Pixar Inc.,Form 8-K, 2-4-2004

(Addresses, including zip code, and telephone number, including area code, of principal executive offices)

On February 4, 2004, the Registrant reported its results of operations for its fiscal fourth quarter and year ended January 3, 2004. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EMERYVILLE, CA — (February 4, 2004) Pixar Animation Studios (Nasdaq: PIXR) today announced financial results for its fourth quarter and fiscal year ended January 3, 2004. For the quarter, Pixar earned $83.9 million, or $1.44 per diluted share, on revenues of $164.8 million. This compares to earnings of $17.0 million, or $0.31 per diluted share, on revenues of $39.4 million, achieved in the fourth quarter of 2002.

For the fiscal year ended January 3, 2004, Pixar earned $124.8 million, or $2.17 per diluted share, on revenues of $262.5 million. These results compare to earnings of $90.0 million, or $1.68 per diluted share, on revenues of $201.7 million for the full year ended December 28, 2002.

“We are thrilled to report the most profitable quarter and full year in Pixar’s history,” said Pixar CEO Steve Jobs. “Pixar has created five of the most successful animated films of all time – including Finding Nemo, the highest grossing animated film in history – and we are extremely excited about our next film, The Incredibles, which premieres this November.”

Fiscal year 2003 results exceeded the company’s previous guidance of approximately $1.76 per diluted share, largely because of the greater than anticipated performance of Finding Nemo during the fourth quarter. As of the year-end, Finding Nemo had generated worldwide box office receipts of $792 million and domestic home video sales of 24.8 million units. Since that time, the film has been released in all of its scheduled international markets and has continued to climb to a worldwide box office of $850 million.

The company will discuss its fourth quarter and fiscal year 2003 earnings results during the conference call to be held today, Wednesday, February 4, 2004 at 5:00 p.m. Eastern Time, 2:00 p.m. Pacific Time. The call, hosted by Pixar’s chairman and chief executive officer, Steve Jobs, and executive vice president and chief financial officer, Ann Mather, can be accessed by dialing 888-428-4479 (U.S.) or 612-288-0329 (Int’l) approximately 10 minutes prior to the start time. Additionally, a replay of the call will be provided through Monday, February 9, 2004 until midnight Eastern Time. To access the replay, please call 800-475-6701 (U.S.) or 320-365-3844 (Int’l) and reference

Pixar will also provide live audio streaming of its fourth quarter and full-year 2003 results conference call. The webcast will be accessible through Pixar’s web site at http://www.pixar.com/investor/index.html.

About Pixar Animation Studios
Pixar Animation Studios (Nasdaq: PIXR, http://www.pixar.com) combines creative and technical artistry to create original films in the medium of computer animation. Pixar has created and produced five of the most successful and beloved animated films of all time: Academy Award®-winning Toy Story (1995); A Bug’s Life (1998); Golden Globe-winner Toy Story 2 (1999); the Academy Award®-winning Monsters, Inc. (2001); and the Academy Award®-nominated Finding Nemo (2003), the highest-grossing animated film of all time. To date, Pixar’s five films have earned more than $2.5 billion at the worldwide box office and sold over 150 million DVDs and videos. The Northern California studio’s next two films are The Incredibles (November 5, 2004) and Cars (holiday 2005).

This release contains forward-looking information regarding Pixar’s targeted release dates for Pixar’s future films and actual results may differ materially. Factors that could cause delays in the release of our films include, but are not limited to: (1) the uncertainties related to production delays; (2) financing requirements; (3) personnel availability; (4) external political events; and (5) the release dates of competitive films. Please refer to Pixar’s 2002 Form 10-K and 2003 Third Quarter Form 10-Q, particularly the sections on risks, for important factors that could cause actual results to differ.

Pixar Animation Studios
Condensed Statements of Income
(in thousands, except per share data)


			Quarter				Twelve Months
			Ended				Ended

			January 3,		December 28,		January 3,		December 28,
			2004		2002		2004		2002

Revenue:
	Film		$	161,345	$	37,880	$	250,383	$	193,591
	Software			3,437		1,504		12,115		8,133

		Total revenue		164,782		39,384		262,498		201,724

Cost of revenue:
	Film			23,012		7,772		38,029		41,003
	Software			2		122		29		531

		Total cost of revenue		23,014		7,894		38,058		41,534

		Gross profit		141,768		31,490		224,440		160,190

Operating expenses:
	Research and development			3,325		1,874		15,311		8,497
	Sales and marketing			653		476		2,422		1,334
	General and administrative			2,839		3,322		12,783		9,677

		Total operating expenses		6,817		5,672		30,516		19,508

Income from operations				134,951		25,818		193,924		140,682
	Other income, net			1,895		2,663		10,517		10,342

Income before income taxes				136,846		28,481		204,441		151,024
	Income tax expense			52,973		11,518		79,673		61,074

Net income			$	83,873	$	16,963	$	124,768	$	89,950

Basic net income per share			$	1.52	$	0.33	$	2.30	$	1.78
Diluted net income per share			$	1.44	$	0.31	$	2.17	$	1.68
Shares used in computing basic net income per share				55,338		51,902		54,219		50,473
Shares used in computing diluted net income per share				58,442		55,284		57,422		53,400


					January 3,		December 28,
					2004		2002

ASSETS
Cash and investments					$	521,923	$	339,083
Receivables, net						203,794		136,911
Prepaid expenses and other assets						1,047		13,826
Deferred income taxes						51,496		32,719
Property and equipment, net						115,026		117,423
Capitalized film production costs						107,667		92,104

			Total assets		$	1,000,953	$	732,066

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
		Accounts payable			$	1,803	$	2,341
		Accrued liabilities				13,007		9,322
		Income taxes payable				37,595		—
		Unearned revenue				8,038		7,341

			Total liabilities			60,443		19,004

Shareholders’ equity:
		Common stock				546,999		442,477
		Accumulated other comprehensive income				314		2,156
		Retained earnings				393,197		268,429

				Total shareholders’ equity		940,510		713,062

	Total liabilities and shareholders’ equity				$	1,000,953	$	732,066


California	0-26976	68-0086179

(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)


	Item 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
SIGNATURES
INDEX TO EXHIBITS
EXHIBIT 99.1


	Pixar

DATE: February 4, 2004	By:	/s/ ANN MATHER

		Ann Mather
		Executive Vice President and Chief Financial Officer


Exhibit
Number		Description

99.1		Press release, dated February 4, 2004, entitled “Pixar Reports Record Fourth Quarter and Fiscal 2003 Financial Results”


Press Release	For more information contact:
For immediate release	Nils Erdmann	Investor Relations
		Pixar Animation Studios
		(510) 752-3374

	John Buckley	Brainerd Communicators
		(212) 986-6667

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