#1STRICTLY PRIVATE AND CONFIDENTIAL DISCUSSION MATERIALS Presentation to Independent Committee December 19, 2012 J.P.Morgan#2DISCUSSION MATERIALS This presentation was prepared exclusively for the benefit and internal use of the independent committee (the "Independent Committee") of the board of directors of Focus Media (including its subsidiaries, the "Company") to whom it is directly addressed and delivered in order to assist the Independent Committee in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan (or "we"). Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. The information in this presentation is based upon the management projections supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. J.P. Morgan's opinions and estimates constitute J.P. Morgan's judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan's policies on data privacy can be found at http://www.jpmorgan.com/pages/privacy. J.P. Morgan's policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation. J.P. Morgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors. IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. J.P. Morgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities LLC, J.P. Morgan Limited, J.P. Morgan Securities Ltd. and the appropriately licensed subsidiaries of JPMorgan Chase & Co. in EMEA and Asia-Pacific, and lending, derivatives and other commercial banking activities are performed by JPMorgan Chase Bank, N.A. J.P. Morgan deal team members may be employees of any of the foregoing entities. This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services. PROJECT FOXTROT J.P.Morgan#3DISCUSSION MATERIALS Agenda Situation overview Valuation analysis Appendix PROJECT FOXTROT Page 13 J.P.Morgan#4SITUATION OVERVIEW Executive summary On August 13, 2012, Focus Media announced that its Board of Directors received a preliminary non- binding proposal letter from a Buyer Group comprising of Jason Jiang (Chairman and CEO of Focus Media), Carlyle, FountainVest, CITIC Capital Partners, CDH Investments and China Everbright that proposes to take Focus Media private at $27.00 per ADS On August 23, 2012, J.P. Morgan was appointed by the Independent Committee of the Board of Directors ("Independent Committee" or "IC") as its financial advisor to assist the Independent Committee in reviewing and evaluating the proposal On December 15, 2012, the final offer of $27.50 was proposed J.P. Morgan's focus is to evaluate the fairness of the Buyer Group's offer, from a financial point of view, based on standard valuation methodologies PROJECT FOXTROT 2 J.P.Morgan#5SITUATION OVERVIEW Key transaction metrics Focus Media capitalization table (US$mm) Revised offer $27.50 128 136 3,737 200 904 9 3,043 Offer price (US$/ADS) Basic shares outstanding (ADSmm) Diluted number of shares outstanding¹ Equity value Total debt² Total cash².3 Minority interest Firm value Source: Company filings, company projections 1 Includes 0.5mm options and 7.5mm restricted stock units 2 Balance sheet data as of Sep 30, 2012 based on latest filings ³ Based on cash of US$901mm and 15% stake of equity investments in VisionChina PROJECT FOXTROT 3 Key valuation metrics Offer price (US$/ADS) Premium over Last close prior to offer 30-day VWAP 60-day VWAP 1-year VWAP Based on management projections P/E 2012E 2013E FV / EBITDA LTM (US$/ADS) 2012E 2013E FV / Sales LTM 2012E 2013E 23.38 20.14 20.53 21.84 (US$mm) 333 393 420 417 491 936 938 1,127 Initial offer Revised offer 27.00 27.50 15.5% 34.1% 31.5% 23.6% 11.0x 9.3x 7.1x 7.1x 6.1x 3.2x 3.2x 2.6x 17.6% 36.6% 33.9% 25.9% 11.2x 9.5x 7.2x 7.3x 6.2x 3.3x 3.2x 2.7x J.P.Morgan#6DISCUSSION MATERIALS Agenda Situation overview Valuation analysis Appendix PROJECT FOXTROT Page 1 4 13 J.P.Morgan#7VALUATION ANALYSIS Business overview Focus Media is a business that primarily sells advertising space or time on the most extensive network of fixed digital displays and poster displays in China ■ Focus Media's display assets are well distributed in elevators and public areas of commercial, office and residential buildings throughout most of China's major cities, creating for advertisers both an effective national market reach as well as a deep local market presence ■ Focus Media's management believes that sometime in the next 5 years, its customer value proposition (mind share of Chinese consumers) and effectiveness of its service may decline as a result of three main trends ■ Advertising budgets continuing to migrate from traditional media towards digital, Internet and mobile media providers; Wireless Internet performance improving dramatically in speed, affordability and coverage due to massive investment in communications infrastructure; and Personal display devices (smartphones and tablets) gaining rapid adoption and dependence among Chinese consumers Focus Media's management further believes that if the company is to maintain its growth and profitability in the near to medium term future, it will be necessary to compete with internet and wireless based providers of advertising services, requiring Focus Media to significantly increase its capital expenditure and R&D budgets, potentially impairing its future financial performance PROJECT FOXTROT 5 J.P.Morgan#8VALUATION ANALYSIS Overview of key financials Key financials (non-GAAP) All figures in US$mm Total net revenue % growth Gross profit % net revenue EBIT % net revenue D&A EBITDA % net revenue Net income % net revenue Capex % net revenue Source: Company projections PROJECT FOXTROT Cumulative 1Q-3Q 2012 689 445 64.6% 275 39.9% 23 298 43.2% 238 34.6% 18 2.6% Estimated 4Q 2012 250 173 69.2% 109 43.8% 10 120 48.0% 95 37.9% 15 6.0% 2012E 938 618 65.8% 384 40.9% 33 417 44.5% 333 35.5% 33 3.5% 6 2013E 1,127 20.1% 744 66.0% 453 40.2% 38 491 43.6% 393 34.8% 51 4.5% 2014E 1,376 22.1% 913 66.3% 557 40.5% 49 606 44.0% 482 35.0% 62 4.5% 2015E 1,645 19.6% 1,099 66.8% 667 40.5% 70 737 44.8% 546 33.2% 105 6.4% 2016E 1,922 16.8% 1,282 66.7% 783 40.7% 95 878 45.7% 640 33.3% 131 6.8% 2017E 2,172 13.0% 1,450 66.8% 886 40.8% 104 990 45.6% 684 31.5% 174 8.0% J.P.Morgan#9VALUATION ANALYSIS Valuation methodology overview Discounted cash flow analysis ("DCF") Trading multiples Transaction multiples PROJECT FOXTROT "Intrinsic" value of business Present value of projected free cash flows "Public market valuation" Valuation based on market trading multiples of comparable companies "Private market valuation" Value based on multiples paid for comparable companies in sale transactions in the industry 7 J.P.Morgan#10VALUATION ANALYSIS Valuation summary of Focus Media Implied share price of Focus Media (US$/ADS) Primary valuation methodologies¹ DCF-management case Term growth (2% -4% ) : WACC (14.0 % -18.0%) Beta of 1.952, WACC of 18.3%, TGR of 3% Beta of 2.021, WACC of 18.9%, TGR of 3% Beta of 2.278, WACC of 20.8%, TGR of 3% Trading multiples 2013E P/E³ (9.0-12.0x) 2013E FV/EBITDA³ (6.0-9.0x) 2013E FV / Sales³ (1.5-2.5x) Transaction multiples² LTM FV/EBITDA (6.0-8.0x) LTM FV / sales (1.0-2.5x) For reference only 52-week range prior to offer Precedent US-listed Chinese take private Last trading day prior to offer ( 17% -34% premium) 30-day VWAP prior to offer (22% -39% premium) Analyst target price range 8.79 PROJECT FOXTROT 12.04 17.58 Initial offer Revised offer $27.00 $27.50 30-day VWAP: $20.14 22.35 8 23.67 22.64 22.07 20.23 26.01 26.79 60-day VWAP: $20.53 Current: $23.90 22.35 24.57 52-wk VWAP: $21.84 27.35 26.00 25.85 25.0 31.17 29.81 27.99 30.0 34.59 32.93 31.33 Equity value per ADS (US$) 5.0 10.0 15.0 20.0 Source: Bloomberg, Broker estimates, Company filings, FactSet; Note: Market data as of Dec 17, 2012 ¹ Assumes total debt of US$200mm, cash of US$901mm (cash and cash equivalents of US$492mm, restricted cash of US$198mm, and short-term investment of US$211mm) (as of Sep 30, 2012) and diluted ADS o/s; equity value adjusted for FMCN's 15% stake in Vision China 2LTM EBITDA of US$420mm and LTM sales of US$936mm as of Sep 30, 2012 ³ Based on non-GAAP sales of US$1,127mm, EBITDA of US$491mm and net income of US$393mm for 2013E per company projections 37.51 35.0 43.00 40.0 45.0 50.0 J.P.Morgan#11VALUATION ANALYSIS Focus Media discount rate analysis Discount rate summary Risk free rate¹ Equity risk premium Levered beta Country risk premium Cost of equity Pre-tax cost of debt Post-tax cost of debt³ Debt/total cap target Discount rate 11.3% Discount rate at varied Focus Media betas Focus Media beta Cost of equity Discount rate Sensitivity of discount rate* Debt/total cap 8.0% 1.10 1.6% 12.2% 15.0% 0.0% 15.0% 5.0% 14.4% 10.0% 13.9% 15.0% 13.3% 20.0% 12.8% PROJECT FOXTROT 1.8% 5.0% 3.8% 10.0% Historical beta 1.952 20.0% 18.3% 16.0% 16.0% 15.4% 14.8% 14.2% 13.6% Cost of equit Relevered Barra historical predicted 2.021 2.278 20.6% 22.7% 18.9% 20.8% 17.0% 17.0% 16.3% 15.7% 15.0% 14.4% 9.0% 2.00 1.6% 21.4% *Debt/total cap vs. levered beta sensitivity assumes equity risk premium of 8.5% 5 Includes US-listed Chinese media companies with market cap of US$1bn-4bn Assumes equity risk premium of 8.5% 19.6% 18.0% 18.0% 17.3% 16.6% 15.9% 15.2% Capital structure benchmarks (US$mm) 9 Company Global outdoor advertising JCDecaux Lamar Advertising Clear Channel Outdoor APG | SGA SA Stroer Out-Of-Home Media Clear Media Mean Median US-listed Chinese media companies $3,253 $3,032 $2,311 $1,840 $1,684 $1,416 $1,379 $1,237 Sina Corp Gihoo 360 Youku Tudou Soufun Sohu.com Renren 51Job Changyou.com Mean Median Market cap Focus Media For reference only Air Media VisionChina $5,384 $3,811 $2,443 $637 $387 $279 $3,246 $123 $18 Debt/ total cap Barra predicted 9.6% 35.3% 66.0% 55.8% 0.0% 27.8% 22.4% 0.0% 0.0% 0.2% 16.0% 11.7% 0.0% 0.0% 0.0% 3.5% 0.0% 5.8% 0.0% 72.7% Levered beta 1.414 1.180 1.254 1.004 1.859 0.672 1.231 1.217 1.399 1.327 1.814 1.329 1.251 1.491 1.163 1.787 1.445 1.364 2.278 2.131 2.031 Historical 1.118 1.981 2.171 1.237 0.330 1.208 1.178 Source: FactSet, Barra Market data as of Dec 17, 2012 U.S. 10-year treasury bond yield Historic relevered beta is implied based on unlevering beta for each respective company based on their current capital structure and relevering beta based on debutotal cap target of 10.0% 3 Assumes tax rate of 25.0% 1.549 1.711 2.496 1.953 1.632 1.478 1.032 2.365 1.777 1.672 1.952 1.336 1.617 Relevered historical² 1.129 1.642 1.093 148 0.689 0.357 0.893 0.891 1.678 1.853 2.699 1.865 1.594 1.601 1.118 2.562 1.871 1.766 2.021 1.447 0.584 J.P.Morgan#12VALUATION ANALYSIS Discounted cash flow valuation Projected free cash flows (US$mm) Fiscal year date EBIT + D&A Share-based compensation - Tax expense - Capex - Change in working capital Unlevered free cash flow Equity value (US$mm) - WACC 4Q-12 109 10 (5) (18) (15) 32 114 PROJECT FOXTROT Terminal growth 3.0% Dec-13 453 38 (72) (82) (51) (46) 241 Dec-14 Dec-15 557 667 49 70 (79) (87) (100) (153) (62) (105) (62) (67) 303 324 Equity value per ADS (US$) 10 Dec-16 783 95 (96) (180) (131) (68) 403 2.0% 4.0% 4.0% 14.0% 3,819 4,008 4,236 14.0% 28.10 31.17 15.0% 3,578 3,733 3,917 15.0% 26.33 28.82 16.0% 3,372 3,501 3,651 16.0% 24.81 26.86 17.0% 3,194 3,302 3,426 17.0% 23.50 25.21 18.0% 3,038 3,129 3,234 18.0% 22.35 23.80 Source: Company projections; Assumes total debt of US$200mm, cash of US$901mm (cash and cash equivalents of US$492mm, restricted cash of US$198mm, and short-term investment of US$211mm) (as of Sep 30, 2012) and diluted ADS o/s; equity value adjusted for FMCN's 15% stake in VisionChina as of Dec 17, 2012 WACC Dec-17 Terminal year 886 824 104 179 (105) (108) (248) (231) (174) (179) (62) (64) 401 Terminal growth 3.0% 29.49 27.47 25.76 24.29 23.03 2.0% 422 J.P.Morgan#13VALUATION ANALYSIS Trading comparables Trading comparables (US$mm, unless otherwise stated) % of Share price 52-week (LC) high 71.1% 83.6% Company FMCN (last day prior to offer, mgmt proj) FMCN@offer price (Mgmt proj) Global outdoor advertising JCDecaux Lamar Advertising Clear Channel Outdoor APG|SGA SA Stroeer Out-of-Home Media Clear Media Median 23.38 27.50 PROJECT FOXTROT 18.44 78.5% 40.14 96.7% 6.84 46.0% 99.4% 46.9% 82.7% 195.00 6.98 4.05 Market value $3,176 $3,737 Firm value $2,481 $3,043 $5,385 $5,515 $3,810 $5,848 $2,443 $6,877 $637 $581 $387 $849 $279 $157 Source: Company reports, broker research, FactSet market data as of Dec 17, 2012 ¹ Represents ADS price as of Aug 10, 2012, which is the last trading day prior to the offer 11 FV/ Revenue CY2012E CY2013E CY2014E 2.6x 2.2x 1.8x 3.2x 2.7x 2.2x 1.6x 5.0x 2.3x 1.7x 1.2x 0.7x 1.6x 1.6x 4.7x 2.2x 1.6x 1.1x 0.7x 1.6x 1.5x 4.5x 2.2x 1.6x 1.1x NA 1.6x FV/EBITDA CY2012E CY2013E CY2014E 5.9x 5.1x 7.3x 6.2x 7,3x 115× 10.1x 6.7x 6.3x NA 7.3x 7.1x 10.9x 9.5x 7.3x 5.8x NA 7.3x 4.1x 5.0x 6.7x 10.4x 8.8x 7.0x 5.3x NA 7.0x P/E CY 2012E CY 2013E CY2014E 9.5x 11.2x 8.1x 9.5x 17.7x NM 19.1x NM NM 13.6x 14.0x 10.7x 13.8x 12.5× NM 13.2x 11.8x 9.0x 6.6x 7.8x 15.7x 42.6x NM 12.4x 9.6x NA 14.0x J.P.Morgan#14VALUATION ANALYSIS Transaction multiples in the past five years Precedent transaction multiples Date Target Global advertising 20-Jul-12 Eye Corp Australia 24-Oct-11 Mediakiosk 28-Feb-08 Vista 31-Aug-07 Primesight 23-Apr-07 Affichage Median Source: Company filings, press releases, broker notes, Factset, Mergermarket, Dealogic PROJECT FOXTROT Acquiror CHAMP Private Equity JCDecaux Lamar GMT Communications Partners (IBO) Compagnie Nationale a Portefeuille SA (CNP) 12 Stake acq. (%) 100.0% 95.0% 100.0% 100.0% 25.3% Deal value (US$mm) 114 83 66 125 413 FV/LTM Sales 0.8x 2.3x 1.8x NA 1.5x 1.7x EBITDA ΝΑ 5.7x 22.6x 8.0x 7.7x 7.9x J.P.Morgan#15DISCUSSION MATERIALS Agenda Situation overview Valuation analysis Appendix PROJECT FOXTROT 13 Page 1 13 J.P.Morgan#16APPENDIX Focus Media public market overview Share price performance¹ (rebased to Focus Media price) Price (US$) Vol (mm) 80 70 60 50 40 30 20 10 Prior to offer Since 80 offer Performance to date Since IPO 3-year 1-year 3-month 30-day Focus Media 175.1% 140.8% (17.2%) 0.5% (0.1%) 22% 40.9% 51.6% 26.9% 3.0% 2.4% (0.3%) (1.4%) 23.7% 3.1% (7.4%) 1.4% 99% Nasdaq Peers Initial offer price: $27.00/ADS IPO price¹: $8.5/ADS 0 Jul-05 Focus Media Nasdaq Global outdoor advertising peers* Revised offer price: $27.50/ADS PROJECT FOXTROT Prior to offer: $23.38/ADS Jan-07 Jun-08 Dec-09 Source: Factset; Market data as of Dec 17, 2012 ¹Since IPO Jun-11 70 60 50 40 30 20 10 0 Dec-12 Trading range (US$/ADS) 14 70.0 60.0 50.0 40.0 30.0 20.0 66.3 0.0 25.9 10.0 IPO price: 8.51 4.8 Since IPO 37.6 21.0 8.4 Min VWAP Max & Current 21.9 32.9 8.8 -23:8 20.0 Last 3 Last 1 year year Prior to offer 16.8 23.4. 26.5 24.4 22.6 Last 30 Last trading Since trading days day offer 2 Represents Aug 10, 2012 which is the last trading day before the take private offer on Aug 13, 2012 3 Focus Media did a 2 to 1 ADS split in Apr 2007, the pre-adjustment IPO price is US$17 * Global outdoor advertising peers includes JCDecaux, Lamar Advertising, Clear Channel Outdoor Holdings, APG|SGA, Ströer Out-of-Home Media, and Clear Media Initial 23.9 offer price: $27.00 Revised offer price: $27.50 Current J.P.Morgan#17FOCUS MEDIA TRADING AND VALUATION ANALYSIS Premium for precedent completed take-private transactions for US-listed Chinese companies Cayman Non - Cayman Premium for precedent completed transactions Company One day avg. CHEMSPEC FunTalk 乐语 SNDA IMARYS CRIC 国人通信 GRENTECH Gushan & Sinoenergy Corporation CFS CTFO CSST 中国安防投票與限公司 Focus Initial offer @ $27.00 Media Revised offer @ $27.50 Source: Company filings, FactSet PROJECT FOXTROT ! Median = 23.0% 19.0% 17.1% 28.2% 23.5% 22.5% 23.0% 20.2% 12.6% 15.5% 17.6% 34.1% Median 43,8% 48.4% 43.8% 58.5% 30 day VWAP 15 Median = 29.2% 22.3% 29.2% 34.2% 26.6% 34.3% 27.2% 38.7% 26.5% Median 39.1% 46.5% 36.3% 39.1% 34.1% 36.6% 52.4% 60 day VWAP › Median = 27.0% 21.9% 27.0% 30.6% 25.1% 23.6% 16.8% 28.7% 42.4% Median = 35.1% 35.1% 40.1% 38.8% 35.0% 31.5% 33.9% J.P.Morgan