GLOBAL CHANNELS - [Page 2 of 2]

With the American market being vital to BBC Worldwide's growth plans, BBC America continued on a strong growth curve, increasing its distribution from 45m to 54m homes in 2006/07. It is currently reinventing itself to reflect contemporary Britain. Each night, the schedule is demographically targeted and includes hit shows such as Hotel Babylon, Torchwood, Jekyll, Life on Mars, Top Gear, Robin Hood, Dragons' Den and Gordon Ramsay's F Word.

JOINT-VENTURE CHANNELS

Global Channels has two joint-venture channels with Discovery Communications Inc - People+Arts and Animal Planet; a joint venture subscription channel with Foxtel and FremantleMedia - UK.TV; and two BBC-branded channels in Canada - BBC Canada and BBC Kids.The latter are managed by a joint venture with Alliance Atlantis, which is being acquired by CanWest Mediaworks Inc. Global Channels looks forward to building a relationship with its new partner in 2007/08.

At home, UKTV - BBC Worldwide's joint venture with Virgin Media - had a good year. The carriage deal with Sky was renewed, commercial audiences grew by 18% and advertising sales performance was well above market average. Almost 800 hours of original content were commissioned across the 10-channel network and, on average every month, over one million unique users accessed UKTV's portfolio of websites (including uktvfood.co.uk and uktv.co.uk), generating more than 10m page impressions. During the year the business started to recognise profits from UKTV as well as continuing to receive growing dividends.

TEAM STRENGTHENED

In order to deliver the new strategy, the business made a raft of new appointments, including Senior Vice Presidents for: Europe, Middle East and Africa (EMEA) based in London; Asia-Pacific, based in Singapore; and Latin America and the US Hispanic market, based in Miami.

In addition, Garth Ancier was appointed to the new role of President, BBC Worldwide America, with overall control of all BBC Worldwide's US operations, including BBC America.

His experience gained at major US networks including Fox, NBC and Warner Bros will help BBC America play a crucial role in driving the company's expansion. Following Dick Emery's retirement in November, David Abraham joined UKTV as CEO in April, following a hugely successful period in the US.

OUTLOOK

Global Channels now has in place a clearly defined BBC-branded strategy and a strong executive team to deliver this growth plan. Over the next 12-18 months, the business will focus on an ambitious expansion of the BBC-branded portfolio with launches across EMEA, Latin America and Asia. Global Channels will also look to expand its operations in the US, and in the UK focus on attracting new viewers and advertisers to sustain UKTV's solid growth, developing them both into truly multiplatform brands.

With favourable new deals agreed or under negotiation and tight management controls in place, the business is confident it has the drive and vision to build on the achievements of 2006/07 and deliver strong growth over the next five years.