Media will appoint at least one of the independent directors voted in by Class A shares to each primary standing committee of the board.
Under the corporate services agreement between CCU and CCOH, as long as CCU has more than 50% voting control of CCOH, it provides CCOH with corporate services, including
treasury, executive officer, HR, legal, IT, investment, corporate and procurement.
Bain Capital Partners, LLP and Thomas H. Lee Partners, L.P. make up the entirety of Clear Channels Sponsors, and collectively have a 69.4% economic/voting interest.
John E. Hogan was promoted to chairman and chief executive officer Clear Channel Media & Entertainment in February 2012; C. William Eccleshare was promoted to CEO
Outdoor, overseeing both Americas and International in January 2012; Ronald H. Cooper served as CEO Clear Channel Outdoor Americas until his termination in
February 2012.
Related-party transactions: In FY 2012, the company provided advertising and other services exceeding $120,000 for 14 companies in which the sponsors directly or indirectly owned
a greater than 10% equity interest. Bressler, Connaughton, Loring and Sperling also served as directors of three of these companies during 2012. The company was paid $10.2 Mil.
with respect to these transactions. In addition, entities in which THL directly or indirectly owns a greater than 10% equity interest provided the company with audio conferencing,
payroll tax processing and commercial credit card processing services. Fees paid by the company for each of these services did not exceed $120,000.
No stock ownership guidelines; clawback policy not in place; plurality vote standard.
September 19, 2013

Corporates

Corporate Governance Overview Clear Channel Outdoor Holdings, Inc.
a
OIBDAN is defined as: consolidated net income (loss) adjusted to exclude non cash compensation expense and the following line items presented in the statement of operations:
income tax benefit (expense); other income (expense) net; equity in earnings (loss) of nonconsolidated affiliates; gain (loss) on marketable securities; interest expense; other
operating income (expense) net; depreciation and amortization; and impairment charges.
b
c
Most recent filings on Bloomberg as
of March 2013.
d
% of total on an as-converted basis. RSUs Restricted stock units. N.A. Not applicable. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Robert W. Pittman Executive Chairman and Director
C. William Eccleshare CEO 1,057,296 405,096 1,860,760 374,094 540,186 1,191,919 5,429,351
Thomas W. Casey EVP and CFO 321,575 93,426 1,797,464 228,346 2,539 2,443,350
Robert H. Walls, Jr. EVP, GC and Secretary 1,999,996 1,999,996
Jonathan D. Bevan MD and COO Clear Channel Int. 517,918 300,000 415,660 359,781 1,593,359
Franklin G. Sisson, Jr. Chief Revenue Officer Americas 450,000 332,528 460,431 6,250 1,249,209
Scott D. Hamilton SVP, Chief Accounting Officer 132,015 11,884 55,299 2,539 201,737
Ronald H. Cooper Former CEO, Clear Channel Americas 110,288 2,168,750 2,279,038
Board of Directors
James C.
Carlisle
37 N May 2012
May 2015
2012 None Agencyport Software Ltd Managing Director
Thomas H. Lee Partners, L.P.
Blair E.
Hendrix
48 N May 2013
May 2016
2008 None TWCC Holdings Corp. Managing Director
Bain Capital Partners, LLC
Douglas L.
Jacobs
Presiding
director
65 Y May 2013
May 2016
2010 252,000 41,241 293,241 Audit (Chair and
Financial Expert);
Compensation
Springleaf Finance,
Inc.; Doral Financial
Corporation; Fortress
Investment Group LLC
Former EVP and Treasurer
FleetBoston Financial Group
Daniel G.
Jones
38 N May 2013
May 2016
2008 None None Director THL
Robert W.
Pittman
Executive
Chairman
59 N May 2012
May 2015
2011 None None CEO and Director
CC Media and Clear Channel
Thomas R.
Shepherd
83 Y May 2011
May 2014
2011 63,000 41,241 104,241 None TSG Equity Partners LLCRetired Managing Director
THL
Christopher M.
Temple
45 Y May 2011
May 2014
2011 226,500 41,241 267,741 Audit Plains All American
Pipeline GP, LLC
President DelTex Capital LLC
Dale W.
Tremblay
54 Y May 2012
May 2015
2005 110,500 41,241 151,741 Audit; Compensation
(Chair)
Texas Capital Bank President and CEO
C.H. Guenther & Son, Inc.
Scott R.
Wells
44 N May 2011
May 2014
2008 None CRC Health Corporation Operating Partner
Bain Capital
Annual Incentive Targeted OIBDAN
a
on either a segment-specific or consolidated basis, varying on the role of the executive and various qualitative factors
Base Salary NEOs employment agreements at min. level base salary.
Annual Incentive Annual incentive targets were: Eccleshare $1.0 Mil., Bevan 100% of base salary, Sisson Jr. $540,000. Compensation for Casey and Walls
was set by the board of directors of CC Media.
Long-Term Incentives Stock options and RSUs vesting varies on a case by case basis. Time-vesting RSUs were granted to Casey and Walls for FY 2012. Eccleshare,
Bevan and Sisson were awarded time-vesting stock options to purchase 90,000, 100,000 and 80,000 shares of Class A common stock. Long-term
incentives are based on evaluation of competitive factors and total compensation provided, within the boundaries of the compensation program.
September 19, 2013

Corporates

Corporate Governance Overview Clear Channel Outdoor Holdings, Inc. (Continued)
a
OIBDAN is defined as: consolidated net income (loss) adjusted to exclude non cash compensation expense and the following line items presented in the statement of operations:
income tax benefit (expense); other income (expense) net; equity in earnings (loss) of nonconsolidated affiliates; gain (loss) on marketable securities; interest expense; other
operating income (expense) net; depreciation and amortization; and impairment charges.
b
c
Most recent filings on Bloomberg as
of March 2013.
d
% of total on an as-converted basis. RSUs Restricted stock units. N.A. Not applicable.
In January 2012, Margaret W. Covell resigned from the board of Clear Channel Outdoor Holdings, Inc., the board appointed James C. Carlisle as her replacement.
Mark Mays retired as CEO in March 2011 and as Chairman in November 2011. Mays term as a director ended at the 2012 annual meeting and he is not standing for re-election. In
October 2011, Robert Pittman was appointed as executive chairman and a member of the board and, in January 2012, C. William Eccleshare was appointed as CEO Outdoor,
overseeing both Americas and International. Ronald H. Cooper, served as CEO Clear Channel Outdoor Americas until his termination in Feb. 2012. Bevan was promoted to
Managing Director and Chief Operating Officer International on Feb. 1, 2012. Franklin G. Sisson, Jr. was appointed Chief Revenue Officer Americas on Feb. 1, 2012.
Only independent directors are compensated for serving as directors of Clear Channel Outdoor.
CC Media will appoint at least one of the independent directors voted in by Class A shares to each primary standing committee of the board.
Under the Corporate Services agreement between CCU and CCOH, as long as CCU has more than 50% voting control of CCOH, it provides CCOH with corporate services,
including treasury, executive officer, HR, legal, IT, investment, corporate and procurement.
CCU and CCOH file consolidated taxes.
Bain Capital Partners, LLP and Thomas H. Lee Partners, L.P. make up the entirety of Clear Channels sponsors, and collectively have a 69.4% economic/voting interest.
Beginning July 2010, independent directors will receive an annual cash retainer of $45,000, $1,500 per board and/or committee meeting attended, $15,000 to the audit committee
chairperson, $10,000 retainer to the compensation committee chairperson and up to 10,000 stock shares per year.
Each share of Class B and C common stock is convertible, at the election of the holder thereof, into one share of Class A common stock at any time. Class A common stock is entitled
to one vote and Class B common stock is entitled to twenty votes on all matters on which stockholders are entitled to vote.
Related-party transactions: James C. Carlisle, Blair E. Hendrix and Robert W. Pittman, current directors, are also directors of CC Media and Clear Channel. In FY2012, the company
provided advertising and other services exceeding $120,000 for 5 companies in which Bain Capital and/or THL directly or indirectly owned a greater than 10% equity interest.
The company was paid $2.3 Mil. with respect to these transactions. In addition, entities in which THL directly or indirectly owns a greater than 10% equity interest provided the
company with audio conferencing, payroll tax processing and commercial credit card processing services. Fees paid by the company for each of these services did not
exceed $120,000.
No stock ownership guidelines; clawback policy not in place; auditor: Ernst & Young LLP.
d

Jonathan D. Bevan 302,965 <1.0
James C. Carlisle
Thomas W. Casey
Ronald H. Cooper
C. William Eccleshare 325,751 <1.0
Scott D. Hamilton
Blair E. Hendrix
Douglas L. Jacobs 12,500 <1.0
Daniel G. Jones
Robert W. Pittman
Thomas R. Shepherd 7,500 <1.0
Franklin G. Sisson, Jr 410,265 1.0
Christopher M. Temple 7,500 <1.0
Dale W. Tremblay 52,397 <1.0
Robert H. Walls, Jr
Scott R. Wells
All Directors and Executive Officers as a Group (16 Individuals) 1,118,878 2.6
Note: Directors & NEO Holdings include stock options exercisable within 60 days of March 20, 2013.
b
Equity Holdings Holders Class B
c
Gamco 5,268 12.3% Clear Channel Communications, Inc. 315,000 100.0%
JP Morgan 5,223 12.2% Total 315,000 100.0%
Canyon Capital Advisors LLC 4,689 11.0%
Mason Capital Management LLC 4,173 9.8%
Abrams Capital Management LLC 3,354 7.8%
HMI Capital LLC 2,162 5.1%
Vanguard Group Inc. 2,117 4.9%
Blackrock 2,081 4.9%
CC Media Holdings Inc. 1,554 3.6%
Credit Suisse AG 1,494 3.5%
Total Top 10 32,115 75.0%
September 19, 2013

Corporates

Detailed Maturities Schedule Clear Channel Communications, Inc.
Senior Secured Bank Debt Guaranteed
Senior Secured Term Loan B 3,030.3 2016 3,030.3
Senior Secured Term Loan C 198.2 2016 2.8 7.0 3.4 185.0
Senior Secured Term Loan D 5,000.0 2019 5,000.0
Receivables-Based Credit Facility 247.0 2017 247.0
Total Secured Bank Debt Guaranteed 8,475.5 2.8 7.0 3.4 3,215.3 247.0 5,000.0
9.000% Priority Guarantee Notes 1,999.8 2019 1,999.8
9.000% Priority Guarantee Notes 1,750.0 2021 1,750.0
11.250% Priority Guarantee Notes 575.0 2021 575.0
Other Secured Subsidiary Debt 22.7 20132028 1.1 8.3 8.3 4.9
Senior Unsecured LBO Notes Guaranteed
Senior Cash Pay Notes 448.1 2016 448.1
Senior Toggle Notes
a
365.3 2016 25.3 7.7 332.3
Total Senior Unsecured LBO Notes Guaranteed 813.4 25.3 7.7 780.4
14.000% Senior Unsecured Notes (Exchange Notes) 780.0 2021 780.0
Senior Unsecured Legacy Notes Not Guaranteed
5.500% Senior Notes 461.5 2014 461.5
4.900% Senior Notes 250.0 2015 250.0
5.500% Senior Notes 250.0 2016 250.0
Total Senior Unsecured Legacy Notes Not Guaranteed 1,436.5 461.5 250.0 250.0 475.0
Clear Channel Outdoor Debt
6.500% Senior Unsecured Notes 2,725.0 2022 2,725.0
7.625% Subordinated Notes 2,200.0 2020 2,200.0
Other 1.4 1.4
Total Clear Channel Outdoor 4,926.4 1.4 4,925.0
Total 20,779.3 30.6 476.8 269.4 4,245.7 247.0 15,509.7
a
Includes $25 million applicable high-yield discount obligation payment in 2013. Note: Excludes capital lease obligations and unamortized fair value adjustments.
September 19, 2013

Corporates

International
Subsidiaries
of CCWW
Guarantee from 100%-Owned
U.S. Subsidiaries
Guarantors for CCU Notes (58% of Consolidated EBITDA).
100% 100%
International Outdoor
Segment
U.S. Subsidiary
of CCWW
Organizational Structure Clear Channel Communications, Inc.
($ Mil., As of June 30, 2013)
Sponsors (Bain/THL)
Directors and
Executive Officers
Public
100%
100%
100%
Clear Channel Communications, Inc. (CCU)
IDR CCC/Stable Outlook
7%
CC Media Holdings, Inc. [CCMO]
Clear Channel Capital II, LLC
Clear Channel Capital I, LLC
69% 24%
Amount Rating
Senior Secured Credit Facilities 8,476 CCC/RR4
Senior Secured Notes (Guaranteed) 4,325 CCC/RR4
Senior Unsecured Notes (Subordinated Guarantee) 1,593 CC/RR6
Pre-LBO Senior Notes (Not Guaranteed) 1,436 C/RR6
Clear Channel Holdings, Inc. [CCH]
U.S. Subsidiaries of CCH
Radio and Other Assets
U.S. Subsidiaries of CCU
U.S. Subsidiaries
of CCO
Domestic Outdoor
Operations
Clear Channel Outdoor, Inc. [CCO]
Clear Channel Outdoor Holdings, Inc. [CCOH]
Clear Channel Worldwide Holdings, Inc. [CCWW]
100% 100%
100%
88.7%
Public
11.3%
100%
CCU Debt Guarantor Subsidiaries
CCWW Debt Guarantor Subsidiaries
Radio
Segment
Americas
Outdoor
Segment
100%
Amount Rating
6.500% Series A Senior Notes Due 2022 736 BB/RR2
6.500% Series B Senior Notes Due 2022 1,989 BB/RR2
7.625% Series A Senior Sub. Notes Due 2020 275 B/RR4
7.625% Series B Senior Sub. Notes Due 2020 1,925 B/RR4
CCWW Debt Guarantor Subsidiaries
Guarantors for CCWW Notes (23% of Consolidated EBITDA)
September 19, 2013

Corporates

Bank Agreement Covenant Summary Clear Channel Communications
Covenant
Overview
Borrower Clear Channel Communications, Inc. (CCU)
Document Date Original May 13, 2008, filed with S-4 dated June 2, 2008, as Exhibit 10.3 (for Revolver) and Exhibit 10.2 (for Term Loan);
Amended July 9, 2008, filed with 8-K dated July 30, 2008, as Exhibit 10.10 (for Revolver) and Exhibit 10.13 (for Term Loan);
Amended July 28, 2008, as Exhibit 10.11 (for Revolver) and Exhibit 10.14 (for Term Loan);
Amended and Restated Feb. 23, 2011, filed with 8-K dated Feb. 24, 2011, as Exhibit 10.1;
Amended on Oct. 25, 2012, filed with 8-K dated Oct. 25, 2012, as Exhibit 10.1;
Amended on May 31, 2013, filed with 8-K dated June 4, 2013, as Exhibit 10.1
Maturity Date Facility Type Maturity Date Amortization
Term B, and C Jan. 30, 2016 Yes
Term Loan D Jan. 30, 2019 No
Description of Debt Senior secured credit facility.
Amount Facility Type Commitment
Term B and C $11.7 billion and $0.7 billion
Term D $5.0 billion
Ranking The obligations rank equally and ratably with all of CCUs (and subsidiary guarantors) existing and future senior debt.
Security The revolving and term debt is secured by a first-priority security interest in and mortgage/pledge of (a) stock of CCU; (b) stock and
intercompany debt of wholly owned domestic unrestricted subsidiaries of CCU, as per legacy notes; (c) principal properties representing
Article 9 collateral (under Uniform Commercial Code, subject to a limit of 15% of consolidated shareholders equity, pending the discharge/
redemption of legacy notes
a
; (d) all tangible/intangible assets of the foreign borrower and foreign subsidiary guarantors (in the case of
foreign obligations); and (e) a perfected second-priority interest in the receivables collateral securing the ABL facility.
The ABL facility is secured by a first-priority perfected security interest in the receivables collateral (including credit card receivables).
Guarantee All obligations are unconditionally guaranteed on a senior secured basis by (a) Clear Channel Capital I, LLC (CCUs direct parent); (b)
wholly owned material domestic restricted subsidiaries of CCU (CCOH is not a U.S. subsidiary guarantor since it is not a wholly owned
subsidiary); and (c) CCU.
The guarantees shall be senior to the guarantee obligations under the senior guaranteed notes and any other guarantees issued in
respect of any permitted additional notes.
Financial Covenants
Secured Leverage Ratio (x)
(Maximum)
Up to first-quarter 2013 9.50
Second-quarter 2013 to third-quarter 2013 9.25
Fourth-quarter 2013 to third-quarter 2014 9.00
Fourth-quarter 2014 and thereafter 8.75
Debt Restrictions
Debt Incurrence Notable carveouts to the debt restriction: $1 billion for CCU and its restricted subsidiaries and $400 million for nonguarantor subsidiaries;
capital lease and sale-leaseback up to $150 million; permitted acquisitions related up to $250 million; subordinated guarantees; existing
debt, and senior guaranteed LBO notes up to $2.31 billion; indebtedness of CCOH and its restricted subsidiaries used to refinance the
CCU term note; notes that are pari or junior to the bank debt and secured by the same collateral, so long as the notes mature after the
term debt and the proceeds are used to repay bank debt; up to $3.5 billion of notes that are pari to (and secured by the same collateral)
or junior to the bank debt and secured by the same collateral, the proceeds of which can be used for anything not prohibited by the credit
agreement , with the amount subject to change based on incremental amounts of bank debt drawn/repaid (nine-month lookback on
$2 billion of notes where any cash used to repay legacy notes can be replaced with proceeds from these notes).
Limitation on Liens Liens securing permitted secured notes as described in Debt Incurrence section above. General carveout of $100 million This
notwithstanding, no liens may be granted as security for notes until legacy notes are redeemed. Up to $5 billion in permitted debt
exchanges permitted.
Restricted Payments (RPs) RPs include any direct or indirect dividend, distribution, or payment with respect to the stock of CCU or its restricted subsidiaries, including
share buybacks and equity investments therein. The cumulative dividend and investment capacity
b
is governed by the use of the available
amount and specific carveouts, as shown below:
The available amount (commencing on April 1, 2008) is equal to 50% of the consolidated net income of CCU and restricted subsidiaries:
1. plus, cash contributions (noncure related), net cash proceeds from issuance of stock, or debt exchanged into equity, received by CCU;
2. plus, cash distributions received from any minority investments or unrestricted subsidiaries, including principal repayments on loans
and sale/disposition of ownership interest therein that was previously financed by using the available amount;
3. minus, the aggregate restricted payments made to redeem/repay junior debt using available amount;
4. minus, the aggregate amount of permitted investments made through the use of available amount capacity.
Carveouts: (a) stock buybacks from employees/directors capped at $50 million per annum or $75 million per annum, if unused amounts
from prior year are carried over (b) dividends up to 6% annually from proceeds of first public equity offering of CCU or its parents stock;
(c) purchases of equity interests in CCOH; (d) repayment/redemption of junior debt capped at the sum of $400 million and the available
amount at that time.
a
Within 60 days of a subsequent discharge/redemption of legacy notes, the obligations will be secured be a perfected lien in substantially all tangible/intangible assets of
CCU and U.S. subsidiary guarantors.
b
Notwithstanding capacity availability, no cash distribution is permitted to sponsors unless total leverage ratio is less than 6.0x.
ABL Asset-based lending. M&A Merger and acquisition. RCF Revolving credit facility. Continued on next page.
September 19, 2013

Corporates

Bank Agreement Covenant Summary Clear Channel Communications (Continued)
Covenant
Principal Repayments
Mandatory/Tax Prepayment Mandatory prepayment with respect to:
Excess cash: 50% of excess cash (25% if total leverage ratio is less than 6x; 0% if less than 3x) less voluntary prepayments;
Permitted dispositions: 100% of net proceeds not reinvested in assets useful for business within 18 months of sale;
Nonpermitted dispositions: 100% of net proceeds (or 75% if total leverage ratio is less than 6x; 50% if less than 3x);
New debt issuance: 100% of net proceeds of nonpermitted debt; For excess cash and debt prepayments, proceeds will be applied first,
ratably to term loan A, B, and delayed draw and then to term C, whereas disposition-related proceeds will be applied first to tranche C.
Amortization Schedule Date Term B (%) Term C (%)
3/31/11 0.000 0.000
6/30/11 0.000 0.000
9/30/11 0.625 0.625
12/31/11 0.625 0.625
3/31/12 0.625 0.625
6/30/12 0.625 0.625
9/30/12 0.625 0.625
12/31/12 0.625 0.625
3/31/13 0.625 0.625
6/30/13 0.625 0.625
9/30/13 2.500 2.500
12/31/13 2.500 2.500
3/31/14 2.500 2.500
6/30/14 2.500 2.500
9/30/14 2.500 2.500
12/31/14 2.500 2.500
3/31/15 2.500 2.500
6/30/15 2.500 2.500
Callability/Optional At any time without prepayment penalty. Discounted term loan repurchases are permitted (with certain required procedures)
Pricing
Coupon Type/Index Floating based off Libor.
Total Leverage Ratio Applicable Libor Margin
(%) Term B Term C
Less than 7-to-1 3.40 3.40
More than 7-to-1 3.65 3.65
Term Loan D Adjusted Libor plus 6.75% or a base rate plus 5.75%
Change-of-Control
(CoC) Provision
A CoC constitutes an event of default. CoC occurrences include (i) acquisition of more than 50% of voting power by nonpermitted holders
(prior to a qualified IPO) and more than 35% (upon/after a qualified IPO), unless sponsors retain control over a majority of the board; and
(ii) a CoC under any other agreement relating to debt greater than $100 million.
M&A, Investments
Restriction
Acquisition of assets constituting a business unit or in an entity that becomes a wholly owned subsidiary is permitted provided no default
has occurred and pro forma compliance with the financial covenant. Aggregate investments in any nonguarantor subsidiary are capped at
the sum of 1) available amount (see RPs section) plus 2) the higher of $500 million and 1.5% of total assets. General carveout for other
investments is capped at the sum of available amount and the higher of $900 million and 3% of total assets.
Acquisition of outstanding public ownership in CCOH that results in CCOH (and its wholly owned domestic subsidiaries) becoming
guarantors under the credit agreement is also expressly permitted and not included in the general carveout.
Sale of Assets Restriction Disposition includes the sale, and sale-leasebacks of assets, including the issuance of a restricted subsidiary stock, the net proceeds of
which exceed $25 million. Asset sales aggregating up to $900 million (in fair market value since May 2008) are permitted provided: no
default exists, are at fair market value, and at least 75% of the consideration is in cash or equivalents (for sales higher than $50 million).
Further, pending the redemption of legacy notes, no restricted subsidiary may transfer any material operating assets or broadcast licenses
to CCU. Proceeds must be reinvested in useful assets within 18 months. Unapplied proceeds must be used toward loan prepayment.
Other
Cross-Default Yes, for material debt (more than $100 million).
Cross-Acceleration Yes, for material debt (more than $100 million).
Equity Cure CC Media Holdings, Inc. is permitted to cure a financial covenant breach by making cash or common equity contributions (to be applied to
EBITDA to place the ratio in compliance) provided that in each four fiscal quarter period there shall be at least one fiscal quarter in which
the cure right is not exercised.
a
Within 60 days of a subsequent discharge/redemption of legacy notes, the obligations will be secured by a perfected lien in substantially all tangible/intangible assets of
CCU and U.S. subsidiary guarantors.
b
Notwithstanding capacity availability, no cash distribution is permitted to sponsors unless total leverage ratio is less than 6.0x.
ABL Asset-based lending. M&A Merger and acquisition. RCF Revolving credit facility.
September 19, 2013

Corporates

Secured Notes Covenant Summary (Priority Guarantee Notes)
Covenant
Overview
Issuer Clear Channel Communications, Inc.
Document Date Indenture dated Feb. 23, 2011, filed with 8-K dated Feb. 24, 2011 as Exhibit 4.1
Maturity Date 3/1/21
Description of Debt 9.000% Priority Guarantee Notes due 2021.
Original Issue/Outstanding $1.75 billion/$1.75 billion
Security First-priority security interest in and mortgage/pledge of (a) stock of CCU; (b) stock and intercompany debt of wholly owned domestic
unrestricted subsidiaries of CCU as per legacy notes; and (c) a perfected second-priority interest in the receivables collateral securing
the ABL facility.
Ranking The obligations rank equally and ratably with all of CCUs (and subsidiary guarantors) existing and future senior debt. Notes are ranked
ahead of senior LBO notes and are pari passu to the bank debt (though they do not benefit from the grant of security interest in the
principal property up to the value of 15% of consolidated shareholders equity).
Guarantee Unconditionally guaranteed on a senior unsecured basis, jointly and severally, by Clear Channel Capital I, LLC (CCUs direct parent)
and wholly owned domestic restricted subsidiaries of CCU (excluding CCOH, since CCOH is not wholly-owned by CCU) that also
guarantee the senior secured credit facilities.
The guarantee is pari passu to the guarantee on the secured credit facilities and receivables-based credit facility.
Release of Guarantee If a subsidiary becomes an unrestricted subsidiary, it will no longer guarantee the bank debt. HoldCo will not be a guarantor if all of the
assets of the HoldCo are sold and HoldCo no longer guarantees other debt.
Equity Clawback CCU can redeem up to 40% (by March 1, 2014) at 109.0 of principal amount with net proceeds from equity offerings provided at least 50%
of principal amount issued remains outstanding thereafter.
Callability March 1, 2016 at 104.50
March 1, 2017 at 103.00
March 1, 2018 at 101.50
March 1, 2019 and after at 100
Financial Covenants
(Maximum)
Senior Secured Leverage

(Maximum)
Interest Coverage
(Minimum)
Change of Control
(CoC) Provision
A CoC occurs if persons other than permitted holders acquire more than 50% of the voting stock of CCU (or its direct/indirect parents) or if
the company is sold to anyone but a permitted holder. There is a COC put at 101, but it does not constitute an event of default.
Sale of Assets Restriction General carveout of $50 million asset sale at fair market value permitted provided 75% of consideration in cash. Proceeds must be applied
to repay debt or acquire additional properties within 18 months. Unapplied/excess proceeds exceeding $100 million will trigger a note
repurchase offer.
Limitation on
Acquisitions/Investments
Restricted except for investments up to $200 million in similar businesses, other investments up to $600 million, or 2% of total assets.
Debt Restrictions
Additional Debt Restriction Incurrence Test: 7.5x consolidated leverage (sublimit of $750 million for nonguarantors, e.g. CCO).
Carveouts: general basket of $1 billion; credit facility up to $16.27 billion (less securitization proceeds relating to Americas Outdoor
advertising segment); capital leases up to $150 million; foreign subsidiary debt up to $250 million; intercompany debt provided that if it is
owed to a nonguarantor subsidiary, it is expressly subordinated to the notes/guarantee; refinancing debt (excludes any debt incurrence by
a nonguarantor subsidiary to refinance debt of CCU).
Limitation on Liens Permitted if consolidated secured leverage <=6.75x. General carveouts, liens refinancing existing debt secured by a lien; liens securing
general incremental debt basket up to $500 million. Other carveouts include general carveout of $50 million.
Restricted Payments Cumulative availability (from quarter following issuance date): 50% of consolidated net income (or, if negative, then minus 100% of deficit);
plus net proceeds from issuance/sale of CCU stock; plus contributed capital, and debt reduction from exchange/conversion into equity of
CCU or its parents; plus sale of restricted investments plus other adjustments; less restricted payments made since issuance.
Carveouts: purchase shares of CCOH not owned by CCU or its restricted subsidiaries (publicly owned portion); stock repurchases from
employees/directors capped at $50 million per annum ($75 million if carryover); dividends on CCU stock following the first public equity
offering up to 6% per annum of net proceeds, existing notes prior to maturity up to $350 million; other, up to $400 million.
ABL Asset-based Loan. MAC Material adverse change. Continued on next page.
September 19, 2013

Corporates

Secured Notes Covenant Summary (Priority Guarantee Notes)
Clear Channel Communications (Continued)
Mandatory/Tax Prepayment Proceeds of asset sales not used to repay bank debt or acquire additional properties within 18 months that exceed $100 million will trigger
a note repurchase offer.
Amortization Schedule Bullet repayment.
Callability/Optional
Prepayment
On March 1, 2016 at 100 plus 4.500%
On March 1, 2017 at 100 plus 3.000%
On March 1, 2018 at 100 plus 1.500%
On March 1, 2019 and thereafter at 100%
Until March 1, 2014 Up to 40.000% at 109.000% with proceeds from equity offerings, and 50.000% remains outstanding.
Pricing
Coupon Type/Index Fixed rate.
Pricing Grid 9.000%
Other
Cross-Default Yes, principal payment default at stated final maturity or acceleration of any debt issued/guaranteed by CCU (or its restricted subsidiaries)
greater than $100 million.
Cross-Acceleration Yes (see above).
MAC Clause None
Covenant Applicability and
Suspension
Apply to CCU and its restricted subsidiaries. Legal and covenant defeasance options available to CCU.
ABL Asset-backed Loan. MAC Material adverse change.
September 19, 2013

Corporates

LBO Notes Covenant Summary Clear Channel Communications
Bonds Covered
Cash Pay Notes PIK Toggle Notes
Overview
Issuer Clear Channel Communications, Inc. Clear Channel Communications, Inc.
Document Date Both notes issued under same indenture dated July 30, 2008, with supplemental indenture dated Dec. 9, 2008.
Maturity Date Aug. 1, 2016 (may require AHYDO catch-up principal redemptions
starting in 2013).
Aug. 1, 2016 (may require special redemption of up to $30 million
on Aug. 1, 2015, and AHYDO catch-up payments starting in 2013).
Description of Debt 10.750% senior cash pay notes due 2016. 11.000%/11.750% senior toggle notes due 2016.
Original Issue/Outstanding $980 million/$448.1 million $1.33 billion/$365.3 million
Security None None
Ranking Senior unsecured debt ranking equally and ratably with all of CCUs (and guarantors) existing and future senior debt (including credit
facilities). Notes are structurally senior to CCUs legacy notes.
Guarantee Unconditionally guaranteed on a senior unsecured basis, jointly and severally, by Clear Channel Capital I, LLC (CCUs direct parent) and
wholly owned domestic restricted subsidiaries of CCU (excluding CCOH, since CCOH is not wholly owned by CCU) that also guarantee
the senior secured credit facilities.
a

Release of Guarantee Guarantee will be automatically released upon the release or discharge of the guarantee under the credit facilities.
Equity Clawback CCU can redeem up to 40% (by Aug. 1, 2011) at 110.75 (cash pay) and 111.0 (toggle) of principal amount with net proceeds from equity
offerings provided at least 50% of principal amount issued remains outstanding thereafter.
Callability Aug. 1, 2012 at 105.375
Aug. 1, 2013 at 102.688
Aug. 1, 2014 and after at 100
Aug. 1, 2012 at 105.50
Aug. 1, 2013 at 102.75
Aug. 1, 2014 and after at 100
Financial Covenants
(Maximum)

(Maximum)

Interest Coverage
(Minimum)

Change of Control (CoC)
Provision
A CoC occurs if persons other than permitted holders acquire more than 50% of the voting stock of CCU (or its direct/indirect parents).
There is a COC put at 101, but it does not constitute an event of default.
Sale of Assets Restriction General carveout of $50 million asset sale at fair market value permitted provided 75% of consideration in cash. Proceeds must be applied
to repay debt or acquire additional properties within 18 months. Unapplied/excess proceeds exceeding $100 million will trigger a note
repurchase offer.
Limitation on Acquisitions/
Investments
Restricted except for investments up to $200 million in similar businesses, other investments up to $600 million, or 2% of total assets.
Debt Restrictions
Additional Debt Restriction Incurrence test: 7.5x consolidated leverage (sublimit of $750 million for nonguarantors e.g., CCO).
Carveouts: general basket of $1 billion; credit facility up to $16.77 billion (less securitization proceeds relating to Americas Outdoor
advertising segment); capital leases up to $150 million; foreign subsidiary debt up to $250 million; intercompany debt provided that if it is
owed to an nonguarantor subsidiary, it is expressly subordinated to the notes/guarantee; refinancing debt (excludes any debt incurrence
by a nonguarantor subsidiary to refinance debt of CCU).
Limitation on Liens Liens securing the $1 billion general debt basket; Liens securing debt permitted under the indenture if consolidated leverage <6.75x.
General $50 million lien carveout.
Restricted Payments Cumulative availability (from quarter following issuance date): 50% of consolidated net income (or, if negative, then minus 100% of deficit);
plus net proceeds from issuance/sale of CCU stock; plus debt reduction from exchange/conversion into equity of CCU or its parents; plus
sale of restricted investments plus other adjustments; less restricted payments made since issuance.
Carveouts: purchase shares of CCOH not owned by CCU or its restricted subsidiaries (publicly owned portion); stock repurchases from
employees/directors capped at $50 million per annum ($75 million if carryover); dividends on CCU stock following the first public equity
offering up to 6% per annum of net proceeds; other, up to $400 million.
a
Guarantee is subordinated in right of payment to the guarantee obligations under the secured credit facilities and receivables-based credit facility. PIK Payment in
kind. AHYDO Applicable high-yield discount obligation. MAC Material adverse change. Continued on next page.
September 19, 2013

Corporates

LBO Notes Covenant Summary (Continued) Clear Channel Communications
Bonds Covered
Cash Pay Notes PIK Toggle Notes
Mandatory/Tax Prepayment Bonds may require catch-up principal redemptions starting in 2013 if
notes trigger the AHYDO rules under the IRS.
Proceeds of asset sales not used to repay secured debt or acquire
additional properties within 18 months that exceed $100 million will
trigger a note repurchase offer.
Issuer must redeem for cash on Aug. 1, 2015, an amount equal to
$30 million. Bonds may also require catch-up principal redemptions
starting in 2013 if notes trigger the AHYDO rules under the IRS.
Proceeds of asset sales not used to repay secured debt or acquire
additional properties within 18 months that exceed $100 million will
Amortization Schedule Bullet repayment. Bullet repayment.
Callability/
Optional Prepayment
On Aug. 1, 2012 at 100 plus 5.375%
On Aug. 1, 2013 at 100 plus 2.688%
On Aug. 1, 2014 and thereafter at 100.000%
Until Aug. 1, 2011, up to 40.000% at 110.750% with proceeds from
equity offerings and 50.000% remains outstanding.
On Aug. 1, 2012 at 100 plus 5.500%
On Aug. 1, 2013 at100 plus 2.750%
On Aug. 1, 2014 and thereafter at 100.000%
Until Aug. 1, 2011, up to 40.000% at 111.000% with proceeds from
equity offerings and 50% remains outstanding.
Pricing
Coupon Type/Index Fixed rate. Fixed rate.
Pricing Grid 10.750% 11.000% (11.750% if PIK option).
Other
Cross-Default Yes, principal payment default at stated final maturity or acceleration of any debt issued/guaranteed by CCU (or its restricted subsidiaries)
greater than $100 million.
Cross-Acceleration Yes (see above).
MAC Clause None
Covenant Applicability
and Suspension
Apply to CCU and its restricted subsidiaries. Legal and covenant defeasance options available to CCU.
a
Guarantee is subordinated in right of payment to the guarantee obligations under the secured credit facilities and receivables-based credit facility.
PIK Payment in kind. AHYDO Applicable high-yield discount obligation. MAC Material adverse change.
September 19, 2013

Corporates

Legacy Notes Covenant Summary (Base and Supplemental Indentures)
Overview
Borrower Clear Channel Communications, Inc. (CCU)
Document Date Oct. 1, 1997 (base indenture) filed with 10-Q dated Nov. 6, 1997;
22 supplemental indentures: Jan. 2, 2008 (last).
Maturity Date Various
Description of Debt Senior unsecured notes.
Security None (but note equivalent security negative pledge provision below).
Ranking The notes are senior indebtedness of CCU, rank pari passu in right of payment with all existing and future senior indebtedness (including
credit facilities) of CCU, and rank senior in right of payment to all existing and future subordinated indebtedness of CCU. Further, the
notes are effectively subordinated to all existing and future debt of (and notes guaranteed by) CCUs subsidiaries, including the senior
guaranteed notes.
Guarantee None
Financial Covenants
(Maximum)

(Maximum)
Interest Coverage
(Minimum)
Change of Control (CoC)
Provision
No put option or similar protection afforded to noteholders upon CoC.
Sale of Assets Restriction Sale and leaseback transactions relating to principal property aggregating (together with debt secured with liens) in excess of 15.000%
of consolidated equity of CCU are not permitted unless (i) such transaction occurs within 120 days from the acquisition of the principal
property, or (ii) CCU applies the net sale proceeds toward retirement of outstanding indebtedness. (Waived for 7.650% 2010 notes.)
Limitation on Acquisitions No
Debt Restrictions
Additional Debt Restriction No
Limitation on Liens Equivalent security negative pledge provision: CCU and its restricted subsidiaries are not permitted to create any liens upon (i) stock
of any restricted subsidiary or intercompany notes, and (ii) the principal property (in the U.S. owned by CCU/subsidiaries) in excess of
15.000% of the total consolidated stockholders equity of CCU as per latest annual report (principal property permitted amount), unless the
notes are equally and ratably secured with the secured obligations. (Waived for 7.650% 2010 notes.)
Restricted Payments No
Other
Cross-Default No (an event of default is limited to that particular series).
Cross-Acceleration No
and Suspension
Apply to CCU and its restricted subsidiaries (majority-owned direct/indirect subsidiaries whether domestic or foreign).
Does not apply to CCUs parent (Clear Channel Capital 1, LLC). Legal defeasance and covenant defeasance options available to CCU.
Mandatory/Tax Prepayment None
Amortization Schedule Bullet repayment
Callability/
Optional Prepayment
None
Pricing
Coupon Type/Index Fixed rate
Pricing Grid Various
September 19, 2013

Corporates

Bond Covenant Summary (Bonds Covered) Clear Channel Worldwide Holdings, Inc.
Series A Series B
Overview
Issuer Clear Channel Worldwide Holdings, Inc. (CCWW)
Document Date Issued under separate indentures, each dated Nov. 19, 2012 filed under an 8-K dated Nov. 19, 2012 as Exhibit 4.1 (for Series A) and
Exhibit 4.2 (for Series B).
Maturity Date Nov. 15, 2022 Nov. 15, 2022
Description of Debt 6.50% series A senior notes due 2022. 6.50% series B senior notes due 2022.
Original Issue/Outstanding $735.75 million/$735.75 million $2 billion/$2 billion
Security Unsecured
Ranking These notes are senior obligations of CCWW and rank equally and ratably with all of its existing and future senior indebtedness and are
senior to any of its subordinated indebtedness.
Guarantee Unconditionally guaranteed on a senior unsecured basis, jointly and severally, by CCOH, CCO, and subsidiaries representing Americas
Outdoor segment.
Release of Guarantee Guarantee will be released if the guarantor is no longer a restricted subsidiary.
Equity Clawback Redeem up to 40% (up to Nov. 15, 2015) at 106.5 of principal amount with net proceeds from equity offerings provided it occurs within 180
days of such offering and at least 65% of principal amount issued remains outstanding thereafter.
Callability Nov. 15, 2017 at 103.250
Nov. 15, 2018 at 102.167
Nov. 15, 2019 at 101.083
Nov. 15, 2020 and after at100
Nov. 15, 2017 at 103.250
Nov. 15, 2018 at 102.167
Nov. 15, 2019 at 101.083
Nov. 15, 2020 and after at 100
Financial Covenants
(Maximum)

(Maximum)

Interest Coverage
(Minimum)

Change of Control
(CoC) Provision
indirect parents); (iii) majority of board of directors changed within a
two-year period; (iv) CCWW is no longer a wholly owned subsidiary
of CCOH; (v) a sale of all or substantially all of CCOH assets to
persons other than a Permitted Holder (private equity owners,
management, Clear Channel). There is a CoC put at 101, but it does
not constitute an event of default (unless put not honored).
indirect parents); (iii) majority of board of directors changed within a
two-year period; (iv) CCWW is no longer a wholly owned subsidiary
of CCOH; (v) a sale of all or substantially all of CCOH assets to
persons other than a Permitted Holder (private equity owners,
management, Clear Channel). There is a CoC put at 101, but it does
not constitute an event of default (unless put not honored).
Sale of Assets Restriction None Carveout of up to $50 million. Thereafter, asset sale at fair market
value permitted provided 75% of consideration in cash. Proceeds
must be applied to repay debt or acquire additional properties within
18 months. Unapplied/excess proceeds exceeding $50 million will
Limitation on Acquisitions None Permitted investments (in the form of advances, guarantees,
purchase of debt, or equity) in (i) any debt of CCU (or its
subsidiaries) provided it concurrently reduces the amount owed by
CCOH under the mirror note; (ii) up to $500 million or 7.5% of total
assets in similar businesses; (iii) other investments up to
$250 million or 3.750% of total assets.
MAC Material adverse change. Continued on next page.
September 19, 2013

Corporates

Bond Covenant Summary (Bonds Covered) Clear Channel Worldwide Holdings, Inc.
(Continued)
Series A Series B
Debt Restrictions
Additional Debt Restriction Incurrence Test: 7x (consolidated leverage); 5x (senior leverage).
Carveouts: up to $150 million under credit facility; capitalized
leases up to $25 million.
Limitation on restricted subsidiaries of CCOH from guaranteeing
debt issued by CCOH/CCO/CCWW exceeding $10 million.
However, no limitation regarding guaranteeing debt issued up the
parent chain (including CCU).
Incurrence Test: 7x (consolidated leverage); 5x (senior leverage).
Carveouts: up to $150 million under credit facility; capitalized
leases up to $25 million.
Limitation on restricted subsidiaries of CCOH from guaranteeing
debt issued by CCOH/CCO/CCWW exceeding $10 million.
However, no limitation regarding guaranteeing debt issued up the
parent chain (including CCU).
Limitation on Liens CCOH and its restricted subsidiaries are not permitted to create any
liens (other than permitted liens) unless the notes are equally and
ratably secured with the obligations so secured. Carveouts, existing
liens; additional $40 million; securing credit facilities up to
$250 million.
CCOH and its restricted subsidiaries are not permitted to create any
ratably secured with the obligations so secured. Carveouts, existing
liens; additional $40 million; securing credit facilities up to
$250 million.
Restricted Payments None Carveouts: dividends up to $500 million; dividends funded by
subordinate debt provided consolidated leverage is less than 7x and
senior leverage is less than 5x; stock repurchases from employees/
directors capped at
$7.5 million per annum ($15 million if carryover); other, up to
$25 million.
Other
Cross-Default Yes, principal payment default at stated final maturity or acceleration of any debt (issued by CCOH or its restricted subsidiaries) greater
than $50 million.
Cross-Acceleration Yes, see above.
MAC Clause No
and Suspension
Apply to CCOH and its restricted subsidiaries. Legal and covenant defeasance options available.
MAC Material adverse change.
September 19, 2013

Corporates

Bond Covenant Summary (Bonds Indentured) Clear Channel Worldwide Holdings, Inc.
Series A Series B
Overview
Issuer Clear Channel Worldwide Holdings, Inc. (CCWW) Clear Channel Worldwide Holdings, Inc. (CCWW)
Document Date and
Location
Issued under separate indenture dated March 15, 2012.
Filed with 8-K dated March 16, 2012; Exhibit 4.1
Issued under separate indenture dated March 15, 2012. Filed with
8-K dated March 16, 2012; Exhibit 4.2
Maturity Date March 15, 2020 March 15, 2020
Description of Debt
Amount ($ Mil.) and OID (%) Issued: $275 million
Outstanding: $275 million
Issued: $1.925 billion
Outstanding: $1.925 billion
Ranking These notes are senior subordinated obligations of CCWW
and rank equally and ratably with all of its existing and future
senior subordinated indebtedness and junior to any of its senior
indebtedness, including the unsecured notes.
These notes are senior subordinated obligations of CCWW
and rank equally and ratably with all of its existing and future
senior subordinated indebtedness and junior to any of its senior
indebtedness, including the unsecured notes.
Security Subordinated Subordinated
Guarantee Unconditionally guaranteed on an unsecured subordinated basis,
jointly and severally, by CCOH, CCO, and subsidiaries representing
America's Outdoor segment.
Unconditionally guaranteed on an unsecured subordinated basis,
jointly and severally, by CCOH, CCO, and subsidiaries representing
America's outdoor segment.
Financial Covenants
Leverage (Maximum) Consolidated Leverage
< 7.0x (for Debt Incurrence)
< 7.0x (for Debt Incurrence)
Change of Control
(CoC) Provision
CoC defined as (i) sale of all or substantially all of the assets;
(ii) persons other than permitted holders acquire more than 50%
of the voting stock of CCOH (or its direct/indirect parents;) (iii)
majority of board of directors changed within a two-year period;
(iv) CCOH/CCO/CCWW become wholly owned subsidiaries of
CCU; (v) CCWW ceasing to be a direct or indirect wholly owned
subsidiary of CCOH.
There is a CoC put at 101, but it does not constitute an event of
default (unless put not honored).
CoC defined as (i) sale of all or substantially all of the assets;
(ii) persons other than permitted holders acquire more than 50%
of the voting stock of CCOH (or its direct/indirect parents); (iii)
majority of board of directors changed within a two-year period;
(iv) CCOH/CCO/CCWW become wholly owned subsidiaries of
CCU; (v) CCWW ceasing to be a direct or indirect wholly owned
subsidiary of CCOH.
There is a CoC put at 101, but it does not constitute an event of
default (unless put not honored).
M&A, Investments
Restriction
None Permitted investments (in the form of advances, guarantees,
purchase of debt or equity) in (i) any debt of CCU (or its
subsidiaries) provided it concurrently reduces the amount owed
by CCOH under the mirror note; (ii) up to $500 million or 7.5% of
total assets in similar businesses; (iii) other investments up to $350
million or 4.5% of total assets.
Sale of Assets Restriction None Asset sale at fair market value permitted provided 75% of
consideration in cash, with noncash consideration for all assets
sales not exceeding the greater of $150 million or 2% of total assets.
Proceeds must be applied to repay debt or acquire additional
properties within 18 months. Unapplied/excess proceeds exceeding
$50 million will trigger a note repurchase offer.
Debt Restrictions
Debt Incurrence Incurrence test: 7.0x consolidated leverage
Carveouts: Up to $150 million under credit facility; capitalized
leases up to greater of $140 million or 2% of total assets;
$150 million foreign subsidiary debt
Limitation on restricted subs of CCOH from guaranteeing debt
issued by CCOH/CCO/CCWW exceeding $25 million. However,
no limitation regarding guaranteeing debt issued up the parent
chain (including CCU).
Incurrence test: 7.0x consolidated leverage
Carveouts: Up to $150 million under credit facility; capitalized
leases up to greater of $140 million or 2% of total assets;
$150 million foreign subsidiary debt
Limitation on restricted subs of CCOH from guaranteeing debt
issued by CCOH/CCO/CCWW exceeding $25 million. However,
no limitation regarding guaranteeing debt issued up the parent
chain (including CCU).
Limitation on Liens CCOH and its restricted subsidiaries are not permitted to create any
ratably secured with the obligations so secured.
CCOH and its restricted subsidiaries are not permitted to create any
ratably secured with the obligations so secured.
M&A Merger and acquisition. MAC Materially adverse change. IG Investment grade. Continued on next page.
September 19, 2013

Corporates

Bond Covenant Summary (Bonds Indentured) Clear Channel Worldwide Holdings, Inc.
(Continued)
Series A Series B
Debt Restrictions (Continued)
Limitation on Guarantees Guarantees by nonguarantor restricted subsidiaries (unless they are
voluntarily designated as such and not required to be) limited to
$25 million, unless the subsidiaries become guarantors of the
notes, or the guaranteed debt and the guarantee are expressly
subordinated to the notes.
Guarantees by nonguarantor restricted subsidiaries (unless they are
voluntarily designated as such and not required to be) limited to
$25 million, unless the subsidiaries become guarantors of the
notes, or the guaranteed debt and the guarantee are expressly
subordinated to the notes.
Restricted Payments (RP) None Basket: 50% of consolidated net income beginning April 1, 2012,
plus cash proceeds from equity sales, equity contributions, and
asset sales. Carveouts: Dividends up to $500 million; dividends
funded by debt provided consolidated leverage < 7x; stock
repurchases from employees/directors capped at $7.5 million p.a.
($15 million if carryover); Other up to $25 million.
Mandatory/Tax Prepayment Series A Notes cannot be repurchased if the ratio of Series A/
Series B Notes outstanding exceeds 0.25x.
An optional repurchase or asset sale repurchase of Series B
notes must be accompanied by a pro rata repurchase of Series
A Notes.
Series A Notes cannot be repurchased if the ratio of Series A/
Series B Notes outstanding exceeds 0.25x.
An optional repurchase or Asset Sale repurchase of Series B
notes must be accompanied by a pro rata repurchase of Series
A Notes.
Asset sale proceeds that are not otherwise applied to debt
reduction, once greater than $50 million, must be applied to
repurchase notes.
Amortization Schedule Bullet repayment Bullet repayment
Callability/
Optional Prepayment
On 3/15/15
On 3/15/16
On 3/15/17
On 3/15/18 and after
@ 100+5.719%
@ 100+3.813%
@ 100+1.906%
@ 100%
On 3/15/15
On 3/15/16
On 3/15/17
On 3/15/18 and after
@ 100+5.719%
@ 100+3.813%
@ 100+1.906%
@ 100%
Pricing
Coupon Type/Index Fixed Rate 7.625% Fixed Rate 7.625%
Other
Cross Default Yes Principal payment default at stated final maturity or
acceleration of any debt (issued by CCOH or its restricted
subsidiaries) greater than $50 million.
Yes Principal payment default at stated final maturity or
acceleration of any debt (issued by CCOH or its restricted
subsidiaries) greater than $50 million.
Cross Acceleration Yes See above. Yes See above.
MAC Clause No. No.
Equity Clawback Redeem up to 40% (up to March 15, 2015) at 107.625 of principal
amount with net proceeds from equity offerings provided it occurs
within 180 days of such offering and at least 60% of principal
amount issued remains outstanding thereafter.
Redeem up to 40% (up to March 15, 2015) at 107.625 of principal
amount with net proceeds from equity offerings provided it occurs
within 180 days of such offering and at least 60% of principal
amount issued remains outstanding thereafter.
Covenant Suspension Covenants apply to CCOH and its restricted subsidiaries. Legal and
covenant defeasance options available:
If the notes achieve an IG rating by both rating agencies (as
defined), the following covenants will be suspended:
(1) Debt repurchase from asset sale proceeds; (2) Limitation on
restricted payments; (3) Limitation on debt incurrence; (4) Dividend
and other payment restrictions affecting restricted subsidiaries;
(5) Limitation on guarantees of indebtedness by restricted
subsidiaries; (6) Transactions with affiliates; (7) Debt incurrence and
pro forma leverage test under the merger and consolidation clause.
If rating reverts again to below IG, CCOH will again be subject to the
suspended covenants.
Covenants apply to CCOH and its restricted subsidiaries. Legal and
covenant defeasance options available:
If the notes achieve an IG rating by both rating agencies (as
defined), the following covenants will be suspended:
(1) Debt repurchase from asset sale proceeds; (2) Limitation on
restricted payments; (3) Limitation on debt incurrence; (4) Dividend
and other payment restrictions affecting restricted subsidiaries;
(5) Limitation on guarantees of indebtedness by restricted
subsidiaries; (6) Transactions with affiliates; (7) Debt incurrence and
pro forma leverage test under the merger and consolidation clause.
If rating reverts again to below IG, CCOH will again be subject to the
suspended covenants.
M&A Merger and acquisition. MAC Materially adverse change. IG Investment grade.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Clear Channel Outdoor Holdings, Inc.
Date of
5/2/2013 1Q2013 Q&A Q: Figure on Capex for the entire company, it looks like capex in the the Outdoor business was down pretty significantly year-over-
year in Q1. So any guidance you can give out on kind of what that might look like for the year?
A: Okay. On the capex, I gave an update that were still probably in line with $350 million for the year. Thats kind of our target. That
would be all-in. The big users of capital tend to be the Outdoor businesses. And from a year ago, I mean, theyre down slightly, a
couple million bucks, but there typically is not a significant capital outlay in the first quarter. So its not much of a story other than we
continue to do invest into business and were still thinking thats about $350 million or so.
5/2/2013 1Q2013 Q&A Q: Oh, thanks. A couple of questions. One, maybe you could talk about how the company feels right now about their liquidity position
and specifically Im thinking about the ability to take on more interest expense should there be any more debt swaps of any kind going
forward?
A: Yeah. Sure. Well. Were obviously very focused on liquidity and the ability to continue to generate liquidity in the business. Our
balance sheet cash is lower due to some payments during the quarter, and then, obviously, its coming off of our weakest operating
quarter. That being said, we dont have any significant debt maturities until late September 2014. There was a Ohio payment
in August, but other than that the runway is clear. We look to continue to grow free cash flow. We have availability under our ABL
facilities and continue over time to improve the business free cash flow. We have additional levers from distributions from of excess
cash from subsidiaries, working capital initiatives. A lot of activities that we can kind of look to.
Weve cleared the runway, continue to operate the business, feel that we have enough free cash flow and liquidity to meet all our
operating needs moving forward, but it is a balance. Weve always taken a balanced and sequenced approach to refinancing in
a manner that could be supported by our liquidity and I think well continue to do that. Balancing that with refinancing risk and
being opportunistic in attractive markets. So I think we feel pretty good about our liquidity position. We continue to focus on it, and
every capital structure move we make reprices some fairly attractive some fairly attractively priced debt. Thats why weve been
sequenced and deliberative in the past and well continue to take that view going forward.
5/2/2013 1Q2013 Q&A Q: Great. And if I can ask just one question about the capital structure. So clearly, you made significant progress with your balance
sheet and now 2014 from a maturity standpoint is pretty much a non-event. Now, the market is very strong right now and recently at
our conference you have also alluded to, I think, some preliminary discussions with the LBO bondholders in terms of how to manage
the 2016 maturities, so I just wanted to see if there is anything you can share with us on that front, whether its on the LBO bonds or
on the banker side, how are you thinking about starting to address 2016 debt maturities?
A: Well, Jason, as weve talked and I think weve been consistent on the phone over the last few years, we see how robust the market
is right now and we continue to be very disciplined and proactive in managing through our debt maturities. You saw us proactively
prepay the 2014s; again, that opens up a lot of opportunities for the company. We have a number of amendments in place from our
transactions last year. And so were well-positioned, we think, to take advantage of market opportunities when we see them. And I
think that posture would continue. I think I cant comment on specific transactions, and I think you know that weve always been
proactive in our management of our capital.
2/19/2013 4Q2012 Q&A Q: Okay, great. And just related to that, you gave an outlook for 2013 capex I believe at the overall company. Do you have a
breakdown maybe you gave it, but I missed it just for Outdoor for 2013?
A: I havent given guidance on capex for each company. Having said that, probably close to $250 million, $260 million of thats going
to be total Outdoor. As we renewed and issued new securities, we did try to conform the permissible leverage ratios at Outdoor.
And indeed the senior leverage ratio I think stands at five times, and the total leverage ratio at seven times. So contractually theres
additional flexibility. I think from a management perspective, Outdoor is happy with its current position, its debt level, its leverage ratio,
and Im not aware of any change to that strategy currently.
2/19/2013 4Q2012 Q&A Q: All right. Thank you for that. And then on Clear Channel Outdoor, you had some flexibility under your covenants to increase the
debt you have the capacity to increase debt, whether thats the senior or the sub level. Can you provide any color on how youre
thinking about that in 2013?
A: Well, I think youre referring to some of the amendments we got in various agreements. As we renewed and issued new securities,
we did try to conform the permissible leverage ratios at Outdoor. And indeed the senior leverage ratio I think stands at five times, and
the total leverage ratio at seven times. So contractually theres additional flexibility. I think from a management perspective, Outdoor is
happy with its current position, its debt level, its leverage ratio, and Im not aware of any change to that strategy currently. Tom You
can see it in our building of new businesses like iHeartRadio, which surpassed 20 million registered users faster than any Internet
service platform ever and now draws over half of its usage from mobile, or in the unique capability we have to leverage our 840
radio stations, digital businesses, and events to connect fans with artists. You can also see it in our Outdoor businesses where were
launching innovative digital products around the world and in our groundbreaking music rights agreements with record labels. And
were building out our national advertising capabilities in both Media and Entertainment and Outdoor. All these activities are focused
on maximizing the value of Clear Channels unique platform of Media and Entertainment and Outdoor assets with its industry-leading
reach.
11/2/2012 3Q2012 Prepared Also during the quarter, we continue to invest in our operations. Over the last 12 months, we have devoted more than $400 million of
capex, including $300 million at our Outdoor company. This is one of the ways were providing our marketing partners with bold new
offerings across multiple platforms, especially digital.
11/2/2012 3Q2012 Prepared As we announced last week, we successfully closed our $2 billion debt exchange and amendment transaction moving a meaningful
amount of 2016 debt to 2019 and achieving significant amendments to our credit facilities, which enhanced our toolkit to address
our debt maturities going forward. So we are very pleased with where the company is today and we will continue to work hard and
maintain our focus on our business strategy.
11/2/2012 3Q2012 Prepared Concurrently with the exchange, we attained an important package of amendments to our credit facilities that provides more flexibility
to manage our liquidity and debt maturity profile. For example, the amendments permit a total of $3 billion more in exchange offers of
term loans for new note securities and enable us to prepay our 2014 bank debt of $1 billion on a no pro rata basis with our 2016 term
loans. It will also provide more flexibility for us to repurchase our junior debt maturing before January 2016 with up to $200 million of
cash and purchased term loans below par.
We are excited about the transaction and the tools weve gained to manage our capital structure going forward. With only a relatively
small amount of maturities remaining that our due prior to 2014, we are pleased with our short-term liquidity profile.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Clear Channel Outdoor Holdings, Inc. (Continued)
Date of
8/1/2012 2Q2012 Q&A Q: Okay. That is very helpful. And then maybe if I can turn it over to the balance sheet and then Ill let other people chime in. Really
two questions, one, do you have the ability to buy back any bonds in the open market and then have you done anything subsequent to
your quarter close? Thank you.
A: We have not repurchased any bonds in the open market. We have a variety of baskets available under the credit agreement that
permit us to repurchase debt securities. But we have not during the quarter.
8/1/2012 2Q2012 Q&A Q: And then any outlook on capital expenditures for the rest of the year, especially given some of the street furniture and transit
contract wins and defenses that youve had? Thanks.
A: So I think that with regard to capex, I think weve given you kind of an idea of where were coming in for the year. I dont think
that we have anything any changes to that right now. But I would say that clearly were looking at being disciplined about how we
deploy capital. Frankly, a lot of the capital, we will deploy to now and in the year, its already been committed. And this is just a roll-out
of certain tenders that we previously won. So, thats well give you an update on the next quarter and as we start getting into next
year, what it will look like next year, but I think were still on track for our target this year.
5/4/2012 1Q2012 Prepared In addition to capital deployment, we have remained proactive in managing our capital structure. On March 15, a subsidiary of Clear
Channel Outdoor Holdings issued a total of $2.2 billion aggregate principal amount of 7.625% senior subordinate notes due in 2020.
Proceeds from the note issuance were used to pay a special cash dividend to Clear Channel Outdoor Holdings stockholders. Using
primarily a shared dividend, Clear Channel Communication repaid approximately $2.1 billion of indebtedness. The majority of the
debt repayments reduced our senior credit facility debt with the maturity date occurring in 2014 creating a more manageable capital
structure and maturity profile for the Clear Channel through 2014.
5/4/2012 1Q2012 Q&A A: Sure. Doug, as you mentioned, the vast majority of Outdoors debt is in the form of the two note issuance, the senior and the
subordinated notes. So, these are long-term fixed rate notes. There is some flexibility with respect to fixed-priced calls that will kick in
on the senior notes. Our subordinated notes are at what we feel are pretty attractive rates. The senior notes are probably higher than
market. And so, it is something that I think we mentioned on our last conference call that were continuing to examine.
The remaining debt is largely in our International operations, and theres not a lot of it. So, I think the question that youre asking is, is
there an opportunity to reduce debt going forward, and certainly, we expect the Outdoor companies to generate free cash flow such
that it could. But well have to continue to look at the opportunities given that the note issuances are long term. But we do have some
flexibility and call protection that is built into the senior notes and well evaluate that throughout the remainder of the year.
5/4/2012 1Q2012 Q&A Yeah, we havent given any kind of guidance like that, James. I think we continue to see opportunities to grow both domestically and
internationally in our Outdoor business. We still have pretty significant expectations on capex, over $350 million across the company.
Most of that is going to be in the Outdoor business, about 80%.
2/21/2012 4Q2011 Prepared Proceeds from the note issuance were used to refinance 2011 and 2012 note maturities and portions of the 2014 and 2016 bank
maturities. As of Dec. 31, 2011, CC Media Holdings total debt stood at $20.2 billion. Clear Channels leverage as defined under its
credit agreement at the end of 2011 was 6.9 times, compared to 6.7 times the year before. And cash on the balance sheet at year end
totaled $1.2 billion.
2/21/2012 4Q2011 Prepared As we previously mentioned, we expect 2011 capital expenditures somewhere in the range of $300 million to $350 million, so we
ended up slightly above that range and we saw additional opportunities to invest throughout the end of the year. For CC Media
Holdings in 2012, we expect capital expenditures to be within the range of approximately $350 million to $400 million and that 75% to
80% will be in the companys Outdoor business.
As you can see from our spend in 2011 and guidance for 2012, we are continuing to deploy capital to further strengthen both our
media and entertainment and outdoor platforms, including such initiatives as iHeartRadio and Outdoor digital displays in the U.S. and
internationally.
10/31/2011 3Q2011 Prepared So were pleased about where our liquidity and maturity profile ended the quarter, with about $1.2 billion in cash on the balance sheet.
With very little debt maturing over the next two years, we remain focused on addressing Clear Channels future maturities, primarily in
2012 and 2016, while delivering strong OIBDAN and free cash flow at our businesses.
10/31/2011 3Q2011 Q&A Q: Do you have any additional capacity to buy back bonds in the open market?
A: Yeah, hi, Tim, this is Brian. We did; we bought back $80 million of the 2014 debt. We dont get into the specifics on our baskets
in our various credit agreements, but we will continue to look for opportunities to repurchase debt if its attractive to do so, or invest
in other ways. I think to guide you toward the opportunities we have in repurchasing debt, you really would divide it in the junior debt
buybacks. Since 2008, weve bought back over $2 billion worth of junior debt, spent about $1 billion, captured about $1 billion of
discount. So weve been very aggressive in repurchasing junior debt. And when we look at it right now, we dont have a whole lot in
the 2012- 2013 area, and that trades pretty close to par, so there is not a lot of discount to capture. And thats why we focused on
2014.
With respect to other categories of debt buybacks, you could have the bank loans, but that would have to be compliant with the
credit agreement and so, something that would be a little more complicated to look at. And then youd have other senior debt like the
[indiscernible], which I dont think there are any restrictions on repurchasing debt. So, we kind of look at it as three buckets. We
kind of give you little guidance on what various restrictions there are with respect to buying back the debt, how aggressive we have
been on the junior debt buyback. This quarter we bought in $80 million, thats about 15% of the 2014 maturities, so we feel pretty good
about that and well continue to keep our eyes open for future opportunities.
8/3/2011 2Q2011 Prepared We feel good about our progress managing our liquidity and maturity profile at CC Media Holdings ending the quarter with
approximately $1.2 billion of cash on the balance sheet. Weve also have very little in the way of debt maturing over the next two
years. You should expect that we will continue to value at our capital structure going forward, which includes addressing Clear
Channels future maturities, primarily in 2014 and 2016 while continuing to focus on growing our business operations.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Clear Channel Outdoor Holdings, Inc. (Continued)
Date of
8/3/2011 2Q2011 Prepared At the beginning of this year, we noted that we expected to deploy approximately 120 digital displays during 2011, and we expect CC
Media Holdings capital expenditures to be in the range of $275 million to $325 million, and that we expect that 75% of that 80% of
that spend to be in the companys Outdoor business.
As I noted earlier, we now expect that we will be deploying 160 or more digital displays this year and that CC Media Holdings capex
spending will be in the range of $300 million to $350 million with 80% to 85% of that expected to be in the Outdoor businesses. This
increase in capex reflects the additional digital display opportunities along with some strategic street furniture contract wins that I
mentioned earlier.
5/6/2011 1Q2011 Prepared With the $1 billion of priority guaranteed notes, Clear Channel used the proceeds of the notes offering to prepay $500 million of its
indebtedness outstanding under the senior secured credit facility. The $500 million prepayment was allocated on a ratable basis
between outstanding term loans and revolving credit commitments under Clear Channels revolving credit facility, thus permanently
reducing the revolving credit commitment under the Clear Channel revolving credit facility to $1.9 billion. And finally as I mentioned
earlier, Clear Channel also used the proceeds from the offering of the notes along with available cash on hand to repay at maturity
$692.7 million in aggregate principal amounts of 6.25% senior notes, which matured during the first quarter 2011.
Were pleased with the favorable reception that we received with this offering and believe that the amendments provide us financial
flexibility to address our future maturities primarily in 2014 and 2016.
2/7/2011 4Q2010 Prepared We had noted earlier in 2010 that we expected capital expenditures to be in the range of $225 million to $275 million for outdoor, so
we ended up slightly below that range. For 2011, CC Media Holdings expects capital expenditure to be in the range of $275 million to
$325 million and that about 75% to 80% of the expected spend will be in the companys outdoor business.
8/9/2010 2Q2010 Q&A Q: Just want to, kind of, get more of a sense for the logic and the thinking behind the buyback. I guess, my understanding is that there
is a fair amount of leverage on the parent. So theres a 11 or 12 turns of leverage. And youve got excess cash or have the ability to
put capital to work. Maybe this is obvious, but why not apply some of that capital towards debt pay down at the parent level?
A: Well, as I mentioned I think that we have announced this as an opportunity. We have not committed or commenced or commencing
any transaction at this time. We wanted to notify the market that this is an option that the company may be seeking. We would do it
the same way we would look at our debt buybacks. And so to the extent we see an opportunity to put the capital to work. Thats how
well consider it.
Q: But, I mean I guess, Im trying to understand, I mean, why would you choose to buyback? I guess, why would you choose to
buyback stock at the CCMO level if you have 12 turns of debt? Why would you even consider that I guess I dont understand?
A: The stock has experienced some ranges of values that we at certain times we may think is attractive for us to deploy our capital
at that level.
8/9/2010 2Q2010 Q&A Q: On the cash, you are still toting around, whatever it is, $600-some-odd million, and you have the carve-out that allows you to do the
$500 million dividend pro rata to the public shareholders and then the parent company. Can you give us some color on what youre
thinking about timing on that or why youre keeping so much on cash? And just as a corollary follow-up, on the owed-to-CCO part of
the balance sheet due from Clear Channel, does that calculate into the covenant ratio definition?
A: Let me hit the first one and we may have to have you repeat the second one. Yes, youre correct. Theres about $500 million
opportunity of unrestricted dividend. Weve got about $590 million or so at the end of the quarter. Were continuing to evaluate our
opportunities with our cash. Obviously, it gives us incredible flexibility to manage our way through this challenging environment.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Clear Channel Communications, Inc.
12 Months
12
Months
12
Months Three Months
12
Months Three Months
12
Months Three Months
LTM
Ended
($ Mil.) 12/31/08 12/31/09 12/31/10 9/30/11 12/31/11 12/31/11 3/31/12 6/30/12 9/30/12 12/31/12 12/31/12 3/31/13 6/30/13 6/30/13
Profitability
Operating EBITDA 1,901.7 1,452.2 1,711.3 479.1 545.4 1,842.6 260.4 531.9 479.5 545.6 1,817.4 266.7 504.6 1,796.4
FFO Return on
Adjusted Capital (%) 11.92 11.72 14.03 14.46 13.82 14.02 13.61 13.77 13.85 14.40 14.40 14.16 14.06 14.06
Free Cash Flow Margin (%) 10.35 (0.77) 5.81 (1.25) 6.55 0.19 (23.63) 1.19 (2.94) 11.95 (2.34) (11.03) (4.78) (1.11)
Coverages (x)
Operating EBITDA/
Capital Expenditures 2.98 0.81 2.41 0.75 1.75 1.03 (0.06) 1.19 0.46 2.56 1.25 (1.40) (0.09) 0.80
Leverage (x)
FCF/Total Adjusted Debt (%) 2.29 (0.14) 1.15 0.33 0.04 0.04 (0.40) (0.71) (0.80) (0.49) (0.49) 0.09 (0.23) (0.23)
Balance Sheet
Short-Term Debt 562.9 398.8 867.7 285.1 268.6 268.6 311.7 323.5 419.9 381.7 381.7 68.4 35.8 35.8
Long-Term Senior Secured Debt 12,727.4 13,933.3 14,130.1 14,553.5 14,577.2 14,577.2 13,080.4 13,077.5 13,076.9 12,850.8 12,850.8 12,824.5 12,823.1 12,823.1
Long-Term Senior Unsecured Debt 6,213.3 6,369.8 5,609.5 5,341.2 5,361.3 5,361.3 7,300.0 5,113.8 5,041.0 5,309.0 5,309.0 5,330.6 5,351.8 5,351.8
Long-Term Subordinated Debt 2,200.0 2,200.0 2,200.0 2,200.0 2,200.0 2,200.0 2,200.0
Other Debt 5.6 5.6 2.7 1.4 1.4
Equity Credit
Off-Balance Sheet Debt 10,680.2 9,243.4 8,959.6 8,977.1 9,455.7 9,455.7 9,298.2 9,301.2 9,299.8 9,302.7 9,302.7 9,304.3 9,304.0 9,304.0
Total Adjusted Debt
Cash Flow
Funds From Operations 1,037.9 76.8 504.7 116.0 86.2 484.9 45.1 171.0 108.6 162.2 486.9 (94.8) 113.8 289.8
Change in Working Capital 243.4 104.3 77.7 (58.2) 166.3 (111.0) (49.3) (50.2) (69.0) 170.3 1.8 8.3 (120.1) (10.5)
Cash Flow from Operations 1,281.3 181.1 582.4 57.8 252.5 373.9 (4.2) 120.8 39.6 332.5 488.7 (86.5) (6.3) 279.3
Non-Recurring Cash Flow (65.3)
Dividends (93.4) (244.7) (244.7)
Free Cash Flow 692.1 (42.7) 340.9 (19.8) 108.3 11.6 (321.5) 19.1 (46.6) 202.7 (146.3) (148.1) (77.4) (69.4)
Net Acquisitions and Divestitures (87.3) 40.5 12.5 (5.9) 3.7 7.9 4.9 (12.2) 32.5 (15.6) 9.6 6.0 18.8 41.7
Net Debt Proceeds 13,954.8 1,690.5 (302.7) (17.8) (25.4) (627.5) 451.9 (2.2) (3.5) (202.3) 243.9 (340.8) (34.2) (580.8)
Net Equity Proceeds 14.0 (0.2)
Other (Investing and Financing) (14,478.9) (43.9) (13.8) (10.3) (23.3) (84.2) (37.9) (14.2) (2.2) (56.6) (110.9) (20.5) 76.2 (3.1)
Total Change in Cash 94.7 1,644.2 36.9 (53.8) 63.3 (692.2) 97.4 (9.5) (19.8) (71.8) (3.7) (503.4) (16.6) (611.6)
Ending Cash and
Securities Balance 239.8 1,884.0 1,920.9 1,165.4 1,228.7 1,228.7 1,326.1 1,316.5 1,296.6 1,225.0 1,225.0 721.6 704.2 704.2
Income Statement
Revenue 6,688.7 5,551.9 5,865.7 1,583.4 1,652.8 6,161.4 1,360.7 1,602.5 1,587.3 1,696.4 6,246.9 1,343.1 1,618.1 6,244.9
Revenue Growth (%) (3.36) (17.00) 5.65 7.18 1.11 5.04 3.02 (0.12) 0.25 2.64 1.39 (1.29) 0.97 0.73
Operating EBIT 1,204.8 686.8 978.4 281.6 344.1 1,070.4 85.0 350.1 297.1 355.9 1,088.1 84.5 324.9 1,062.4
Gross Interest Expense 929.0 1,500.9 1,533.3 369.2 368.3 1,466.2 374.0 385.9 388.2 400.9 1,549.0 385.5 407.5 1,582.1
440 Company Summaries Houghton Miffin Harcourt Publishers Inc.
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
Houghton Mifflin
Harcourt Publishers Inc.
IDR B+
Senior Secured Term Loan BB+/RR1
Senior Secured A/R Revolver BB+/RR1
Houghton Mifflin
Harcourt Publishing Company
IDR B+
HMH Publishers LLC
IDR B+
Rating Outlook
Stable
Houghton Miffin Harcourt Publishers Inc.
Key Rating Drivers
Addressable Market Share of 37%: Houghton Miffin Harcourt Publishers Inc. (HMH) continues
to be a leader in the K12 educational material and services sector, capturing 37% of its
Association of American Publishers addressable market. Fitch believes investments made in
digital products and services will position HMH to take a meaningful share of the rebound in the
K12 educational market. Fitch expects HMH will be able to, at a minimum, maintain its market
share.
Investment Flexibility: HMH has signifcant fnancial fexibility to invest in digital content and new
business initiatives. These investments in international markets and adjacent K-12 educational
material markets may provide diversity away from highly cyclical state and local budgets.
Capital Structure: The ratings refect Fitchs belief that the current capital structure is not
permanent and that, long term, HMH will carry higher levels of leverage and debt on its balance
sheet. Fitch does not expect any leveraging transactions in the near term.
Slow Long-Term Growth: Fitchs base case model assumes fat revenues in 2013 and growth
in 2014 in the low to midsingle digits, driven by the adoption of common core standards for the
2014/2015 school year.
Positive Free Cash Flow: Fitch calculates free cash fow (FCF) of negative $61 million in
2012. Fitch expects FCF to turn positive in 2013 and range from $25 million to $50 million.
This improvement is driven in part by the reduced interest burden and the cost associated with
HMHs 2012 restructuring, which will not impact 2013 cash fows. Fitch expects HMH to continue
to dedicate liquidity (including FCF) towards digital investments and adjacent K-12 educational
material markets.
Proposed IPO: The company has fled an IPO prospectus, but the timing has not been made
public. Currently, sponsors intend to sell shares of HMH and HMH will not receive any proceeds
from the IPO. The IPO as currently proposed does not affect the current ratings.
Positive Trigger: Long-term, meaningful diversifcation into international markets and into new
business initiatives could lead to rating upgrades.
Performance Negative Triggers: Revenue declines in the midsingle digits could result in rating
pressures.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
September 19, 2013

Corporates

Portfolio Summary Houghton Mifflin Harcourt Publishers Inc.
(As of June 30, 2013)
Education Group Trade
Comprehensive Curriculum
Houghton Mifflin Harcourt (Pre-K6)
Holt McDougal (612)
ScienceFusion
HMH Fuse
Journey
GO Math!
Math in Focus
Supplemental products
Intervention by Design
Destination Math/Reading
Earobics
Heinemann (Professional books/development resources for teachers)
Benchmarks/LLI
Professional Services
The Leadership and Learning Center
Riverside Assessment (district and state level solutions and assessment tools)
International (Asia Pac, Middle East, Latin America, the Caribbean and Africa)
General Interest and Reference Parents and Children
J.R.R. Tolkien titles Curious George
The Best American Series Gossie and Friends
CliffNotes The Polar Express
Peterson Field Guides Little Blue Truck
Betty Crocker Martha Speaks
Better Homes and Gardens The Little Prince
The Gourmet Cookbook
American Heritage
Webster dictionary
September 19, 2013

Corporates

U.S.
95%
Internatio
nal
5%
Houghton Mifflin Harcourt
Publishers Inc.
(As of Dec. 31, 2012)
International
5%
Educatio
n
88%
Trade
Publishin
g
12%
Revenues by Segment
Publishers Inc.
(As of Dec. 31, 2012)
Education
88%
Trade
Publishing
12%
Educatio
n
92%
Trade
Publishin
g
8%
EBITDA by Segment
Publishers Inc.
(As of Dec. 31, 2012)
Education
92%
Trade
Publishing
8%
September 19, 2013

Corporates

Event Risk Dashboard Houghton Miffin Harcourt Publishers, Inc.
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition M
Divesture L
Litigation Risk L
Regulatory Risk H
LBO Risk Low
The company is currently owned by private equity sponsors.
Given the secular and cyclical K12 education trends, Fitch does not expect any
material leveraging transaction in the near term.
Secular Risk Medium
The education landscape is in the early stages of shifting from print educational
materials to digital materials. Fitch believes that the greatest risk in the shift to
digital is born by the commercial printers.
It is critical that educational material content creators invest and create digital
products that take complete advantage of tablet/digital device capabilities (which may
help prevent piracy).
Fitch recognizes that new content creators may emerge. However Fitch believes
currently entrenched creators, such as Houghton Miffin Harcourt, will have digital
content to compete effectively and the sales staff to sell these digital products to the
complex web of state and local municipalities and universities.
HMH is exposed primarily to the U.S. K12 market. Fitch believes the transition to
digital textbooks in the K12 sector will be slower than higher education given the
issue of funding digital devices.
Concentrated ownership controlled by private equity.
Fitch does not believe that the post-bankruptcy capital structure will be permanent.
Fitch believes the sponsors may look to extract shareholder returns (leveraged
dividend) prior to exiting their investment. Fitch does not believe that such a
transaction will occur in the near term.
With the company's fnancial fexibility post bankruptcy, HMH has become more
acquisitive. Fitch believes any acquisitions would be concentrated in digital
capabilities.
Fitch does not expect any material divestitures.
The funds appropriated by schools to fund textbook purchases are approved by
federal, state, and municipal governing bodies.
Over the last three to four years state and municipal budgets have been under
pressure, leading to cuts in education spending.
Litigation Risk Low
Existing debt is secured and guaranteed by HMH's material subsidiaries.
Houghton Mifflin Harcourt Publishers, Inc.
Rating History
D
B+
CCC
C
CC
B
B
BB
September 19, 2013

Corporates

Detailed Maturities Schedule Houghton Mifflin Harcourt
Revolving Credit Facilities
a
2017
$250 Million Term Loan, Interest Payable Monthly 246.9 2018 1.3 2.5 2.5 2.5 2.5 235.6
a
Subject to borrowing base. As of June 30, 2013 borrowing base availability was approximately $213 million.
Organizational Structure Houghton Mifflin Harcourt Publishers Inc.
($ Mil., As of June 30, 2013)
A/R Accounts receivable. IDR Issuer Default Rating. RR Recovery Rating.
Houghton Mifflin Harcourt Publishers Inc.
IDR B+/Stable Outlook
Houghton Mifflin Harcourt Publishing Company
Co-Borrower Under the A/R Facility and Term Loan
HMH Holding (Delaware), Inc.
Guarantor
HMH Publishing Company
Guarantor
Various Non-U.S. Subsidiaries
Nonguarantor
Various U.S. Subsidiaries
Guarantors
Various Intermediate Holding
Companies and Subsidiaries
Guarantors
HMH Publishers LLC
Co-Borrower Under the A/R Facility and Term Loan
U.S. Subsidiary
Tax-Exempt Foundation
Nonguarantor
Guarantors
U.S. Subsidiary
Tax-Exempt Foundation
Nonguarantor
Guarantors
Non-U.S. Subsidiaries
Nonguarantors)
100% of Regular Shares
Amount Rating
$250 Million A/R Facility due 2017 BB+/RR1
$250 Million Senior Secured Term Loan due 2018 247 BB+/RR1
Total Debt 247
September 19, 2013

Corporates

Bank Agreement Covenant Summary Houghton Mifflin Harcourt Publishers Inc.
Covenant
Overview
Borrower Houghton Mifflin Harcourt Publishers Inc. (HMHP), HMH Publishers LLC (Publishers) and Houghton Mifflin Harcourt Publishing Company
(HMCo).
Document Date
and Location
May 22, 2012, Amended May 24, 2013.
Description of Debt Facility Type
Senior secured term loan credit facility
The facility is senior secured and guaranteed by the direct and indirect domestic subsidiaries and HMH Holdings (Delaware), Inc.
Security The facility is secured on a first-lien basis on materially all the assets of the borrower and guarantors. Excluded securities include: 1) asset
backed revolver collateral (includes inventory and accounts); 2) any lease, license, general intangible, contract, or agreement that (and for
as long as) is not assignable or capable of being encumbered as a matter of law or under the documents terms without the consent of the
applicable party, and such consent has not been obtained; 3) any intent-to-use application for a trademark, and solely during the period in which
the grant of a security interest would impair the validity or enforceability of such intent-to-use application; 4) any vehicle owned by any grantor
that is subject to a certificate of title; 5) any equity interests in joint ventures or any nonwholly owned subsidiaries but only to the extent that the
organizational documents or other agreements do not permit and/or restrict the pledge of equity interest; and 6) assets that are subject to or
secured by liens, as permitted under the credit facility.
The facility is secured by a second lien on the asset backed revolver collateral (includes inventory and accounts).
In addition to the security noted above, any equity interests held by the borrowers and guarantors have been pledged. Pledged limitations/
exclusions include: 1) limited to 66% of the equity of foreign subsidiaries; 2) excludes the accounts receivable subsidiary; and 3) any equity
interest in non-for-profit subsidiaries. The security may not be released until all loan obligations under the credit facility have been repaid
(carveouts exist to allow for permitted asset sales).
Guarantee Each of the guarantors unconditionally guarantees, jointly and severally, the due and punctual payment and performance of the obligations. The
guarantees are secured. A guarantee may not be released until all loan obligations under the credit facility have been repaid (carveouts exist to
allow for permitted asset sales).
Financial Covenants
Leverage (Maximum) Less than 2.25x June 30, 2012 to Sept. 30, 2013.
Less than 2.00x Dec. 31, 2013 and thereafter.
Interest Coverage
(Minimum)
More than 7.00x. Sept. 30, 2012 to Dec. 31, 2012.
More than 8.00x. March 31, 2013 to Dec. 31, 2013.
More than 9.00x. March 31, 2014 and thereafter.
Mandatory
Prepayment
50% of annual excess cash flow (as defined) to be dedicated to reducing debt balances (starting in 2014, the excess cash flow repayment is not
required if covenant leverage is under 0.75x).
Amortization Schedule 1% annual required amortization
Callability/
Optional Prepayment
Prepayments permitted, subject to customary breakage fees.
Pricing
Coupon Type/Index Floating based off Libor, with a 1.0% floor, or ABR plus the appropriate applicable percentage rate.
Pricing Grid Applicable percentage rate is 3.25% for ABR loans and 4.25% for Libor loans.
Equity Cure The sponsors may make a capital contribution, which would be treated on a dollar-for-dollar basis as consolidated EBITDA solely for the
purpose of complying with the financial covenants. The equity cure may be used up to five times for the life of the agreement and there must be
at least two consecutive quarters where no equity contributions are made.
Change-of-Control
(CoC) Provision
A CoC triggers an event of default. A CoC is defined as a sale of all or substantially all the assets of the borrower and subsidiary guarantors,
taken as a whole; acquisition of 50% of the voting control by a person who is not a permitted holder; or HMH Publishing Company (parent
holding company) no longer being the sole owner of Houghton Mifflin Harcourt Publishers, Inc.
M&A, Investments
Restriction
Standard short-term cash investment carveouts exist. Investments (including guarantees) in subsidiaries that are not borrowers or guarantors
are capped at $25 million in any fiscal year. Acquisitions are permitted as long as there is and there would be no event of default; the target is
in a similar line of business; on a pro forma basis, the company is in compliance with the financial covenants and has at least $250 million in
liquidity (on a consolidated basis); and if it is a domestic subsidiary of the holding company or a restricted subsidiary, it become a guarantor. Up
to $100 million per fiscal year in digital development investment into HMH IP Company. There is also a general investment basket of $50 million.
Sale of Assets
Restriction
Asset sales, sales lease back (subject to the $50 million capital lease cap) and disposition are permitted as long as on a pro forma basis the
company is in compliance with the financial covenants and there is no event of default and the fair market value of assets disposed does not
exceed $40 million in any fiscal year.
ABL Asset-backed loan. ABR Alternate base rate. Continued on next page.
September 19, 2013

Corporates

Bank Agreement Covenant Summary Houghton Mifflin Harcourt Publishers Inc.
(Continued)
Covenant
Debt Restrictions
Debt Incurrence Standard carveouts exist. The ABL revolving credit agreement is capped at $300 million. Capital leases are capped at $50 million; capital leases
for subsidiaries that are not borrowers or guarantors are capped at $10 million, and this $10 million cap is included in the $50 million cap. Debt
of acquired subsidiaries is permitted (as long as such debt was not created in contemplation of the acquisition) and capped at $75 million.
Restricted subsidiaries that are not borrowers or guarantors may incur up to $50 million in debt. Subordinated debt is permitted, up to
$100 million.
Limitation on Liens Standard carveouts exist. The ABL facility is capped at $300 million. See the restrictions in the Debt Incurrence section above.
Limitation on
Guarantees
See the restrictions in the Debt Incurrence section above. Guarantees fall under the definition of indebtedness.
Restricted Payments
(RPs)
RPs are permitted if on a pro forma basis the company is in compliance with the financial covenants and the company has at least $250 million
in liquidity (on a consolidated basis).
Other
Cross-Default Payment default in an aggregate principal amount exceeding $35 million.
Cross-Acceleration Accelerated debt in an aggregate principal amount exceeding $35 million.
ABL Asset-backed loan. ABR Alternate base rate.
September 19, 2013

Corporates

Financial Summary Houghton Mifflin Harcourt Publishers Inc.
12 Months12 Months12 Months Three Months 12 Months Three Months
LTM
Ended
($ Mil.) 12/31/09 12/30/10 12/31/11 3/31/12 6/30/12 9/30/12 12/31/12 12/31/12 3/31/13 6/30/13 6/30/13
Profitability
Operating EBITDA 181 244 109 (66) 54 169 13 170 (65) 88 205
Operating EBITDA Margin (%) 11.6 16.2 8.5 (40.1) 15.7 34.3 4.5 13.2 (38.9) 24.3 15.7
FFO Return on Adjusted Capital (%) 11.9 8.2 9.4 10.4 8.8 3.3 5.4 5.4 5.9 10.6 10.6
Free Cash Flow Margin (%) (24.1) (3.0) (4.8) (128.4) (25.0) 23.3 43.3 (4.7) (87.5) (10.5) 4.1
Coverages (x)
FFO Interest Coverage 0.5 0.8 0.8 (1.9) 1.1 24.2 (0.4) 0.7 (20.0) 25.9 7.8
Operating EBITDA/
Gross Interest Expense 0.2 0.6 0.5 (1.0) 1.3 24.5 1.9 1.4 (11.0) 15.5 8.2
FFO Fixed-Charge Coverage 0.6 0.9 0.8 (1.5) 1.1 10.8 0.4 0.8 (7.0) 10.3 3.7
FCF Debt Service Coverage 0.3 0.6 0.6 0.5 0.6 0.4 0.5 0.5 1.1 2.9 2.9
Capital Expenditures (11.3) 0.3 0.1 (20.4) (8.0) 7.7 9.6 (0.2) (8.5) (1.4) 1.9
Leverage (x)
Operating EBITDA 24.2 11.0 27.1 24.6 1.7 2.3 1.5 1.5 1.4 1.2 1.2
Long-Term Secured Debt/FFO (10.5) (39.7) (65.0) (50.9) (2.9) (1.6) (6.9) (6.9) 8.0 1.4 1.4
Total Debt with Equity Credit/Operating
EBITDA 38.3 11.8 27.5 25.0 1.7 2.4 1.5 1.5 1.5 1.2 1.2
FFO Adjusted Leverage 13.2 8.2 13.5 13.3 2.2 5.6 3.2 3.2 3.0 1.7 1.7
Operating EBITDAR 25.4 11.4 21.5 19.6 2.3 2.8 1.9 1.9 1.9 1.6 1.6
FCF/Total Adjusted Debt (%) (5.3) (1.5) (1.9) (3.3) (19.8) (25.2) (15.3) (15.3) 1.4 13.5 13.5
Balance Sheet
Short-Term Debt 592 193 44 44 3 3 3 3 3 3 3
Long-Term Senior Secured Debt 4,397 2,669 2,968 2,968 248 246 246 246 245 244 244
Long-Term Senior Unsecured Debt 1,964
Other Debt
Equity Credit
Total Debt with Equity Credit 6,954 2,862 3,012 3,012 250 249 248 248 248 247 247
Off-Balance-Sheet Debt 207 207 192 192 192 192 149 149 149 149 149
Total Adjusted Debt
with Equity Credit 7,161 3,069 3,203 3,203 442 440 397 397 396 396 396
Cash Flow
Funds From Operations (419) (67) (46) (190) 3 160 (9) (36) (124) 142 169
Change in Working Capital 74 90 56 (12) (80) (28) 145 26 (7) (164) (53)
Cash Flow from Operations (346) 23 10 (202) (77) 132 136 (10) (130) (22) 116
Nonrecurring Cash Flow
Capital Expenditures (31) (68) (72) (10) (10) (17) (14) (51) (15) (16) (63)
Dividends
Free Cash Flow (377) (45) (62) (212) (86) 115 122 (61) (146) (38) 53
Net Acquisitions and Divestitures 14 (11) (35) 0 0 0 (11) (11) 0 (1) (12)
Net Debt Proceeds 314 (181) 107 (11) 250 (1) (1) 237 (1) (1) (3)
Net Equity Proceeds 650
Other (Investing and Financing) (11) (127) 24 (89) (118) (44) (250) 6 (44) (200)
Total Change in Cash (59) 286 34 (223) 75 (4) 67 (85) (140) (84) (161)
Ending Cash and Securities Balance 94 380 414 190 266 262 329 329 189 105 105
Short-Term Marketable Securities 18 113 146 146 140 107 107
Income Statement
Revenue 1,562 1,507 1,295 165 344 494 282 1,286 167 363 1,306
Revenue Growth (%) (23.8) (3.5) (14.1) 8.4 4.8 (14.0) 17.7 (0.8) 0.9 5.5 (1.4)
Operating EBIT (361) (374) (324) (152) (20) 84 (40) (128) (126) 6 (75)
Gross Interest Expense 860 416 245 67 43 7 7 123 6 6 25
448 Company Summaries Liberty Interactive LLC/QVC Inc.
September 19, 2013

Corporates

Liberty Interactive LLC/QVC Inc.
Key Rating Drivers
Consolidated Profle Drives Ratings: Fitchs Issuer Default Ratings (IDRs) for Liberty
Interactive LLC (Liberty LLC) and QVC Inc. refect the consolidated legal entity/obligor credit
profle, rather than the Liberty Interactive (Interactive)/Liberty Ventures (Ventures) tracking stock
structure. Based on Fitchs interpretation of the Liberty LLC bond indentures, the company could
not spin out QVC without consent of the bondholders, based on the current asset mix at Liberty
LLC. QVC generates 84% and 97% of Liberty LLCs revenues and EBITDA, respectively, and
QVC makes up a meaningful portion of Liberty LLCs equity value. Any spinoff of QVC at this
time would likely trigger the substantially all asset disposition restriction within the Liberty LLC
indentures.
Leverage Targets: The ratings refect Fitchs expectation that the company will continue to
manage leverage on a Liberty LLC consolidated basis. Fitch expects Liberty LLCs gross
unadjusted leverage to be managed at 4.0x and QVCs unadjusted gross leverage to be
managed at 2.5x.
QVC Debt Ratings: Fitch rates both QVCs senior secured bank credit facility and the senior
secured notes BBB (two notches higher than QVCs IDR). The secured issue rating refects
what Fitch believes would be QVCs stand-alone rating.
Solid Growth and Diversity at QVC: The ratings refect the solid operating performance
at QVC with revenues and EBITDA for the LTM ending March 31, 2013, up 2.3% and 4.7%,
respectively. During the same period, QVC Germany was the only region to endure revenue
declines, down 8.4%. The geographic diversifcation of QVC provides the credit cushion to
endure cyclical declines in the German region. The ratings incorporate the cyclicality inherent in
QVCs business/retail industry.
Cash Deployment: Fitch expects Interactives FCF to be dedicated towards share repurchases
and acquisitions. While QVC will deleverage over time through EBITDA growth, Fitch expects
the company to manage closer to its stated leverage targets. There is tolerance in the ratings for
debt-funded buybacks within stated targets.
Acquisition Risk at Interactive: The ratings incorporate the risk of continued acquisitions at
Interactive. Fitch recognizes that there is a risk of an acquisition of HSN Inc. However, depending
on how the transaction is structured, and the companys commitment to returning to QVCs and
Liberty LLCs leverage targets, ratings may remain unchanged.
Positive Rating Actions: Fitch believes that the current fnancial policy is consistent with the
current ratings. If the company were to manage more conservative leverage targets, ratings may
be upgraded.
Negative Rating Actions: Conversely, changes to fnancial policy (including more aggressive
leverage targets) and asset mix changes that weakened bondholder protection could pressure
the ratings. While unexpected, revenue declines in excess of 10% that materially drive declines
in EBITDA and FCF and result in QVC leverage exceeding 2.5x would likely pressure ratings.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
Ratings
Security Class
Current
Rating
Liberty Media LLC
IDR BB
Senior Unsecured Debt BB
QVC Inc.
IDR BB
Senior Secured Debt BBB
Rating Outlook
Stable
September 19, 2013

Corporates

Liberty Interactive Tracking Stock Liberty Ventures Tracking Stock
Portfolio Summary Liberty Interactive LLC
(June 30, 2013)
QVC Inc.
Backcountry.com (88%)
Bodybuilding.com (90%)
Celebrate Interactive
Provide Commerce
Commerce Hub (99%)
Evite
Gifts.com
HSN, Inc. (38%)
Motosports Inc.
Liberty Advertising
LOCKERZ (36%)
The Right Start
Expedia (17% Equity/55% Voting)
Trip Advisor (22% Equity/57% Voting)
Time Warner Inc. (1%)
Time Warner Cable (2%)
AOL Inc. (2%)
Tree.com (Lending Tree) (24%)
Interval Leisure Group, Inc. (29%)
Green Investments
September 19, 2013

Corporates

U.S.
70%
Japan
12%
Germany
10%
Other
8%
Liberty Interactive LLC
(As of Dec. 31, 2012)
QVC
85%
E-
Commerc
e
15%
Revenues by Segment
(As of Dec. 31, 2012)
E-Commerce
15%
QVC
95%
E-
Commerc
e
5%
EBITDA by Segment
(As of Dec. 31, 2012)
E-Commerce
5%
U.S.
66%
Japan
15%
Germany
11%
U.K.
7%
Italy
1%
QVC Inc.
(As of Dec. 31, 2012)
September 19, 2013

Corporates

Event Risk Dashboard Liberty Interactive LLC
Note: Event Risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of the potential actions a company is able to take, from our
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition M
Divestiture M
Covenant Breach L
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Concentrated ownership by John Malone may pose a challenge for an LBO.
Sale of asset provisions in the Liberty bonds would prevent an LBO of QVC.
The Liberty notes would have to be assumed by any acquirer of QVC.
Secular Risk Low
There is low secular risk associated with Liberty Interactive. Liberty Interactives
QVC and e-commerce businesses have been growing their mobile and online
store fronts.
Concentrated voting control Malone has 33% voting control.
Tracking stock structure Liberty Interactive tracking stock and Liberty
Ventures tracking stock.
Liberty targets 4.0x gross leverage; QVC targets 2.5x gross leverage.
Liberty deploys cash towards acquisitions and share repurchases. Fitch does
not expect material deleveraging.
There are no material debt incurrence or subsidiary guarantee restrictions
within the Liberty Interactive bonds.
There are no material restrictions in the Liberty indentures limiting subsidiary
guarantees.
The QVC facility and notes benefit from a security interest in the capital stock of
QVC and are guaranteed by QVCs material domestic subsidiaries.
QVC is subject to various FCC regulations.
Libertys e-commerce businesses are subject to various state and federal
commerce regulations.
Libertys track record in adhering to these regulations is a mitigant to regulation
risk.
Liberty Interactive Corporation Rating History
B+
BBB
BB
BB
BB+
BBB
0.0
2.0
4.0
6.0
8.0
10.0
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
5
10
15
20
25
30
Source: Bloomberg.
Liberty Interactive Corporation Stock Price
($/Share)
September 19, 2013

Corporates

Fitch has not identified any material contingent liabilities.
Litigation Risk Low
Event Risk Dashboard Liberty Interactive LLC (Continued)
2012 28.0 1,030.0
2011 14.0
2010 33.0 530.0
2009 4.0 557.0
2008 77.0 43.0
2007 348.0 495.0
2012 divestitures relate to investments and assets attributable to the Liberty
Venture tracking stock.
YTD June 2013 499.0
2012 815.0
2011 366.0
2010
2009
(x)
Covenant
Level
Ratio/Test as of
6/30/13
EBITDA
Cushion (%)
QVC Gross Leverage 3.5 2.1 41
September 19, 2013

Corporates

Corporate Governance Overview Liberty Interactive LLC
a
Adjusted OIBDA is defined as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock and other equity-based
compensation).
b
Most recent filings on Bloomberg as of June 2013. N.A. Not available. RSUs Restricted stock units. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Gregory B. Maffei President and CEO 778,641 41,688,138 2,641,866 193,395 45,302,040
Charles Y. Tanabe Former EVP and General Counsel 193,500 4,049,495 543,348 6,776 4,793,119
Albert E. Rosenthaler SVP 275,840 2,275,697 387,900 11,049 2,950,486
Christopher W. Shean SVP and CFO 385,000 2,917,953 467,775 14,022 3,784,750
Michael A. George President, QVC, Inc. 1,030,000 16,110,136 875,500 223,977 18,239,613
Richard N. Baer EVP and General Counsel
Board of Directors
Michael A.
George
51 N June 2012
June 2015
2011 None Brinker
International Inc.
CEO and President QVC
M. Ian G.
Gilchrist
63 Y June 2013
June 2016
2009 146,000 87,721 233,721 Compensation (Chair);
Nominating and Corporate
Governance; Audit
Liberty Media Corp. Former Managing Director
Citigroup/Salomon Brothers
Gregory B.
Maffei
52 N June 2012
June 2015
2005 Executive Electronic Arts, Inc.;
Zillow, Inc.; Sirius XM
Radio Inc.; Live Nation
Entertainment, Inc.;
Barnes and Noble, Inc.;
Trip Advisor; Starz;
Liberty Media Corp.
CEO and President Liberty
Interactive
Evan D.
Malone
42 N June 2011
June 2014
2008 86,000 87,500 173,500 None Liberty Media Corp. President NextFab Studio,
LLC
John C.
Malone
Chairman
72 N June 2013
June 2016
1994 Executive (Chair) Liberty Media Corp.;
Liberty Global, Inc.
(LGI); Discovery
Communications, Inc.;
Expedia, Inc.; Sirius XM
Radio Inc.
Former CEO Liberty Media
(From 2005 to 2006)
David E.
Rapley
71 Y June 2011
June 2014
2002 140,000 87,500 227,500 Audit; Compensation;
Nominating and Corporate
Governance (Chair)
Liberty Global, Inc. (LGI);
Liberty Media Corp.
Founder and former CEO and
President Rapley Engineering
Services, Inc.
M. LaVoy
Robison
77 Y June 2012
June 2015
2003 110,000 87,721 197,721 Audit (Chair and Financial
Expert)
Discovery
Former Executive Director
The Anschutz Foundation
Larry E.
Romrell
73 Y June 2011
June 2014
1999 120,000 87,500 207,500 Nominating and Corporate
Governance; Audit
Liberty Global, Inc. (LGI);
Liberty Media Corp.
Held numerous executive
positions Tele-
Andrea L.
Wong
46 Y June 2013
June 2016
2010 106,000 87,500 193,500 Compensation; Nominating
and Corporate Governance
Liberty Media Corp. President International
Productions for Sony Pictures
Television
Annual Incentive Revenue, cash flow and adjusted OIBDA
a
(40% weight); individual performance (60%) and adjustment for time served.
Base Salary Is a smaller portion of each NEOs overall compensation package.
Annual Incentive Max bonus amounts: CEO 400% of base salary, EVP 200%, SVPs 150%. The company grants an individual and corporate bonus. Max
bonus amount subject to reduction based on individual performance and corporate financial metrics. Bonus payment subject to the company attaining
adjusted OIBDA
a
of $1 billion or greater. Georges 2012 performance bonus was based on QVC EBITDA growth with target bonus amount of 100% of
his base salary.
Long-Term Incentives Equity mix: stock options and RSUs various vesting and 710 year terms. No equity awards were made in 2012 as all officers received grants of
multiyear equity incentive awards in one of the preceding two years.
September 19, 2013

Corporates

Corporate Governance Overview Liberty Interactive LLC (Continued)
a
compensation).
b
Most recent filings on Bloomberg as of June 2013. N.A. Not available. RSUs Restricted stock units. Continued on next page.
Equity Holdings Top 10 Holders of
Series A (LINTA)
b
Series B (LINTB)
b
FMR LLC 27,966 5.6 Malone, John C 27,258 94.3
Brown Brothers Harriman & Co. 26,591 5.3 Fisher, Donne F 140 0.5
Macquarie Group 26,328 5.3 Dimensional Fund Advisors LP 61 0.2
Dodge & Cox 26,063 5.2 FIC Capital Inc 28 0.1
Blackrock 20,883 4.2 Beck Mack & Oliver LLC 13 0.0
Harris Associates LP 20,675 4.1 UBS AG 12 0.0
Clearbridge Investment LLC 14,142 2.8 M&T Bank Corporation 3 0.0
Vanguard Group Inc. 13,309 2.7 Romrell, Larry E 810 0.0
Meritage Group LP 12,199 2.4 California Public EMP Calpers 725 0.0
State Street 11,185 2.2 Tower Research Capital LLC 280 0.0
Series A (LVNTA)
b
Series B (LVNTB)
b
JANA Partners LLC 2,634 7.5 Malone, John C 1,361 94.4
Blackrock 2,190 6.2 Dimensional Fund Advisors 3 0.2
FPR Partners LLC 2,162 6.1 Citadel Advisors LLC 3 0.2
Vanguard Group Inc. 1,554 4.4 UBS <1,000 0.0
Highfields Capital Management 1,483 4.2 M & T Bank Corporation <1,000 0.0
State Street 1,304 3.7 Tower Research Capital LLC <1,000 0.0
Eton Park Capital Management 1,219 3.5 California Public EMP Calpers <1,000 0.0
Horizon Kinetics 1,036 2.9 American International Group <1,000 0.0
Jet Capital Investors LP 858 2.4 Total Top 10 1,367 94.8
Highline Capital Management LLC 771 2.2 Tower Research Capital LLC 280 0.0
(000) LINTA LINTB LVNTA LVNTB
Holder Shares (000) % of Total Shares (000) % of Total Shares (000) % of Total Shares (000) % of Total
John C. Malone 3,359 <1.0 27,690 94.3 666 1.9 1,385 94.5
Gregory B. Maffei 6,049 1.2 332 <1.0
Michael A. George 2,734 <1.0 151 <1.0
M. Ian G. Gilchrist 9 <1.0
Evan D. Malone 33 <1.0 2
David E. Rapley 46 <1.0 3 <1.0
M. LaVoy Robison 33 <1.0 3 <1.0
Larry E. Romrell 58 <1.0 <1,000 <1.0 3 <1.0 <1,000 <1.0
Andrea L. Wong 16 <1.0 <1,000 <1.0
Albert E. Rosenthaler 383 <1.0 21 <1.0
Christopher W. Shean 647 <1.0 43 <1.0
Charles Y. Tanabe 593 <1.0 36 <1.0
All Directors and Executive Officers
as a Group (13 Persons) 14,050 2.7 27,691 94.3 1,265 3.6 1,385 94.5
Note: Directors and NEO holdings include stock options exercisable within 60 days of Feb. 28, 2013.
September 19, 2013

Corporates

Liberty Interactive LLC and QVC Maturities
($ Mil., As of June 30, 2013)
Total $
Amount 2013 2014 2015 2016 2017 2018 2019 2020 2021 Thereafter
8.500% Senior Debentures due 2029 287.0 287.0
4.000% Exchangeable Senior Debentures due 2029 469.0 469.0
Total Liberty Interactive LCC 2,938.0 2,938.0
QVC Inc.
QVC 7.500% Senior Secured Notes due 2019 769.0 769.0
QVC Bank Credit Facilities 990.0 990.0
Total QVC Debt 3,809.0 990.0 769.0 500.0 1,550.0
Total Consolidated Debt 6,747.0 990.0 769.0 500.0 4,488.0
Note: Excludes TripAdvisor and other subsidiary debt.
Corporate Governance Overview Liberty Interactive LLC (Continued)
a
compensation).
b
Most recent filings on Bloomberg as of June 2013. N.A. Not available. RSUs Restricted stock units.
John Malone has approximately 34.5% voting control of the company and 5% economic control.
Liberty Interactive Corp. has two stacking stocks: Liberty Interactive and Liberty Ventures. Holders of shares of LINTA have one vote per share, holders of shares of LINTB have ten
votes per share, holders of shares of LVNTA have one vote per share, and holders of LVNTB have ten votes per share.
Tanabe resigned from all offices with the company on Dec. 31, 2012 but remains a consulting employee. Richard N. Baer succeeds him as senior vice president and general counsel
of the company since January 2013.
M. George is party to an employment agreement with QVC Inc., which governs his compensation arrangements. The compensation committee provides recommendations in regard
to executive compensation for operating subsidiaries of Liberty Interactive. Liberty Interactives CEO is responsible for reviewing and approving the executive compensation programs
of its operating subsidiaries, including QVC.
Lockerz, LLC (Lockerz) was formed in February 2009 by Kathy Savitt and LMC Lockerz, LLC, a wholly owned subsidiary of Liberty Media. In November 2009, Liberty Media CEO and
director Gregory Maffei invested $2.86 Mil. for a 24.2% aggregate equity interest. As of March 31, 2013, Maffei owns less than 1% of Lockerz and LMC Lockerz owns approximately
29% of Lockerz, with the balance owned by the other shareholders. Maffei is also a director of Lockerz.
No clawback policy in place.
Auditor: KPMG LLP.
September 19, 2013

Corporates

Organizational Structure (Legal/Obligor) Liberty Interactive LLC
($ Mil., As of June 30, 2013)
N.A. Not Applicable. IDR Issuer Default Rating. Note: TripAdvisor has been excluded from Fitchs calculations.
IDR BB/Stable Outlook
Outstanding Ratings
Sr. Unsecured Notes due 20292043 2,938 BB
QVC Senior Secured Debt 3,809 BBB
Other Subsidiary Debt 138
Total Gross Debt 6,885
Cash 1,248
Net Debt 5,637
Public Holdings 6,687
Net Debt After Public Holdings (1,050)
Consolidated EBITDA 1,905
Gross Debt/EBITDA (x) 3.6
Net Debt/EBITDA (x) 3.0
Net Leverage Through Public Holdings (x) N.A.
Interest Coverage (x) 4.6
QVC Inc.
IDR BB/Stable Outlook
Outstanding Ratings
$2 Bil. Sr. Secured Credit Facility due 2018 990 BBB
Senior Secured Notes due 20172022 2,819 BBB
Total Debt 3,809
EBITDA 1,838
Interest Coverage (x) 7.8
Supplemental Liberty Media Metrics (Excludes E-Commerce Business EBITDA)
Total Debt/QVC EBITDA (x) 3.7
Net Debt/QVC EBITDA (x) 3.1
Net Debt (Including Net of Public Holdings)/QVC EBITDA (x) N.A.
QVC EBITDA/Total Interest Expense (x) 5.5
Investments (Ownership)
Expedia Inc. (17%) Interval Leisure Group Inc. (29%) Tree.com (Lending Tree) (24%)
HSN Inc. (37%) Time Warner Inc. (2%) LOCKERZ (38%)
Time Warner Cable (2%) Trip Advisor (22%) AOL Inc. (2%)
E-Commerce
EBITDA 104
Includes
BackCountry.com
Celebrate Interactive
CommerceHub
Bodybuilding.com
Provide Commerce
The Right Start
September 19, 2013

Corporates

Bank Agreement Covenant Summary QVC Inc.
Covenant
Overview
Borrower QVC, Inc.
Document Date
and Location
Amended and Restated on March 1, 2013 QVC, Inc., 8-K on March 7, 2013
Maturity Date Revolver 3/1/18
Description of Debt $2.0 billion senior secured revolving credit facility. (Uncommitted accordion of $1 billion.)
Amount ($ Mil.) Facility Type Commitment
Revolver 2,000
Ranking Pari passu with the existing senior secured notes.
Security Secured by the stock of QVC, Inc.
Guarantee Guaranteed by the material domestic subsidiaries of QVC, Inc., jointly and severally, unconditionally and irrevocably, and on an
unsecured basis.
Debt Restrictions
Debt Incurrence The issuance of Pari Passu debt (defined as debt secured by the borrowers assets), existing notes, unsecured debt and capital leases is
governed by the leverage ratio covenant. Priority debt (debt senior to the credit facility) may not exceed 50% of consolidated LTM EBITDA
and must be in compliance with the leverage ratio covenant.
Limitation on Liens Standard operating carveouts exist. Liens existing prior to an acquisition, as long as the lien was not created in contemplation of the
acquisition and the lien does not apply to any other assets other than the assets secured on the date of the acquisition, including any
refinancing of such debt, are permitted. See additional debt restrictions above, which may include secured debt, as long as the credit
agreement is secured on a pari passu basis.
Limitation on Guarantees Guarantees by any restricted subsidiaries are permitted pursuant to the debt incurrence limitations, so long as the credit agreement is
guaranteed at least to the same extent for the following: existing notes, pari passu debt, and unsecured debt.
Restricted Payments Unrestricted dividends allowed for Liberty Interactive Corp and its subsidiaries principal and interest payments and for tax payments.
A general carveout exists that is governed by a pro forma leverage ratio incurrence test of 3.25x.
Change-of-Control
(CoC) Provision
A CoC event triggers an event of default. A CoC event is if more than 30% of voting power is acquired by a person/entity other than a
permitted holder (Liberty Interactive Corp., John Malone, and affiliates of John Malone), such voting power exceeds the voting power of
the permitted holders, and (a) such person/entity is rated (i) non-investment grade (as defined) or (ii) lower than Liberty Interactive, or (b)
QVC is rated non-investment grade.
M&A, Investments
Restriction
Governed by the leverage ratio incurrence test of 3.25x. Net investment in unrestricted subsidiaries may not exceed $375 million in any
fiscal year and $750 million in the term of the credit agreement. In addition, there is a general investment basket of $250 million (the
investment basket is in addition to incurrence and unrestricted subsidiary carveouts).
Sale of Assets Restriction Dispositions in the ordinary course of business are permitted. Sale and leaseback transactions that do not qualify as capital leases are
limited to an aggregate of $100 million. The company may not sell or dispose of all or substantially all of the assets. Shares of restricted
subsidiaries may be sold as long as there would be no default under the agreement pro forma the sale. The company may not change its
line of business.
Financial Covenants
Leverage (Maximum) Consolidated leverage (gross basis) 3.50x.
Prepayment/Mandatory Prepayments permitted, subject to customary breakage fees. Mandatory prepayment is required in the event that the outstanding
revolving credit exceeds the total commitments.
Pricing
Coupon Type/Index Floating based off Libor or ABR plus the appropriate applicable rate listed below.
Pricing Grid Consolidated Leverage Ratio (x) Commitment Fee (%) Applicable Rate LIBOR (%) Applicable Rate ABR (%)
More than 2.5 and less than 3.0 0.375 2.000 1.000
Less than 1.5 0.250 1.250 0.250
Other
Cross-Default Payment default by QVC, Inc. or a restricted subsidiary in an aggregate principal amount exceeding $100 million. No cross defaults exist
with Liberty Interactive debt.
Cross-Acceleration Accelerated debt of QVC, Inc. or a restricted subsidiary in an aggregate principal amount exceeding $100 million. No cross defaults exist
with Liberty Interactive debt.
MAC Clause None noted.
Equity Cure None noted.
Covenant Suspension None noted.
Required Lenders/
Voting Rights
Contains standard amendment language.
M&A Merger and acquisition. LINTA Liberty Interactive. MAC Material adverse change. ABR Alternate base rate.
September 19, 2013

Corporates

Bond Covenant Summary (Bond Indenture) Liberty Interactive LLC
Covenant
Overview
Issuer Liberty Interactive LLC
Document Date and
Location
Indenture dated: July 7, 1999. Filed Liberty Interactive Corp., S-4, Sept. 3, 1999. Notes issued under various supplemental indentures.
See the Description of Debt section below.
Maturity Date Various. See the Description of Debt section below.
Description of Debt 8.500% Senior Notes due 2029 issued under the first SI dated July 7, 1999.
4.000% Exchangeable Notes due 2029 issued under the second SI dated Nov. 16, 1999.
8.250% Senior Notes due 2030 issued under the third SI dated Feb. 2, 2000.
3.750% Exchangeable Notes due 2030 issued under the fourth SI dated Feb. 2, 2000.
3.500% Senior Notes due 2031 issued under the fifth SI dated Jan. 11, 2001.
0.750% Exchangeable Notes due 2043 issued under the 16th SI, dated April 9, 2013.
Ranking Senior unsecured. No guarantees from subsidiaries. All notes listed in the Description of Debt section above rank pari passu with
each other.
Debt Restrictions
Debt Incurrence No material provisions noted.
Limitation on Liens Liens are not permitted under the bonds, unless a pari passu lien is granted to the notes. Standard carveouts exist (including capital
leases and liens existing prior to an acquisition, as long as the lien was not created in contemplation of the acquisition). There is also a
general lien basket that limits liens (and sale-leaseback transactions) to 15% of the total consolidated asset value of Liberty Media and its
restricted subsidiaries. The company has material flexibility in designation of restricted subsidiaries.
Limitation on Guarantees No material provisions noted.
Restricted Payments No material provisions noted.
Change-of-Control
(CoC) Provision
M&A, Investments
Restriction
Sale of Assets Restriction Only in the ordinary course of business. The company shall not merge, sell, transfer, convey, or dispose of all or substantially all of its
assets and the assets of its subsidiaries (taken as a whole), unless the successor entity or entities are a corporation under the laws of the
U.S. and expressly assume the notes, and no event of default shall have occurred after giving effect to such transaction.
Prepayment/Mandatory Prepayments permitted, subject to customary breakage fees. Mandatory prepayment is required in the event that the outstanding
revolving credit exceeds the total commitments.
Other
Cross-Default No material provisions noted. See the Cross-Acceleration section below.
Cross-Acceleration Cross acceleration on other Liberty Interactive debt in excess of $100 million.
MAC Clause No material provisions noted.
Equity Clawback No material provisions noted.
Covenant Suspension No material provisions noted.
Put Dates The 0.750% exchangeable notes due 2043 may be put to the company on March 30, 2023.
SI Supplemental indenture. M&A Merger and acquisition. MAC Material adverse change.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Liberty Interactive LLC
Date of
5/8/2013 1Q2013 Prepared Ill take a quick look at the liquidity picture. At the end of the quarter, Liberty Integrative Group had attributed cash of $587 million and
$4.7 billion in principal amount of attributed debt. QVCs total debt to adjusted OIBDA ratio, as is defined in their credit agreement, was
approximately 1.95 times, as compared to a maximum allowable leverage of 3.25 times.
QVC has been very active on the debt side. It refinanced and extended its credit facility, while improving the pricing and its terms. It
redeemed the full amount of the 7.125% senior secured notes due 2017, some of which happened post-quarter-end; tendered for a
portion of the 7.5% senior secured notes due 2019; and issued $750 million in 4.375% senior secured notes due 2023 and
$300 million in 5.95% senior secured notes due 2043.
11/2/2012 3Q2012 Prepared We consider when you consider repurchase this quarter, look at them sorry, we consider them abnormally low and probably
disappointing to you. I would note, however, that the board of directors has approved an incremental $1 billion to the share repurchase
authorization and I believe, we remain committed to share repurchases.
11/2/2012 3Q2012 Q&A Q: Good morning, guys. Thanks for taking the question. Greg, just curious, when you think about leverage at the QVC level, I know
you guys have talked about the fact that youre well below the target levels there. How quickly can you get there? How do you think
about when do you kind of start to take on more leverage and how do you see that unfolding?
A: Well, I think as we outlined at the Investor Day, we believe we can easily support 2.5x leverage at QVC and, obviously, when were
at that 1.9x level now, getting to that 2.5x level at QVC, there are really three sources supply of capital. One is, obviously, cash flow
generated by QVC and, to a lesser degree, by our e-commerce companies. Second is growth in the e-commerce and QVC income
streams, EBITDA streams, which opens up incremental borrowing capacity in our minds. Finally just getting from the 1.9x to the 2.5x
that we stand at today. And all three sources will become available in increasing amounts over the next couple of three years.
How long will it take to get to that 2.5x is probably a function of, really, how much volume there is in the market and where the stock
trades. We tend to put in ladders which are more aggressive in repurchasing stock at lower levels. I think were probably more likely
to continue with ongoing share repurchases rather than one time, meaning self-tenders or the like. But I firmly believe that over the
period we outlined, the three years, we can usually get to the 2.5x.
11/2/2012 3Q2012 Prepared Id note, that even with the increase in the revolver balance at QVC, which was used in part to fund that cash at Liberty Ventures,
leverage at QVC is still a very conservative 1.9 times. As you may note, Liberty Interactive purchases were down for the quarter. This
was due to a couple of factors. First, we were out of the market for six weeks while doing a recap. Secondly, when we entered our
normal black-out period, as most companies have, we had a repurchase plan in place, but the stock responded very strongly. In fact,
we rose above our grid. So for much of the quarter, we were out of the market.
11/2/2012 3Q2012 Q&A Q: Okay. For these projects that youre looking at, can you give us some sense of your initial view of the return on invested capital
hurdle that youre applying to these investments?
A: Well, I have to tell you, it sort of varies because in some cases, we can look at something that has a 12% return, but we think we
can put a lot of leverage against it in cheap financing and get our equity returns considerably higher and then other ones which we
probably have less ability to finance because they probably have more volatility in the cash flows or less certainty in the cash flows,
and were going to look at rates probably considerably higher, if not 20% plus. So it really does vary.
5/8/2012 1Q2012 Q&A Two things; well see what happens over time as we provide the greater clarity around the operating businesses and ventures. Well
always consider looking at another tracker if that doesnt work. No plans or intent but secondly to the degree that multiple seems low
and doesnt reflect the performance of those businesses well try and take advantage of it with incremental share repurchase and if
the market is willing to hand us the stock back at what we think is a relatively inexpensive price, well thank them and execute on a
share repurchase.
2/23/2012 4Q2011 Q&A Well, the one thing I would note is that were here to present to investors a clean Liberty Interactive. If you think about the nature of
the tracking stocks from the fact that were still under one indenture and both sides are liable for each others debt, one of the things
thats important is to ensure a well-capitalized Liberty Ventures to give the market confidence that it, Liberty Ventures, can handle the
debt, which has been attributed to it, and that it never will be called upon, or be calling upon, rather, Liberty Interactive to ever handle
that debt, even if that debt is many, many years down the road, you want to present a fully capitalized and strongly capitalized Liberty
Ventures, so it is not a drag on Liberty Interactive. So, thats the only other reason, besides putting capital in for opportunities, its to
ensure strength that the balance sheet is not a drag.
2/23/2012 4Q2011 Q&A I think one other point Id make, Barton, is we did increase the authorization of buyback at Liberty Interactive, which I think had
dwindled down to about $300 million up to a new billion dollar level. So, we clearly are making a statement about our willingness to
buy, and we did ramp over where we had been. So, hopefully those are all positive signs.
8/9/2011 2Q2011 Prepared And positively, we continue to pay down debt, reducing the bank credit facility revolving credit facility at QVC by $170 million in the
quarter, continuing to drive our leverage down.
11/5/2010 3Q2010 Prepared As we discussed on our last call, this new arrangement freed up a $500 million receivable with GE, which was used to pay down
outstanding debt and reduced our exposure to the potential bad debt of this portfolio.
5/7/2010 1Q2010 Prepared And at Liberty Capital, we hope to identify effective uses for the large cash that we have, whether it be shrinking equity, as you saw us
do this quarter; reducing debt, as we have done; or opportunistic investments in debt and equity of others.
2/25/2010 4Q2009 Q&A As I mentioned, investing in our own equity, investing in our own debt, which would mean effectively the Time Warner debt in this
case, investing in other companies debt and other companies equity. We obviously think our equity is attractive, but I would note
some of the other investments we have made have turned out pretty attractively as well, like SIRIUS. So Im not going to pre-judge
which way were going to go with any of that money.
8/7/2009 2Q2009 Prepared Here at corporate we strengthened the balance sheet considerably, retiring about $1.94 billion face of debt on a corporate-wide basis.
That included about $750 million of bank debt at QVC, and retirement of certain maturities as straight debt and other purchases in the
marketplace. All together we brought that debt in at a discount to face of about $275 million. I think you should expect youll see more
debt retirement coming in the quarters ahead.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Liberty Interactive LLC
(Including LSTZA, LCAPA)
(excluding LSTZA, LCAPA, TRIP)
($ Mil., Years Ending Dec. 31) 2007 2008 2009 2010 2011 2012
LTM Ended
June 30, 2013
Profitability
Operating EBITDA 1,691.0 1,558.0 1,842.0 1,726.0 1,823.0 1,892.0 1,905.0
Operating EBITDA Margin (%) 17.95 15.45 18.13 19.32 18.96 18.89 18.72
FFO Return on Adjusted Capital (%) 5.35 4.86 9.90 10.88 11.38 8.34 7.49
FCF Margin (%) 8.97 4.37 11.60 12.53 9.42 10.91 7.02
Coverages (x)
FFO Interest Coverage 2.51 1.97 3.23 2.99 3.22 3.34 2.83
Operating EBITDA/Gross Interest Expense 2.64 2.17 2.93 2.76 4.27 4.38 4.58
FFO Fixed-Charge Coverage 2.02 1.68 2.48 2.12 2.01 2.07 1.82
FCF Debt Service Coverage 1.79 0.73 0.71 1.56 0.83 0.74 0.78
Cash Flow from Operations/Capex 4.14 3.17 5.48 5.00 2.93 4.22 3.38
Leverage (x)
Long-Term Secured Debt/Operating EBITDA 2.17 1.61 1.34 2.02 2.00
Long-Term Secured Debt/FFO 2.85 2.23 2.57 3.78 5.01
Total Debt with Equity Credit/Operating EBITDA 7.40 9.33 5.78 3.74 3.61 3.92 3.62
FFO Adjusted Leverage 8.46 10.49 6.11 4.33 5.56 5.80 6.41
Total Adjusted Debt/Operating EBITDAR 8.11 9.71 6.63 4.61 4.49 4.71 4.47
FCF/Total Adjusted Debt (%) 5.22 2.43 8.22 10.96 8.64 9.67 6.63
Balance Sheet
Short-Term Debt 191.0 868.0 1,932.0 493.0 1,189.0 1,638.0 1,029.0
Long-Term Senior Secured Debt 3,996.0 2,770.0 2,434.0 3,815.0 3,800.0
Long-Term Senior Unsecured Debt 12,330.0 13,668.0 4,719.0 3,200.0 2,960.0 2,019.0 1,774.0
Other Debt
Equity Credit
Total Debt with Equity Credit 12,521.0 14,536.0 10,647.0 6,463.0 6,583.0 7,412.0 6,885.0
Off-Balance-Sheet Debt 3,665.3 3,627.9 3,679.0 3,746.6 3,906.0 3,887.6 3,887.6
Total Adjusted Debt with Equity Credit 16,186.3 18,163.9 14,326.0 10,209.6 10,489.0 11,299.6 10,772.6
Cash Flow
Funds from Operations 968.0 700.0 1,400.0 1,243.0 946.0 1,009.0 758.0
Change in Working Capital 341.0 (56.0) 47.0 46.0 (32.0) 423.0 257.0
Cash Flow from Operations 1,309.0 644.0 1,447.0 1,289.0 914.0 1,432.0 1,015.0
Total Non-Operating/Nonrecurring Cash Flow (148.0) (5.0) 88.0 304.0
Capital Expenditures (316.0) (203.0) (264.0) (258.0) (312.0) (339.0) (300.0)
Dividends
FCF 845.0 441.0 1,178.0 1,119.0 906.0 1,093.0 714.0
Net Acquisitions and Divestitures 147.0 (34.0) 553.0 459.0 1,030.0 714.0
Net Debt Proceeds 1,371.0 2,198.0 (1,344.0) (1,817.0) (516.0) 804.0 (264.0)
Net Equity Proceeds (537.0) (18.0) (366.0) (487.0) (358.0)
Other (Investing and Financing) (2,335.0) (2,068.0) 1,406.0 (363.0) (530.0) (627.0) 19.0
Total Change in Cash 28.0 1,775.0 (602.0) (506.0) 1,813.0 825.0
Ending Cash and Securities Balance 3,135.0 3,135.0 4,835.0 1,353.0 847.0 2,660.0 1,448.0
Marketable Securities and Investments 19,386.0 17,349.0 5,150.0 2,059.0 2,303.0 2,670.0 2,248.0
Income Statement
Revenue 9,423.0 10,084.0 10,158.0 8,932.0 9,616.0 10,018.0 10,173.0
Revenue Growth (%) 9.40 7.01 0.73 7.55 7.66 4.18 2.85
Operating EBIT 1,016.0 848.0 1,176.0 1,155.0 1,182.0 1,283.0 1,135.0
Gross Interest Expense 641.0 719.0 628.0 626.0 427.0 432.0 416.0
461 Company Summaries McGraw-Hill Global Education Holding, LLC
September 19, 2013

Corporates

McGraw-Hill Global Education
Holding, LLC
Key Rating Drivers
Strong and Defensible Share: The higher education publishing market is dominated primarily
by Pearson, Cengage and McGraw-Hill Global Education Holding, LLC (MHGE). Collectively,
these three publishers make up 75% (according to Monument Information Resources; provided
by the company), with MHGE holding a 17% market share. This scale provides meaningful
advantages to these three publishers and creates barriers to entry for new publishers.
Near-Term Pressure: According to the National Center for Education Statistics, U.S. student
enrollment in higher education has grown nearly every year for the last 50 years. There have
been eight years when enrollment declined (including 2012) in the low single digits. Fitch believes
that there could be some near-term enrollment pressures due to continued enrollment declines
at for-proft universities and the potential for federal student aid cuts. Long term, Fitch believes
enrollment will continue to grow in the low single digits, as higher education degrees continue to
be a necessity for individuals seeking employment.
Pricing Power, but Waning: MHGE and its peers have continued to demonstrate pricing power
over their products. Fitch believes this will continue, albeit at lower levels than historically.
Textbook pricing increases are expected to slow down materially and will likely be in the low
single digits. Revenue growth will primarily come from the continued growth in volume of digital
solution products sold and pricing increases associated with these digital products as they gain
traction with professors.
Digital a Long-Term Opportunity: Fitch believes that the transition from physical education
materials to digital products will lead to a net beneft for the publishers over time. Publishers
should have the opportunity to disintermediate used/rental text book sellers. Fitch expects print/
digital margins to remain roughly the same, as both the discount of the digital textbook (relative
to the print textbook) and the investments made in the interactive user experience offset the
elimination of the costs associated with manufacturing, warehousing, and shipping printed
textbooks. Fitch expects the growth in digital solutions, custom publishing and eBooks to offset
the traditional print revenue declines within the next two to three years.
Digital Offsets Traditional Decline: Continued growth in digital revenues coupled with leverage
of 4x or less (on a Fitch-calculated basis) would likely lead to positive rating actions.
Missed Opportunity in Digital: Mid to high single-digit revenue declines, which may be driven
by declines or no growth in digital products (caused by a lack of execution or adoption by
professors) would pressure ratings.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
Ratings
Security Class
Current
Rating
McGraw-Hill Global
Education Holding, LLC
Long-Term IDR B+
Senior Secured Bank Facility BB/RR2
Senior Secured Notes BB/RR2
McGraw-Hill Global
Education Finance, Inc.
Long-Term IDR B+
Senior Secured Bank Facility BB/RR2
Senior Secured Notes BB/RR2
RR Recovery Rating.
Rating Outlook
Stable
September 19, 2013

Corporates

Portfolio Summary McGraw-Hill Global Education Holding, LLC.
(As of Dec. 31, 2012)
McGraw-Hill Higher Education McGraw-Hill Professional
McGraw-Hill Campus Access Medicine
McGraw-Hill Connect Access Science
McGraw-Hill Create Access Engineering
McGraw-Hill Tegrity Access Pharmacy
McGraw-Hill LearnSmart
September 19, 2013

Corporates

Event Risk Dashboard McGraw-Hill Global Education Holding, LLC
Source: Company filings, Fitch Ratings
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition M
Divestiture L
Litigation Risk L
Regulatory Risk H
LBO Risk Low
The company is currently owned by private equity sponsors.
Secular Risk Medium
The education landscape is in the early stages of shifting from print educational
materials to digital materials. Fitch believes that the greatest risk in the shift to
digital is borne by the commercial printers.
It is critical that educational material content creators invest and create digital
products that take complete advantage of tablet/digital device capabilities
(which may help prevent piracy).
Fitch recognizes that new content creators may emerge. However, Fitch
believes currently entrenched creators, such as McGraw-Hill Education,
will have the digital content to compete effectively and the sales staff to sell
these digital products. In addition, the shift to digital services (including online
homework solutions) provides opportunities to grow revenues that are less
susceptible to piracy risk.
Concentrated ownership controlled by private equity.
There remain shared services between McGraw-Hill's previous parent and
shared services (including management's time) with the K-12 Education business
subsidiary.
While management has not stated a leverage target, Fitch believes that the
private equity ownership is incentivized to reduce leverage in order to improve
the prospects for an exit from its investment.
The ratings reflect Fitchs expectation that FCF will be dedicated towards debt
reduction and acquisitions.
Additional debt is primarily limited by a 6.25x total indebtedness leverage ratio
incurrence test.
McGraw-Hill Global Education Holding LLC.
Rating History
B+
B
B
BB
Divesture Risk Low
Fitch believes most acquisitions will be small tuck-in acquisitions.
Fitch does not expect any material divestures.
Litigation Risk Low
Currently Fitch views litigation risk as low.
Existing debt is secured and guaranteed by existing and future wholly-owned
domestic subsidiaries of McGraw-Hill Global Education Holding LLC (subject to
certain exceptions).
Regulation risk is ranked as high given the risk that federal budget cuts could
lead to reduced fnancial aid to students, thereby pressuring enrollment.
464 Company Summaries Nielsen Holdings N.V.
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
Nielsen
IDR BB
Nielsen Finance
IDR BB
Senior Secured BB+
Senior Unsecured BB
Rating Outlook
Positive
Key Rating Drivers
Resilient Performance During Recession: Nielsen Holdings N.V. (Nielsen) was much more
resilient during the downturn than other media companies, given the contractual and diversifed
nature of its revenue stream and the benign competitive environment. The company exhibited
revenue and EBITDA growth and positive FCF through the trough of the downturn.
Arbitron Acquisition: Nielsen entered into an agreement to acquire Arbitron Inc. (Arbitron),
valued at approximately $1.3 billion. The transaction is expected to close as soon as customary
closing conditions are met and regulatory review is completed. Fitch views the use of proceeds
from the sale of the Exposition business ($925 million in net proceeds; closed June 2013) towards
the acquisition of Arbitron favorably. The reduced debt funding requirements to complete the
acquisition improve Nielsens pro forma credit metrics. Fitch estimates pro forma unadjusted
gross leverage of approximately 4.1x.
Expect Continued Deleveraging: Fitch believes Nielsen will be able to continue to reduce
gross leverage levels, as Fitch expects EBITDA will grow in the low to midsingle digits over the
next two years, coupled with mandatory debt amortization payments. Fitch may consider a one-
notch upgrade within the next 1224 months.
Long-Term Financial Policy: Nielsen has publicly stated its goal to reach investment grade
(IG), and has set a net leverage target of 2.75x3.00x. Fitch believes that range could be
commensurate with an IG rating, assuming operational performance and market position has
not materially changed and Fitch is comfortable with the remaining private equity infuence.
Competition Risk Accommodated in Rating: Nielsens Watch and Buy businesses are
well positioned in their respective markets. The ratings refect the risk that competitive threats
may emerge over time. Increased competition could result in revenue pressure (lost share),
incremental costs (talent/sales/services) and some FCF pressure (investments in offerings).
However, the complexity and signifcant investments associated with attempting to replicate
Nielsens offerings create meaningful barriers to entry.
Financial Flexibility Mitigates Risk: Fitch expects Nielsen to generate FCF in the
$300 million$400 million range per annum over the next several years (without adjusting for the
Arbitron acquisition). This will provide Nielsen with the fnancial fexibility to satisfy mandatory
debt amortization, make small acquisitions and institute balanced shareholder-friendly programs.
Metric Positive Triggers: Continued improvement in operating trends with gross leverage less
than 4x (pro forma for the sale of Exposition and acquisition of Arbitron) over the next 1224
months could result in a one-notch upgrade.
Negative Triggers: Additional debt-funded acquisitions that materially increased leverage, or
shareholder-friendly policies that increased debt in the near term and kept pro forma unadjusted
gross leverage at more than 4.5x, would pressure the ratings. In addition, ratings may be
pressured if competitive threats emerge and take a meaningful share of Nielsens market position.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
September 19, 2013

Corporates

United
States
51%
North
and
South
America
(excludin
g U.S.)
11% The
Netherlan
ds
1%
Other
Europe,
Middle
East and
Africa
24%
Asia
Pacific
13%
The Nielsen Company
(As of Dec. 31, 2012)
North and
South America
(excluding U.S.)
11%
The
Netherlands
1%
Buy
61%
Watch
36%
Expositio
ns
3%
Revenues by Segment
The Nielsen Company
(As of Dec. 31, 2012)
Expositions
3%
Watch
52%
Buy
42%
Expositio
ns
6%
EBITDA by Segment
The Nielsen Company
(As of Dec. 31, 2012)
Expositions
6%
Portfolio Summary The Nielsen Company B.V.
(As of Dec. 31, 2012)
What Consumers Buy What Consumers Watch
Information
Retail Measurement Services
Consumer Panel Measurement
Insights
Analytical Services
Television Audience Measurement Services
Digital (Online) Audience Measurement Services
Mobile Measurement Services
Advertiser Solutions
September 19, 2013

Corporates

Event Risk Dashboard Nielsen Holdings N.V.
a
Includes other acquisitions and investments in affiliates. Note: Event Risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of
the potential actions a company is able to take, from our expectations of what it will actually do. Continued on next page.
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition M
Divestiture M
Covenant Breach L
Litigation Risk M
Regulatory Risk M
LBO Risk Low
The company has materially reduced leverage since its LBO in 2006. However,
leverage is still around 4x, which may make fnancing an LBO challenging.
Given private equity sponsors, 2011 IPO and recent share offering, Fitch does not
believe there is a material risk of an MBO.
Secular Risk Low
Fitch believes that the secular shift in media consumption is an advantage for the
company in the long run given its breadth of services versus competitors.
Fitch believes that the company's investments in measuring media consumption
across various platforms will enable it to defend its market position.
Nielsen's exposition business (less than 5% of revenues) faces some secular
challenges as more virtual seminars and conferences are developed and
deployed. Fitch believes that any such virtual meetings will not be able to
replicate easily the experience of a live conference.
Concentrated Ownership Private equity continues to have meaningful voting
control (41% ownership) from the 2006 LBO. The private equity holders maintain
considerable control over the board and the company.
The company's track record of streamlining the company, driving material
improvements in EBITDA, and reducing absolute levels of debt mitigate the risks
of concentrated ownership.
Nielsen has publicly stated its goal to reach investment grade, and has set a
net leverage target of 2.75x to 3.0x. Fitch believes that this target range could
be commensurate with an investment-grade rating, assuming operational
performance and market position have not materially changed and Fitch is
comfortable with the remaining private equity ownership/infuence.
The 2011 IPO and follow-up offerings by the sponsors demonstrate the sponsors
could monetize their investment without negatively affecting Nielsen's credit
profle.
Additional debt subject to 6.75x incurrence test.
Fitch believes that the risk of structural subordination is currently limited due to
the covenant restrictions within the bank and bond indentures of Nielsen Finance.
Bonds limit additional debt up to 6.75x.
The majority of the debt is guaranteed by the wholly owned U.S. subsidiaries (any
new debt at these subsidiaries would dilute the guarantee).
Foreign subsidiaries would be limited only by the total company leverage
incurrence test.
Nielsen Holdings N.V. Rating History
B
B
B+
BB+
BB
BB
0.0
2.0
4.0
6.0
8.0
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
10
20
30
40
Source: Bloomberg.
Nielsen Holding N.V. Stock Price
(Jan 2011August 2013)
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Nielsen Holdings N.V. (Continued)
a
Includes other acquisitions and investments in affiliates. Note: Event risk describes typically unforeseen or difficult to predict events. Fitch separates the assessment of
the potential actions a company is able to take from expectations of what it will actually do.
YTD June 2013 19 934
2012 160 4
2011 123 5
2010 55 17
2009 50 84
2008
a
261 23
2007 837 440
In June, 2013, Nielsen sold its Exposition business for a cash consideration of
$950 million.
On Dec. 18, 2012, Nielsen announced a defnitive agreement to acquire Arbitron
Inc. The transaction is valued at approximately $1.3 billion and will be funded
entirely with cash/new debt. Nielsen noted that it has obtained commitments to
fund the transaction. The transaction is expected to close as soon as customary
closing conditions are met and regulatory review is completed.
Fitch expects most acquisitions to target bolt-on analytical capabilities and
expansion into emerging markets.
The company has publicly indicated that its tradeshow business is noncore and
may be divested.
Pensions
Nielsens U.S. pension is unfunded by $416 million as of year-end 2012. Fitch
believes the company will have adequate liquidity to cover its pension funding
requirements.
The company completed its IPO in January 2011 and had follow-on offerings in
2012 and 2013.
On July 25, 2013, the companys board approved a new share repurchase
program for up to $500 million of Nielsens common stock. The primary purpose
is to mitigate dilution associated with equity compensation plans.
(x)
Covenant
Level
Fitch Estimated
Level as of
6/30/13
EBITDA
Cushion (%)
Nielsen is subject to various data and information regulations in the U.S.
and abroad.
As with other companies that have dominant market share, the risk of regulation
or increased regulation is inherent.
Both Nielsen and Kantar have had a lawsuit brought against them by New Delhi
Television Ltd., over alleged manipulation of data. Monetary claims appear to be
in excess of $500 million in damages and $800 million in lost revenues. The case
is in its early stages.
September 19, 2013

Corporates

Corporate Governance Overview Nielsen Holdings N.V.
a
2012 operating plan EBITDA target required a growth of 8% from 2011.
b
Most recent filings on Bloomberg as of July 2013. RSUs Restricted stock units. N.A. Not applicable.
($)
Stock
Awards
Option
Awards
Non-Equity
David Calhoun CEO 1,625,000 2,004,039 6,624,000 3,650,000 22,250 13,925,289
Mitchell Habib COO 875,000 419,700 1,449,000 1,600,000 22,500 4,366,200
Brian West CFO 850,000 419,700 1,242,000 1,350,000 22,500 3,884,200
James Cuminale Chief Legal Officer 700,000 279,800 952,200 900,000 23,992 2,855,992
Susan Whiting Vice Chairperson 950,000 279,800 786,600 950,000 47,421 3,013,821
Board of Directors
David L.
Calhoun
55 N May 2013
May 2014
2011 None The Boeing Company;
Caterpillar Inc.
CEO The Nielsen Company
B.V.; CEO TNC B.V.
James A.
Attwood, Jr.
54 N May 2013
May 2014
2006 Compensation (Chair);
Nomination and
Syniverse Holdings,
Inc.; Getty Images
and CoreSite Realty
Corporation
Managing Director The
Carlyle Group
Richard J.
Bressler
55 N May 2013
May 2014
2011 Compensation;
Nomination and
Gartner, Inc.; CC Media
Holdings
Managing Director Thomas
H. Lee Partners, L.P.
Patrick
Healy
46 N May 2013
May 2014
2006 Compensation;
Nomination and
Securitas Direct; Wood
Mackenzie; Gaztransport
et Technigaz S.A.S
Deputy CEO Hellman &
Friedman LLC
Karen M.
Hoguet
56 Y May 2013
May 2014
2011 86,000 100,000 186,000 Audit (Chair and
Financial Expert);
Compensation
None CFO Macys Inc.
James M.
Kilts
Chairman
65 N May 2013
May 2014
2011 None Metropolitan Life
Insurance Co.;
MeadWestvaco
Corporation; Pfizer Inc
Founding Partner
Centerview Partners
Alexander
Navab
47 N May 2013
May 2014
2006 Compensation;
Nomination and
Visant; Weld North General Partner KKR &
Co. L.P.
Robert
Pozen
66 Y May 2013
May 2014
2011 84,000 100,000 184,000 Audit (Financial Expert);
Nomination and
(Chair)
Medtronic, Inc.; AMC,
a subsidiary of the
International Finance
Corporation
Retired Consultant MFS
Investment Management
Vivek
Ranadive
55 Y May 2013
May 2014
2012 15,000 47,500 37,500 100,000 None TIBCO Software Inc. CEO and Chairman TIBCO
Software Inc.
Robert Reid 40 N May 2013
May 2014
2011 Compensation;
Nomination and
ICS Group Senior Managing Director
Corporate Private Equity Group
at The Blackstone Group
Javier G.
Teruel
62 Y May 2013
May 2014
2011 75,000 100,000 175,000 Audit (Financial Expert);
Compensation
Starbucks Corporation;
JCPenney
Partner Spectron Desarrollo
Annual Incentive Operating Plan EBITDA Target
a
; Cash Flow
Base Salary Comparable to companys peer group.
Annual Incentive For FY2012, payouts to NEOs were at 95% of target. Cash flow is a factor and may result in a reduction of bonus pool by up to 30%. FY2012 cash
flow objectives were met.
Long-Term Incentives Stock options 100% of Calhouns award and 75% for other NEOs; RSUs 25%. Both options and RSUs vest over 4 years in equal annual
installments.
Stock Ownership Requirements CEO 6x base salary, NEOs 3x
September 19, 2013

Corporates

Corporate Governance Overview Nielsen Holdings N.V. (Continued)
a
2012 operating plan EBITDA target required a growth of 8% from 2011.
b
Most recent filings on Bloomberg as of July 2013. RSUs Restricted stock units. N.A. Not applicable.
Nielsen was purchased on May 24, 2006 by a consortium of private equity firms (AlpInvest Partners, The Blackstone Group, The Carlyle Group, Hellman & Friedman, Kohlberg Kravis
Roberts & Co. and Thomas H. Lee Partners), who collectively are referred to as the original sponsors.
The sponsors control the election of members of the board. Each of the sponsors initially has a right to nominate for appointment the following number of directors: one director from
AlpInvest Partners, two from The Blackstone Group, two from The Carlyle Group, one from Hellman & Friedman, two from Kohlberg Kravis Roberts & Co., two from Thomas H. Lee
Partners and one from Centerview, who must be Mr. Kilts.
On Jan. 25, 2011 the company issued an IPO raising $1.6 Bil.
Related-party transactions for FY2012: Ranadiv, who has served on the companys board since July 26, 2012, is the CEO and chairman of TIBCO and owns approximately 8.18%
of TIBCOs capital stock. During the year ended Dec. 31, 2012, the company paid approximately $11.6 Mil. to TIBCO for certain software licenses and related support, maintenance
and training.
The company is incorporated in the Netherlands
No clawback policy; auditor: Ernst & Young LLP
b
Thomas H Lee Partners LP 39,308 10.5
Capital Group Companies Inc. 36,269 9.7
Blackstone 34,698 9.2
Kohlberg Kravis Roberts & Co LP 31,264 8.3
Carlyle Group 30,793 8.2
Hellman & Friedman LLC 14,826 4.0
Alpinvest Partners NV 10,856 2.9
Blackrock 8,718 2.3
Eton Park Capital Management 8,000 2.1
Total Top 10 222,907 59.3
James A. Attwood, Jr.
Richard J. Bressler
Patrick Healy
Karen M. Hoguet 36,295 <1.0
James M. Kilts
Alexander Navab
Robert Pozen 240,712 <1.0
Robert Reid
Vivek Ranadive 5,437 <1.0
Javier G. Teruel 38,955 <1.0
David L. Calhoun 4,988,748 1.3
Susan Whiting 459,882 <1.0
James Cuminale 510,625 <1.0
Brian West 615,844 <1.0
Mitchell Habib 235,292 <1.0
All Directors and Executive Officers as a Group (21 Persons) 8,166,380 2.2
Note: Directors & NEO Holdings include stock options exercisable within 60 days of April 1, 2013.
September 19, 2013

Corporates

Pension Screener
a
2013 "At Risk" Shortfall? Yes Estimated Pension Outflow
Greater than 10%?
No
Plan Assets
Fair Value of Plan Assets (U.S.) 248.0 221.0
Fair Value of Plan Assets (Non-U.S.) 1,193.0 1,051.0
Actual Return on Plan Assets (Non-U.S.) 118.0 37.0
b
7.0 16.0
Projected Benefit Obligation (PBO, U.S.) 664.0 284.0
Projected Benefit Obligation (Non-U.S.) 1,022.0 1,157.0
Benefits Paid (U.S.) (10.0) (10.0)
Leverage Screener
Cash Flow Screener
a
Act of 2010 (PRA).
b
September 19, 2013

Corporates

Detailed Maturities Schedule Nielsen Holdings N.V.
Nielsen Finance Senior Secured Debt
Senior Secured Term Loan Class D 1,146.0 2017 30.7 106.9 122.2 151.6 734.6
Senior Secured Term Loan Class E 2,520.0 2016 25.3 25.3 25.3 2,444.1
Senior Secured Term Loan Class E (Euro based) 375.0 2016 3.8 3.8 3.8 363.8
Revolving Facility ($635.0 Mil. Capacity) 2016
Total Secured Debt 4,041.0 59.7 136.0 151.3 2,959.5 734.6
Nielsen Finance Senior Unsecured Notes
$1080 Mil. 7.750% Senior Note 1,080.0 2018 1,080.0
$215 Mil. 11.625% Senior Note 215.0 2014 215.0
$800 Mil. 4.500% Senior Note 800.0 2020 800.0
Total Unsecured Notes 2,095.0 215.0 1,880.0
Total Bank and Bond Debt 6,136.0 59.7 351.0 151.3 2,959.5 734.6 1,880.0
Note: Excludes $119 million of debt-related lease financing arrangements, capital lease obligations and other debt.
September 19, 2013

Corporates

Represents entities that provide a guarantee to Nielsen Finances secured credit facility and senior notes.
Organizational Structure Nielsen Holdings N.V.
Nielsen Holding and Finance B.V.
VNU B.V. and Subsidiaries VNU Services B.V. VNU International B.V. VNU Holdings B.V.
The Nielsen Company (U.S.), Inc. ACN Holdings, Inc.
Nielsen Media Research Inc. and
Other U.S. Subsidiaries
AC Nielsen Corp. Non-U.S. Subsidiaries
Non-U.S. Subsidiaries U.S. Subsidiaries
Sponsors and Management Public
43% 57%
IDR BB/Positive Outlook
Amount Outstanding
Other Debt 119
Consolidated Debt 6,255
LTM EBITDA 1,605
Leverage (x) 3.9
Valcon Acquisitions B.V.
VNU Intermediate Holding B.V.
The Nielsen Company B.V.
Nielsen Finance LLC and Nielsen Finance Co.
IDR BB/Positive Outlook
Amount
Outstanding Rating
USD3.75 Billion Senior Secured Term Loan due 2016/2017 3,666 BB+
EUR289 Million Senior Secured Term Loan due 2016 375 BB+
USD635 Million Senior Secured Revolving Credit Facility 0 BB+
Total Secured Debt 4,041
USD2.1 Billion Senior Unsecured Notes due 2014/2018/2020 2,095 BB
Total Debt 6,136
Business Segments
Buy Watch
Information: Retail Measurement Services
Information: Consumer Panel Measurement
Insights: Analytical Services
Insights: Advertiser Solutions
Television Audience Measurement Service
Online Audience Measurement Service
Mobile Measurement Service
Three-Screen Media Measurement
September 19, 2013

Corporates

Bond Covenant Summary Nielsen Holdings N.V.
Bond Indentures
Covenant
Issuer Nielsen Finance LLC and Nielsen Finance Co.
Document Date
and Location
Indentures dated Jan. 27, 2009 (8K filed Feb. 28, 2009); Oct. 12, 2010 (8K filed Oct. 14, 2010), and Oct. 2, 2012 (8-K filed Oct. 4, 2012).
Maturity Date Various, see description of debt below.
Description of Debt 11.625% note due Feb. 1, 2014 (Jan. 27, 2009 Indenture)
7.750% note due Oct. 15, 2018 (Oct. 12, 2010 Indenture)
4.500% note due Oct. 1, 2020 (Oct. 4, 2012 Indenture)
Ranking Guaranteed, Senior Unsecured.
Guarantee Guaranteed jointly and severally. The guarantees are absolute, unconditional, and irrevocable on a secured basis. The guarantors include
The Nielsen Company B.V., VNU Intermediate Holding B.V., VNU International B.V., VNU Services B.V., VNU Holdings B.V.,
ACN Holdings, Inc., Nielsen Media Research Inc. and other U.S. subsidiaries, and AC Nielsen Corp. and other U.S. subsidiaries.
Financial Covenants
(Maximum)

(Maximum)
Interest Coverage
(Minimum)
Change of Control
(CoC) Provision
A CoC put offer at 101%. CoC is triggered when: a) any person becomes the beneficial owner, directly or indirectly, of a majority or more of
the total voting power; b) the sale/disposition of all or substantially all the assets of the company to anyone other than a permitted holder.
M&A, Investments
Restriction
Covered by the RP restrictions. Standard carveouts exist. Permitted investments include investment/acquisition that results in the entity
becoming a restricted subsidiary; aggregate investment in unrestricted subsidiaries of up to 1.25% of total assets; JVs limited to an
aggregate of $25 million; investments into similar business, not to exceed 2.5% of total assets; general investment basket, not to exceed
2.5% of total assets.
Sale of Assets Restriction The borrower, guarantors, or any of their restricted subsidiaries may not merge, dissolve, liquidate, or consolidate with or into another
person or dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired). There are standard carveouts that allow a restricted subsidiary to merge with another restricted subsidiary, borrower,
or guarantor. Also, a borrower may merge with another entity as long as the borrower is the surviving entity. If it is not the surviving entity,
then: 1) the new entity must be a U.S. entity; 2) it must assume the obligations under the credit agreement and the security agreement; 3)
no default is existing; 4) the company could incur $1 of additional debt or the pro forma consolidated leverage ratio is less than the current
ratio level; 5) the guarantor must confirm their guarantee of the new entity; and 6) an opinion by council confirming that such a merger
complies with the credit agreement. Mergers in order to affect a permitted investment are allowed. Similar restrictions exist for a guarantor
merging with another entity and the guarantor is not the surviving entity. Solely for purposes of Section 5.01 (Merger Restrictions), the
sale of ACN Holdings Inc. and its subsidiaries that are restricted subsidiaries shall not constitute a sale of all or substantially all of the
assets of the company, taken as a whole, so long as, at the time of such transaction: a) the EBITDA of ACN and its restricted subsidiaries
on a consolidated basis for the most recent LTM represented less than 45% of the EBITDA of the covenant parties and the restricted
subsidiaries on a consolidated basis for the same period and b) the covenant parties and the restricted subsidiaries would be permitted
to incur at least $1.00 of additional debt under the consolidated leverage ratio test. Asset sales are permitted as long as: 1) the asset is
sold at or greater than FMV; 2) 75% of the consideration is in cash (except for a permitted asset swap) and the aggregate of any noncash
consideration does not exceed 5% of total assets of the covenant parties and restricted subsidiaries; and 3) any asset sale of collateral
complies with the loan agreement and the security documents. Proceeds must be reinvested within 15 months (or entered into a binding
agreements, with proceeds being reinvested up to 360 days later) or go to reduce debt.
Debt Restrictions
Debt Incurrence Standard carveouts exist. Debt limitations are governed by a consolidated leverage ratio incurrence test of 6.75x, determined on a pro
forma basis (including pro forma the application of the proceeds). Other carveouts that are not subject to the incurrence test include
hedging obligations and a $400 million general debt basket, plus 2x the net cash proceeds received from a capital contribution or sale of
equity (where the proceeds were contributed to the covenant parties and the restricted subsidiaries) less any amount of proceeds used
to make restricted payments or investments (this clause would increase the general debt basket); refinancing of existing or permitted
debt issuances ; acquisition debt as long as such debt is 1) not secured and is subordinated to the loans, 2) no default is existing, 3)
matures and does not amortize prior to the secured loans maturity, and 4) the company could incur $1 of additional debt or the pro forma
consolidated leverage ratio is less than the current ratio level. In addition to the previously discussed acquisition carveout, there is an
aggregate $200 million acquisition basket, a foreign subsidiary debt carveout of up to 5% of total assets of the foreign subsidiary, and debt
or guarantees of joint ventures, not to exceed $25 million.
Limitation on Liens Liens not permitted unless a pari passu lien is provided. In the case of secured subordinated debt, the lien provided to the senior
unsecured debt would have priority over the subordinated debt. A consolidated secured debt ratio incurrence test of no greater than
4.75x limits the secured debt permitted under the debt restrictions above (the $400 million general debt basket may be secured, the
foreign subsidiary debt limitation noted above may be secured, as long as the security extends only to those foreign assets, and the $200
million acquisition basket may be secured, only on the acquired assets). Standard carveouts exists (which are not governed by the 4.75x
incurrence test). Other permitted liens include: liens existing prior to an acquisition, as long as the lien was not created in contemplation
of the acquisition and does not apply to any other assets other than those secured on the date of the acquisition; liens to secure hedging
obligations; liens related to a receivable financing; and other liens on the ordinary course of business, not to exceed $50 million.
M&A Merger and acquisition. JV Joint venture. FMV Fair market value. MAC Material adverse change. Continued on next page.
September 19, 2013

Corporates

Bond Covenant Summary Nielsen Holdings N.V. (Continued)
Bond Indentures
Limitation on Guarantees Guarantees by existing guarantors are limited by the debt incurrence and investment restriction provisions. No domestic restricted
subsidiary that is not currently a guarantor may issue a guarantee for the debt of the borrower or guarantors, unless a guarantee is issued
for the benefit of the notes (unless the restricted subsidiary was acquired and the guarantee existed prior to the acquisition and not issued
in connection with the acquisition). Such new guarantees will have an equivalent ranking as the debt/loan being guaranteed is relative to
the notes (i.e., if the loan is senior to the notes, the guarantee to the loan will be senior to the guarantee to the notes).
Restricted Payments (RP) Standard carveouts exist. RP permitted if: 1) there is no default, 2) the borrower could incur $1 of additional debt under the 6.75x debt
incurrence test; and 3) all RPs made after Aug. 9, 2006 (excluding certain carveouts) do not exceed a cumulative RP basket. This
cumulative RP basket is calculated by taking EBITDA of the covenant parties and restricted subsidiaries beginning on July 1, 2006, less
1.4x interest expense of the same group, plus 100% of the net proceeds of an equity sale of Nielsen Holding and Finance B.V. (or a direct
or indirect parent), capital contribution by equity holders of Nielsen Holding and Finance B.V. (or a direct or indirect parent) or any debt that
has been converted to equity, plus 100% of the net proceeds of certain dispositions, plus in the case of a redesignation of an unrestricted
subsidiary into a restricted subsidiary, the FMV of investments made into such unrestricted subsidiary. In addition to the RP basket above,
the company may repay subordinated debt with the proceeds of new debt (as long as the new debt is subordinate to the secured loans);
aggregate investment in unrestricted subsidiaries of up to 1.25% of total assets; RP of up to 6% per annum of the net proceeds received/
contributed from an IPO; include Nielsen Company BV required interest payments; RP to fund operating cost and taxes under the ordinary
course of business of a parent company; RP made with excluded contribution; RP aggregate general basket of 2% of total assets.
Other
Cross-Default/
Cross-Acceleration
Payment default or an acceleration of debt due to noncompliance with the debt agreement(s), and such debt is in aggregate $100 million
or more.
MAC Clause No material provision noted.
Covenant Suspension If the borrower is rated investment grade by both rating agencies (Moody's and S&P) and there is no event of default occurring, the
following covenants are suspended: RPs, debt limitations, CoC, limitations on guarantees, and asset sale limitations (but not the merger
or sale of substantially all covenants, except for the incurrence test in the merger provisions).
Mandatory/Tax Prepayment The net proceeds of certain asset sales (standard carveouts, asset sales do not trigger this clause) must be used to either reduce debt or
be invested back into the business.
Amortization Schedule Bullet repayment.
Prepayment and
Equity Clawback
11.625% note due Feb. 1, 2014 (Jan. 27, 2009 indenture)
Any time prior to maturity, the company may call the notes at a premium calculated at the greater of: 1) 1% of the prepayment principal
amount; or 2) present value of the prepayment principal amount plus all the interest due on the notes to be prepaid through maturity
(excluding accrued but unpaid interest), calculated using a T plus 50 discount rate, less the prepayment principal amount.
Until Feb. 1, 2012, the company may redeem up to 35% of the notes at 111.625% within 90 days of an equity offering or sale of a business
unit of the parent, provided 65% of the original issued amount remains outstanding.
7.750% note due Oct. 15, 2018 (Oct. 12, 2010 indenture)
Any time prior to Oct. 15, 2014, the company may call the notes at a premium calculated at the greater of: 1) 1% of the prepayment
principal amount; or 2) present value of 103.875% times the prepayment principal amount plus all the interest due on the notes to be
prepaid through Oct. 15, 2014 (excluding accrued but unpaid interest), calculated using a T plus 50 discount rate, less the prepayment
principal amount.
Until Oct. 15, 2013, the company may redeem up to 35% of the notes at 107.75% within 90 days of an equity offering or sale of a business
On and after Oct. 15, 2014, the company may call the notes at the following price:
Oct. 15, 2014 to Oct. 14, 2015 at 103.875%;
Oct. 15, 2015 to Oct. 14, 2016 at 101.938%; and
After Oct. 15, 2016 at 100%.
4.500% note due Oct. 1, 2020 (Oct. 4, 2012 indenture)
Any time prior to Oct. 1, 2016, the company may call the notes at a premium calculated at the greater of: 1) 1% of the prepayment
principal amount; or 2) the present value of 102.25% times the prepayment principal amount plus all the interest due on the notes to be
prepaid through Oct. 1, 2016 (excluding accrued but unpaid interest), calculated using a T plus 50 discount rate, less the prepayment
principal amount.
Until Oct. 1, 2015, the company may redeem up to 35% of the notes at 104.5% within 90 days of an equity offering or sale of a business
On and after Oct. 1, 2016, the company may call the notes at the following price:
Oct. 1, 2016 to Sept. 30, 2017 at 102.250%;
Oct. 1, 2017 to Sept. 30, 2018 at 101.125%; and
On and after Oct. 1, 2018 at 100.000%.
Pricing
Coupon Type/Index Fixed rate.
M&A Merger and acquisition. JV Joint venture. FMV Fair market value. MAC Material adverse change.
September 19, 2013

Corporates

Bank Agreement Covenant Summary Nielsen Holdings N.V.
Bond Agreement
Covenant
Borrower Nielsen Finance LLC; TNC (US) Holdings Inc.; Nielsen Holding and Finance B.V.
Document Date
and Location
Aug. 9, 2006; amended and restated Feb. 2, 2012; amended and restated Feb. 28, 2013 (Filed 8-K March 4, 2013).
Various, see description of debt below.
Maturity Date Term Loan D - Feb. 2, 2017 (Jan. 22, 2016 if on Jan. 15, 2016 the aggregate amount of Term Loans E with a maturity of May 1, 2016
exceeds $750 million); Term Loan E May 1, 2016; Revolver April 1, 2016.
Description of Debt Term Loan D USD1,222.2 million; Term Loan E USD2.532 billion and EUR289.8 million; USD635 million revolving credit facility.
Ranking Senior secured and guaranteed.
Security
IP Security Agreement Dated
Aug. 9, 2006 (amended on
June 23, 2009 and Feb.
28, 2013, but not filed) and
Amended and Restated
Security Agreement dated
June 23, 2009 (amended
Feb. 28, 2013, but not filed)
Security is made up of: 1) all equity interest in subsidiaries, except more than 65% of the issued and outstanding voting equity interest of
any foreign subsidiary of a domestic subsidiary, equity interest of a subsidiary of a foreign subsidiary, equity interest in a subsidiary that
is not wholly owned (directly or indirectly), equity interest in a subsidiary, whose cost to secure such equity interest would be excessive in
view of the benefits gained, any pledge that would be illegal, and any equity interest held by VNU International BV except equity interest
in TNC (US) Holdings Inc. and ACN Holding Inc.; 2) debt securities held by the grantors (entities providing the security); 3) payments
received or receivables related to items 1 and 2 above; 4) rights and privileges of items 13 above; 5) tangible and general intangible
property, including equipment, inventory, documents, LOCs, and money and deposit accounts, except vehicles, equity interest excluded
in item 1 above, assets whose cost to secure such equity interest would be excessive (including adverse tax consequence) in view of the
benefits gained, and any assets that have a permitted lien already; and 6) intellectual property, including databases, software, patents, and
trademarks.
Security is provided by Nielsen Finance, each guarantor, and each future domestic subguarantor. VNU International BV will only pledge its
equity interest in TNC (US) Holdings Inc., and ACN Holding Inc.
Guarantee Guaranteed jointly and severally. The guarantees are absolute, unconditional, and irrevocable on a secured basis. The guarantors
include The Nielsen Company B.V., VNU Intermediate Holding B.V., VNU International B.V., VNU Services B.V., VNU Holdings B.V., ACN
Holdings, Inc., Nielsen Media Research Inc. and other U.S. subsidiaries, and AC Nielsen Corp. and other U.S. subsidiaries.
Financial Covenants
Total Leverage Ratio (x)
(Maximum)
7/1/07 to 12/31/07 10.00
1/1/08 to 9/30/08 9.50
10/1/08 to 9/30/09 8.75
10/1/09 to 9/30/10 8.00
10/1/10 to 9/30/11 7.50
10/1/11 to 9/30/12 7.00
10/1/12 and Thereafter 6.25
Interest Coverage Ratio (x)
(Minimum)
7/1/07 to 12/31/07 1.25
1/1/08 to 9/30/08 1.35
10/1/08 to 9/30/09 1.50
10/1/09 to 9/30/10 1.65
10/1/10 to 9/30/11 1.75
10/1/11 to 9/30/12 1.60
10/1/12 and Thereafter 1.50
Change of Control
(CoC) Provision
Occurs when any person or group, other than the permitted holders (sponsors), acquires beneficial ownership of at least 35% of the voting
interest of the company, and the permitted holders in aggregate hold less than such person or group. A CoC is considered an event of
default.
M&A, Investments
Restriction
Standard operating carveouts exist. The company may make acquisitions as long as no default would occur, the company is in pro forma
compliance with its financial covenants (for acquisitions whose FMV exceeds $25 million), and the total amount of acquisitions where
the acquired entity does not become a loan party may not exceed $475 million (considered permitted acquisitions). The company also
has a general investment basket of $475 million. In addition, the company may make investments/acquisitions that do not exceed the
"cumulative credit," defined as retained excess cash flow, plus proceeds from a sale of equity or capital contribution by shareholders, plus
proceeds of a sale of an unrestricted subsidiary or dividends from an unrestricted subsidiary, less any cumulative credit used to make
investments or pay dividends/distributions. The company may also guarantee debt and/or make investments in nonguarantor subsidiaries,
up to $475 million in aggregate. The $475 million permitted amounts for acquisitions, the general investments basket and covenant party,
or restricted subsidiary guarantee of a nonguarantor affiliate have an overall aggregate is cap of $1.0 billion.
Sale of Assets Restriction The borrower, guarantors, or any of their restricted subsidiaries may not merge, dissolve, liquidate, or consolidate with or into another
person or dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired). There are standard carveouts that allow a restricted subsidiary to merge with another restricted subsidiary, borrower,
or guarantor. Also, a borrower may merge with another entity as long as the borrower is the surviving entity. If it is not the surviving entity:
1) the new entity must be a U.S. entity (or a Dutch entity for the Dutch borrower); 2) it must assume the obligations under the credit
agreement and the security agreement; 3) the guarantor must confirm their guarantee of the new entity; and 4) an opinion by council
confirming that such a merger complies with the credit agreement. Mergers in order to affect a permitted investment are allowed.
The company may dispose of assets under the normal course of business. Sale leaseback of property/assets owned on Aug. 9, 2006 (the
closing date) is capped at $150 million and any sale leaseback of new property is permitted, as long as such a transaction is completed
within 270 days of the acquisition or completed construction of the property/asset. Other dispositions are permitted, as long as: 1) no
default would occur; 2) for transactions that exceed $25 million, 75% of such proceeds are in cash; and 3) the aggregate of any noncash
consideration does not exceed 2.5% of total assets of the covenant parties and restricted subsidiaries.
M&A Merger and acquisition. FMV Fair market value. MAC Material adverse change. ECF Excess cash flow. Continued on next page.
September 19, 2013

Corporates

Bank Agreement Covenant Summary Nielsen Holdings N.V. (Continued)
Bond Agreement
Debt Restrictions
Debt Incurrence Standard carveouts exist, including the refinancing of existing debt and swap contracts used for hedging purposes. Debt of an acquired
restricted subsidiary (as long as such debt was not put in place for the acquisition) and as long as the company is in pro forma compliance
with its financial covenant ratios. Additional debt may be issued, and not used to repay term loans, as long as such debt does not exceed
the maximum incremental facility amount (the amount of debt that would take the secured leverage ratio to 3x plus $687.5 million less any
incremental facility debt incurred). There is also a general debt basket of $400 million. Debt of nonguarantor subsidiaries is capped at
$75 million. Secured permitted acquisition debt may not exceed $200 million. Receivable financing of up to $100 million.
Limitation on Liens Standard operating carveouts exist. Other permitted liens include: liens existing prior to an acquisition, as long as the lien was not created
in contemplation of the acquisition and does not apply to any other assets than those secured on the date of the acquisition; liens placed
upon the equity interest or assets of restricted subsidiary that is acquired (in a permitted acquisition), used to secure the financing (or
guarantee) of the restricted subsidiary; receivable financing of up to $100 million; and other liens not to exceed $125 million. Secured
permitted acquisition debt may not exceed $200 million.
Limitation on Guarantees Guarantees are limited by the debt incurrence and investment restriction provisions.
Restricted Payments (RP) Standard carveouts exist. Other carveouts include Nielsen required interest payments; RP to fund operating cost and taxes under the
ordinary course of business of a parent company; RP to fund any permitted acquisitions or mergers; RP to cover any equity or debt
offerings; RP to cover any listing fees and any other cost attributable with being a publicly traded company (reasonable and customary)
and RP of up to 6% per annum of the net proceeds received/contributed from an IPO; and $250 million RP basket, plus if leverage is
equal to or lower than 7x, available cumulative credit (defined above in the Investment Restrictions section on the previous page).
Mandatory/Optional
Prepayment
Optional prepayments permitted, subject to customary breakage fees.
Mandatory prepayment include: 1) starting after Dec. 31, 2008, the applicable ECF % (defined below) of excess cash flow less any
voluntary reductions (that were not funded with debt) in term loans/revolver loans (as long as the revolver commitment is also permanently
reduced) for such fiscal year; 2) 100% (50% if the leverage ratio is below 5.5x) of the proceeds from certain dispositions; 3) 100% of
certain debt issuances; and 4) required in the event that the outstanding revolving credit exceeded the total revolver commitments.
Applicable ECF % means, for any fiscal year: a) 50% if the total leverage ratio as of the last day of such fiscal year is greater than or equal
to 6.00x; b) 25% if the total leverage ratio as of the last day of such fiscal year is less than 6.00x but greater than or equal to 5.00x; and
c) 0% if the total leverage ratio as of the last day of such fiscal year is less than 5.00x.
Amortization Schedule On the last business day of March, June, September, and December, the company will pay 0.25% of the aggregate amount of all class E
term loans ever outstanding (payments would be reduced by any voluntary repayments).
Class D term loan amortization schedule (% is applied to the original aggregate dollar amount of class D term loans):
Date (%) Date (%)
May 9, 2012 1.25 Nov. 9, 2014 2.50
Aug. 9, 2012 1.25 Feb. 9, 2015 2.50
Nov. 9, 2012 1.25 May 9, 2014 2.50
Feb. 9, 2013 1.25 Aug. 9, 2015 2.50
May 9, 2013 1.25 Nov. 9, 2015 2.50
Aug. 9, 2013 1.25 Feb. 9, 2016 2.50
Nov. 9, 2013 1.25 May 9, 2016 3.33
Feb. 9, 2014 1.25 Aug. 9, 2016 3.33
May 9, 2014 2.50 Feb. 9, 2016 3.33
Aug. 9, 2014 2.50 Feb. 2, 2017 Remaining Balance
Above amortization payments would be reduced by any voluntary prepayments.
Other
Cross-Default/
Cross-Acceleration
Payment default on $50 million or more in debt (in aggregate) or any debt that may become accelerated due to noncompliance with the
debt agreement(s).
Equity Cure Equity cure, in the event that the financial ratio covenants may be breached, the sponsors may make a capital contribution, which would
be applied to EBITDA, in order to place the ratio in compliance.
Covenant Suspension No material provision noted.
Required Lenders/
Voting Rights
Required lender threshold is greater than 50%.
M&A Merger and acquisition. FMV Fair market value. MAC Material adverse change. ECF Excess cash flow. Continued on next page.
September 19, 2013

Corporates

Bank Agreement Covenant Summary Nielsen Holdings N.V. (Continued)
Bond Agreement
Pricing
Coupon Type/Index Floating based off Libor or base rate plus the appropriate applicable rate listed below.
Pricing Grid
Applicable Rate
Class D Dollar Term Loans (%)
Pricing Level
Secured
Leverage Ratio (x)
Libor
Applicable Rate
Base
Applicable Rate
1 < 3.25 1.75 0.75
2 > 3.25 and < 3.75 2.00 1.00
3 > 3.25 and < 5.00 2.25 1.25
4 > 5.00 2.50 1.50
Class E Dollar Term Loans
Base Applicable Rate = 1.75% and in the case of Eurocurrency Rate Loans 2.75%
Class E Euro Term Loans
Applicable Rate = 3.0%
Revolving Credit Loans (%)
Pricing Level
Secured
Leverage Ratio (X)
Libor
Applicable Rate
Base
Applicable Rate
Unused
Commitment Fee
1 < 3.00 2.25 1.25 0.375
2 > 3.0 and < 3.5 2.50 1.50 0.500
3 > 3.5 and < 4.0 2.75 1.75 0.500
4 > 4.0 and < 4.5 3.00 2.00 0.625
5 > 4.5 and < 5.5 3.25 2.25 0.625
6 > 5.5 3.50 2.50 0.750
Other
Cross-Default/
Cross-Acceleration
Payment default on $50 million or more in debt (in aggregate) or any debt that may become accelerated due to noncompliance with the
debt agreement(s).
Equity Cure Equity cure, in the event that the financial ratio covenants may be breached, the sponsors may make a capital contribution, which would
be applied to EBITDA, in order to place the ratio in compliance.
Covenant Suspension No material provision noted.
Required Lenders/
Voting Rights
Required lender threshold is greater than 50%.
M&A Merger and acquisition. FMV Fair market value. MAC Material adverse change. ECF Excess cash flow.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Nielsen Holdings N.V.
Date of
2/11/2013 4Q2012 Prepared Capital allocation, because of all of this work and the milestones we got through and the course of 2012, its now giving us the
opportunity to define what our capital allocation policy is going to be going forward. Ill remind everyone our priorities start with
investing in our business for growth both organically and on an acquired basis as we continue our tuck in strategy. Well also look to
pay down debt and then return capital to shareholders. As Dave mentioned, due to the adoption of our dividend policy, which is initially
a 2% yield, the quarterly dividend of USD0.16 will start payment in the first quarter of 2013 and its a range where we can commit to
our annual growth expectations.
From a target capital structure standpoint, we believe that the range of 2.75 to 3 times net-debt-to-EBITDA is where is, where were
on road to get to, which we believe gets us to the investment grade goal, ahead of our 2016 to 2018 refinancing needs, as you can
see in the maturity stack on the right hand side of this chart. We really arent a new issuer of a debt for some time and this gives the
confidence to begin returning excess cash to our shareholders in the form of the dividend to maximize overall shareholder returns.
From a target capital structure standpoint, we believe that the range of 2.75 to 3 times net-debt-to-EBITDA is where is, where were
on road to get to, which we believe gets us to the investment grade goal, ahead of our 2016 to 2018 refinancing needs, as you can
see in the maturity stack on the right hand side of this chart. We really arent a new issuer of a debt for some time and this gives the
confidence to begin returning excess cash to our shareholders in the form of the dividend to maximize overall shareholder returns.
Adjusted income growth is estimated at plus 13% to 17% constant currency and the adjusted net income per share on a reported
basis, including FX as of last Fridays rates is USD2.13 to USD2.19 per share. As I mentioned, the initial dividend yield is 2% and we
expect to deleverage by 0.3 turns.
2/11/2013 4Q2012 Q&A Q:Good evening. What are your thoughts on growing the dividend over time as you deleverage? Should we think of Nielsen as like a
single-digit dividend grower? Or something more than that? Thank you.
A: I dont want to get into projecting that now. I will let Brian comment if he likes. We will grow it with consistent performance of the
companys growth rates and thats our intention. And we will always hold out our objective to get to investment grade when the time
is right for us to refinance certain things. So I dont want to get into a sort of conjecture at this moment, but if our model continues to
produce at the kind of rate it does today, it will be that kind of growth rate.
10/22/20123Q2012 Q&A Q: Hi. Can you talk about your longer-term plans, as far as your capital allocation strategy? Youre quickly de-levering the balance
sheet and I just wanted to know your thoughts on when you might consider a dividend or a share buyback.
A: Well, I think as we noted, the thing we feel great about is getting the most recent milestone behind us, which is refinancing these
high-coupon notes. And then, from where were going and the future capital structure, we will be thoughtful and descriptive when were
ready.
7/25/2012 2Q2012 Prepared And finally on deleveraging, as we march down the path towards investment-grade, well take leverage down and well de-risk the
balance sheet. And we have a proven track record of some level of leverage.
4/25/2012 1Q2012 Q&A Q: Dave, in the past, youve talked about a desire to march the company towards investment grade [IG] status. Curious, as you
consider your various options for uses of cash going forward, investments obviously youve laid out on this call, debt pay down,
dividends, et cetera. Does achieving that IG status still remain a priority, and if so perhaps when you envision maybe getting there?
A: Yeah, so Im still on the mission because thats what the company has been designed to do. As everyone has noted our free cash
flow is getting better and better every day that goes by. I dont see a big change with respect to acquisition philosophy has nothing
to do with our desire, were always desirous of good acquisitions. Its just within our space they tend to be small, they tend to be add
on, they tend to be tuck-in, we are going continue down that path and you will see, we will continue to do it in mostly the measured
way we have so far. So I dont see breakout things going on there, at least at this stage of our life. As we get closer and closer to that
investment-grade status, there is always an economic trade-off that Ill rely on Brian to evaluate day in and day out, and well always
be efficient with respect to what we do for shareholders. So but that decision set for us is still a little way off, I consider a couple of
the hurdles to be the retirement of these high-priced notes. Thats one thing Id just like to get done because there is a real economic
advantage in getting that done sooner rather than later. At any rate thats, again, Im sure Im leaving it open ended for you but I guess
the real message is no change in my objective or my philosophy or the way we are running the place at this stage.
4/25/2012 1Q2012 Q&A Again, our governor of capex is always going to be our reinvestment ratio. So the range we have out there today keeps us in that
governor, where we are never going to allow that ratio above one. Because our view is that, you never bring fresh capital on to the
business faster than it was coming off in the form of operational D&A. And thats always going to be the governor and we like where
we are at with that and we continue to be able to work and run the business in that kind of framework.
2/6/2012 4Q2011 Prepared Moving on to page 13, Ill remind everyone that our financial policy isnt has been to reduce risk and reduce leverage and increase our
financial flexibility and we were very pleased with the way weve de-risked it over time and particularly this year. As I mentioned, we
paid down USD382 million of debt post IPO and just last month we took another meaningful step towards de-risking. We refinanced
USD1.2 billion of our existing 2013 term loan maturities with a new five year facility, all of that is 100% pre-payable.
2/6/2012 4Q2011 Q&A Q: Okay, great. And then just on your leverage ratio, youre at four times today, you got your upgrade in your credit rating. Any
comments you can have as far as your long-term comfort or where youd want to see that ratio?
A: We still like going down. We think its healthy. We have always said investment grade is a good goal, and were just going to keep
running our play.
10/27/2011 3Q2011 Prepared On deleveraging, the half a turn, we are very comfortable that we will deliver a half a turn and we expect additional debt repayment in
the fourth quarter to not only address existing maturities, but also to make additional prepayments.
7/28/2011 2Q2011 Q&A Q: Some thoughts about how you want to deploy all the free cash flow that you are likely to generate this year and ahead.
A: So, Bishop, its primarily paying down debt, and that has been the philosophy that weve had in the past and will continue to have
going forward. Now, there will be a little of that well use for acquisitions of tuck-in nature, but its small and its manageable with that
target. But this is about deleveraging debt pay down story for us.
4/28/2011 1Q2011 Prepared With respect to the IPO, its a big event for us simply because we retired USD1.75 billion of debt. It helps unleash what we think is a
very strong cash flow natural cash flow orientation of this company and so we accomplished all of our objectives and then some
with the IPO.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Nielsen Holdings N.V.
12
Months
12
Months
12
Months Three Months
12
Months Three Months
12
Months Three Months
LTM
Ended
($ Mil.) 12/31/08 12/31/09 12/31/10 9/30/11 12/31/11 12/31/11 3/31/12 6/30/12 9/30/12 12/31/12 12/31/12 3/31/13 6/30/13 6/30/13
Profitability
Operating EBITDA 1,192.0 1,276.0 1,367.0 407.0 431.0 1,536.0 330.0 386.0 424.0 450.0 1,590.0 344.0 387.0 1,605.0
Free Cash Flow Margin (%) (1.1) 4.9 3.9 14.0 10.4 5.0 (6.3) 3.3 18.1 13.9 7.5 (5.2) 6.6 8.5
Coverages (x)
Operating EBITDA/
Capital Expenditures 1.1 2.1 1.8 3.8 2.0 1.8 (0.0) 1.7 4.5 2.5 2.2 0.8 3.8 2.8
Leverage (x)
FCF/Total Adjusted Debt (%) (0.6) 2.6 2.3 3.7 4.1 4.1 4.3 4.5 5.5 6.4 6.4 6.6 7.3 7.3
Balance Sheet
Short-Term Debt 421.0 110.0 94.0 204.0 144.0 144.0 293.0 324.0 428.0 355.0 355.0 372.0 335.0 335.0
Long-Term Senior Unsecured Debt 1,809.0 2,535.0 2,484.0 1,676.0 1,675.0 1,675.0 1,494.0 1,396.0 1,296.0 1,851.0 1,851.0 1,835.0 1,879.0 1,879.0
Long-Term Subordinated Debt 784.0 885.0 999.0 288.0 288.0 288.0 288.0 288.0 288.0 288.0 288.0
Other Debt
Equity Credit 288.0 288.0 288.0 288.0 288.0 288.0 288.0 288.0
Off-Balance Sheet Debt 414.3 318.7 322.1 322.1 251.1 251.1 251.1 251.1 251.1 321.5 321.5 321.5 321.5 321.5
Total Adjusted Debt
Cash Flow
Funds From Operations 621.0 656.0 680.0 296.0 220.0 745.0 173.0 205.0 323.0 286.0 987.0 192.0 253.0 1,054.0
Change in Working Capital (199.0) (56.0) (66.0) (27.0) 83.0 (103.0) (176.0) (89.0) 8.0 54.0 (203.0) (138.0) (47.0) (123.0)
Cash Flow from Operations 422.0 600.0 614.0 269.0 303.0 642.0 (3.0) 116.0 331.0 340.0 784.0 54.0 206.0 931.0
Non-Recurring Cash Flow (106.0) (85.0) (70.0) (1.0) (1.0)
Dividends (9.0) (56.0) (59.0) (115.0)
Free Cash Flow (54.0) 233.0 201.0 198.0 148.0 274.0 (85.0) 46.0 258.0 203.0 422.0 (72.0) 92.0 481.0
Net Acquisitions and Divestitures (215.0) 34.0 (38.0) (18.0) (7.0) (118.0) (16.0) (58.0) (63.0) (23.0) (160.0) (11.0) 62.0 (35.0)
Net Debt Proceeds 305.0 (97.0) (169.0) (126.0) (224.0) (1,839.0) (1,145.0) 9.0 (170.0) 1,077.0 (229.0) (1,833.0) (76.0) (1,002.0)
Net Equity Proceeds 78.0 (1.0) 1,801.0 1,209.0 (1,180.0) 29.0 1,866.0 3.0 689.0
Other (Investing and Financing) (47.0) (124.0) (87.0) (24.0) (2.0) (220.0) 13.0 (9.0) 17.0 (114.0) (93.0) (5.0) 843.0 741.0
Total Change in Cash 67.0 45.0 (93.0) 30.0 (85.0) (102.0) (24.0) (12.0) 42.0 (37.0) (31.0) (55.0) 924.0 874.0
Ending Cash and Securities Balance 466.0 511.0 418.0 404.0 319.0 319.0 295.0 283.0 325.0 288.0 288.0 233.0 1,157.0 1,157.0
Income Statement
Revenue 5,012.0 4,808.0 5,126.0 1,413.0 1,421.0 5,532.0 1,340.0 1,385.0 1,423.0 1,464.0 5,612.0 1,376.0 1,386.0 5,649.0
Revenue Growth (%) 6.5 (4.1) 6.6 9.6 3.7 7.9 2.9 (0.8) 0.7 3.0 1.5 2.7 0.1 1.6
Operating EBIT 688.0 719.0 809.0 282.0 298.0 1,007.0 199.0 259.0 294.0 318.0 1,070.0 216.0 257.0 1,085.0
480 Company Summaries Regal Entertainment Group
September 19, 2013

Corporates

Regal Entertainment Group
Key Rating Drivers
Key Promotion Window for Studios: Regal Entertainment Groups (Regal) ratings refect
Fitchs belief that movie exhibition will continue to be a key promotion window for the movie
studios biggest/most proftable releases.
Stable Industry Outlook: Industry fundamentals have beneftted from a strong flm slate that
produced midsingle-digit growth in 2012 and a roughly fat performance to date in 2013. The
2013 flm slate has been solid and has included some highly anticipated movies such as Iron
Man 3, Despicable Me 2, Man of Steel (Superman), and Monsters University. The flm
slate for the remainder of 2013 includes Thor: The Dark World, The Hunger Games: Catching
Fire, and The Hobbit: The Desolation of Smaug. The 2014 flm slate includes movies from
highly successful franchises such as The Hunger Games, The Hobbit, X-Men, Spider-Man,
Transformers, 300, and Fast & Furious. Fitchs base case projects industry box offce revenues
to be fat to up in the low single digits in 2014. Fitch recognizes the hit-cyclical nature of the
industry that could infuence attendance growth year-over-year.
Solid Liquidity: Regals solid liquidity position is supported by interest coverage that generally
remains at or above 3.0x, annual pre-dividend FCF between $150 million and $300 million, and
a favorable near-term maturity schedule. Fitch expects excess cash to be used for acquisitions
and/or an extraordinary dividend as it did in 2008, 2010 and 2012.
Competitive Threats: The ratings factor in the intermediate/long-term risks associated with
increased competition from at-home entertainment media, limited control over revenue trends,
pressure on flm distribution windows and increasing indirect competition from other distribution
channels (such as VOD and other OTT services).
High Fixed Cost Structure: A signifcant portion of exhibitors operating expenses are considered
fxed, primarily due to rent and labor and utility costs. The high operating leverage could make
theater operators FCF negative during periods of reduced attendance.
No Control Over Movie Product: Regal and its peers rely on the quality, quantity and timing of
movie product, all factors out of managements control.
Challenged Attendance Growth: For the long term, Fitch continues to expect that the movie
exhibitor industry will be challenged in growing attendance, and any potential attendance
declines will offset some of the growth in average ticket prices.
Limited Rating Upside: Fitch heavily weighs the prospective challenges facing Regal and
its industry peers in arriving at the long-term credit ratings. Signifcant improvements in the
operating environment (sustainable increases in attendance) and sustained deleveraging could
have a positive effect on the rating, though Fitch views this as unlikely.
Negative Trigger: Fitch anticipates that the company, and other movie exhibitors, will continue
to consolidate. While not anticipated, a debt-fnanced material acquisition or return of capital to
shareholders that would raise the unadjusted gross leverage beyond 4.5x could have a negative
effect on the rating. In addition, meaningful, sustained declines in attendance and/or per-guest
concession spending that drove leverage beyond 4.5x would pressure the rating as well.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
Ratings
Security Class
Current
Rating
IDR B+
Senior Unsecured Notes B/RR6
Regal Cinemas Corporation
IDR B+
Senior Secured Credit Facility BB+/RR1
Senior Unsecured Notes BB/RR2
RR Recovery Rating.
Rating Outlook
Stable
September 19, 2013

Corporates

Portfolio Summary Regal Entertainment Group
(As of Dec. 27, 2012)
Note: Does not include Hollywood Theaters, which was acquired on Feb. 19, 2013. Roughly 30% of the theaters are located in Texas.
Location Theaters Screens Location Theaters Screens
California 86 1,042 Kentucky 6 68
New York 48 565 New Mexico 6 60
Florida 45 671 Idaho 5 73
Washington 32 356 Connecticut 5 57
Virginia 30 411 Alaska 5 52
Pennsylvania 24 314 Louisiana 5 50
North Carolina 23 274 Missouri 4 62
Ohio 21 296 Hawaii 4 47
Oregon 21 220 West Virginia 3 34
Texas 18 260 New Hampshire 3 33
South Carolina 17 230 Minnesota 2 36
Georgia 16 245 Alabama 2 34
Maryland 14 190 Delaware 2 33
Tennessee 13 179 Arkansas 2 24
Colorado 12 145 Nebraska 1 16
Indiana 12 145 Maine 1 15
Massachusetts 12 135 District of Columbia 1 14
Illinois 11 148 Michigan 1 14
New Jersey 10 140 Total 540 6,880
Nevada 10 136
Mississippi 7 56
Screen Format Screens
Digital 6,671
3D Enabled 2,898
IMAX (3D Enabled) 73
RPX (3D Enabled) 37
Admissio
ns
68%
Concessi
ons
27%
Other
5%
Revenues by Product and Service
(As of Dec. 31, 2012)
Admissions
68%
Concessions
27%
September 19, 2013

Corporates

Event Risk Dashboard Regal Entertainment Group
Event Risk Summary
Level of Risk
LBO L
Secular M
Acquisition M
Divestiture L
Covenant Breach M
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Current leverage levels mitigate LBO/MBO event risk.
The movie exhibition industry has volatile cash fows and has a fairly signifcant
fxed cost structure.
Concentrated ownership by Anschutz may pose a challenge for an LBO.
Secular Risk Medium
Increased competition from at-home entertainment media and indirect
competition from other distribution channels, such as VOD and Internet, pose
threats to the long-term growth of the business.
Fitch believes that movie exhibition will continue to be the key promotional
window for the studios. However, Fitch expects long-term attendance growth to
be challenging.
Concentrated Ownership Anschutz Company owns all outstanding Class B
common stock. The ten votes per Class B share result in 78% voting power (38%
economic interest) for Anschutz. Anschutz no longer holds a seat on the board,
but continues to have meaningful infuence.
The risk of fnancial policy revision is inherent in issuers with concentrated
ownership.
No committed leverage target; management is comfortable managing in the 3.0x
to 4.0x net leverage range.
History of large extraordinary dividend payouts.
Fairly consistent balance sheet with capital allocation focused on growth
opportunities and recurring/extraordinary dividends.
Indentures restrict additional debt with 2.0x interest coverage incurrence test.
Standard carveouts exist including $500 million basket.
Additional secured leverage limited to the greater of $1.85 billion or max. 2.75x
senior secured leverage ratio.
Most at risk are the Regal Entertainment Group notes, which are not guaranteed
by any of the operating subsidiaries.
Structural subordination is limited by the additional debt restrictions under the
Regal Cinemas Corporation debt documents (see Debt and Covenant Synopsis).
Litigation Risk Low
Regal Entertainment Group Rating History
B
BB
B+
3.0
3.5
4.0
4.5
5.0
2007 2008 2009 2010 2011 2012 June
2013
Leverage Trend
(x)
0
5
10
15
20
25
Source: Bloomberg.
Regal Entertainment Group Stock Price
(June 2007August 2013)
($/Share)
September 19, 2013

Corporates

Event Risk Dashboard Regal Entertainment Group (Continued)
YTD June 2013 194.4 4.1
2012 89.7 5.8
2011 20.5
2010 55.0 34.7
2009 0.8
2008 209.3 3.6
2007 40.6
Fitch believes Regal will continue to look for expansion opportunities in the U.S.
The industry is expected to experience some consolidation as smaller operators
may not be able to fund digital conversion.
Fitch expects Regal, along with the other major exhibitors, to add theaters to its
portfolio in a disciplined manner.
Fitch also believes the company will continue to evaluate its portfolio and divest
any underperforming theaters. However, Fitch does not expect this to be material.
There are no material acquisition restrictions in the indentures.
Lease Obligations
Regal currently has roughly $3.2 billion of undiscounted future minimum
lease payments, which could be barriers if the company needed to terminate
underperforming theaters.
Union Workforce
Some theaters employ union projectionists but Fitch does not believe they are a
material percentage of the workforce.
Not material. During 2004, the board authorized a share repurchase program,
allowing the repurchase of up to $50 million of class A common stock within a
twelve month period. The share repurchase program expired in 2009.
Covenant Breach Risk Medium
(x)
Covenant
Level
Estimated Ratio/
Test as of 12/31/12
EBITDA
Cushion (%)
Consolidated Adjusted Leverage 6.0 4.4 26
Given Regal's large market share in the U.S., any sizable acquisition will be
reviewed by the Antitrust Division of the DOJ and may result in a disposal of
assets in order to complete an acquisition.
Regal's theaters are subject to the Americans with Disabilities Act (ADA). There
are no material claims ongoing and Regal believes that it is in substantial
compliance with current regulations.
September 19, 2013

Corporates

Corporate Governance Overview Regal Entertainment Group
a
Strategic factors used to determine 75% of the target award for executives may be any one of, or a combination of: (i) total stockholder return; (ii) such total stockholder return as
compared to total return (on a comparable basis) of a publicly available index such as, but not limited to, the Standard & Poors 500 Index; (iii) net income; (iv) pretax earnings; (v)
EBITDA; (vi) EBITDAR; (vii) pretax operating earnings after interest expense and before bonuses and extraordinary or special items; (viii) EBITDAR margin; (ix) earnings per share;
(x) return on equity; (xi) return on capital; (xii) return on investment; (xiii) operating earnings; (xiv) working capital; (xv) ratio of debt to stockholders equity; and (xvi) revenue.
b
Most
recent filings on Bloomberg as of July 2013. TBRSUs Time-based restricted stock units; PBRSUs Performance-based restricted stock units. Continued on next page.
($)
Stock
Awards
Option
Awards
Non-Equity
Amy E. Miles CEO 800,000 1,785,816 1,200,000 668,409 4,454,225
Gregory W. Dunn President and COO 515,000 718,508 772,500 276,640 2,282,648
David H. Ownby EVP, CFO and Treasurer 420,000 562,538 472,500 129,315 1,584,353
Peter B. Brandow EVP, GC and Secretary 395,000 529,055 444,375 208,306 1,576,736
Board of Directors
Thomas D.
Bell, Jr.
Lead Director
63 Y May 2013
May 2016
2002 40,000 100,000 14,959 154,959 Nominating and
(Chair)
AGL Resources, Inc.;
Cousins Properties
Incorporated; Norfolk
Southern Corporation
Chairman
Mesa Capital Partners
Charles E.
Brymer
53 Y May 2012
May 2015
2007 45,000 100,000 14,959 159,959 Audit; Compensation None President and CEO
DDB Worldwide
Communications Group, Inc.
Michael L.
Campbell
Chairman
59 N May 2012
May 2015
2002 100,000 200,000 29,918 329,918 None None Retired CEO and
Chairman of the Board
Regal Entertainment
(20052009)
and Executive Chairman
(2009Dec. 2011)
Stephen A.
Kaplan
54 Y May 2011
May 2014
Nominating and
Cannery Casino Resorts,
LLC; Oaktree Capital
Group, LLC; OCM
Holdco, LLC; Pierre
Foods, Inc.; Townsquare
Media, Inc.
Principal
Oaktree Capital Group, LLC
David H. Keyte 56 Y May 2013
May 2016
2006 40,000 100,000 14,959 154,959 Compensation Caerus Oil and Gas LLC Chairman and CEO
Caerus Oil and Gas LLC
Amy E. Miles 46 N May 2013
May 2016
2009 None National CineMedia, Inc. CEO
Lee M. Thomas 68 Y May 2013
May 2016
2006 42,500 100,000 14,959 157,459 None Airgas, Inc.; Dupont Retired President and CEO
Rayonier, Inc.
Jack Tyrrell 66 Y May 2011
May 2014
2006 45,000 100,000 14,959 159,959 Audit None Managing Partner
Richland Ventures II, L.P. and
Richland Ventures III, L.P.
Nestor R.
Weigand, Jr.
74 Y May 2011
May 2014
2005 40,000 100,000 14,959 154,959 Compensation;
Nominating and
J. P. Weigand & Sons,
Inc.
Chairman and CEO
J. P. Weigand & Sons, Inc.
Alex
Yemenidjian
57 Y May 2012
May 2015
2005 50,000 100,000 14,959 164,959 Audit (Chair and
Financial Expert)
Guess?, Inc.; Baron
Investment Funds Trust.
CEO and Chairman
Tropicana Las Vegas Hotel
and Casino, Inc.
Annual Incentive EBITDA/EBITDAR Margins (25%), and varying strategic factors (75%).
a
Long-Term Incentives Adjusted Annual EBITDA Target.
Base Salary Near or above the median of companys peer group.
Annual Incentive Targets were: Dunn and Miles 100% of base salary, Ownby and Brandow 75%. Actual payouts were 150% of target amounts for Miles and
Dunn and 122.5% for Ownby and Brandow.
Long-Term Incentives Equity mix consists of TBRSUs (43%) and PBRSUs (57%). Target equity incentive were: Miles $1.6 million; Ownby $504,000;
Dunn $643,000; Brandow $474,000.
Stock Ownership Requirements CEO 5x base salary, president, COO, CFO and General Counsel 2x base salary; other senior VPs 1x base salary.
September 19, 2013

Corporates

Corporate Governance Overview Regal Entertainment Group
a
Strategic factors used to determine 75% of the target award for executives may be any one of, or a combination of: (i) total stockholder return; (ii) such total stockholder return as
compared to total return (on a comparable basis) of a publicly available index such as, but not limited to, the Standard & Poors 500 Index; (iii) net income; (iv) pretax earnings; (v)
EBITDA; (vi) EBITDAR; (vii) pretax operating earnings after interest expense and before bonuses and extraordinary or special items; (viii) EBITDAR margin; (ix) earnings per share;
(x) return on equity; (xi) return on capital; (xii) return on investment; (xiii) operating earnings; (xiv) working capital; (xv) ratio of debt to stockholders equity; and (xvi) revenue.
b
Most
recent filings on Bloomberg as of July 2013. TBRSUs Time-based restricted stock units; PBRSUs Performance-based restricted stock units.
Anschutz company owns all outstanding Class B common stock. The ten votes per Class B share result in 78% voting power for Anschutz.
The company entered into a Separation and General Release Agreement with Michael Campbell, pursuant to which he resigned as executive chairman of the company, effective
Dec. 28, 2011. Campbell agreed to continue serving as a director of the company.
Related-party transactions: 1) In connection with an agreement with an Anschutz affiliate, Regal received various forms of advertising in exchange for on-screen advertising provided
in certain of its theatres. The value of such advertising was approximately $0.1 Mil. 2) Regal Cinemas incurred approximately $0.1 Mil. of expenses payable to Anschutz affiliates for
certain advertising services. 3) Regal Cinemas received less than $0.1 Mil. from an Anschutz affiliate for rent and other expenses related to a theatre facility. 4) the company received
approximately $0.5 Mil. from an Anschutz affiliate for management fees related to a theatre site in Los Angeles, California. 5) Campbells brothers, Charles Campbell and Rick
Campbell, are employed by the company as VP of Security and VP of Information Technology. Charles Campbells compensation was approximately $150,000 and Rick Campbells
compensation was approximately $174,000.
Clawback policy not in place.
Auditor: KPMG LLP.
Thomas D. Bell, Jr. 80 <1.0
Charles E. Brymer 48 <1.0
Michael L. Campbell 667 <1.0
Stephen A. Kaplan 123 <1.0
David H. Keyte 58 <1.0
Lee M. Thomas 63 <1.0
Jack Tyrrell 253 <1.0
Nestor R. Weigand Jr. 67 <1.0
Alex Yemenidjian 53 <1.0
Amy E. Miles 561 <1.0
Gregory W. Dunn 117 <1.0
Peter B. Brandow 209 <1.0
David H. Ownby 143 <1.0
Note: Directors and NEO Holdings include stock options exercisable within 60 days of March 13, 2013.
Equity Holdings Top 10 Class A Holders
Anschutz Philip F 50,000 37.8
Epoch Investment Partners, Inc. 5,023 3.8
Alliance Bernstein 4,665 3.5
Ameriprise Financial Inc. 4,124 3.1
Anchor Capital Advisors Inc. 3,745 2.8
river Road Asset Management LLC 3,491 2.6
Blackrock 3,468 2.6
Peconic Partners LLC 2,935 2.2
Total Top 10 85,851 65.0
September 19, 2013

Corporates

Detailed Maturities Schedule Regal Entertainment Group
Senior Secured Debt
Senior Secured Credit Facility 983.4 2017 10.1 10.1 10.1 10.1 943.0
9.125% Senior Notes, Including Premium 315.9 2018 315.9
8.625% Senior Notes 400.0 2019 400.0
5.750% Senior Notes 250.0 2023 250.0
5.750% Senior Notes 250.0 2025 250.0
Total Unsecured Debt 1,215.9 1,215.9
Total 2,199.3 10.1 10.1 10.1 10.1 943.0 1,215.9
Note: Excludes $120.9 million of debt-related lease financing arrangements, capital lease obligations and other debt.
Organizational Structure Regal Entertainment Group
($ Mil., As of June 30, 2013)
a
Company disclosed leverage (generally calculated in line with Fitch-calculated leverage), pro forma for the Great Escape and Hollywood acquisition, of 3.3x.
IDR Issuer Default Rating. RR Recovery Rating.
Anschutz Company Public
Amount
Outstanding Rating
Unsecured Senior Notes due 2018 315.9 B/RR6
LTM EBITDA 543.5
a
Anschutz Company
100%
Regal Cinemas Corporation
Amount
Outstanding Rating
Secured Term Loan due 2016 983.4 BB+/RR1
Secured Revolving Credit Facility due 2017 BB+/RR1
Senior Unsecured Notes due 2019 394.1 BB/RR2
Capital and Lease Financing Obligations 112.7
Other Debt 8.2
Total Debt 1,498.4
100%
National CineMedia, LLC
Digital Cinema Implementation Partners, LLC
19.8%
46.7% (33.3% Voting Interest)
Business Assets
577 Theaters; 7,343 Screens in the U.S.
September 19, 2013

Corporates

Debt and Covenant Synopsis Regal Entertainment Group
Issuer Regal Cinemas Corporation Regal Cinemas Corporation Regal Entertainment Group
Description of Debt $1.006 billion term loan facility
$85 million revolving facility
$400m 8.625% Senior Unsecured due 2019 $525m 9.125% Senior Unsecured due 2018
$250m 5.75% Senior Unsecured due 2025
$250m 5.75% Senior Unsecured due 2023
Document Date May 19, 2010; amended on Feb. 23, 2011;
April 19, 2013 and May 28, 2013.
7/15/09 Aug. 16, 2010 (base indenture)
Jan. 17, 2013 (base indenture for notes due
2025 & 2023); supplemental indenture dated
Jan. 17 2013 and Jun. 13, 2013.
Summary Credit agreement covenants and provisions
provide a level of protection for bank creditors
against potential leveraging transactions.
Guaranteed by the company and all of
its existing and future domestic restricted
subsidiaries.
While there are no financial covenants,
change of control, cross-default, and cross-
acceleration provisions provide some
protection for noteholders.
Maturity Term facility: Aug. 23, 2017
Revolver: May 19, 2017
7/15/19 8/15/2018, 2/1/2025, 6/15/2023
Financial Covenants
(Maximum)
4.0x (Tested only if RCF borrowing exceeds
25% of commitment amount.)

Consolidated Adjusted
Leverage Ratio
(Maximum)
6.0x (Tested only if RCF borrowing exceeds
25% of commitment amount.)

Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)

Capex as a Percent of
EBITDA (Maximum)
35% (plus one-year carry forward for unused
amounts)

Change-of-Control
(CoC) Provision
CoC offer of 101% if a) any person or group
obtains 50% or more of the voting interest,
other than Anschutz Company and any of its
affiliates; b) liquidation, dissolution or sale of
all or substantially all the assets; c) individuals
who constituted the board of directors cease
to constitute at least a majority of the board;
d) if Regal Entertainment Holdings (Holdings)
no longer owns 100% of Regal Cinemas,
free and clear of any liens (except for liens
created for the bank credit facility) and Regal
Entertainment Group no longer owns 100% of
Holdings.
who constituted the board of directors cease to
constitute at least a majority of the board.
who constituted the board of directors cease to
constitute at least a majority of the board.
Sale of Assets
Restriction
Disposition of assets are limited, also see
CoC Provisions and Mandatory Prepayments
conditions on next page. Carveouts exist and
include dispositions/sales related to standard
operating events, sale/disposition of asset
related to investments, a $100 million per year
basket and the NCM equity offer commenced
by the company.
No material provision noted. See CoC. See CoC. All or substantially all limitations
noted, unless the surviving entity expressly
assumes the debt and is able to incur $1 of
additional debt under the debt limitations
noted on next page (other than debt items
permitted under the definition of permitted
indebtedness).
Debt Restrictions
Additional Debt
Restriction
Restrictions noted. Carveouts include, capital
lease capped at $100 million, refinancing of
existing debt generally permitted, subordinated
debt permitted for permitted acquisitions (as
defined) and capital expenditures, basket for
unsecured debt of $260 million and a general
indebtedness basket of $10 million.
Standard carveouts, plus capital leases, $500
million of additional debt permitted basket,
refinancings of existing debt and up to $200
million in debt related to digital projector
financing, in addition an interest coverage
incurrence test of 2.0x for additional debt in
excess of carveouts and $500 million permitted
basket.
Standard carveouts, plus capital leases, $500
million of additional debt permitted basket,
refinancings of existing debt and up to $200
million in debt related to digital projector
financing, in addition an interest coverage
incurrence test of 2.0x for additional debt in
excess of carveouts and $500 million permitted
basket.
Limitation on
Secured Debt
Restrictions on liens noted, carveouts exist
plus a $1 million lien basket.
Standard carveout for operating purposes,
plus $50 million permitted lien basket and
the greater of $1.85 billion in secured debt
or max 2.75x senior secured leverage ratio
(test includes secured credit facility at Regal
Cinemas).
Standard carveout for operating purposes,
plus $50 million permitted lien basket and
the greater of $1.85 billion in secured debt
or max 2.75x senior secured leverage ratio
(test includes secured credit facility at Regal
Cinemas).
September 19, 2013

Corporates

Debt and Covenant Synopsis Regal Entertainment Group (Continued)
Issuer Regal Cinemas Corporation Regal Cinemas Corporation Regal Entertainment Group
Restricted Payments Carveouts exist, including $100 million plus
50% of excess cash flow (as defined).
Carveouts exist, including $400 million.
Additional restricted payments (RP) may be
made as long as: 1) no event of default has
occurred or is ongoing; 2) able to incur $1 of
additional debt under the debt limitations noted
below (other than debt items permitted under
the definition of permitted indebtedness);
and 3) all RP (other than carveouts) made
since the issue date, including the proposed
RP, do not exceed consolidated EBITDA less
1.7x consolidated interest expense plus other
additions that include the sale of capital stock.
Carveouts exist, including $400 million.
Additional restricted payments (RP) may be
made as long as: 1) no event of default has
occurred or is ongoing; 2) able to incur $1 of
additional debt under the debt limitations noted
below (other than debt items permitted under
the definition of permitted indebtedness);
and 3) all RP (other than carveouts) made
since the issue date, including the proposed
RP, do not exceed consolidated EBITDA less
1.7x consolidated interest expense plus other
additions that include the sale of capital stock.

Other
Cross-Default Cross-default on payment defaults of debt
greater than or equal to $25 million
Cross-Acceleration Cross-acceleration on debt greater than or
equal to $25 million.
Cross-acceleration on debt greater than or
Cross-acceleration on debt greater than or
Miscellaneous Mandatory prepayments with: 50% of excess
cash flow in any fiscal year; eliminated if
leverage ratio less than 3.75x. 100% of the net
cash proceeds of all asset dispositions. The
first $100 million in dispositions per year is
excluded from this requirement (and must be
reinvested within one year). 100% of the net
cash proceeds of issuances of debt, subject to
exceptions; and; 50% of the net cash proceeds
of issuances of equity securities by Regal
Cinemas; elimination if leverage ratio less than
3.75x.
Call schedule: a) during 2014, 104.313%;
b) during 2015, 102.875%; c) during 2016,
101.438%; and d) 2017 and thereafter,
100.000% of the principal amount. In addition,
prior to July 15, 2012, the issuer may redeem
up to 35% of the original aggregate principal
amount with the net proceeds of certain equity
offerings at a redemption price of 108.625%
of the principal amount. If issue ratings are
investment grade, certain covenants would be
suspended, including the limitations on debt,
restricted payments and liens.
If issue ratings are investment grade, certain
covenants would be suspended, including the
limitations on debt, restricted payments and
liens.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Regal Entertainment Group
Date of
4/30/2013 1Q2013 Q&A Q: Okay, and maybe if I could just follow one up on the dividend. David, maybe can you help us think about how you think about the
regular dividend? Is there a specific payout ratio or yield that youre focused on?
A: Weve never thought about it that way, Robert. We always think about it simply more as when we have cash to allocate, how do we
best use that cash to benefit our long-term shareholders. Obviously, in recent periods, weve been able to do a little bit of everything.
Weve been able to acquire some new screens and grow our business. Weve been able to invest in things like Open Road and, in
addition to that, continue to pay a healthy recurring dividend and a special dividend late last year.
4/30/2013 1Q2013 Q&A Q: Got it. Thank you. And then, David, I was just hoping to get your way of thinking around your leverage target and then also if you
could just break out ticket prices for the quarter between 2D, 3D and IMAX, please?
A: And sorry, Bo, you asked about leverage, our leverage targets. Really, our thinking there hasnt changed. Weve talked for a long
period of time about our, kind of being comfortable kind of in that three to four times net debt to EBITDA. Thats where we are today
and feel like that gives us a lot of financial flexibility to do the things that are important to our business.
2/7/2013 4Q2012 Prepared And finally, over the last several years, we have clearly and consistently communicated that using our cash in ways that best benefit
our long-term shareholders by investing in the growth of our business and providing a meaningful return to shareholders is a key part
of our strategy. To that end, were extremely pleased that our late November acquisition of Great Escape Theatres and the December
payment of $1 per share special dividend clearly demonstrated our ongoing commitment to creating value for our shareholders. We
fully expect each of these initiatives to have a positive impact on our operation as well as our free cash flow in 2013 and into the
future.
10/25/20123Q2012 Q&A Q: Great. Thank you. And then, and David, I was curious how you guys are thinking about the dividend in the context of any changes
in tax policy? And whether buying back stock would that be an option either in the open market or from your current shareholders to
the extent you want to maximize your float? Thanks.
A: Sure, Bo. I think our approach to capital allocation really hasnt changed much over time. We try to consider what all the factors
are. And certainly you mentioned tax policy, and thats one factor, its certainly not the only factor that we consider. But when
we do think about capital allocation, I think weve said before, we always want to make sure we do things that create value for our
shareholders. In the past, for us, thats really included a two-pronged approach. Weve used some of our cash to return value through
primarily through dividends. Weve also used our cash to grow our business, both by buying and building theaters and by investing
in things like Open Road Films, which Amy mentioned earlier. Thats still our approach. We still want to go through the process to
figure out what the best uses of our cash are. Weve talked a lot about the M&A environment that were in today, and that its very
robust and certainly were actively looking at the opportunities that are available in that market. But at the same time, if you look at
our history, weve been able to do those types of transactions and still maintain a healthy dividend and continue to return value to
shareholders. So, in summary, our approach there just hasnt changed though.
7/26/2012 2Q2012 Q&A Q: And then also talk about kind of the window for this. I mean how long before you kind of fish or cut bait in terms of acquisitions
versus dividend? Cinemark and others have kind of spoken to maybe a couple-of-year kind of window around the digital transition;
youll know whether its there or not. So a little bit of color on that would be great.
A: I mean, I guess first, with respect to what we look for. Were always looking for high-quality assets. We like to see a high
percentage of stadium seating and assets that are going to be beneficial to our long-term free cash flow strategy. So again, when we
think about it, its not geography or other base focus, its more of an asset-based focus. Historically, we have paid anywhere from five
to seven times for acquisitions. And the accretion for us is pretty immediate. So from that perspective, you do not have a lot of synergy
risk in our business.
And from that perspective, weve been able to, on the majority of our acquisitions, take that multiple and generate either a turn to a
turn and-a-half of synergy. So you can see on those levels, today, that would still be very accretive for our business. So you can think
about the universe of opportunities out there and thats how well evaluate those. I dont think today that we have a specific timeframe
with respect to when youd make one decision or the other. But what I can say, where I believe we have been very successful over
time is, we have been able to have a very disciplined capital structure.
Weve returned over $22 to shareholders over time. Weve increased dividends during that time period, and weve also executed a lot
of tuck-in acquisitions. And those happen not in lieu of each other but in conjunction with each other, those strategies. So that is how I
would think about that window from our perspective.
7/26/2012 2Q2012 Q&A Q: Okay. And, David, can you give us an early sense of your capex and screen outlook for next year in terms of new-builds and
closures?
A: Sure. I think were finally now starting to kind of get back to normal after a few years of slower new-builds and slower growth. So
I think next year will look much more like a normal year for us which, a normal year, I would say, is somewhere between $115 million
and $125 million of capex. We would likely get for that eight to 10 new theaters with 125 to 150 screens. And we probably would
offset that with closures of somewhere between 75 and 100 screens. So youre probably talking about net screen growth of about 50
screens.
7/26/2012 2Q2012 Q&A Q: Okay. And then as follow-up. So youre now sitting on nearly $200 million of excess cash, meaning your cash less one full year
of your dividends, obviously, you want to have some dry powder for M&A. And you just had a shelf offering several weeks back that
gives you some debt flexibility. At what point does that start burning a hole in your pocket and maybe think about increasing the
dividend a little bit?
A: Eric, were still just going through the exactly the same process that we always do. Were considering what options are out there.
And weve talked a lot about the activity in the M&A market. We do continue to see deals in the marketplace and hear about other
deals that may be coming to the marketplace in the near term. So were going to do exactly what we always do, evaluate all those
options and figure out what we think is the best use of that cash for our shareholders. And when we feel like we have the right
information in front of us, well make those decisions.
5/1/2012 1Q2012 Q&A Weve historically Barton weve said that wed be comfortable operating the business in the kind of three to four times net debt to
EBITDA range and I think were at 3.1x net debt to EBITDA today. Id have to go back and look and see when the last time we were
below that number, but its been quite a while since we were lower than that.
Source: FactSet.
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Regal Entertainment Group (Continued)
Date of
5/1/2012 1Q2012 Prepared Furthermore, we have a proven track record of using our cash in ways that best benefit our long-term shareholders by investing in the
growth of our business and by providing a meaningful return to our shareholders in the form of recurring and special cash dividends.
5/1/2012 1Q2012 Q&A I think as weve talked about before, we dont weve never really changed the way we think about capital allocation, as I said at
the end of our prepared remarks. We believe that our strategy over the last 10 years of using our capital in a variety of ways, both for
growth and for shareholder return has been one that has worked for us over time. And, quite frankly, thats the conversation that we
have with our board every time we see them. And well continue to have that conversation.
2/13/2012 4Q2011 Q&A And then in terms of the dividend, certainly youre right; we do have a healthy amount of cash here on the balance sheet as of the end
of the year. Remember, if you think about how our cash profile looks throughout the year is that typically we give back some working
capital cash in Q1 and Q3 and we build cash in Q2 and Q4. So I dont feel like were really pressed to make a decision at this point
and so when you see that cash balance, it may be a little bit misleading in terms of what decision we could actually make.
10/27/2011 3Q2011 Q&A Q: If you could talk us through use of cash a little bit more as you look out into the acquisition market. Are there opportunities for
consolidation? I mean, as you look at your leverage, where do you feel comfortable in terms of leverage? And then as you look at
potential for incremental revenue and special or sorry, regular and special dividends, maybe you could just talk a little bit and
update us on your thoughts on use of cash?
A: Sure, Anthony. And really our thoughts on uses of cash havent changed. As you well know, historically, weve used our cash for
really one of two or three things. Weve grown the business the old-fashioned wise, thats by buying or building theaters. And certainly,
well continue to look to do that. Weve also grown the business in more, what I would call, non-traditional ways. Most recently with
our investing in Open Road Films, and well continue to look for those innovative ways to grow our business. And then certainly, weve
been able, historically, to combine with those strategies a healthy dividend policy. And certainly, today returning value to shareholders
is the key part of our strategy, and it will continue to be going forward.
10/27/2011 3Q2011 Q&A Q: So a couple of my question is sort of follow-ons to other peoples. I think it was Anthony who started talking about capital structure
and opportunities. When from a cash perspective, what the sense of how much capital like if I look at your balance sheet over
the years, is it kind of fair to say that around $200 million of cash is kind of what you need from a working capital perspective, and
anything above that kind of at least makes the potential for a dividend increase or a special a little bit greater, is that the way we
should be looking at it?
A: Yeah. This is not necessarily our policy, Ben, but historically, just in terms of a comfort level for us to operate the business. We tend
to like to have about one years worth of dividend on the balance sheet in cash. So, as we think about allocating capital, then we dont
like to allocate down too much below that number.
2/9/2011 4Q2010 Q&A I think, as we looked at our options at the end of the year, we certainly felt like we did analyze several different things. But we felt
like the special dividend made the most sense for us, particularly given an environment where a buyback of shares for us reduces
our float pretty considerably, and thats not something we wanted to do. And as we sized that dividend and then sized the recurring
dividend, we felt like we paid the extraordinary dividend from the balance sheet. That was cash that we had accumulated from cutting
our dividend back at the beginning of 2009. And then we really sized the recurring dividend such that we could make sure that we
could pay it out of continuing free cash flow. And as that continuing free cash flow grows over time, certainly thats one of the options
that we have to use that cash, is to continue to increase that dividend.
4/29/2010 1Q2010 Q&A We did say in the short term here that there are a couple things that we wanted to accomplish before we made any big capital
allocation decisions. The first thing was to complete the DCIP financing, which obviously weve done that, and the second thing was
to make sure that we execute a plan to deal with our near-term and mid-term debt maturities. And that would be our Ill call that
our 2011, 12, and 13 debt maturities. Obviously we havent checked that box yet. That process has been ongoing, but we have not
finished that process yet. But once we do that, well go back to our normal capital allocation strategy and decide at that point in time
what we believe the right use of our cash is. And that could be it could be obviously returning value to shareholders, it could be
growing our circuit through acquisition or new builds, or like you said it could be used to deleverage a little bit.
7/30/2009 2Q2009 Q&A I mean, weve always said that wed like to keep our leverage at that, call it three to I guess 3.5x would be a ceiling over time.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Regal Entertainment Group
12
Months
12
Months
12
Months Three Months
12
Months Three Months
12
Months Three Months
12
Months
($ Mil.) 1/01/09 12/31/09 12/30/10 9/29/11 12/29/11 12/29/11 3/29/12 6/28/12 9/27/12 12/27/12 12/27/12 3/28/13 6/27/13 6/27/13
Profitability
Free Cash Flow Margin (%) (1.6) 6.6 (5.9) (1.6) 11.5 5.1 10.6 2.0 (10.0) (6.8) (1.1) 8.3 10.5 0.8
Coverages (x)
Operating EBITDA/Gross Interest
Expense 3.95 3.41 3.08 3.69 2.44 2.99 3.89 4.01 3.91 4.37 4.03 2.98 4.75 4.01
FCF Debt Service Coverage 0.58 2.11 (0.08) 0.56 1.68 1.77 2.36 1.75 1.41 0.67 0.71 0.55 1.00 1.00
Cash Flow from Operations/Capital
Expenditures 2.06 3.78 2.64 2.17 4.46 4.05 10.78 2.93 (0.29) 6.32 3.89 4.64 5.90 4.04
Leverage (x)
Long-Term Secured Debt/Operating
EBITDA 3.18 2.40 2.66 2.11 2.19 2.19 1.88 1.93 1.97 1.78 1.78 1.90 1.76 1.76
Total Adjusted Debt/Operating
EBITDAR 5.11 4.88 5.29 5.17 5.07 5.07 4.66 4.74 4.80 4.66 4.66 5.11 5.00 5.00
FCF/Total Adjusted Debt (%) (1.0) 4.4 (3.8) (1.4) 3.2 3.2 5.3 3.5 2.1 (0.7) (0.7) (1.1) 0.5 0.5
Balance Sheet
Short-Term Debt 23.4 17.1 95.8 20.4 20.6 20.6 21.1 21.4 22.0 22.0 22.0 19.5 24.9 24.9
Long-Term Senior Secured Debt 1,638.4 1,248.3 1,211.1 980.6 977.9 977.9 974.8 972.0 969.0 966.4 966.4 963.9 958.5 958.5
Long-Term Subordinated Debt 251.5 246.1 275.0 535.2 534.8 534.8 534.5 534.1 534.0 533.4 533.4 783.0 815.9 815.9
Other Debt 9.0 9.0 8.0 8.2 8.2
Equity Credit
Off-Balance-Sheet Debt 2,477.7 2,396.3 2,359.7 2,359.7 2,185.6 2,185.6 2,185.6 2,185.6 2,186.0 2,326.4 2,326.4 2,326.4 2,326.4 2,326.4
Total Adjusted Debt with
Equity Credit 4,492.1 4,393.4 4,432.7 4,380.5 4,201.9 4,201.9 4,195.7 4,191.1 4,186.0 4,321.6 4,321.6 4,562.3 4,640.7 4,640.7
Cash Flow
Change in Working Capital (71.6) 44.9 (54.7) (50.2) 0.8 (20.7) 7.3 13.4 (70.0) (7.7) (56.4) 53.6 34.4 11.3
Cash Flow from Operations 270.9 410.8 259.4 37.6 132.9 353.1 117.5 71.4 (8.0) 164.9 346.6 110.9 145.7 414.5
Total Non-Operating/Nonrecurring
Cash Flow
Dividends (184.2) (110.8) (327.1) (32.5) (32.4) (129.8) (33.9) (32.7) (33.0) (188.1) (287.3) (34.0) (32.8) (287.5)
Free Cash Flow (45.0) 191.2 (166.1) (12.2) 70.7 136.1 72.7 14.3 (69.0) (49.3) (29.9) 53.0 88.2 24.5
Net Acquisitions and Divestitures (205.7) 0.8 (20.3) 0.1 7.5 20.5 0.1 0.9 (85.0) (83.9) 3.5 (193.8) (275.3)
Net Debt Proceeds (8.8) (12.5) 53.2 (2.5) (4.2) (67.6) (6.0) (4.5) (6.0) (4.6) (20.6) (9.1) (247.0) (266.7)
Net Equity Proceeds 0.5 (0.3) (0.1) 0.2 (0.9) (0.8) 1.3 0.2 0.7 (2.7) 0.4 (2.1)
Other (Investing and Financing) (6.0) (21.3) 10.5 (1.8) (0.3) (40.4) (2.8) (2.4) (1.0) (3.2) (9.8) 241.2 247.9 484.9
Total Change in Cash (265.0) 157.9 (122.8) (16.4) 73.9 47.7 63.2 9.6 (76.0) (141.9) (143.5) 285.9 (104.3) (34.7)
Income Statement
Revenue 2,771.9 2,893.9 2,807.9 743.6 613.9 2,681.7 684.9 723.3 693.0 723.1 2,824.2 642.8 842.3 2,901.2
Revenue Growth (%) 4.2 4.4 (3.0) 6.8 (7.1) (4.5) 20.0 (4.0) (6.8) 17.8 5.3 (6.2) 16.5 4.9
Operating EBIT 313.0 319.3 242.1 89.3 39.9 250.0 93.1 92.5 80.0 95.1 360.7 56.9 122.8 354.8
492 Company Summaries Univision Communications, Inc.
September 19, 2013

Corporates

Ratings
Security Class
Current
Rating
Univision Communications, Inc.
IDR B
Senior Secured Bank B+/RR3
Senior Secured Notes B+/RR3
Senior Unsecured Notes CCC+/RR6
RR Recovery Rating.
Rating Outlook
Stable
Key Rating Drivers
Positive View on Hispanic Broadcasting: The ratings refect Fitch Ratings positive view
on the Hispanic demographics ongoing growth in number and spending power. Univision
Communications, Inc. (Univision) benefts from a premier industry position, with duopoly
television and radio stations in most of the top Hispanic markets, with a national overlay of
broadcast and cable networks. Hispanic population growth should mitigate the effect of longer
term secular issues challenging the media and entertainment sector. Fitch expects Univisions
large audience and entrenched position to enable it to succeed amid new competitors.
Competitive Threats Emerging: Recent new entrants in the Hispanic broadcast and cable
network market will add to the competitive pressures facing Univision. However, Univision
currently has incumbent advantage and dominant market presence, with all of the top 10
primetime network broadcast programs among Hispanics, according to Nielsen. Fitch expects
these factors, along with its pipeline of proven content from Grupo Televisa SAB (Televisa), to
enable it to grow amid these increasing pressures.
Highly Leveraged Capital Structure: Pro forma for the February and May 2013 refnancing
transactions, Fitch estimates total leverage (including the subordinated convertible preferred
debentures due to Televisa) and secured leverage of 11.0x and 8.9x, respectively. Fitch
expects deleveraging to be driven by EBITDA growth and modest levels of mandatory term
loan amortization. Despite the recent improvements to the capital structure, total debt has not
declined and leverage remains high for the rating category.
Near-Term Maturities Addressed: Univision has been active in reducing its near-term maturities
over the past two years. With the completion of its May 2013 credit agreement amendment,
Univision has cleared its maturities to 2019, when $1.2 billion in 6.875% senior secured notes
comes due. Fitch believes that the private equity owners, Televisa, and the secured lenders
remain motivated to facilitate Univisions long-term viability, as refnancing an improved operating
and credit profle will provide more value than bankruptcy/debt restructuring.
Negative Rating Action: Negative rating actions could occur if operating results and FCF are
materially lower than Fitchs expectations. Fitch expects annual FCF of $50 million$100 million
in 2013 and $150 million$250 million in 2014. This would be contradictory to Fitchs constructive
view on the U.S. Hispanic broadcasting market and Univisions position within it, and could
indicate that the company is more susceptible to secular challenges than previously anticipated.
Positive Rating Action: Positive rating actions could occur if Univision deleverages signifcantly
from current levels, with indications that the company is on target to reach 7x9x and 5x6x total
and secured leverage targets, respectively, by 2015/2016.
Analysts
Rolando Larrondo
+1 212 908-9189
David Peterson
+1 312 368-3177
September 19, 2013

Corporates

Televisio
n
82%
Radio
14%
Digital
4%
Revenues by Segment
Univision Communications Inc.
(As of Dec. 31, 2012)
Television
82%
Televisio
n
88%
Radio
10%
Interactiv
e
2%
EBITDA by Segment
(As of Dec. 31, 2012)
Source: Company filings. Source: Company filings.
Television
88%
Interactive
2%
Television Broadcast Networks
Univision Network
UniMs Network
Cable Networks
Galavisin
Univision Deportes Network
Univision tlnovelas
ForoTV
Univision Emerging Network
De Pelcula
De Pelcula Clsico
Bandamax
Ritmoson
Telehit
Distrito Comedia
Univision/ABC News JV 24-hour English language news network
El Rey Network
a
Univision Television Group O&O TV Stations
20 Full-Power Stations
Nine Low-Power Stations
One station in Washington, DC that Univision does not operate
Three Full-Power Stations in Puerto Rico
UniMs Television Group O&O TV Stations
18 Full-Power Stations and 14 Low-Power Stations
Univision Studios
Univision Radio
Owns and Operates 64 Radio Stations in 16 of top 25
U.S. Hispanic Markets
Owns and Operates Five Radio Stations in Puerto Rico
Univision Interactive (Digital) Media
Univision.com
Univision Mvil
Uvideos
Univision Partner Group
Portfolio Summary Univision Communications, Inc.
(As of June 30, 2013)
a
May 14, 2013 Announced strategic investment of debt and equity in El Rey Network. O&O Owned and operated.
September 19, 2013

Corporates

Event Risk Dashboard Univision Communications, Inc.
Event Risk Summary
Level of Risk
LBO L
Secular L
Acquisition L
Divestiture H
Covenant Breach M
Litigation Risk L
Regulatory Risk M
LBO Risk Low
Already private; 2007 LBO.
Secular Risk Low
Fitch expects growth of Hispanic population in the U.S. to offset the impact of
audience fragmentation.
Share shift of ad spending to Hispanic media to drive growth.
Radio faces moderately higher secular pressures, but is only 10% of EBITDA.
The company is private, owned by a consortium of private equity (PE) frms, from
the 2007 LBO.
Of the 21 board members, 16 are affliated with the private equity owners, Univision
or Grupo Televisa.
Grupo Televisa (owns approximately 7% at present) has the right to acquire
another approximately 4%, plus 30% under the terms of the convertible preferred
(subject to regulatory requirements).
By default, fnancial policy is debt reduction, given current leverage and absolute
levels of debt.
In order to successfully refnance 2017, Univision needs to deleverage.
No availability in restricted payment basket, except $150 million general carveout.
Max. leverage of 9.25x under credit agreement.
Univision Communications, Inc. Rating History
B
B
B+
BB
BB
BB+
BBB
BBB
BBB+
9
10
11
12
13
14
2007 2008 2009 2010 2011 2012 6/2013
Leverage Trend
(x)
ownership regulations not likely to be changed. No impact on Univision.
Relaxation of alien-ownership laws would allow Grupo Televisa to own more than
the current max. of 25% of Univision (currently owns approximately 7%, with the
right to acquire up to 10% at fair market value, plus the option to convert junior
preferred debenture into additional 30% ownership).
September 19, 2013

Corporates

Event Risk Dashboard Univision Communications, Inc. (Continued)
Litigation Risk Low
Union Workforce
Fitch estimates less than 10% of the companys employees are subject to
collective bargaining agreements (CBAs).
YTD June 2013
2012
2011
2010 (51.20)
2009 (36.00)
2008 (19.10)
2007 (14.00)
Management has stated publicly it would be willing to sell the radio business
(10% of EBITDA) for the right price.
Minimal fnancial fexibility for acquisitions.
Company's strategy has recently been new channel launches and partnerships
rather than acquisitions.
No limitations on acquisitions or divestitures in credit agreement.
At current leverage, 100% of asset sale proceeds not reinvested in the business
must go to repay term loans.
Covenant Thresholds Risk Medium
(x)
Covenant
Level
Ratio/Test as of
6/30/13
EBITDA
Cushion (%)
First Lien Net Leverage 9.25 7.7 16
The credit facility allows for an equity cure in the event of a covenant breach,
which reduces the potential for a covenant breach.
Covenant calculation per defnition in companys bank agreement. Amounts
outstanding at the credit facilities are on a pro forma basis, giving effect to the
closing of the February amendment.
Permitted nonguarantor subsidiary debt is limited to $500 million.
Guaranteed by HoldCo and wholly owned domestic subsidiaries.
The company is privately owned by a consortium of private-equity frms and
Grupo Televisa.
September 19, 2013

Corporates

Detailed Maturities Schedule Univision Communications Inc.
Senior Secured Debt
Revolving Credit Facility 2018
Bank Senior Secured Term Loan Facility 3,377.4 2020 17.0 34.0 34.0 34.0 34.0 3,224.4
Incremental Bank Senior Secured Term Loan Facility 1,246.9 2020 6.3 12.5 12.5 12.5 12.5 1,190.7
6.875% Senior Secured Notes 1,200.0 2019 1,200.0
7.875% Senior Secured Notes 750.0 2020 750.0
6.750% Senior Secured Notes 1,225.0 2022 1,225.0
5.125% Senior Secured Notes 700.0 2023 700.0
Accounts Receivable Facility 180.0 2018 180.0
Total Senior Secured Debt 8,679.3 23.3 46.5 46.5 46.5 46.5 8,470.1
8.5% Senior Notes 815.0 2021 815.0
Total 9,494.3 23.3 46.5 46.5 46.5 46.5 9,285.1
September 19, 2013

Corporates

19% Equity
Organizational Structure Univision Communications, Inc.
($ Mil., As of June 30, 2013)
O&O Owned and operated. A/R Accounts receivable. IDR Issuer Default Rating. RR Recovery Rating.
Madison Dearborn
Partners, LLC
Providence Equity
Partners Inc.
Saban Capital
Group
Texas Pacific
Group
Thomas H. Lee
Partners
Management and
Employees
Grupo Televisa
Broadcasting Media Partners, Inc.
19% Equity 7% Equity 21% Equity 19% Equity 7% Equity 7% Equity
Univision Receivables Co., LLC
(Special-Purpose Entity)
$400 Million A/R Revolving Facility
$180.0 Mil. Outstanding
Univision Television Univision Radio Univision Online
Univision Television Network
20 Full-Power O&O Stations
9 Low Power O&O Stations
UniMs (Formerly TeleFutura) Network
18 Full-Power O&O Stations
14 Low-Power O&O Stations
Univision Cable
Network
Univision
Emerging
Network
Univision
Studios
Amount Rating
Senior Secured Revolving Credit Facility Maturing in 2018 0.0 B+/RR3
Bank Senior Secured Term Loan Facility Maturing in 2020 4,624.3 B+/RR3
Senior Secured Notes 6.875% due 2019 1,200.0 B+/RR3
Senior Secured Notes 7.875% due 2020 750.0 B+/RR3
Senior Secured Notes 6.750% due 2022 1,225.0 B+/RR3
Senior Secured Notes 5.125% due 2023 700.0 B+/RR3
Senior Unsecured Notes 8.50% due 2021 815.0 CCC+/RR6
Other 76.5
Total Debt (Including A/R Facility) 9,570.8
Total Debt Including Televisa Junior Convertible Debentures 10,695.8
LTM EBITDA 1,004.0
Amount Rating
Junior Convertible Debentures to Grupo Televisa 1,125.0
Amount
EBITDA 890.7
Amount
LTM Revenues 337.9
EBITDA 108.0
69 O&O Radio Stations
Amount
LTM Revenues 104.5
EBITDA 29.2
Broadcast Media Partners Holdings, Inc.
100% Equity
100% Equity
50% Voting
Interest
19% Equity
September 19, 2013

Corporates

Debt and Covenant Synopsis (Bank Agreement/Indentures)
Term Loan Facility Secured Notes Unsecured Notes
Overview
Issuer Univision Communications Inc. Univision Communications Inc. Univision Communications Inc.
Document Date 3/29/07, as amended 6/19/09, 10/26/10,
8/21/12, 2/28/13, and 5/29/13
10/26/10; 8/29/12; 5/21/13 8/15/2016 11/23/10 and 1/13/11
Maturity Term loan: $4.7 billion matures
March 1, 2020;
RCF: $550 million matures March 2018.
7.875% due 11/1/2020;
6.75% due 9/15/22;
5.125% due 11/15/23
5/15/21
Description of Debt Senior term loan and revolving credit
facility (RCF)
7.875% senior secured notes;
6.750% senior secured notes;
5.125% senior secured notes
8.500% senior unsecured notes
Original Issue/
Outstanding
$7 billion term loan;
$600 million RCF.
7.875% $750 million issued;
6.75% $1,225 million issued;
5.125% $700 million issued
$815 million
Security All tangible and intangible assets, excluding
cash, deposit and securities accounts, more
than 65% foreign subsidiaries, FCC licenses,
equipment subjected to liens, JVs that require
third-party consent, and patent applications.
Substantially all of Univisions and the
guarantor subsidiaries property and assets
that secure the senior credit facilities.
None
Ranking The obligations rank equally and ratably with
all of Univisions (and subsidiary guarantors)
existing and future senior debt.
Senior obligations that rank equally with
existing and future senior debt. Senior
to existing and future unsecured senior
obligations to the extent of the value of the
assets securing the notes and guarantees.
Senior unsecured obligations that are equal
to all existing and future senior debt that is not
expressly subordinated in right of payment.
Effectively subordinated in right of payment to
the senior credit facilities and senior secured
notes.
Guarantee Holding company; wholly owned domestic
subsidiaries.
All Univisions direct and indirect wholly owned
domestic subsidiaries that guarantee the bank
debt
All Univisions direct and indirect wholly owned
domestic subsidiaries that guarantee the bank
debt.
Equity Clawback 7.875%: Up to 35% (by Nov. 1, 2013) at
107.875 with net cash proceeds from equity
offerings; 6.750%: Up to 40% (by Sept. 15,
2015) at 106.75 with net cash proceeds
from equity offerings; 5.125%: Up to 40%
(by May 15, 2016) at 105.125 with net cash
proceeds from equity offerings. Provided that
at least 50% of the principal amount remains
outstanding for both bonds.
UVN can redeem up to 35% (by Nov. 15,
2013) at 108.5 with net cash proceeds from
equity offerings, provided that at least 50% of
the principal amount remains outstanding.
Callability 7.875%: July 1, 2015 @ 103.938
July 1, 2016 @ 102.625
July 1, 2017 @ 101.313
July 1, 2018 and after @ 100
6.750%: Sept. 15, 2017 @ 103.375
Sept. 15, 2018 @ 102.25
Sept. 15, 2019 @ 101.125
Sept. 15, 2020 and after @ 100
5.125%: May 15, 2018 @ 102.563
May 15, 2019 @ 101.708
May 15, 2020 @ 100.854
May 15, 2021 and after @ 100
Nov. 15, 2015 @ 104.250
Nov. 15, 2016 @ 102.833
Nov. 15, 2017 @ 101.417
Nov. 15, 2018 and after @ 100
Financial Covenants
(Maximum)
First-lien leverage ratio of 11.75x through
September 2009, decreasing to 11.25x
(through March 2010); 11.00x (through
September 2010); 10.75x (through September
2011); 10.50x (through March 2012); 10.25x
(through September 2012); 9.25x (through
September 2013); and 8.50x thereafter.

Senior Secured
Leverage (Maximum)

Interest Coverage
(Minimum)

RCF Revolving credit facility FCC Federal Communications Commission. JVs Joint ventures. N.A. Not available. FCF Free cash flow. LOC Letter of credit.
PP&E Property, plant, and equipment. Note: Detailed Term Loan Facility amendment documents for the amendments executed in 20102013 are not publicly
available. The 7.875%, 6.750%, and 5.125% secured notes and 8.500% unsecured notes are private placement securities, and detailed documentation/indentures are
not publicly available. Continued on next page.
September 19, 2013

Corporates

Debt and Covenant Synopsis (Bank Agreement/Indentures)
Univision Communications Inc. (Continued)
Term Loan Facility Secured Notes Unsecured Notes
Change of Control
(CoC) Provision
If the sponsors cease to own more than
50% of the equity interests prior to an IPO.
If one person becomes the beneficial owner
of more than 35% of the equity after an IPO.
Term loan is due and payable upon a CoC.
CoC offer of 101% if the company experiences
a CoC (as defined in the indenture).
CoC offer of 101% if the company experiences
a CoC (as defined in the indenture).
Merger Clause Cannot consolidate or merge into another
entity if it would result in an increase in the
secured leverage or consolidated leverage
ratio and if the successor cannot incur $1 of
incremental debt.

Mandatory
Prepayments
100% of proceeds from asset sales or
insurance settlements that are not reinvested
must be applied to term loan repayment if
leverage is more than 8.0x. If leverage is
between 6.0x and 8.0x, 50% of net cash
proceeds must be used for term loan
repayment. No mandatory repayment if
leverage is more than 6.0x. 100% of net cash
proceeds from incurrence of debt to be applied
as mandatory prepayment. 50% of excess
FCF if leverage is more than 6.0x; 25% of
excess FCF if leverage less than 6.0x and
more than 5.0x.

Sale of
Assets Restriction
Only if 1) fair market value is received;
2) 75% of consideration is cash.
Proceeds must be reinvested in the business,
prepay certain guarantors secured debt or
debt of nonguarantors, or make an offer to
repurchase the notes at 100.
Proceeds must be reinvested in the business,
prepay certain guarantors' secured debt or
debt of nonguarantors, or make an offer to
Limitation on
Acquisitions
No material provision noted. N.A. N.A.
Debt Restrictions
Additional Debt
Restriction
Permitted if leverage ratio (before carveouts) is
below 9.5x through June 30, 2009, decreasing
to 8.5x thereafter. Carveouts include existing
debt, bankers acceptances, LOCs, debt
to/from restricted subsidiaries, hedging
obligations, debt of 100% of the net cash
proceeds from the sale of equity interests,
permitted refinancing debt, foreign subsidiary
debt up to 5% of foreign subsidiary total
assets, debt for acquisitions of less than $300
million, and debt to finance the purchase of
PP&E, along with refinancing indebtedness, up
to $150 million.
N.A. N.A.
Limitation on Secured
Debt
Liens on pari passu or junior obligations if
secured leverage is less than 6.0x. Acquired
liens plus refinancing liens of less than $400
million; other ordinary course liens that do not
exceed $100 million; other standard carveouts.
N.A. N.A.
Restricted Payments Excluding carveouts, basket is cumulative
EBITDA less 1.4x consolidated interest
expense, plus 100% aggregate net cash
proceeds from the sale of equity interests or
other property received by or contributed to
the issuer or its subsidiaries. General basket
of $150 million or, if pro forma leverage is less
than 9.5x, 3% of total assets.
N.A. N.A.
Other
Cross-Default Yes, more than $100 million. N.A. N.A.
Cross-Acceleration
with Facility
N.A. N.A.
RCF Revolving credit facility FCC Federal Communications Commission. JVs Joint ventures. N.A. Not available. FCF Free cash flow. LOC Letter of credit.
PP&E Property, plant, and equipment. Note: Detailed Term Loan Facility amendment documents for the amendments executed in 20102013 are not publicly
available. The 7.875%, 6.750%, and 5.125% secured notes and 8.500% unsecured notes are private placement securities, and detailed documentation/indentures are
not publicly available.
September 19, 2013

Corporates

Covenant Summary Univision Communications Inc.
Financial Covenants
Leverage (Maximum) Consolidated First Lien Leverage (x)
Through Sept. 30, 2011 10.750
Through March 31, 2012 10.500
Through Sept. 30, 2012 10.250
Through Sept. 30, 2013 9.205
Thereafter 8.500
Mandatory/Tax Prepayment 100% of proceeds from asset sales or insurance settlements that are not reinvested must be applied to term loan repayment if leverage
more than 8.0x. If leverage is between 6.0x and 8.0x, 50% of net cash proceeds must be used for term loan repayment. No mandatory
repayment if leverage is more than 6.0x. 100% of net cash proceeds from incurrence of debt to be applied as a mandatory prepayment.
50% of excess FCF if leverage is more than 6.0x; 25% of excess FCF if leverage is less than 6.0x and more than 5.0x.
Amortization Schedule Through March 31, 2012, 0.625% of term loan (including delayed draw) quarterly.
Thereafter, through maturity, 0.250% of term loan (including delayed draw) quarterly.
a

Prepayment
At any time, without prepayment penalty.
Pricing
Coupon Type/Index/Margin Libor floor of 1.25% and interest rate margin of 3.50% per annum (subject to an agreed-upon stepdown in such margin upon the
achievement of a certain leverage ratio or the obtaining of a specified rating from Moodys).
a
Optional prepayments are applied against the remaining payments. Note: Detailed term loan facility amendment documents for the amendments executed in
20102013 are not publicly available.
September 19, 2013

Corporates

Bond Covenant Summary Univision Communications Inc.
Bond Indenture
Covenant
Issuer Univision Communications Inc.
Document Date Issued under indenture dated May 9, 2011
Issued $600 Mil. in May 2011 and $600 Mil. in February 2012
Maturity Date May 5, 2019
Description of Debt 6.875% senior secured notes
Amount ($ Mil.) and OID (%) Issued: $1.2 Bil.
Outstanding: $1.2 Bil.
Ranking Senior secured obligations that rank equally and ratably with all of its existing and future senior secured indebtedness. Senior to existing
and future unsecured senior obligations to the extent of the value of the assets securing the notes and guarantees.
Security Substantially all of Univision's and the guarantor subsidiaries' property and assets that secure the senior credit facilities.
Guarantee All Univisions direct and indirect wholly owned domestic subsidiaries that guarantee the bank debt
Financial Covenants
Leverage (Maximum) Consolidated Leverage
Coverage (Minimum)
Current Ratio (Minimum)
Net Worth (Minimum)
Change of Control
(CoC) Provision
CoC offer of 101% if the company experiences a CoC (as defined in the indenture).
M&A, Investments
Restriction
None
Sale of Assets Restriction Proceeds must be reinvested in the business, prepay certain guarantors secured debt or debt of nonguarantors, or make an offer to
Debt Restrictions
Debt Incurrence
Limitation on Liens
Limitation on Guarantees Guarantees by nonguarantor restricted subsidiaries (unless they are voluntarily designated as such and not required to be) limited to $25
million, unless the subsidiaries become guarantors of the notes, or the guaranteed debt and the guarantee are expressly subordinated to
the notes.
Restricted Payments (RP) None
Mandatory/Tax Prepayment Proceeds not reinvested or used to prepay other debt must be used to repurchase the notes at 100.
Amortization Schedule Bullet repayment
Callability/
Optional Prepayment
On 5/15/15 @ 103.438%
On 5/15/16 @ 101.719%
On 5/15/17 @ 100.000%
Pricing
Coupon Type/Index Fixed rate
6.875%
September 19, 2013

Corporates

Financial Policy Transcript Excerpts Univision Communications Inc.
Date of
2/21/2013 4Q2012 Q&A Q: I apologize for that. I just want to touch back on that capex number, the $200 million. Do we know the timing of that spend
throughout this year?
A:The maintenance is around $100 million in the building and other projects, because there are few other projects besides the building
as we move from distributing to shared services for editing, master control, arts, graphics, et cetera which has some accelerated
capex associated with it, thats about $100 million combined with the building.
2/24/2012 4Q2011 Prepared At Dec. 31, 2011, outstanding indebtedness as defined by the bank credit agreement, net of cash and cash equivalents of
$58.1 million, totaled approximately $9.2 billion. On Feb. 7, 2012, the company issued $600 million aggregate principal amount of its
6L% senior secured notes due 2019. The proceeds from the sale of the new notes were used to repay $595.9 million of borrowings
under the non-extended portion of the companys senior secured term loan facility due Sept. 30, 2014 plus related fees and expenses.
2/24/2012 4Q2011 Q&A Q: Okay. Two more here. On the working capital side, obviously some negative moves particularly in AP in 2011. How do we think
about that in 2012? Any reversals that kind of could make this more normalized?
A: No, I think we see 2011 was the reversal of the moves we made in 2010 to conserve cash so we could get a step down in our
interest rate grid. So, we wont be stretching payables, we dont intend to this year. So, I think you wont see that type of use of cash in
the coming year.
5/6/2011 1Q2011 Q&A Q: Can you just bridge, if you dont mind, the quarter-end cash balance to the deal you just did? And then just talk about the liquidity
position and general availability? And then any puts and takes as it relates to free cash flow this year, tax refunds, anything else? And
lastly, is there any cash in the holding company or anything else I may be missing as I think about liquidity?
A: So there is no cash available for distribution at the holding company. There is cash up at the Holdco that serves as kind of an
interest reserve account for the cash payment thats made to Televisa up there. The effect of the $600 million offering is to tender for
the $545 million of bonds that have 107 and change, plus pay the fees and expenses associated with the tender and the offering. That
basically all adds up to $600 million. So you add $600 million of debt, you take out $545 million, and we go from paying 12% coupon
to 6.875%.
2/24/2011 4Q2010 Prepared At Dec. 31, 2010, outstanding indebtedness as defined by the bank credit agreement, net of cash and cash equivalents of
$1.3 billion, totaled approximately $8.6 billion. The cash balance includes $1.1 million from the Televisa transaction, which was used to
pay down a portion of the 2015 senior notes, also known as the PIK toggle bonds, in January. As you know, we completed a number
of debt refinancings and maturity extension transactions in 2010, and we feel very good about our current capital structure, both in
terms of maturity profile and cost of borrowing.
11/4/2010 3Q2010 Prepared Last week, the company closed its offering of 7 7/8% senior secured notes due 2020 in our amend and extend transaction. In
aggregate, after paying down after the pay down associated with the senior secured note offering, we extended $6.110 billion of
bank debt to 2017, leaving 1.117 billion of maturities in 2014.
11/4/2010 3Q2010 Q&A Q: So in terms of the balance of that issue probably I could figure this out but Ill just ask you, do you have the ability to issue
secured debt to call the balance?
A: Theres a covenant that would prohibit us from incurring secured refinancing indebtedness to repay unsecured debt unless
consolidated EBITDA or consolidated leverage is below, I think, its 6.5 times, it might be 6 times.
2/25/2010 4Q2009 Q&A Q: And then just looking out to 2010 given that your swaps are rolling off and your growth, your free cash flow looks like its going to be
increasing a lot, have you guys thought at all about how you might use that?
A: Pay down debt, I think is the use.
Source: FactSet.
September 19, 2013

Corporates

Financial Summary Univision Communications, Inc.
12
Months
12
Months
12
Months Three Months
12
Months Three Months
12
Months Three Months
LTM
Ended
($ Mil.) 12/31/08 12/31/09 12/31/10 9/30/11 12/31/11 12/31/11 3/31/12 6/30/12 9/30/12 12/31/12 12/31/12 3/31/13 6/30/13 6/30/13
Profitability
Operating EBITDA 798.2 762.6 882.8 219.8 262.7 873.0 167.6 234.2 253.1 264.5 919.4 203.4 283.0 1,004.0
Free Cash Flow Margin (%) (2.8) 3.9 12.5 11.9 (0.6) (1.4) 14.3 (6.2) 12.4 (6.9) 2.8 (5.5) (6.4) (1.7)
Coverages (x)
Operating EBITDA/
FCF Debt Service Coverage 0.6 0.9 0.5 1.2 0.6 0.9 1.1 1.2 1.2 0.8 1.1 0.9 0.7 0.7
Capital Expenditures 1.7 3.0 4.5 5.0 0.9 0.6 7.5 (1.8) 4.5 0.1 1.7 0.4 0.3 0.8
Leverage (x)
Long-Term Secured Debt/FFO 4,569.1 90.7 23.5 44.2 43.0 43.0 32.9 39.1 30.1 33.5 33.5 34.5 28.0 28.0
FCF/Total Adjusted Debt (%) (0.5) 0.7 2.4 1.1 (0.3) (0.3) 0.5 1.0 1.1 0.7 0.7 (0.3) (0.4) (0.4)
Balance Sheet
Short-Term Debt 391.1 145.9 1,394.9 351.6 342.4 342.4 276.0 319.6 258.7 267.7 267.7 423.5 231.1 231.1
Long-Term Subordinated Debt 1,500.0 1,578.8 1,125.0 1,125.0 1,125.0 1,125.0 1,125.0 1,125.0 1,125.0 1,125.0 1,125.0 1,125.0 1,125.0 1,125.0
Other Debt
Equity Credit
Off-Balance-Sheet Debt 146.4 338.9 146.4 150.2 132.2 131.4 131.4 131.4 131.4 211.8 211.8 211.8 316.8 316.8
Total Adjusted Debt
Cash Flow
Change in Working Capital 109.6 68.5 19.2 35.5 (56.5) (144.8) 52.6 (61.4) (13.8) (49.4) (72.0) (7.8) (91.3) (162.3)
Cash Flow from Operations 111.5 161.0 359.9 87.1 25.7 42.5 87.1 (24.0) 100.0 5.6 168.7 19.8 14.9 140.3
Nonrecurring Cash Flow (103.0) (31.4)
Dividends (8.4) (8.4)
Free Cash Flow (56.7) 76.5 280.7 69.8 (4.0) (32.9) 75.5 (37.7) 77.8 (46.4) 69.2 (30.9) (43.3) (42.8)
Net Acquisitions and Divestitures (3.1) (17.8) (38.0) 1.0 7.0 6.5 6.5 (81.3) (81.3)
Net Debt Proceeds 594.8 (512.6) 836.6 (54.0) (11.5) (1,062.6) (66.8) 43.5 (43.2) 8.3 (58.2) 160.7 196.2 322.0
Net Equity Proceeds (6.1) 37.3
Other (Investing and Financing) (68.4) 11.8 (67.4) (1.0) (1.1) (147.2) (9.5) 0.2 (31.0) 0.2 (40.1) (37.6) (91.7) (160.1)
Total Change in Cash 466.6 (448.2) 1,049.2 14.8 (15.6) (1,235.7) (0.8) 12.5 3.6 (37.9) (22.6) 10.9 65.5 42.1
Ending Cash and Securities Balance 692.8 244.6 1,293.8 73.7 58.1 58.1 57.3 69.8 73.4 35.5 35.5 46.4 111.9 111.9
Short-Term Marketable Securities 67.6 19.0
Income Statement
Revenue 2,020.3 1,972.5 2,245.2 584.6 616.7 2,273.5 528.4 613.0 628.9 671.7 2,442.0 562.0 676.5 2,539.1
Revenue Growth (%) (2.5) (2.4) 13.8 1.7 6.9 1.3 9.7 3.8 7.6 8.9 7.4 6.4 10.4 8.4
Operating EBIT 675.3 637.4 765.0 188.7 220.0 737.2 135.4 202.1 219.8 231.8 789.1 166.2 248.7 866.5

September 19, 2013

Corporates

Appendix

September 19, 2013


Industry Resources
Description Location
Media and Advertising
Ad Week www.adweek.com
Advertising Age www.adage.com
American Advertising Federation www.aaf.org
American Association of Advertising Agencies www.aaaa.org
American Marketing Association www.ama.org
Jack Myers Media Business Report www.jackmyers.com
Nielsen News & Insights Reports www.nielsen.com/us/en/insights/reports-downloads.html
PwC Global Entertainment and Media Outlook: 2013-2017 www.pwc.com/outlook
Red 7 Media www.red7media.com/index.shtml
Veronis Suhler Stevenson www.vss.com
Print
Association of American Publishers www.publishers.org
Association of Directory Publishers www.adp.org
Association of Educational Publishers www.aepweb.org
Alliance for Audited Media www.auditedmedia.com
Direct Marketing Association www.thedma.org
Editor and Publisher www.editorandpublisher.com
Journalism.org www.journalism.org
Magazine Publishers Association www.magazine.org
National Education Association www.nea.org
Newspaper Advertising Association www.naa.org
Poynter Institute (Romenesko) www.poynteronline.org
TV
Association of American Public TV Stations www.apts.org
Cable TV Association for Marketing www.ctam.com
National Association of Broadcasters www.nab.org
National Association of Television Program Executives www.natpe.org
National Cable & Telecommunications Association www.ncta.com
Television Bureau of Advertising www.tvb.org
Radio, Music, Outdoor
Arbitron www.arbitron.com
International Federation of the Phonographic Industry www.ifpi.org
Music Publishers Association www.mpa.org
Outdoor Advertising Association of America www.oaaa.org
Radio Advertising Bureau www.rab.com
Recording Industry Association of America www.riaa.com
Internet
eMarketer www.emarketer.com
Interactive Advertising Bureau www.iab.net
Nielsen NetRatings www.nielsen-netratings.com
Pew Internet and American Life Project www.pewinternet.org
Film, Video Games, Theme Parks
Box Office Mojo www.boxofficemojo.com
Consumer Electronics Association www.ce.org
Entertainment Software Association www.theesa.com
Hollywood.com www.hollywood.com/boxoffice/
International Association of Amusement Parks and Attractions www.iaapa.org
Motion Picture Association of America www.mpaa.org
National Association of Theater Owners www.natoonline.org
The Internet Movie Database www.imdb.com
Variety www.variety.com
Regulation
U.S. Federal Communications Commission www.fcc.gov
U.S. Federal Trade Commission www.ftc.gov
U.S. Securities and Exchange Commission www.sec.gov

September 19, 2013

Corporates

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Volume VI 2013-2014

03/15/12 Amazon and Discovery announce

Source: Company filings, Fitch Ratings.

Senior Secured Leverage

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