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| Net Assets, Financial Position and Results of Operations |
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Optimum utilization of programming resources
In all, the cost of programming and materials at Kabel 1 rose 4 percent, to
EUR 155 million. Depreciation of programming assets - the major component
of programming and material costs - was EUR 128 million at Kabel 1
in 2002. This is an 8 percent increase from the previous year's EUR 119 million,
primarily as a result of depreciation due to showings. Unscheduled depreciation,
at roughly EUR 3 million, was only slightly above the previous
year's good level.
Expenses for licenses, transmission fees and materials, at EUR 17 million, were
below the previous year's EUR 19 million. Expenses for purchased services
and goods, largely made up of production costs and professional fees, were
pared down from the previous year's EUR 11 million to EUR 10 million.
An expected rise in scheduled depreciation of programming assets, a small
increase in unscheduled depreciation, and lower expenditures for licenses,
transmission fees, materials, and purchased goods and services, all added up
to show that Kabel 1 made optimum use of its programming resources again
in 2002.
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Net assets and financial position remain stable
Kabel 1's total assets were down 26 percent from the year before, to EUR
117 million.
On the assets side of the balance sheet, the lower figure for total assets is
the result of a decrease in current assets, which were off 25 percent from
the previous year. Cutbacks in programming assetswere the main factor responsible
for this change. On-balance-sheet programming assets were down
from EUR 142 million to EUR 102 million. Programming investments with
an impact on the balance sheet amounted to EUR 89 million in 2002, compared to the previous year's EUR 171 million. The acquisition of additional attractive programming rights over the past two years will ensure high-quality programming at Kabel 1 in the future.
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Kabel 1's on-balance-sheet programming assets are mainly feature films and
series, along with commissioned productions intended for one-time or multiple
airings. Feature films and series are included here as of the beginning
of their license term; commissioned productions are capitalized as showable
programming assets as of their completion. Kabel 1 has further programming
assets worth EUR 33 million that have not yet been capitalized.
Programming assets under contract totaled EUR 135 million as of December
31, 2002.
Kabel 1's programming stock comprises 8,454 hours of broadcasting rights
under contract. Of this total, 6,818 hours are feature films. Within the
ProSiebenSat.1 Group, Kabel 1 is positioned as the station that shows film
classics from the past five decades. A second focus of its programming is
series. Here Kabel 1 has a programming inventory of 1,636 hours. The total
revenue potential of its broadcasting rights is around EUR 212 million. The
programming rights the station had under contract as of December 31,
2002, will cover roughly 51 percent of its needs for licensed programming
until the year 2005. Thus Kabel 1 continues to enjoy a solid programming
base.
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| Key features of the Kabel 1 programming stock |
| Programming stock (hours) |
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On the liabilities and shareholders' equity side of the balance sheet, equity
capitalization improved. A shareholder resolution boosted capital reserves
by EUR 75 million, to EUR 80 million. At the same times, liabilities to affiliated
companies were slashed from EUR 144 million to EUR 30 million, mainly
by the redemption of an intercompany loan from ProSiebenSat.1 Media
AG. The decline in debt to Group companies is the main factor responsible
for the lower total liabilities and equity.
Paying off the intercompany loan from ProSiebenSat.1 Media AG, together
with lower liabilities to affiliated companies, improved the net interest expense
in the income statement, shaving EUR 2 million from the previous
year's figure, to leave EUR -2 million.
Under a profit and loss transfer agreement, the year's net profit of EUR 12
million was transferred directly to ProSiebenSat.1 Media AG.
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New programming increases personnel slightly
Kabel 1 K1 Fernsehen GmbH had an average of 51 employees for the past
year. This represents an increase of 8 percent from the year before. The
new employees were hired to build up the editorial teams for the new Kabel
1 programs. The larger staff, in turn, increased personnel expenses slightly,
to roughly EUR 4 million.
The average age of all Kabel 1 personnel in 2002 was 34. Kabel 1 employed
a total of five interns in 2002.
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