Financial Statements - IM Internationalmedia AG

2000
Annual Report 2000
THE MOVIE PARTNER

Financial Calendar
Contact
11 May 2001
Publication of the first quarter report for 2001
28 June 2001
Annual General Meeting
19 August 2001
Publication of the first half-year report for 2001
16 November 2001
Publication of the third quarter report for 2001
28 February 2002
Publication of preliminary figures for fiscal 2001
14 March 2002
Publication of figures for fiscal 2001
8 May 2002
Publication of the first quarter report for 2002
12 June 2002
Annual General Meeting
8 August 2002
Publication of the first half-year report for 2002
14 November 2002
Publication of the third quarter report for 2002
IM Internationalmedia AG
Investor Relations
Cuvilliésstr. 25
D - 81679 Munich
Tel. +49 (89) 98 107-100
Fax: +49 (89) 98 107-199
www.internationalmedia.de
E-Mail: info@internationalmedia.de
Contents
Multi-year Overview U 1
Contents 3
Letter to the Shareholders 4
Annual Review 8
Summary 10
Annual Review of the Internationalmedia Group 12
Special Topic of Current Interest 17
Management Report 18
Economic Environment 20
Sales and Income Position 25
Implementation of Controlling Models 3 1
Balance Sheet Structure and Investments 33
Cash Flow 35
Acquisition of Film Rights 36
Film Distribution 37
Film Portfolio 38
Staff 41
Legal Corporate Structure 42
Initial Public Offering 44
Corporate Communication 45
Risk Management 46
Supplementary Information 49
Outlook 50
IM Internationalmedia AG Shares 52
Responsibility to Shareholders 54
Consolidated Financial Statements 58
Consolidated Income Statement 61
Consolidated Balance Sheet 62
Cash Flow Statement 64
Consolidated Statement of Shareholders` Equity 65
Schedule of Fixed Asset Movements 66
Notes to the Consolidated Financial Statements 68
Auditors’ Opinion 102
Report of the Supervisory Board 104
Group Data 106
Locations 108
Group Structure 109
IM Internationalmedia AG Financial Statements 110
IM AG Balance Sheet 112
IM AG Income Statement 114
IM AG Notes to the Financial Statements 115
IM AG Auditors’ Opinion 134
Glossary U3
Credits U3
Key Year _ Stock Market Debut _ Financial Statements _ Internal Growth _ Shares _ Price Performance _ Neuer Markt _ Distribution Partner _ Cinem
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5

Sales to 2000 increased on average by nearly 50 %
Leap in Sales expected for 2001
[in million euros] Source: Internationalmedia Group
400
350
300
250
200
150
100
50
CAGR* = 48 %
46.2 62.8 116.6 149.7 355.0
1997 1998 1999 2000 2001 (e)
Sales of 355.0 million euros
are anticipated for 2001
EBIT increased on average by nearly 140 %
47 million euros are anticipated for 2001
[in million euros] Source: Internationalmedia Group
45
40
35
30
25
20
15
10
5
CAGR* = 139 %
2.0 6.3 13.0 27.5 47.0
1997 1998 1999 2000 2001 (e)
EBIT for 2001 is predicted
at 47.0 million euros.
Net income increased on average
by almost 150 %
[in million euros] Source: Internationalmedia Group
25
20
15
10
5
CAGR* = 147 %
1997 1998 1999 2000
Earnings per share increased
on average nearly 140 %
[in million euros] Source: Internationalmedia Group
0,7
0,6
0,5
0,4
0,3
0,2
0,1
CAGR* = 138 %
0.05 0.15 0.31 0.67
1997 1998 1999 2000
CAGR* = Compounded Annual Grouth Rate
1.3 3.8 7.5 19.7

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4
Letter to the Shareholders
Dear Shareholders and Customers,
Dear Partners and Colleagues,
The year 2000 was a key year for Internationalmedia. This was the year when we made our
stock market debut on 18 May 2000. We also wanted to live up to the high expectations of
the international financial markets. Both of these objectives were achieved and we are privileged
to look back on a particularly successful year of business.
The predictions for growth and earnings made in the Financial Statements for the year 2000
speak for themselves: Sales increased by nearly 30 percent to 149.7 million euros and our
net income rose by more than 160 per cent to 19.7 million euros. It was particularly pleasing
that all our business segments made a positive contribution to earnings. Furthermore, we
achieved this outstanding result despite incurring additional costs in the short-term by doubling
our team to 88 employees. This expansion safeguards profitable internal growth into the
future. Our superb team will continue to work with commitment and motivation to ensure that
our company rises to new pinnacles of achievement.
Florian Bollen, born in 1965, 1992
Master of Business Administration (MBA);
until 1998 management functions with
CLT Ufa International and Premiere
Medien GmbH (Bertelsmann), until 2000
CEO of MTG Acquisitions, London, since
2000 Chairman of the Board of Management
of IM Internationalmedia AG. Area
of responsibilitiy: strategic consulting,
internet, investor relations.
GOOD SHARE PRICE PERFORMANCE
We were delighted that following only eight months of trading since our stock market listing
in May, our shares achieved a price of 43 euros at the close of the year. This represents
an increase in price of almost 35 percent. Unfortunately we were not quite so successful in
carrying over this positive price performance into the first months of 2001. The turbulence
in Frankfurt’s Neuer Markt has had an impact on our company, even though our corporate
concept is geared towards expansion and this has been taken up positively by the capital
markets.
GLOBAL GROWTH
During recent years, and particularly during fiscal 2000, we intensified regional contacts
with major film distribution partners as well as establishing new contacts. We have excellent
business contacts with virtually all the major American studios and we are in business with
most of them. Contacts with the biggest film distributors in nearly all territories are also
strong. This places us in the position of being able to benefit from global growth in the media
markets and to operate irrespective of regional trends and developments.
Moritz Bormann, born in 1955,
studied directing at the American Film
Institute LA; since 1997 CEO of Pacifica
Film Distribution LLC, Pacifica Film
Development Inc. and Onda Entertainment
Inc., LA, since 2000 Deputy Chairman
of IM Internationalmedia AG. Area of
responsibility: coordination and monitoring
of US productions, film financing, mergers
and acquisitions.
Guy East, born in 1951, studied English
and European Law; distribution manager
at ITC Films international and head of
distribution and marketing at Goldcrest
Films International, 1985 appointed the
first British director of the American Film
Marketing Association, later Managing
Director of Carolco Films International,
1995 foundation of Majestic Films International,
1996 foundation of Intermedia
Film Equities Ltd, London, together
with Nigel Sinclair, since 2000 Member of
the Board of Management of IM Internationalmedia
AG. Area of responsibility:
development and acquisition of European
film productions, global distribution.
s _ Golden Globe _ Enigma _ Media Company _ TV Business _ Internet _ Integration _ Goals _ Key Year _ Stock Market Debut _ Financial Statements _ Internal Growth _ Shares _ Price Performancer _ Neuer Markt _ Distribution Partner _ Cinema Films _ Golden Globe _ Enigma _ Media Company _
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6
FIRST-CLASS STAFF
Our first-class employees are our most important capital resource in the development and
sales of our internationally successful cinema films. We ensure that the risks generally
associated with the film business are kept to a minimum and we are proud to have outstanding
sector experts in all key positions. The core business of film development is not the
only area to have been strengthened. Management functions for organization, development
and sales have also undergone successful expansion. This means we are ideally placed to
tackle the challenges of the future with the necessary capacity to take on other ambitious
projects.
The team has also demonstrated exceptional dedication and we were again able to celebrate
numerous successes during the course of the year 2000.
CINEMA FILMS WITH INTERNATIONAL SUCCESS
Highlights include the Golden Globe awarded to Renée Zellweger as best actress for her
role in “Nurse Betty” and “Enigma”, the opening film of the Sundance Film Festival, which
received outstanding reviews from the critics. Our film “The Wedding Planner” was a big
box office hit in the USA. All these top achievements continue to position Internationalmedia
as a media company with the highest quality standards.
Andreas Konle, born in 1970, studied
business administration, 1998 Certified Public
Accountant (CPA), until 2000 worked with
accountants KPMG Deutsche Treuhand-
Gesellschaft AG Wirtschaftsprüfungsgesellschaft,
specialist areas: auditing individual
accounts and Consolidated Financial
Statements in conformity with the German
Commercial Code (HGB) and US GAAP,
issues relating to group strategy, auditing
and consulting in conjunction with stock
market listings, company valuations and due
diligence, since 2000 Member of the Board of
Management of IM Internationalmedia AG.
Area of responsibility: finance, management,
personnel.
ENTRY INTO THE TV BUSINESS
Naturally, as an innovative media company we need to think and act with a vision of the
future. We must expand the value of our core business. Entry into the TV business is the first
step in this quest. It is clear from the intensive development of cinema films that this expansion
of our business can bring significant benefits to Internationalmedia. Projects which are not
finally suitable for cinema may be attractive for TV presentation, and we plan to pursue this
avenue.
Initial successes have already prompted us to consider further integration of innovative areas,
such as internet, broadband and soundtrack. Whilst we, of course, review each individual
option, we do not wish to depart very far from our core business, film development and
film distribution, since this is where we have built an excellent position that we now plan to
expand strategically.
Finally, I should like to conclude by expressing my sincere thanks once again to all shareholders,
employees, colleagues and customers for the confidence they have placed in Internationalmedia,
the commitment they have given, and the loyalty they have shown. You can
be confident that we will continue to achieve our ambitious goals as quickly as possible in
your interest.
Florian Bollen
Chairman of the Board of Management
Annual
R e v i e w
Nigel Sinclair, born in 1948, studied
economics and law, Master of Law
(Columbia University School of Law); until
1989 lawyer with the English law firm Denton
Hall Burgin & Warrens, establishing an office
in LA in 1981, 1989 founded the law firm
Sinclair Tenenbaum & Co., Beverly Hills,
1996 founded Intermedia Film Equities Ltd,
London, together with Guy East, since
2000 Member of the Board of Management
of IM Internationalmedia AG. Area of
responsibility: film distribution in North
America, contacts with the US film industry.
iness _ Internet _ Integration _ Goals _ Key Year _ Stock Market Debut _ Financial Statements _ Internal Growth _ Shares _ Price Performancer _ Neuer Markt _ Media Company _ Cinema _ Internal Growth _ Shares _ Price Performance _ Neuer Markt _ Distribution Partner _ Cinema Films
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8
Annual
R e v i e w
“Love’s Labour’s Lost” is a bitter-sweet comedy about love and romance
in which four well intentioned but misguided young men discover the
impossibility of denying the power of true love..
The King of Navarre (Alessandro Nivola) and his three companions
publicly swear an oath to study together and to renounce women for
three years, but their honour is soon put to the test by the arrival of the
Princess of France (Alicia Silverstone) and her three lovely companions.
It’s love at first sight for all concerned followed by the men’s highly
entertaining but hopeless efforts to disguise their feelings.
ANNUAL REVIEW
MM. REPORT
„Love’s Labour’s Lost“ > 2000
Annual Review
Alicia Silverstone
Alessandro Nivola
SHARE
nes _ Actors _ Film scripts _ Financing _ Marketing _ Advantage _ Stock Market Listing _ International _ Growth _ Renée Zellweger _ First Look Deal _ London _ Telltale Films _ Production company _ The Quiet American _ Cooperation _ Projects _ MIFED _ Box TV _ USA _ Europe _ Earnings _ Expan
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A n n u a l R e v i e w
Summary
The Internationalmedia Group is a leading development, finance and global
distribution company for American feature films. The business focus of the Internationalmedia
Group can be defined as follows:
The value-added chain of Internationalmedia begins with reading several hundred film scripts
each year. This forms the basis on which we identify and develop promising cinema projects.
When suitable film scripts have been identified, Internationalmedia develops project proposals
with possible actors, directors and producers. These projects are presented and marketed at
international film festivals such as Cannes, MIFED and the American Film Market. Acquisition
of film scripts and subsequent production financing may give Internationalmedia general
copyrights, the exploitation rights in the films, and some associated rights, e.g. soundtrack
and merchandising.
These rights are then offered under licence to a wide range of national distribution partners.
The minimum guarantee contracts concluded for the licensed territories and additional estimates
of proceeds will usually be in excess of the production costs for the film before the banks or
media funds will assume responsibility for financing the films. This is when production can really
begin. As a result of our outstanding reputation and many years of management experience
we are supported in the provision of finance by first-class partners including Société Générale,
Chase Manhattan, Union Bank of California and IMF Medienfonds.
The Marketing Department of Internationalmedia assists local partners in marketing films
and advises on optimum national presentation for the films. As soon as cinema revenues
or subsequent film exploitation achieve the agreed threshold amount, Internationalmedia
participates in the additional profit on a contractually agreed basis.
A big advantage in the business model of Internationalmedia is the low volume of equity
capital tied up and the low prefinancing costs. This is because production costs are in
general covered by bank financing, and the interest incurred in production is a budget item.
This permits a large number of film productions in relation to the capital deployed. A further
advantage is that the risks of film production are largely minimised because the completion
bond guarantees the finalisation of film projects and Internationalmedia practically bears none
of this risk. Production costs are partly covered by film funds like IMF Medienfonds.
Internationalmedia divisions have the following sources of income:
- reimbursement of project development costs plus a fee from the film budgets,
- financing charges, also known as financing fees, for organisation and provision of
the resources required to finance production,
- sales commissions on the world sales revenues derived from the films,
- potential profit-sharing in successful films and
- revenues from reissue sales rights that revert to Internationalmedia following expiry
of the original licence period and which can then be relicensed.
n _ Business _ Investment _ Development _ Deal _ Entertainment _ Cannes _ Actors _ Film scripts _ Financing _ Marketing _ Advantage _ Stock Market Listing _ International _ Growth _ Renée Zellweger _ First Look Deal _ London _ Telltale Films _ Production company _ The Quiet American _ Coope
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12
A n n u a l R e v i e w
Annual Review of the
Internationalmedia Group
MARCH 2000
ANNOUNCEMENT OF THE PLANNED STOCK MARKET LISTING
Intermedia Munich plans to take a stock market listing during the first half of 2000. The
intention is for shares in the international company to be quoted on the Neuer Markt in
Frankfurt. The company will use the additional capital to expand its leading international
market position.
MAY 2000
STRONG GROWTH IN THE FIRST QUARTER
Internationalmedia presents good growth figures in the first quarter of 2000. This enables
the Group to announce an increase in sales revenues from 3.7 million euros (pro forma) to
approximately 36.0 million euros (pro forma) for the period 1 January to 31 March 2000.
AWARD IN CANNES
Internationalmedia Film “Nurse Betty” wins the Best Screenplay Award at the Cannes Film
Festival. Renée Zellweger and Morgan Freeman play the lead roles in this fast-moving
comedy directed by Neil LaBute.
SUCCESSFUL STOCK MARKET LISTING CONCLUDED
Internationalmedia celebrates the successful launch of their shares (securities code
WKN 548 880) on the Frankfurt Stock Exchange on 18 May 2000. Under the management
of DG Bank and BNP Paribas a total of 6,502,500 no-par-value bearer shares are placed
between 9 and 16 May 2000. The issue volume on first-time listing is approximately
197.1 million euros.
JUNE 2000
NEW PRODUCTION AGREEMENT IN THE USA
Conclusion of an exclusive First Look Deal with Mark Johnson Productions gives Internationalmedia
access to rights for all levels of exploitation in the films of this production company.
SURPLUS ALLOCATION EXERCISED
Internationalmedia exercises in full the surplus allocation option (Greenshoe) triggered in
May during the stock market listing. Based on the current stock market capitalisation, Internationalmedia
ranks as the second strongest media stock behind EM.TV in the Neuer Markt.
The additional capital will be used to expand existing core business and for branching out
into lucrative new areas of business.
HONOUR FOR SERVICES TO FILM INDUSTRY
Nigel Sinclair, member of the Board of Management of Internationalmedia and Chairman of
the Board of Management of subsidiary Intermedia Film Equities in London, is awarded the
distinction of Commander of the British Empire (CBE) by Queen Elizabeth II. This award is
made for his services in California to the British film industry.
JULY 2000
IMPORTANT MANAGEMENT APPOINTMENT
Jere Hausfater, Executive Vice President for Film Purchasing and Business Affairs at
Buena Vista Film Sales, the global sales arm of the Disney Group, joins Internationalmedia.
He will be responsible for acquisition of quality feature films and the international distribution
and marketing of all our films.
nes _ Actors _ Film scripts _ Financing _ Marketing _ Advantage _ Stock Market Listing _ International _ Growth _ Renée Zellweger _ First Look Deal _ London _ Telltale Films _ Production company _ The Quiet American _ Cooperation _ Projects _ MIFED _ Box TV _ USA _ Europe _ Earnings _ Expan
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A n n u a l R e v i e w
ADDITIONAL COOPERATION PARTNERSHIP
IN THE UK
A First Look Deal has been concluded between Internationalmedia and Kate Winslet/Jim
Threapleton (Telltale Films). Under the agreement, Telltale Films will offer Internationalmedia
their rights, giving Internationalmedia access to distribution rights.
AUGUST 2000
NEW PRODUCER AGREEMENT
IN THE USA
Internationalmedia concludes an additional exclusive First Look Deal with production company
Saturn Pictures, operated by Nicolas Cage and his partner Norm Golightly. The deal with Saturn
Pictures is another producer agreement giving Internationalmedia distribution rights in films
in return for a share in development costs.
SEPTEMBER 2000
NEW FILM PROJECT
Producers Sydney Pollack and Anthony Minghella are to produce a film starring Michael
Caine and Brendan Fraser entitled “The Quiet American” for Internationalmedia, based on a
short story by Graham Greene. Internationalmedia holds the exploitation rights in this film.
OCTOBER 2000
COOPERATION AND SALES
PARTNERSHIP
Internationalmedia concludes a First Look Deal with production company C-2 Pictures.
Initial projects will be sequels to Box office hits “Basic Instinct” with Sharon Stone in 2001
and “The Terminator” in 2002 with Arnold Schwarzenegger. A joint venture has also been
agreed with Constantin Film AG for world distribution of two international cinema films.
PRESENTATION OF NEW FILM PROJECTS
AT THE FILM MARKET IN MILAN
Internationalmedia presents seven high-quality film projects with great potential at the MIFED
International Milan Film Market. Projected sales from these projects run to 230 million US
dollars.
NOVEMBER 2000
ENTRY INTO
TV PRODUCTION
Acquisition of a 24.9 per cent stake in Box TV Ltd lays the foundation stone for Internationalmedia’s
expansion into television. Box TV Ltd is planning three projects for Channel 4 and is
currently in negotiations with BBC, ITV and BSkyB, while also talking to television companies in
the USA and Europe. Internationalmedia will market the distribution rights for some of the
productions from Box TV Ltd.
n _ Business _ Investment _ Development _ Deal _ Entertainment _ Cannes _ Actors _ Film scripts _ Financing _ Marketing _ Advantage _ Stock Market Listing _ International _ Growth _ Renée Zellweger _ First Look Deal _ London _ Telltale Films _ Production company _ The Quiet American _ Coope
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A n n u a l R e v i e w
SUCCESSFUL JOINT-VENTURE
PARTNERSHIP
On the basis of a good experience with the existing Second Look Deal, Internationalmedia
expands the relationship with Outlaw Productions and concludes a First Look Deal for future
projects.
OUTSTANDING FIGURES
AFTER NINE MONTHS
After only nine months, Internationalmedia has already exceeded projected net income for
the year. Sales revenues have doubled over the same period for 1999 and pre-tax earnings
have also undergone a substantial hike over the previous half-year period. Consolidated
net income of 11.2 million euros is a particularly gratifying result, since it exceeds the projected
annual result which has been in the region of 10.6 million euros.
FURTHER IMPORTANT
MANAGEMENT APPOINTMENTS
Internationalmedia concludes a contract with Basil Iwanyk. Previously he has been Vice
President for Production at Warner Brothers and now takes responsibility for productions at
Internationalmedia. Iwanyk will focus on monitoring complex film projects with big commercial
potential. Michael Dragotto, former Vice President at Buena Vista Film Sales, also joins the
team at Internationalmedia. He will have responsibility for ongoing expansion of the fastgrowing
international distribution business under Jere Hausfater.
Special Topic of
Current Interest
Investment in Box TV Ltd
The acquisition of a 24.9 per cent interest in Box TV Ltd enabled Internationalmedia to join
forces with a reliable joint-venture partner in TV productions. The goal is to make this new
business area a driving force in the production of television content. This is a natural business
development for Internationalmedia where some of the projects developed for cinema may
finally be more suitable for TV.
Box TV Ltd is a new production company run by the former Head of Drama at Channel 4
in the UK, Gub Neal. Some of Gub Neal’s successes include “Cracker” from his time as an
Executive Producer at TV broadcaster Granada. The format for this series was sold to US TV
network and retitled “Fitz”. It became the biggest worldwide selling drama series originated
from the UK. Internationalmedia supports Box TV Ltd with operating capital and development
finance and will take care of distribution of their productions. Internationalmedia also retains
an option to increase its holding in the company.
Box TV Ltd has already received a production order for Channel 4. Further deals are about to
be concluded with two other UK broadcasters and a US TV company. Projects with other
television producers specializing in documentary, entertainment and children’s programming
are in discussion.
ion _ Projects _ MIFED _ Box TV _ USA _ Europe _ Earnings _ Expansion _ Business _ Investment _ Development _ Deal _ Entertainment _ Cannes _ Actors _ Film scripts _ Financing _ Marketing _ Advantage _ Stock Market Listing _ International _ Growth _ Renée Zellweger _ First Look Deal _ Lo
M M
R e p o r t
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M M
R e p o r t
No one understands love and romance like Mary
Fiore (Jennifer Lopez) who is the most prestigious
wedding planner in San Francisco and specializes
in making everyone else’s dreams of love come
true, but not her own. After a chance meeting with
a handsome doctor Steve (Matthew McConaughey)
Mary thinks that she has found her own true love
and finally it looks as though there could be a
man in her life. That is until she discovers she
has just fallen for the fiancé of her newest and
most important client, and she is soon to realize
that; sometimes the journey to the altar can be
more eventful than the marriage that follows.
ANNUAL REVIEW
MM. REPORT
SHARE“The
Wedding Planner“ > 2000
MM. Report
Jennifer Lopez
Matthew McConaughey
FINANCIAL STATEMENTS
erview _ DVD _ Increase _ Visitor Number _ Cinema Density _ Cinema Screen _ Movies _ Holland _ Major Studios _ Film Distributors _ Film Titles _ New Technology _ Market _ Trend _ Turnover _ Growth _ Position _ Sales Trend _ High Quality _ Internationalmedia _ North America _ Share _ EBIT
SEITE
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M M . R e p o r t
Economic Environment
Market Overview
The international entertainment market is continuing to grow and this is
having a positive effect both on the cinema market and on the video, DVD
and TV markets.
INCREASED TICKET PRICES AND INCREASED TICKET
SALES IN THE USA AND EUROPE
The world's cinema industry can look back at a number of successful years. In overall terms,
between 1995 and 2000, cinema ticket sales rose by 36 per cent in the USA and by 39 per
cent in Europe. This increase is due in part to a higher spend on leisure activities generally,
but other factors include the extensive refurbishment of film theatres, the development of
multi-screen cinemas and more hit films. In the USA and Europe higher ticket prices were
more significant than the increase in tickets sales in accounting for average annual increases
in revenue of 5.3 per cent and 5.6 per cent respectively.
USA: Increasing cinema revenues from higher ticket prices
and greater visitor numbers Source: MPA Worldwide Market Research
8.000
7.000
6.000
5.000
4.000
3.000
2.000
1.000
5,500 5,900 6,400 6,900 7,300 7,500
1,300 1,300 1,400 1,500 1,500 1,600
1995 1996 1997 1998 1999 2000
Visitor Numbers (in million) Ticket Sales (in million USD)
DjW *: 3.5 % DjW *: 5.3 %
* DjW: Average annual growth rates
HIGHEST CINEMA DENSITY IN AMERICA
We only have to look at a comparison of cinema density to see that cinema in America
occupies a much more prominent position as a leisure pastime than in Europe. According
to the latest statistics, there are an average of 3.5 cinemas per 100,000 inhabitants in
the USA, whereas in the EU member states there are around 2.8 cinemas for the same
number of people, some 20 per cent fewer.
A comparison of cinema screens shows an even greater divergence. Whereas in the USA
the statistics for 1998 show one screen per 7,900 inhabitants, for Europe the figure was
one for every 16,500.
Europe: Increasing ticket sales responsible
for increased cinema receipts Source: European Cinema Yearbook
5.000
4.000
3.000
2.000
1.000
3,017 3,375 3,732 4,039 4,120 4,202
663 708 761 819 812 832
1995 1996 1997 1998 1999 2000
Visitor Numbers (in million) Ticket Sales (in million 8)
DjW *: 3.9 % DjW *: 5.6 %
* DjW: Average annual growth rates
ures _ Income before tax _ Corporation Tax _ Financial Year _ Earnings per Share _ Positive Income _ Owned Films _ Nurse Betty _ Library Rights _ Serviced Films _ After Image _ Financing Income _ Synergy _ Integration _ Target _ Net Assets _ Shareholder _ Management _ Investment _
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22
M M . R e p o r t
AMERICAN MOVIES DOMINANT IN EUROPE
US productions account for some 75 percent of European box office receipts. With the
highest share in the Netherlands, at approximateley 90 per cent and the lowest in Austria,
at around 55 per cent.
Share of US movie productions
in European box office receipts
Holland
Germany
UK
Spain
Denmark
Sweden
Belgium
Finland (1997)
Switzerland
Luxembourg (1997)
Italy
France
Austria (1997)
Source: European Cinema Yearbook, 1998
0 10 20 30 40 50 60 70 80 90
89.8 %
83.9 %
82.0 %
78.6 %
77.8 %
76.3 %
76.1 %
73.1 %
72.3 %
68.4 %
65.2 %
64.0 %
55.0 %
IMPROVED MARKET SITUATION FOR
INDEPENDENT DISTRIBUTORS
Whereas sales earnings outside the USA for the seven major US film production companies
– or major studios as they are known – dropped by approximately 2 per cent to 2.85 billion
USD from 1999 to 2000, the independent distribution companies managed to increase their
sales in the same period by approximately 22 per cent to 2.79 billion USD.
International Market offers excellent opportunities
for independent film distributors Source: MPA, AFMA
30
20
10
0
-10
-20
-30
+ 22 %
- 2 %
1999 2000
independent
film distribution companies (AFMA),
international market volume:
2.79 billion USD
sales by Major Studios (MPA),
international market volume:
2.85 billion USD
This development highlights the fact that the international film market outside the USA is
growing and that the independent distributors in particular are benefiting from this shift.
Internationalmedia anticipates that in 2001 the turnover of the independent distributors on
the international market will exceed that of the major studios for the first time.
Yet the USA market is also seeing a shift towards independent distribution companies. In
1999, approximateley 53 per cent of all film titles were marketed in the US by independent
distributors, a figure which is already 10 per cent higher than in 1995.
nsparency _ Investor _ Net Operating Income _ Film Portfolio _ Assets _ Los Angeles _ IPO _ Balance Sheet _ Liability _ Expansion _ Cash Flow _ Financing Activities _ Operating Activities _ Acquisition _ Producer _ Partnership _ Success _ Film Distribution _ Growth Phase _ European Market _
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M M . R e p o r t
Positive Influence of
New Technologies
DVD BOOM ENSURES ADDITIONAL INCOME
The film industry has been boosted in particular by the rapid development of DVD (Digital
Versatile Disc) technology. According to one survey experts anticipate DVD sales of around
65 billion USD in 2010, a sevenfold increase on 2000. Today, just four years since DVD
was first launched on the market, some 14 million US households own a DVD player. By
comparison, the number of video recorders sold in the eighties reached 2 million and the
number of CD players 4 million.
Forecast international
DVD market volumes
[in billion USD] Source: Baskerville Communication Corp.
60 6
50 5
40 4
30 3
20 2
10 1
9.06 47.93 64.65
INTERNET TV BECOMING AN
ESTABLISHED TRANSMISSION FORMAT
8.19 40.64 52.29
0.87 7.29 12.36
2000 2005 2010
Acquisitions Rental
Internet TV represents another technology with healthy growth prospects. In 2000, 16.6 million
internet users throughout the world generated a turnover of 22 million USD in the Internet TV
sector - and the trend is upwards. Industry experts forecast that in eight years' time 109.9
million Internet users will generate revenues of 7.1 billion USD worldwide. Growth in this area
is directly proportional to the demand for programmes in this sector, meaning that demand
for audiovisual content from independent film distribution companies is set to rise.
Forecast development of the Internet TV market
[in billion USD] Source: Paul Kagan Associates Inc. (1999)
7
6
5
4
3
2
1
0.01 0.22 1.01 2.55 4.57 7.10
1998 2000 2002 2004 2006 2008
2.4 16.6 42.8 70.8 90.2 109.9
Internet TV users in millions
Sales and
Income Position
Continued Profitable Growth
In the financial year 2000 Internationalmedia
succeeded in expanding its
market position as a leading international
company developing and distributing
high-quality feature films. Compared
with the previous year (unless otherwise
stated, the previous year's figures relate
to the pro forma Consolidated Financial
Statements as at 31.12.1999) group sales
rose by 34.0 million euros to just under
149.7 million euros.
Sales trend
me Cinema Sector _ Sales Activities _ Sundance Film Festival _ Portfolio _ Owned Films _ The Wedding Planner _ Blow Dry _ Nurse Betty _ Where the Heart Is _ After Image _ Staff _ Employees _ Motivation _ Share Option Scheme _ Value _ Parent Company _ IM Filmproduktions- und Vertriebs GmbH
[in million 8]
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
115.7 149.7
1999 2000
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26
M M . R e p o r t
SALES BY REGION
Compared with last year, Internationalmedia increased sales by a total of 29 per cent. In North
America, sales increased by just under 33 per cent to a total of 42.0 million euros. The European
share of sales income rose in the financial year 2000 by 19 per cent to 71.9 million euros,
while in Asia sales fell 8.2 per cent to 9.0 million euros.
2000 1999 Change Share
[in T8] [in T8] [in T8] [in %] [in %]
Europe 71,852 60,477 11,375 18.8 48.0
North America 41,996 31,674 10,322 32.6 28.1
Asia 9,019 9,829 -810 -8.2 6.0
Other regions 13,222 8,865 4,357 49.1 8.8
Finance charges 13,573 4,875 8,698 178.4 9.1
Total 149,662 115,720 33,942 29.3 100.0
Significantly Improved
Income Position
Compared with the previous year, the EBIT increased by more than 110 per cent to 27.5 million
euros. This figure includes the extraordinary effect of the one-off exchange rate gain of
5.9 million euros, which is shown under other trade income.
Income before tax rose to 33.2 million euros, a threefold increase. Income after tax
increased to 19.7 million euros, a figure which includes the extraordinary effect of a reduction
in corporation tax to 25 per cent.
Significantly improved income position
[in million 8]
35.0
30.0
25.0
20.0
15.0
10.0
5.0
12.9 27.5 11.0 33.2 7.5 19.7
EBIT result result
before tax after tax
1999 2000
Effects of the Corporate
Tax Reform Act
Income after tax is currently subject to release of deferred taxation. Also, as a result of
the reduction in corporation tax to 25 per cent as part of the overall corporation taxation
reforms, a net liability of approximately 2.0 million euros results from the application of
the lower tax rate when capitalising the losses carried forward.
o. KG _ Pacifica Film Distribution LLC _ Pacifica Film Development Inc. _ Worldwide Exploitation _ Film Production _ Intermedia _ Library Films _ Frankfurt Stock Exchange _ Greenshoe Option _ IPO _ Market Position _ Overview _ DVD _ Increase _ Visitor Number _ Cinema Density _ Cinema
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28
Earnings per Share
Significantly Improved
In the last financial year Internationalmedia more than doubled earnings per share, from
0.31 euros to 0.67 euros.
Positive Income Position
in All Segments
Income position by segment
[in million 8]
140.0
120.0
100.0
80.0
60.0
40.0
20.0
M M . R e p o r t
“OWNED” FILMS
116.4 32.0 19.7 0.9 13.6 13.6
“Owned” Films “Serviced” Films Financing Income
Sales 2000
Gross income 2000
The “Owned” films segment, with a turnover of 116.4 million Euros, made the major contribution
with films including “Enigma”, “The Wedding Planner”, “Whipped”, “Blow Dry”, “Nurse Betty”,
“The Crow: Salvation”, “The Calling”, and “Where the Heart Is”.
The exploitation of library rights also generated further income. The greater number of films
plus bigger budgets, compared with previous years, also had a positive overall effect on
results.
“SERVICED” FILMS
In the “Serviced” film segment, “Small Time Crooks”, “After Image”, “Just Looking” and
“Sunburn” were delivered, the first proving to be the biggest earner. This segment generated
total receipts of 19.7 million euros.
FINANCIAL INCOME
Last year work began on production of a number of promising films. Financing income
totalling 13.6 million euros was generated, making a 100 per cent contribution to gross
income.
een _ Movies _ M. Hollholland _ Major Studios _ Film Distributors _ Film Titles _ New Technology _ Market _ Trend _ Turnover _ Growth _ Position _ Sales Trend _ High Quality _ Internationalmedia _ North America _ Share _ EBIT _ Figures _ Income before tax _ Corporation Tax _ Financial Ye
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30
M M . R e p o r t
Positive Financial Position
The financial result for the fiscal year 2000 of 5.7 million euros was mainly due to the investment
of income from the IPO in May 2000. The income has been invested in low risk time deposits
with terms of between one and six months. In view of the net credit balance that has existed
since the beginning of the year, Internationalmedia expects a further increase in the financial
income for the current financial year.
Savings through Increased
Synergies
We are pleased to report that the integration process within the Internationalmedia Group
has progressed far more quickly than was first assumed. Apart from a few exceptions,
the most important of the integration targets set had already been achieved by the end
of the financial year 2000. The bundling of financial activities within Internationalmedia, the
standardisation of corporate communications and the logical merging of Accounts and other
operating units were particularly important in this respect.
Value Contribution Improved
Internationalmedia increased net operating income, used as the basis for calculating the
return on capital employed at Group level, by 15.5 million euros. Interest on net assets
was also increased, from 9.8 per cent to an excellent 11.2 per cent. This confirms that Internationalmedia
is in a strong position to improve the value of the company for the benefit of
shareholders.
Implementation of
Controlling Models
In the course of the company merger, a standard control model was developed to ensure
a value-led management and control of the Group. The individual controlling models allow and
promote decentralised responsibility, inter-departmental transparency and also a capital
market-centred investment management in all areas of the company. In the consolidated
financial statements, the term “net operating income” is a capital market-centred variable
representing the income after tax. It is related to the capital used in the Group to calculate
the return on net assets (RONA). This illustrates to what extent the interest claim of the
investors is earned or exceeded. The interest claim and the average capital costs of the
Group are derived from the minimum return which investors expect for the equity and
loan capital invested. These capital costs are basically determined by the interest rate for
long-term securities and by a risk premium for investments in shares. Consequently, the Group
can expect weighted average capital costs of 8.8 per cent after tax.
The net operating income derived from the annual profit rose in the year under review
by 15.5 million euros to 23.6 million euros and therefore resulted in 11.2 per cent return
on net assets (compared with 9.8 per cent in 1999). This corresponds to an increase
of 1.4 percentage points.
Internationalmedia is also defining value contribution targets for the Group's individual business
segments as part of its strategic value management. To this end, both the returns and the
growth rates of competitors in the industry are analysed using benchmarking processes. In
this respect Internationalmedia aligns itself primarily with the major studios.
arnings per Share _ Positive Income _ Owned Films _ Nurse Betty _ Library Rights _ Serviced Films _ After Image _ Financing _ Income _ Synergy _ Target _ Net Assets _ Shareholder _ Management _ Investment _ Transparency _ Investor _ Net Operating Income _ Film Portfolio _ Assets _ Los A
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M M . R e p o r t
Reconciliation to Jan.-Dec. 2000 Jan.-Dec. 1999
net operating income [in T8] [in T8]
Consolidated annual profit 19,685 7,485
+ interest expense 314 529
= corrected consolidated annual profit 19,999 8,014
+ depreciation for Goodwill 3,557 0
= Net operating income (NOI) 23,556 8,014
Reconciliation to Jan.-Dec. 2000 Jan.-Dec. 1999
net asset [in T8] [in T8]
Fixed assets 121,678 149,474
+ inventories 23,883 5,044
+ accounts receivable 72,788 94,539
+ liquid assets 191,338 30,376
+ capitalised deferred taxation 10,301 0
+ deferred charges and prepaid expenses 29 114
+ cumulative depreciation for Goodwill 3,557 0
- production-related liabilities - 64,107 -149,412
- reserves - 64,063 - 48,673
- adjustment of liquid assets - 85,000 0
Net assets 210,404 81,462
Return on net assets (RONA) 11.2 % 9.8 %
Balance Sheet Structure
and Investments
Sustained Increase in
the Balance Sheet Total
The total assets of Internationalmedia have increased since 1999 by 140.4 million
euros to 420.0 million euros. The fixed assets have decreased by a total of
27.8 million euros. This is mainly due to the considerable decrease in the film
portfolio through depreciation in connection with deliveries made. On the
other hand, the property assets have increased following the purchase of
an office building in Los Angeles for a total of 11.5 million euros.
Balance sheet structure Shareholders’ Equity and
[in million 8] Assets Liabilities
500.0
450.0
4000.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
279.6 420.0 279.6 420.0
149.5
130.1
121.7
298.3
The current assets have increased by 129 per cent to 298.3 million euros, of which 161.0 million
euros is mainly due to liquid assets. On the other hand, receivables dropped by 21.8 million
euros, whereas the other current assets (capitalised development costs and also capitalised
deferred taxation) increased by 29.1 million euros.
Equity has grown by 207.1 million euros to 288.5 million euros since the beginning of the
year. Of this, 197.1 million euros was in the form of income from the IPO. The equity was
used to offset IPO costs of 8.3 million euros. The equity ratio has increased by a total of 40
percentage points to 69 per cent as a result.
81.5
198.1
288.5
131.5
1999 2000 1999 2000
current assets
non current assets
shareholders’ equity
liabilities
es _ IPO _ Balance Sheet _ Liability _ Expansion _ Cash Flow _ Financing Activities _ Operating Activities _ Acquisition _ Producer _ Partnership _ Success _ Film Distribution _ Growth Phase _ European Market _ Home Cinema Sector _ Sales Activities _ Sundance Film Festival _ Portfolio _ Owned Films _
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M M . R e p o r t
Ratios Jan.- Dec. 2000 Jan.-Dec. 1999
Equity
Equity ratio* (per cent)
Total Assets
68.7 % 29.1 %
Equity-to-fixed Equity
237.1 % 54.5 %
assets ratio* (per cent) Fixed assets
Debt Current debt
74.9 % 69.0 %
structure* (per cent) Total liabilities
Of the outside funds totalling 131.5 million euros, 49 per cent are made up of reserves, 25
per cent of financial debts and 26 per cent of other liabilities. Of the 64.1 million euro reserves,
the biggest share - 36.2 million euros - is set aside for formal payment liabilities. 10.4 million
euros are for deferred taxation liabilities and 13.8 million euros for income tax reserves.
Compared with the 1999 pro forma Financial Statements, finance debt fell to 33.0 million
euros. Other liabilities decreased to 34.5 million euros.
Operating expenses
[in %]
70.0
60.0
50.0
40.0
30.0
20.0
10.0
* Based on 31.12.2000 and 12.31.1999
17 % 9 % 69 % 5 %
Project Distribution Administration Other
development costs costs costs operating expenses
INVESTMENTS IN DEVELOPMENT AND MARKETING
In line with the company's continuous expansion, operating expenses in the financial year
2000 increased to 21.9 million euros, but were maintained at a low level in overall terms. Most
of the expenditure was due to sales and administration costs, which rose to 17.0 million euros.
The increase in costs resulted from investments to expand the business, with a high proportion
spent on increasing staff numbers in the film development and sales sectors. The effects of
additional start-up investments were also felt; however, these will result in considerable future
cost savings.
Cash Flow
After adjustment for changes to consolidation parameters and exchange rate effects, the
cash flow from operating activities rose to 68.1 million euros in the year under review. The
significant increase in the financial profit (before expenses and income not affecting payments)
was partly offset by a higher current working capital for business reasons. The cash flow from
investing activities was -94.0 million euros and was therefore also affected by the continuing
expansion of our film business in the year under review. Short-term and medium-term loans
were taken up to cover the capital required for the film finance business. Together with the
IPO, this produced a cash flow from our financing activities of 217.2 million euros, resulting in
an overall increase in liquid assets to 191.3 million euros.
Cash Flow Analysis
[in million 8 ]
-48.7
-94.0
39.2
68.1
10.5
217.2
-150 -100 -50 0 50 100 150 200 250
1999 2000
cash flow
from operating activities
cash flow
from investing activities
cash flow from
financing activities
Wedding Planner _ Blow Dry _ Nurse Betty _ Where the Heart Is _ After Image _ Staff _ Emplyees _ Motivation _ Share Option Scheme _ Value Parent Company _ IM Filmproduktions- und Vertriebs GmbH & Co. KG _ Pacifica Film Distribution LLC _ Pacifica Film Development Inc. _ Worldwide Exploita
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M M . R e p o r t
Acquisition of Film Rights
Internationalmedia actively cooperates with various producers to develop its own
productions. Cooperation agreements exist between Internationalmedia and a
number of producers to underpin these partnerships. This means that production
services can be obtained without tying up large amounts of capital. Also, the
additional acquisition of film libraries is monitored continuously so that potential
packaging – a combination of film rights from film libraries – offered in conjunction
with the rights to top films can be specifically marketed.
SIGNING OF PRODUCTION CONTRACTS
Internationalmedia Group has entered into a series of development and production contracts
with well-known producers and directors. These include Mirage Enterprises (Sydney Pollack,
Anthony Minghella - “Sliding Doors”), Baltimore Spring Creek (Barry Levinson, Paula Weinstein -
“The Perfect Storm”), Mark Johnson Productions (Mark Johnson - “Rain Man”), C-2 Pictures
(Mario Kassar, Andy Vajna - “Terminator”), Outlaw Productions (Robert Newmyer - “ sex,
lies and videotape”), Saturn Pictures (Nicolas Cage - “The Rock”), Scott Free Productions
(Ridley & Tony Scott - “Top Gun”) and Telltale Films (Kate Winslet - “Enigma”).
After an in-depth examination of ideas and scripts, a decision is reached whether a project
offers commercial potential or not. If it does, the rights are acquired and the development
of the film then starts. These business relationships with well-known production companies
create an image which has a positive effect on the success of Internationalmedia.
Film Distribution
The international film market is in a steady growth phase. Increased licensing
activity in some countries is helping offset a fall in demand for feature films in
others. For example, the last financial year saw an improvement in Australia and
South Korea, whereas in the European market, because of the poor performance
of the euro, price levels were not always maintained. The steady growth in new
multi-screen cinemas internationally – particularly in Latin America and South East
Asia – the refurbishment of existing cinemas and also the excellent development
of DVD technology in the home cinema sector point to an overall expansion of
the entertainment sector.
Internationalmedia is sparing no effort in exploiting this international growth. Restructuring
has also taken place within the Group to promote the company's expansion policy. As a
result, Sales, Finance, Business and Legal Affairs, Supply, Collection and other central
departments are now concentrated in Los Angeles. Marketing and also parts of the Production
Department are run from London. The main sales activities concentrate on film
festivals such as MIFED, AFM (American Film Market) and Cannes.
Selected film markets
February AFM (American Film Market) Santa Monica, L.A., USA
May Cannes Intl. Film Festival Cannes, France
October MIFED Milan, Italy
Selected film festivals
January Sundance Film Festival Salt Lake City, Utah, USA
February Berlin Intl. Film Festival
Award: Golden Bear
Berlin, Germany
May Cannes Intl. Film Festival
Award: Golden Palm
Cannes, France
September Venice Film Festival Venice, Italy
Award: Golden Lion
_ Film Production _ Intermedia _ Library Films _ Frankfurt Stock Exchange _ Greenshoe Option _ IPO _ Market Position Overview _ DVD _ Increase _ Visitor Number _ Cinema Density _ Cinema Screen _ Movies _ Holland _ Major Studios _ Film Distributors _ Film Titles _ New Technology _ Market _ Trend _
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M M . R e p o r t
Film Portfolio
“OWNED” FILMS
DELIVERED IN 2000
Title Main partner Summary Exploitation Areas
in creative area term/rights (territories)
[delivery date]
Enigma Production: March 1943: unlimited worldwide
Jagged Films /Broadway Nazi U-boats changed excl.
Productions/Meespierson Film CV/ their Enigma code. Germany
Senator Film Produktions GmbH A British convoy
Cast: with 10,000 men
Dougray Scott, Kate Winslet, on board is in
Jeremy Northam deadly danger.
Director:
(December 2000) Michael Apted
The Wedding Production: A romance unlimited worldwide
Planner Tapestry Films/IMF/Columbia between a wedding
Pictures Corp./Dee Gee Entertain- planner and one of her
ment/Prufrock Pictures clients
Cast:
Jennifer Lopez,
Matthew McConaughey
Director:
(September 2000) Adam Shankman
Whipped Production: Three single men unlimited worldwide
Hi-Rez Films break female hearts excl. North
Cast: for fun. But their sport America
Amanda Peet, comes to a sticky
Brian Van Holt, end when the
Jonathan Abrahams mysterious Mia turns
Director: the tables.
(December 1999) Peter M. Cohen
Blow Dry Production: The inhabitants of unlimited worldwide
Mirage Enterprises/ a small, insignificant
West Eleven Films/IMF town in Yorkshire
Cast: are totally unprepared
Alan Rickman, when the glamour and
Natasha Richardson glitter of the national
Heidi Klum hairdressing champion-
Director: ships suddenly enters
(September 2000) Paddy Breathnach their lives.
Title Main partner Summary Exploitation Areas
in creative area term/rights (territories)
[delivery date]
Nurse Betty Production: Following the death unlimited worldwide
Propaganda Films/IMF/Abstrakt of her husband,
Films/Gramercy Pictures/Pacifica a small town waitress
Films/abstrakt pictures escapes to the world
Cast: of stars and soap
Morgan Freeman, operas and ends up
Renée Zellweger, in Hollywood.
Greg Kinnear
Director:
(March 2000) Neil LaBute
The Crow: Production: Falsely accused and unlimited worldwide
Salvation Edward R. Pressman Film condemned as a
Corporation / IMF/ Fallen Bird murderer, Alex Corvis
Productions/Jeff Most Productions returns from the dead
Cast: as a crow to take
Kirstin Dunst, revenge on the
Eric Mabius, real murderer
Fred Ward of his fiancée.
Director:
(March 2000) Bharat Nalluri
The Calling Production: The fate of the world unlimited worldwide
Constantin Film / IMF is in the hands
Cast: of a young woman
Laura Harris, whose task is to avert
Richard Lintern,
Alex Roe
Director:
the apocalypse.
(September 2000) Richard Caesar
Where Production: Heavily pregnant term worldwide
the Heart Is Wind Dancer Productions 17 year old Novalee deal excl. North
Cast: gives birth in a super- America, UK,
Natalie Portman, market and becomes Ireland, Australia,
Ashley Judd a media star as a South Africa,
Director: result. English-speaking,
Matt Williams African
countries, British
(April 2000) Caribbean
nover _ Growth _ Position _ Sales TrendHigh Quality _ Internationalmedia _ North America _ Share _ EBIT _ Figures _ Income before tax _ Corporation Tax _ Financial Year _ Earnings per Share _ Positive Income _ Owned Films _ Nurse Betty _ Library Rights _ Serviced Films _ After Image _ Financi
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M M . R e p o r t
“SERVICED” FILMS
FILMS DELIVERED IN 2000
Title Main partner Summary Exploitation Areas
in creative area term/rights (territories)
[delivery date]
Small Time Production: The latest comedy 10 years worldwide excl.
Crooks Sweetland Films from Woody Allen North America
Cast: follows the illegal 3 months’
Woody Allen, dealings of a former notice
Tracey Ullman, dishwasher and his
Hugh Grant wife who both dream
Director: of big money.
(June 2000) Woody Allen
After Image Production: In a race against time, unlimited worldwide
Catch 23 Entertainment/The Sun- a crime photographer
dance Institute/Whitetail Images and a young woman
Cast: struggle against a
John Mellencamp, psychopath who is
Louise Fletcher, obsessed with killing.
Billy Burke
Director:
(October 2000) Robert Manganelli
Just Looking Production: 1955: Faced with 10 years worldwide excl.
Camellia Productions anxiety about his own North America
Cast: sexual experiences, 3 months’
Ryan Merriman, the teenage Lenny notice
Joy Franquinha discovers voyeuristic
Director: pleasures.
(October 2000) Jason Alexander
Sunburn Production: The Irish American 10 years worldwide excl.
Sweetland Films immigration theme North America
Cast: seen from a new 3 months’
Paloma Baeza, angle. Penniless kids notice
Cilliau Murphy from Dublin spend a
Director: summer working on
(December 2000) Nelson Hume Long Island.
Staff
Our Employees Guarantee Our
Worldwide Success
Motivated employees are the most important capital resource underpinning the
worldwide success of Internationalmedia. In the financial year 2000 the company
continued on its path of organic growth, with the number of people employed by
the company increasing to 88. At year end Internationalmedia AG had 9 staff in
Munich, Intermedia Film Equities Ltd had 46 in London, Intermedia Film Equities
USA, Inc. had 23 in Los Angeles, and Pacifica Film Development Inc. had 10. The
average number of employees for the year was 76.
The management structures of Internationalmedia were further adapted to meet the demands
placed on a fast growing, global organisation and experienced managers were recruited
from the film industry. These include in particular Jere Hausfater (President of Motion Picture
Group of Intermedia Inc., Los Angeles), who was until recently Executive Vice President
for Film Purchase and Business Affairs at Buena Vista Film Sales, Basil Iwanyk (President,
Worldwide Production of Intermedia Inc., Los Angeles), formerly Vice President Production
at Warner Brothers, and Deana Elwell (COO world wide Intermedia), formerly CEO of the
Polygram Television Group.
The principal factors behind the motivation of our employees are the open corporate culture and
also the involvement of the staff in the company’s success via the share option scheme. This
scheme is open to employees who have already actively supported the IPO, new employees
and also employees of associated companies. The availability of option rights should reduce
the risk of key staff departing and also encourage employees and members of the board to
secure the medium and long term success of IM Internationalmedia AG and its subsidiaries.
In this way, Internationalmedia has created a solid base for further corporate growth and at
the same time is increasing the value of the company in the interests of the shareholders.
ome _ Synergy _ Integration _ Target _ Net Assets _ Shareholder _ Management _ Investment _ Transparency _ Investor _ Net Operating Income _ Film Portfolio _ Assets _ Los Angeles _ IPO _ Balance Sheet Liability _ Expansion _ Cash Flow _ Financing Activities _ Operating Activities _ Acquisition _
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42
M M . R e p o r t
Legal Corporate Structure
The Internationalmedia Group consists of the parent company, IM Internationalmedia
AG, which has a direct interest in the four wholly-owned subsidiaries
IM Filmproduktions- und Vertriebs GmbH & Co. KG, Grünwald, Pacifica Film
Distribution LLC, Los Angeles, Pacifica Film Development Inc., Los Angeles, and
Intermedia Film Equities Ltd, London. The Group also includes several small
companies in which IM Internationalmedia AG has an indirect financial interest
via the above subsidiaries. A detailed list of the subsidiaries is given in the
Notes on page 72. The business areas of the four main subsidiaries are as
follows:
IM FILMPRODUKTIONS- UND VERTRIEBS GMBH & CO. KG
IM Filmproduktions- und Vertriebs GmbH & Co. KG was founded in September 2000. The aim
of the company is the development, financing and production of feature films and their
licensing.
PACIFICA FILM DISTRIBUTION LLC
Pacifica Film Distribution LLC was founded in February 1997. The company organises the
worldwide licensing of feature films in all media sectors.
PACIFICA FILM DEVELOPMENT INC.
Pacifica Film Development Inc. is responsible for finding potentially successful film material
and for its subsequent development.
INTERMEDIA FILM EQUITIES LTD
The principal aim of Intermedia Film Equities Ltd (Intermedia) is the worldwide exploitation
of film rights. As a rule, the company licenses all the rights in the complete film production
and distribution chain to subdistributors, who then take over the marketing of the individual
distribution stages in their own territory. In general, the films sold by Intermedia can be
divided into the following categories:
1. “Owned” Films: Intermedia organises and structures the financing of film projects
and acquires the copyright to these films. By owning the copyright, Intermedia
is in a position to exploit the film rights all over the world via all the distributions
stages without time limit.
2. “Serviced” Films: Intermedia organises the distribution of films as a service
provi der without owning the copyright and levies a commission for this service.
3. “Library” Films: The film library consists of owned, acquired and serviced films.
ducer _ Partnership _ Success _ Film Distribution _ Growth Phase _ European Market _ Home Cinema Sector _ Sales Activities _ Sundance Film Festival Portfolio _ Owned Films _ The Wedding Planner _ Blow Dry _ Nurse Betty _ Where the Heart Is _ After Image _ Staff _ Emplyees _ Motivation _ Share
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44
M M . R e p o r t
Initial Public Offering
On 18 May 2000 IM Internationalmedia AG floated on the Neuer Markt of the
Frankfurt Stock Exchange. A total of 5,625,000 bearer shares with a theoretical
share of the capital of 1 euro each was issued at a price of 32 euros. A further
877,500 shares were placed on the Neuer Markt on 15 June 2000 to service
the Greenshoe option.
Part of this income was invested in expanding the company's core business areas of film
project development, finance and distribution.
The IPO had a major beneficial publicity effect, particularly in the USA. The funds generated
from the IPO will be used to expand activities in both the core business and in new areas.
Following the IPO, we have been able to expand our market position, consolidate existing
contacts and gain new business contacts.
Corporate Communications
The Internationalmedia Group attaches great importance to active corporate
communications. Intensive national and international PR work, specific investor
relations work, a comprehensive website with up-to-date information and also
detailed quarterly reports are evidence of this open communications policy.
PR WORK
Regular interviews and press releases and ad hoc business bulletins provide a detailed insight
into the life of the company at any time. In addition to the mandatory quarterly reports,
Internationalmedia now also publishes reports on planned productions, senior appointments
and acquisitions.
AD HOC BULLETINS
In the year under review Internationalmedia published more than one ad hoc bulletin per
month, although only information relevant to the stock price is covered under this category.
INVESTOR RELATIONS
An important pillar of the corporate communications of Internationalmedia is direct contact
with investors. Whether it be at roadshows, face-to-face discussions with investors (organised
by ABN Amro, BNP Paribas, DG Bank, Dresdner Bank, Merrill Lynch, Sal. Oppenheim and
Morgan Stanley, among others) or at investor conferences (e.g. DVFA media conferences in
Frankfurt, Munich, London, Zürich, Cologne, Hanover and Tegernsee), Internationalmedia
is always represented by at least one board member.
Direct responses by telefone, e-mail and fax to the numerous enquiries received further
support the company’s communication activities administered by the Investor Relations
Department. Detailed information is also provided on our extensive website and through
quarterly reports and information brochures.
tion Scheme _ Value _ Parent Company _ IM Filmproduktions- und Vertriebs GmbH & Co. KG _ Pacifica Film Distribution LLC _ Pacifica Film Development Inc. _ Worldwide Exploitation _ Film Production _ Intermedia _ Library Films _ Frankfurt Stock Exchange _ Greenshoe Option _ IPO _ Market Position
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M M . R e p o r t
Risks Management
Internationalmedia is exposed to a number of risks specific to the industry that
may influence the financial, asset and income position of the Group.
Monetary Risks
IM Internationalmedia AG's liquid assets are mainly invested in the money markets. This
balances the need to safeguard the Group's immediate ability to pay with finding the best
possible return.
All investments are made in time deposits with a term of between one and six months. Such
investments are always based on the LIBOR (London Interbank Offered Rate) and, because
of their much smaller risk factor, are preferred to higher risk securities offering a higher return.
In general, liabilities connected with film productions are secured by the film itself and also
by what is known as the completion bond. This is a completion guarantee granted by an
insurance company. There is usually no recourse to the company under such arrangements.
Exchange Rate Risks
Since the functional currency (main transaction currency of the Group) of Internationalmedia
is the US dollar, nearly all IPO proceeds were converted into USD shortly after the IPO. This
avoided exchange rate risks at an early stage. Internationalmedia's exposure to other risks in
this sector is minimal.
Risks Inherent in
the Industry
INCREASING ACQUISITION AND
PRODUCTION COSTS
Overall, the costs of producing, marketing and exploiting films have generally risen considerably
in the last decade. As part of its business strategy, Internationalmedia also intends in the future
to acquire film rights and finance films which - often because of a higher budget – have a
higher production value and therefore a greater potential to reach a broader public. An
experienced management, defined corporate communication and decision-making channels
and also strict cost control take these factors into account. In addition, the artistic and public
value of the films marketed is secured by well-known independent production companies.
FIERCE COMPETITION
The producing, financing and licensing of films is a highly competitive area. Since Internationalmedia
is one of the few companies with worldwide distribution, the company has established
an independent position in the market. Continuous emphasis on developing top-quality films
helps maintain this position.
RISKS CONNECTED WITH
ACQUISITIONS
The expansion strategy of IM Internationalmedia AG includes the worldwide acquisition of
other suitable companies. Problems may arise when merging different corporate cultures,
jobs, offices and employees. IM Internationalmedia AG addresses such issues through fast,
targeted recruitment to key positions and by maintaining a high level of transparency in
internal processes.
rview _ DVD _ Increase _ Visitor Number _ Cinema Density _ Cinema Screen _ Movies _ Holland _ Major Studios _ Film Distributors _ Film Titles _ New Technology _ Market _ Trend _ Turnover _ Growth _ Position _ Sales TrendHigh Quality _ Internationalmedia _ North America _ Share _ EBIT _ Fig
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48
M M . R e p o r t
FILM PIRACY
Film piracy is widespread in many parts of the world (e.g. South America, Asia and also the
Eastern bloc countries). The Motion Picture Export Association, the American Film Marketing
Association and also the American Film Export Association monitor piracy and have banned
exports to certain countries in order to put pressure on the various governments.
POTENTIAL STRIKE IN THE USA
There is still uncertainty surrounding a possible strike by writers and actors in the USA, which
could start on 30 June 2001 when the present union contracts expire. This strike would affect
all American actors and writers. However, since this risk has been anticipated for some time,
Internationalmedia has organised projects planned for 2001 with the intention that they can
all be completed before a possible strike. Provided that this strike does not last for more
than a few months, Internationalmedia does not believe that this situation will affect subsequent
years.
Supplementary Information
Events After the Fiscal Year
EXCLUSIVE FIRST LOOK DEAL
WITH BARRY LEVINSON AND PAULA WEINSTEIN
Internationalmedia signed a further First Look Deal with Barry Levinson’s and Paula
Weinstein’s Baltimore/Spring Creek Pictures in January 2001. Internationalmedia will finance
the development of their projects, receive the copyrights and distribute them. The first
project realised under the deal is “In the Heart of the Sea”, a novel by Nathaniel Philbrick,
who has just won the National Book Award.
VISONO
In January 2001, IM Internationalmedia AG continued its corporate strategy of positioning
itself for future developments in the Internet, Web TV and Video-on-Demand by the acquisition
of a 25.1 per cent stake in VISONO GmbH, Berlin.
LARGO FILM LIBRARY
With the purchase of Largo Entertainment Film Library, Internationalmedia has acquired 25
films including “Point Break” (Keanu Reeves and Patrick Swayze), “Malcolm X”, “White
Squall” (Jeff Bridges), “G.I. Jane” (Demi Moore), “Affliction” (James Coburn in an Oscar
winning performance), and has thereby taken a large step towards a further strategic goal
of expanding its film portfolio. Inernationalmedia now holds exploitation rights for more than
100 films, offering attractive earnings potential.
_ Income before tax _ Corporation Tax _ Financial Year _ Earnings per Share _ Positive Income _ Owned Films _ Nurse Betty _ Library Rights _ Serviced Films _ After Image _ Financing Income _ Synergy _ Integration _ Target _ Net Assets _ Shareholder _ Management _ Investment _ Transpa-
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50
M M . R e p o r t
Outlook
The Board of IM Internationalmedia AG is convinced that sales can be increased
considerably again this year and expects 355 million euros from the eight feature
films due fordelivery. It also expects further serviced receipts from the sales of
its own film library. Internationalmedia will also sell two to four films worldwide
in exchange for a commission. IM Internationalmedia AG is expecting a total
consolidated EBIT of 47 million euros in 2001.
OPENING UP NEW AREAS OF BUSINESS
For IM Internationalmedia AG, the most important aims for the financial year 2001 include
developing new, related business sectors. For example, we will be examining the commercial
arguments for founding an own label to take over the production and worldwide marketing
of soundtracks of Internationalmedia films.
The new media sector will also be expanded and its possibilities will be used for promoting
Internationalmedia films. Among other things, we want, in future, to employ more attractive
websites to create additional sales potential over and above the already successful B2B
marketing platforms.
POSITIVE MARKET SITUATION
Trends in the international entertainment market are, for the most part, positive. This is
confirmed both by the sustained increases in cinema income – both the USA and Germany
returned record results in 2000 - and the successful development of entertainment media
as a whole, most notably DVD.
International film markets have also recorded positive growth in overall terms. In the first
few months of 2001 Internationalmedia consolidated its competitive position in the US, a vitally
important market for the film business, by presenting the following new film projects:
K19 – The Widowmaker
Harrison Ford, Liam Neeson
K-Pax
Kevin Spacey, Jeff Bridges
Basic Instinct II
Sharon Stone
Adaptation
Nicolas Cage
The Quiet American
Michael Caine, Brendan Fraser
The Plague Season
Kurt Russell
National Security
Martin Lawrence
Iris
Judi Dench, Kate Winslet
Additional films will be set on production in the course of the year 2001.
In the European marketplace, and in Germany in particular, there has been little evidence of
the subdued mood expected after the crash on the Neuer Markt. Demand from our business
partners for high-quality cinema films is as high as ever. After a number of weaker years,
signs of renewed interest are also beginning to emerge from Asia – mainly Japan – as well as
from Italy and Spain.
cy _ Investor _ Net Operating Income _ Film Portfolio _ Assets _ Los Angeles _ IPO _ Balance Sheet _ Liability _ Expansion _ Cash Flow _ Financing Activities _ Operating Activities _ Acquisition _ Producer _ Partnership _ Success _ Film Distribution _ Growth Phase _ European Market _ Home Cine
S h a r e

S h a r e
In March 1943, Britain’s elite team of young codebreakers
are facing their worst nightmare: Nazi
U-boats have unexpectedly changed their
Enigma code and a convoy with 10,000 men is
in peril. The authorities turn for help to Tom Jericho
(Dougray Scott), a brilliant young mathematician
and code-breaker. Unbeknown to his colleagues,
Jericho has another equally baffling enigma of
his own to unravel: Claire (Saffron Burrows), the
woman he loves, has disappeared and he suspects
ANNUAL REVI
there may be a spy in their midst. He enlists the help
of Hester (Kate Winslet) and together they race
against time to solve the double enigma of the
code and Claire.
S h a r e
MM. REPORT
SHARE
FINANCIAL STATE
“Enigma“ > 2000 /2001
Kate Winslet
Dougray Scott
Free Float _ Stock Market Listing _ Holding Period _ Management Staff _ Share Option _ Company _ Trading _ Declaration of Consent _ Performance _ German Stock Exchange _ Portfolio _ Success _ Nemax Media & Entertainment _ Annual Report _ Investor Relations _ Relationship _ Financial Com
KONZERNABSCH
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54
S h a r e
Responsibility
to Shareholders
Successful Stock Market Listing
On 18 May 2000, shares in Internationalmedia AG were listed on the Frankfurt Stock
Market’s Neuer Markt for the first time. The book building range for the share was
between 26 and 32 euros. The share offer was many times oversubscribed and the
sale price was set at 32 euros.
Around 6.5 million shares were placed on the Frankfurt stock market, including the surplus
allocation option and Greenshoe. The shares were sold as no-par-value shares to keen
investors in Germany and abroad. The Free float is now around 30 per cent. The total number
of shares issued is 30,877,500.
Free float following stock market listing
[in percent]
Private shareholders
(primarily from Germany)
Institutional investors
in Germany
Institutional investors
in Britain
Institutional investors
in Switzerland
Other,
primarily institutional investors
0 10 20 30
30.0 %
28.0 %
24.5 %
10.5 %
7.0 %
Holding Periods
Members of the Board of Management and shareholders of Internationalmedia committed
themselves to retaining their shares for the first six months following the stock market flotation.
They agreed not to offer their shares for sale or dispose of them directly or indirectly until
after 18 November 2000. This regulation applied to all shares that are not in free float and represents
around 70 per cent of total equity.
For a further year, members of the Board of Management and management staff have also
committed themselves to dispose of no more than 20 percent of the stock they hold with the
previous consent of the consortium leader. The agreement affects 47 percent of the shares.
Stock exchange: Frankfurt
Electronic Trading System Xetra
WKN: 548880
Share Option Scheme
for Employees
Internationalmedia has introduced a share option scheme in order to increase the identification
of employees with the company. The scheme generally runs for four years. The first third of
the options can be exercised after an employee has been with the company for two years and
the other two thirds can be exercised over the following two years.
nity _ Share _ Free Float _ Stock Market Listing _ Holding Period _ Management Staff _ Share Option _ Company _ Trading _ Declaration of Consent _ Performance _ German Stock Exchange _ Portfolio _ Success _ Nemax Media & Entertainment _ Annual Report _ Investor Relations _ Relationship _
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56
S h a r e
Restricted Trading
in Own Shares
Internationalmedia adopted a corporate resolution in December 2000 to severely restrict
trading in their own shares. Such trading is only permitted at times when there is no insider
information available in any part of the company. The declaration of consent was signed
by all members of the Board of Management, employees and members of the Supervisory
Board. Any member of the company can obtain information on current trading permission
status by logging onto the Intranet.
Data on the share [in 8]
Issue price 18.5.2000 32.00
Year-end price 31.12.2000 43.00
Price per share (high) (12.6.2000) 59.77
Price per share (low) (12.10.2000) 36.50
Performance 2000 34.40 %
Trading volume since stock market listing 118,455
Source: Bloomberg
Internationalmedia phone price versus
Nemax Media & Entertainment and Nemax 50
Period: 18.5.2000 to 29.12.2000
Period: weekly
based on the Internationalmedia share price
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
From March 2001 all members of the Board of
Management and members of the Supervisory
Board are obliged to inform the German Stock
Exchange (Deutsche Börse) of any dealings in
the company’s own shares within a three-day
period. They are further required to publish
quarterly details of their current portfolio.
M a y June July Aug. Sep. Oct. Nov. Dec.
Internationalmedia Nemax 50 Nemax Media & Entertainment
Significant Share Losses on the
Neuer Markt
The performance of the company’s share price has continued the success of the stock
market launch. By the close of the year, the share price had risen by more than 20 per cent
over the opening price and closed at a price of 43 euros. This increase in value has enabled
the share to outperform the relevant indices. The comparable period saw the Nemax 50
losing nearly 60 per cent, while the Nemax Media & Entertainment sustained losses in the
region of 75 per cent. The downturn in sentiment on the Neuer Markt was mainly due to
major market players failing to meet profit forecasts and the associated loss of confidence
among investors.
Share weighting
by index
Nemax 50 1.8 %
Nemax Media & Entertainment 13.8 %
Source: Bloomberg, at February 2001
Earnings per Share
Earnings per share are 0.67 euros. No dividend was paid out.
Performance comparison
from May 2000 to year-end
Internationalmedia AG 13.16 %
Nemax 50 - 57.79 %
Nemax Media & Entertainment - 75.78 %
Source: Bloomberg
Proactive Investor Relations
Proactive contact with institutional investors, analysts and private investors is a fundamental
component in our corporate strategy. Internationalmedia provides a wide range of current
and topical information to keep all interested parties informed.
Our Annual Report has been expanded to include an information section and this document
forms the basis for communicating the development of our company. A new internet site
will soon be available with a dedicated Investor Relations platform. Internationalmedia has
regularly participated in investor conferences and communicates on an individual basis with
analysts, investors and the financial and business press. This creates a close relationship
with the financial community, including private investors.
ancial Community _ Share _ Free Float _ Stock Market Listing _ Holding Period _ Management Staff _ Share Option _ Company _ Trading _ Declaration of Consent _ Performance _ German Stock Exchange _ Portfolio _ Success _ Nemax Media & Entertainment _ Annual Report _ Investor Relations _ Relati
Financial
Statements
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57

Financial
Statements
“Nurse Betty” is a darkly comic story about one woman’s incredible
determination to make her dreams come true against numerous odds.
ANNUAL REVIEW
When small-town waitress and TV fanatic Betty Sizemore (Renée
Zellweger) flees reality for a soap-opera fantasy world following her
husband’s violent death, fantasy collides with reality as she inspires
herself and everyone she meets to find at least a piece of their real
selves. With the local sheriff and a pair of hit men in hot pursuit, she
MM. REPORT
heads for Hollywood in search of the TV doctor of her dreams.
SHARE
FINANCIAL STATEMENTS
KONZERNABSCHLUSS
GROUP DATA
“Nurse Betty” > 1999/2000
Renée Zellweger
Financial Statements Morgan Freeman
IM AG FINANCIALS
ss _ EBIT _ Tax _ Balance Sheet _ Assets _ Investments _ Film Development _ Liabilities _ Cash Flow _ Shareholders’ Equity _ Results _ Fixed-Asset Movement _ Acquisition Costs _ Book Value _ Payment _ Group Activity _ Accounting Policy _ IAS _ US-GAAP _ Operating _ Financing _ Investing _ F
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60
Financial Statements
Consolidated
Income Statement
FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2000
IN ACCORDANCE WITH INTERNATIONAL ACCOUNTING STANDARDS
(WITH PREVIOUS YEAR’S FIGURES FOR COMPARISON) 1
Notes 2000 1999
[in T8] [in T8]
Sales revenue (1) 149,662 115,720
Cost of goods sold (2) -103,219 -97,041
Gross profit 46,443 18,679
Project development costs -3,758 -1,076
Distribution costs (3) -2,065 -1,306
General administration costs (4) -14,892 -3,865
Other operating income (5) 6,449 502
Other operating costs (6) -1,164 0
Goodwill amortisation -3,557 0
EBIT 27,456 12,934
Financial result (7) 5,753 -727
Result from ordinary business activities 33,209 12,207
Extraordinary result 0 -1,205
Result before tax 33,209 11,002
Taxes on income and profits (8) -13,524 -3,517
Result after tax (9) 19,685 7,485
Loss carried forward -1
Pro forma adjustments 0 -7,486
Net retained profits 19,684 -1
1) The previous year’s figures refer to the pro forma Consolidated Financial Statements of 31.12.1999
and in the Prospectus of 20.5.2000 in accordance with US-GAAP.
_ Accounts _ Valuation and Consolidation Method _ Provision _ Financial Year _ Majority Holding _ Mergers and Acquisitions _ London _ Los Angeles _ Munich _ Exchange Rate _ Transaction _ Financing Scheme _ Distribution Rights _ Company _ Valuation _ Screenplay _ Film Production _ Goodwill
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62
Financial Statements
Consolidated Balance Sheet
AS OF 31 DECEMBER 2000
IN ACCORDANCE WITH INTERNATIONAL ACCOUNTING STANDARDS
(WITH COMPARATIVE FIGURES FOR THE PREVIOUS YEAR) 1
Assets Notes 31.12.2000 31.12.1999
[in T8] [in T8]
A. Noncurrent assets
Intangible assets
Goodwill 74,065 33,979
Film and license assets 35,444 102,016
Payments on account 0 13,035
Total intangible assets
Fixed assets
(10) 109,509 149,030
Buildings 11,050 0
Other equipment, operating and office equipment 826 430
Payments on account 10 0
Total fixed assets
Financial assets
(11) 11,886 430
Investments 283 14
Total financial assets (12) 283 14
Total noncurrent Assets 121,678 149,474
B. Current Assets
Inventories
Film development costs
and distribution costs 23,883 5,044
Total Inventories
Receivables and other assets
(13) 23,883 5,044
Trade accounts receivable 67,744 87,732
Receivables from shareholders 0 25
Other assets 5,044 6,782
Total receivables and
other assets
Cheques, cash in hand, central bank
(14) 72,788 94,539
and bank balances (15) 191,338 30,376
Total current assets 288,009 129,959
C. Prepaid expenses (16) 30 114
D. Deferred tax assets (17) 10,301 0
Total Assets 420,018 279,547
Shareholders’ Notes 31.12.2000 31.12.1999
equity and liabilities [in T8] [in T8]
A. Shareholders’ equity
Subscribed capital (18) 30,878 24,375
Capital reserves (19) 242,584 57,088
Retained earnings 19,684 -1
Currency translation differences -4,630 0
Total shareholders’ equity 288,516 81,462
B. Accrued liabilities
Accrued taxes on earnings 13,748 94
Deferred tax liabilities (20) 10,403 45,733
Other accrued liabilities (21) 39,912 2,846
Total accrued liabilities (22) 64,063 48,673
C. Liabilities
Bank loans and overdrafts 32,985 61,475
Payments received on account of orders 7,825 25,300
Trade accounts payable
Non-consolidated
22,983 50,542
liabilities to affiliates 65 0
Other liabilities 3,581 12,095
Total liabilities (23) 67,439 149,412
Total shareholders' equity and liabilites 420,018 279,547
1) The figures of the previous year refer to the pro forma Financial Statements as of 31.12.1999 as in the Prospectus
dated 20 May 2000 and are in accordance with US-GAAP.
pital _ Share Options _ Employees _ Geographical Markets _ Personnel Costs _ Financial Results _ Income _ Profit _ Reconciliation _ Accounting _ Foundation _ Closing Date _ Box TV Ltd _ Inventories _ Trade Accounts _ Share Capital _ Commercial Register _ Cash Contribution _ Agreement _ Ge
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64
Financial Statements
Cash Flow Statement
FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2000 1
IN ACCORDANCE WITH INTERNATIONAL ACCOUNTING STANDARDS
(WITH PREVIOUS YEAR’S FIGURES FOR COMPARISON) 2
Notes 2000 1999
[in T8] [in T8]
Consolidated net income 19,685 7,485
Depreciation and amortization 63,882 58,583
Change in accrued liabilities
Other non-cash
58,439 -8,233
expenses and income -1,397 0
Cash Flow I (26) 140,609 57,835
Changes in inventories
Changes in trade accounts
-23,883 -1,819
receivable and other assets -72,788 -49,714
Changes in other short term assets
Changes in trade
-10,330 -73
accounts payable 23,048 4,859
Changes in other liabilities 11,406 28,158
Changes in Working Capital -72,547 -18,589
Cash Flow from operating activities
Investments in
68,062 39,246
intangible assets (27) -66,233 -48,303
Investments in fixed assets -11,880 -402
Financial investments -267 -14
Total Investments
Receipts from
-78,380 -48,719
disposals of assets 160 29
Changes in consolidated group -15,755 0
Cash Flow from investing activities (28) -93,975 -48,690
Changes in financial liabilities 32,984 17,992
Paid-up increases in capital (28) 197,195 0
Shareholders’ equity currency translation -4,630 0
Other changes in shareholders’ equity -8,323 -7,486
Cash Flow from financing activities 217,226 10,506
Changes in liquidity 191,313 1,062
Cash and Cash Equivalents at beginning of period 25 29,314
Cash and Cash Equivalents at end of period (29) 191,338 30,376
1) The Cash Flow Statement as of 31 December 2000 was drawn up using actual figures for the period 1 January
2000 to 31 December 2000. A direct comparison of the changes in balance sheet items given in the pro forma
Financial Statements of 31.12.1999 is not possible.
2) The figures for the previous year refer to the pro forma Financial Statements of 31.12.1999 as in the Prospectus
dated 20 May 2000 and are in accordance with US-GAAP.
Consolidated Statement of
Shareholders’ Equity
FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2000 3
IN ACCORDANCE WITH INTERNATIONAL ACCOUNTING STANDARDS
(WITH PREVIOUS YEAR’S FIGURES)
Subscribed Capital Net retained Currency translation Total
capital reserves earnings adjustment (CTA)
[in T8] [in T8] [in T8] [in T8] [in T8]
Balance 16.8.1999 25 1 - - 26
Results after tax - - -1 - -1
Balance 31.12.1999 25 1 -1 0 25
Balance 1.1.2000 25 1 -1 - 25
Additional paid-in capital 30,853 250,906 - - 281,759
Result after tax - - 19,685 - 19,685
IPO costs - -8,323 - - -8,323
Currency translation adjustment - - - -4,630 -4,630
Balance 31.12.2000 30,878 242,584 19,684 -4,630 288,516
3) A direct comparison of shareholders' equity from the changes in items in the pro forma Financial Statements of
the 31.12.1999 and the items on the 31.12.2000 is not possible, as the shareholders’ equity was drawn up using
actual figures.
al Meeting _ Costs of Flotation _ Film Stock _ Sale of Licences _ Valuation Year _ Film Assets _ Funds Statement _ Film Rights _ Europe _ North America _ Asia _ Board Member _ Management _ VISONO GmbH _ German Auditing Regulations _ Knowledge _ Supervisory Board _ Company _ Gross
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66
Financial Statements
Schedule of
Fixed Asset Movements
FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2000
IN ACCORDANCE WITH INTERNATIONAL ACCOUNTING STANDARDS
(WITH COMPARATIVE FIGURES FOR THE PREVIOUS YEAR) 1
ACQUISITION COST DEPRECIATION BOOK VALUE
Brought Changes in Additions Disposals Balance B/F Changes in Additions Disposals Currency Trans- Balance Book Value Book Value
forward consolidated 31.12.2000 1.1.2000 consolidated lation Adjustment 31.12.2000 31.12.2000 31.12.1999
1.1.2000 [in T8] companies [in T8] [in T8] [in T8] [in T8] companies [in T8] [in T8] (CTA) [in T8] [in T8] [in T8] [in T8]
Intangible assets
Goodwill 0 75,466 2,081 0 77,547 0 0 3,557 0 -75 3,482 74,065 33,979
Film assets 0 19,514 74,649 0 94,163 0 0 59,991 0 -1,272 58,719 35,444 102,016
Payments on account 0 0 0 0 0 0 0 0 0 0 0 0 13,035
0 94,980 76,730 0 171,710 0 0 63,548 0 -1,347 62,201 109,509 149,030
Fixed assets
Buildings
Other equipment, operating
0 0 11,052 0 11,052 0 0 2 0 0 2 11,050 0
and office equipment 0 776 818 -160 1.434 0 326 331 -44 -5 608 826 430
Payments on account 0 0 10 0 10 0 0 0 0 0 0 10 0
0 776 11,880 -160 12,496 0 326 333 -44 -5 610 11,886 430
Financial assets
Investments 0 16 267 0 283 0 0 0 0 0 0 283 14
0 16 267 0 283 0 0 0 0 0 0 283 14
Total noncurrent assets 0 95,772 88,877 -160 184,489 0 326 63,881 -44 -1,352 62,811 121,678 149,474
1) Balances brought forward on 1.1.2000 are based on actual figures and are therefore not
equivalent to the balance sheet items in the pro forma Financial Statements of 31.12.1999.
T _ Tax _ Balance Sheet _ Assets _ Investments _ Film Development _ Liabilities _ Cash Flow _ Shareholders’ Equity _ Results _ Fixed-Asset _ Movement _ Acquisition Costs _ Book Value _ Payment _ Group Activity _ Accounting Policy _ IAS _ US-GAAP _ Operating _ Financing _ Investing _ Final _ Acco

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68
Financial Statements
Notes to the Consolidated
Financial Statements
I. General
GROUP ACTIVITIES
IM Internationalmedia AG is registered under No. HR B 130722 in the Commercial Register
of the Munich District Court and its registered office is in Munich, Germany. Group activities
include the production, sale and distribution of media productions, principally feature films
and films for television, television series and other television productions of all kinds. Also
included are services to the film and television industry and the acquisition and holding of
investments in companies in the same sector.
ACCOUNTING POLICIES
The IM Internationalmedia AG Financial Statements for the financial year 1 January 2000 to
31 December 2000 were prepared under International Accounting Standards (IAS) in accordance
with § 292a of the HGB (German Commercial Code). The company is consequently released
from the obligation to prepare Consolidated Financial Statements on the basis of the regulations
of the HGB and the AktG (German Stock Companies Law). Since IM Internationalmedia AG is
quoted on the Neuer Markt of the German Stock Exchange, it is required to produce its Financial
Statements in accordance with the regulations of the IAS or the American regulations of US-GAAP.
IM Internationalmedia AG has opted for the accounting regulations of the IAS for the preparation
of its first Financial Statements. In all instances where no specific standard was given in the IAS
regulations US-GAAP standards have been applied.
In both the Consolidated Income Statement and the Consolidated Balance Sheet various items
are combined in order to give a clearer view. The individual items are explained in detail under
an appropriate reference number in the Notes. The Consolidated Income Statement was drawn
up as per the cost of sales format in normal international use. In the absence of a specific IAS
formatting regulation, the Consolidated Balance Sheet was set out to conform with the usual
format set out in § 266 HGB (German Commercial Code). In the Cash Flow Statement the flow
of payments are formatted as per IAS 7 conforming with international practice in the areas of
cash flow from operating activities, cash flow from investing activities and cash flow from
financing activities. The Segment Reporting was set out in accordance with IAS 14 regulations.
The Consolidated Financial Statements show the consolidated results of the Company and
of its affiliates in which it has a majority holding. Unless indicated otherwise, all total amounts
are given in thousand euros (T8).
USE OF ESTIMATES
The preparation of final accounts in accordance with IAS regulations requires that estimates
and assumptions are included which have an effect on the values of assets, liabilities and
financial obligations on the closing date and on the income and expenditures shown therein.
The actual results may deviate from these estimates and assumptions.
PECULIARITIES SPECIFIC
TO THE INDUSTRY
Neither the HGB requirements nor the IAS regulations take into account the peculiarities
specific to the film and media industry. Therefore, in cases of doubt, accounting principles
were supplemented by the regulations of US-GAAP. In questions of interpretation, valuation
and accounting, as well as in questions of disclosure peculiar to the industry, the current
issue of SOP 00-02 (Accounting by Producers or Distributors of Films) was used as a basis.
US-GAAP regulations were only brought into use if they did not contradict existing IAS
regulations. As such, the use of these regulations is also deemed appropriate for accounting
according to IAS.
aluation and Consolidation Method _ Provision _ Financial Year _ Majority Holding _ Mergers and Acquisitions _ London _ Los Angeles _ Munich _ Exchange Rate _ Transaction _ Financing Scheme _ Distribution Rights _ Company _ Valuation _ Screenplay _ Film Production _ Goodwill _ Capital _
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Financial Statements
EXPLANATION OF THE ESSENTIAL DIFFERENCES BETWEEN
THE IAS CONSOLIDATED FINANCIAL STATEMENTS
AND THE GERMAN ACCOUNTING REGULATIONS
The main differences in accounting, valuation and consolidation methods valid under German
law include the capitalisation of self-produced intangible assets, the recognition of revenues
and treatment of IPO costs. In addition, there are further differences in the reporting and the
valuation of claims, provisions and liabilities.
Self-produced intangible assets, in particular film and merchandising rights, were entered
as assets as costs of production, even though under HGB rules this is forbidden. A detailed
explanation of revenue recognition is given in the report on accounting methods.
In the Consolidated Balance Sheet the diverging valuation according to IAS of assets and
liabilities on closing date is relevant. Assets and liabilities in foreign currencies in the IAS
Consolidated Financial Statements are valued at the exchange rate on closing date regardless
of the historical rate. This is contrary to the rules of the HGB where the lowest / highest
value principle for assets and liabilities respectively is used.
Provisions and liabilities which are either low interest bearing or non-interest bearing are
reported under IAS at their present value. In contrast, HGB uses nominal values or amounts
repayable.
Expenses directly related to the capital increase were offset with the corresponding tax
benefits and subsequently charged to capital reserves. Under HGB rules the expenses
of capital increases are reported under other operating expenses.
For all material temporary differences between the Commercial Balance Sheet and the Fiscal
Balance Sheet deferred tax items were constituted.
IAS’s more detailed criteria for disclosure were applied in the Notes (including details of
earnings per share, related party transactions), rather than those of the HGB.
FIRST-TIME CONSOLIDATION AND
COMPARATIVE FIGURES
First-time consolidation of the investments to be consolidated took place on the 1 April 2000.
As a result, the Consolidated Income Statement for the financial year 1 January to 31 December
1999 comprised solely parent company data. To allow a comparison with the results of the
previous year, the figures for the appropriate pro forma Consolidated Financial Statements
for the same period in the previous year were compared with the Consolidated Income
Statement for the financial year 1 January to 31 December 2000. Due to the differing basis
for the pro forma Consolidated Financial Statements for 1 January to 31 December 1999 a
complete comparison is not given.
CONSOLIDATED GROUP
In the financial year 2000 the consolidated group is made up of IM Internationalmedia AG
and its subsidiaries. The group includes the following companies in which IM Internationalmedia
AG either directly or indirectly has a majority holding, or companies which by reason
of other rights are subsidiary to it:
re Options _ Employees _ Geographical Markets _ Personnel Costs _ Financial Results _ Income _ Profit _ Reconsiliation _ Accounting _ Foundation _ Closing Date _ Box TV Ltd _ Inventories _ Trade Accounts _ Share Capital _ Commercial Register _ Cash Contribution _ Agreement _ General Meeti
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72
Financial Statements
AFFILIATES OF IM INTERNATIONALMEDIA AG
Equity interest Period included in Date
in Consolidated Financial of first-time
% Statements consolidation
Pacifica Film Development Inc.,
USA, Los Angeles
100 % 1 April - 31 December 2000 1 April 2000
Pacifica Film Distribution LLC,
USA, Los Angeles
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Film Equities Ltd,
UK, London
100 % 1 April - 31 December2000 1 April 2000
Intermedia Film Equities USA Inc.,
USA, Los Angeles
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Film Distribution Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films Land Girls Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films MP Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films SF Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films JDP Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films Villa Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (FB) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
MEI Films Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (BD) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (ACE) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (HS) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (LLL) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (WD) Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia.Com Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Film Development Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Finance Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (Enigma) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Up at the Villa Productions Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Codebreaker Productions Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Facilities Ltd., UK, London 100 % 1 April - 31 December 2000 1 April 2000
Village Intermedia Pictures Lt.,
UK, London
50 % 1 April - 31 December 2000 1 April 2000
Intermedia Arc Pictures Ltd, UK, London 50 % 1 April - 31 December 2000 1 April 2000
Intermedia Films 2000 Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Music Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Dovestar Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
RPM Guaranty N.V.,
Netherlands Antilles, Curacao
100 % 1 April - 31 December 2000 1 April 2000
Dovestar MTE Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (TR) Ltd, UK, London
IM Filmproduktions- und Vertriebs-
100 % 1 April - 31 December 2000 1 April 2000
GmbH & Co. KG, Grünwald 100 % 29 September - 31 December 2000 29 September 2000
NEW MERGERS AND ACQUISITIONS
The IAS financial statements of the affiliates listed were included in the Group Financial
Statements for the first time on the balance sheet closing date.
PRINCIPAL SUBSIDIARIES
INTERMEDIA FILM EQUITIES LTD
LONDON
The main operational activities of Internationalmedia Group are concentrated in this
company founded on 28 November 1995. IM Internationalmedia AG has a 100 per cent holding
in the company. The annual deficit reported for the period 1 April 2000 to 31 December 2000
amounted to 4,132 t euros.
PACIFICA FILM DISTRIBUTION LLC,
LOS ANGELES
The activities of Pacifica Film Distribution LLC comprise the distribution of film rights in all
media sectors. IM Internationalmedia AG has a 100 per cent holding in the company. For the
period 1 April 2000 to 31 December 2000 the company reported an annual surplus of 868 euros.
PACIFICA FILM DEVELOPMENT INC.,
LOS ANGELES
Pacifica Film Development Inc. is concerned with the identification of potential film subjects,
their development and the packaging of film productions. IM Internationalmedia AG has
a 100 per cent holding in this company. The company reported a surplus for the period
1 April 2000 to 31 December 2000 of 623 t euros.
IM FILMPRODUKTIONS- UND VERTRIEBS GMBH & CO. KG,
GRÜNWALD
IM Filmproduktions- und Vertriebs GmbH & Co. KG holds rights to existing films and produces
new feature films. IM Internationalmedia AG has a 100 per cent holding. For the period
28 September 2000 to 31 December 2000 the company reported a surplus of 25,823 t euros.
osts of Flotation _ Film Stock _ Sale of Licences _ Valuation Year _ Film Assets _ Funds Statement _ Film Rights _ Europe _ North America _ Asia _ Board Member _ Management _ VISONO GmbH _ German Auditing Regulations _ Knowledge _ Supervisory Board _ Company _ Gross _ EBIT _ Tax _ Ba
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Financial Statements
ASSOCIATED COMPANIES
BOX TV LTD, LONDON
Box TV Ltd, which began operations in December 2000, is a TV production company with great
potential for the future in which IM Internationalmedia AG has an indirect holding of 24.9 per
cent. The company’s results were not included in the Group Financial Statements because of
the minimal influence it would have on the assets, finance and income situation.
CONSOLIDATION PRINCIPLES
UNIFORM GROUP ACCOUNTING AND VALUATION
The Group Financial Statements are based on the audited year-end financial statements of
the group companies prepared according to uniform rules on Group Financial Statements.
Only in the case of associated companies, valued according to the equity method, different
accounting and valuation methods were used in the Group Financial Statements.
FULL CONSOLIDATION
Capital consolidation of the fully consolidated companies uses the book value method, setting
the purchase price against the group share in the equity of the consolidated subsidiaries at
the moment of acquisition or upon first-time consolidation. If valued higher than the share in
equity the difference was entered in the assets of the respective subsidiaries in the Group
Financial Statements. The remaining differential amount after write-ups is shown as Goodwill.
It is amortised using the straight-line method over a scheduled lifespan of up to 20 years.
Group receivables and liabilities between fully consolidated companies were consolidated.
In the case of consolidation of earnings, the internal revenues and internal incomes of fully
consolidated companies were set against the expenses arising from them. If depreciation on
holdings in consolidated companies was entered in the individual financial statements of a
group company, this was eliminated from the Income Statement of the Group.
CURRENCY TRANSLATION
INDIVIDUAL FINANCIAL STATEMENTS
IN FOREIGN CURRENCIES
Monetary positions in foreign currencies reported in individual balance sheets of constituent
companies are expressed in terms of the exchange rate on the closing date in accordance
with IAS 21.
The main operational activities of the company are settled in US dollars. The US dollar
therefore serves as the functional currency. The Group Financial Statements were also
expressed in US dollars. The Internationalmedia Group has decided to use the euro (8) for
the presentation of the Group Financial Statements. For the purposes of reporting in the
Group Financial Statements, items on the Balance Sheet are converted at the exchange
rate on the closing date, and items in the Income Statements are converted at the average
rate for the financial year. Shareholders’ equity is converted at historical rates, and the
annual surplus at the average rate for the financial year.
DIFFERENCES
IN CURRENCY TRANSLATION
Conversion differences arising on conversion of the functional currency into the reporting
currency are set against shareholders’ capital with no effect on the net income.
RECEIVABLES AND LIABILITIES
IN FOREIGN CURRENCY
Foreign currency receivables and liabilities in consolidated individual financial statements are
converted at the year end rate. Losses to be expected from changes in exchange rates are
accounted for on the closing date with due effect on the operating results.
ce Sheet _ Assets _ Investments _ Film Development _ Liabilities _ Cash Flow _ Shareholders’ Equity _ Results _ Fixed-Asset Movement _ Acquisition Costs _ Book Value _ Payment _ Group Activity _ Accounting Policy _ IAS _ US-GAAP _ Operating _ Financing _ Investing _ Final _ Accounts _ Valuat
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76
Financial Statements
EXCHANGE RATES
The exchange rate pertaining on the individual transaction date was used as the basis
for converting the individual balance sheet items of the consolidated German and English
companies.
ACCOUNTING PRINCIPLES
REVENUE AND REVENUE RECOGNITION
IM Internationalmedia AG generates revenues from production and worldwide distribution of
film rights. Revenues are mainly generated in the following areas: financing schemes and
licensing of distribution rights.
Where the Company does not already have distribution rights by virtue of production contracts,
the Group obtains the necessary licenses from the licensing authority for particular countries
and time periods.
On the basis of the acquired distribution rights the Group companies grant sublicenses for
limited periods and for restricted territories worldwide. Once a contract is signed revenues pass
to the licensee, provided that Internationalmedia has fulfilled its main contractual obligations.
As a rule, this means that all rights have passed to the licensee, and distributable material
has either been delivered or is available for delivery (e.g. by means of a lab access letter),
so that the licensee can exploit the material and the licensing period can begin.
VALUATION OF FILM AND LICENSE ASSETS
The valuation of film and license assets is effected in the Internationalmedia Group by means
of the film-forecast-computation-method. This internationally recognised method prescribes
that the sole attributable costs of production or acquisition of film or licensing assets must be
capitalised until commencement of the distribution of a film or film rights. Capitalised production
costs include external costs for acquisition of screenplay and film production as well as actors
fees etc. In addition, costs of third party capital are included according to IAS 23/l. In total,
interest on third party capital is capitalised in the amount of 3,317 t euros.
In the year 2000, acquisition or production costs of 94,163 t euros (including changes to
the consolidated group and payments made) were capitalised. Amortisation of film and
license assets according to the film-forecast-computation-method was effected dependent
on exploitation. Periodic proportional amortisation over a period of 20 years (distribution
dependent amortisation) is taken into account, corresponding to the share of total revenue
resulting from exploitation. In addition, at regular intervals, but by each closing date at the
latest, an impairment test is to be carried out in accordance with IAS 16.
If the respective lower limit of amortisation is reported within the possible time-span, then
at the end of the first distribution cycle (i.e. initial completion of the various distribution
stages) an average of 17 per cent of the originally capitalised acquisition or production costs
will remain. At the end of the first exploitation cycle an analysis will be made as to what
extent a second cycle is probable and what value (17 per cent on average) it should be given.
INTANGIBLE ASSETS
Intangible assets acquired are reported with acquisition or production costs. Computer
software depreciation is straight-line over its estimated life span of three to five years.
Goodwill resulting from capital consolidation is depreciated by the straight-line method
conforming to IAS 22 over a maximum of 20 years because of the long term strategic
importance of the holdings.
and Consolidation Method _ Provision _ Financial Year _ Majority Holding _ Mergers and Acquisitions _ London _ Los Angeles _ Munich _ Exchange Rate _ Transaction _ Financing Scheme _ Distribution Rights _ Company _ Valuation _ Screenplay _ Film Production _ Goodwill _ Capital _ Share Opt
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78
Financial Statements
Film and license assets belonging to IM Internationalmedia AG are shown as a separate item
in intangible assets. In the absence of IAS regulations specific to the industry, valuation is carried
out according to the regulations of SOP 00-02 (Accounting by Producers or Distributors of Films)
with the exception of the amortisation of films. Film amortisation is effected over a period of
20 years, whereas SOP 00-02 prescribes a period of 10 years. There exist mortgages inherent
in the industry.
FIXED ASSETS
Fixed asset items are valued at acquisition
cost less depreciation in accordance with
IAS 16. As such, the following life spans
for individual fixed asset items are applied:
FINANCIAL ASSETS
Financial assets include holdings in subsidiary and associated companies, other investments
and other loans. With the exception of the holdings in associated companies valued according
to the equity method, holdings and other investments and loans are posted at acquisition cost.
The exception constitutes unscheduled depreciation on account of continuous impairment.
INVENTORIES
Buildings
Depreciation in years
Buildings 40
Computer hardware 3 - 5
Office and business equipment 4 - 10
Conforming to IAS 16 fixed assets are subject to an
impairment test at each closing date.
The valuation of inventories in the Internationalmedia Group is effected at year end according
to IAS 2 regulations at acquisition or production cost or lower replacement cost. In this case
production costs assume full costs.
RECEIVABLES AND OTHER ASSETS
Receivables and other assets are posted at nominal value less individual adjustments for
bad debts. In cases of doubt reasonable adjustments by commercial judgement are made.
Long-term debts with more than a year to run are discounted at an interest rate of 6 per
cent p. a. on the closing date.
LIABILITIES
Liabilities are posted at their repayment value. A special rule applies to liabilities at low or
zero interest, which are posted at their present value.
ACCRUED LIABILITIES
According to IAS 37 provisions for doubtful liabilities, deferred expenses and expected losses
from pending transactions are constituted at a level that is reasonable and prudent. Provisions
are only constituted when there is a legal or de facto obligation towards third parties for them.
The posted value of provisions is based on those amounts required to cover future obligations
to pay, recognisable risks and doubtful liabilities of the Group.
DEFERRED TAXES
Deferred taxes are constituted to cover differences between the commercial/group balance
sheet result and the cumulative fiscal result of the consolidated companies. The value of
the capitalised deferred tax assets is determined by whether the claim within the utility of
the losses carried forward is more probable than improbable. In accordance with IAS 12.47
these deferred taxes are calculated using tax rates which will be valid when the differences
will either be reversed or compensated.
_ Employees _ Geographical Markets _ Personnel Costs _ Financial Results _ Income _ Profit _ Reconciliation _ Accounting _ Foundation _ Closing Date _ Box TV Ltd _ Inventories _ Trade Accounts _ Share Capital _ Commercial Register _ Cash Contribution _ Agreement _ General Meeting _ Cos
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Financial Statements
AUTHORISED
BUT UNISSUED CAPITAL
In a resolution of the General Shareholders’ Meeting on 8 May 2000 the capital stock of
IM Internationalmedia AG was conditionally increased by 1,500,000 euros. This conditional
increase in capital is for the exercise of share options, which were issued to board members
and employees in 2000. This conditional increase in capital is only to be utilised insofar as
holders exercise the options.
SHARE OPTION SCHEMES
IAS currently contains no regulations for the posting and valuation of share option schemes.
Consequently, no special treatment is prescribed for the balance sheet and the profit and loss
account. It is therefore not obligatory to show an appropriate expenditure as personnel costs
in the profit and loss account, as provided for in US-GAAP for example. Against this background
IM Internationalmedia AG confines itself to a detailed presentation of its proposed
share option schemes in the Notes.
II. Notes to the Consolidated
Income Statement
In order to make a comparison of developments in the previous year, the current Group
Income Statement for the financial year 1 January 2000 to 31 December 2000 and the
adjusted pro forma Income Statement for the previous year were used. On account of
diverging assumptions, full comparability of data is not possible.
(1) REVENUES
A schedule of revenues by geographical markets and areas of activity is given in the
Segment Report.
(2) COST OF GOODS SOLD
Production costs necessary for the attainment of revenues amounted to 103,219 t euros.
They comprise amortisation of film rights dependent on exploitation totalling 59,991 t euros
and personnel and materials costs amounting to 43,228 t euros. Cost of goods sold include
the following items:
Cost of goods sold 2000 1999
[in T8] pro forma
Film rights amortisation 59,991 58,583
Cost of materials 16,660 37,560
Personnel expenses 437 898
Other costs of materials
(Residuals, Participations)
26,131 0
Total 103,219 97,041
In the previous year, Residuals and Participations were entered under Cost of Materials.
Flotation _ Film Stock _ Sale of Licences _ Valuation Year _ Film Assets _ Funds Statement _ Film Rights _ Europe _ North America _ Asia _ Board Member _ Management _ VISONO GmbH _ German Auditing Regulations _ Knowledge _ Supervisory Board _ Company _ Gross _ EBIT _ Tax _ Balance
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82
Financial Statements
(3) DISTRIBUTION COSTS
In the financial year 2000 distributions costs amounted to 2,065 t euros. The individual items
are set out in the following table:
Distribution Costs 2000 1999
[in T8] pro forma
Personnel expenses 1,599 1,011
Advertising and travel expenses 11 0
Space costs 191 0
Other costs 264 295
Total 2,065 1,306
In the previous year costs of rooms were entered in general administration costs.
(4) GENERAL ADMINISTRATION COSTS
In the financial year 2000, general administration costs amounted to 14,892 t euros.
They consisted of the following items:
General Administration Costs 2000 1999
[in T8] pro forma
Personnel expenses 9,229 2,482
Depreciation 220 132
Consultancy 1,545 317
Advertising and travel expenses 1,361 467
Space costs 946 247
Other costs 1,591 220
Total 14,892 3,865
(5) OTHER OPERATING INCOME
Other operating income amounting to 6.449 t euros comprise the following items:
Other operating income 2000 1999
[in T8] pro forma
Foreign exchange gains 6,025 502
Servicing department 95 0
Other 329 0
Total 6,449 502
(6) OTHER OPERATING COSTS
Other operating costs amounting to 1,164 t euros comprise the following items:
Other operating costs 2000 1999
[in T8] pro forma
Foreign exchange losses 160 0
Restructuring costs 966 0
Allowance for bad debt 32 0
Other 6 0
Total 1,164 0
(7) FINANCIAL RESULT
The financial result for the year 2000 came to 5,753 t euros and comprised:
Financial result 2000 1999
[in T8] pro forma
Other interest receivable and similar income 6,277 155
Interest payable and similar costs -524 -882
Total 5,753 -727
et _ Assets _ Investments _ Film Development _ Liabilities _ Cash Flow _ Shareholders’ Equity _ Results _ Fixed-Asset Movements _ Acquisition Costs Consolidation Method _ Provision _ Financial Year _ Majority Holding _ Mergers and Acquisitions _ London _ Los Angeles _ Munich _ Exchange Rate _
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Financial Statements
(8) TAXES ON INCOME AND PROFITS
Tax liabilities for the financial year 2000 consist of the following individual items: Profit Taxes
- 18,685 t euros, deferred taxes 5,161 t euros. Tax expenditure is calculated by applying the
German tax rate of 40 per cent (corporation tax, solidarity surcharge and trade tax). Taxes on
flotation costs amounting to 4,405 t euros were set against equity capital with neutral effect.
Reconciliation of tax expenditure 2000 1999
[in T8] pro forma
Result before tax 33,209 11,002
Calculated tax expenditure
at tax rate of 40 %
-13,284 -5,894
Non-deductible operational expenses 2,190 5
Goodwill amortisation -1,427 0
Divergent foreign tax rates 393 2,247
Domestic tax rate changes -1,396 125
Actual tax expenditure 13,524 -3,517
Deferred taxes amounting to 5,161 t euros were entered as follows:
Deferred Taxes 2000 1999
[in T8] pro forma
Timing differences of film assets 7,603 -5,726
Timing differences of film liabilities
Transitory accounting difference of
-5,838 0
other provisions and liabilities 126 0
Losses carried forward from period prior to registration 5,237 0
Tax rate changes -1,967 0
Total 5,161 -5,726
(9) EARNINGS PER SHARE
Basic earnings per share is calculated according to IAS 33 by dividing group annual profit
after third party shares and taxes by the average number of existing shares.
The basis for calculating the average number of existing shares was the issued shares in
existence at the foundation of the Group at the moment of transformation into a joint stock
company on 2 March 2000.
Earnings per share 2000 1999
pro forma
Net income in T8 19,685 7,485
Weighted average number of shares outstanding 29,520,902 24,375,000
Basic earnings per share in 8 0.67 0.31
Weighted average number of shares outstanding 29,520,902 24,375,000
Weighted average number of
potential shares
245,041 0
Diluted earnings per share in 8 0.66 0.31
nsaction _ Financing Scheme _ Distribution Rights _ Company _ Valuation _ Screenplay _ Film Production _ Goodwill _ Capital _ Share Options _ Employees _ Geographical Markets _ Personnel Costs _ Financial Results _ Income _ Profit _ Reconciliation _ Accounting _ Foundation _ Closing Da
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Financial Statements
III. Notes to the Consolidated
Balance Sheet
(10) INTANGIBLE ASSETS
Intangible assets comprise the goodwill acquired on consolidation. On the closing date on
31 December 2000 intangible assets were constituted as set out in the following table.
Intangible assets 31.12.2000 31.12.1999
pro forma
[in T8]
Goodwill 74,065 33,979
Film and license assets 35,444 102,016
Payments on account 0 13,035
Total 109,509 149,030
(11) FIXED ASSETS
The acquisition and disposal of fixed assets mainly centre on the purchase of an office
building in Los Angeles. For detailed information please refer to the schedule of fixed
asset movements.
(12) FINANCIAL ASSETS
Financial assets consist of holdings in associated companies. With a volume of 283 t euros this
principally refers to holdings in Box TV Ltd. The company was not included in the Consolidated
Financial Statements, as it had not been involved in any substantial operations and, overall, is
of minor significance as regards the Consolidated Financial Statements. In this context, please
refer to the explanatory notes on the Consolidated Group above.
Financial Assets 31.12.2000 31.12.1999
[in T8] pro forma
Holdings in associated companies 283 14
Total 283 14
(13) INVENTORIES
Inventories on 31 December 2000 consist mainly of film development costs and preproduction
costs.
(14) TRADE ACCOUNTS RECEIVABLE AND OTHER ASSETS
Trade accounts receivable and other assets amount to 72,788 t euros, all of which are
receivable within 12 months. The situation on closing date was as follows:
Receivables and other assets 31.12.2000 31.12.1999
pro forma
[in T8]
Trade accounts receivable 67,744 87,732
Receivables from shareholders 0 25
Other assets 5,044 6,782
Total 72,788 94,539
Trade accounts receivable constitute the licensing of films amounting to 65,917 t euros
(85,983 t euros) as well as other trade accounts receivable over 1,827 t euros (1,749 t euros).
The breakdown of other assets is shown in the following table:
Other Assets 31.12.2000 31.12.1999
pro forma
[in T8]
Tax refund claims 1,003 4,352
Accrued interest 1,855 0
Miscellaneous other assets 2,186 2,430
Total 5,044 6,782
ox TV Ltd _ Inventories _ Trade Accounts _ Share Capital _ Commercial Register _ Cash Contribution _ Agreement _ General Meeting _ Costs of Flotation _ Film Stock _ Sale of Licences _ Valuation Year _ Film Assets _ Funds Statement _ Film Rights _ Europe _ North America _ Asia _ Board Mem
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Financial Statements
(15) CASH AND CASH EQUIVALENTS
The cash and cash equivalents held by Internationalmedia amount to 191,338 t euros.
On 31 December 2000 this item consisted mainly of bank balances.
(16) PREPAID EXPENSES
Deferrals include deferred costs for expenditures in the following year.
(17) DEFERRED TAX ASSETS
Deferrals of taxes are effected in accordance with IAS 12 (rev. 1996). In accordance with
this standard, the tax rates in force or adopted on the closing date are applied. Further
explanations regarding capitalised deferred taxes are to be found under Note (8) “Taxes
on income and profits”.
SHAREHOLDERS’ EQUITY
(18) SUBSCRIBED CAPITAL
The subscribed capital of IM Internationalmedia AG, amounting to 30,877,500 euros on the
closing date consisted of 30,877,500 euros no par value bearer shares with an arithmetical
interest in the capital of 1 euro each. Subscribed capital was fully paid in.
In a resolution of the General Shareholders’ Meeting on 22 December 1999 the name of
“deltaaquarii Beteiligungs GmbH” under which the company was founded, was changed to
“Intermedia GmbH” and entered in the Commercial Register on 21 February 2000.
By a shareholders’ resolution of 2 March 2000 Intermedia GmbH in accordance with the
regulations in Art. 90 ff of the Umwandlungsgesetz (UmwG – German Company Reorganisation
Act) was reorganised, changing its legal form from a GmbH (Ltd company equivalent) into an
Aktiengesellschaft (plc equivalent) and the name changed to “Intermedia AG”. On the same
day the shareholders’ meeting decided to increase the share capital by cash contribution of
25,000 euros to a total of 50,000 euros. This capital increase was entered in the Commercial
Register on the 5 April 2000.
In the course of the reorganisation of the company into an Aktiengesellschaft the existing
share capital of 50,000 euros was reorganised as share capital of 50,000 euros divided into
50,000 no par value bearer shares with an arithmetical share of 1 euro each. The entry of the
reorganisation in the Commercial Register at the Munich District Court was made on 11 April
2000. The company is registered there under number HR B 130722.
At the extraordinary Shareholders’ Meeting on 11 April 2000 the following resolutions were
passed concerning the capital of the company: The share capital of the company was
increased by a nominal 24,325,000 euros divided into 24,325,000 shares with an arithmetical
share of 1 euro each against the contribution of business activities of IMF Internationale
Medien- und Film GmbH & Co. Produktions KG and of all the share capital of Intermedia Film
Equities Ltd., of Pacifica Film Distribution LLC and of Pacifica Film Development Inc. It was
further resolved at the Shareholders’ Meeting on 8 May 2000 to increase the share capital of
the company by cash deposit of 5,625,000 euros to 30,000,000 euros. The capital increase
was effected by the issue of 5,625,000 no par value bearer shares with an arithmetical
share of 1 euro each. These shares were brought into circulation on flotation. The new shares
have been entitled to profit share since the beginning of the financial year commencing
1 January 2000.
By a resolution of the Management Board on 5 June 2000 and with the agreement of the
Supervisory Board on 6 June 2000 an increase in share capital of 877,500 euros from authorised
capital I detailed below was undertaken. The increase in capital was undertaken to service
the Greenshoe option through the issue of 877,500 no par value bearer shares with an
arithmetical share of 1 euro each. The new shares have also been entitled to profit share
since the beginning of the financial year commencing 1 January 2000.
_ Management _ VISONO GmbH _ German Auditing Regulations _ Knowledge _ Supervisory Board _ Company _ Gross _ EBIT _ Tax _ Balance Sheet _ Assets _ Investments _ Film Development _ Liabilities _ Cash Flow _ Shareholders’ Equity _ Results _ Fixed-Asset Movements _ Acquisition Costs _ Boo
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Financial Statements
AUTHORISED CAPITAL I
At the Shareholders’ Meeting held on the 8 May 2000 the Board of Management was
authorised to increase the share capital of the company with the agreement of the Supervisory
Board by up to a total of 12,000,000 euros by a single or multiple issues of new bearer individual
shares for cash and/or increase of non-cash capital. The Board of Management is authorised
to make decisions concerning the suspension of subscription rights with the agreement of
the Supervisory Board and to determine further details of any capital increase as well as to
define conditions of the share issue. The Board of Management is empowered in particular
to suspend subscription rights in order (a) to remove residual amounts from subscription
rights, (b) to cover a multiple allotment in the issue of the company’s shares within the context
of their shares being placed on a German stock exchange by the issuing banks, (c) to acquire
companies or holdings in companies by the issue of shares for cash or increase of non-cash
capital insofar as the acquisition of a company or holdings in a company lies within the interests
of the company, (d) to issue shares as part of a capital increase for cash to banks, as long
as the latter have agreed to offer the shares taken up to the general public and to remit the
difference between price at issue and on placement to the company (Authorised Capital 2000/I).
Authorised capital is reduced to 11,122,500 euros as a consequence of the servicing of the
Greenshoe option.
AUTHORISED CAPITAL II
Additionally, the Board of Management was authorised at the General Meeting held on
8 May 2000, with the agreement of the Supervisory Board to increase the share capital of
the company by up to 3,000,000 euros by a single or multiple issue of new bearer shares
for cash or increase of non-cash capital. A complete or partial suspension of subscription
rights is permissible in the case of a cash increase in capital, as long as the issue price
of the new shares is not significantly below the market price of similar quoted shares at the
time of fixing the issue price. The Board of Management is authorised, with the agreement
of the Supervisory Board to decide on the suspension of subscription rights and further
details of any increase in capital, and to define the conditions for the issue of shares
(Authorised Capital 2000/Il).
AUTHORISED BUT UNISSUED CAPITAL
For details concerning authorised but unissued capital refer to page 80 and, concerning share
option schemes, to page 98 and under the reference number 31 in the Notes. In addition,
please refer to page 65 for information concerning Consolidated Statement of Shareholders’
Equity.
(19) CAPITAL RESERVES
The costs of flotation incurred by the increase in capital resolved on 8 May 2000 amounting
to 13,103 t euros gross were entered in accordance with SIC 17 with neutral effect on results
at a figure of 8,323 (net of taxes) euros into capital reserves. Accordingly, capital reserves are
shown as follows:
Capital Reserves 31.12.2000 31.12.1999
pro forma
[in 8]
Balance at beginning of financial year 1,250 57,088,000
Premium from capital increase
on 3 March 2000
52,301 0
Premium from capital increase in kind
of 11 April 2000
60,239,207 0
Premium from cash increase in capital I
of 8 May 2000
164,825,000 0
Premium from cash increase in capital II
of 6 June 2000
25,789,725 0
IPO costs
(net of taxes)
-8,323,368 0
Total 242,584,115 57,088,000
(20) DEFERRED TAX LIABILITIES
Provisions for deferred taxes are effected according to the “temporary concept” as per IAS
12 (rev. 1996). In accordance with this standard the tax rates known, valid or adopted on the
closing date are applied. Further information concerning deferred taxes is to be found in
Note (8) “Taxes on Income and Profits”.
ue _ Payment _ Group Activity _ Accounting Policy _ IAS _ US-GAAP _ Operating _ Financing _ Investing _ Final _ Accounts _ Valuation and Consolidation Method _ Provision _ Financial Year _ Majority Holding _ Mergers and Acquisitions _ London _ Los Angeles _ Munich _ Exchange Rate _ Transaction
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Financial Statements
(21) OTHER ACCRUED LIABILITIES
Other accrued liabilities on 31.12.2000 are set out in the following table. Accrued liabilities of
4,994 t euros have a term of up to a year and accrued liabilities of 19,684 t euros have a term
of over five years.
Other accrued liabilities 31.12.2000 31.12.1999
[in T8] pro forma
Accrued liabilities for residuals and participations 36,320 1,966
Accrued liabilities for personnel 1,627 880
Accrued liabilities for reorganisation 927 0
Other accrued liabilities 1,038 0
Total 39,912 2,846
(22) SCHEDULE OF ACCRUED LIABILITIES
Accrued liabilities Accrued Accrued Other
schedule liabilities for liabilities for accrued
[in T8] taxes on profits deferred taxes liabilities Total
Balance on 1.1.2000 0 0 0 0
Additions 13,748 10,403 39,912 64,063
Amount consumed 0 0 0 0
Retransfer -20 0 -2,838 -2,858
Changes in
Consolidated Group
20 0 2,838 2,858
Total 13,748 10,403 39,912 64,063
(23) LIABILITIES
Liabilities to banks are secured by assignments of parts of the film stock and an open
assignment of receivables from sale of licenses. These liabilities are made up as follows:
Liabilities 31.12.2000 31.12.1999
[in T8] pro forma
Liabilities to banks 32,985 61,475
Prepayments 7,825 25,300
Trade accounts
payable
23,048 50,542
Other liabilities 3,581 12,095
Total 67,439 149,412
Of which with a term
of up to a year
65,620 95,973
Of which with a term
of one to five years
1,362 53,439
Of which with a term of over five years 457
(24) CONTINGENCIES
On the closing date there were no contingencies.
(25) OTHER FINANCIAL LIABILITIES
On the closing date the following financial obligations were outstanding, resulting from service,
rental and leasing obligations:
Other financial Between
obligations Less than one Over five
[in T8] a year and five years years Total
Leasing contracts 11 39 0 50
Rental contracts 61 0 0 61
Total 72 39 0 111
ancing Scheme _ Distribution Rights _ Company _ Valuation _ Screenplay _ Film Production _ Goodwill _ Capital _ Share Options _ Employees _ Geographical Markets _ Personnel Costs _ Financial Results _ Income _ Profit _ Reconciliation _ Accounting _ Foundation _ Closing Date _ Box TV Ltd
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94
Financial Statements
IV. Notes to the Cash Flow
Statement
(26) INTEREST PAYMENTS
In the year 2000 the outflow of funds for interest payments amounted to 524 t euros, whilst
interest income amounted to 6,277 t euros. The non-cash element of interest outflows and
of income is entered under Changes to Other Liabilities and Accrued Liabilities and under
Other Assets.
(27) NET CHANGES TO FILM AND LICENSE ASSETS
Net changes to film assets including payments on account on these assets is shown on the
balance sheet in the cash flows from investing activities.
(28) ACQUISITION OF SUBSIDIARIES
Cash outflows for the acquisition of companies in the financial year 2000 came to 266 t euros.
In the context of acquisitions cash funds of 2,721 t euros were taken over. Alongside this,
non-cash transactions totalling 84,567 t euros were realised for these acquisitions.
(29) CASH AND CASH EQUIVALENT
For the purposes of the cash flow statement assets belonging to IM Internationalmedia AG
with an original maturity of up to three months are entered as Cash and Cash Equivalents.
V. Notes to
Segment Reporting
PRINCIPLES
IM Internationalmedia AG is divided into the following three segments (primary report format):
“Owned” Films, “Serviced” Films and Financing Fees. The Segment Reporting is produced
according to the regulations of IAS 14. The distinction of segments occurs according to the
“risks and return” approach. As within Internationalmedia Group, the segmental risks are
divided according to the planned internal organisation structure. The segments correspond
with the management approach required by IAS 14. The information presented concerning
the separate fields of activity (“Owned” Films, “Serviced” Films and Financing Fees) is based
on standard accounting and valuation methods, by which the consolidated numbers in the
Consolidated Financial Statements also were determined.
DESCRIPTION OF THE SEGMENTS
The "Owned” film segment includes all activities relating to the distribution of films for which
Internationalmedia Group has worldwide distribution rights.
The "Serviced" Film segment covers any activity resulting from the distribution of films which
are not the property of the Group. As a rule, in the case of these films, the Group has the distribution
rights for fixed periods and for certain territories.
PRESENTATION OF SEGMENT INFORMATION
Information on segments for the financial year 2000 is presented by separate fields of activity
and breaks down as follows:
entories _ Trade Accounts _ Share Capital _ Commercial Register _ Cash Contribution _ Agreement _ General Meeting _ Costs of Flotation _ Film Stock _ Sale of Licences _ Valuation Year _ Film Assets _ Funds Statement _ Film Rights _ Europe _ North America _ Asia _ Board Member _ Manag
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96
Financial Statements
(30) SEGMENT DETAILS
Business segments Business segments
2000
“Owned” “Serviced” Financing Elimination/
[in T8] Film Film Fees transitions Group
External revenues 116,392 19,697 13,573 0 149,662
Internal group revenues 57,948 0 0 -57,948 0
Total revenue 173,340 19,697 13,573 -57.948 149.662
Gross profit 32,015 855 13,573 0 46,443
Project development costs -3,758 -3,758
Distribution costs -2,065
General administration costs -14,892
Other operating income 6,449
Other operating costs -1,164
Goodwill amortisation -3,557
EBIT 27,456
Segment fixed assets 35,444 86,234 121,678
Depreciation and amortisation -59,991 -322 -60,313
By region
nt _ VISONO GmbH _ German Auditing Regulations _ Knowledge _ Supervisory Board _ Company _ Gross _ EBIT _ Tax _ Balance Sheet _ Assets _ Investments _ Film Development _ Liabilities _ Cash Flow _ Shareholders’ Equity _ Results _ Fixed-Asset Movement _ Acquisition Costs _ Book Value _
1999
“Owned” “Serviced” Financing Elimination/
[in T8] Film Film Fees Transitions Group
External revenues 72,635 38,210 4,875 0 115,720
Internal group revenues 34,687 0 0 -34,687 0
Total revenue 107,322 38,210 4,875 -34,687 115,720
Gross profit 14,301 650 3,728 0 18,679
Project development costs -1,076 -1,076
Distribution costs -1,306
General administrative costs -3,865
Other operating income 502
Other operating expenses 0
EBIT 12,934
Segment fixed assets 115,051 34,423 149,474
Depreciation and amortisation -58,451 -132 -58,583
Revenues 2000 1999
[in T8] pro forma
Europe 71,852 60,477
North America 41,996 31,674
Asia 9,019 9,829
Other regions 13,222 8,865
Financing fees 13,573 4,875
Total 149,662 115,720
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98
Financial Statements
IV. Notes to the
Share Option Scheme
(31) DETAILS OF THE SHARE OPTION SCHEME
The share option scheme 2000 for employees was set up by the company and adopted at the
Shareholders’ Meeting on 8 May 2000. Amongst other things, the objective of the programme
is to recruit and retain employees and to secure the success of the enterprise by enabling
employees to purchase shares in the company.
Under the share option scheme 2000 the company is authorised to issue to employees
a total of 1,500,000 options to purchase shares in IM Internationalmedia AG over the period
between 16 May 2000 and 8 May 2002. A third of the options is reserved for Board members,
a further third for senior executives and members of subsidiary companies’ management,
and the final third for all other employees. The options entitle the owner to purchase shares
in the company at a price equal to the share price on the day of grant plus 10 per cent.
The options can be paid in three instalments: 33 per cent after two years, a further 33 per
cent at the end of three years and the remaining 33 per cent after four years from the time
the option rights were granted. In each case exercise is only possible within four weeks
after publication of quarterly results.
Under the share option scheme 2000, option rights may only be exercised if the owner
remains in employment at IM Internationalmedia AG or at a subsidiary company. Options
are not transferable.
Share option scheme Number of options
Balance at beginning of financial year 0
Granted 1,113,650
Exercised 0
Expired 0
Balance at end of financial year 1,113,650
Of which may be exercised 0
VII. Other Information
(32) MEMBERS OF THE BOARD OF MANAGEMENT DURING THE
FINANCIAL YEAR 2000
Board Management
Florian Bollen Chairman strategic consulting,
(from 2 March 2000) internet, investor relations
Moritz Bormann Deputy Chairman coordination and monitoring
(from 2 March 2000) of US productions, film financing,
mergers and acquisitions
Guy East (from 11 April 2000) development and acquisition of
European film productions,
global distribution
Andreas Konle (from 1 May 2000) finance, management, personnel
Nigel Sinclair (from 11 April 2000) film distribution in North America,
contacts with US film industry
(33) MEMBERS OF THE SUPERVISORY BOARD DURING THE
FINANCIAL YEAR 2000:
Supervisory Board Profession other
supervisory
board duties
Antoinette Hiebeler-Hasner Chairman Tax adviser @Lounge Entertainment AG,
(from 2 March 2000) Munich
Matthias Deyle (from 2 March 2000) Film producer None
Hugh Grant (from 8 May 2000) Actor None
Dr. Mathias Hink (from 8 May 2000) Banker None
Stefan von Moers (from 2 March 2000) Lawyer @Lounge Entertainment AG,
Munich
Tony Stewart (from 8 May 2000) Financial consultant None
ment _ Group Activity _ Accounting Policy _ IAS _ US-GAAP _ Operating _ Financing _ Investing _ Final _ Accounts _ Valuation and Consolidation Method _ Provision _ Financial Year _ Majority Holding _ Mergers and Acquisitions _ London _ Los Angeles _ Munich _ Exchange Rate _ Transaction _ Finan
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Financial Statements
(34) COMPENSATIONS - SUPERVISORY BOARD
AND BOARD OF MANAGEMENT
In the financial year 2000 the total compensation of the Board of Management amounted
to 3,483 t euros. In addition, during the financial year members of the Board were granted
375,000 share options.
In the financial year 2000 the compensation of the Supervisory Board amounted to a total
of 35 t euros in conformity with the articles of incorporation.
(35) NUMBER OF EMPLOYEES
In the financial year 2000 an average of 76 people were employed at the Internationalmedia
Group. On 31.12.2000 there was a total of 88 employees.
(36) RELATED PARTIES’ TRANSACTIONS
Under IAS 24 the management of IM Internationalmedia AG, its shareholders and the
Supervisory Board are considered to be “related parties”. During the reporting period business
transactions with Mrs. Hiebeler-Hasner of 18 t euros and with Mr. Deyle of 43 t euros were
recorded. Costs in connection with the flotation of 5,529 t euros were reimbursed to Onda
Entertainment Inc., a company belonging to Mr. Bormann.
Members of the Board of Management receive annual compensation containing both fixed and
variable elements. In the reporting period these amounted to 3,483 t euros.
(37) EVENTS AFTER THE BALANCE SHEET DATE
In January 2001 IM Internationalmedia AG acquired a stake of 25.1 per cent in VISONO GmbH,
Berlin. VISONO GmbH is active in the field of rich media content. IM Internationalmedia AG
has the option to take up a further holding of up to 25.0 per cent in the company.
In addition, on 4 January 2001 receivables amounting to 65,844 t euros from a large American
studio were received, which were due in financial year 2000.
(38) DISTRIBUTION OF PROFITS
It is proposed that IM Internationalmedia AG’s annual deficit for the year just ended
amounting to - 1,706 t euros (according to HGB [German Commercial Code]) be carried
forward.
Munich, March 7, 2001
IM Internationalmedia AG – The Board of Management
Florian Bollen Moritz Bormann Guy East
Andreas Konle Nigel Sinclair
g Scheme _ Distribution Rights _ Company _ Valuation _ Screenplay _ Film Production _ Goodwill _ Capital _ Share Options _ Employees _ Geographical Markets _ Personnel Costs _ Financial Results _ Income _ Profit _ Reconciliation _ Accounting _ Foundation _ Closing Date _ Box TV Ltd _ Inventori
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102
Financial Statements
Auditors’ Opinion
We have audited the Consolidated Financial Statements, comprising the balance sheet,
the Income Statement and the Statements of Changes in shareholders’ equity and Cash
Flows as well as the Notes to the Financial Statements prepared for the business year from
January 1 to December 31, 2000. The preparation and the content of the Consolidated
Financial Statements in accordance with International Accouting Standards (IAS) are the
responsibility of the Company’s management. Our responsibility is to express an opinion
on these Consolidated Financial Statements based on our audit.
We conducted our audit of the Consolidated Financial Statements in accordance with
German auditing regulations and German generally accepted standards for the audit of
financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW) and International
Standards on Auditing (ISA). Those standards require that we plan and perform the audit
such that it can be assessed with reasonable assurance whether the Consolidated Financial
Statements are free of material misstatements. Knowledge of the business activities and the
economic and legal environment of the Group and evaluations of possible misstatements
are taken into account in the determination of audit procedures. The evidence supporting
the amounts and disclosures in the Consolidated Financial Statements are examined on
a test basis within the framework of the audit. The audit includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the Consolidated Financial Statements give a true and fair view of the net
assets, financial position, results of operations and cash flows of the Group for the business
year in accordance with International Accounting Standards.
Our audit, which also extends to the Group Management Report prepared by the Company’s
management for the business year from January 1 to December 31, 2000, has not led to any
reservations. In our opinion on the whole the group management report provides a suitable
understanding of the Group`s position and suitably presents the risks of future development.
In addition, we confirm that the Consolidated Financial Statements and the Group Management
Report for the business year from January 1 to December 31, 2000 satisfy the conditions
required for the Company’s exemption from its duty to prepare Consolidated Financial Statements
and the Group Management Report in accordance with German law.
Munich, March 15, 2001
KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Dr. Ellrott Maurer
Auditor Auditor
rade Accounts _ Share Capital _ Commercial Register _ Cash Contribution _ Agreement _ General Meeting _ Costs of Flotation _ Film Stock _ Sale of Licences _ Valuation Year _ Film Assets _ Funds Statement _ Film Rights _ Europe _ North America _ Asia _ Board Member _ Management _ VISONO
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104
Financial Statements
Report of the
Supervisory Board
In the year 2000, the Supervisory Board was informed on the situation of the company by
the Board of Management in two meetings (4 September 2000, 15 September 2000) as well
as in individual meetings and passed the required resolutions pursuant to its duties legally
established Statute.
Corporate business development as well as medium-and-long term corporate strategy,
including planning of finances and personnel, formed the focal point of the Board of Management’s
reporting. The main focus of our consultancy activities were the economic development
of the whole Group as well as specific business areas.
In the Year 2000 necessary resolutions were passed in Supervisory Board meetings as well
as via circulars. No special committees were required. The full Supervisory Board gave advise
and took decisions on all important topics of the Year 2000. Acquisitions were approved
after detailed meetings with the Board of Management.
The Financial Statements of IM Internationalmedia AG and the Consolidated Financial
Statements as of December 31, 2000, as well as the notes have been audited by KPMG
Deutsche Treuhandgesellschaft AG Wirtschaftsprüfungsgesellschaft. They expressed an
unqualified opinion.
The auditors’ report of KPMG on both the Financial Statements and the Consolidated Financial
Statements were available to the Supervisory Board and were discussed in detail with the
auditors at the meeting of the Supervisory Board on March 16, 2001. Based on our examination
of the documents made available by the auditors and the Board of Management, we have
no reservations and agree with the auditors’ opinion. The Supervisory Board approves the
Financial Statements for the year 2000 – which are herewith passed pursuant § 127 AktG.
The Supervisory Board expresses its thanks to the Board of Management and all employees
of IM Internationalmedia AG and its subsidiaries for their performance and commitment during
the previous year.
Munich, March 17, 2001
Antoinette Hiebeler-Hasner
Chairman of the Supervisory Board
bH _ German Auditing Regulations _ Knowledge _ Supervisory Board _ Company _ Financial Results _ Income _ Profit _ Reconciliation _ Accounting Personnel Costs _ Financial Results _ Income _ Profit _ Reconciliation _ Accounting _ Foundation _ Closing Date _ Box TV Ltd _ Distribution Righ
G r o u p
D a t a
PAGE
105

PAGE
106
G r o u p
D a t a
ANNUAL REVIEW
When the working-class city of Keighley, England, is chosen to host
the National Hair Championships, almost all the locals are excited. But
MM. REPORT
not Phil (Alan Rickman), the one-time golden boy of the competitive
hairdressing circuit. Phil hung up his scissors when his wife and model,
Shelley (Natasha Richardson), left him and their son, Brian (Josh Hartnett),
to set up shop - and housekeeping - with Sandra (Rachel Griffiths). Old
habits die hard, however. And when Phil, Shelley, and Sandra learn that
some outsiders are bending the rules to score an underhanded win, they
SHARE
set aside their differences to dive hair-first into the contest.
FINANCIAL STATEMENT
PAGE
KONZERNABSCHLUSS
GROUP DATA
IM AG FINANCIALS
“Blow Dry” > 2000 /2001
Natasha Richardson,
G r o u p D a t a
Rachel Griffiths, Alan Rickman,
Heidi Klum und Josh Hartnett
nchen _ Beverly Hills _ Los Angeles _ London _ Natasha Richardson _ Rachel Griffiths _ Alan Rickman _ Heidi Klum _ Josh Hartnett _ München _ Beverly Hills _ Los Angeles _ London _ Natasha Richardson _ Rachel Griffiths _ Alan Rickman _ Heidi Klum _ Josh Hartnett _ Munich _ Beverly Hills _ Los An-
107

PAGE
108
Group Data
Locations
IM Internationalmedia AG
Cuvilliésstraße 25
D - 81679 Munich
Tel.: +49 (89) 98 107-100
Fax: +49 (89) 98 107-199
E-Mail: info@internationalmedia.de
Internet: http://www.internationalmedia.de
Pacifica Film Development Inc.
335 North Maple Drive
Suite 235
Beverly Hills, CA 90210
Tel.: +1 (310) 285-969-6
Fax: +1 (310) 285-969-1
Intermedia Film Equities Inc.
8490 Sunset Boulevard
Los Angeles, CA 90069
Tel.: +1 (310) 777-000-7
Fax: +1 (310) 777-000-8
Intermedia Film Equities Ltd
9 -13 Grosvenor Street
London WIK 4QA
Tel.: +44 (20) 74 95-3322
Fax: +44 (20) 74 95-3993
Group Structure
IM Filmproduktions-
und Vertriebs
GmbH & Co.KG
München Munich
100 %
IM IM Internationalmedia AG
BOX TV Ltd
24,9 %
Intermedia Film
Equities Ltd
Dovestar Ltd
100 %
London
100 %
Intermedia Film
Intermedia Film
Developement
Development Ltd
Inc.
100 %
100 %
Intermedia Film
Distribution Ltd
100 %
Pacifica Film
Distribution LLC
Los Angeles
100 %
RPM Guaranty N. V.
100 %
Intermedia Film
Equities USA Inc. Inc.
100%
Intermedia
Music Ltd
100%
Pacifica Film
Development Inc.
Los Angeles
100 %
Intermedia.Com
Ltd
100%
MEI Films Ltd
100%
es _ London _ Natasha Richardson _ Rachel Griffiths _ Alan Rickman _ Heidi Klum _ Josh Hartnett _ München _ Beverly Hills _ Los Angeles _ London _ Natasha Richardson _ Rachel Griffiths _ Alan Rickman _ Heidi Klum _ Josh Hartnett _ Munich _ Beverly Hills _ Los Angeles _ London _ Natasha Rich-
IM AG
Financials
PAGE
109

PAGE
110
IM AG
Financials
IM AG ABSCHLUSS
IM AG NOTES
odwill _ Payments _ Trade Accounts _ Liabilities _ German Commercial Code _ Stock Companies Law _ Additions _ Disposals _ Acquisition Costs _ Liquid Assets _ Capital _ Stock Exchange _ Share Certificates _ Share Subscription _ Quarterly Results _ Xetra _ Share Price _ Sales _ Liabilities _ N
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112
Financials
IM AG Balance Sheet
AS OF 31 DECEMBER 2000 AS PER HGB
(WITH COMPARATIVE FIGURES FOR THE PREVIOUS YEAR) 1
Assets Notes 31.12.2000 31.12.1999
[in 8] [in 8]
A. Intangible assets
Goodwill 0,00 0,00
Total intangible assets (1) 0,00 0,00
Fixes assets
Other plant, business
and office equipment 232,945.60 0.00
Payments on account 10,243.89 0.00
Total fixed assets
Financial assets
(2) 243,189.49 0.00
Investment in Subsidiaries 33,795,559.27 0.00
Loans to subsidiaries 145,460,471.00 0.00
Total financial assets (3) 179,256,030.27 0.00
Total noncurrant assets 179,499,219.76 0.00
B. Current assets
Trade accounts
receivable
Receivables from
(4) 790.97 0.00
subsidiaries 13,624.00 0.00
Other assets
Cheques, cash in hand
(5) 2,747,862.90 55.75
and at bank (6) 68,935,409.57 25,403.01
Total current assets 71,697,687.44 25,458.76
C. Prepaid expenses 25,146.11 0.00
Total assets 251,222,053.31 25,458.76
Shareholders’ Notes 31.12.2000 31.12.1999
equity and liabilities [in 8] [in 8]
A. Shareholders’ equity
Subscribed capital 30,877,500.00 25,000.00
Capital reserves 190,668,275.81 1,250.00
Loss carried forward -1,706,882.69 -791.24
Total Shareholders’ equity (7) 219,838,893.12 25,458.76
B. Accrued liabilities
Other accrued liabilities 1,195,617.15 0.00
Total Accrued liabilities (8) 1,195,617.15 0.00
C. Liabilities
Liabilities
(9)
to banks
Trade accounts
176.60 0.00
payable (10) 567,356.45 0.00
Liabilities to
subsidiaries 29,572,953.11 0.00
Other liabilities
of which taxes 33,924.44 8 (prev. year 0.00 8)
of which social security 10,801.08 8 (prev. year 0.00 8)
(11) 47,056.88 0.00
Total Liabilities 30,187,543.04 0.00
Total Shareholders’ equity and liabilities 251,222,053.31 25,458.76
1) The previous year’s figures refer to the partial financial year from 16 August to 31 December 1999 for
deltaaquarii Beteiligungs GmbH (later: Intermedia GmbH, then: Intermedia AG, then: IM Internationalmedia AG)
odwill _ Payments _ Trade Accounts _ Liabilities _ German Commercial Code _ Stock Companies Law _ Additions _ Disposals _ Acquisition Costs _ Liquid Assets _ Capital _ Stock Exchange _ Share Certificates _ Share Subscription _ Quarterly Results _ Xetra _ Share Price _ Sales _ Liabilities
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114
Financials
IM AG
Income Statement
FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2000 AS PER HGB
(WITH COMPARATIVE FIGURES OF THE PREVIOUS YEAR) 1
Notes 2000 1999
[in 8] [in 8]
Revenues (13) 33,898,889.80 0.00
Other operating income (14) 21,567,167.13 0.00
Total services and revenue 55,466,056.93 0
Cost of materials (15) -36,566,256.90 0
Personnel expenses (16) -404,862.26 0
Depreciation
Other operating
-447,973.75 0
costs
Income from loan of
(17) -23,896,375.86 -791,24
financial assets (18) 1,496,857.00 0.00
of which from subsidiary companies 1,496,857 8 (prev. year 0.00 8)
Other interest and similar revenue (18) 5,403,127.93 0.00
Interest and similar expenditures (18) -2,756,664.55 0.00
of which from subsidiary companies 979,069 8 (prev. year 0.00 8)
Result from ordinary business activities/
Annual deficit -1,706,091.45 -791,24
Loss carried forward from last year -791,24 0.00
Loss carried forward -1,706,882.69 -791,24
1) The previous year’s figures refer to the partial financial year from 16 August to 31 December 1999 for
deltaaquarii Beteiligungs GmbH (later: Intermedia GmbH, then: Intermedia AG, then: Internationalmedia AG)
Notes to the
Financial Statements
I. General
IM Internationalmedia AG’s annual Financial Statements have been drawn up in accordance
with the regulations of the German Commercial Code (HGB) for large corporations and the
German Stock Companies Law (AktG). The parent company, IM Internationalmedia AG has
used the possibility of consolidating the Annual Report and Group Annual Report which is allowed
under Art. 315 para. 3 of the Commercial Code. Accordingly, IM Internationalmedia AG’s
Annual Financial Statements are published together with the Consolidated Financial Statements
in the Companies’ Register of the Munich District Court under number HRB 130722.
INFORMATION ON THE COMPANY
IM Internationalmedia AG (IM AG) was formed from Intermedia AG following a resolution
passed at the Shareholders’ Meeting held on 8 May 2000. Intermedia AG itself had been
formed on 2 March 2000 as a result of the transformation of Intermedia GmbH. The change
in name from deltaaaquarii Beteiligungs GmbH to Intermedia GmbH had taken effect on
21 February 2000. Intermedia AG’s share capital amounted to 50,000 euros. By resolution
of the Shareholders’ Meeting held on 11 April 2000 the share capital was increased to
24,375,000 euros. At the Shareholders’ Meeting of IM Internationalmedia AG held on
8 May 2000 it was also resolved, under the listing on the Neuer Markt, to increase the capital
by 5,625,000 euros to 30,000,000 euros and to have authorised capital of a total amount of
15,000,000 euros. With the approval of the Supervisory Board on 6 June 2000, 877,500 euros
was taken from the authorised capital to service the Greenshoe option. The subscribed
capital thus amounts to 30,877,500 euros.
The increase in capital to 24,325,000 euros approved on 11 April 2000 is based on an
increase in capital and non-cash contributions, represented as follows: The business of
IMF Internationale Medien und Film GmbH & Co. Produktions KG (IMF), and all shares in
Pacifica Film Distribution LLC (Pacifica Distribution), Pacifica Film Development Inc. (Pacifica
Development) and Intermedia Film Equities Limited (Intermedia). As consideration for the
contribution IMF received shares to the amount of 3,351,016 euros, the shareholders in
Pacifica Distribution received shares to the amount of 8,106,322 euros, shareholders in
Pacifica Development shares to the amount of 100 euros and shareholders in Intermedia
shares amounting to 12,867,562 euros.
tes _ Financial Results _ Share Ownership _ Board of Management _ Supervisory Board _ Goodwill _ Payments _ Trade Accounts _ Liabilities _ German Commercial Code _ Stock Companies Law _ Additions _ Disposals _ Acquisition Costs _ Liquid Assets _ Capital _ Stock Exchange _ Share Certificate
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116
Financials
On 29 September 2000 IM Filmproduktions- und Vertriebs-Verwaltungs GmbH (IM GmbH) was
founded with an initial contribution of 25,000 euros, one of the objects of which is to assume
personal liability in IM Filmproduktions- und Vertriebs GmbH & Co. KG (IM KG), which was also
founded on 29 September 2000.
As part of the restructuring of the Group, effective 12 a.m. on 29 September 2000 IM Internationalmedia
AG contributed its business activities in the fields of film and media to IM Filmproduktions-
und Vertriebs GmbH & Co. KG (hereinafter referred to as IM KG) in return for
shares. In consideration for the transfer of assets IM AG received a participation to the amount of
5,000,000 euros and thus obtained a 100 per cent stake in the corporate value of IM KG.
IM KG’s objective is the development, financing and production of feature films and their
distribution while IM Internationalmedia AG, since the capital contribution was made, has held
the position of de facto Group holding company.
IM Internationalmedia AG draws up Consolidated Financial Statements in accordance with
the regulations set out in International Accounting Standards (IAS), as required for companies
listing on the Neuer Markt. These Consolidated Financial Statements are exempt under the
provisions of Art. 292a of the Commercial Code.
II. Accounting principles
IM Internationalmedia AG’s annual Financial Statements as of 31 December 2000 are
drawn up in accordance with the regulations laid down in the Commercial Code for
large corporations, in accordance with Stock Companies Law and with the supplementary
provisions of the articles of incorporation.
COMPARISON WITH THE PREVIOUS YEAR
The figures for the previous year refer to the annual Financial Statements as of
31 December 1999 of the legal predecessor deltaaquarii Beteiligungs GmbH which had
not yet begun operations (incomplete financial year for the period 16 August 1999 to
31 December 1999).
III. N o t e s t o t h e B a l a n c e
S h e e t
(1) INTANGIBLE ASSETS
Intangible assets acquired are valued at acquisition cost less depreciation calculated in
accordance with the straight-line method. Goodwill is written down over its probable
useful life of 20 years. In the event of decreases in value thought to be permanent and
extraordinary depreciation is charged.
IMF’s contribution made in April 2000 resulted in intangible assets – goodwill – totalling
11,129 t euros written down using the straight-line method over a fixed useful life of 20 years.
The transfer of IM Internationalmedia AG’s film and media activities to IM KG resulted in a
transfer of assets. Accordingly, they were only written down over 9 months in the financial
year 2000.
Intangible Goodwill
assets
[in 8]
Accumulated acquisition costs at 1.1.2000 0
Additions 11,128,684
Disposals 11,128,684
Accumulated acquisition costs at 31.12.2000 0
Accumulated amortisation at 1.1.2000
Additions 417,326
Disposals 417,326
Accumulated amortisation at 31.12.2000 0
Residual book values at 31.12.2000 0
hare Subscription _ Quarterly Results _ Xetra _ Share Price _ Sales _ Liabilities _ Notes _ Financial Results _ Share Ownership _ Board of Management _ Supervisory Board _ Goodwill _ Payments _ Trade Accounts _ Liabilities _ German Commercial Code _ Stock Companies Law _ Additions _ Disposal
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(2) FIXED ASSETS
Tangible fixed assets are valued at purchase and manufacturing cost less depreciation.
Tangible fixed assets are written down using the straight-line method only, using the
simplification rule of R44 para. 2 of the Income Tax Regulations. For other assets, fixtures
and fittings the useful life is between 3 and 20 years. Economic assets with a low value are
written down in full in the year they are acquired. An extraordinary depreciation is charged,
if it is expected that a decrease in value will be permanent. The extraordinary depreciation
is revoked.
Fixed assets Other plant,
business and Payments
[in 8] office equipment on account Total
Accumulated acquisition costs at 1.1.2000 0 0 0
Additions 266,288 10,244 276,532
Disposals - 7,138 0 - 7,138
Accumulated acquisition costs at 31.12.2000 259,150 10,244 269,394
Accumulated depreciation at 1.1.2000 0 0
Additions 30,648 0 30,648
Disposals 4,444 0 4,444
Accumulated depreciation at 31.12.2000 26,204 0 26,204
Residual book values at 31.12.2000 232,946 10,244 243,190
(3) FINANCIAL ASSETS
Financial assets are valued at the acquisition cost, if necessary less depreciation. The
additions of shares in associated companies refers to the contribution of all shares in
Intermedia Film Equities Ltd, London, in Pacifica Film Distribution LLC, Los Angeles, and in
Pacifica Film Development Inc., Los Angeles. IM Filmproduktions- und Vertriebs GmbH & Co. KG,
Grünwald, was founded in the second half of the year .
Loans to associated companies refer essentially to providing Intermedia Film Equities Ltd
with necessary funds. Debts in foreign currencies are converted at the rate prevailing on the
closing date.
Financial assets Investments in Loans to
subsidiaries subsidiaries Total
[in 8]
Accumulated acquisition costs at
1.1.2000 0 0 0
Additions 33,795,559 163,396,985 197,192,544
Disposals 0 17,936,514 17,936,514
Accumulated acquisition costs at
31.12.2000 33,795,559 145,460,471 179,256,030
Accumulated depreciation
at 1.1.2000 0 0 0
Additions 0 0 0
Disposals 0 0 0
Accumulated depreciation
at 31.12.2000 0 0 0
Remaining book value at 31.12.2000 33,795,559 145,460,471 179,256,030
uisition Costs _ Liquid Assets _ Capital _ Stock Exchange _ Share Certificates _ Share Subscription _ Quarterly Results _ Xetra _ Share Price _ Sales _ Liabilities _ Notes _ Financial Results _ Share Ownership _ Board of Management _ Supervisory Board _ Goodwill _ Payments _ Trade Accounts _ Lia
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(4) TRADE ACCOUNTS RECEIVABLE
Debts for supplies and services are shown at their nominal value. Short-term debts in foreign
currencies are converted at the rate prevailing on the closing date.
(5) OTHER ASSETS
Other receivables and other assets are shown at their nominal value. Any default or other
risks are taken into account by means of corresponding adjustments in value. Short-term
debts in foreign currencies are converted at the rate prevailing on the closing date.
This applies in particular to offset accounts with other companies in the Internationalmedia
Group, claims for tax refunds and interest receivable.
Other in more in more
assets than than
31.12.2000 one year 31.12.1999 one year
[in 8]
Other receivables
from subsidiaries 13,624 0 0 0
Tax refunds 893,126 0 0 0
Other assets 1,854,737 0 56 0
(6) CASH
2,761,487 0 56 0
Cash includes credit balances with various banks in different currencies. Credit balances in
foreign currencies are converted at the rate prevailing on the closing date.
(7) SHAREHOLDERSS’ EQUITY
Subscribed capital has increased considerably following the Company’s flotation on the
stock exchange. It is divided into 30,877,500 no par value bearer ordinary shares with an
arithmetical interest in the share capital of 1 euro per share.
A resolution passed at the Shareholders’ Meeting held on 8 May 2000 authorised the Board of
Management to increase the Company’s share capital with the agreement of the Supervisory
Board by 8 May 2005 by issuing up to 12,000,000 new bearer shares for contributions in cash
or kind on one or several occasions, in total up to 12,000,000 euros (authorised capital 2000/I).
The Board of Management is also authorised to decide, with the agreement of the Supervisory
Board, on the exclusion of subscription rights and to determine further details of any capital
increase, the conditions for the issue of shares and the details of the rights embodied in the
share certificates.
The Board of Management has made use of this capital authorised for 2000/I in the year under
review by placing, in order to service the greenshoe option agreed as part of the flotation,
877,500 bearer shares with no par value and with an arithmetical share of 1 euro of the
Company’s share capital at an issue price of 32 euros per share. The remaining capital
authorised for 2000/I, valid until 8 May 2005, thus amounts to 11,122,500 euros as at the
balance sheet date.
The Board of Management was also authorised by the Shareholders’ Meeting held on
8 May 2000 to increase the Company’s share capital with the agreement of the Supervisory
Board by 8 May 2005 by issuing new bearer shares for contributions in cash or kind on
one or several occasions, by up to 3,000,000 euros (authorised capital 2000/I). Suspending
subscription rights when the capital held in cash is increased is permissible in whole or in part
if the issuing price of the new shares is not substantially less than the market price of the
shares already quoted on the stock exchange on the same terms at the time the issue price
is finally determined (authorised capital 2000/II). The Board of Management is authorised, with
the agreement of the Supervisory Board, to decide on the suspension of the shareholders’
subscription rights and to determine further details of any capital increase and the conditions
for the share issue. The capital authorised for 2000/II is 3,000,000 euros as at balance sheet
date and remains valid until 8 May 2005.
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The General Meeting of Shareholders held on 8 May 2000 also voted on a contingent capital
increase amounting to 1,500,000 euros in accordance with Art. 192 para. 1,2 no 3 in order to
cover the granting of subscription rights to employees.
The resolution complies with the requirements of Art. 193 para. 2 AktG by virtue of including
the following statements:
7.1 CONTENTS OF THE SHARE SUBSCRIPTION RIGHTS
Each share subscription right gives entitlement to purchase one of the bearer shares.
The new shares in the Company resulting from the exercise of the share subscription rights
are equivalent to the shares in the Company already issued at the time the new shares are
issued as regards the right to participate in profits.
7.2 PEOPLE ENTITLED TO SUBSCRIBE AND ALLOCATION
The share subscription rights may be offered to members of the Board of Management of
Intermedia AG (now IM Internationalmedia AG), to members of the management of associated
companies at home and abroad within the meaning of Art. 15 AktG and to employees of
Intermedia AG (now IM Internationalmedia AG) and associated companies at home and
abroad in accordance with Art. 15 AktG and in each case the statutory subscription rights
of the shareholders are suspended.
Share subscription rights are to be allocated to individual groups as follows:
a) Members of the Board of Management of Intermedia AG (now IM Internationalmedia AG)
may be allocated a total of up to 500,000 shares.
b) Members of the management of companies associated with Intermedia AG
(now IM Internationalmedia AG) may be allocated a total of up to 500,000 shares.
c) Employees of Intermedia AG (now IM Internationalmedia AG) and associated
companies may be allocated a total of up to 500,000 shares.
In particular, who is entitled to apply for shares is determined by the Board of Management
and, if members of the Board of Management and members of the management of companies
associated with Intermedia AG (now: IM Internationalmedia AG) are amongst those entitled,
by the Supervisory Board.
7.3 ISSUE PERIODS
Before flotation on the stock market the share subscription rights may be issued at any time,
that is up to one day before acceptance for listing on a German stock market.
After quotation on the stock market the share subscription rights may be issued to beneficiaries
only four times a year, within a period of six weeks after publication of the quarterly results.
7.4 LOCK-UP PERIOD
The various holders of the share subscription rights may exercise their share subscription
rights on expiry of the following lock-up periods but must comply with the option terms:
a) After a lock-up period of at least two years has expired since the share subscription rights
were issued a maximum of 1/3 of the share subscription rights may be exercised.
b) After a lock-up period of at least three years has expired since the share subscription
rights were issued a maximum of a further 1/3 of the share subscription rights may be
exercised.
c) After a lock-up period of at least four years has expired since the share subscription rights
were issued all the share subscription rights may be exercised, provided they have not
already been exercised previously.
7.5 PERIODS DURING WHICH RIGHTS MAY BE EXERCISED
a) The share subscription rights may be exercised in the four years following expiry of the
waiting period subject to b) below, and in each case only within a period of four weeks
of publication of a quarterly or half-yearly report.
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b) Despite the preconditions for exercising the share subscription rights contained in a)
above, they may not be exercised during the following periods:
- before General Meetings of Shareholders of the Company between the last day for
depositing the shares and the third bank working day after the General Meeting of
Shareholders.
- within a period of 15 calendar days before the close of the Company’s financial year
- within a period between the day on which the Company publishes an offer relating to
new shares or loan stock with conversion or option rights in a compulsory publication
of the Frankfurt Stock Exchange and the end of the final day of the subscription period.
7.6 SUCCESS TARGETS
Share subscription rights issued prior to the Company floating on the stock exchange may
be exercised only when the closing price of the shares as quoted on the “Xetra” electronic
trading system on the Frankfurt Stock Exchange is at least equal to the issue price of the
shares in the Company on flotation on the stock exchange plus 10 per cent on a minimum
of five consecutive trading days following the issue of the share subscription rights.
Share subscription rights issued after the Company floated on the stock exchange may
be exercised only when the closing price of the shares as quoted on the “Xetra” electronic
trading system on the Frankfurt Stock Exchange since the issue of the share subscription
rights is at least equal to the closing price of the shares ascertained by the “Xetra” electronic
trading system on the Frankfurt Stock Exchange on the day the share subscription rights
were granted plus 10 per cent on a minimum of five consecutive trading days .
7.7 BASE PRICE
When exercising a share subscription right issued before the Company is listed on the stock
exchange the person entitled to do so must pay a base price to the Company corresponding
to the issue price of the shares in the Company at the time they are listed on the stock
exchange plus 10 per cent.
When exercising a share subscription right issued after the Company is listed on the stock
exchange the person entitled to do so must pay a base price to the Company corresponding to
the closing price of the shares quoted on the "Xetra” electronic trading system on the Frankfurt
Stock Exchange on the day the share subscription rights were granted plus 10 per cent.
7.8 ADDITIONAL RULES
The Board of Management is authorised, with the agreement the Supervisory Board, to
determine the further details of the share subscription terms, of the issue and of the exercise
of the share subscription rights. If members of the Board of Management are to be allocated
share subscription rights, such authorisation passes to the Supervisory Board.
Shareholders’ equity
Subscribed Capital
Loss
carried
[in 8] capital reserve forward
Situation on 1.1.2000 25,000 1,250 -791
Capital increase of 3 March 2000 25,000 52,301 0
Capital increase of 11 April 2000 24,325,000 0 0
Capital increase of 8 May 2000 5,625,000 164,825,000 0
Capital increase of 6 June 2000 877,500 25,789,725 0
Deficit for the year 0 0 -1,706,092
Total 31.12.2000 30,877,500 190,668,276 -1,706,883
(8) ACCRUED LIABILITIES
The Further provisions contained in the accrued liabilities refer mainly to deferred amounts
for the Annual Report and the General Meeting of Shareholders.
Accrued liabilities
[in 8]
31.12.2000 31.12.1999
Provisions for employee expenses 36,302 0
Provisions for outstanding invoices 713,469 0
Provisions for costs of annual financial statements 98,168 0
Further provisions 347,678 0
1,195,617 0
ra _ Share Price _ Sales _ Liabilities _ Notes _ Financial Results _ Share Ownership _ Board of Management _ Supervisory Board _ Goodwill _ Payments _ Trade Accounts _ Liabilities _ German Commercial Code _ Stock Companies Law _ Additions _ Disposals _ Acquisition Costs _ Liquid Assets _ Capi
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(9) LIABILITIES
Liabilities are valued at repayment amounts. Short-term liabilities in foreign currencies have
been converted at rates on the settling day. All liabilities have a remaining term of up to one
year.
(10) TRADE ACCOUNTS PAYABLE
All liabilities arising from supplies and services are to other companies and have a remaining
term of up to one year. Apart from the reservations of title customary in the business no
other securities are furnished.
(11) OTHER LIABILITIES
The remaining life for all other liabilities is up to one year. No securities are furnished for the
liabilities.
Other liabilities
[in 8]
31.12.2000 31.12.1999
Tax liabilities 33,924 0
Social security liabilities 10,801 0
Liabilities to subsidiaries 29,572,953 0
Other liabilities 2,332 0
(12) CONTINGENT LIABILITIES
29,620,010 0
There were other financial liabilities in the form of tenancy and leasing liabilities to the amount
of 61 t euros (0 t euro in the previous year).
IV. Notes to the
Income Statement
(13) REVENUES
The revenues arise from the commercialisation of two feature films up to 28 September 2000.
The sole outlet is North America.
(14) OTHER OPERATING INCOME
The other operating income is essentially from exchange gains of 9,567 t euros (0 t euro in
the previous year) and 12,000 t euros as a result of splitting off the operations of the film and
media areas from IM Internationalmedia AG and incorporating them in IM KG.
(15) COST OF MATERIALS
The cost of materials refers exclusively to the purchase of items connected with film
production.
(16) PERSONNEL EXPENSES
Personnel expenses
[in 8]
2000 1999
Salaries and wages
Contributions and expenses
371,637 0
for pensions and benefits 33,225 0
404,862 0
Average number of employees during the year 4 0
Number of employees at the date of the report 9 0
tock Exchange _ Share Certificates _ Share Subscription _ Quarterly Results _ Xetra _ Share Price _ Sales _ Liabilities _ Notes _ Financial Results _ Share Ownership _ Board of Management _ Supervisory Board _ Goodwill _ Payments _ Trade Accounts _ Liabilities _ German Commercial Code _
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(17) OTHER OPERATING EXPENSES
Other operating expenses
[in 8]
2000 1999
Exchange rate losses resulting from operations 12,353,816 0
Legal fees 4,749,832 0
General flotation costs 4,541,463 0
Advertising and entertainment 1,163,994 0
Travel and accommodation 263,254 0
Premises (rent, heat, lighting etc.) 56,533 0
Other 767,484 791
(18) FINANCIAL RESULT
Financial result
[in 8]
23,896,376 791
of which of which
2000 subsidiaries 1999 subsidiaries
Income from loans
of financial assets 1,496,857 1,496,857 0 0
Other interest and similar income 5,403,128 0 0 0
Interest and similar expenses -2,756,665 -979,069 0 0
4,143,320 517,788 0 0
V.Other Information
(19) SHARE OWNERSHIP
Company Holdings Shareholders’ Result for
equity previous year
[in %] [in 8] [in 8]
Intermedia Film Equities Limited, London
Pacifica Film Distribution LLC,
100 5,953.573 4,742,000
Los Angeles
Pacifica Film Development Inc.,
100 0 0
Los Angeles
IM Filmproduktions- und
100 0 0
Vertriebs GmbH & Co. KG, Grünwald 100 12,000,000 1 0 2
IM Filmproduktions- und
Verwaltungs GmbH, Grünwald 100 25,000 1 0 2
1) Equity capital at 29.9.2000
2) First business year ends 31.8.2001.
ck Companies Law _ Additions _ Disposals _ Acquisition Costs _ Liquid Assets _ Capital _ Stock Exchange _ Share Certificates _ Share Subscription _ Quarterly Results _ Xetra _ Share Price _ Sales _ Liabilities _ Notes _ Financial Results _ Share Ownership _ Board of Management _ Supervisory Boa
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(20) EXECUTIVE BODIES
20.1 Board of Management
During the period 1 January 2000 to 1 March 2000 the Directors of the legal predecessor of
IM Internationalmedia AG, Intermedia GmbH, were:
Board of Management
Florian Bollen MBA
Moritz Bormann Film producer
The Board of Management consists of five members:
Board Management
Florian Bollen Chairman strategic consulting,
(from 2 March 2000) internet, investor relations
Moritz Bormann Deputy Chairman coordination and monitoring
(from 2 March 2000) of US productions, film financing,
mergers and acquisitions
Guy East (from 11 April 2000) development and acquisition of
European film productions,
global distribution
Andreas Konle (from 1 May 2000) finance, management, personnel
Nigel Sinclair (from 11 April 2000) film distribution in North America,
contacts with US film industry
Information about Directors’ compensation is omitted in accordance with Art. 285 no 9
a) of the Commercial Code in connection with Art. 286 para. 4 of the Commercial Code.
20.2 Supervisory Board
The Supervisory Board consists of six members:
Supervisory Board Profession other
supervisory
board duties
Antoinette Hiebeler-Hasner Chairman Tax adviser @Lounge Entertainment AG,
(from 2 March 2000) Munich
Matthias Deyle (from 2 March 2000) Film producer None
Hugh Grant (from 8 May 2000) Actor None
Dr. Mathias Hink (from 8 May 2000) Banker None
Stefan von Moers (from 2 March 2000) Lawyer @Lounge Entertainment AG,
Munich
Tony Stewart (from 8 May 2000) Financial consultant None
In the past financial year emoluments paid to the Supervisory Board totalled 35,000 euros
(previous year 0 euro).
oodwill _ Payments _ Trade Accounts _ Liabilities _ German Commercial Code _ Stock Companies Law _ Additions _ Disposals _ Acquisition Costs _ Liquid Assets _ Capital _ Stock Exchange _ Share Certificates _ Share Subscription _ Quarterly Results _ Xetra _ Share Price _ Sales _ Liabilities _ No
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(21) SUMMARY OF AFFILIATED COMPANIES
OF IM INTERNATIONALMEDIA AG
Equity interest Period included in Date
in Consolidated Financial of first-time
% Statements consolidation
Pacifica Film Development Inc.,
USA, Los Angeles
100 % 1 April - 31 December 2000 1 April 2000
Pacifica Film Distribution LLC,
USA, Los Angeles
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Film Equities Ltd,
UK, London
100 % 1 April - 31 December2000 1 April 2000
Intermedia Film Equities USA Inc.,
USA, Los Angeles
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Film Distribution Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films Land Girls Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films MP Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films SF Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films JDP Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films Villa Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (FB) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
MEI Films Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (BD) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (ACE) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (HS) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (LLL) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (WD) Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia.Com Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Film Development Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Finance Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (Enigma) Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Up at the Villa Productions Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Codebreaker Productions Ltd,
UK, London
100 % 1 April - 31 December 2000 1 April 2000
Intermedia Facilities Ltd., UK, London 100 % 1 April - 31 December 2000 1 April 2000
Village Intermedia Pictures Lt.,
UK, London
50 % 1 April - 31 December 2000 1 April 2000
Intermedia Arc Pictures Ltd, UK, London 50 % 1 April - 31 December 2000 1 April 2000
Intermedia Films 2000 Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Music Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Dovestar Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
RPM Guaranty N.V.,
Netherlands Antilles, Curacao
100 % 1 April - 31 December 2000 1 April 2000
Dovestar MTE Ltd, UK, London 100 % 1 April - 31 December 2000 1 April 2000
Intermedia Films (TR) Ltd, UK, London
IM Filmproduktions- und Vertriebs-
100 % 1 April - 31 December 2000 1 April 2000
GmbH & Co. KG, Grünwald 100 % 29 September - 31 December 2000 29 September 2000
The Board of Management – Munich, March 7, 2001
Florian Bollen Moritz Bormann Guy East
Andreas Konle Nigel Sinclair
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Auditors’ Opinion
We have audited the Annual Financial Statements, together with the bookkeeping system,
of IM Internationalmedia AG, as well as the Consolidated Financial Statements and its report
on the position of the Company and the Group prepared by the Company for the business
year from January 1 to December 31, 2000. The maintenance of the books and records and
the preperation of the Annual Financial Statements and management report in accordance
with German commercial law are the responsibility of the Company`s management. Our
responsibility is to express an opinion on the Annual Financial Statements, the bookkeeping
system and the management report based on our audit.
We conducted our audit of the Annual Financial Statements and the Consolidated Financial
Statements in accordance with Section 317 of the German Commercial Code (“HGB”) and the
German generally accepted standards for the audit of Financial Statements promulgated by
the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the
audit such that material misstatements affecting the presentation of the net assets, financial
position and results of operastions in the Annual Financial Statements in accordance with
German accounting principles and in the management report are detected with reasonable
assurance. Knowledge of the business activities and the economic and legal environment
of the Company and evaluations of possible misstatements are taken into account in the
determination of audit procedures. The effectiveness of the accounting related internal control
system and the evidence supporting the disclosures in the books and records, the annual
financial statements and the management report are examined primarily on a test basis within
the framework of the audit. The audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of
the annual financial statements and consolidated financial statements and management report.
We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, the Annual Financial Statements and Consolidated Financial Statements give a
true and fair view of the net asset, financial position and results of operations of the Company
and the Group. On the whole the management report provides a suitable understanding of
the Company`s and Group`s position and suitably presents the risks of future development.
Munich, March 8, 2001
KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Dr. Ellrott Maurer
Auditor Auditor
re Subscription _ Quarterly Results _ Xetra _ Share Price _ Sales _ Liabilities _ Notes _ Financial Results _ Share Ownership _ Board of Management _ Supervisory Board _ Goodwill _ Payments _ Trade Accounts _ Liabilities _ German Commercial Code _ Stock Companies Law _ Additions _ Disposals
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Glossary
AFM
American Film Market
Advance Sale
Licence agreement concluded before shooting
starts (e.g. only on the basis of a film
script, the cast and the budget).
Blockbuster
Very successful film (in the USA from box
office takings around 100 million US dollars,
in Germany from at least 3 million viewers)
Bookbuilding Procedure
Procedure to determine the initial price of a
share. Interested investors can submit bids
to purchase shares within a price spread
specified by the investment banks promoting
the stock-market listing. The issue price
is then determined on the basis of the bids
received.
Box Office
Proceeds from the sale of cinema tickets
Copyright
The right to make copies and control an
original literary, musical or artistic work.
DVD
Digital Versatile Disc is a new disc storage
medium for films (similar to a CD-ROM). It
will largely replace videocassettes in the
future.
EBIT
Earnings Before Interest and Tax
EBITDA
Earnings before interest, tax, depreciation
and amortization
EPS (Earnings per share)
Net profit per share. This value is used to
determine the P/E ratio (price/earnings ratio).
Exploitation Stages/Chain
The exploitation stages generally comprise
the exploitation rights for cinema, Pay TV,
Free TV, video/DVD, merchandizing and
Soundtrack.
Film Assets
Value of the film rights portfolio of a private
or legal entity
Film Library
Portfolio of film rights owned by a producer
or distributor
First-Look-Deal
Agreement on the first offer of films or
rights (see also Output Deal)
Free TV
Television financed by fees and advertising
(see also Pay TV)
Greenshoe
Oversubscription reserve or surplus allocation
option that gives an issue consortium
the option of placing a specified volume
of surplus allocations on the market at the
original conditions within the framework
of a bookbuilding procedure.
IAS (International Accounting Standards)
Accounting standards promulgated by the
International Accounting Standards Committee
(IASC).
Independent Distributor
Film distributor not tied to a major studio.
Internet-TV
www supported TV broadcasts
LIBOR (London Interbank Offered Rate)
The London Interbank Offered Rate is the
most important global reference interest
rate for short-term credit and investment
business.
Lock-Up Period
Blocking period for existing shareholders.
The sale of interests owned by existing
shareholders were blocked following the
new issue for a period of six to twelve
months.
Major Studios
US studios with worldwide distribution
(e.g. MGM, Warner Bros., Disney, Columbia
Tristar, Universal Pictures, Paramount,
20th Century Fox)
Market Capitalization and Sales
The value of a company measured by the
value of its share on the stock exchange.
Merchandising
Film-related articles for sale (e.g. T-shirts,
toys etc.)
Minimum Guarantee
Also has to be paid if a film is unsuccessful
and is equal to the purchase price of the
rights in a film. If the film is successful a proportion
of the proceeds from exploitation
also has to be paid
Multiplex cinema
Cinema with several (approximately 6
to 20) auditoria of varying size
Nemax 50
The NEMAX 50 is the index for the 50
biggest securities in the Neuer Markt
measured by market capitalization and
sales.
Net Profit Participation
Participation in the proceeds arising from
the net profit on a film (e.g. by actors)
Neuer Markt
The Neuer Markt is a segment of the
Frankfurt Stock Exchange and provides
a platform for young growth-oriented
companies.
Output Deal
License agreement on all productions that
are produced by a film producer or studio
within a specified period of time.
Owned Films
Films in which a film distributor generally
holds rights unrestricted by time.
Package Business
License agreement on a film package,
comprising several productions.
Pay TV
Broadcasting television programmes that
can be received on payment of a monthly
charge (see also Free TV).
Production Alliances
Contractual agreement between a producer
and a distribution company on realizing film
projects.
Second Look Deal
Agreement on the second offer of films
or rights (see also Output-Deal).
Serviced Films
Films whose rights may be used by film
distribution limited by time.
Soundtrack
Compilation of specially composed or
selected music titles that represent a
specific film.
Territory
Individual countries to which film rights
are assigned.
Video On Demand
Broadcasting transmissions (e.g. films) that
can be triggered by individual order.
Web TV
See Internet TV

Credits
Publisher
IM Internationalmedia AG
Cuvilliésstr. 25
D - 81679 Munich
Tel. +49 (89) 98 107-100
Fax: +49 (89) 98 107-199
www.internationalmedia.de
E-Mail: info@internationalmedia.de
Concept and Content
IM Internationalmedia AG
Editors
Ragna Strutz
Mo Schlattner
Petra Wittmann
Design
Petra Sunita Kull Design
4werk Finanzkommunikation
Photos
Title: Petra Sunita Kull Design
Content: © 2001 Intermedia.
All rights reserved
IM Internationalmedia AG _ Cuvilliésstr. 25 _ 81679 Munich _ Germany
Fon: +49 (89) 98 107-100 _ Fax: +49 (89) 98 107-199
E-Mail: info@internationalmedia.de _ www.internationalmedia.de