vrl shareholders, page-3

Ed,

You forgot to mention the film production facility. This still requires sosme financing, and there is a danger that the big ticket films that VRL has co-financed have run substantially over budget (ie: the 2 Matrix sequels).

Whilst, according to AOL-Time Warner, '2003 will be the year of The Matrix', some instability could flow if the films have run over budget, particularly with the revenue recovery (ie: from box office receipts, etc), unlikely to fully kick in until H2cy03 (in the case of the first sequel), and CY04 (in the case of the 2nd).

VRLPA's do, however, represent superior value to the VRL share price particularly given that the only differentiating criteria appears to be the payment of dividends in preference to the ordinary shares (restricted, however, to only those occasions when a dividend on the ordinary shares is declared).

The doubts for VRL in 2003, therefore, are:
1)
the film production business (and financing of the facility);
2)
ongoing performance of the theme parks;
3)
congestion in the box office (although The Matrix sequels are likely to dominate); and
4)
future strategic direction.