Ion Media Networks — Investor Presentation (December 2006)
29 slides from Ion Media Networks's investor presentation, Dec 5, 2006
Slide 1: Investor Breakfast December 5, 2006
Investor Breakfast December 5, 2006
Slide 2: Forward-Looking Statements
This presentation contains "forward-looking statements," within the meaning of federal securities laws, that involve risks and uncertainties. All statements herein, other than those consisting solely of historical facts, that address activities, events or developments that ION Media Networks, Inc. (
Slide 3: Vision
Vision
Slide 4: ION Media Networks
ION Media Networks ionline.tv TV Network Largest U.S. broadcast station group with 60 stations, including top 20 U.S. markets and 39 of top 50 markets. Nationwide wholly-owned TV network serving 90+ million homes 24/7 via broadcast, cable and satellite. TV and multimedia network for children, in par
Slide 5: ION Local and National Reach
ION Local and National Reach ION serves 90+ million homes via TV stations, cable and satellite Cable Owned TV Stations DirecTV/Echostar
Slide 6: ION Network Reach Exceeds Cable Network US TV HH
Source: Nielsen Media Research October 2006 ION Network Reach Exceeds Cable Network US TV HH (000s) HH Penetration ION Discovery 93,220 92,338 84% 83% ESPN 92,245 83% USA 91,980 83% TNT 91,974 83% Lifetime 91,850 82% Nickelodeon 91,773 82% TBS 91,517 82% MTV 91,176 82% ABC Family 91,056 82% Comedy C
Slide 7: Popular Television Series
Popular Television Series The Wonder Years Mama's Family Knight Rider Charlie's Angels Growing Pains Welcome Back, Kotter The Monkees Amen Diagnosis Murder The Partridge Family A-Team Over 50 of America's Most Popular Television Series
Slide 8: Popular Theatrical Movies
Popular Theatrical Movies Over 1,000 Feature Films From Top Movie Studios Protocol The Shining Dead Calm Platoon Unlawful Entry
Slide 9: RHI Entertainment Partnership
RHI Entertainment Partnership RHI 4,000+ Hour Library of Acclaimed Television: 448 Emmy Nominations, 103 Emmy Awards, 15 Golden Globes RHI provides ION with primetime content starting July 2007 High-quality programming will include library content and originals ION and RHI collaborate on scheduling,
Slide 10: ION Media Digital Advantage
67 MM digital cable/DBS 15 MM digital terrestrial 7 MM fiber-to-home 89 MM digital HH Multicast networks Multi-local networks ION Media Digital Advantage 90+ MM analog HH One national channel Limited localization 2006 Analog 2009 Digital
Slide 11: Digital Multicasting: qubo
TV place for children and parents Focus on literacy and possibilities Content for kids ages 3-12 Inspires children-parents co-viewing English and Spanish language Multiplatform distribution: Broadcast: ION, NBC, Telemundo 24-hour digital network Scholastic book clubs & schools Video-on-demand Intern
Slide 12: Digital Multicasting: I-Health
Digital Multicasting: I-Health Content and Information Helping Consumers Focus on Health, Wellness, Treatment and Prevention Informative health content, adult care, diet, exercise, family health Leading health content partners, including ITV, Aquarius, Ivanhoe, Medical News
Slide 13: Datacasting R&D Focus
Datacasting R&D Focus Emerging transmission and receiver technology may enable broadcast spectrum to serve new mobile and in-home devices ION would be a major beneficiary of such progress, and therefore should take an active role in promoting the necessary R&D ION has joined organizations like ATSC
Slide 14: Execution
Execution
Slide 15: Ratings Revitalization
Source: Nielsen NTI Dates as Listed Ratings Revitalization Primetime HH (000's) +31% +54% +48% 1st/2nd Qtr'06 TP Avg Mama's Family M-F/8-9pm (8/14-11/24/06) 1st/2nd Qtr'06 TP Avg Diagnosis Murder M-F/10-11pm (6/26-11/24/06) Sat/Sun Prime Movies (6/26-11/26/06) 1st/2nd Qtr'06 TP Avg +7% 1st/2nd Qtr'0
Slide 16: Growth in Key Demographics
Growth in Key Demographics A18-49 A25-54 W18-49 W25-54 Sue Thomas (12/26/05-8/11/06) 134 181 95 124 Mama's Family (8/14-11/24/06) 225 287 140 180 Source: Nielsen NTI Dates as Listed A18-49 A25-54 W18-49 W25-54 Early Edition/Doc/Movie (12/26/05-6/25/06) 130 175 90 119 Charlie's Angels (9/18-11/24/06)
Slide 17: Growth in Key Demographics: Diagnosis Murder and Sunday Movies
Source: Nielsen NTI Dates as Listed Diagnosis Murder A18-49 A25-54 W18-49 W25-54 Doc/It's A Miracle (12/26/05-6/25/06) 121 152 81 102 Diagnosis Murder (6/26-11/24/06) 153 192 100 126 +23% +26% +26% +24% A18-49 A25-54 W18-49 W25-54 Sun/7-11pm TP (12/26/05-6/25/06) 97 117 57 70 Sun Movies (7/2-11/26/0
Slide 18: More Profitable Revenue Mix
More Profitable Revenue Mix a (In Millions) 2004 2005 = 2006 Est. 2007 Est. NET REVENUES: Long formpaid advertising 1787 183.9 185.4 172.4 Network spat/content deals 404 276 a4 54.4 Network direct respanse 138 18.0 38.6 22.8 Localinatianal spot 36.2 154 - 19 Localinational direct response 73 38 24 2
Slide 19: Cost Management
Cost Management Plus Overhead Cost Cuts: -- corporate aircraft -- discretionary entertainment -- litigation expenses
Slide 20: Cost Management: Programming
Cost Management: Programming Network Cash Cost MTV $257MM CNN 232 VH1 156 The History Channel 145 Comedy Central 145 ABC Family 143 Discovery 108 Hallmark 88 Food Network 88 The Learning Channel 87 E! 86 Bravo 79 AMC 77 BET 66 TV Land 60 Court TV 52 Animal Planet 49 Source: Cable Program Investor, K
Slide 21: Projection
Projection
Slide 22: Cash Flow vs. Cost of Capital
Cash Flow vs. Cost of Capital (1) Broadcast cash flow is defined as net cash provided by (used in) operating activities less purchases of property and equipment plus cash paid for interest (net of interest income). (2) Assuming election to pay 2nd lien interest in cash 42.1 43.0 8.6 108.1 16.8 110.0
Slide 23: Capitalization
Capitalization
Slide 24: Current Capital Structure
Balance Balance Maturity Maturity Rate Rate Debt : Debt : Debt : Debt : First Lien Senior Floating Rate Notes 400 400 Jan-2012 Jan-2012 8.36% 8.36% First Priority Term Loan 325 325 Jan-2012 Jan-2012 8.36% 8.36% Second Priority Term Loan 405 405 Jan-2013 Jan-2013 11.36% 11.36% (1) (1) 1,130 1,130 9.4
Slide 25: December 2005 Refinancing Recap
December 2005 Refinancing Recap ION refinanced entire debt structure with $1.1 billion floating rate debt, and subsequently swapped to fixed to protect against rate volatility Financing Benefits and Features: Provided the company with additional financial flexibility by extending our repayment matur
Slide 26: November 2005 Settlement Recap
November 2005 Settlement Recap Bud Paxson optioned all his shares to NBC for $25 million in cash Exercise price for these shares is $6 million, funded as follows: NBCU placed $3.9 million in escrow for Class A shares NBCU acquired Series B preferred stock for $2.5 million cash NBCU canceled $100 mil
Slide 27: May 2007 Scenarios
May 2007 Scenarios NBC Exercise Scenario: In conjunction with option exercise, NBCU's qualified Transferee is required to make cash tender offer for all outstanding Class A shares Transferee purchases Bud Paxson's Class A shares for $3.9 million (amount escrowed in November 2005) Transferee purchase
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Broadcast cash flows ("BCF") is not a performance measure in accordance with GAAP and the use of BCF is not intended to replace or supersede any information presented in accordance with GAAP. The following table provides a reconciliation between BCF (a non-GAAP fi
Slide 29: Slide 29
ION Media Networks — Investor Presentation (December 2006) on 6ix