preliminary results year ended 31 march 2010

PRELIMINARY RESULTS
YEAR ENDED 31 MARCH 2010
Introducing…
Darren Throop – CEO
Giles Willits – CFO
2
Overview
Entertainment One is a leading international independent entertainment group
Specialises in the acquisition, production and distribution of film and television
content across all media with core operations in the UK, Canada, Benelux and
the U.S.
Strategy focuses on the ownership and control of entertainment rights for
exploitation across all media channels in multiple territories
“No. 1 independent multi-territory distributor”
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Highlights
Revenue
Financial Highlights*
£444m
Revenue of £444.2 million, up 30%
Underlying EBITDA up 36% at £34.3 million
£343m
£264m
Operational Highlights
123 movies released theatrically in the year
including the record breaking performance of
The Twilight Saga: New Moon
213 half hours of original television
programming delivered in the year
2008
2009
EBITDA
2010
£34.3m
£25.3m
£18.6m
Expanded international network adding
Australia, New Zealand and France
2008
2009
2010
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Revenue and Earnings Split
Film
Television
Distribution
13
32%
41%
50%
EBITDA
Revenue
£444 million
18
EBITDA
£39 million
46%
£34.3 million
8
22%
9%
68% EBITDA through Film/TV
5
Rights Library
Business underpinned by content rights library – driving 28% of
film and TV revenues in 2010
Independent third party valuation - $220 million (March 2009)
Library includes
20,000 film and television titles
2,400 programme hours
$220m
$175m
45,000 music tracks
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FILM
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Film
Overview
Acquire long-term film rights in multiple territories for distribution across all
media
No. 1 or 2 independent distributor in our three core territories
Financial Performance*
Revenue of £208 million up 52%, Underlying EBITDA up 135% at £18 million
Investment in content increased 34% to £51 million in 2010
Operational Highlights
123 theatrical releases in 2010 including Twilight Saga: New Moon
Increased multi territory slate supported by Summit output deal
Strong slate of films for 2011 – investment in content increasing
* All figures at constant currency
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Story of Film Distribution
Film Value Chain
Theatrical/Cinema
Production
Airlines
Home Entertainment
VOD / Pay per View
Pay TV
• Acquires long term
rights from
Free / Speciality TV
producers
• Provides for the use
of films to
consumer
Box Office
Release
6 Months 12 Months 18 Months 24 Months 30 Months 36 Months
Up to 25
years
Indicative Film Cash flow Profile
Distribution
• Markets and
promotes films to
consumers
• Provides negatives
to cinemas and
broadcasters
+
-
Consumer
Pay Minimum
Guarantee
Box Office
Release
6 Months
12 Months
18 Months
24 Months
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The Global Film Market
$22.6bn
$4.1bn
$24.6bn
$29.7bn
2009
$107.3 billion
$33.7bn
2014
$22.6bn
$9.4bn
$114.1 billion
$51.0bn
$46.3bn
Forecast market growth over five years of $6.8bn
Growth in Digital and Box Office offsetting decline in home video
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Positioned for Digital Growth
Digital continues to represent a growing part of the Group’s business
generating c. £20 million revenue in FY 2010
In 2010 the group enhanced its digital service infrastructure and signed its
first multi-territory independent film distributor deal with iTunes
Strategy to increase investment in content library ensures we benefit from
growth in new channels to market
Digital also brings opportunities for improved margins through lower
operating costs
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Selection of Upcoming Releases
From some of our key partners
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Film – Strategic Focus
Increase the number of films distributed from independent producers
Expand into new territories through partnerships and acquisitions
Grow digital business in line with the development of the market
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TELEVISION
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Television
Overview
Leading production, international sales, licensing and merchandising business
Multiple genres and formats including established Kids business
Sells and distributes to over 500 broadcasters and distributors in 180 countries
Financial Performance
Revenue of £43.7 million up 21% with underlying EBITDA at £8.4 million
Investment in programmes of £24 million
Operational Highlights
213 half hours of original television programming delivered in 2010
Developed partnerships with major US/Canadian broadcasters
Exciting pipeline of programmes for 2011
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Television Production
Typical Production Financing in Canada
Internationally
focused content
Revenue
Home Entertainment/Digital
10%
Upside from
International
Markets
Internationalsales
Entertainment One
20%
5%
North American
Broadcaster Pre - Sales
40%
Tax Credits
30%
Production
Funding
Canadian Media Fund
25%
-
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Recent Television Productions
With a selection of our key partners
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Kids Overview
Creates, produces and distributes children’s entertainment in 180 territories
Properties include the UK’s No.1 pre-school girl's property Peppa Pig, and
BAFTA winning Ben & Holly’s Little Kingdom and Lost and Found
Amberwood catalogue deal in Canada adds global distribution rights for over
240 half hours of programming
Aims to leverage successes, expand the number of properties and extend its
reach
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Kids Licensing and Merchandising
Dedicated team focused on expanding opportunities across all retail segments
including clothing, home, toys, books, electronic games and DVDs
Generated over £100 million of retail sales through its agreements this year
Recent successes include Peppa World at Paultons theme park, launch of Ben
& Holly’s merchandise range, iphone app for Humf
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Television – Strategic Focus
Extend reach in North American and international broadcast markets
Expand original programming slate across multiple genres and formats
Increase focus on Kids TV
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DISTRIBUTION
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Distribution
Overview
Largest wholesaler of entertainment software in Canada and No.1
independent distributor for video and music in the U.S.
Delivers the Group’s own, and third party, content to over 4,000 retail partners
across North America
Financial Performance
Revenue in line with prior year at £231 million on like for like basis, EBITDA of
£13.3 million
Operational Highlights
Increased market share in Canada in a stable market, expanding long serving
relationships with the industry’s largest producers and retailers
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Spotlight on Financials
FINANCIALS
PP
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Summary
Revenue, £444.2 million, up by 18%
Underlying EBITDA, £34.3 million, up by 25%
Adjusted PBT, at £22.1 million, up by 35% from £16.4 million
Acquired Intangibles amortisation charge of £17.5 million will reduce in 2011 to c. £15
million
Net one-off credit of £5.7 million (including exchangeable buy-back gain) – anticipate
charge of £1.6m for Main Market step up in 2011
Share Options charge down to £2.7 million – new incentive plan and options for 2011
– no change to existing guidance for 2011
Adjusted finance charge at £10 million up partly reflecting higher debt following TV
business acquisition in 2008 – lower cost in 2011 from lower debt levels and
exchangeable interest saving
Adjusted tax rate of 20% benefiting from tax loss utilisation – guidance range of 25%
to 30% for 2011
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Earning per Share
Adjusted diluted EPS, at 11.5 pence, up 34% from 8.6 pence
Weighted adjusted diluted shares of 153.6 million split
142.6 million shares in issue (including S Class shares)
11 million dilutive share options
Share issue in February 2010 raised £10 million through issue of 19.5
million shares
2.5 million share options issued to Summit on 24th May 2010 – time
vesting within 12 months
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Cashflow
Net cash increase of £5.8 million in 2010 (2009: decrease £6.8 million)
Improved Free cash inflow of £8.6 million (2009: £14.9 million outflow)
Operating cash inflow, £85.2 million, up 137% driven by EBITDA
improvement and positive working capital movement
Cash investment in content of £75 million, up £27 million, will continue to
increase in 2011 – expect total in range of £85 - £100 million
Acquisition of subsidiaries relates to deferred payments for the TV businesses
Net cash interest paid of £5.7 million – 6 times interest cover
Equity raise settled exchangeable note buy back - net cash in £1.0 million
TV Financing driving increase in borrowings, non TV related debt down
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Net Debt
Adjusted Net Debt leverage down to 1.8 times in 2010 (3.2 times in 2009)
Senior net debt down £4.1 million
Net Debt
Strong cash generation reducing senior debt
£86.1m
Further improvements expected in 2011
£22.9m
Exchangeable debt down £13.0 million
£89.8m
£9.5m
£18.6m
£5.6m
£57.6m
£61.7m
Part repurchased exchangeable note at a cost
of £9.0 million. Funded through equity £10.0
million equity raise
TV production financing up £13.4 million
Increase driven by success of the TV
business in growing the production slate
£38 million of senior facility headroom to support strategic growth plans
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Main Market Listing
On 31 March 2010 announced step up from AIM to Main Market of London
Stock Exchange
It is expected that the move will be completed during July 2010
The Board believes the move will result in improved shareholder value
resulting from
─ Higher corporate profile
─ Supports acquisitive growth strategy
─ Increased stock liquidity
─ Access to a wider pool of funds both in Europe and North America
As part of the step-up process the Group will be re-domiciling to Canada
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Growth Strategy
Acquisitions
Proven track record of successfully embedding acquisitions into
business
Constantly on the look out for suitable opportunities
Renewed focus on corporate activity to drive growth in next 12 months
Target Territories
Main focus is on territories where Hollywood films widely accepted
Prime targets are western European and English speaking countries
Opportunities for consolidation within existing territories also exist
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Summary
Excellent results proving content investment strategy
Strong slate of Film and Television going into new year
Operating cash flow driving down debt
Opportunities for acquisition to drive further growth
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Does anyone have any questions?
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APPENDICES
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Board of Directors
Darren Throop,Chief Executive Officer
Darren has over 20 years of executive management in the entertainment industry.
He became CEO of Entertainment One in July 2003 and has been in the group since
1999. Previously Darren was the owner of Urban Sound Exchange between 1991
and 1999 when it was acquired by CD Plus.
Giles Willits, Chief Financial Officer
Giles joined the board of Entertainment One in March 2007. He was formally director
of Group Finance at J Sainsbury plc from 2005 to 2007 and group corporate
development director and interim group finance director at Woolworths Group plc.
Before this Giles held a number of financial and operational management roles within
Kingfisher plc and Sears plc. Giles is a chartered accountant having qualified with
PricewaterhouseCoopers.
Patrice Theroux, President Filmed Entertainment
Patrice has over 20 years of experience in the motion picture distribution industry.
Until June 2006 was president and CEO of Motion Picture Distribution LP, where he
managed one of the world's leading independent distribution operations, including
MPD in Canada, Momentum Pictures in the United Kingdom and Aurum
Producciones in Spain.
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Future Releases
E1 UK - RELEASE SCHEDULE
TITLE
GENRE
DIRECTOR
CAST
Quarter 1 (April 1, 2010 - June 30, 2010)
Remember Me
The Joneses
Furry Vengeance
Rec 2
Letters To Juliet
Drama/Romance
Comedy/Satire
Family/Comedy
Horror
Comedy/Romance
Allen Coulter
Derrick Borte
Roger Kumble
Jaume Balagueró & Paco Plaza
Gary Winick
Robert Pattinson, Pierce Brosnan, Emile de Ravin
Demi Moore, David Duchovny, Lauren Hutton
Brendan Fraser, Brooke Shields, Ken Jeong
Manuela Velasco, Ferran Terraza, Javier Botet
Amanda Seyfried, Gael García Bernal, Vanessa Redgrave, Christopher Egan
Quarter 2 (July 1, 2010 - September 30, 2010)
Eclipse
Baaria
The Runaways
Under The Mountain
The Hole 3D
Fantasy/Drama
Comedy/Drama
Biopic/Drama
Family Adventure
Family Horror/Thriller
David Slade
Giuseppe Tornatore
Floria Sigismondi
Jonathan King
Joe Dante
Kristen Stewart, Robert Pattinson, Taylor Lautner, Billy Burke, Ashley Greene
Francesco Scianna, Margareth Made, Raoul Bova
Kristen Stewart, Dakota Fanning, Michal Shannon, Tatum O’Neal
Sam Neill, Tom Cameron
Teri Polo, Chris Massoglia, Haley Bennett, Brue Dern
Quarter 3 (October 1, 2010 - December 31, 2010)
Mr Nice
The Way Back
Fair Game
Red
Biopic/Drama
Drama
Thriller
Action/Comedy/Thriller
Bernard Rose
Peter Weir
Doug Liman
Robert Schwentke
Rhys Ifans, Chloe Sevigny
Ed Harris, Colin Farrell, Mark Strong, Jim Sturgess, Saoirse Ronan
Sean Penn, Naomi Watts
Bruce Willis, Morgan Freeman, Helen Mirren, John Malkovich
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Future Releases
E1 CANADA - RELEASE SCHEDULE
TITLE
GENRE
DIRECTOR
CAST
Quarter 1 (April 1, 2010 - June 30, 2010)
La Cité (The City of Shadows)
Shine of Rainbows
Coco & Igor
Control Alt Delete
Furry Vengeance
Liberte
Letters To Juliet
Harry Brown
Leslie, My Name is Evil
Micmacs
L'Affaire Farewell (Eng: Farewell)
George A Romero's Survival of The Dead
Agora
Looking for Eric
Perriers Bounty
Splice
Incendies
Year of the Carnivore
The Killer Inside Me
Act of Dishonour
Love Ranch
Eclipse
Drama
Drama/Family
Drama/Romance
Comedy/Drama
Family/Comedy
Drama
Romance/Comedy
Crime/Drama/Thriller
Comedy/Crime/Fantasy
Comedy/Crime
Thriller
Horror
Adventure/Drama/History/Romance
Comedy/Drama/Fantasy/Sport
Comedy/Crime/Drama
Horror/Sci-Fi/Thriller
Drama
Comedy/ Drama
Crime/Drama/Thriller/Western
Drama
Drama
Fantasy/Drama
Kim Nguyen
Vic Sarin
Jan Kounen
Cameron Labine
Roger Krumble
Tony Gatlif
Gary Winick
Daniel Barber
Reginald Harkema
Jean-Pierre Jeunet
Christian Carion
George A Romero
Alejandro Amenabar
Ken Loach
Iam Fitzgibbon
Vincenzo Natali
Denis Villeneuve
Sook- Yin Lee
Michael Winterbottom
Nelofar Pazrira
Taylor Hackford
David Slade
Jean-Marc Barr, Pierre Lebeau, Claude Legault
Connie Nielsen, Aidan Quinn, John Bell, Jack Gleeson, Tara Alice Scully, Niamh Shaw
Anna Mouglalis, Mads Mikkelsen, Elena Morozova
Sonja Benett, Tyler Labine, Laura Bertram
Brendan Fraser, Brooke Shields, Ken Jeong
Marc Lavoine, Marie-Josée Croze, James Thiérrée
Amanda Seyfried, Gael Garcia Bernal, Vanessa Redgrave, Christopher Egan
Michael Caine, Emily Mortimer, Jack O'Connell
Gregory Smith, Kristen Hager, Ryan Robbins, Don McKellar
Dany Boon, Andre Dussoliier, Dominique Pinon, Yolande Moreau
Guillaume Canet, Emir Kusturica, Diane Kruger
Athena Karkanis, Kenneth Walsh, Devon Bostick
Rachel Weisz, Max Minghella, Oscar Isaac, Rupert Evans
Steve Evets, Eric Cantona, Stephanie Bishop
Cillian Murphy, Brendan Gleeson, Jim Broadbent
Sarah Polley, Adrian Brody
Quarter 2 (July 1, 2010 - September 30, 2010)
Mr. Nobody
Baaria
Les Herbes Folles (Eng Title: Wild Grass)
Cabotins
Life During Wartime
The Concert
Y en Aura Pas De Facile
Shelter
Drama/Fantasy/Romance/Sci-Fi
Comedy/Drama
Drama
Comedy
Comedy/Drama
Comedy/Music
Drama/Comedy
Horror/Thriller
Jaco van Dormael
Giuseppe Tornatore
Alain Resnais
Alain Desrochers
Todd Solondz
Radu Mihaileanu
Marc-Andree Lavoie
Mans Marlind/Bjorn Stein
Jared Leto, Sarah Polley, Diane Kruger, Rhys Ifans
Francesco Scianna, Margareth Made, Raoul Bova
Andre Dussollier, Sabine Azema, Mathier Almalric
Quarter 3 (October 1, 2010 - December 31, 2010)
The Bang Bang Club
Le Poil De Bete
Red
Beat The World
Lance et compte
La Rafle
Barney's Version
Drama
Adventure
Action/Comedy/Thriller
Drama
Drama/Sport
Drama
Drama
Steven Silver
Phillippe Gagnon
Robert Schwentke
Robert Adetuyi
Fréférick D’Amours
Roselyne Bosch
Richard Lewis
Ryan Phillipe, Malin Ackerman, Taylor Kitsch
Guillaume Lemay- Thivierge, Antoine Bertrand, Gilles Renaud
Bruce Willis, Morgan Freeman, Helen Mirren, John Malkovich
Mishael Morgan, Sho-Tyme, Chase Armitage, Lil’ Steph, Christian Loclair, Shane
Marc Messier, Marina Orsini, Carl Marotte, Jason Roy-Léveillée
Mélanie Laurent, Jean Reno, Gad Elmaleh
Paul Giamatti, Dustin Hoffman, Rosamund Pike, Minnie Driver
Release dates to be confirmed (a selection of)
Tell Me
Tree of Life
What's Wrong with Virgina
Meres et Filles
The Big Bang
The Whistleblower
Vanishing on Seventh Street
Dumas
Bagman
Drama/Romance
Fantasy/Drama
Drama
Drama
Action/Mystery/Thriller
Drama
Horror/Mystery/Thriller
History
Thriller
Massy Tadjedin
Terrence Malick
Jennifer Connelly, Emma Roberts, Ed Harris
Julie Lopes Curval
Tony Krantz
Larysa Kondracki
Brad Anderson
Safy Nebbou
George Hickenlooper
Keira Knightley, Eva Mendes, Sam Worthingon, Guillaume Canet
Brad Pitt, Sean Penn, Joanna Going, Fiona Shaw, Jessica Chastain
Dustin Lance Black
Catherine Deneuve, Marie Josee Croze
Antonio Banderas, Sienna Guillory, Sam Elliot, William Fichtner, Rebecca Mader
Rachel Weisz, Monica Bellucci, David Strathairn, Vanessa Redgrave
Thandie Newton, Hayden Chistensen, John Leguizamo,
Gérard Depardieu, Benoit Poelvoorde, Dominique Blanc
Kevin Spacey, Barry Pepper, Rachelle Lefevre, David Cross
Mark Rendall, Cristin Miloti,
Jessica Alba, Casey Affleck, Kate Hudson, Bill Pullman
Nelofar Pazrira, Greg Byrk
Scout Taylor-Compton, Bryan Cranston, Helen Mirren, Joe Pesci
Kristen Stewart, Robert Pattinson, Taylor Lautner, Billy Burke, Ashley Greene
Ciaran Hinds, Ally Sheedy, Paul Ruebens
Alexsei Guskov, Melanie Laurent, Dmitri Nazarov
Mahee Paiement, Pierre-Luc Brillant
Julianne Moore, Jonathan Rhys Meters, Jeffrey DeMunn
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Future Releases
E1 BENELUX - RELEASE SCHEDULE
TITLE
GENRE
DIRECTOR
CAST
Quarter 1 (April 1, 2010 - June 30, 2010)
Pope Joan
The Immortal
Kom Niet Aan Mijn Kinderen
Balibo
Streetdance 3D
The Doors: When You're Strange
Dossier K
Ondine
Letters To Juliet
Drama/History/Romance
Action/Crime/Thriller
Drama
Thriller
Dance/Music
Documentary
Thriller
Drama
Comedy/Romance
Sonke Wortmann
Richard Berry
Ron Termaat
Robert Connolly
Max Giwa/Dania Pasquini
Tom DiCillo
Jan Verheyen
Neil Jordan
Gary Winick
Johanna Wokalek, Ellie Kemish, John Goodman
Jean Reno
Karina Smulders, Tom Hofman
Anthony LaPaglia, Damon Gameau, Tom Wright
Nichola Burley,Richard Winsor, Charlotte Rampling
Johnny Depp, Jim Morrison
Koen de Bouw, Werner de Smedt
Colin Farrell,Stephen Rea, Tom Archdeacon
Amanda Seyfried, Gael García Bernal, Vanessa Redgrave, Christopher Egan
Quarter 2 (July 1, 2010 - September 30, 2010)
After Life
Tucker & Dale Vs Evil
De Bonte Brigade
London Boulevard
Peacock
Machete
Resident Evil: Afterlife (3D)
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Thriller
Comedy
Family
Drama
Thriller
Action
Action
Thriller
Agnieszka Wojtowicz-Vosloo
Eli Craig
Roger Kumble
William Monahan
Michael Lander
Robert Rodriguez
Paul W.S. Anderson
Gela Babluani
Christina Ricci, Justin Long, Liam Neeson
Alan Tudyk, Tyler Labine, Katrina Bowden
Brendan Fraser, Brooke Shields, Dick van Dyke
Keira Knightley, Colin Farrell, David Thewlis
Susan Sarandon, Ellen Page, Cillian Murphy, Bill Pulman
Danny Trejo, Robert De Niro, Jessica Alba
Milla Jovovich, Wentworth Miller
Mickey Rourke, Jason Statham, Emmanuelle Chiriqui
Quarter 3 (October 1, 2010 - December 31, 2010)
The Eagle Of The Ninth
Warrior
Red
Another Year
The Way Back
The Rhum Diary
Fair Game
Sinterklaas 3
Shanghai
The Next Three Days
Action
Action
Action/Comedy/Thriller
Drama
Drama
Drama
Thriller
Family
Drama
Thriller
Kevin MacDonald
Gavin O'Connor
Robert Schwentke
Mike Leigh
Peter Weir
Bruce Robinson
Doug Liman
Martijn van Nellestijn
Mikael Hafström
Paul Haggis
Channing Tatum, Jamie Bell
Nick Nolte, Tom Hardy, Joel Edgerton
Bruce Willis, Morgan Freeman, Helen Mirren, John Malkovich
Jim Broadbent, Imelda Staunton, Philip Davis, Lesley Manville
Colin Farrell, Ed Harris, Mark Strong
Johnny Depp, Aaron Eckhart, Amber Heard, Giovanni Rbisi
Sean Penn, Naomi Watts
Sinterklaas, Zwarte Piet
John Cusack, Chow Yun-Fat, Gong Li
Russell Crowe, Liam Neeson, Elizabeth Banks, Olivia Wilde
Release date to be determined
Gallow Walker
New Daughter
The Beaver
Scream 4
Shelter
Dream House
The Guard
Killer Elite
St. Vincent
Source Code
Africa United
Area 51
Henry's Crime
Blitz
Action/Horror/Thriller/Western
Horror/Thriller
Comedy/Drama
Horror/Thriller
Horror/Thriller
Thriller
Comedy/Thriller
Action/Thriller
Crime/Drama/Thriller
Drama/Sci Fi
Adventure/Comedy/Drama
Horror/Thriller/Sci Fi
Comedy
Thriller
Andrew Goth
Luis Berdejo
Jodie Foster
Wes Craven
Mans Manlind
Jim Sheridan
John Michael McDonagh
Gary McKendry
Water Hill
Duncan Jones
Debs Gardner-Paterson
Oren Peli
Malcolm Menville
Elliott Lester
Wesley Snipes
Kevin Costner
Jodie Foster, Mel Gibson
Courtney Cox, Neve Campbell
Julianne Moore, Jonathan Rhys Meyers
Daniel Craig, Naomi Watts
Don Cheadle
Robert DeNiro, Jason Statham
Mickey Rourke
Jake Gyllenhaal
Roger Nsengiyumva
Sandra Staggs
Keanu Reeves, James Caan
Jason Statham
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