• Unlike the major studios, we are not part of large diversified corporate groups whose other operations can make up for volatility in their results. We principally operate in one business, the production of CG animated feature films, and our lack of a diversified business could adversely affect us. • Weare dependent on DreamWorks Studios for the distribution and promotion of our feature films and direct-to-video films. If DreamWorks Studios were to experience financial difficulty, file for bankruptcy or otherwise cease operations, our business could be materially adversely affected. • We have only recently operated as an independent company, and we do business in a relatively new industry, each of which makes it more difficult to predict whether our business model will be successful. For further discussion of these and other risks that we face, see “—Risk Factors.” OurFilms Films in Production Wearecurrently producing five animated feature films and have committed to acquire distribution rights to one stop-motion animated film being produced by Aardman Animations. In addition, we have a substantial number of projects in development that are expected to fill our release schedule in 2007 and beyond. The table below lists all of our films in various stages of pre-production and production that are expected to be released through 2007. Title Expected Release Date* Voice Talent* Madagascar .................. May27,2005 BenStiller, Chris Rock, Jada Pinkett-Smith, David Schwimmer Wallace & Gromit: Curse of the WereRabbit (stop-motion) .... October 7, 2005 Ralph Fiennes, Helena Bonham Carter, Peter Sallis Over the Hedge ............... May19,2006 Bruce Willis, Garry Shandling Flushed Away ................. Fall, 2006 HughJackman,IanMcKellen, Kate Winslet Shrek 3 ...................... May,2007 MikeMyers,CameronDiaz,EddieMurphy, Antonio Banderas Bees ........................ Fall, 2007 Jerry Seinfeld * Release dates and voice talent are tentative. Due to the uncertainties involved in the development and production of animated feature films, the date of their completion can be significantly delayed and planned voice talent can change. Madagascar. A comic adventure about four New York City Central Park Zoo animals who find themselves unexpectedly shipwrecked on the exotic island of Madagascar. Best of friends in the civilized world, these die-hard native New Yorkers must try to survive in the wild and discover the true meaning of the phrase, “it’s a jungle out there.” Madagascar features the voices of Ben Stiller, Chris Rock, Jada Pinkett-Smith and David Schwimmer. As of March 2005, Madagascar was in post production. Wallace & Gromit: Curse of the Were Rabbit. Produced with Aardman Animations in Bristol, England (makers of Chicken Run), Wallace & Gromit: Curse of the Were Rabbit is the first feature film about the characters of the Academy Award-winning film shorts of the same name. Wallace & Gromit: Curse of the Were Rabbit is being produced in stop-motion animation, the style for which Aardman and its award-winning director, Nick Park, are well recognized. As of March 2005, Wallace & Gromit: Curse of the Were Rabbit was three quarters through its shooting schedule with nearly all of the film’s final voices recorded. Over the Hedge. Based on the popular comic strip seen in over 200 newspapers, Over the Hedge tells the story of a mischievous raccoon named R.J. (voiced by Bruce Willis) and a timid turtle named Verne (voiced by Garry Shandling). When R.J., Verne and their woodland friends find a suburban housing development encroaching on their forest home, Verne’s first instinct is to head for the hills. But the opportunistic R.J. sees a 6