BERMUDA
|
98-0438382
|
(State
or other jurisdiction of incorporation and organization)
|
(IRS
Employer Identification No.)
|
Clarendon
House, Church Street, Hamilton
|
HM
11 Bermuda
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer x
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
Class
|
Outstanding
as of July 30, 2007
|
Class
A Common Stock, par value $0.08
|
34,639,921
|
Class
B Common Stock, par value $0.08
|
6,312,839
|
Page
|
|
Part
I. Financial information
|
|
2
|
|
4
|
|
6
|
|
7
|
|
8
|
|
40
|
|
81
|
|
82
|
|
Part
II. Other Information
|
|
83
|
|
86
|
|
93
|
|
94
|
|
95
|
|
96
|
June
30,
2007
|
December
31,
2006
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ |
116,662
|
$ |
145,904
|
||||
Restricted
cash (Note 6)
|
1,174
|
4,954
|
||||||
Accounts
receivable (net of allowance) (Note 7)
|
180,059
|
152,505
|
||||||
Income
taxes receivable
|
4,766
|
3,053
|
||||||
Program
rights, net
|
62,182
|
59,645
|
||||||
Other
current assets (Note 8)
|
61,755
|
47,555
|
||||||
Total
current assets
|
426,598
|
413,616
|
||||||
Non-current
assets
|
||||||||
Investments
|
16,563
|
19,214
|
||||||
Property,
plant and equipment, net (Note 9)
|
130,181
|
115,805
|
||||||
Program
rights, net
|
85,715
|
76,638
|
||||||
Goodwill
(Note 4)
|
922,739
|
905,580
|
||||||
Broadcast
licenses, net (Note 4)
|
210,881
|
198,730
|
||||||
Other
intangible assets, net (Note 4)
|
88,464
|
71,942
|
||||||
Other
non-current assets (Note 8)
|
19,151
|
17,475
|
||||||
Total
non-current assets
|
1,473,694
|
1,405,384
|
||||||
Total
assets
|
$ |
1,900,292
|
$ |
1,819,000
|
June
30,
2007
|
December
31,
2006
|
|||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued liabilities (Note 10)
|
$ |
141,640
|
$ |
119,717
|
||||
Duties
and other taxes payable
|
35,845
|
31,707
|
||||||
Income
taxes payable
|
13,483
|
12,434
|
||||||
Credit
facilities and obligations under capital leases (Note 11)
|
12,433
|
13,057
|
||||||
Dividends
payable to minority shareholders in subsidiaries
|
5,513
|
-
|
||||||
Deferred
consideration – Croatia
|
-
|
4,010
|
||||||
Deferred
consideration – Ukraine
|
1,060
|
200
|
||||||
Deferred
tax
|
4,263
|
1,836
|
||||||
Total
current liabilities
|
214,237
|
182,961
|
||||||
Non-current
liabilities
|
||||||||
Credit
facilities and obligations under capital leases (Note 11)
|
5,802
|
6,359
|
||||||
Senior
Notes (Note 5)
|
533,424
|
487,291
|
||||||
Income
taxes payable
|
5,072
|
3,000
|
||||||
Deferred
tax
|
63,292
|
58,092
|
||||||
Other
non-current liabilities
|
3,885
|
19,342
|
||||||
Total
non-current liabilities
|
611,475
|
574,084
|
||||||
Commitments
and contingencies (Note 18)
|
||||||||
Minority
interests in consolidated subsidiaries
|
21,556
|
26,189
|
||||||
SHAREHOLDERS'
EQUITY:
|
||||||||
Nil
shares of Preferred Stock of $0.08 each (December 31, 2006 –
nil)
|
-
|
-
|
||||||
34,639,921
shares of Class A Common Stock of $0.08 each (December 31, 2006 –
34,412,138)
|
2,771
|
2,753
|
||||||
6,312,839
shares of Class B Common Stock of $0.08 each (December 31, 2006 –
6,312,839)
|
505
|
505
|
||||||
Additional
paid-in capital
|
936,730
|
931,108
|
||||||
Accumulated
deficit
|
(609 | ) | (31,730 | ) | ||||
Accumulated
other comprehensive income / (loss)
|
113,627
|
133,130
|
||||||
Total
shareholders’ equity
|
1,053,024
|
1,035,766
|
||||||
Total
liabilities and shareholders’ equity
|
$ |
1,900,292
|
$ |
1,819,000
|
For
the Three Months Ended
June
30,
|
For
the Six Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
revenues
|
$ |
216,284
|
$ |
156,589
|
$ |
364,196
|
$ |
276,343
|
||||||||
Operating
costs
|
30,944
|
26,042
|
56,601
|
49,014
|
||||||||||||
Cost
of programming
|
82,773
|
52,850
|
149,126
|
101,268
|
||||||||||||
Depreciation
of station property, plant and equipment
|
7,680
|
6,059
|
14,579
|
11,761
|
||||||||||||
Amortization
of broadcast licenses and other intangibles (Note 4)
|
5,165
|
4,620
|
10,327
|
8,952
|
||||||||||||
Cost
of revenues
|
126,562
|
89,571
|
230,633
|
170,995
|
||||||||||||
Station
selling, general and administrative expenses
|
15,699
|
14,541
|
31,480
|
28,707
|
||||||||||||
Corporate
operating costs
|
7,444
|
7,696
|
16,248
|
15,677
|
||||||||||||
Impairment
charge
|
-
|
748
|
-
|
748
|
||||||||||||
Operating
income
|
66,579
|
44,033
|
85,835
|
60,216
|
||||||||||||
Interest
income
|
1,732
|
1,741
|
3,146
|
3,194
|
||||||||||||
Interest
expense
|
(19,438 | ) | (11,337 | ) | (30,834 | ) | (21,855 | ) | ||||||||
Foreign
currency exchange loss, net
|
(2,116 | ) | (20,625 | ) | (5,252 | ) | (31,487 | ) | ||||||||
Change
in fair value of derivatives (Note 12)
|
7,528
|
(1,876 | ) |
12,052
|
(1,876 | ) | ||||||||||
Other
(expense) / income
|
(546 | ) |
167
|
(6,759 | ) | (381 | ) | |||||||||
Income
before provision for income taxes, minority interest, equity in loss
of
unconsolidated affiliates and discontinued
operations
|
53,739
|
12,103
|
58,188
|
7,811
|
||||||||||||
Provision
for income taxes
|
(13,419 | ) | (3,582 | ) | (18,478 | ) | (7,576 | ) | ||||||||
Income
before minority interest, equity in loss of unconsolidated affiliates
and
discontinued operations
|
40,320
|
8,521
|
39,710
|
235
|
||||||||||||
Minority
interest in income of consolidated subsidiaries
|
(5,730 | ) | (1,276 | ) | (5,370 | ) | (6,717 | ) | ||||||||
Equity
in loss of unconsolidated affiliates
|
-
|
-
|
-
|
(730 | ) | |||||||||||
Net
income / (loss) from continuing operations
|
34,590
|
7,245
|
34,340
|
(7,212 | ) | |||||||||||
Discontinued
operations (Note 17):
|
||||||||||||||||
Tax
on disposal of discontinued operations (Czech Republic)
|
-
|
1,277
|
-
|
(2,530 | ) | |||||||||||
Net
income / (loss) from discontinued operations
|
-
|
1,277
|
-
|
(2,530 | ) | |||||||||||
Net
income / (loss)
|
$ |
34,590
|
$ |
8,522
|
$ |
34,340
|
$ | (9,742 | ) | |||||||
Currency
translation adjustment, net
|
(13,868 | ) |
44,706
|
(19,503 | ) |
77,165
|
||||||||||
Total
comprehensive income
|
$ |
20,722
|
$ |
53,228
|
$ |
14,837
|
$ |
67,423
|
For
the Three Months Ended
June
30,
|
For
the Six Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
PER
SHARE DATA (Note 15):
|
||||||||||||||||
Net
income / (loss) per share:
|
||||||||||||||||
Continuing
operations – Basic
|
$ |
0.84
|
$ |
0.18
|
$ |
0.84
|
$ | (0.18 | ) | |||||||
Continuing
operations – Diluted
|
0.83
|
0.18
|
0.83
|
(0.18 | ) | |||||||||||
Discontinued
operations – Basic
|
0.00
|
0.03
|
0.00
|
(0.07 | ) | |||||||||||
Discontinued
operations – Diluted
|
0.00
|
0.03
|
0.00
|
(0.07 | ) | |||||||||||
Net
income / (loss) – Basic
|
0.84
|
0.21
|
0.84
|
(0.25 | ) | |||||||||||
Net
income / (loss) – Diluted
|
$ |
0.83
|
$ |
0.21
|
$ |
0.83
|
$ | (0.25 | ) | |||||||
Weighted
average common shares used in computing per share amounts
(000’s):
|
||||||||||||||||
Basic
|
40,941
|
40,597
|
40,867
|
39,355
|
||||||||||||
Diluted
|
41,407
|
41,186
|
41,390
|
39,355
|
|
|
Class
A Common Stock
|
|
|
Class
B Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Number
of shares
|
|
|
Par
value
|
|
|
Number
of shares
|
|
|
Par
value
|
|
|
Additional
Paid-In Capital
|
|
|
Accumulated
Deficit
|
|
|
Accumulated
Other Comprehensive Income / (Loss)
|
|
|
Total
Shareholders' Equity
|
|
||||||||
BALANCE,
December 31, 2006
|
|
|
34,412,138
|
|
|
$
|
2,753
|
|
|
|
6,312,839
|
|
|
$
|
505
|
|
|
$
|
931,108
|
|
|
$
|
(31,730
|
)
|
|
$
|
133,130
|
|
|
$
|
1,035,766
|
|
Impact
of adoption of FIN 48
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,219
|
)
|
|
|
-
|
|
|
|
(3,219
|
)
|
BALANCE,
upon the
adoption
of FIN 48
|
|
|
34,412,138
|
|
|
$
|
2,753
|
|
|
|
6,312,839
|
|
|
$
|
505
|
|
|
$
|
931,108
|
|
|
$
|
(34,949
|
)
|
|
$
|
133,130
|
|
|
$
|
1,032,547
|
|
Stock-based
compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,910
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,910
|
|
Stock
options exercised
|
|
|
227,783
|
|
|
|
18
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,712
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,730
|
|
Net
income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
34,340
|
|
|
|
-
|
|
|
|
34,340
|
|
Currency
translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(19,503
|
)
|
|
|
(19,503
|
)
|
BALANCE,
June 30, 2007
|
|
|
34,639,921
|
|
|
$
|
2,771
|
|
|
|
6,312,839
|
|
|
$
|
505
|
|
|
$
|
936,730
|
|
|
$
|
(609
|
)
|
|
$
|
113,627
|
|
|
$
|
1,053,024
|
|
Class
A Common Stock
|
Class
B Common Stock
|
|||||||||||||||||||||||||||||||
Number
of Shares
|
Par
Value
|
Number
of Shares
|
Par
Value
|
Additional
Paid-In Capital
|
Accumulated
Deficit
|
Accumulated
Other Comprehensive Income / (Loss)
|
Total
Shareholders' Equity
|
|||||||||||||||||||||||||
BALANCE,
December 31, 2005
|
31,032,994
|
$ |
2,482
|
6,966,533
|
$ |
558
|
$ |
754,061
|
$ | (52,154 | ) | $ | (24,394 | ) | $ |
680,553
|
||||||||||||||||
Stock-based
compensation
|
-
|
-
|
-
|
-
|
1,418
|
-
|
-
|
1,418
|
||||||||||||||||||||||||
Stock
options exercised
|
77,250
|
7
|
-
|
-
|
1,060
|
-
|
-
|
1,067
|
||||||||||||||||||||||||
Shares
issued, net of fees
|
2,530,000
|
202
|
-
|
-
|
168,397
|
-
|
-
|
168,599
|
||||||||||||||||||||||||
Conversion
of Class B to Class A Common Shares
|
753,694
|
61
|
(753,694 | ) | (61 | ) |
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(9,742 | ) |
-
|
(9,742 | ) | ||||||||||||||||||||||
Currency
translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
77,165
|
77,165
|
||||||||||||||||||||||||
BALANCE,
June 30, 2006
as
restated (see Note
2)
|
34,393,938
|
$ |
2,752
|
6,212,839
|
$ |
497
|
$ |
924,936
|
$ | (61,896 | ) | $ |
52,771
|
$ |
919,060
|
For
the Six Months Ended June 30,
|
||||||||
2007
|
2006
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income/(loss)
|
$ |
34,340
|
$ | (9,742 | ) | |||
Adjustments
to reconcile net income / (loss) to net cash generated from operating
activities:
|
||||||||
Loss
from discontinued operations (Note 17)
|
-
|
2,530
|
||||||
Equity
in loss of unconsolidated affiliates, net of dividends
received
|
-
|
730
|
||||||
Depreciation
and amortization
|
110,945
|
74,429
|
||||||
Impairment
charge
|
-
|
748
|
||||||
Loss
on disposal of fixed asset
|
-
|
1,171
|
||||||
Stock-based
compensation (Note 14)
|
2,605
|
1,418
|
||||||
Minority
interest in income of consolidated subsidiaries
|
5,370
|
6,717
|
||||||
Change
in fair value of derivative instruments
|
(12,052 | ) |
1,876
|
|||||
Foreign
currency exchange loss, net
|
5,252
|
31,487
|
||||||
Net
change in (net of effects of acquisitions and disposals of
businesses):
|
||||||||
Accounts
receivable
|
(25,572 | ) | (7,970 | ) | ||||
Program
rights
|
(100,593 | ) | (69,836 | ) | ||||
Other
assets
|
(8,018 | ) |
1,963
|
|||||
Accounts
payable and accrued liabilities
|
5,723
|
(7,893 | ) | |||||
Income
taxes payable
|
(274 | ) | (6,922 | ) | ||||
Deferred
taxes
|
(458 | ) |
5,352
|
|||||
VAT
and other taxes payable
|
4,333
|
11,217
|
||||||
Net
cash generated from continuing operating
activities
|
21,601
|
37,275
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Net
change in restricted cash
|
-
|
(4,068 | ) | |||||
Purchase
of property, plant and equipment
|
(25,469 | ) | (18,461 | ) | ||||
Proceeds
from disposal of property, plant and equipment
|
123
|
19
|
||||||
Investments
in subsidiaries and unconsolidated affiliates
|
(63,017 | ) | (59,308 | ) | ||||
Repayment
of loans and advances to related parties
|
250
|
250
|
||||||
Net
cash used in continuing investing activities
|
(88,113 | ) | (81,568 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds
from credit facilities
|
135,465
|
34,765
|
||||||
Payment
of credit facilities and capital leases
|
(137,289 | ) | (65,519 | ) | ||||
Net
proceeds from issuance of Senior Notes
|
199,400
|
-
|
||||||
Redemption
of Senior Notes
|
(169,010 | ) |
-
|
|||||
Proceeds
from issuance of stock options
|
2,730
|
1,067
|
||||||
Issuance
of shares of Class A Common Stock
|
-
|
168,599
|
||||||
Excess
tax benefits from share based payment arrangements
|
305
|
-
|
||||||
Dividends
paid to minority shareholders
|
(476 | ) | (679 | ) | ||||
Net
cash received from continuing financing
activities
|
31,125
|
138,233
|
||||||
NET
CASH USED IN DISCONTINUED OPERATIONS – OPERATING
ACTIVITIES
|
(1,624 | ) | (1,690 | ) | ||||
Impact
of exchange rate fluctuations on cash
|
7,769
|
(4,910 | ) | |||||
Net
(decrease)/increase in cash and cash equivalents
|
(29,242 | ) |
87,340
|
|||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
145,904
|
71,658
|
||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ |
116,662
|
$ |
158,998
|
Company
Name
|
Effective
Voting
Interest
|
Jurisdiction
of
Organization
|
Type
of Affiliate (1)
|
Nova
TV d.d. (“Nova TV (Croatia)”)
|
100.0%
|
Croatia
|
Subsidiary
|
Media
House d.o.o.
|
100.0%
|
Croatia
|
Subsidiary
|
Internet
Dnevnik d.o.o.
|
76.0%
|
Croatia
|
Subsidiary
|
|
|||
CME
Media Investments, s.r.o.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
VILJA,
a.s. (“Vilja”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
CET
21 spol., s r.o. (“CET 21”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
ERIKA
a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
MEDIA
CAPITOL a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
NOVA-V.I.P.
a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
(in liquidation)
|
HARTIC,
a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
Galaxie
sport s r.o. (“Galaxie Sport”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
|
|||
Media
Pro International S.A. (“MPI”)
|
95.0%
|
Romania
|
Subsidiary
|
Media
Vision SRL (“Media Vision”)
|
95.0%
|
Romania
|
Subsidiary
|
MPI
Romania B.V.
|
95.0%
|
Netherlands
|
Subsidiary
|
Pro
TV S.A. (“Pro TV”)
|
95.0%
|
Romania
|
Subsidiary
|
Sport
Radio TV Media SRL (“Sport.ro”)
|
95.0%
|
Romania
|
Subsidiary
|
Media
Pro B.V.
|
10.0%
|
Netherlands
|
Cost
investment
|
Media
Pro Management S.A.
|
10.0%
|
Romania
|
Cost
investment
|
|
|||
A.R.J.
a.s. (“ARJ”)
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
MARKIZA-SLOVAKIA
spol. s r.o. (“Markiza”)
|
80.0%
|
Slovak
Republic
|
Subsidiary
|
GAMATEX
spol. s r.o.
|
80.0%
|
Slovak
Republic
|
Subsidiary
(in liquidation)
|
A.D.A.M.,
a.s.
|
80.0%
|
Slovak
Republic
|
Subsidiary
(in liquidation)
|
|
|||
MMTV
1 d.o.o.
|
100.0%
|
Slovenia
|
Subsidiary
|
Produkcija
Plus d.o.o. (“Pro Plus”)
|
100.0%
|
Slovenia
|
Subsidiary
|
POP
TV d.o.o. (“Pop TV”)
|
100.0%
|
Slovenia
|
Subsidiary
|
Kanal
A d.o.o. (“Kanal A”)
|
100.0%
|
Slovenia
|
Subsidiary
|
Euro
3 TV d.o.o
|
42.0%
|
Slovenia
|
Equity-Accounted
Affiliate
|
Company
Name
|
Effective
Voting Interest
|
Jurisdiction
of Organization
|
Type
of Affiliate (1)
|
MTC
Holding d.o.o.
|
24.0%
|
Slovenia
|
Equity-Accounted
Affiliate (in liquidation)
|
|
|||
International
Media Services Ltd. (“IMS”)
|
60.0%
|
Bermuda
|
Subsidiary
|
Innova
Film GmbH (“Innova”)
|
60.0%
|
Germany
|
Subsidiary
|
Foreign
Enterprise “Inter-Media” (“Inter-Media”)
|
60.0%
|
Ukraine
|
Subsidiary
|
TV
Media Planet Ltd.
|
60.0%
|
Cyprus
|
Subsidiary
|
Studio
1+1 LLC (“Studio 1+1”)
|
18.0%
|
Ukraine
|
Consolidated
Variable Interest Entity
|
|
|||
Ukrainian
Media Services LLC
|
99.0%
|
Ukraine
|
Subsidiary
|
Ukrpromtorg
-2003 LLC (“Ukrpromtorg”)
|
65.5%
|
Ukraine
|
Subsidiary
|
Gravis
LLC
|
60.4%
|
Ukraine
|
Subsidiary
|
Delta
JSC
|
60.4%
|
Ukraine
|
Subsidiary
|
Nart
LLC
|
65.5%
|
Ukraine
|
Subsidiary
|
TV
Stimul LLC
|
49.1%
|
Ukraine
|
Equity-Accounted
Affiliate
|
Tor
LLC (“Tor”)
|
60.4%
|
Ukraine
|
Subsidiary
|
Zhysa
LLC (“Zhysa”)
|
60.4%
|
Ukraine
|
Subsidiary
|
|
|||
CME
Media Enterprises B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
CME
Czech Republic II B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
CME
Romania B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
CME
Slovak Holdings B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
|
|||
Central
European Media Enterprises N.V.
|
100.0%
|
Netherlands
Antilles
|
Subsidiary
|
Central
European Media Enterprises II B.V.
|
100.0%
|
Netherlands
Antilles
|
Subsidiary
|
|
|||
CME
SR d.o.o.
|
100.0%
|
Serbia
|
Subsidiary
(in liquidation)
|
CME
Ukraine Holding GmbH
|
100.0%
|
Austria
|
Subsidiary
|
CME
Cyprus Holding Ltd.
|
100.0%
|
Cyprus
|
Subsidiary
|
CME
Development Corporation
|
100.0%
|
Delaware
|
Subsidiary
|
(1)
|
all
subsidiaries have been consolidated in our Consolidated Financial
Statements. All equity-accounted affiliates have been accounted for
using
the equity method. All cost investments have been accounted for using
the
cost method.
|
Jurisdiction
|
Year
|
Croatia
|
2003
|
Czech
Republic
|
2003
|
Germany
|
2000
|
Netherlands
|
2004
|
Romania
|
2002
|
Slovak
Republic
|
2001
|
Slovenia
|
2001
|
Ukraine
|
2003
|
United
States
|
2001
|
As
reported
previously
|
Adjustment
|
As
restated
|
||||||||||
Balance
Sheet (as of June 30, 2006)
|
||||||||||||
Additional
paid-in capital at June 30, 2006
|
$ |
917,755
|
$ |
7,181
|
$ |
924,936
|
||||||
Accumulated
deficit at June 30, 2006
|
(54,715 | ) | (7,181 | ) | (61,896 | ) |
Fair
Value on Acquisition
|
||||
Property,
plant and equipment
|
$ |
35
|
||
Intangible
assets subject to amortization (1)
|
4,784
|
|||
Intangible
assets not subject to amortization (2)
|
8,974
|
|||
Other
assets
|
2,904
|
|||
Goodwill
|
2,311
|
|||
Deferred
tax liability
|
(1,575 | ) | ||
Other
liabilities
|
(6,398 | ) | ||
Total
purchase price
|
$ |
11,035
|
||
(1)
The intangible assets subject to amortization comprise customer
relationships, which are being amortized over one to twenty years
(weighted average: 15.5 years) and trademarks, which are being amortized
over two years.
|
||||
(2)
Intangible assets not subject to amortization represent television
broadcast licenses.
|
Fair
Value on Acquisition
|
||||
Intangible
assets subject to amortization (1)
|
$ |
4,517
|
||
Intangible
assets not subject to amortization (2)
|
23,597
|
|||
Goodwill
|
23,974
|
|||
Deferred
tax liability
|
(4,498 | ) | ||
Minority
interests
|
4,029
|
|||
Total
purchase price
|
$ |
51,619
|
||
(1)
The intangible assets subject to amortization comprise customer
relationships, which are being amortized over one to ten years (weighted
average: 8.3 years).
|
||||
(2)
Intangible assets not subject to amortization comprise approximately
US$
9.2 million in trademarks and US$ 14.4 million relating to television
broadcast licenses.
|
Balance
December
31, 2006
|
Additions
|
Foreign
currency movement
|
Balance
June
30, 2007
|
|||||||||||||
Croatia
|
$ |
-
|
$ |
712
|
$ |
-
|
$ |
712
|
||||||||
Czech
Republic
|
823,786
|
-
|
(14,804 | ) |
808,982
|
|||||||||||
Romania
|
31,130
|
26,285
|
-
|
57,415
|
||||||||||||
Slovak
Republic
|
25,483
|
-
|
1,427
|
26,910
|
||||||||||||
Slovenia
|
16,458
|
-
|
415
|
16,873
|
||||||||||||
Ukraine
(STUDIO 1+1)
|
4,096
|
-
|
-
|
4,096
|
||||||||||||
Ukraine
(KINO, CITI)
|
4,627
|
3,124
|
-
|
7,751
|
||||||||||||
Total
|
$ |
905,580
|
$ |
30,121
|
$ | (12,962 | ) | $ |
922,739
|
Indefinite-Lived
Broadcast Licenses
|
Amortized
Broadcast Licenses
|
Total
|
||||||||||
Balance,
December 31, 2006
|
$ |
26,344
|
$ |
172,386
|
$ |
198,730
|
||||||
Additions
|
23,421
|
-
|
23,421
|
|||||||||
Amortization
|
-
|
(8,446 | ) | (8,446 | ) | |||||||
Foreign
currency movements
|
132
|
(2,956 | ) | (2,824 | ) | |||||||
Balance,
June 30, 2007
|
$ |
49,897
|
$ |
160,984
|
$ |
210,881
|
June
30,
2007
|
December
31, 2006
|
|||||||
Gross
value
|
$ |
198,523
|
$ |
201,994
|
||||
Accumulated
amortization
|
(37,539 | ) | (29,608 | ) | ||||
Total
net book value
|
$ |
160,984
|
$ |
172,386
|
Trademarks
|
Customer
Relationships
|
Other
|
Total
|
|||||||||||||
Balance,
December 31, 2006
|
$ |
44,026
|
$ |
27,213
|
$ |
703
|
$ |
71,942
|
||||||||
Additions
|
9,787
|
8,664
|
14
|
18,465
|
||||||||||||
Amortization
|
(106 | ) | (1,727 | ) | (48 | ) | (1,881 | ) | ||||||||
Foreign
currency movements
|
(241 | ) |
127
|
52
|
(62 | ) | ||||||||||
Balance,
June 30, 2007
|
$ |
53,466
|
$ |
34,277
|
$ |
721
|
$ |
88,464
|
June
30,
2007
|
December
31,
2006
|
|||||||
Gross
value
|
$ |
95,359
|
$ |
76,695
|
||||
Accumulated
amortization
|
(6,895 | ) | (4,753 | ) | ||||
Total
net book value
|
$ |
88,464
|
$ |
71,942
|
Carrying
Value
|
Fair
Value
|
|||||||||||||||
June
30,
2007
|
December
31,
2006
|
June
30,
2007
|
December
31,
2006
|
|||||||||||||
EUR
245.0 million 8.25% Senior Notes
|
$ |
330,858
|
$ |
322,666
|
$ |
357,326
|
$ |
353,722
|
||||||||
EUR
125.0 million Floating Rate Senior Notes
|
-
|
164,625
|
-
|
170,181
|
||||||||||||
EUR
150.0 million Floating Rate Senior Notes
|
202,566
|
-
|
202,313
|
-
|
||||||||||||
$ |
533,424
|
$ |
487,291
|
$ |
559,639
|
$ |
523,903
|
From:
|
Fixed
Rate Notes
Redemption
Price
|
|||
May
15, 2009 to May 14, 2010
|
104.125 | % | ||
May
15, 2010 to May 14, 2011
|
102.063 | % | ||
May
15, 2011 and thereafter
|
100.000 | % |
From:
|
2014
Floating Rate Notes
Redemption
Price
|
|||
November
15, 2007 to May 14, 2008
|
102.000 | % | ||
May
15, 2008 to May 14, 2009
|
101.000 | % | ||
May
15, 2009 and thereafter
|
100.000 | % |
June
30,
2007
|
December
31,
2006
|
|||||||
Croatia
|
$ |
383
|
$ |
4,183
|
||||
Slovenia
|
743
|
724
|
||||||
Ukraine
(STUDIO 1+1)
|
48
|
47
|
||||||
Total
restricted cash
|
$ |
1,174
|
$ |
4,954
|
June
30,
2007
|
December
31,
2006
|
|||||||
Trading:
|
||||||||
Third-party
customers
|
$ |
187,160
|
$ |
156,701
|
||||
Less:
allowance for bad debts and credit notes
|
(12,748 | ) | (11,472 | ) | ||||
Related
parties
|
5,114
|
7,655
|
||||||
Less:
allowance for bad debts and credit notes
|
(134 | ) | (798 | ) | ||||
Total
trading
|
$ |
179,392
|
$ |
152,086
|
||||
Other:
|
||||||||
Third-party
customers
|
$ |
365
|
$ |
359
|
||||
Less:
allowance for bad debts and credit notes
|
(105 | ) | (103 | ) | ||||
Related
parties
|
468
|
454
|
||||||
Less:
allowance for bad debts and credit notes
|
(61 | ) | (291 | ) | ||||
Total
other
|
$ |
667
|
$ |
419
|
||||
Total
accounts receivable
|
$ |
180,059
|
$ |
152,505
|
June
30,
2007
|
December
31,
2006
|
|||||||
Current:
|
||||||||
Prepaid
programming
|
$ |
32,531
|
$ |
23,072
|
||||
Other
prepaid expenses
|
17,182
|
13,177
|
||||||
Deferred
tax
|
2,872
|
2,124
|
||||||
VAT
recoverable
|
2,328
|
2,562
|
||||||
Loan
to related party
|
600
|
600
|
||||||
Capitalized
debt issuance costs
|
2,723
|
2,908
|
||||||
Other
|
3,519
|
3,112
|
||||||
Total
other current assets
|
$ |
61,755
|
$ |
47,555
|
||||
Non-current:
|
||||||||
Capitalized
debt costs
|
$ |
10,765
|
$ |
11,264
|
||||
Loan
to related party
|
1,441
|
1,603
|
||||||
Deferred
tax
|
4,636
|
3,443
|
||||||
Other
|
2,309
|
1,165
|
||||||
Total
other non-current assets
|
$ |
19,151
|
$ |
17,475
|
June
30,
2007
|
December
31,
2006
|
|||||||
Land
and buildings
|
$ |
57,958
|
$ |
56,212
|
||||
Station
machinery, fixtures and equipment
|
124,354
|
115,238
|
||||||
Other
equipment
|
23,933
|
21,980
|
||||||
Software
licenses
|
17,283
|
15,495
|
||||||
Construction
in progress
|
18,404
|
4,070
|
||||||
Total
cost
|
241,932
|
212,995
|
||||||
Less: Accumulated
depreciation
|
(111,751 | ) | (97,190 | ) | ||||
Total
net book value
|
$ |
130,181
|
$ |
115,805
|
||||
Assets
held under capital leases (included above)
|
||||||||
Land
and buildings
|
$ |
5,682
|
$ |
5,541
|
||||
Station
machinery, fixtures and equipment
|
1,674
|
2,330
|
||||||
Total
cost
|
7,356
|
7,871
|
||||||
Less:
Accumulated depreciation
|
(1,533 | ) | (1,877 | ) | ||||
Net
book value
|
$ |
5,823
|
$ |
5,994
|
June
30,
2007
|
December
31,
2006
|
|||||||
Accounts
payable
|
$ |
27,080
|
$ |
47,447
|
||||
Programming
liabilities
|
38,647
|
32,316
|
||||||
Accrued
interest payable
|
5,149
|
5,375
|
||||||
Deferred
income
|
20,505
|
3,212
|
||||||
Accrued
staff costs
|
16,854
|
12,947
|
||||||
Accrued
production costs
|
7,197
|
7,435
|
||||||
Accrued
legal costs
|
8,709
|
3,619
|
||||||
Accrued
rent costs
|
1,339
|
1,163
|
||||||
Authors’
rights
|
7,215
|
943
|
||||||
Onerous
contracts
|
1,804
|
-
|
||||||
Other
accrued liabilities
|
7,141
|
5,260
|
||||||
Total
accounts payable and accrued liabilities
|
$ |
141,640
|
$ |
119,717
|
June
30,
2007
|
December
31,
2006
|
||||||||
Credit
facilities:
|
|||||||||
Corporate
|
(a)
|
$ |
-
|
$ |
-
|
||||
Croatia
|
(b)
|
-
|
847
|
||||||
Czech
Republic
|
(c)
– (e)
|
11,760
|
11,975
|
||||||
Romania
|
(f)
|
40
|
-
|
||||||
Slovenia
|
(g)
|
-
|
-
|
||||||
Ukraine
(KINO, CITI)
|
(h)
|
1,705
|
1,703
|
||||||
Total
credit facilities
|
$ |
13,505
|
$ |
14,525
|
|||||
Capital
leases:
|
|||||||||
Croatia
operations, net of interest
|
$ |
-
|
$ |
19
|
|||||
Romania
operations, net of interest
|
430
|
495
|
|||||||
Slovak
Republic operations, net of interest
|
112
|
154
|
|||||||
Slovenia
operations, net of interest
|
4,188
|
4,223
|
|||||||
Total
capital leases
|
$ |
4,730
|
$ |
4,891
|
|||||
Total
credit facilities and capital leases
|
$ |
18,235
|
$ |
19,416
|
|||||
Less
current maturities
|
(12,433 | ) | (13,057 | ) | |||||
Total
non-current maturities
|
$ |
5,802
|
$ |
6,359
|
2007
|
$ |
11,805
|
||
2008
|
-
|
|||
2009
|
1,700
|
|||
2010
|
-
|
|||
2011
|
-
|
|||
2012
and thereafter
|
533,424
|
|||
Total
|
$ |
546,929
|
2007
|
$ |
464
|
||
2008
|
1,190
|
|||
2009
|
726
|
|||
2010
|
620
|
|||
2011
|
620
|
|||
2012
and thereafter
|
3,024
|
|||
$ |
6,644
|
|||
Less:
amount representing interest
|
(1,914 | ) | ||
Present
value of net minimum lease payments
|
$ |
4,730
|
For
the Three Months
Ended
June 30,
|
For
the Six Months
Ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Stock-based
compensation charged under SFAS 123(R)
|
$ |
1,343
|
$ |
730
|
$ |
2,605
|
$ |
1,418
|
Date
of Option Grant
|
Number
of Options Granted
|
Risk-free
interest rate (%)
|
Expected
term (years)
|
Expected
volatility (%)
|
Dividend
yield (%)
|
Weighted-average
fair value ($/share)
|
||||||||||||||||||
April
2, 2007
|
12,500
|
4.57 | % |
6.25
|
41.29 | % | 0 | % | $ |
42.25
|
||||||||||||||
June
5, 2007 (Class A)
|
35,000
|
4.92 | % |
3.00
|
32.38 | % | 0 | % | $ |
25.19
|
||||||||||||||
June
5, 2007 (Class B)
|
5,000
|
4.92 | % |
3.00
|
32.38 | % | 0 | % | $ |
23.35
|
Shares
|
Weighted
Average Exercise Price per Share
|
Weighted
Average Remaining Contractual Term (years)
|
Aggregate
Intrinsic Value
|
|||||||||||||
Outstanding
at December 31, 2007
|
1,288,575
|
$ |
35.51
|
7.45
|
$ |
44,443
|
||||||||||
Granted
|
52,500
|
89.77
|
||||||||||||||
Exercised
|
(227,783 | ) |
11.99
|
|||||||||||||
Forfeited
|
(18,125 | ) |
46.76
|
|||||||||||||
Outstanding
at June 30, 2007
|
1,095,167
|
$ |
42.82
|
7.14
|
$ |
59,974
|
||||||||||
Vested
or expected to vest at June 30, 2007
|
1,022,652
|
42.09
|
7.07
|
56,747
|
||||||||||||
Exercisable
at June 30, 2007
|
467,792
|
$ |
23.71
|
6.45
|
$ |
34,557
|
|
|
For
the Three Months
Ended
June 30,
|
|
|
For
the Six Months
Ended
June 30,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
income / (loss) available for common shareholders
|
|
$
|
34,590
|
|
|
$
|
8,522
|
|
|
$
|
34,340
|
|
|
$
|
(9,742
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average outstanding shares of common stock
(000’s)
|
|
|
40,941
|
|
|
|
40,597
|
|
|
|
40,867
|
|
|
|
39,355
|
|
Dilutive
effect of employee stock options (000’s)
|
|
|
466
|
|
|
|
589
|
|
|
|
523
|
|
|
|
-
|
|
Common
stock and common stock equivalents (000’s)
|
|
|
41,407
|
|
|
|
41,186
|
|
|
|
41,390
|
|
|
|
39,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income / (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.84
|
|
|
$
|
0.21
|
|
|
$
|
0.84
|
|
|
$
|
(0.25
|
)
|
Diluted
|
|
$
|
0.83
|
|
|
$
|
0.21
|
|
|
$
|
0.83
|
|
|
$
|
(0.25
|
)
|
·
|
expenses
presented as corporate operating costs in our consolidated statements
of
operations and comprehensive
income;
|
·
|
stock-based
compensation charges;
|
·
|
foreign
currency exchange gains and losses;
|
·
|
changes
in fair value of derivatives; and
|
·
|
certain
unusual or infrequent items (e.g., extraordinary gains and losses,
impairments on assets or
investments).
|
For
the Three Months Ended June 30,
|
||||||||||||||||
Segment
Net Revenues (1)
|
Segment
EBITDA
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Country:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ |
10,414
|
$ |
5,647
|
$ | (2,167 | ) | $ | (2,639 | ) | ||||||
Czech
Republic (TV NOVA, GALAXIE SPORT)
|
80,544
|
56,312
|
47,595
|
29,509
|
||||||||||||
Romania
(2)
|
52,224
|
37,769
|
22,530
|
16,424
|
||||||||||||
Slovak
Republic (MARKIZA TV)
|
29,652
|
20,046
|
11,712
|
7,827
|
||||||||||||
Slovenia
(POP TV, KANAL A)
|
20,095
|
15,555
|
8,388
|
6,430
|
||||||||||||
Ukraine
(STUDIO 1+1)
|
22,701
|
21,062
|
565
|
6,037
|
||||||||||||
Ukraine
(KINO, CITI)
|
654
|
198
|
(1,755 | ) | (432 | ) | ||||||||||
Total
segment data
|
$ |
216,284
|
$ |
156,589
|
$ |
86,868
|
$ |
63,156
|
||||||||
Reconciliation
to condensed consolidated statement of
operations:
|
||||||||||||||||
Consolidated
net revenues / income before provision for income taxes, minority
interest
and discontinued operations
|
$ |
216,284
|
$ |
156,589
|
$ |
53,739
|
$ |
12,103
|
||||||||
Corporate
operating costs
|
-
|
-
|
7,444
|
7,696
|
||||||||||||
Depreciation
of station property, plant and equipment
|
-
|
-
|
7,680
|
6,059
|
||||||||||||
Amortization
of broadcast licenses and other intangibles
|
-
|
-
|
5,165
|
4,620
|
||||||||||||
Impairment
charge
|
-
|
-
|
-
|
748
|
||||||||||||
Interest
income
|
-
|
-
|
(1,732 | ) | (1,741 | ) | ||||||||||
Interest
expense
|
-
|
-
|
19,438
|
11,337
|
||||||||||||
Foreign
currency exchange loss, net
|
-
|
-
|
2,116
|
20,625
|
||||||||||||
Change
in fair value of derivatives
|
-
|
-
|
(7,528 | ) |
1,876
|
|||||||||||
Other
income
|
-
|
-
|
546
|
(167 | ) | |||||||||||
Total
segment data
|
$ |
216,284
|
$ |
156,589
|
$ |
86,868
|
$ |
63,156
|
||||||||
(1)
All net revenues are derived from external customers. There are no
inter-segmental revenues.
|
||||||||||||||||
(2)
Romanian networks are PRO TV, PRO CINEMA, ACASA, PRO TV INTERNATIONAL
and
SPORT.RO.
|
|
|
For
the Six Months Ended June 30,
|
|
|||||||||||||
|
|
Segment
Net Revenues (1)
|
|
|
Segment
EBITDA
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
Country:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Croatia
(NOVA TV)
|
|
$
|
17,646
|
|
|
$
|
9,457
|
|
|
$
|
(6,819
|
)
|
|
$
|
(7,081
|
)
|
Czech
Republic (TV NOVA, GALAXIE SPORT)
|
|
|
132,063
|
|
|
|
96,861
|
|
|
|
73,262
|
|
|
|
42,335
|
|
Romania
(2)
|
|
|
91,566
|
|
|
|
67,640
|
|
|
|
37,666
|
|
|
|
28,037
|
|
Slovak
Republic (MARKIZA TV)
|
|
|
48,329
|
|
|
|
31,252
|
|
|
|
17,468
|
|
|
|
6,850
|
|
Slovenia
(POP TV, KANAL A)
|
|
|
32,764
|
|
|
|
25,782
|
|
|
|
11,389
|
|
|
|
9,463
|
|
Ukraine
(STUDIO 1+1)
|
|
|
40,776
|
|
|
|
46,540
|
|
|
|
(1,805
|
)
|
|
|
17,024
|
|
Ukraine
(KINO, CITI) (3)
|
|
|
1,052
|
|
|
|
572
|
|
|
|
(4,172
|
)
|
|
|
(557
|
)
|
Total
segment data
|
|
$
|
364,196
|
|
|
$
|
278,104
|
|
|
$
|
126,989
|
|
|
$
|
96,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to condensed consolidated statement of
operations:
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
net revenues / income before provision for income taxes, minority
interest, equity in income of unconsolidated affiliates and discontinued
operations
|
|
$
|
364,196
|
|
|
$
|
276,343
|
|
|
$
|
58,188
|
|
|
$
|
7,811
|
|
Corporate
operating costs
|
|
|
-
|
|
|
|
-
|
|
|
|
16,248
|
|
|
|
15,677
|
|
Depreciation
of station property, plant and equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
14,579
|
|
|
|
11,761
|
|
Amortization
of broadcast licenses and other intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
10,327
|
|
|
|
8,952
|
|
Impairment
charge
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
748
|
|
Unconsolidated
equity affiliates (4)
|
|
|
-
|
|
|
|
1,761
|
|
|
|
-
|
|
|
|
(1,283
|
)
|
Interest
income
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,146
|
)
|
|
|
(3,194
|
)
|
Interest
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
30,834
|
|
|
|
21,855
|
|
Foreign
currency exchange loss, net
|
|
|
-
|
|
|
|
-
|
|
|
|
5,252
|
|
|
|
31,487
|
|
Change
in fair value of derivatives
|
|
|
-
|
|
|
|
-
|
|
|
|
(12,052
|
)
|
|
|
1,876
|
|
Other
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
6,759
|
|
|
|
381
|
|
Total
segment data
|
|
$
|
364,196
|
|
|
$
|
278,104
|
|
|
$
|
126,989
|
|
|
$
|
96,071
|
|
(1)
All net revenues are derived from external customers. There are no
inter-segmental revenues.
|
||||||||||||||||
(2)
Romanian networks are PRO TV, PRO CINEMA, ACASA, PRO TV INTERNATIONAL
and
SPORT.RO.
|
||||||||||||||||
(3)
We acquired our Ukraine (KINO, CITI) operations in January
2006.
|
||||||||||||||||
(4)
Our Slovak Republic operations were accounted for as an equity affiliate
until January 23, 2006.
|
For
the Three Months
Ended
June 30,
|
For
the Six Months
Ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Depreciation
of station property, plant and equipment and amortization of broadcast
licenses and other intangibles:
|
||||||||||||||||
Croatia
|
$ |
947
|
$ |
902
|
$ |
1,732
|
$ |
1,431
|
||||||||
Czech
Republic
|
6,689
|
5,883
|
13,150
|
11,408
|
||||||||||||
Romania
|
2,180
|
1,137
|
3,927
|
2,364
|
||||||||||||
Slovak
Republic
|
947
|
877
|
2,134
|
2,348
|
||||||||||||
Slovenia
|
1,110
|
810
|
2,096
|
1,540
|
||||||||||||
Ukraine
(STUDIO 1+1)
|
799
|
929
|
1,544
|
1,501
|
||||||||||||
Ukraine
(KINO, CITI)
|
173
|
141
|
323
|
298
|
||||||||||||
Total
|
$ |
12,845
|
$ |
10,679
|
$ |
24,906
|
$ |
20,890
|
||||||||
Reconciliation
to condensed consolidated statement of
operations:
|
||||||||||||||||
Unconsolidated
equity affiliates
|
-
|
-
|
-
|
(177 | ) | |||||||||||
Total
consolidated depreciation and amortization
|
$ |
12,845
|
$ |
10,679
|
$ |
24,906
|
$ |
20,713
|
||||||||
Represented
as follows:
|
||||||||||||||||
Depreciation
of station property, plant & equipment
|
7,680
|
6,059
|
14,579
|
11,761
|
||||||||||||
Amortization
of broadcast licenses and other intangibles
|
5,165
|
4,620
|
10,327
|
8,952
|
Total
assets (1):
|
June
30,
2007
|
December
31,
2006
|
||||||
Croatia
|
$ |
34,859
|
$ |
30,394
|
||||
Czech
Republic
|
1,205,154
|
1,200,894
|
||||||
Romania
|
302,436
|
206,850
|
||||||
Slovak
Republic
|
110,576
|
86,872
|
||||||
Slovenia
|
75,858
|
67,919
|
||||||
Ukraine
(STUDIO 1+1)
|
80,287
|
75,020
|
||||||
Ukraine
(KINO, CITI)
|
14,756
|
13,293
|
||||||
Total
segment assets
|
$ |
1,823,926
|
$ |
1,681,242
|
||||
Reconciliation
to condensed consolidated balance sheets:
|
||||||||
Corporate
|
76,366
|
137,758
|
||||||
Total
assets
|
$ |
1,900,292
|
$ |
1,819,000
|
||||
(1)
Segment assets exclude any inter-company investments, loans, payables
and
receivables.
|
Long-lived
assets (1):
|
June
30,
2007
|
December
31,
2006
|
||||||
Croatia
|
$ |
8,040
|
$ |
6,804
|
||||
Czech
Republic
|
36,687
|
28,002
|
||||||
Romania
|
34,906
|
32,312
|
||||||
Slovak
Republic
|
20,374
|
19,498
|
||||||
Slovenia
|
16,904
|
15,595
|
||||||
Ukraine
(STUDIO 1+1)
|
7,569
|
7,965
|
||||||
Ukraine
(KINO, CITI)
|
4,082
|
3,674
|
||||||
Total
long-lived assets
|
$ |
128,562
|
$ |
113,850
|
||||
Reconciliation
to condensed consolidated balance sheets:
|
||||||||
Corporate
|
1,619
|
1,955
|
||||||
Total
long-lived assets
|
$ |
130,181
|
$ |
115,805
|
||||
(1)
Reflects property, plant and equipment
|
For
the Three Months
Ended
June 30,
|
For
the Six Months
Ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Tax
on disposal of discontinued operations
|
-
|
1,277
|
-
|
(2,530 | ) | |||||||||||
Net
income / (loss) from discontinued operations
|
$ |
-
|
$ |
1,277
|
$ |
-
|
$ | (2,530 | ) |
June
30,
2007
|
||||
Croatia
|
$ |
2,771
|
||
Czech
Republic
|
48,033
|
|||
Romania
|
23,244
|
|||
Slovak
Republic
|
16,717
|
|||
Slovenia
|
6,914
|
|||
Ukraine
(STUDIO 1+1)
|
18,792
|
|||
Ukraine
(KINO, CITI)
|
843
|
|||
Total
|
$ |
117,314
|
June
30,
2007
|
||||
2007
|
$ |
1,673
|
||
2008
|
1,911
|
|||
2009
|
1,169
|
|||
2010
|
834
|
|||
2011
|
428
|
|||
2012
and thereafter
|
-
|
|||
Total
|
$ |
6,015
|
Croatia
|
The
license of NOVA TV (Croatia) expires in April 2010.
|
Czech Republic
|
The
license of TV NOVA (Czech Republic) expires in January 2017. The
GALAXIE SPORT license expires in March 2014.
|
Romania
|
Licenses
expire on dates ranging from August 2007 to February
2016.
|
Slovak Republic
|
The
license of MARKIZA TV in the Slovak Republic expires in September
2019.
|
Slovenia
|
The
licenses of POP TV and KANAL A expire in August 2012.
|
Ukraine
|
The
15-hour prime time and off prime time license of STUDIO 1+1 expires
in
December 2016. The license to broadcast for the remaining nine hours
in
off prime expires in August 2014. Licenses used for the KINO
and CITI channels expire on dates ranging from June 2008 to July
2016.
|
Management's
Discussion and Analysis of Financial Condition and Results
of
Operations
|
I.
|
Forward-looking
Statements
|
II.
|
Executive
Summary
|
III.
|
Analysis
of Segment Results
|
IV.
|
Analysis
of the Results of Consolidated Operations
|
V.
|
Liquidity
and Capital Resources
|
VI.
|
Critical
Accounting Policies and
Estimates
|
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Net
revenues
|
$ |
216,284
|
$ |
156,589
|
$ |
59,695
|
||||||
Operating
income
|
66,579
|
44,033
|
22,546
|
|||||||||
Net
income from continuing operations
|
34,590
|
7,245
|
27,345
|
|||||||||
Net
income
|
$ |
34,590
|
$ |
8,522
|
$ |
26,068
|
||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Net
revenues
|
$ |
364,196
|
$ |
276,343
|
$ |
87,853
|
||||||
Operating
income
|
85,835
|
60,216
|
25,619
|
|||||||||
Net
income / (loss) from continuing operations
|
34,340
|
(7,212) |
41,552
|
|||||||||
Net
income / (loss)
|
$ |
34,340
|
$ | (9,742) | $ |
44,082
|
·
|
In
the three months ended June 30, 2007, we reported growth in Segment
Net
Revenues of 38% and Segment EBITDA of 38% compared to the three
months
ended June 30, 2006, delivering a Segment EBITDA margin of 40%,
in line
with that reported in the three months ended June 30, 2006 (Segment
EBITDA
is defined and reconciled to our consolidated results in Item 1,
Note
16).
|
·
|
Other
than our operations in Ukraine, each of our stations reported revenue
growth in excess of 25% compared to the three months ended June
30, 2006,
with particularly strong growth reported in Croatia and the
Slovak Republic. Our operations in Ukraine experienced a slight
increase in Segment Net Revenues but a significant decline in Segment
EBITDA as we were required to increase our investment in programming
in
the face of increased competition and poor ratings
performance.
|
·
|
On
May 15, 2007 we redeemed our EUR 125.0 million floating rate Senior
Notes,
bearing interest at six-month EURIBOR plus
5.50%.
|
·
|
On
May 16, 2007 we issued EUR 150.0 million of floating rate Senior
Notes,
bearing interest at six-month EURIBOR plus
1.625%.
|
·
|
On
June 1, 2007, we completed the acquisition of an additional 5%
interest in
Pro TV and MPI and now own a 95.0% interest in our Romania
operations.
|
·
|
On
June 25, 2007, our shares of Class A Common Stock were included
within the
broad-market Russell 3000 Index, the large-cap stocks Russell 1000
Index
and the Russell Global Index.
|
·
|
On
July 13, 2007, we acquired an additional 20.0% interest in Markiza
and now
own 100.0% of our Slovak Republic
operations.
|
·
|
Pursuing
sub-regional efficiencies, especially in the area of local programming
between Slovenia and Croatia and between the Czech and Slovak
Republics;
|
·
|
Supporting
the growth of television advertising in our markets through increased
development and through the launch or acquisition of additional
channels
to expand our advertising inventory and target niche
audiences;
|
·
|
Leveraging
our existing brands and assets to develop new revenue opportunities,
including in the creation and distribution of programming and in
the new
media sectors; and
|
·
|
Continuing
to expand our footprint into additional Central and Eastern European
markets when financially prudent opportunities
arise.
|
·
|
Continuing
to improve the effectiveness of our operations in the Czech Republic
and
the Slovak Republic.
|
·
|
Additional
investment in Russian series and local programming for STUDIO 1+1,
which
have driven ratings historically, and continuing the development
of our
Ukraine channels KINO and CITI which were launched in
2006.
|
·
|
Further
development of our non-broadcast activities, particularly in new
media,
which is being coordinated across our
markets.
|
·
|
Acquisition
of additional shares in our operations in Ukraine if the opportunity
arises; and
|
·
|
Continuing
to invest in the development of our Croatia
operations.
|
·
|
expenses
presented as corporate operating costs in our condensed consolidated
statement of operations and comprehensive
income;
|
·
|
stock-based
compensation charges;
|
·
|
foreign
currency exchange gains and losses;
|
·
|
change
in fair value of derivatives; and
|
·
|
certain
unusual or infrequent items (e.g., extraordinary gains and
losses,
impairments of assets or
investments).
|
SEGMENT
FINANCIAL INFORMATION
|
||||||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||||||
2007
|
(1)
|
2006
|
(1)
|
|||||||||||||
Segment
Net Revenue
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ |
10,414
|
5 | % | $ |
5,647
|
4 | % | ||||||||
Czech
Republic (TV NOVA, GALAXIE SPORT)
|
80,544
|
37 | % |
56,312
|
36 | % | ||||||||||
Romania
(2)
|
52,224
|
24 | % |
37,769
|
24 | % | ||||||||||
Slovak
Republic (MARKIZA TV)
|
29,652
|
14 | % |
20,046
|
13 | % | ||||||||||
Slovenia
(POP TV, KANAL A)
|
20,095
|
9 | % |
15,555
|
10 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
22,701
|
11 | % |
21,062
|
13 | % | ||||||||||
Ukraine
(KINO, CITI)
|
654
|
-
|
198
|
-
|
||||||||||||
Total
Segment Net Revenues
|
$ |
216,284
|
100 | % | $ |
156,589
|
100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ |
214,987
|
99 | % | $ |
155,902
|
100 | % | ||||||||
Non-broadcast
operations
|
1,297
|
1 | % |
687
|
-
|
|||||||||||
Total
Segment Revenues
|
$ |
216,284
|
100 | % | $ |
156,589
|
100 | % | ||||||||
Segment
EBITDA
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ | (2,167) | (2) | % | $ | (2,639) | (4) | % | ||||||||
Czech
Republic (TV NOVA, GALAXIE SPORT)
|
47,595
|
55 | % |
29,509
|
47 | % | ||||||||||
Romania
(2)
|
22,530
|
26 | % |
16,424
|
26 | % | ||||||||||
Slovak
Republic (MARKIZA TV)
|
11,712
|
13 | % |
7,827
|
12 | % | ||||||||||
Slovenia
(POP TV, KANAL A)
|
8,388
|
9 | % |
6,430
|
10 | % | ||||||||||
Ukraine
(STUDIO 1+1)
|
565
|
1 | % |
6,037
|
10 | % | ||||||||||
Ukraine
(KINO, CITI)
|
(1,755) | (2) | % | (432) | (1) | % | ||||||||||
Total
Segment EBITDA
|
$ |
86,868
|
100 | % | $ |
63,156
|
100 | % | ||||||||
Represented
by:
|
||||||||||||||||
Broadcast
operations
|
$ |
87,175
|
100 | % | $ |
62,970
|
100 | % | ||||||||
Non-broadcast
operations
|
(307) |
-
|
186
|
-
|
||||||||||||
Total
Segment EBITDA
|
$ |
86,868
|
100 | % | $ |
63,156
|
100 | % | ||||||||
Segment
EBITDA Margin (3)
|
40 | % | 40 | % | ||||||||||||
(1)
Percentage of Total Segment Net Revenues and Total Segment
EBITDA.
|
||||||||||||||||
(2)
Romania networks are PRO TV, PRO CINEMA, ACASA, PRO TV INTERNATIONAL
and
SPORT.RO.
|
||||||||||||||||
(3)
We define Segment EBITDA margin as the ratio of Segment EBITDA
to Segment
Net Revenue.
|
SEGMENT
FINANCIAL INFORMATION
|
|||||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
|||||||||||||||
2007
|
(1)
|
2006
|
(1)
|
||||||||||||
Segment
Net Revenue
|
|||||||||||||||
Croatia
(NOVA TV)
|
$ |
17,646
|
5 | % | $ |
9,457
|
4 | % | |||||||
Czech
Republic (TV NOVA)
|
132,063
|
37 | % |
96,861
|
35 | % | |||||||||
Romania
(2)
|
91,566
|
25 | % |
67,640
|
24 | % | |||||||||
Slovak
Republic (MARKIZA TV) (3)
|
48,329
|
13 | % |
31,252
|
11 | % | |||||||||
Slovenia
(POP TV, KANAL A)
|
32,764
|
9 | % |
25,782
|
9 | % | |||||||||
Ukraine
(STUDIO 1+1)
|
40,776
|
11 | % |
46,540
|
17 | % | |||||||||
Ukraine
(KINO, CITI) (4)
|
1,052
|
-
|
572
|
-
|
|||||||||||
Total
Segment Net Revenues
|
$ |
364,196
|
100 | % | $ |
278,104
|
100 | % | |||||||
Represented
by:
|
|||||||||||||||
Broadcast
operations
|
$ |
362,409
|
100 | % | $ |
276,975
|
100 | % | |||||||
Non-broadcast
operations
|
1,787
|
-
|
1,129
|
-
|
|||||||||||
Total
Segment Revenues
|
$ |
364,196
|
100 | % | $ |
278,104
|
100 | % | |||||||
Segment
EBITDA
|
|||||||||||||||
Croatia
(NOVA TV)
|
$ | (6,819) | (5) | % | $ | (7,081) | (7) | % | |||||||
Czech
Republic (TV NOVA)
|
73,262
|
58 | % |
42,335
|
44 | % | |||||||||
Romania
(2)
|
37,666
|
29 | % |
28,037
|
29 | % | |||||||||
Slovak
Republic (MARKIZA TV) (3)
|
17,468
|
13 | % |
6,850
|
7 | % | |||||||||
Slovenia
(POP TV, KANAL A)
|
11,389
|
9 | % |
9,463
|
10 | % | |||||||||
Ukraine
(STUDIO 1+1)
|
(1,805) | (1) | % |
17,024
|
18 | % | |||||||||
Ukraine
(KINO, CITI) (4)
|
(4,172) | (3) | % | (557) | (1) | % | |||||||||
Total
Segment EBITDA
|
$ |
126,989
|
100 | % | $ |
96,071
|
100 | % | |||||||
Represented
by:
|
|||||||||||||||
Broadcast
operations
|
$ |
127,889
|
101 | % | $ |
95,916
|
100 | % | |||||||
Non-broadcast
operations
|
(900) | (1) | % |
155
|
-
|
||||||||||
Total
Segment EBITDA
|
$ |
126,989
|
100 | % | $ |
96,071
|
100 | % | |||||||
Segment
EBITDA Margin (5)
|
35 | % | 35 | % | |||||||||||
(1)
Percentage of Total Segment Net Revenues and Total Segment
EBITDA.
|
|||||||||||||||
(2)
Romania networks are PRO TV, PRO CINEMA, ACASA, PRO TV INTERNATIONAL
and
SPORT.RO.
|
|||||||||||||||
(3)
Our Slovak Republic operations were accounted for as an equity
affiliate
until January 23, 2006.
|
|||||||||||||||
(4)
We acquired our Ukraine (KINO, CITI) operations on January 11,
2006.
|
|||||||||||||||
(5)
We define Segment EBITDA margin as the ratio of Segment EBITDA
to Segment
Net Revenue.
|
CROATIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
8,482
|
$ |
4,698
|
$ |
3,784
|
||||||
Non-spot
revenues
|
1,932
|
949
|
983
|
|||||||||
Segment
Net Revenues
|
$ |
10,414
|
$ |
5,647
|
$ |
4,767
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
10,389
|
$ |
5,647
|
$ |
4,742
|
||||||
Non-broadcast
operations
|
25
|
-
|
25
|
|||||||||
Segment
Net Revenues
|
$ |
10,414
|
$ |
5,647
|
$ |
4,767
|
||||||
Segment
EBITDA
|
$ | (2,167 | ) | $ | (2,639 | ) | $ |
472
|
||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (2,144 | ) | $ | (2,639 | ) | $ |
495
|
||||
Non-broadcast
operations
|
(23 | ) |
-
|
(23 | ) | |||||||
Segment
EBITDA
|
$ | (2,167 | ) | $ | (2,639 | ) | $ |
472
|
||||
Segment
EBITDA Margin
|
(21 | )% | (47 | )% | 26 | % |
·
|
Segment
Net Revenues for the three months ended June 30, 2007 increased
by US$ 4.8 million, or 84%, compared to the three months ended
June 30,
2006. In local currency, Segment Net Revenues increased by
73%. Spot revenues increased by US$ 3.8 million, or 81%, as a
result of a significant increase in the volume of GRPs
sold. Non-spot revenues increased by US$ 1.0 million, or 104%,
as a result of increased levels of
sponsorship.
|
·
|
Segment
EBITDA for the three months ended June 30, 2007 was a loss of
US$
2.2 million compared to a loss of US$ 2.6 million in the three
months
ended June 30, 2006, an improvement of 18%. In local currency,
Segment EBITDA improved by 20%.
|
CROATIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
13,503
|
$ |
7,751
|
$ |
5,752
|
||||||
Non-spot
revenues
|
4,143
|
1,706
|
2,437
|
|||||||||
Segment
Net Revenues
|
$ |
17,646
|
$ |
9,457
|
$ |
8,189
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
17,616
|
$ |
9,457
|
$ |
8,159
|
||||||
Non-broadcast
operations
|
30
|
-
|
30
|
|||||||||
Segment
Net Revenues
|
$ |
17,646
|
$ |
9,457
|
$ |
8,189
|
||||||
Segment
EBITDA
|
$ | (6,819) | $ | (7,081) | $ |
262
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (6,767) | $ | (7,081) | $ |
314
|
||||||
Non-broadcast
operations
|
(52) |
-
|
(52) | |||||||||
Segment
EBITDA
|
$ | (6,819) | $ | (7,081) | $ |
262
|
||||||
Segment
EBITDA Margin
|
(39) | % | (75) | % | 36 | % |
·
|
Segment
Net Revenues for the six months ended June 30, 2007 increased by
US$ 8.2 million, or 87%, compared to the six months ended June
30,
2006. In local currency, Segment Net Revenues increased by
73%. Spot revenues increased by US$ 5.8 million, or 74%, as a
result of a significant increase in the volume of GRPs sold,
augmented by
increased prices. Non-spot revenues increased by US$ 2.4
million, or 143%, as a result of increased levels of
sponsorship.
|
·
|
Segment
EBITDA for the six months ended June 30, 2007 was a loss of
US$
6.8 million compared to a loss of US$ 7.1 million in the six
months ended
June 30, 2006, an improvement of 4%. In local currency, Segment
EBITDA improved by 10%.
|
CZECH
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
74,048
|
$ |
49,390
|
$ |
24,658
|
||||||
Non-spot
revenues
|
6,496
|
6,922
|
(426) | |||||||||
Segment
Net Revenues
|
$ |
80,544
|
$ |
56,312
|
$ |
24,232
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
80,489
|
$ |
56,092
|
$ |
24,397
|
||||||
Non-broadcast
operations
|
55
|
220
|
(165) | |||||||||
Segment
Net Revenues
|
$ |
80,544
|
$ |
56,312
|
$ |
24,232
|
||||||
Segment
EBITDA
|
$ |
47,595
|
$ |
29,509
|
$ |
18,086
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
47,822
|
$ |
29,463
|
$ |
18,359
|
||||||
Non-broadcast
operations
|
(227) |
46
|
(273) | |||||||||
Segment
EBITDA
|
$ |
47,595
|
$ |
29,509
|
$ |
18,086
|
||||||
Segment
EBITDA Margin
|
59 | % | 52 | % | 7 | % |
·
|
Segment
Net Revenues for the three months ended June 30, 2007 increased
by US$ 24.2 million, or 43%, compared to the three months ended
June 30,
2006. In local currency, Segment Net Revenues increased by
33%. Spot revenues increased by US$ 24.7 million, or 50%,
primarily due to an increase in the volume of GRPs sold as advertisers
have shifted expenditure to our channel from our competitors, as
well as
increased average revenue per rating point sold. Non-spot revenue
decreased by US$ 0.4 million, or 6%, primarily due to a reduction
in the
number of shows generating voting revenue in the three months ended
June
30, 2007 compared to those programs broadcast in the three months
ended
June 30, 2006 and also a reduction in votes in the shows that were
broadcast.
|
·
|
Segment
EBITDA for the three months ended June 30, 2007 increased
by US$
18.1 million, or 61%, compared to the three months ended June
30, 2006,
resulting in an EBITDA margin of 59% compared to 52% in the
three months
ended June 30, 2006. In local currency, Segment EBITDA
increased by 48%. Costs charged in arriving at Segment EBITDA
for the three months ended June 30, 2007 increased by US$ 6.1
million, or
23%, compared to the three months ended June 30, 2006. Cost of
programming increased by US$ 2.3 million, or 15%, primarily
due to
increased investment in local productions. Other operating
costs increased by US$ 3.3 million, or 49%, primarily due to
increased
accruals for performance-related bonus payments. Selling,
general and administrative expenses increased by US$ 0.5 million,
or 12%,
primarily due to increased marketing and research
costs.
|
CZECH
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
120,712
|
$ |
82,833
|
$ |
37,879
|
||||||
Non-spot
revenues
|
11,351
|
14,028
|
(2,677) | |||||||||
Segment
Net Revenues
|
$ |
132,063
|
$ |
96,861
|
$ |
35,202
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
131,969
|
$ |
96,494
|
$ |
35,475
|
||||||
Non-broadcast
operations
|
94
|
367
|
(273) | |||||||||
Segment
Net Revenues
|
$ |
132,063
|
$ |
96,861
|
$ |
35,202
|
||||||
Segment
EBITDA
|
$ |
73,262
|
$ |
42,335
|
$ |
30,927
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
73,759
|
$ |
42,319
|
$ |
31,440
|
||||||
Non-broadcast
operations
|
(497) |
16
|
(513) | |||||||||
Segment
EBITDA
|
$ |
73,262
|
$ |
42,335
|
$ |
30,927
|
||||||
Segment
EBITDA Margin
|
55 | % | 44 | % | 11 | % |
·
|
Segment
Net Revenues for the six months ended June 30, 2007 increased by
US$ 35.2 million, or 36%, compared to the six months ended June
30,
2006. In local currency, Segment Net Revenues increased by
25%. Spot revenues increased by US$ 37.9 million, or 46%,
primarily due to an increase in the volume of GRPs sold, as well
as
increased average revenue per rating point sold. Non-spot revenue
decreased by US$ 2.7 million, or 19%, primarily due to a reduction
in the
number of shows generating voting revenue in the six months ended
June 30,
2007 compared to those programs broadcast in the six months ended
June 30,
2006 and also a reduction in votes in the shows that were
broadcast.
|
·
|
Segment
EBITDA for the six months ended June 30, 2007 increased by US$
30.9 million, or 73%, compared to the six months ended June 30,
2006,
resulting in an EBITDA margin of 55% compared to 44% in the six
months
ended June 30, 2006. In local currency, Segment EBITDA
increased by 58%. Costs charged in arriving at Segment EBITDA
for the six months ended June 30, 2007 increased by US$ 4.2 million,
or
8%, compared to the six months ended June 30, 2006. Cost of
programming was in line with the six months ended June 30, 2006
as we
focused on improving operational efficiency. Other operating
costs increased by US$ 4.2 million, or 33%, primarily due to increased
accruals for performance-related bonus payments. Selling,
general and administrative expenses were in line with the six months
ended
June 30, 2006 primarily
due to increased accruals for performance-related bonus
payments. Selling, general and administrative expenses were in
line with the six months ended June 30,
2006.
|
ROMANIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
49,069
|
$ |
35,735
|
$ |
13,334
|
||||||
Non-spot
revenues
|
3,155
|
2,034
|
1,121
|
|||||||||
Segment
Net Revenues
|
$ |
52,224
|
$ |
37,769
|
$ |
14,455
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
52,168
|
$ |
37,769
|
$ |
14,399
|
||||||
Non-broadcast
operations
|
56
|
-
|
56
|
|||||||||
Segment
Net Revenues
|
$ |
52,224
|
$ |
37,769
|
$ |
14,455
|
||||||
Segment
EBITDA
|
$ |
22,530
|
$ |
16,424
|
$ |
6,106
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
22,625
|
$ |
16,424
|
$ |
6,201
|
||||||
Non-broadcast
operations
|
(95) |
-
|
(95) | |||||||||
Segment
EBITDA
|
$ |
22,530
|
$ |
16,424
|
$ |
6,106
|
||||||
Segment
EBITDA Margin
|
43 | % | 43 | % |
-
|
·
|
Segment
Net Revenues for the three months ended June 30, 2007 increased
by US$ 14.5 million, or 38%, compared to the three months ended
June 30,
2006. Spot revenues increased by US$ 13.3 million, or 37%,
driven
primarily by increases in the average revenue per rating point
sold in
each of our three existing channels, which more than offset
a decline in
the volume of GRPs sold. Non-spot revenues increased by US$
1.1 million,
or 55%, primarily due to increased cable tariff revenue. The
acquisition
of Sport.ro added approximately US$ 2.2 million to our revenues
for the
three months ended June 30, 2007.
|
·
|
Segment
EBITDA for the three months ended June 30, 2007 increased
by US$
6.1 million, or 37%, compared to the three months ended June
30, 2006,
resulting in an unchanged EBITDA margin of 43%. Costs charged
in arriving at Segment EBITDA for the three months ended June
30, 2007
increased by US$ 8.3 million, or 39%, compared to the three
months ended
June 30, 2006. Cost of programming grew by US$ 8.6 million, or
66%, due partially to the inclusion of the salary-related costs
of
production staff within cost of programming rather than operating
costs;
excluding the impact of this change in classification, cost
of programming
increased by US$ 6.4 million, or 49%, as a result of increased
market
competition and investment in quality programming. Other
operating costs decreased by US$ 0.6 million, or 10%, after
the difference
in classification described above; excluding the impact of
this change in
classification, other operating costs increased by US$ 1.6
million, or
29%, primarily due to the impact of a weaker dollar on local
currency
denominated staffing costs. Selling, general and administrative
expenses increased by US$ 0.3 million, or 10%, primarily due
to increased
marketing and research costs and increased office running
costs. The acquisition of Sport.ro added approximately US$ 0.6
million to our Segment EBITDA for the three months ended June
30,
2007.
|
ROMANIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
85,604
|
$ |
63,870
|
$ |
21,734
|
||||||
Non-spot
revenues
|
5,962
|
3,770
|
2,192
|
|||||||||
Segment
Net Revenues
|
$ |
91,566
|
$ |
67,640
|
$ |
23,926
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
91,510
|
$ |
67,640
|
$ |
23,870
|
||||||
Non-broadcast
operations
|
56
|
-
|
56
|
|||||||||
Segment
Net Revenues
|
$ |
91,566
|
$ |
67,640
|
$ |
23,926
|
||||||
Segment
EBITDA
|
$ |
37,666
|
$ |
28,037
|
$ |
9,629
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
37,899
|
$ |
28,037
|
$ |
9,862
|
||||||
Non-broadcast
operations
|
(233) |
-
|
(233) | |||||||||
Segment
EBITDA
|
$ |
37,666
|
$ |
28,037
|
$ |
9,629
|
||||||
Segment
EBITDA Margin
|
41 | % | 41 | % |
-
|
·
|
Segment
Net Revenues for the six months ended June 30, 2007 increased by
US$ 23.9 million, or 35%, compared to the six months ended June
30, 2006.
Spot revenues increased by US$ 21.7 million, or 34%, driven primarily
by
increases in the average revenue per rating point sold in each
of our
three existing channels, which more than offset a decline in the
volume of
GRPs sold. Non-spot revenues increased by US$ 2.2 million, or 58%,
primarily due to increased cable tariff revenue.
The acquisition of Sport.ro added approximately US$ 2.9 million
to our
revenues for the six months ended June 30,
2007.
|
·
|
Segment
EBITDA for the six months ended June 30, 2007 increased
by US$
9.6 million, or 34%, compared to the six months ended June
30, 2006, with
an unchanged EBITDA margin of 41%. Costs charged in arriving at
Segment EBITDA for the six months ended June 30, 2007 increased
by US$
14.3 million, or 36%, compared to the six months ended June
30,
2006. Cost of programming grew by US$ 14.5 million, or 58%, due
partially to the inclusion of the salary-related costs of production
staff
within cost of programming rather than operating costs; excluding
the
impact of this change in classification, cost of programming
increased by
US$ 10.5 million, or 42%, as a result of increased market competition
and
investment in quality programming. Other operating costs
decreased by US$ 0.7 million, or 6%, after the difference in
classification described above; excluding the impact of this
change in
classification, other operating costs increased by US$ 3.3
million, or
34%, primarily due to the impact of a weaker dollar on local
currency
denominated staffing costs. Selling, general and administrative
expenses increased by US$ 0.5 million, or 11%, primarily due
to increased
marketing and research costs and increased office running
costs. The acquisition of Sport.ro added approximately US$ 0.8
million to our Segment EBITDA for the six months ended June
30,
2007.
|
SLOVAK
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
28,494
|
$ |
19,182
|
$ |
9,312
|
||||||
Non-spot
revenues
|
1,158
|
864
|
294
|
|||||||||
Segment
Net Revenues
|
$ |
29,652
|
$ |
20,046
|
$ |
9,606
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
29,563
|
$ |
20,039
|
$ |
9,524
|
||||||
Non-broadcast
operations
|
89
|
7
|
82
|
|||||||||
Segment
Net Revenues
|
$ |
29,652
|
$ |
20,046
|
$ |
9,606
|
||||||
Segment
EBITDA
|
$ |
11,712
|
$ |
7,827
|
$ |
3,885
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
11,894
|
$ |
7,821
|
$ |
4,073
|
||||||
Non-broadcast
operations
|
(182) |
6
|
(188) | |||||||||
Segment
EBITDA
|
$ |
11,712
|
$ |
7,827
|
$ |
3,885
|
||||||
Segment
EBITDA Margin
|
39 | % | 39 | % |
-
|
·
|
Segment
Net Revenues for the three months ended June 30, 2007 increased
by US$ 9.6 million, or 48%, compared to the three months ended
June 30,
2006. In local currency, Segment Net Revenues increased by
23%. The increase in Segment Net Revenues was due to an
increase of US$ 9.3 million, or 49%, in spot revenues and an increase
of
US$ 0.3 million, or 34%, in non-spot revenues. The increase in
spot revenues is mainly due to increases in the average revenue
per rating
point sold, as well as an increase in the volume of advertising
spots
sold.
|
·
|
Segment
EBITDA for the three months ended June 30, 2007 increased by
US$
3.9 million, or 50%, compared to the three months ended June 30,
2006,
resulting in an unchanged EBITDA margin of 39%. In local
currency, Segment EBITDA increased by 23%. Costs charged in
arriving at Segment EBITDA for the three months ended June 30,
2007
increased by US$ 5.7 million, or 47%, compared to the three months
ended
June 30, 2006. Cost of programming increased by US$ 3.5
million, or 54% primarily due to increased investment in local
productions
such as Bailando. Other operating costs increased by US$ 1.8
million, or 47%, primarily due to increased accruals for
performance-related bonus payments and increased broadcast and
operating
expenses. Selling, general and administrative expenses
increased by US$ 0.4 million, or 23%, primarily due to increased
consultancy costs.
|
SLOVAK
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
46,569
|
$ |
29,496
|
$ |
17,073
|
||||||
Non-spot
revenues
|
1,760
|
1,756
|
4
|
|||||||||
Segment
Net Revenues
|
$ |
48,329
|
$ |
31,252
|
$ |
17,077
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
48,225
|
$ |
31,245
|
$ |
16,980
|
||||||
Non-broadcast
operations
|
104
|
7
|
97
|
|||||||||
Segment
Net Revenues
|
$ |
48,329
|
$ |
31,252
|
$ |
17,077
|
||||||
Segment
EBITDA
|
$ |
17,468
|
$ |
6,850
|
$ |
10,618
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
17,753
|
$ |
6,869
|
$ |
10,884
|
||||||
Non-broadcast
operations
|
(285) | (19) | (266) | |||||||||
Segment
EBITDA
|
$ |
17,468
|
$ |
6,850
|
$ |
10,618
|
||||||
Segment
EBITDA Margin
|
36 | % | 22 | % | 14 | % |
·
|
Segment
Net Revenues for the six months ended June 30, 2007 increased by
US$ 17.1 million, or 55%, compared to the six months ended June
30,
2006. In local currency, Segment Net Revenues increased by
36%. The increase in Segment Net Revenues was due to an
increase of US$ 17.1 million, or 58%, in spot revenues, with non-spot
revenues in line with the six months ended June 30, 2007. The
increase in spot revenues is mainly due to increases in the average
revenue per rating point sold, as well as an increase in the volume
of
advertising spots sold. Our advertising revenues benefited from
the launch of a new mobile phone operator during the six months
ended June
30, 2007, as well as increased spending from existing customers,
particularly in the pharmaceutical sector. Segment Net Revenues
for the six months ended June 30, 2006 included approximately US$
1.8
million in respect of the period prior to acquisition on January
23, 2006
when Markiza was accounted for as an equity
affiliate.
|
·
|
Segment
EBITDA for the six months ended June 30, 2007 increased by
US$
10.6 million, or 155%, compared to the six months ended June
30, 2006,
resulting in an EBITDA margin of 36% compared to 22% in the six
months
ended June 30, 2006. In local currency, Segment EBITDA
increased by 77%. Costs charged in arriving at Segment EBITDA
for the six months ended June 30, 2007 increased by US$ 6.5 million,
or
26%, compared to the six months ended June 30, 2006. Cost of
programming increased by US$ 3.1 million, or 23%, due to increased
investment in local productions and syndicated programming; the
amount
charged in the six months ended June 30, 2006 included a charge
of US$ 0.7
million to write off an unsuccessful show. Other operating
costs increased by US$ 2.4 million, or 31%, due to increased
accruals for
performance-related bonus payments, increased broadcast and operating
expenses and increased music right costs. Selling, general and
administrative expenses increased by US$ 0.9 million, or 28%,
primarily
due to increased consultancy and increased marketing and research
costs. Costs charged in arriving at Segment EBITDA for the six
months ended June 30, 2006 included US$ 1.7 million of programming
costs,
US$ 0.9 million of other operating costs and US$ 0.4 million
of selling,
general and administrative expenses in respect of the period
prior to
acquisition on January 23,
2006.
|
SLOVENIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
17,435
|
$ |
14,934
|
$ |
2,501
|
||||||
Non-spot
revenues
|
2,660
|
621
|
2,039
|
|||||||||
Segment
Net Revenues
|
$ |
20,095
|
$ |
15,555
|
$ |
4,540
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
19,023
|
$ |
15,095
|
$ |
3,928
|
||||||
Non-broadcast
operations
|
1,072
|
460
|
612
|
|||||||||
Segment
Net Revenues
|
$ |
20,095
|
$ |
15,555
|
$ |
4,540
|
||||||
Segment
EBITDA
|
$ |
8,388
|
$ |
6,430
|
$ |
1,958
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
8,017
|
$ |
6,296
|
$ |
1,721
|
||||||
Non-broadcast
operations
|
371
|
134
|
237
|
|||||||||
Segment
EBITDA
|
$ |
8,388
|
$ |
6,430
|
$ |
1,958
|
||||||
Segment
EBITDA Margin
|
42 | % | 41 | % | 1 | % |
·
|
Segment
Net Revenues for the three months ended June 30, 2007 increased
by US$ 4.5 million, or 29%, compared to the three months ended
June 30,
2006. Spot revenues increased by US$ 2.5 million, or 17%, as
our operations benefited from an increase in the average revenue
per
thirty-second advertising spot, particularly from large fast-moving
consumer goods clients and local retailers, which more than offset
a
decline in the volume of GRPs sold. Non-spot revenues increased
by US$ 2.0 million, or 328%, due to an increased level of sponsorship
and
an increase in non-broadcast advertising
revenue.
|
·
|
Segment
EBITDA for the three months ended June 30, 2007 increased by
US$
2.0 million, or 30%, compared to the three months June 30, 2006,
resulting
in an EBITDA margin of 42% compared to 41% in the three months
ended June
30, 2006. Costs charged in arriving at Segment EBITDA for the
three months ended June 30, 2007 increased by US$ 2.6 million,
or 28%,
compared to the three months ended June 30, 2006. Cost of
programming grew by US$ 2.5 million, or 59%, due to increased investment
in programming in a more competitive market environment. Other
operating costs decreased by US$ 0.4 million, or 12%, primarily
due to
lower salary and freelance costs, partially offset by higher music
rights
costs and higher transmitter and associated maintenance
costs. Selling, general and administrative expenses increased
by US$ 0.5 million, or 39%, primarily due to higher office running
costs
and increased marketing and research
costs.
|
SLOVENIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
28,760
|
$ |
24,675
|
$ |
4,085
|
||||||
Non-spot
revenues
|
4,004
|
1,107
|
2,897
|
|||||||||
Segment
Net Revenues
|
$ |
32,764
|
$ |
25,782
|
$ |
6,982
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
31,261
|
$ |
25,027
|
$ |
6,234
|
||||||
Non-broadcast
operations
|
1,503
|
755
|
748
|
|||||||||
Segment
Net Revenues
|
$ |
32,764
|
$ |
25,782
|
$ |
6,982
|
||||||
Segment
EBITDA
|
$ |
11,389
|
$ |
9,463
|
$ |
1,926
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
11,039
|
$ |
9,305
|
$ |
1,734
|
||||||
Non-broadcast
operations
|
350
|
158
|
192
|
|||||||||
Segment
EBITDA
|
$ |
11,389
|
$ |
9,463
|
$ |
1,926
|
||||||
Segment
EBITDA Margin
|
35 | % | 37 | % | (2) | % |
·
|
Segment
Net Revenues for the six months ended June 30, 2007 increased by
US$ 7.0 million, or 27%, compared to the six months ended June
30,
2006. Spot revenues increased by US$ 4.1 million, or 17%, as
our operations benefited from an increase in the average revenue
per
thirty-second advertising spot, which more than offset a decline
in the
volume of GRPs sold. Non-spot revenues increased by US$ 2.9
million, or 262%, due to an increased level of sponsorship and
an increase
in non-broadcast advertising
revenue.
|
UKRAINE
(STUDIO 1+1) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
18,285
|
$ |
17,596
|
$ |
689
|
||||||
Non-spot
revenues
|
4,416
|
3,466
|
950
|
|||||||||
Segment
Net Revenues
|
$ |
22,701
|
$ |
21,062
|
$ |
1,639
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
22,701
|
$ |
21,062
|
$ |
1,639
|
||||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
Net Revenues
|
$ |
22,701
|
$ |
21,062
|
$ |
1,639
|
||||||
Segment
EBITDA
|
$ |
565
|
$ |
6,037
|
$ | (5,472) | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
716
|
$ |
6,037
|
$ | (5,321) | ||||||
Non-broadcast
operations
|
(151) |
-
|
(151) | |||||||||
Segment
EBITDA
|
$ |
565
|
$ |
6,037
|
$ | (5,472) | ||||||
Segment
EBITDA Margin
|
2 | % | 29 | % | (27) | % |
·
|
Segment
Net Revenues for the three months ended June 30, 2007 increased
by US$ 1.6 million, or 8%, compared to the three months ended June
30,
2006. Spot revenues increased by US$ 0.6 million, or 4%. There
was a decrease in the volume of GRPs sold in the three months ended
June
30, 2007 compared to the three months ended June 30, 2006 as our
ratings
declined due to the poor performance of the Russian series of Mothers
and
Daughters and of Damned Paradise (which aired following the conclusion
of
the successful current run of Cadets), particularly as against
the runaway
success of a new Russian series Day of Tatyana on Inter, which
is expected
to run until early 2008. We also suffered increased competition
from other broadcasters. These factors were partially offset by
an
increase in the average revenue per rating point sold. Non-spot
revenues increased by US$ 1.0 million, or 27%, primarily due to
increased
sponsorship and the sale of surplus
programming.
|
·
|
Segment
EBITDA for the three months ended June 30, 2007 decreased by
US$
5.5 million, or 87%, compared to the three months ended June 30,
2006,
resulting in an EBITDA margin of 2% compared to 29% in the three
months
ended June 30, 2006. Costs charged in arriving at Segment
EBITDA for the three months ended June 30, 2007 increased by US$
7.1
million, or 47%, compared to the three months ended June 30,
2006. Cost of programming grew by US$ 7.7 million, or 87%,
including a charge of US$ 2.2 million to write off poorly performing
programming, principally second runs of American series. The
increase in cost of programming reflects continued price inflation
for
Russian programming, which drives strong ratings in the market,
as well as
increased investment in such programming to improve our programming
schedule and boost ratings following disappointing ratings in the
first
half of 2007 and against unusually strong programming on
Inter. Other operating costs increased by US$ 1.0 million, or
31%, due to increased salary costs and increased broadcast operating
expenses. Selling, general and administrative expenses
decreased by US$ 1.6 million, or 53%, primarily due to decreased
taxes and
reduced bad debt expense.
|
UKRAINE
(STUDIO 1+1) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
33,106
|
$ |
40,324
|
$ | (7,218 | ) | |||||
Non-spot
revenues
|
7,670
|
6,216
|
1,454
|
|||||||||
Segment
Net Revenues
|
$ |
40,776
|
$ |
46,540
|
$ | (5,764 | ) | |||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
40,776
|
$ |
46,540
|
$ | (5,764 | ) | |||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
Net Revenues
|
$ |
40,776
|
$ |
46,540
|
$ | (5,764 | ) | |||||
Segment
EBITDA
|
$ | (1,805 | ) | $ |
17,024
|
$ | (18,829 | ) | ||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (1,622 | ) | $ |
17,024
|
$ | (18,646 | ) | ||||
Non-broadcast
operations
|
(183 | ) |
-
|
(183 | ) | |||||||
Segment
EBITDA
|
$ | (1,805 | ) | $ |
17,024
|
$ | (18,829 | ) | ||||
Segment
EBITDA Margin
|
(4 | )% | 37 | % | (41 | )% |
·
|
Segment
Net Revenues for the six months ended June 30, 2007 decreased by
US$ 5.8 million, or 12%, compared to the six months ended June
30, 2006.
Spot revenues decreased by US$ 7.2 million, or 18%. There was a
decrease in the volume of GRPs sold as our ratings declined due
to the
poor performance of certain series on Studio 1+1 and increased
competition
from other broadcasters. There was also a decrease in the
average revenue per rating point sold in the six months ended June
30,
2007 compared to the six months ended June 30, 2006 due to extreme
price
competition in the first quarter. In the six months ended June 30,
2006, we benefited from US$ 8.4 million of political advertising
revenue
ahead of the parliamentary elections in March 2006 as well as the
extraordinary ratings success of the Russian series Ugly Betty,
which ran
until July 2006. Non-spot revenues increased by US$ 1.5 million,
or 23%,
primarily due to the sale of surplus programming and increased
sponsorship.
|
·
|
Segment
EBITDA for the six months ended June 30, 2007 decreased by US$
18.8 million, or 111%, compared to the six months ended June 30,
2006,
resulting in an EBITDA loss of (4)% compared to an EBITDA margin
of 37% in
the six months ended June 30, 2006. Costs charged in arriving
at Segment EBITDA for the six months ended June 30, 2007 increased
by US$
13.1 million, or 44%, compared to the six months ended June 30,
2006. Cost of programming grew by US$ 13.0 million, or 75%,
including a charge of US$ 2.7 million to write off poorly
performing programming, principally second runs of American
series. The increase in cost of programming reflects continued
price inflation for Russian programming, which drives strong ratings
in
the market, as well as increased investment in such programming
to improve
our programming schedule and boost ratings following disappointing
ratings
in the first half of 2007 and against unusually strong programming
on
Inter. Other operating costs increased by US$ 1.6 million, or
22%, due to increased salary costs and increased broadcast operating
expenses. Selling, general and administrative expenses
decreased by US$ 1.5 million, or 27%, primarily due to decreased
taxes and
reduced bad debt expense.
We
plan continued investment in programming throughout the remainder
of 2007
as we seek to recover audience share and improve
profitability. The performance of our Ukraine operations
remains subject both to political developments, which can have
a
significant impact on market development in the second half of
2007, and
to the competitive dynamics of the market (See Part II, Item IA
– “Risk
Factors”).
|
UKRAINE
(KINO, CITI) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ |
334
|
$ |
106
|
$ |
228
|
||||||
Non-spot
revenues
|
320
|
92
|
228
|
|||||||||
Segment
Net Revenues
|
$ |
654
|
$ |
198
|
$ |
456
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
654
|
$ |
198
|
$ |
456
|
||||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
Net Revenues
|
$ |
654
|
$ |
198
|
$ |
456
|
||||||
Segment
EBITDA
|
$ | (1,755) | $ | (432) | $ | (1,323) | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (1,755) | $ | (432) | $ | (1,323) | ||||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
EBITDA
|
$ | (1,755) | $ | (432) | $ | (1,323) | ||||||
Segment
EBITDA Margin
|
(268) | % | (218) | % | (50) | % |
·
|
Segment
Net Revenues for the three months ended June 30, 2007 increased
by US$ 0.5 million, or 230%, compared to the three months ended
June 30,
2006. Spot revenues increased by US$ 0.2 million, or
215%. Non-spot revenues increased by US$ 0.2 million, or 248%,
primarily due to increased program
sponsorship.
|
·
|
Segment
EBITDA for the three months ended June 30, 2007 decreased by
US$
1.3 million, or 306%, compared to the three months ended June 30,
2006,
resulting in an EBITDA margin of (268)%
compared to (218)% in the three months ended June 30,
2006. Costs charged in arriving at Segment EBITDA for the three
months ended June 30, 2007 increased by US$ 1.8 million, or 282%,
compared
to the three months ended June 30, 2006 as we continued to develop
the
channels. Cost of programming grew by US$ 1.3 million, or
854%. Other operating costs increased by US$ 0.2 million, or
62%. Selling, general and administrative expenses increased by
US$ 0.3 million, or 313%.
|
UKRAINE
(KINO, CITI) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006(1)
|
Movement
|
||||||||||
Spot
revenues
|
$ |
477
|
$ |
321
|
$ |
156
|
||||||
Non-spot
revenues
|
575
|
251
|
324
|
|||||||||
Segment
Net Revenues
|
$ |
1,052
|
$ |
572
|
$ |
480
|
||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ |
1,052
|
$ |
572
|
$ |
480
|
||||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
Net Revenues
|
$ |
1,052
|
$ |
572
|
$ |
480
|
||||||
Segment
EBITDA
|
$ | (4,172) | $ | (557) | $ | (3,615) | ||||||
Represented
by:
|
||||||||||||
Broadcast
operations
|
$ | (4,172) | $ | (557) | $ | (3,615) | ||||||
Non-broadcast
operations
|
-
|
-
|
-
|
|||||||||
Segment
EBITDA
|
$ | (4,172) | $ | (557) | $ | (3,615) | ||||||
Segment
EBITDA Margin
|
(397) | % | (97) | % | (300) | % | ||||||
(1)
From acquisition on January 11, 2006 only
|
·
|
Segment
Net Revenues for the six months ended June 30, 2007 increased by
US$ 0.5 million, or 84%, compared to the six months ended June
30, 2006.
Spot revenues increased by US$ 0.2 million, or 49%. Non-spot
revenues increased by US$ 0.3 million, or 129%, primarily due to
increased
program sponsorship.
|
·
|
Segment
EBITDA for the six months ended June 30, 2007 decreased by US$
3.6 million, or 649%, compared to the six months ended June 30,
2006,
resulting in an EBITDA margin of (397)% compared to (97)% in the
six
months ended June 30, 2006. Costs charged in arriving at
Segment EBITDA for the six months ended June 30, 2007 increased
by US$ 4.1
million, or 362%, compared to the six months ended June 30, 2006
as we
continued to develop the channels. Cost of programming grew by
US$ 3.0 million, or 1465%. Other operating costs increased by
US$ 0.6 million, or 101%. Selling, general and administrative
expenses increased by US$ 0.5 million, or
167%.
|
COST
OF PROGRAMMING
|
||||||||||||||||
For
the Three Months Ended June 30, (US$ 000’s)
|
For
the Six Months Ended June 30, (US$
000’s)
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Production
expenses
|
$ |
40,778
|
$ |
26,045
|
$ |
68,334
|
$ |
49,020
|
||||||||
Program
amortization
|
41,995
|
26,805
|
80,792
|
52,248
|
||||||||||||
Cost
of programming
|
$ |
82,773
|
$ |
52,850
|
$ |
149,126
|
$ |
101,268
|
·
|
US$
4.0 million of additional programming costs from our Croatia
operations;
|
·
|
US$
2.3 million of additional programming costs from our Czech Republic
operations.
|
·
|
US$
8.6 million of additional programming costs from our Romania
operations;
|
·
|
US$
3.5 million of additional programming costs from our Slovak Republic
operations;
|
·
|
US$
2.5 million of additional programming costs from our Slovenia
operations;
|
·
|
US$
7.7 million of additional programming costs from our Ukraine (STUDIO
1+1)
operations; and
|
·
|
US$
1.3 million of additional programming costs from our Ukraine (KINO,
CITI)
operations;
|
·
|
US$
7.8 million of additional programming costs from our Croatia
operations;
|
·
|
US$
14.4 million of additional programming costs from our Romania
operations;
|
·
|
US$
4.8 million of additional programming costs from our Slovak Republic
operations, which have been consolidated for the entire six-month
period
in 2007;
|
·
|
US$
4.8 million of additional programming costs from our Slovenia
operations;
|
·
|
US$
13.0 million of additional programming costs from our Ukraine (STUDIO
1+1)
operations; and
|
·
|
US$
3.0 million of additional programming costs from our Ukraine (KINO,
CITI)
operations;
|
PROGRAM
AMORTIZATION AND CASH PAID FOR PROGRAMMING
|
||||||||||||||||
For
the Three Months Ended June 30, (US$ 000’s)
|
For
the Six Months Ended June 30, (US$
000’s)
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Program
amortization:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ |
5,234
|
$ |
3,472
|
$ |
10,634
|
$ |
6,890
|
||||||||
Czech
Republic (TV NOVA)
|
7,295
|
6,506
|
13,851
|
13,889
|
||||||||||||
Romania
(PRO TV, ACASA, PRO CINEMA, PRO TV INTERNATIONAL and
SPORT.RO)
|
9,906
|
7,074
|
19,335
|
13,790
|
||||||||||||
Slovak
Republic (MARKIZA TV) (post-acquisition)
|
2,969
|
(1)3,642 |
6,176
|
(1)4,078 | ||||||||||||
Slovenia
(POP TV and KANAL A)
|
2,246
|
1,788
|
4,442
|
3,205
|
||||||||||||
Ukraine
(STUDIO 1+1)
|
13,561
|
5,964
|
24,489
|
12,010
|
||||||||||||
Ukraine
(KINO, CITI)
|
784
|
94
|
1,865
|
121
|
||||||||||||
$ |
41,995
|
$ |
28,540
|
80,792
|
$ |
53,983
|
||||||||||
(1)
Includes the program amortization of our operations in the Slovak
Republic
(MARKIZA TV) for the period prior to January 23, 2006 when they
were
accounted for as an equity affiliate
|
||||||||||||||||
Cash
paid for programming:
|
||||||||||||||||
Croatia
(NOVA TV)
|
$ |
10,002
|
$ |
3,232
|
$ |
10,907
|
$ |
7,598
|
||||||||
Czech
Republic (TV NOVA)
|
4,269
|
4,277
|
10,846
|
16,213
|
||||||||||||
Romania
(PRO TV, ACASA, PRO CINEMA, PRO TV INTERNATIONAL and
SPORT.RO)
|
12,931
|
10,789
|
22,977
|
17,395
|
||||||||||||
Slovak
Republic (MARKIZA TV)
|
4,466
|
2,263
|
8,165
|
5,542
|
||||||||||||
Slovenia
(POP TV and KANAL A)
|
2,480
|
1,680
|
4,652
|
3,499
|
||||||||||||
Ukraine
(STUDIO 1+1)
|
16,075
|
5,437
|
26,559
|
13,409
|
||||||||||||
Ukraine
(KINO, CITI)
|
375
|
273
|
1,117
|
388
|
||||||||||||
$ |
50,598
|
$ |
27,951
|
$ |
85,223
|
$ |
64,044
|
CONSOLIDATED
NET REVENUES
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Croatia
|
$ |
10,414
|
$ |
5,647
|
$ |
4,767
|
||||||
Czech
Republic
|
80,544
|
56,312
|
24,232
|
|||||||||
Romania
|
52,224
|
37,769
|
14,455
|
|||||||||
Slovak
Republic
|
29,652
|
20,046
|
9,606
|
|||||||||
Slovenia
|
20,095
|
15,555
|
4,540
|
|||||||||
Ukraine
(STUDIO 1+1)
|
22,701
|
21,062
|
1,639
|
|||||||||
Ukraine
(KINO, CITI)
|
654
|
198
|
456
|
|||||||||
Total
Consolidated Net Revenues
|
$ |
216,284
|
$ |
156,589
|
$ |
59,695
|
CONSOLIDATED
NET REVENUES
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Croatia
|
$ |
17,646
|
$ |
9,457
|
$ |
8,189
|
||||||
Czech
Republic
|
132,063
|
96,861
|
35,202
|
|||||||||
Romania
|
91,566
|
67,640
|
23,926
|
|||||||||
Slovak
Republic *
|
48,329
|
29,491
|
18,838
|
|||||||||
Slovenia
|
32,764
|
25,782
|
6,982
|
|||||||||
Ukraine
(STUDIO 1+1)
|
40,776
|
46,540
|
(5,764 | ) | ||||||||
Ukraine
(KINO, CITI)
|
1,052
|
572
|
480
|
|||||||||
Total
Consolidated Net Revenues
|
$ |
364,196
|
$ |
276,343
|
$ |
87,853
|
CONSOLIDATED
COST OF REVENUES
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Operating
costs
|
$ |
30,944
|
$ |
26,042
|
$ |
4,902
|
||||||
Cost
of programming
|
82,773
|
52,850
|
29,923
|
|||||||||
Depreciation
of station property, plant and equipment
|
7,680
|
6,059
|
1,621
|
|||||||||
Amortization
of broadcast licenses and other intangibles
|
5,165
|
4,620
|
545
|
|||||||||
Total
Consolidated Cost of Revenues
|
$ |
126,562
|
$ |
89,571
|
$ |
36,991
|
CONSOLIDATED
COST OF REVENUES
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Operating
costs
|
$ |
56,601
|
$ |
49,014
|
$ |
7,587
|
||||||
Cost
of programming
|
149,126
|
101,268
|
47,858
|
|||||||||
Depreciation
of station property, plant and equipment
|
14,579
|
11,761
|
2,818
|
|||||||||
Amortization
of broadcast licenses and other intangibles
|
10,327
|
8,952
|
1,375
|
|||||||||
Total
Consolidated Cost of Revenues
|
$ |
230,633
|
$ |
170,995
|
$ |
59,638
|
CONSOLIDATED
STATION SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Croatia
|
$ |
2,013
|
$ |
1,248
|
$ |
765
|
||||||
Czech
Republic
|
4,908
|
4,388
|
520
|
|||||||||
Romania
|
2,918
|
2,646
|
272
|
|||||||||
Slovak
Republic
|
2,321
|
1,894
|
427
|
|||||||||
Slovenia
|
1,770
|
1,271
|
499
|
|||||||||
Ukraine
(STUDIO 1+1)
|
1,417
|
3,009
|
(1,592 | ) | ||||||||
Ukraine
(KINO, CITI)
|
352
|
85
|
267
|
|||||||||
Total
Consolidated Station Selling, General and Administrative
Expenses
|
$ |
15,699
|
$ |
14,541
|
$ |
1,158
|
CONSOLIDATED
STATION SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Croatia
|
$ |
3,739
|
$ |
2,790
|
$ |
949
|
||||||
Czech
Republic
|
10,000
|
10,065
|
(65 | ) | ||||||||
Romania
|
5,342
|
4,810
|
532
|
|||||||||
Slovak
Republic
|
4,259
|
2,913
|
1,346
|
|||||||||
Slovenia
|
3,477
|
2,484
|
993
|
|||||||||
Ukraine
(STUDIO 1+1)
|
3,883
|
5,353
|
(1,470 | ) | ||||||||
Ukraine
(KINO, CITI)
|
780
|
292
|
488
|
|||||||||
Total
Consolidated Station Selling, General and Administrative
Expenses
|
$ |
31,480
|
$ |
28,707
|
$ |
2,773
|
CORPORATE
OPERATING COSTS
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Corporate
operating costs (excluding stock-based compensation)
|
$ |
6,101
|
$ |
6,966
|
$ | (865 | ) | |||||
Stock-based
compensation
|
1,343
|
730
|
613
|
|||||||||
Corporate
Operating Costs
|
$ |
7,444
|
$ |
7,696
|
$ | (252 | ) |
·
|
Decreased
legal costs incurred in connection with legal proceedings in respect
of
our Ukraine operations, partly offset
by;
|
·
|
Increased
staff-related costs; and
|
·
|
Increased
business development expenses incurred in researching potential
acquisition targets.
|
CORPORATE
OPERATING COSTS
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Corporate
operating costs (excluding stock-based compensation)
|
$ |
13,643
|
$ |
14,259
|
$ | (616 | ) | |||||
Stock-based
compensation
|
2,605
|
1,418
|
1,187
|
|||||||||
Corporate
Operating Costs
|
$ |
16,248
|
$ |
15,677
|
$ |
571
|
·
|
Decreased
property-related costs, as the expense incurred in the six months
ended
June 30, 2006 included a lease exit charge of approximately US$
1.6 million (including additional depreciation of US$ 0.3 million)
incurred following relocation of our London office during the first
quarter of 2006;
|
·
|
Decreased
legal costs incurred in connection with legal proceedings in respect
of
our Ukraine operations, partly offset
by;
|
·
|
Increased
staff-related costs; and
|
·
|
Increased
business development expenses incurred in researching potential
acquisition targets.
|
OPERATING
INCOME
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Operating
Income
|
$ |
66,579
|
$ |
44,033
|
$ |
22,546
|
OPERATING
INCOME
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Operating
Income
|
$ |
85,835
|
$ |
60,216
|
$ |
25,619
|
OTHER
INCOME / (EXPENSE) ITEMS
|
||||||||||||
For
the Three Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Interest
income
|
$ |
1,732
|
$ |
1,741
|
$ | (9 | ) | |||||
Interest
expense
|
(19,438 | ) | (11,337 | ) | (8,101 | ) | ||||||
Foreign
currency exchange loss, net
|
(2,116 | ) | (20,625 | ) |
18,509
|
|||||||
Change
in fair value of derivatives
|
7,528
|
(1,876 | ) |
9,404
|
||||||||
Other
(expense) / income
|
(546 | ) |
167
|
(713 | ) | |||||||
Provision
for income taxes
|
(13,419 | ) | (3,582 | ) | (9,837 | ) | ||||||
Minority
interest in income of consolidated subsidiaries
|
(5,730 | ) | (1,276 | ) | (4,454 | ) | ||||||
Discontinued
operations
|
$ |
-
|
$ |
1,277
|
$ | (1,277 | ) |
OTHER
INCOME / (EXPENSE) ITEMS
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Interest
income
|
$ |
3,146
|
$ |
3,194
|
$ | (48 | ) | |||||
Interest
expense
|
(30,834 | ) | (21,855 | ) | (8,979 | ) | ||||||
Foreign
currency exchange gain loss, net
|
(5,252 | ) | (31,487 | ) |
26,235
|
|||||||
Change
in fair value of derivatives
|
12,052
|
(1,876 | ) |
13,928
|
||||||||
Other
expense
|
(6,759 | ) | (381 | ) | (6,378 | ) | ||||||
Provision
for income taxes
|
(18,478 | ) | (7,576 | ) | (10,902 | ) | ||||||
Minority
interest in income of consolidated subsidiaries
|
(5,370 | ) | (6,717 | ) |
1,347
|
|||||||
Equity
in income / (loss) of unconsolidated affiliates
|
-
|
(730 | ) |
730
|
||||||||
Discontinued
operations
|
$ |
-
|
$ | (2,530 | ) | $ |
2,530
|
EQUITY
IN INCOME / (LOSS) OF UNCONSOLIDATED AFFILIATES
|
||||||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Romania
operations
|
$ |
-
|
$ |
7
|
$ | (7 | ) | |||||
Slovak
Republic operations
|
-
|
(737 | ) |
737
|
||||||||
Equity
in Income / (Loss) of Unconsolidated Affiliates
|
$ |
-
|
$ | (730 | ) | $ |
730
|
SUMMARIZED
CONDENSED CONSOLIDATED BALANCE SHEET (US$ 000’s)
|
||||||||||||
June
30,
2007
|
December
31,
2006
|
Movement
|
||||||||||
Current
assets
|
$ |
426,598
|
$ |
413,616
|
$ |
12,982
|
||||||
Non-current
assets
|
1,473,694
|
1,405,384
|
68,310
|
|||||||||
Current
liabilities
|
214,237
|
182,961
|
31,276
|
|||||||||
Non-current
liabilities
|
611,475
|
574,084
|
37,391
|
|||||||||
Minority
interests in consolidated subsidiaries
|
21,556
|
26,189
|
(4,633 | ) | ||||||||
Shareholders’
equity
|
$ |
1,053,024
|
$ |
1,035,766
|
17,258
|
SUMMARY
OF CASH FLOWS
|
||||||||
For
the Six Months Ended June 30, (US$ 000's)
|
||||||||
2007
|
2006
|
|||||||
Net
cash generated from continuing operating activities
|
$ |
21,601
|
$ |
37,275
|
||||
Net
cash used in continuing investing activities
|
(88,113 | ) | (81,568 | ) | ||||
Net
cash received from financing activities
|
31,125
|
138,233
|
||||||
Net
cash used in discontinued operations – operating
activities
|
(1,624 | ) | (1,690 | ) | ||||
Net
(decrease)/increase in cash and cash equivalents
|
$ | (29,242 | ) | $ |
87,340
|
·
|
Payment
of US$ 51.6 million in connection with our acquisition of an additional
5%
stake in our Romania broadcasting operations and a 20% stake in our
Romanian production company (for further information, see Part I,
Item 1,
Note 3);
|
·
|
Payments
of EUR 6.7 million (approximately US$ 8.4 million) in connection
with our
acquisition of Sport.ro (for further information, see Part I, Item
1, Note
3);
|
·
|
Payments
of US$ 2.1 million in connection with our acquisition of a 60.4%
stake in
each of Tor and Zhysa (for further information, see Part I, Item
1, Note
3); and
|
·
|
Capital
expenditure of US$ 25.5 million.
|
Operating
segment (US$ 000’s)
|
June
30, 2007
|
December
31, 2006
|
||||||
Croatia
|
$ |
85,140
|
$ |
67,623
|
||||
Czech
Republic
|
411,821
|
434,897
|
||||||
Romania
|
37,235
|
25,620
|
||||||
Slovak
Republic
|
23,518
|
23,670
|
||||||
Slovenia
|
58
|
-
|
||||||
Ukraine
(STUDIO 1+1)
|
556
|
-
|
||||||
Ukraine
(KINO, CITI)
|
11,972
|
4,621
|
||||||
Total
|
$ |
570,300
|
$ |
556,431
|
Contractual
Obligations
|
Payments
due by period (US$ 000’s)
|
|||||||||||||||||||
Total
|
Less
than 1 year
|
1-3
years
|
3-5
years
|
More
than 5 years
|
||||||||||||||||
Long-Term
Debt – principal
|
$ |
546,929
|
$ |
11,805
|
$ |
1,700
|
$ |
-
|
$ |
533,424
|
||||||||||
Long-Term
Debt – interest
|
208,481
|
39,510
|
78,383
|
78,077
|
12,511
|
|||||||||||||||
Capital
Lease Obligations
|
6,644
|
540
|
1,840
|
1,240
|
3,024
|
|||||||||||||||
Operating
Leases
|
6,015
|
2,611
|
2,419
|
985
|
-
|
|||||||||||||||
Unconditional
Purchase Obligations
|
118,498
|
110,045
|
6,059
|
1,580
|
814
|
|||||||||||||||
Other
Long-Term Obligations
|
9,199
|
7,199
|
2,000
|
-
|
-
|
|||||||||||||||
Total
Contractual Obligations
|
$ |
895,766
|
$ |
171,710
|
$ |
92,401
|
$ |
81,882
|
$ |
549,773
|
June
30, 2007
(US$
000’s)
|
||||||||
Corporate
|
(1)–(2) | $ |
533,424
|
|||||
Croatia
operations
|
(3) |
-
|
||||||
Czech
Republic operations
|
(4)–(6) |
11,760
|
||||||
Romania
operations
|
(7) |
40
|
||||||
Slovenia
operations
|
(8) |
-
|
||||||
Ukraine
(KINO, CITI) operations
|
(9) |
1,705
|
||||||
Total
|
$ |
546,929
|
(1)
|
In
May 2005, we issued Senior Notes in the aggregate principal amount
of EUR
370.0 million (approximately US$ 499.7 million) consisting of EUR
245.0 million (approximately US$ 330.9 million) of 8.25% Senior Notes
due May 2012 and EUR 125.0 million (approximately US$ 168.8
million) of floating rate Senior Notes due May 2012, which bore
interest at six-month Euro Inter-Bank Offered Rate (“EURIBOR”) plus
5.50%. On May 15, 2007, we redeemed the floating rate Senior
Notes.
|
(2)
|
On
July 21, 2006, we entered into a five-year revolving loan agreement
for
EUR 100.0 million (approximately US$ 135.1 million) arranged by the
European Bank for Reconstruction and Development (the
“Loan”). ING Bank N.V. (“ING”) and Ceska Sporitelna, a.s.
(“CS”) are participating in the facility for EUR 50.0 million in
aggregate.
|
(3)
|
On
March 28, 2007, we repaid EUR 0.6 million (approximately US$ 0.8
million),
which was the total amount outstanding to our Croatia operations
under two
loan agreements with Hypo Alpe-Adria Bank d.d. Following this repayment,
the security held by the bank was
released.
|
(4)
|
CET
21 has a four-year credit facility of CZK 1.2 billion (approximately
US$
56.4 million) with Ceska Sporitelna, a.s. (“CS”). The final
repayment date is October 31, 2009. This facility may, at the
option of CET 21, be drawn in CZK, US$ or EUR and bears interest
at the
three-month, six-month or twelve-month London Inter-Bank Offered
Rate
(“LIBOR”), EURIBOR or Prague Inter-Bank Offered Rate (“PRIBOR”) rate plus
1.95%. This facility is secured by a pledge of receivables,
which are also subject to a factoring arrangement with Factoring
Ceska
Sporitelna, a.s., a subsidiary of CS. As at June 30, 2007,
there were no drawings under this facility, however on July 10,
2007, CZK
860.0 million (approximately US$ 40.4 million) was drawn down under
this
facility and on July 31, 2007, CZK 260.0 million (approximately
US$ 12.7
million) was repaid.
|
(5)
|
CET
21 has a working capital credit facility of CZK 250.0 million
(approximately US$ 11.8 million) with CS. This working capital
facility bears interest at the three-month PRIBOR rate plus 1.65%
and is
secured by a pledge of receivables, which are also subject to a factoring
arrangement with Factoring Ceska Sporitelna, a.s. On June 30, 2007,
the
full CZK 250.0 million (approximately US$ 11.8
million) was drawn under this facility bearing interest at an aggregate
4.65% (three-month PRIBOR effective for this loan was
3.00%).
|
(6)
|
As
at June 30, 2007, there were no drawings under a CZK 300.0 million
(approximately US$ 14.1 million) factoring facility with Factoring
Ceska
Sporitelna, a.s., a subsidiary of CS. This facility is
available until June 30, 2010 and bears interest at the rate of one-month
PRIBOR plus 1.40% for the period that actively assigned accounts
receivable are outstanding.
|
(7)
|
As
at June 30, 2007, an amount of RON 97 thousand (approximately
US$ 40
thousand) was outstanding under a loan agreement from one of the
founding
shareholders of Sport.ro. The loan is interest free and is repayable
in
equal monthly instalments by August 31,
2007.
|
(8)
|
A
revolving five-year facility agreement was entered into by Pro
Plus for up
to EUR 37.5 million (approximately US$ 50.6 million) in aggregate
principal amount with ING Bank N.V., Nova Ljubljanska Banka d.d.,
Ljubljana and Bank Austria Creditanstalt d.d., Ljubljana. The
facility availability amortizes by 10.0% each year for four years
commencing one year after signing, with 60.0% repayable after five
years. This facility is secured by a pledge of the bank
accounts of Pro Plus, the assignment of certain receivables, a
pledge of
our interest in Pro Plus and a guarantee of our wholly-owned subsidiary
CME Media Enterprises B.V. Loans drawn under this facility will
bear interest at a rate of EURIBOR for the period of drawing plus
a margin
of between 2.1% and 3.6% that varies according to the ratio of
consolidated net debt to consolidated broadcasting cash flow for
Pro
Plus. As at June 30, 2007, EUR 33.8 million (approximately US$
45.6 million) was available for drawing under this revolving
facility; there were no drawings
outstanding.
|
(9)
|
Our
Ukraine (KINO, CITI) operations have entered into a number of three-year
unsecured loans with Glavred-Media, LLC, the minority shareholder
in
Ukrpromtorg. As at June 30, 2007, the total value of loans
drawn was US$ 1.7 million. The loans are repayable between
August 2009 and December 2009 and bear interest at
9.0%.
|
Jurisdiction
|
Year
|
Croatia
|
2003
|
Czech
Republic
|
2003
|
Germany
|
2000
|
Netherlands
|
2004
|
Romania
|
2002
|
Slovak
Republic
|
2001
|
Slovenia
|
2001
|
Ukraine
|
2003
|
United
States
|
2001
|
Expected
Maturity Dates
|
2007
|
2008
|
2009
|
2010
|
2011
|
Thereafter
|
||||||||||||||||||
Total
debt in Euro (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
-
|
-
|
-
|
-
|
-
|
245,000
|
||||||||||||||||||
Average
interest rate (%)
|
-
|
-
|
-
|
-
|
-
|
8.25 | % | |||||||||||||||||
Variable
rate
|
-
|
-
|
-
|
-
|
-
|
150,000
|
||||||||||||||||||
Average
interest rate (%)
|
-
|
-
|
-
|
-
|
-
|
5.80 | % | |||||||||||||||||
Total
debt in US$ (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
-
|
-
|
1,700
|
-
|
-
|
-
|
||||||||||||||||||
Average
interest rate (%)
|
-
|
-
|
9.00 | % |
-
|
-
|
-
|
|||||||||||||||||
Total
debt in CZK (000's)
|
||||||||||||||||||||||||
Fixed
rate
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Average
interest rate (%)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Variable
rate
|
250,000
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Average
interest rate (%)
|
4.65 | % |
-
|
-
|
-
|
-
|
-
|
Yearly
interest charge if interest rates increase by (US$
000s):
|
||||||||||||||||||||||||||||
Value
of Debt as at
June 30, 2007
(US$ 000's)
|
Interest
Rate as at
June 30, 2007
|
Yearly
Interest Charge
(US$
000’s)
|
1% | 2% | 3% | 4% | 5% | |||||||||||||||||||||
202,566
(EUR
150.0 million)
|
5.80%
|
11,743
|
13,768
|
15,794
|
17,820
|
19,845
|
21,871
|
|||||||||||||||||||||
11,760
(CZK
250.0 million)
|
4.65%
|
547
|
664
|
782
|
900
|
1,017
|
1,135
|
|||||||||||||||||||||
Total
|
12,290
|
14,443
|
16,576
|
18,719
|
20,863
|
23,006
|
|
·
|
Additional
demands placed on our senior management, who are also responsible
for
managing our existing operations;
|
|
·
|
Increased
overall operating complexity of our business, requiring greater personnel
and other resources;
|
|
·
|
Difficulties
of expanding beyond our core expertise, in the event that we acquire
content providers or other ancillary
businesses;
|
|
·
|
Significant
initial cash expenditures to acquire and integrate new businesses;
and
|
|
·
|
In
the event that debt is incurred to finance acquisitions, additional
debt
service costs related thereto as well as limitations that may arise
under
our Senior Notes and the EBRD Loan
Agreement.
|
For
|
Withheld
|
|
Ronald
S. Lauder
|
82,659,508
|
2,816,548
|
Michael
Garin
|
85,379,243
|
2,615,038
|
Frank
Ehmer
|
82,861,018
|
2,817,418
|
Charles
R. Frank, Jr
|
82,658,638
|
243,309
|
Herbert
A. Granath
|
85,232,747
|
96,813
|
Herbert
Kloiber
|
79,804,852
|
5,671,204
|
Alfred
W. Langer
|
85,232,747
|
243,309
|
Bruce
Maggin
|
85,101,994
|
374,062
|
Ann
Mather
|
85,233,017
|
243,039
|
Christian
Stahl
|
82,658,738
|
2,817,318
|
Eric
Zinterhofer
|
79,591,571
|
5,884,485
|
10.63
|
Purchase
Agreement, among Central European Media Enterprises Ltd. as Issuer,
Central European Media Enterprises N.V. and CME Media Enterprises
B.V. as
Guarantors and J.P. Morgan Securities Ltd., Lehman Brothers International
(Europe) and ING Bank N.V., London Branch as the Initial Purchasers,
dated
May 9, 2007.
|
10.64
|
Amended
and Restated Registration Rights Agreement, between Central European
Media
Enterprises Ltd., and Testora Ltd., dated May 11, 2007.
|
10.65
|
Indenture,
among Central European Media Enterprises Ltd. as Issuer, Central
European
Media Enterprises N.V. and CME Media Enterprises B.V. as Subsidiary
Guarantors, BNY Corporate Trustee Services Limited as Trustee, The
Bank of
New York as Security Trustee, Principal Paying Agent and Transfer
Agent
and The Bank of New York (Luxembourg) S.A. as Registrar, Luxembourg
Transfer Agent and Luxembourg Paying Agent, dated May 16,
2007.
|
10.66
|
Sale-Purchase
Contract for Shares in Pro TV S.A., between Rootland Trading Ltd.
and CME
Romania B.V., dated June 1, 2007.
|
10.67
|
Sale-Purchase
Contract for Shares in Media Pro International S.A., between Rootland
Trading Ltd. and CME Romania B.V., dated June 1, 2007.
|
31.01
|
Sarbanes-Oxley
Certification s. 302 CEO, dated August 2, 2007.
|
31.02
|
Sarbanes-Oxley
Certification s. 302 CFO, dated August 2, 2007.
|
32.01
|
Sarbanes-Oxley
Certification – CEO and CFO, dated August 2, 2007 (furnished
only).
|
Date:
August 2, 2007
|
/s/
Michael Garin
|
Michael
Garin
|
|
Chief
Executive Officer
|
|
(Duly
Authorized Officer)
|
|
Date:
August 2, 2007
|
/s/
Wallace Macmillan
|
Wallace
Macmillan
|
|
Chief
Financial Officer
|
|
(Principal
Financial Officer and Accounting
Officer)
|
Purchase
Agreement, among Central European Media Enterprises Ltd. as Issuer,
Central European Media Enterprises N.V. and CME Media Enterprises
B.V. as
Guarantors and J.P. Morgan Securities Ltd., Lehman Brothers International
(Europe) and ING Bank N.V., London Branch as the Initial Purchasers,
dated
May 9, 2007.
|
|
Amended
and Restated Registration Rights Agreement, between Central European
Media
Enterprises Ltd., and Testora Ltd., dated May 11, 2007.
|
|
Indenture,
among Central European Media Enterprises Ltd. as Issuer, Central
European
Media Enterprises N.V. and CME Media Enterprises B.V. as Subsidiary
Guarantors, BNY Corporate Trustee Services Limited as Trustee, The
Bank of
New York as Security Trustee, Principal Paying Agent and Transfer
Agent
and The Bank of New York (Luxembourg) S.A. as Registrar, Luxembourg
Transfer Agent and Luxembourg Paying Agent, dated May 16,
2007.
|
|
Sale-Purchase
Contract for Shares in Pro TV S.A., between Rootland Trading Ltd.
and CME
Romania B.V., dated June 1, 2007.
|
|
Sale-Purchase
Contract for Shares in Media Pro International S.A., between Rootland
Trading Ltd. and CME Romania B.V., dated June 1, 2007.
|
|
s.
302 Sarbanes-Oxley Certification - CEO, dated August 2,
2007
|
|
s.
302 Sarbanes-Oxley Certification - CFO, dated August
2, 2007
|
|
s.
906 Sarbanes-Oxley Certification - CEO and CFO, dated August 2, 2007
(furnished only)
|