Investor Relations

Dear shareholders,

2008 was a difficult year for Senator Group, and thus for you as shareholders as well. In the first two quarters, we suffered heavy losses with our films, both at the box office and with DVD releases. Amidst a very difficult market, our TV returns were not up to par either.

However, in the last quarter of 2008 we were able to restructure the firm rapidly and comprehensively. Presumably you have read about how we were able to spin off our capital-intensive and high-risk U.S. division, and how we were also able to conclude debt waiver agreements with our lending banks.

Meanwhile, behind the scenes, our in-house restructuring efforts were also ongoing -- with a much lower profile but at least as significant an impact. The firm has "slimmed down" now, allowing us to expect drastic reductions in overhead for 2009 while moving forward. We will no longer be acquiring expensive and risky U.S. productions. Simultaneously, we are aggressively pursuing a strategy of minimized risk by significantly raising our share of German and European productions. While German films made up only 10% of our slate in 2008, that share will be up to at least 40% in 2009.

From our current perspective it appears that we have turned the company around and can now devote our efforts whole-heartedly to its core business. With the runaway success of Oscar-winner "The Reader" in February, we have accomplished a major first step, and will continue to devote all our energy to generating further box-office successes throughout the course of the year. Our release schedule for 2009 looks very promising!