(1) Consistent with prior years, EBITDA is stated before programme amortisation, impairment and depreciation. EBITDA less depreciation, amortisation and impairment is equivalent to operating income.

New alliance production Yin Yang Yo!
This new series has been produced by Disney's Jetix Animation Concepts Division, and is the latest co-production to be financed by the Jetix global alliance.

Ōban Star–Racers sold to Jetix in the US
This year Jetix Europe has sold three titles, including Ōban Star-Racers, to Disney ABC Cable Networks Group (US). These titles are airing in the Jetix-branded programming block on Toon Disney in the US.

Achievements in 2006

• Division performance stabilised
• Programming sold to US alliance partners
• Strong sales from flagship titles
• 248 new episodes delivered

Priorities for 2007

• Continue investment in content
• Focus on new titles Yin Yang Yo! and Captain Flamingo

Our programme distribution division sells our television programming to third party and other Jetix alliance channels. Jetix Europe’s library of over 6‚000 episodes¹ is refreshed each year with our new programme production and acquisitions.

Our third party customers are typically free-to-air broadcasters. We sell to over 95 clients in 59 markets. This division is serviced by Disney’s Buena Vista International Television (BVITV)‚ allowing us to leverage their market access and global scale.

Strategy

The division relies on having strong programming to sell. We will maintain our current strategy of investing in great content. We will secure significant positions in our properties by continuing to invest heavily in a limited number of great programmes. We will employ a range of strategies to obtain the best programming. We will co-produce with selected partners and acquire high-quality finished product in the marketplace.

We will continue to leverage the global scale and market power of Disney’s international television distribution arm. Where possible‚ notably in less developed markets‚ we aim to secure Jetix-branded programme blocks‚ which help to build our brand presence and act as powerful marketing for our channels.

Highlights in 2006

Overall‚ the division has shown moderate revenue growth. This was primarily due to Disney–owned Jetix operations in the US and Latin America acquiring several Jetix Europe led productions/co–productions. Disney ABC Cable Networks Group bought A.T.O.M. Alpha Teens on Machines‚ Pucca and Ōban Star–Racers. Jetix Latin America bought several titles‚ including Sonic X and Pucca. These sales are on a title–by–title basis and are likely to occur infrequently. These are flagship titles and Jetix Europe had secured broader territorial rights on them than would normally be the case.

Our core‚ third party programme sales have stabilised‚ supported by a strong performance from our major 2006 titles. Power Rangers has continued to sell well‚ alongside A.T.O.M. Alpha Teens on Machines‚ W.I.T.C.H.‚ Pucca and Ōban Star–Racers. These titles have enjoyed good terrestrial audiences. W.I.T.C.H. aired in all five major European markets and was ranked by kids as one of the top two programmes for its timeslot. Sonic X was notably strong in Italy‚ where it attracted more than 40% of the kids audience.

We have taken delivery of 248 new episodes of programming this year‚ well ahead of last year. There were 102 episodes of Jetix Europe led productions or co–productions (Ōban Star–Racers‚ Pucca‚ A.T.O.M. Alpha Teens on Machines‚ Monster Warriors)‚ 118 episodes were co–produced with our US alliance partners (Power Rangers‚ Get Ed‚ Yin Yang Yo!‚ Super Robot Monkey Team Hyperforce Go!‚ W.I.T.C.H.) and 28 episodes were acquired‚ including Captain Flamingo.

Four new series were commissioned during the year. Yin Yang Yo!‚ produced by Disney’s Jetix Animation Concepts‚ and the latest series of Power Rangers further our relationship with our Jetix US partners. The second series of Pucca strengthens this successful consumer products property. We also acquired Captain Flamingo from Breakthrough Entertainment in Canada. At the end of the year we had 93 episodes in production.

Priorities for 2007

Next year we intend to secure‚ and take a substantial ownership position in‚ more great content. We will continue to invest‚ both in new properties and in the development of existing properties.

We will work with BVITV to get our programming to the widest possible audience and to build on our position as a leading kids entertainment supplier.

New episodes delivered