Private Media Group (PRVT)

2005 compared to 2004

Net sales. Our net sales in 2005 were EUR 27.8 million compared to EUR 35.6 million in 2004, a decrease of EUR 7.8 million, or 22%.

DVD sales decreased EUR 4.4 million, or 23%, to EUR 15.1 million. The decrease in DVD sales compared to 2004 was primarily attributable to a non-recurring sale of inventory of EUR 1.3 million in 2004 to our new US distributor and to one month’s loss of sales of new releases equal to approximately EUR 1.0 million. The loss of sales was the result of our DVD duplicator suffering a logistics and delivery breakdown in February 2005. In addition DVD sales were affected by the outsourcing in the US where we now report sales net of agent’s commission (see discussion under Overview above). The negative impact of reporting US sales net of agent’s commission was EUR 1.8 million. Video sales decreased 87%, to EUR 0.3 million. The decrease in video sales was the result of a general industry decrease in video sales due to the migration from video to DVD. Magazine sales decreased EUR 1.4 million, or 27% to EUR 3.7 million as a result of lower quantities sold through certain retail channels during the twelve month period. Internet sales decreased EUR 0.8 million, or 16%, to EUR 4.1 million as a result the closing down of our third party payment processor for US transactions. Subsequently, we temporarily transferred our US transactions to our payment processor for European transactions, however, this did not fully replace the number of transactions. As of July 2005 we have a new payment processor for US transactions online. In addition to the reorganization of our US payments, we have also been experiencing lower conversion rates as result of new securer but less user friendly payment processes for credit cards, e.g. Verified by VISA. We believe conversion rates will revert to prior levels as consumers get used to the new payment processes. Broadcasting sales increased EUR 0.1 million, or 3%, to EUR 3.6 million. Wireless sales increased 83% to EUR 1.0 million as a result our content being available with more operators.

Going forward, we expect DVD, Internet and Broadcasting sales to increase.

Net sales in general were unaffected by changes in exchange rates. Fluctuations in exchange rates between the euro and the dollar can affect the comparability of our results from year to year. We translate our consolidated subsidiaries whose functional currency is not the euro into the euro for reporting purposes. Income statement amounts are translated into euros using the average exchange rate for the fiscal year. The was no change in average exchange rate for the fiscal year 2005 compared to 2004. The balance sheet is translated at the year-end exchange rate. Due to the significance of the results reported in dollars the impact of the euro/dollar exchange rate on our major categories of revenue and expense can be material.

Cost of Sales. Our cost of sales was EUR 14.6 million for 2005 compared to EUR 19.2 million for 2004, a decrease of EUR 4.6 million, or 24%. Cost of sales as a percentage of sales was 53% for 2005, a decrease of 1% compared to 2004. The decrease in cost of sales as a percentage of sales was primarily the result of the absence of impairment of the value of video cassettes in inventory made in 2004.

Included in cost of sales is printing, processing and duplication, amortization of library and broadcasting costs. Printing, processing and duplication cost was EUR 7.7 million for 2005 compared to EUR 12.1 million for 2004, a decrease of EUR 4.4 million, or 36%. Printing, processing and duplication cost as a percentage of sales was 28% for 2005, compared to 34% in 2004. Amortization of library was EUR 6.4 million for 2005 compared to EUR 6.6 million for 2004, a decrease of EUR 0.2 million, or 3%. Amortization of library does not vary with sales since it reflects the amortization of our investments in content which has been available for sale for a period of three to five years. The decrease was the result of lower amounts invested in content released during the period subject to amortization in 2005 compared to 2004. Broadcasting cost was EUR 0.5 million for 2005 compared to EUR 0.6 million for 2004, a decrease of EUR 0.1 million. Broadcasting cost represents programming and transmission cost and the increase relates to the start-up of the Private Fantasy Channel in the United States.

Gross Profit. Our gross profit for 2005 was EUR 13.2 million, or 47% of net sales, compared to EUR 16.4 million, or 46% of net sales for 2004. This represented a decrease of EUR 3.2 million, or 20%, compared to 2004. The decrease was the result of lower sales. Gross profit as a percentage of sales was up 1% for 2005 compared to 2004. The increase in gross profit as a percentage of sales was the result of the absence of impairment of the value of video cassettes in inventory made in 2004.

- 41 -

Selling, general and administrative expenses. Our selling, general and administrative expenses were EUR 14.5 million for 2005 compared to EUR 18.0 million for 2004, a decrease of EUR 3.5 million, or 20%. We attribute the decrease in selling, general and administrative expenses to reduced bad debt provision and depreciation of EUR 2.4 million and the impact of our overall program started in 2003 where the objective is to review and reduce all controllable selling, general and administrative expenses in low or non-profitable areas.

Gain on sale of building. We reported gain on sale of building of EUR 1.3 million for 2005.

Operating profit/loss. We reported operating profit of EUR 0 million for 2005 compared to an operating loss of EUR 1.6 million for 2004, an improvement of EUR 1.6 million. The increase in operating profit was primarily the result of gain on sale of building and reduced selling, general and administrative expenses offset by lower gross profit.

Interest expense. Our interest expense was EUR 0.7 million for 2005, compared to EUR 0.8 million for 2004. The decrease is the result of less average borrowings outstanding in 2005 compared to 2004 and we expect interest expense to continue to decrease in 2006 as our average borrowings outstanding are expected to be less in 2006.

Income tax expense/benefit. Our income tax benefit was EUR 0.6 million for 2005, compared to 1.3 million for 2004.

Net income/loss. Our net loss was EUR 0.0 million for 2005, compared to a net loss of EUR 0.8 million for 2004. We attribute this increase in net income in 2005 of EUR 0.8 million primarily to a increased operating profit offset by decreased income tax benefit.

2005 compared to 2004

Net sales. Our net sales in 2005 were EUR 27.8 million compared to EUR 35.6 million in 2004, a decrease of EUR 7.8 million, or 22%.

DVD sales decreased EUR 4.4 million, or 23%, to EUR 15.1 million. The decrease in DVD sales compared to 2004 was primarily attributable to a non-recurring sale of inventory of EUR 1.3 million in 2004 to our new US distributor and to one month’s loss of sales of new releases equal to approximately EUR 1.0 million. The loss of sales was the result of our DVD duplicator suffering a logistics and delivery breakdown in February 2005. In addition DVD sales were affected by the outsourcing in the US where we now report sales net of agent’s commission (see discussion under Overview above). The negative impact of reporting US sales net of agent’s commission was EUR 1.8 million. Video sales decreased 87%, to EUR 0.3 million. The decrease in video sales was the result of a general industry decrease in video sales due to the migration from video to DVD. Magazine sales decreased EUR 1.4 million, or 27% to EUR 3.7 million as a result of lower quantities sold through certain retail channels during the twelve month period. Internet sales decreased EUR 0.8 million, or 16%, to EUR 4.1 million as a result the closing down of our third party payment processor for US transactions. Subsequently, we temporarily transferred our US transactions to our payment processor for European transactions, however, this did not fully replace the number of transactions. As of July 2005 we have a new payment processor for US transactions online. In addition to the reorganization of our US payments, we have also been experiencing lower conversion rates as result of new securer but less user friendly payment processes for credit cards, e.g. Verified by VISA. We believe conversion rates will revert to prior levels as consumers get used to the new payment processes. Broadcasting sales increased EUR 0.1 million, or 3%, to EUR 3.6 million. Wireless sales increased 83% to EUR 1.0 million as a result our content being available with more operators.

Going forward, we expect DVD, Internet and Broadcasting sales to increase (see discussion under Outlook below).

Net sales in general were unaffected by changes in exchange rates. Fluctuations in exchange rates between the euro and the dollar can affect the comparability of our results from year to year. We translate our consolidated subsidiaries whose functional currency is not the euro into the euro for reporting purposes. Income statement amounts are translated into euros using the average exchange rate for the fiscal year. The was no change in average exchange rate for the fiscal year 2005 compared to 2004. The balance sheet is translated at the year-end exchange rate. Due to the significance of the results reported in dollars the impact of the euro/dollar exchange rate on our major categories of revenue and expense can be material.

Cost of Sales. Our cost of sales was EUR 14.6 million for 2005 compared to EUR 19.2 million for 2004, a decrease of EUR 4.6 million, or 24%. Cost of sales as a percentage of sales was 53% for 2005, a decrease of 1% compared to 2004. The decrease in cost of sales as a percentage of sales was primarily the result of the absence of impairment of the value of video cassettes in inventory made in 2004.

- 41 -

Included in cost of sales is printing, processing and duplication, amortization of library and broadcasting costs. Printing, processing and duplication cost was EUR 7.7 million for 2005 compared to EUR 12.1 million for 2004, a decrease of EUR 4.4 million, or 36%. Printing, processing and duplication cost as a percentage of sales was 28% for 2005, compared to 34% in 2004. Amortization of library was EUR 6.4 million for 2005 compared to EUR 6.6 million for 2004, a decrease of EUR 0.2 million, or 3%. Amortization of library does not vary with sales since it reflects the amortization of our investments in content which has been available for sale for a period of three to five years. The decrease was the result of lower amounts invested in content released during the period subject to amortization in 2005 compared to 2004. Broadcasting cost was EUR 0.5 million for 2005 compared to EUR 0.6 million for 2004, a decrease of EUR 0.1 million. Broadcasting cost represents programming and transmission cost and the increase relates to the start-up of the Private Fantasy Channel in the United States.

Gross Profit. Our gross profit for 2005 was EUR 13.2 million, or 47% of net sales, compared to EUR 16.4 million, or 46% of net sales for 2004. This represented a decrease of EUR 3.2 million, or 20%, compared to 2004. The decrease was the result of lower sales. Gross profit as a percentage of sales was up 1% for 2005 compared to 2004. The increase in gross profit as a percentage of sales was the result of the absence of impairment of the value of video cassettes in inventory made in 2004.

Selling, general and administrative expenses. Our selling, general and administrative expenses were EUR 14.5 million for 2005 compared to EUR 18.0 million for 2004, a decrease of EUR 3.5 million, or 20%. We attribute the decrease in selling, general and administrative expenses to reduced bad debt provision and depreciation of EUR 2.4 million and the impact of our overall program started in 2003 where the objective is to review and reduce all controllable selling, general and administrative expenses in low or non-profitable areas.

Gain on sale of building. We reported gain on sale of building of EUR 1.3 million for 2005.

Operating profit/loss. We reported operating profit of EUR 0 million for 2005 compared to an operating loss of EUR 1.6 million for 2004, an improvement of EUR 1.6 million. The increase in operating profit was primarily the result of gain on sale of building and reduced selling, general and administrative expenses offset by lower gross profit.

Interest expense. Our interest expense was EUR 0.7 million for 2005, compared to EUR 0.8 million for 2004. The decrease is the result of less average borrowings outstanding in 2005 compared to 2004 and we expect interest expense to continue to decrease in 2006 as our average borrowings outstanding are expected to be less in 2006.

Income tax expense/benefit. Our income tax benefit was EUR 0.6 million for 2005, compared to 1.3 million for 2004.

Net income/loss. Our net loss was EUR 0.0 million for 2005, compared to a net loss of EUR 0.8 million for 2004. We attribute this increase in net income in 2005 of EUR 0.8 million primarily to a increased operating profit offset by decreased income tax benefit.

Nine months ended September 30, 2005 compared to the nine months ended September 30, 2004

Net sales. For the nine months ended September 30, 2005, we had net sales of EUR 20.8 million compared to net sales of EUR 29.8 million for the nine months ended September 30, 2004, a decrease of EUR 9.0 million or 30%.

DVD sales decreased EUR 4.6 million, or 29%, to EUR 11.4 million. The decrease in DVD sales compared to 2004 was primarily attributable to a non-recurring sale of inventory of EUR 1.3 million in 2004 to our new US distributor and to one month’s loss of sales of new releases equal to approximately EUR 1.0 million. The loss of sales was the result of our DVD duplicator suffering a logistics and delivery breakdown in February 2005. In addition DVD sales were affected by the outsourcing in the US where we now report sales net of agent’s commission (see discussion under Overview above). The negative impact of reporting US sales net of agent’s commission was EUR 1.8 million. Video sales decreased EUR 2.0 million, or 89%, to EUR 0.3 million. The decrease in video sales was the result of a general industry decrease in video sales due to the migration from video to DVD. Magazine sales decreased EUR 0.9 million, or 22% to EUR 3.1 million as a result of lower quantities sold during the nine month period. Internet sales decreased EUR 0.9 million, or 24%, to EUR 3.1 million as a result the closing down of our third party payment processor for US transactions. Subsequently, we temporarily transferred our US transactions to our payment processor for European transactions, however, this did not fully replace the number of transactions. As of July 2005 we have a new payment processor for US transactions online. In addition to the reorganization of our US payments, we have also been experiencing lower conversion rates as result of new securer but less user friendly payment processes for credit cards, e.g. Verified by VISA. We believe conversion rates will revert to prior levels as consumers get used to the new payment processes. Broadcasting sales decreased EUR 0.6 million, or 16%, to EUR 3.0 million as a result of lower content licensing sales offset by an increase in mobile content and VOD sales in the period.

Going forward, we expect DVD, Internet and Broadcasting sales to increase (see discussion under Outlook below).

Cost of Sales. Our cost of sales was EUR 11.8 million for the nine months ended September 30, 2005 compared to EUR 13.8 million for the nine months ended September 30, 2004, a decrease of EUR 2.0 million, or 14%.

Included in cost of sales is printing, processing and duplication, amortization of library and broadcasting costs. Printing, processing and duplication cost was EUR 6.3 million for the nine months ended September 30, 2005 compared to EUR 7.8 million for the nine months ended September 30, 2004. Printing, processing and duplication cost as a percentage of sales was 30% for the nine months ended September 30, 2005, compared to 26% for the nine months ended September 30, 2004, which represents an increase of 4%. The increase was primarily the result of sales mix. Amortization of library was EUR 5.0 million for the nine months ended September 30, 2005 compared to EUR 5.3 million for the nine months ended September 30, 2004, a decrease of EUR 0.3 million. Amortization of library does not vary with sales since it reflects the amortization of our investments in content which has been available for sale for a period of three to five years. The decrease was the result of lower amounts invested in content released during the

- 16 -

period subject to amortization in 2005 compared to 2004. Broadcasting cost was EUR 0.4 million for the nine months ended September 30, 2005 compared to EUR 0.8 million for the nine months ended September 30, 2004. Broadcasting cost represents programming and transmission cost.

Gross Profit. In the nine months ended September 30, 2005, we realized a gross profit of EUR 9.0 million, or 43% of net sales compared to EUR 16.0 million, or 54% of net sales for the nine months ended September 30, 2004. The decrease in gross profit as a percentage of sales was primarily the result of lower high margin sales e.g., Internet and Broadcasting, and the effect of amortization of library which does not vary with sales.

Selling, general and administrative expenses. Our selling, general and administrative expenses were EUR 10.4 million for the nine months ended September 30, 2005 compared to EUR 13.3 million for the nine months ended September 30, 2004, a decrease of EUR 2.9 million, or 22%. We attribute the decrease primarily to reductions in bad debt expense and depreciation, and the outsourcing of distribution in the United States, offset by non-recurring expenses of EUR 0.5 million related to a weekly publication which was launched and discontinued during the period. We expect selling, general and administrative expenses to continue to decrease in 2005.

Gain on sale of building. We reported gain on sale of building of EUR 1.3 million for the nine months ended September 30, 2005.

Operating profit. We reported an operating loss of EUR 0.2 million for the nine months ended September 30, 2005 compared to an operating profit of EUR 2.7 million for the nine months ended September 30, 2004. The decrease is the result of lower gross profit offset by decreased selling, general and administrative expenses and gain on sale of building.

Interest expense. We reported interest expense of EUR 0.5 million for the nine months ended September 30, 2005, compared to EUR 0.6 million for the nine months ended September 30, 2004. The decrease is the result of less debt outstanding during the period.

Income tax benefit. We reported income tax benefit of EUR 0.5 million for the nine months ended September 30, 2005, compared to EUR 0.4 million for the nine months ended September 30, 2004.

Net income. We reported net income of EUR 0.0 million for the nine months ended September 30, 2005, compared to EUR 2.6 million for the nine months ended September 30, 2004. We attribute this change in net income in 2005 of EUR 2.6 million, to decreased operating profit.

Six months ended June 30, 2005 compared to the six months ended June 30, 2004

Net sales. For the six months ended June 30, 2005, we had net sales of EUR 14.5 million compared to net sales of EUR 19.2 million for the six months ended June 30, 2004, a decrease of EUR 4.7 million or 24%.

DVD sales decreased EUR 2.0 million, or 19%, to EUR 8.3 million. The decrease in DVD sales was primarily attributable to one month’s loss of sales of new releases equal to approximately EUR 1.0 million. The loss of sales was the result of our DVD duplicator suffering a logistics and delivery breakdown in February 2005. In addition DVD sales were affected by our outsourcing in the US where we now report sales net of agent’s commission (see discussion under Overview above). The negative impact of reporting US sales net of agent’s commission was EUR 1.0 million. Video sales decreased EUR 1.0 million, or 83%, to EUR 0.2 million. The decrease in video sales was the result of a general industry decrease in video sales due to the migration from video to DVD. Magazine sales decreased EUR 0.5 million, or 18% to EUR 2.2 million as a result of lower quantities sold during the six month period. Internet sales decreased EUR 0.6 million, or 22%, to EUR 2.0 million as a result the closing down of our third party payment processor for US transactions. Subsequently, we temporarily transferred our US transactions to our payment processor for European transactions, however, this did not fully replace the number of transactions. As of July 2005 we have a new payment processor for US transactions online. In addition to the reorganization of our US payments, we have also been experiencing lower conversion rates as result of new securer but less user friendly payment processes for credit cards, e.g. Verified by VISA. We believe conversion rates will revert to prior levels as consumers get used to the new payment processes. Broadcasting sales decreased EUR 0.7 million, or 28%, to EUR 1.8 million as a result of lower content licensing sales in the period.

Going forward, we expect DVD, Internet and Broadcasting sales to increase (see discussion under Outlook below).

Cost of Sales. Our cost of sales was EUR 8.7 million for the six months ended June 30, 2005 compared to EUR 8.3 million for the six months ended June 30, 2004, an increase of EUR 0.3 million, or 4%.

Included in cost of sales is printing, processing and duplication, amortization of library and broadcasting costs. Printing, processing and duplication cost was EUR 5.1 million for the six months ended June 30, 2005 compared to EUR 4.6 million for the six months ended June 30, 2004. Printing, processing and duplication cost as a percentage of sales was 35% for the six months ended June 30, 2005, which represents an increase of 11%. The increase was primarily the result of sales mix. Amortization of library was EUR 3.3 million for the six months ended June 30, 2005 compared to EUR 3.2 million for the six months ended June 30, 2004, an increase of EUR 0.1 million. Amortization of library does not vary with sales since it reflects the amortization of our investments in content which has been available for sale for a period of three to five years. The increase was the result of certain minor adjustments offset by lower amounts invested in content released during the period subject to amortization in 2005 compared to 2004. Broadcasting cost was EUR 0.2 million for the six months ended June 30, 2005 compared to EUR 0.5

- 16 -

million for the six months ended June 30, 2004. Broadcasting cost represents programming and transmission cost.

Gross Profit. In the six months ended June 30, 2005, we realized a gross profit of EUR 5.8 million, or 40% of net sales compared to EUR 10.9 million, or 57% of net sales for the six months ended June 30, 2004. The decrease in gross profit as a percentage of sales was primarily the result of lower high margin sales e.g., Internet and Broadcasting, and the effect of amortization of library which does not vary with sales.

Selling, general and administrative expenses. Our selling, general and administrative expenses were EUR 7.1 million for the six months ended June 30, 2005 compared to EUR 9.0 million for the six months ended June 30, 2004, a decrease of EUR 1.8 million, or 21%. We attribute the decrease primarily to reductions in bad debt expense and depreciation, and the outsourcing of distribution in the United States, offset by non-recurring expenses of EUR 0.5 million related to a weekly publication which was launched and discontinued during the period. We expect selling, general and administrative expenses to continue to decrease in 2005.

Gain on sale of building. We reported gain on sale of building of EUR 1.3 million for the six months ended June 30, 2005.

Operating profit. We reported no operating profit for the six months ended June 30, 2005 compared to EUR 1.9 million for the six months ended June 30, 2004. The decrease is the result of lower gross profit offset by decreased selling, general and administrative expenses and gain on sale of building.

Interest expense. We reported interest expense of EUR 0.4 million for the six months ended June 30, 2005, compared to EUR 0.4 million for the six months ended June 30, 2004.

Income tax benefit. We reported income tax benefit of EUR 0.3 million for the six months ended June 30, 2005, compared to EUR 0.3 million for the six months ended June 30, 2004.

Net income/loss. We reported no net income for the six months ended June 30, 2005, compared to EUR 1.9 million for the six months ended June 30, 2004. We attribute this change in net income in 2005 of EUR 0.1 million, to decreased operating profit.

Three months ended March 31, 2005 compared to the three months ended March 31, 2004

Net sales. For the three months ended March 31, 2005, we had net sales of EUR 7.4 million compared to net sales of EUR 10.0 million for the three months ended March 31, 2004, a decrease of EUR 2.6 million or 25%.

DVD sales decreased EUR 1.1 million, or 22%, to EUR 4.1 million. The decrease in DVD sales was primarily attributable to one month’s loss of sales of new releases equal to approximately EUR 1.0 million. The loss of sales was the result of our DVD duplicator suffering a logistics and delivery breakdown in February 2005. In addition DVD sales were affected by our outsourcing in the US where we now report sales net of agent’s commission (see discussion under Overview above). The negative impact of reporting US sales net of agent’s commission was EUR 0.5 million. Video sales decreased EUR 0.7 million, or 86%, to EUR 0.1 million. The decrease in video sales was the result of a general industry decrease in video sales due to the migration from video to DVD. Magazine sales decreased EUR 0.2 million, or 14% to EUR 1.3 as a result of fewer issues released during the three month period. Internet sales decreased EUR 0.3 million, or 20%, to EUR 1.0 million as a result of the closing down of our third party payment processor for

- 14 -

US transactions. Subsequently, we temporarily transferred our US transactions to our payment processor for European transactions, however, this did not compensate sales. As of May 2005 we have a new payment processor for US transactions online and we expect sales to increase. Broadcasting sales decreased EUR 0.2 million, or 17%, to EUR 1.0 million as a result of lower content licensing sales in the period.

Easter, which took place during the first quarter of the year compared to the second quarter of the year in 2004, had an overall negative impact on sales of magazines and DVDs.

Cost of Sales. Our cost of sales was EUR 4.5 million for the three months ended March 31, 2005 compared to EUR 4.7 million for the three months ended March 31, 2004, a decrease of EUR 0.2 million, or 4%.

Included in cost of sales is printing, processing and duplication, amortization of library and broadcasting costs. Printing, processing and duplication cost was EUR 2.8 million for the three months ended March 31, 2005 compared to EUR 2.7 million for the three months ended March 31, 2004. Printing, processing and duplication cost as a percentage of sales was 37% for the three months ended March 31, 2005, which represents an increase of 9%. The increase was the result of sales mix. Amortization of library was EUR 1.5 million for the three months ended March 31, 2005 compared to EUR 1.7 million for the three months ended March 31, 2004, a decrease of EUR 0.2 million. Amortization of library does not vary with sales since it reflects the amortization of our investments in content which has been available for sale for a period of three to five years. The decrease was the result of lower amounts invested in content released during the period subject to amortization in 2005 compared to 2004. Broadcasting cost was EUR 0.2 million for the three months ended March 31, 2005 compared to EUR 0.2 million for the three months ended March 31, 2004. Broadcasting cost represents programming and transmission cost.

Gross Profit. In the three months ended March 31, 2005, we realized a gross profit of EUR 3.0 million, or 40% of net sales compared to EUR 5.3 million, or 53% of net sales for the three months ended March 31, 2004. The decrease in gross profit as a percentage of sales was the result of sales mix and the effect of amortization of library which does not vary with sales.

Selling, general and administrative expenses. Our selling, general and administrative expenses were EUR 3.5 million for the three months ended March 31, 2005 compared to EUR 4.5 million for the three months ended March 31, 2004, a decrease of EUR 1.0 million, or 22%. We attribute the decrease primarily to reductions in bad debt expense and depreciation, and the outsourcing of distribution in the United States, offset by non-recurring expenses of EUR 0.5 million related to a weekly publication which was launched and discontinued during the period. We expect selling, general and administrative expenses to continue to decrease in 2005.

Gain on sale of building. We reported gain on sale of building of EUR 1.3 million for the three months ended March 31, 2005.

Operating profit. We reported an operating profit of EUR 0.7 million for the three months ended March 31, 2005 compared to EUR 0.7 million for the three months ended March 31, 2004.

Interest expense. We reported interest expense of EUR 0.2 million for the three months ended March 31, 2005, compared to EUR 0.2 million for the three months ended March 31, 2004.

- 15 -

Income tax benefit. We reported income tax benefit of EUR 0.1 million for the three months ended March 31, 2005, compared to EUR 0.2 million for the three months ended March 31, 2004. The decrease in income tax benefit is a result of lower losses being recorded in jurisdictions with higher corporate tax rates.

Net income/loss. We reported net income of EUR 0.7 million for the three months ended March 31, 2005, compared to EUR 0.8 million for the three months ended March 31, 2004. We attribute this change in net income in 2005 of EUR 0.1 million, to decreased income tax benefit.