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Financial Highlights Interim Report for the Period 1 January to 30 June 2002 Munich, 6 August 2002. Emphasized Financial Data. Overview First Six Months 2002. Limited comparability to last year 2001: - Wedding Planner with extremely high margin - significant Financing Fees
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Financial Highlights Interim Reportfor the Period 1 January to 30 June 2002Munich, 6 August 2002
Emphasized Financial Data Overview First Six Months 2002 • Limited comparability to last year • 2001: - Wedding Planner with extremely high margin - significant Financing Fees • 2002: - no Financing Fees • - different cost structure because of business expansion in 2nd half of 2001 • - high investments in new film projects
Income Statement Numbers Revenue Revenues in €m Comments • Revenues expanded by 33% in the first half • 3 Film releases constitute ~ 83% of revenues: Ali (Will Smith), Iris (Kate Winslet), The Dangerous Lives of Altar Boys (Jodie Foster); all films are pure minimum guarantee films • Overages on Traffic, Wedding Planner and some other films as well as library revenues account for the remaining 17% of revenues • No financing fees booked in the first half • Revenues significantly above preliminary estimates due to currency effects. According to SIC-30 IM has to use the average exchange rate for the reporting period + 33% 94.3 16.0 Ov 70.8 FF 9.2 Ov 0.8 MG 60.9 MG 78.3 30 06 2001 30 06 2002pro forma FF: Financing FeesOv: OveragesMG: Minimum Guarantees
Income Statement Numbers COGS and Project Development Costs Consolidated Income Statement Comments • Gross margin decreases significantly as financing fees of the first half year 2001 did not reoccur in the first six months 2002; also previous year with extraordinary effect of “Wedding Planner” • IM has strongly invested in the development of films, resulting in an increase in development costs of 4.5 m €; the current development pipeline contains about 70 potential film projects
Income Statement Numbers Overhead and Taxes Consolidated Income Statement Comments • Higher overhead costs can mainly be explained through the consolidation of IEG as well as increase in head count • IM has started to implement an overhead cost cutting program which is starting to show effects in the second half of 2002 • After consolidating IEG, IM had to change its tax structure; taking a prudent position no new losses on tax carried forward could be capitalized
Balance Sheet Numbers Cash, Receivables and Film Assets Consolidated Balance Sheet: Assets Comments • Cash of 67m € slightly above the preliminary estimates; the cash position covers about 125% of the current market valuation (at €1,69/ share) • Increase in receivables is caused by the theatrical releases of “Ali” and “The Dangerous Lives of Altar Boys” as well as overages from “Traffic” and “Wedding Planner” • Reduction in film and licence asset is due to regular depreciation of films (“The Dangerous Lives of Altar Boys” and “Traffic”) as well as currency effects
Balance Sheet Numbers Film development costs and deferred taxes Consolidated Balance Sheet: Assets Comments • Lower level of development costs due to going into production of three film projects (“Terminator 3”, “Masked & Anonymous” and “Suspect Zero”) • Netting with deferred tax liabilities is not possible due to varying durations. The accrued liabilities have decreased in the same percentage; Roughly 10 mn € decrease is the counterpart on the liability side
Balance Sheet Numbers Bank loans and overdrafts Consolidated Balance Sheet - Liabilities Comments -18% 242 • Reduction of bank liabilities compared to first quarter due to film projects such as “Mindhunters”, “Basic” and “Dark Blue” • The film loans are non-recourse to IM and solely pledged by the film project • The Largo film library loan is backed by its assets • IEG assets are backing the IEG bank loan; there is no recourse against other IM assets relating to IEG liabilities • Leasing liabilities are recourse only against receivables of the respective assets 198 31 March 2002 30 June 2002 96 198 70 32 Total bank liabilities 30 June 2002 Non-recoursefilm financing IEG + Largo Leases and others
Cash Flow Numbers Depreciation and Working Capital Consolidated Cash Flow Statement Comments • Depreciation for “Ali”, “The Dangerous Lives of Altar Boys”, “Traffic” and “Wedding Planner”, reflecting a significantly higher level of film releases • The negative operating Cashflow is mainly caused by an increase of receivables and film development costs • At the moment there is no material change in on-balance sheet financing; therefore, investment remains on a low level
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