BERMUDA
|
98-0438382
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
Clarendon
House, Church Street, Hamilton
|
HM
CX Bermuda
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer S
|
Accelerated
filer £
|
Non-accelerated
filer £
|
Smaller
reporting company £
|
Document
|
Location
in Form 10-K in Which Document is Incorporated
|
Registrant’s
Proxy Statement for the Annual General Meeting of Shareholders to be held
on June 3, 2008
|
Part
III
|
Page
|
|||
PART
I
|
|||
5
|
|||
33
|
|||
41
|
|||
41
|
|||
42
|
|||
45
|
|||
PART
II
|
|||
46
|
|||
47
|
|||
49
|
|||
95
|
|||
97
|
|||
161
|
|||
161
|
|||
163
|
|||
PART
III
|
|||
164
|
|||
164
|
|||
164
|
|||
164
|
|||
164
|
|||
PART
IV
|
|||
165
|
|||
171
|
ITEM
1.
|
Company
Name
|
Effective
Voting Interest
|
Type
of Affiliate
|
TV
Channels
|
Croatia
|
|||
License
Company:
|
|||
Nova
TV d.d. (“Nova TV (Croatia)”)
|
100.0%
|
Consolidated
Subsidiary
|
NOVA
TV (Croatia)
|
Czech
Republic
|
|||
License
Companies:
|
|||
CET
21 spol s.r.o. (“CET 21”)
|
100.0%
|
Consolidated
Subsidiary
|
TV
NOVA
(Czech
Republic)
NOVA
CINEMA
|
Galaxie
Sport s.r.o. (“Galaxie Sport”)
|
100.0%
|
Consolidated
Subsidiary
|
GALAXIE
SPORT
|
Company
Name
|
Effective
Voting Interest
|
Type
of Affiliate
|
TV
Channels
|
Romania
|
|||
Operating
Companies:
|
|||
Media
Pro International S.A. (“MPI”)
|
95.0%
|
Consolidated
Subsidiary
|
|
Media
Vision S.R.L. (“Media Vision”)
|
95.0%
|
Consolidated
Subsidiary
|
|
License
Company:
|
|||
Pro
TV S.A. (“Pro TV”)
|
95.0%
|
Consolidated
Subsidiary
|
PRO
TV, ACASA, PRO CINEMA, PRO TV INTERNATIONAL and
SPORT.RO
|
Music
Television System S.R.L. (“MTS”)
|
95.0%
|
Consolidated
Subsidiary
|
MTV
ROMANIA
|
Slovak
Republic
|
|||
License
Company:
|
|||
Markiza-Slovakia
s.r.o. (“Markiza”)
|
100.0%
|
Consolidated
Subsidiary
|
TV
MARKIZA
|
Slovenia
|
|||
Operating
Company:
|
|||
Produkcija
Plus d.o.o. (“Pro Plus”)
|
100.0%
|
Consolidated
Subsidiary
|
|
License
Companies:
|
|||
Pop
TV d.o.o. (“Pop TV”)
|
100.0%
|
Consolidated
Subsidiary
|
POP
TV
|
Kanal
A d.o.o. (“Kanal A”)
|
100.0%
|
Consolidated
Subsidiary
|
KANAL
A
|
Ukraine
|
|||
Operating
Companies:
|
|||
Innova
Film GmbH (“Innova”)
|
60.0%
|
Consolidated
Subsidiary
|
|
International
Media Services Ltd. (“IMS”)
|
60.0%
|
Consolidated
Subsidiary
|
|
Foreign
Enterprise “Inter-Media” (“Inter-Media”)
|
60.0%
|
Consolidated
Subsidiary
|
|
TV
Media Planet Ltd. (“TV Media Planet”)
|
60.0%
|
Consolidated
Subsidiary
|
|
License
Company:
|
|||
Studio
1+1 LLC (“Studio 1+1”)
|
60.0%
|
Consolidated
Subsidiary
|
STUDIO
1+1
|
Gravis
LLC (“Gravis”)
|
60.4%
|
Consolidated
Subsidiary
|
KINO
and CITI
|
Tor
LLC (“Tor”)
|
60.4%
|
Consolidated
Subsidiary
|
KINO
and CITI (1)
|
Zhysa
LLC (“Zhysa”)
|
60.4%
|
Consolidated
Subsidiary
|
KINO
and CITI (1)
|
(1)
Zhysa and Tor hold local terrestrial licenses which allow them to
re-broadcast the KINO and CITI
signals.
|
Country
|
TV
Channels
|
Launch
Date
|
Technical
Reach (1)
|
2007
National, All Day, All Audience Share (2)
|
Market
Rank (2)
|
Croatia
|
NOVA
TV (Croatia)
|
August
2000 (3)
|
88.6%
|
18.7%
|
3
|
Czech
Republic
|
TV
NOVA (Czech
Republic)
|
February
1994 (4)
|
97.2%
|
39.6%
|
1
|
GALAXIE
SPORT
|
April
2002 (5)
|
39.1%
|
0.3%
|
14
|
|
NOVA
CINEMA
|
December
2007
|
-
|
-
|
-
|
|
Romania
|
PRO
TV
|
December
1995
|
96.8%
|
14.1%
|
1
|
ACASA
|
February
1998
|
82.8%
|
6.8%
|
4
|
|
PRO
CINEMA
|
April
2004
|
63.0%
|
1.2%
|
16
|
|
SPORT.RO
|
July
2003 (6)
|
66.0%
|
1.9%
|
12
|
|
MTV
ROMANIA
|
June
2002 (7)
|
55.5%
|
0.4%
(7)
|
-
|
|
Slovak
Republic
|
TV
MARKIZA
|
August
1996
|
86.4%
|
35.4%
|
1
|
Slovenia
|
POP
TV
|
December
1995
|
94.7%
|
26.1%
|
1
|
KANAL
A
|
October
1991 (8)
|
90.1%
|
11.3%
|
3
|
|
Ukraine
|
STUDIO
1+1
|
January
1997
|
98.5%
|
16.1%
|
2
|
KINO
|
August
1993 (9)
|
55.5%
|
0.7%
|
23
|
|
CITI
|
March
1994 (9)
|
12.1%
|
0.2%
|
32
|
(1)
|
Source:
Croatia: Croatian Media Council, Czech Republic: ATO - Mediaresearch,
Romania: GFK, Slovak Republic: TBDS, Slovenia: AGB Nelson, Ukraine: GFK
Ukraine. “Technical Reach” is a measurement of the percentage of a
country’s population that is able to receive the signals of the indicated
channels.
|
(2)
|
Source: Croatia:
Peoplemeters AGB Media Services, Czech Republic: ATO -
Mediaresearch / GFK, Romania: Peoplemeters Taylor Nelson Sofres, Slovak
Republic: PMT / TNS SK, Slovenia: Peoplemeters AGB Media Services,
Ukraine: Peoplemeters GFK USM. National all day audience share and rank.
There are four significant stations in Croatia, four in the Czech
Republic, twenty-eight in Romania, six in the Slovak Republic, four in
Slovenia, and six in Ukraine.
|
(3)
|
We
acquired NOVA TV (Croatia) in July
2004.
|
(4)
|
We
acquired TV NOVA (Czech Republic) in May
2005.
|
(5)
|
We
acquired GALAXIE SPORT in September
2005.
|
(6)
|
We
acquired SPORT.RO in March 2007.
|
(7)
|
We
acquired MTV ROMANIA in December 2007. Audience share of 0.4% is an
average audience share for the whole of
2007.
|
(8)
|
We
acquired KANAL A in October 2000.
|
(9)
|
We
acquired KINO and CITI in January 2006 and relaunched them in July 2006
and December 2006, respectively.
|
Country
|
Population
(in
millions)
(1)
|
Technical
Reach
(in
millions)
(2)
|
Television
Households
(in
millions)
(3)
|
Television
Households Reach (%)
(4)
|
Cable
Penetration
(3)
|
|||||||||||||||
Croatia
|
4.6
|
4.1
|
1.5
|
93%
|
16%
|
|||||||||||||||
Czech
Republic
|
10.2
|
|
10.2
|
3.9
|
99%
|
26%
|
||||||||||||||
Romania
|
20.2
|
18.7
|
7.5
|
100%
|
63%
|
|||||||||||||||
Slovak
Republic
|
5.4
|
4.6
|
2.0
|
87%
|
40%
|
|||||||||||||||
Slovenia
|
2.0
|
1.9
|
0.6
|
96%
|
63%
|
|||||||||||||||
Ukraine
|
46.4
|
45.7
|
18.6
|
100%
|
19%
|
|||||||||||||||
Total
|
88.8
|
85.2
|
34.1
|
(1)
|
Source:
Global Insight, except for Romania’s population, which is a CME
estimate.
|
(2)
|
Source:
Internal estimates supplied by each country’s operations. Each
of our operations has estimated its own technical reach based on the
location, power and frequency of each of its transmitters and the local
population density and geography around that transmitter. The
technical reach is separate from the independent third party measurement
that determines audience shares.
|
(3)
|
Source:
Informa Telecoms and Media (July 2007). A Television Household
is a residential dwelling with one or more television
sets. Cable Penetration refers to the percentage of Television
Households that subscribe to television services via cable
channels.
|
(4)
|
Source:
CME. Television Households Reach is the percentage of a country’s
television households that our operation
reaches.
|
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 NOVA CINEMA license expires in November 2019. The
GALAXIE SPORT license expires in March 2014.
|
Romania
|
Licenses
expire on dates ranging from November 2008 to February
2016.
|
Slovak
Republic
|
The
license of TV MARKIZA 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 for KINO
and CITI expire on dates ranging from November 2008 to July
2016.
|
2003
|
2004
|
2005
|
2006
|
2007
|
||||||||||||||||
All
day
|
15.6 | % | 12.0 | % | 13.6 | % | 15.3 | % | 18.7 | % | ||||||||||
Prime
time
|
12.7 | % | 10.9 | % | 13.3 | % | 17.1 | % | 19.7 | % | ||||||||||
Source:
AGB Media Services.
|
Main
Television
Channels
|
Ownership
|
Year
of first
transmission
|
Signal
distribution
|
All
day audience
share
(2007)
|
Technical
reach
|
||||||
RTL
|
Bertelsmann
|
2004
|
Terrestrial
/ satellite / cable
|
28.4%
|
97.0%
|
||||||
HRT
1
|
Public
Television
|
1956
|
Terrestrial
/ satellite / cable
|
25.9%
|
99.0%
|
||||||
NOVA
TV (Croatia)
|
CME
|
2000
|
Terrestrial
/ satellite / cable
|
18.7%
|
88.6%
|
||||||
HRT
2
|
Public
Television
|
1972
|
Terrestrial
/ satellite / cable
|
17.5%
|
97.0%
|
||||||
Others
|
9.5%
|
||||||||||
100.0%
|
|||||||||||
Source:
AGB Puls; Media Council; CME.
|
2003
|
2004
|
2005
|
2006
|
2007
|
||||||||||||||||
All
day
|
43.4 | % | 42.2 | % | 40.9 | % | 41.7 | % | 39.6 | % | ||||||||||
Prime
time
|
45.8 | % | 44.9 | % | 42.3 | % | 44.6 | % | 43.2 | % | ||||||||||
Source:
ATO – Mediaresearch.
|
Main
Television Channels
|
Ownership
|
Year
of first transmission
|
Signal
distribution
|
All
day audience share (2007)
|
Technical
reach
|
||||||
TV
NOVA (Czech Republic)
|
CME
|
1994
|
Terrestrial
/ satellite and digital
|
39.6%
|
98.0%
|
||||||
CT
1
|
Public
Television
|
1953
|
Terrestrial
/ satellite / digital
|
22.7%
|
98.2%
|
||||||
TV
Prima
|
Modern
Times Group/Local owners
|
1993
|
Terrestrial
/ satellite / digital
|
19.4%
|
94.0%
|
||||||
CT
2
|
Public
Television
|
1970
|
Terrestrial
/ satellite / digital
|
7.9%
|
97.6%
|
||||||
GALAXIE
SPORT
|
CME
|
2002
|
Cable
/ satellite
|
0.3%
|
39.1%
|
||||||
NOVA
CINEMA
|
CME
|
2007
|
Cable
/ satellite
|
-*
|
-*
|
||||||
Others
|
10.1%
|
||||||||||
100.0%
|
|||||||||||
Source:
ATO – Mediaresearch; CME.
|
|||||||||||
*Channel
launched in December 2007.
|
2003
|
2004
|
2005
|
2006
|
2007
|
||||||||||||||||
PRO
TV
|
||||||||||||||||||||
All
day
|
15.4%
|
15.8%
|
15.7%
|
15.6%
|
14.1%
|
|||||||||||||||
Prime
time
|
17.1%
|
17.2%
|
16.6%
|
17.0%
|
16.3%
|
|||||||||||||||
ACASA
|
|
|
||||||||||||||||||
All
day
|
6.6%
|
7.4%
|
8.1%
|
7.7%
|
6.8%
|
|||||||||||||||
Prime
time
|
7.8%
|
7.7%
|
9.1%
|
8.1%
|
6.1%
|
|||||||||||||||
SPORT.RO
|
|
|||||||||||||||||||
All
day
|
-
|
-
|
-
|
-
|
1.9%
|
|||||||||||||||
Prime
time
|
-
|
-
|
-
|
-
|
|
1.5%
|
||||||||||||||
PRO
CINEMA
|
|
|||||||||||||||||||
All
day
|
-
|
0.6%
|
0.8%
|
1.0%
|
1.2%
|
|||||||||||||||
Prime
time
|
-
|
0.6%
|
0.7%
|
0.9%
|
1.1%
|
|||||||||||||||
MTV
ROMANIA
|
|
|||||||||||||||||||
All
day
|
0.5%
|
|
0.5%
|
0.4%
|
0.4%
|
0.4%
|
||||||||||||||
Prime
time
|
0.3%
|
0.3%
|
0.2%
|
0.2%
|
0.2%
|
|||||||||||||||
Source:
Peoplemeters Taylor Nelson Sofres.
|
Main
Television Channels
|
Ownership
|
Year
of first transmission
|
Signal
distribution
|
All
day audience share (2007)
|
Technical
reach
|
||||||
PRO
TV
|
CME
|
1995
|
Terrestrial
/ satellite / cable
|
14.1%
|
96.8%
|
||||||
TVR
1
|
Public
Television
|
1956
|
Terrestrial
/ satellite / cable
|
11.8%
|
99.1%
|
||||||
Antena
1
|
Local
owner
|
1993
|
Terrestrial
/ satellite / cable
|
11.3%
|
89.0%
|
||||||
ACASA
|
CME
|
1998
|
Satellite
/ cable
|
6.8%
|
82.8%
|
||||||
Prima
TV
|
SBS
|
1994
|
Terrestrial
/ satellite / cable
|
4.8%
|
86.7%
|
||||||
TVR
2
|
Public
Television
|
1968
|
Terrestrial
/ satellite / cable
|
4.5%
|
93.6%
|
||||||
SPORT.RO
|
CME
|
2003
|
Satellite
/ cable
|
1.9%
|
66.0%
|
||||||
PRO
CINEMA
|
CME
|
2004
|
Satellite
/ cable
|
1.2%
|
63.0%
|
||||||
MTV
ROMANIA
|
CME
|
2002
|
Satellite
/ cable
|
0.4%
|
55.5%
|
||||||
Others
|
43.2%
|
||||||||||
100.0%
|
|||||||||||
Source:
Peoplemeters Taylor Nelson Sofres; CME.
|
2003
|
2004
|
2005
|
2006
|
2007
|
||||||||||||||||
All
day
|
45.8 | % | 39.6 | % | 31.1 | % | 33.6 | % | 35.4 | % | ||||||||||
Prime
time
|
45.5 | % | 40.0 | % | 32.8 | % | 35.9 | % | 39.5 | % | ||||||||||
Main
Television
Channels
|
Ownership
|
Year
of first
transmission
|
Signal
distribution
|
All
day audience
share
(2007)
|
Technical
reach
|
||||||
TV
MARKIZA
|
CME
|
1996
|
Terrestrial
|
35.4%
|
86.4%
|
||||||
STV
1
|
Public
Television
|
1956
|
Terrestrial
|
17.7%
|
98.2%
|
||||||
TV
JOJ
|
Local
owner
|
2002
|
Terrestrial
|
15.8%
|
76.4%
|
||||||
STV
2
|
Public
Television
|
1969
|
Terrestrial
|
5.0%
|
98.2%
|
||||||
Others
|
26.1%
|
||||||||||
100.0%
|
|||||||||||
Source
: Informa Telecoms and Media; Visio / MVK; PMT / TNS SK;
CME.
|
2003
|
2004
|
2005
|
2006
|
2007
|
||||||||||||||||
POP
TV
|
||||||||||||||||||||
All
day
|
29.5%
|
27.6%
|
27.3%
|
28.6%
|
26.1%
|
|||||||||||||||
Prime
time
|
34.0%
|
|
31.9%
|
32.2%
|
34.3%
|
31.9%
|
||||||||||||||
KANAL
A
|
|
|
||||||||||||||||||
All
day
|
10.2%
|
|
8.3%
|
8.5%
|
8.9%
|
11.3%
|
||||||||||||||
Prime
time
|
10.9%
|
9.4%
|
9.8%
|
9.8%
|
11.1%
|
|||||||||||||||
Source:
AGB Nielsen Media Research.
|
Main
Television Channels
|
Ownership
|
Year
of first transmission
|
Signal
distribution
|
All
day audience share (2007)
|
Technical
reach
|
||||||
POP
TV
|
CME
|
1995
|
Terrestrial
/ cable
|
26.1%
|
94.7%
|
||||||
SLO
1
|
Public
Television
|
1958
|
Terrestrial
/ satellite / cable
|
23.3%
|
99.3%
|
||||||
KANAL
A
|
CME
|
1991
|
Terrestrial
/ cable
|
11.3%
|
90.1%
|
||||||
SLO
2
|
Public
Television
|
1967
|
Terrestrial
/ satellite / cable
|
8.5%
|
98.8%
|
||||||
TV3
|
MTG
|
1995
|
Terrestrial
/ cable
|
3.7%
|
68.5%
|
||||||
Others
|
27.1%
|
||||||||||
100.0%
|
|||||||||||
Source
: Media Services AGB; CME.
|
2003
|
2004
|
2005
|
2006
|
2007
|
||||||||||||||||
All
day
|
19.1%
|
20.9%
|
20.0%
|
18.4%
|
16.1%
|
|||||||||||||||
Prime
time
|
25.8%
|
26.9%
|
22.2%
|
23.1%
|
18.2%
|
|||||||||||||||
Main
Television
Channels
|
Ownership
|
Year
of first
transmission
|
Signal
distribution
|
Audience
share
(2007)
|
Technical
reach
|
||||||
Inter
|
Local
owners
|
1996
|
Terrestrial
/satellite
/ cable
|
20.9%
|
99.0%
|
||||||
STUDIO
1+1
|
CME
|
1997
|
Terrestrial
/satellite
/ cable
|
16.1%
|
98.5%
|
||||||
Novy
Kanal
|
Local
owner (same as ICTV and STB)
|
1998
|
Terrestrial
|
7.4%
|
96.8%
|
||||||
ICTV
|
Local
owner (same as Novy Kanal and STB)
|
1992
|
Terrestrial
|
6.9%
|
96.0%
|
||||||
STB
|
Local
owner (same as Novy Kanal and ICTV)
|
1997
|
Terrestrial
|
6.7%
|
94.7%
|
||||||
UT-1
|
Public
Television
|
1965
|
Terrestrial
/cable
|
1.9%
|
97.5%
|
||||||
Others
|
40.1%
|
||||||||||
100.0%
|
ITEM
1A.
|
RISK FACTORS
|
·
|
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
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.
|
ITEM
1 B.
|
UNRESOLVED STAFF
COMMENTS
|
ITEM
2.
|
Location
|
Property
|
Use
|
Hamilton,
Bermuda
|
Leased
office
|
Registered
Office, Corporate
|
Amsterdam,
Netherlands
|
Leased
office
|
Corporate
Office, Corporate
|
London,
United Kingdom
|
Leased
office
|
Administrative
Center, Corporate
|
Zagreb,
Croatia
|
Owned
and leased buildings
|
Office
and studio space, NOVA TV (Croatia)
|
Prague,
Czech Republic
|
Owned
and leased buildings
|
Office
and studio space, TV NOVA (Czech Republic)
|
Bucharest
and other key cities within Romania
|
Owned
and leased buildings
|
Office
and studio space, PRO TV
|
Bratislava,
Slovak Republic
|
Owned
buildings
|
Office
and studio space, TV MARKIZA
|
Ljubljana,
Slovenia
|
Owned
and leased buildings
|
Office
and studio space, POP TV and KANAL A
|
Kiev
and other key cities within Ukraine
|
Leased
buildings
|
Office
and studio space, STUDIO 1+1. Office and studio space, KINO,
CITI
|
Zug,
Switzerland
|
Leased
office
|
Office
space, IMS
|
ITEM
3.
|
LEGAL PROCEEDINGS
|
ITEM
4.
|
SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
ITEM
5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
|
Price
Period
|
High
(US$ / Share)
|
Low
(US$ / Share)
|
2007
|
||
Fourth
Quarter
|
123.49
|
93.36
|
Third
Quarter
|
100.85
|
76.91
|
Second
Quarter
|
100.74
|
86.85
|
First
Quarter
|
88.92
|
70.95
|
2006
|
||
Fourth
Quarter
|
77.69
|
67.50
|
Third
Quarter
|
68.47
|
53.62
|
Second
Quarter
|
71.35
|
52.90
|
First
Quarter
|
71.87
|
56.73
|
Central
European Media Enterprises Ltd.
|
$ |
670.40
|
||
NASDAQ
Composite Index
|
$ |
150.37
|
||
Dow
Jones World Broadcasting Index (1)
|
$ |
132.39
|
ITEM
6.
|
SELECTED FINANCIAL DATA
|
For
the Years Ended December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
(2)
|
2004
|
2003
|
||||||||||||||||
(US$
000’s, except per share data)
|
||||||||||||||||||||
CONSOLIDATED
STATEMENT OF OPERATIONS DATA:
|
||||||||||||||||||||
Net
revenues
|
$ | 839,991 | $ | 603,115 | $ | 400,978 | $ | 182,339 | $ | 124,978 | ||||||||||
Operating
income / (loss)
|
206,044 | 140,674 | 52,196 | 18,671 | (4,410 | ) | ||||||||||||||
Net
income / (loss) from continuing operations
|
88,568 | 25,287 | 42,835 | 15,938 | (24,201 | ) | ||||||||||||||
(Loss)
/ income on discontinued operations (1)
|
- | (4,863 | ) | (513 | ) | 2,524 | 370,213 | |||||||||||||
Net
income
|
$ | 88,568 | $ | 20,424 | $ | 42,322 | $ | 18,462 | $ | 346,012 | ||||||||||
PER
SHARE DATA:
|
||||||||||||||||||||
Net
income / (loss) per common share from:
|
||||||||||||||||||||
Continuing
operations – basic
|
$ | 2.14 | $ | 0.63 | $ | 1.24 | $ | 0.57 | $ | (0.91 | ) | |||||||||
Continuing
operations – diluted
|
2.12 | 0.62 | 1.21 | 0.55 | (0.91 | ) | ||||||||||||||
Discontinued
operations – basic
|
- | (0.12 | ) | (0.01 | ) | 0.09 | 13.97 | |||||||||||||
Discontinued
operations – diluted
|
- | (0.12 | ) | (0.01 | ) | 0.09 | 13.97 | |||||||||||||
Net
income / (loss) – basic
|
2.14 | 0.51 | 1.22 | 0.66 | 13.06 | |||||||||||||||
Net
income / (loss) – diluted
|
$ | 2.12 | $ | 0.50 | $ | 1.19 | $ | 0.63 | $ | 13.06 | ||||||||||
Weighted
average common shares used in computing per share amounts
(000’s)
|
||||||||||||||||||||
Basic
|
41,384 | 40,027 | 34,664 | 27,871 | 26,492 | |||||||||||||||
Diluted
|
41,833 | 40,600 | 35,430 | 29,100 | 26,492 | |||||||||||||||
CONSOLIDATED
BALANCE SHEET DATA:
|
||||||||||||||||||||
Current
assets
|
$ | 529,824 | $ | 413,616 | $ | 286,926 | $ | 265,049 | $ | 266,891 | ||||||||||
Non-current
assets
|
1,808,611 | 1,405,384 | 1,101,924 | 179,590 | 101,861 | |||||||||||||||
Total
assets
|
$ | 2,338,435 | $ | 1,819,000 | $ | 1,388,850 | $ | 444,639 | $ | 368,752 | ||||||||||
Current
liabilities
|
232,770 | 182,961 | 206,961 | 109,745 | 71,116 | |||||||||||||||
Non-current
liabilities
|
682,703 | 574,084 | 488,099 | 18,965 | 23,118 | |||||||||||||||
Minority
interests
|
23,155 | 26,189 | 13,237 | 4,861 | 994 | |||||||||||||||
Shareholders’
equity
|
1,399,807 | 1,035,766 | 680,553 | 311,068 | 273,524 | |||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 2,338,435 | $ | 1,819,000 | $ | 1,388,850 | $ | 444,639 | $ | 368,752 | ||||||||||
ITEM
7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
|
l.
|
Executive
Summary
|
ll.
|
General
Market Information
|
Ill.
|
Analysis
of Segment Results
|
IV.
|
Analysis
of the Results of Consolidated
Operations
|
V.
|
Liquidity
and Capital Resources
|
Vl.
|
Critical
Accounting Policies and Estimates
|
Vll.
|
Related
Party Matters
|
|
·
|
Acquisitions: On July
13, 2007, we acquired an additional 20.0% interest in Markiza for
aggregate consideration of SKK 1.9 billion (approximately US$ 78.5
million) and now own 100.0% of our Slovak Republic operations. On May
16, 2007, we acquired an additional 20.0% of Media Vision and on June 1,
2007 we acquired an additional 5.0% of Pro TV and MPI for aggregate
consideration of US$ 51.6 million.
|
|
·
|
Bank Facilities: On August 22, 2007, we entered into a new
facility with EBRD in the amount of EUR 50.0 million, while at the same
time reducing the interest payable on our existing EUR 100.0 facility to
EURIBOR plus 1.625% from the previous EURIBOR plus 2.75% (see V(c)
“Contractual Obligations, Commitments and Off-Balance Sheet
Arrangements”).
|
|
·
|
Shareholder Investment:
On August 30, 2007, we issued 1,275,227 unregistered shares of our
Class A Common Stock to Igor Kolomoisky for net cash consideration of US$
109.9 million. In connection with this investment,
Mr. Kolomoisky was appointed to our Board of
Directors.
|
|
·
|
Ukrainian Operations:
On August 30, 2007 we completed the registration of a 42% direct
ownership interest in Studio 1+1 via a Ukrainian subsidiary
company, thereby securing control over the Studio 1+1 broadcasting
licenses. In addition, on January 31, 2008 we entered into a series of
agreements with our partners in the Studio 1+1 Group to purchase an
additional 30% interest in the Studio 1+1 Group. The transaction is
expected to close by the end of the second quarter of 2008 (see Item 8,
Note 22 “Subsequent Events –
Ukraine”).
|
|
·
|
New Channels: We continued to implement our multi-channel
strategy for each of our markets by launching NOVA CINEMA in the
Czech Republic in December 2007. We also re-launched TV
SPORT (acquired in March 2007) in Romania as SPORT.RO in April 2007 and
acquired MTV ROMANIA in December 2007, bringing the total number of our
Romanian channels to six (see Part I, Item 1 “Business - Operations by
Country”).
|
|
·
|
Senior Notes
Offering and
Redemption: On May 16, 2007 we redeemed our floating rate
senior notes due May 2012 and issued floating rate senior notes due May
2014 in the aggregate principal amount of EUR 150.0 million, which bear
interest at six-month EURIBOR plus 1.625% (see Item 8, Note 7 “Senior
Notes”).
|
|
·
|
Debt Ratings: On
September 10, 2007, Standard & Poor’s upgraded our corporate credit
rating from BB- to BB.
|
|
·
|
Management Appointment:
On October 17, 2007, we appointed Adrian Sarbu, general director of
our Romanian operations, as our Chief Operating
Officer.
|
·
|
completing
the buyout of our partners in the Studio 1+1 Group and restructuring our
Ukraine operations in order to secure consistent performance and a leading
position in the Ukrainian market;
|
·
|
ensuring
that our leading position in our operating countries is secured during the
transition to digital terrestrial broadcasting and the anticipated growth
of DTH offerings;
|
·
|
launching
or acquiring additional channels in our markets in order to expand our
offerings, target niche audiences and increase our advertising
inventory;
|
·
|
improving
margins by leveraging expertise from our best-performing
operations;
|
·
|
expanding
our capabilities in production and the development of local content;
and
|
·
|
achieving
cash break even in our Croatia operations by the fourth quarter of
2008.
|
Country
|
2007
Rating
|
Details
of 2007 Rating
|
2006
Rating
|
2005
Rating
|
2004
Rating
|
Croatia
|
A4
|
A
somewhat shaky political and economic outlook and a relatively volatile
business environment can affect corporate payment
behavior. Corporate default probability is still acceptable on
average.
|
A4
|
A4
|
A4
|
Czech
Republic
|
A2
|
The
political and economic situation is good. A basically stable
and efficient business environment nonetheless leaves room for
improvement. Corporate default probability is low on
average.
|
A2
|
A2
|
A2
|
Romania
|
A4
|
A
somewhat shaky political and economic outlook and a relatively volatile
business environment can affect corporate payment
behavior. Corporate default probability is still acceptable on
average.
|
A4
|
A4
|
B
|
Slovak
Republic
|
A3
|
Changes
in generally good but somewhat volatile political and economic environment
can affect corporate payment behavior. A basically secure
business environment can nonetheless give rise to occasional difficulties
for companies. Corporate default probability is quite
acceptable on average.
|
A3
|
A3
|
A3
|
Slovenia
|
A1
|
The
political and economic situation is very good. A quality business
environment has a positive influence on corporate payment
behavior. Corporate default probability is very low on
average.
|
A1
|
A2
|
A2
|
Ukraine
|
C
|
A
very uncertain political and economic outlook and a business environment
with many troublesome weaknesses can have a significant impact on
corporate payment behavior. Corporate default probability is
high.
|
C
|
C
|
C
|
Country
|
Population
(in
millions) (1)
|
Per
Capita GDP 2007 (1)
|
Total
Advertising Spending per Capita 2007 (US$) (2)
|
Total
Advertising Spending as a % of GDP 2007
(2)
|
TV
Advertising Spending per Capita (US$)
(2)
|
TV
Advertising Spending as a % of Total Advertising Spending
(2)
|
||||||||||||||||||
Croatia
|
4.6
|
$ |
11,272
|
$ |
72.1
|
0.64%
|
$ |
31.6
|
44%
|
|
||||||||||||||
Czech
Republic
|
10.2
|
$ |
17,061
|
$ |
79.8
|
0.47%
|
$ |
38.3
|
48%
|
|||||||||||||||
Romania
|
20.2
|
$ |
8,094
|
$ |
28.5
|
0.35%
|
$ |
18.7
|
65%
|
|||||||||||||||
Slovak
Republic
|
5.4
|
$ |
13,896
|
$ |
68.4
|
0.49%
|
$ |
31.4
|
46%
|
|||||||||||||||
Slovenia
|
2.0
|
$ |
23,000
|
$ |
77.8
|
0.34%
|
$ |
45.2
|
58%
|
|||||||||||||||
Ukraine
|
46.4
|
$ |
2,943
|
$ |
18.2
|
0.62%
|
$ |
8.5
|
47%
|
(1)
|
Source: Global
Insight Country Analysis, except for Romania’s population, which is a CME
estimate.
|
(2)
|
Source: CME
estimates.
|
Country
|
Population
(in
millions) (1)
|
Per
Capita GDP 2007 (1)
|
Total
Advertising Spending per Capita 2007 (US$) (2)
|
Total
Advertising Spending as a % of GDP 2007
(2)
|
TV
Advertising Spending per Capita (US$)
(2)
|
TV
Advertising Spending as a % of Total Advertising Spending
(2)
|
||||||||||||||||||
Greece
|
11.2
|
$ |
27,941
|
$ |
269.0
|
0.96%
|
$ |
85.3
|
32%
|
|||||||||||||||
Hungary
|
10.0
|
$ |
13,695
|
$ |
85.2
|
0.62%
|
$
|
34.2
|
40%
|
|||||||||||||||
Italy
|
59.4
|
$ |
35,534
|
$ |
170.8
|
0.48%
|
$ |
90.8
|
53%
|
|||||||||||||||
Poland
|
38.1
|
$ |
11,029
|
$ |
54.9
|
0.50%
|
$ |
28.7
|
52%
|
|||||||||||||||
Russia
|
142.5
|
$ |
8,712
|
$ |
59.4
|
0.68%
|
$ |
29.9
|
50%
|
|||||||||||||||
Turkey
|
75.1
|
$ |
6,550
|
$ |
33.7
|
0.51%
|
$ |
18.1
|
54%
|
|||||||||||||||
UK
|
61.0
|
$ |
45,511
|
$ |
339.7
|
0.75%
|
$ |
89.7
|
|
26%
|
||||||||||||||
USA
|
302.8
|
$ |
45,716
|
$ |
532.7
|
1.17%
|
$ |
193.9
|
36%
|
(1)
|
Source: Global
Insight Country Analysis.
|
(2)
|
Source: CME
estimates based on information from Zenith Optimedia (October
2007).
|
Country
|
2003
|
2004
|
2005
|
2006
|
2007
|
|||||||||||||||
Croatia
|
*
|
$
110 - $ 120
|
$
115 – $ 125
|
$
120 - $ 130
|
$
140 - $ 150
|
|||||||||||||||
Czech
Republic
|
*
|
$
260 – $ 270
|
$
285 – $ 295
|
$
310 – $ 320
|
$
390 – $ 400
|
|||||||||||||||
Romania
|
$
85 - $ 95
|
$
110 – $ 120
|
$
165 – $ 175
|
$
235 – $ 245
|
$
375 – $ 385
|
|||||||||||||||
Slovak
Republic
|
$ 60
- $ 70
|
$
80 - $ 90
|
$
90 – $ 100
|
$
105 – $ 115
|
$
165 – $ 170
|
|||||||||||||||
Slovenia
|
$
45 - $ 55
|
$
55 – $ 65
|
$
60 - $ 70
|
$
70 - $ 80
|
|
$
85 – $ 90
|
||||||||||||||
Ukraine
(1)
|
|
$ 100
- $ 115
|
$ 140
- $ 150
|
$
220 - $ 230
|
$
290 - $ 300
|
$
390 - $ 400
|
Country
|
2003
|
2004
|
2005
|
2006
|
2007
|
|||||||||||||||
Croatia
|
*
|
*
|
(1
- 3%)
|
2 -
5%
|
4 -
7%
|
|||||||||||||||
Czech
Republic
|
*
|
*
|
3 –
5%
|
0 -
1%
|
8 –
12%
|
|||||||||||||||
Romania
|
45
- 55%
|
20
- 30%
|
25
- 35%
|
30
– 40%
|
50
- 60%
|
|||||||||||||||
Slovak
Republic
|
16
- 18%
|
14
- 16%
|
8 -
10%
|
|
5 -
7%
|
25
- 30%
|
||||||||||||||
Slovenia
|
(11
- 13%)
|
8 -
11%
|
9 -
11%
|
9 -
11%
|
8 -
10%
|
|||||||||||||||
Ukraine
(1)
|
20
- 30%
|
25
- 35%
|
45
- 55%
|
25
- 35%
|
25
- 35%
|
|
·
|
expenses
presented as corporate operating costs in our consolidated statement of
operations;
|
|
·
|
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, or gains on the sale of
unconsolidated affiliates).
|
SEGMENT
FINANCIAL INFORMATION
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000's)
|
||||||||||||||||||||||||
2007
|
(1 | ) |
2006
|
(1 | ) |
2005
|
(1 | ) | ||||||||||||||||
Segment
Net Revenues
|
||||||||||||||||||||||||
Croatia (NOVA
TV)
|
$ | 37,193 | 5 | % | $ | 22,310 | 4 | % | $ | 22,030 | 5 | % | ||||||||||||
Czech
Republic (2)
|
279,237 | 33 | % | 208,387 | 34 | % | 154,010 | 33 | % | |||||||||||||||
Romania (3)
|
215,402 | 26 | % | 148,616 | 25 | % | 103,321 | 22 | % | |||||||||||||||
Slovak Republic (MARKIZA TV)
(4)
|
110,539 | 13 | % | 73,420 | 12 | % | 64,266 | 14 | % | |||||||||||||||
Slovenia (POP TV and KANAL
A)
|
69,647 | 8 | % | 54,534 | 9 | % | 48,770 | 10 | % | |||||||||||||||
Ukraine (STUDIO
1+1)
|
125,323 | 15 | % | 96,413 | 16 | % | 72,847 | 16 | % | |||||||||||||||
Ukraine (KINO, CITI)
(5)
|
2,650 | 0 | % | 1,195 | 0 | % | - | - | ||||||||||||||||
Total
Segment Net Revenues
|
$ | 839,991 | 100 | % | $ | 604,875 | 100 | % | $ | 465,244 | 100 | % | ||||||||||||
Represented
by:
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 836,367 | 100 | % | $ | 601,885 | 100 | % | $ | 463,030 | 100 | % | ||||||||||||
Non-broadcast
operations
|
3,624 | 0 | % | 2,990 | 0 | % | 2,214 | 0 | % | |||||||||||||||
Total
Segment Net Revenues
|
$ | 839,991 | 100 | % | $ | 604,875 | 100 | % | $ | 465,244 | 100 | % | ||||||||||||
Segment
EBITDA
|
||||||||||||||||||||||||
Croatia (NOVA
TV)
|
$ | (13,882 | ) | (4 | )% | $ | (14,413 | ) | (7 | )% | $ | (15,866 | ) | (10 | )% | |||||||||
Czech
Republic (2)
|
156,496 | 49 | % | 100,488 | 46 | % | 71,544 | 45 | % | |||||||||||||||
Romania (3)
|
93,075 | 29 | % | 65,860 | 30 | % | 43,803 | 28 | % | |||||||||||||||
Slovak Republic (MARKIZA TV)
(4)
|
41,532 | 13 | % | 20,805 | 10 | % | 17,240 | 11 | % | |||||||||||||||
Slovenia (POP TV and KANAL
A)
|
22,767 | 7 | % | 19,842 | 9 | % | 19,337 | 12 | % | |||||||||||||||
Ukraine (STUDIO
1+1)
|
27,000 | 8 | % | 29,973 | 14 | % | 21,803 | 14 | % | |||||||||||||||
Ukraine (KINO, CITI)
(5)
|
(7,293 | ) | (2 | )% | (3,713 | ) | (2 | )% | - | - | ||||||||||||||
Total
Segment EBITDA
|
$ | 319,695 | 100 | % | $ | 218,842 | 100 | % | $ | 157,861 | 100 | % | ||||||||||||
Represented
by:
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 323,573 | 101 | % | $ | 219,128 | 100 | % | $ | 157,520 | 100 | % | ||||||||||||
Non-broadcast
operations
|
(3,878 | ) | (1 | )% | (286 | ) | 0 | % | 341 | 0 | % | |||||||||||||
Total
Segment EBITDA
|
$ | 319,695 | 100 | % | $ | 218,842 | 100 | % | $ | 157,861 | 100 | % | ||||||||||||
Segment
EBITDA Margin (6)
|
38 | % | 36 | % | 34 | % |
(1)
|
Percentage
of Total Segment Net Revenues / Total Segment
EBITDA.
|
(2)
|
We
acquired our Czech Republic operations (TV NOVA) in May 2005 and GALAXIE
SPORT in September 2005. We launched NOVA CINEMA in December
2007.
|
(3)
|
Romanian
networks are PRO TV, PRO CINEMA, ACASA, PRO TV INTERNATIONAL, SPORT.RO and
MTV ROMANIA for the year ended December 31, 2007 and PRO TV, PRO CINEMA,
ACASA, PRO TV INTERNATIONAL for the years ended December 31, 2006 and
2005.
|
(4)
|
Our
Slovak Republic operations were accounted for as an equity affiliate until
January 23, 2006.
|
(5)
|
We
acquired our Ukraine (KINO, CITI) operations on January 11,
2006.
|
(6)
|
We
define Segment EBITDA margin as the ratio of Segment EBITDA to Segment Net
Revenues.
|
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Spot
revenues
|
$ | 29,675 | $ | 16,442 | 80.5 | % | $ | 16,442 | $ | 15,954 | 3.1 | % | ||||||||||||
Non-spot
revenues
|
7,518 | 5,868 | 28.1 | % | 5,868 | 6,076 | (3.4 | )% | ||||||||||||||||
Segment
Net Revenues
|
$ | 37,193 | $ | 22,310 | 66.7 | % | $ | 22,310 | $ | 22,030 | 1.3 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 36,901 | $ | 22,298 | 65.5 | % | $ | 22,298 | $ | 22,030 | 1.2 | % | ||||||||||||
Non-broadcast
operations
|
292 | 12 | 2,333.3 | % | 12 | - | - | |||||||||||||||||
Segment
Net Revenues
|
$ | 37,193 | $ | 22,310 | 66.7 | % | $ | 22,310 | $ | 22,030 | 1.3 | % | ||||||||||||
Segment
EBITDA
|
$ | (13,882 | ) | $ | (14,413 | ) | 3.7 | % | $ | (14,413 | ) | $ | (15,866 | ) | 9.2 | % | ||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | (13,814 | ) | $ | (14,302 | ) | 3.4 | % | $ | (14,302 | ) | $ | (15,866 | ) | 9.9 | % | ||||||||
Non-broadcast
operations
|
(68 | ) | (111 | ) |
38.7
|
% | (111 | ) | - | - | ||||||||||||||
Segment
EBITDA
|
$ | (13,882 | ) | $ | (14,413 | ) | 3.7 | % | $ | (14,413 | ) | $ | (15,866 | ) | 9.2 | % | ||||||||
Segment
EBITDA Margin
|
(37 | )% | (65 | )% | 28 | % | (65 | )% | (72 | )% | 7 | % | ||||||||||||
·
|
Segment Net Revenues
for the year ended December 31, 2007
increased by 67%, compared to 2006. In local currency, Segment
Net Revenues grew by 52%. Spot revenues increased by 81% in
2007 compared to 2006 due to our stronger ratings improving our position
in the market, which supported the sale of significantly higher volumes of
GRPs at increased prices. Non-spot revenues increased by 28% in 2007
compared to 2006, primarily due to increased sponsorships and the revenue
arising from “Nova Lova” (“Call TV”). A blog site operated by Internet
Dnevnik, which we acquired on June 7, 2007, contributed more than half of
non-broadcast revenues. The strengthening of the Croatian Kuna
against the dollar also contributed significantly to the increase in
revenues.
|
|
Segment
Net Revenues for the year ended December 31, 2006 were 1% higher compared
to the year ended December 31, 2005. In local currency, Segment Net
Revenues also grew by 1%. The increase in revenue was
attributable to increased spot sales. Spot revenues increased
by 3% in 2006 compared to 2005, driven principally by price
increases, which offset a decrease in volume of GRPs
sold.
|
·
|
Segment EBITDA losses
for the year ended December 31, 2007 fell by 4% compared to the year ended
December 31, 2006. In local currency, Segment EBITDA losses
fell by 12%.
|
CZECH
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
(1)
|
Movement
|
|||||||||||||||||||
Spot
revenues
|
$ | 254,545 | $ | 181,965 | 39.9 | % | $ | 181,965 | $ | 133,250 | 36.6 | % | ||||||||||||
Non-spot
revenues
|
24,692 | 26,422 | (6.5 | )% | 26,422 | 20,760 | 27.3 | % | ||||||||||||||||
Segment
Net Revenues
|
$ | 279,237 | $ | 208,387 | 34.0 | % | $ | 208,387 | $ | 154,010 | 35.3 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 278,785 | $ | 207,671 | 34.2 | % | $ | 207,671 | $ | 153,626 | 35.2 | % | ||||||||||||
Non-broadcast
operations
|
452 | 716 | (36.9 | )% | 716 | 384 | 86.5 | % | ||||||||||||||||
Segment
Net Revenues
|
$ | 279,237 | $ | 208,387 | 34.0 | % | $ | 208,387 | $ | 154,010 | 35.3 | % | ||||||||||||
Segment
EBITDA
|
$ | 156,496 | $ | 100,488 | 55.7 | % | $ | 100,488 | $ | 71,544 | 40.5 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 157,362 | $ | 100,724 | 56.2 | % | $ | 100,724 | $ | 71,742 | 40.4 | % | ||||||||||||
Non-broadcast
operations
|
(866 | ) | (236 | ) | (266.9 | )% | (236 | ) | (198 | ) | (19.2 | )% | ||||||||||||
Segment
EBITDA
|
$ | 156,496 | $ | 100,488 | 55.7 | % | $ | 100,488 | $ | 71,544 | 40.5 | % | ||||||||||||
Segment
EBITDA Margin
|
56 | % | 48 | % | 8 | % | 48 | % | 46 | % | 2 | % | ||||||||||||
·
|
Segment Net Revenue for
the year ended December 31, 2007 increased by 34% compared to the year
ended December 31, 2006. In local currency, Segment Net
Revenues increased by 19%. Spot revenues increased by 40% in 2007 compared
to 2006 and non-spot revenue revenues fell by 7% in the same
period. The increase in spot revenues was driven by price
increases and by increased numbers of GRPs sold. The decrease in non-spot
revenues was primarily due to lower telephone-based services revenues in a
subsidiary that was sold in November
2007.
|
·
|
Segment EBITDA for the
year ended December 31, 2007 increased by 56% compared to the year ended
December 31, 2006, resulting in an EBITDA margin of 56% compared to 48% in
2006. In local currency, Segment EBITDA increased by
38%.
|
ROMANIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Spot
revenues
|
$ | 202,414 | $ | 140,242 | 44.3 | % | $ | 140,242 | $ | 97,915 | 43.2 | % | ||||||||||||
Non-spot
revenues
|
12,988 | 8,374 | 55.1 | % | 8,374 | 5,406 | 54.9 | % | ||||||||||||||||
Segment
Net Revenues
|
$ | 215,402 | $ | 148,616 | 44.9 | % | $ | 148,616 | $ | 103,321 | 43.8 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 214,976 | $ | 148,616 | 44.7 | % | $ | 148,616 | $ | 103,321 | 43.8 | % | ||||||||||||
Non-broadcast
operations
|
426 | - | - | - | - | - | ||||||||||||||||||
Segment
Net Revenues
|
$ | 215,402 | $ | 148,616 | 44.9 | % | $ | 148,616 | $ | 103,321 | 43.8 | % | ||||||||||||
Segment
EBITDA
|
$ | 93,075 | $ | 65,860 | 41.3 | % | $ | 65,860 | $ | 43,803 | 50.4 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 93,585 | $ | 65,976 | 41.8 | % | $ | 65,976 | $ | 43,803 | 50.6 | % | ||||||||||||
Non-broadcast
operations
|
(510 | ) | (116 | ) | (339.7 | )% | (116 | ) | - | - | ||||||||||||||
Segment
EBITDA
|
$ | 93,075 | $ | 65,860 | 41.3 | % | $ | 65,860 | $ | 43,803 | 50.4 | % | ||||||||||||
Segment
EBITDA Margin
|
43 | % | 44 | % | (1 | )% | 44 | % | 42 | % | 2 | % | ||||||||||||
·
|
Segment Net Revenues for
the year ended December 31, 2007 increased by 45%, compared to the year
ended December 31, 2006. Spot revenues increased by 44% and
non-spot revenues increased by 55%. The increase in spot
revenues was driven by increases in the average revenue per rating point
sold on our Romanian channels, which more than offset a decline in the
volume of GRPs sold across the channels. The increase in
non-spot revenue was primarily due to increased cable tariff revenue.
SPORT.RO contributed approximately US $7.3 million to Romania’s Segment
Net Revenues for the year ended December 31,
2007.
|
·
|
Segment EBITDA for the
year ended December 31, 2007 increased by 41%, compared to the year ended
December 31, 2006, resulting in an EBITDA margin of 43%, compared to 44%
in 2006.
|
SLOVAK
REPUBLIC SEGMENT FINANCIAL INFORMATION
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Spot
revenues
|
$ | 106,445 | $ | 69,336 | 53.5 | % | $ | 69,336 | $ | 60,004 | 15.6 | % | ||||||||||||
Non-spot
revenues
|
4,094 | 4,084 | 0.2 | % | 4,084 | 4,262 | (4.2 | )% | ||||||||||||||||
Segment
Net Revenues
|
$ | 110,539 | $ | 73,420 | 50.6 | % | $ | 73,420 | $ | 64,266 | 14.2 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 110,158 | $ | 73,266 | 50.4 | % | $ | 73,266 | $ | 64,266 | 14.0 | % | ||||||||||||
Non-broadcast
operations
|
381 | 154 | 147.4 | % | 154 | - | - | |||||||||||||||||
Segment
Net Revenues
|
$ | 110,539 | $ | 73,420 | 50.6 | % | $ | 73,420 | $ | 64,266 | 14.2 | % | ||||||||||||
Segment
EBITDA
|
$ | 41,532 | $ | 20,805 | 99.6 | % | $ | 20,805 | $ | 17,240 | 20.7 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 41,957 | $ | 20,879 | 101.0 | % | $ | 20,879 | $ | 17,240 | 21.1 | % | ||||||||||||
Non-broadcast
operations
|
(425 | ) | (74 | ) | (474.3 | )% | (74 | ) | - | - | ||||||||||||||
Segment
EBITDA
|
$ | 41,532 | $ | 20,805 | 99.6 | % | $ | 20,805 | $ | 17,240 | 20.7 | % | ||||||||||||
Segment
EBITDA Margin
|
38 | % | 28 | % | 10 | % | 28 | % | 27 | % | 1 | % | ||||||||||||
·
|
Segment Net Revenues for
the year ended December 31, 2007 increased by 51% compared to the year
ended December 31, 2006. In local currency, Segment Net
Revenues increased by 28%. The increase in Segment Net Revenues
was due to an increase of 54% in spot revenues while non-spot revenues
were stable. The majority of spot revenue growth was driven by
price increases, with a modest increase in GRPs
sold.
|
·
|
Segment EBITDA for the
year ended December 31, 2007 increased by 100% compared to the year ended
December 31, 2006, and the EBITDA margin increased from 28% in 2006 to 38%
in 2007. Local currency EBITDA increased by 56% in 2007
compared to 2006.
|
SLOVENIA
SEGMENT FINANCIAL INFORMATION
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Spot
revenues
|
$ | 60,559 | $ | 50,682 | 19.5 | % | $ | 50,682 | $ | 45,594 | 11.2 | % | ||||||||||||
Non-spot
revenues
|
9,088 | 3,852 | 135.9 | % | 3,852 | 3,176 | 21.3 | % | ||||||||||||||||
Segment
Net Revenues
|
$ | 69,647 | $ | 54,534 | 27.7 | % | $ | 54,534 | $ | 48,770 | 11.8 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 67,574 | $ | 52,426 | 28.9 | % | $ | 52,426 | $ | 46,940 | 11.7 | % | ||||||||||||
Non-broadcast
operations
|
2,073 | 2,108 | (1.7 | )% | 2,108 | 1,830 | 15.2 | % | ||||||||||||||||
Segment
Net Revenues
|
$ | 69,647 | $ | 54,534 | 27.7 | % | $ | 54,534 | $ | 48,770 | 11.8 | % | ||||||||||||
Segment
EBITDA
|
$ | 22,767 | $ | 19,842 | 14.7 | % | $ | 19,842 | $ | 19,337 | 2.6 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 24,249 | $ | 19,518 | 24.2 | % | $ | 19,518 | $ | 18,797 | 3.8 | % | ||||||||||||
Non-broadcast
operations
|
(1,482 | ) | 324 | (557.4 | )% | 324 | 540 | (40.0 | )% | |||||||||||||||
Segment
EBITDA
|
$ | 22,767 | $ | 19,842 | 14.7 | % | $ | 19,842 | $ | 19,337 | 2.6 | % | ||||||||||||
Segment
EBITDA Margin
|
33 | % | 36 | % | (3 | )% | 36 | % | 40 | % | (4 | )% | ||||||||||||
·
|
Segment Net Revenues for
the year ended December 31, 2007 increased by 28% compared to the year
ended December 31, 2006.
|
·
|
Segment EBITDA for the
year ended December 31, 2007 increased by 15% compared to the year ended
December 31, 2006.
|
UKRAINE
(STUDIO 1+1) SEGMENT FINANCIAL INFORMATION
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Spot
revenues
|
$ | 102,204 | $ | 86,042 | 18.8 | % | $ | 86,042 | $ | 63,911 | 34.6 | % | ||||||||||||
Non-spot
revenues
|
23,119 | 10,371 | 122.9 | % | 10,371 | 8,936 | 16.1 | % | ||||||||||||||||
Segment
Net Revenues
|
$ | 125,323 | $ | 96,413 | 30.0 | % | $ | 96,413 | $ | 72,847 | 32.3 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 125,323 | $ | 96,413 | 30.0 | % | $ | 96,413 | $ | 72,847 | 32.3 | % | ||||||||||||
Non-broadcast
operations
|
- | - | - | - | - | - | ||||||||||||||||||
Segment
Net Revenues
|
$ | 125,323 | $ | 96,413 | 30.0 | % | $ | 96,413 | $ | 72,847 | 32.3 | % | ||||||||||||
Segment
EBITDA
|
$ | 27,000 | $ | 29,973 | (9.9 | )% | $ | 29,973 | $ | 21,803 | 37.5 | % | ||||||||||||
Represented
by
|
||||||||||||||||||||||||
Broadcast
operations
|
$ | 27,527 | $ | 30,045 | (8.4 | )% | $ | 30,045 | $ | 21,803 | 37.8 | % | ||||||||||||
Non-broadcast
operations
|
(527 | ) | (72 | ) | (631.9 | )% | (72 | ) | - | - | ||||||||||||||
Segment
EBITDA
|
$ | 27,000 | $ | 29,973 | (9.9 | )% | $ | 29,973 | $ | 21,803 | 37.5 | % | ||||||||||||
Segment
EBITDA Margin
|
22 | % | 31 | % | (9 | )% | 31 | % | 30 | % | 1 | % | ||||||||||||
·
|
Segment Net Revenues for
the year ended December 31, 2007 increased by 30% compared to the year
ended December 31, 2006. Spot revenues increased by 19% due to an
estimated US$ 16.5 million of political advertising generated from the
elections held on September 30, 2007. This offset a slight
decline in revenues due to a decrease in the volume of GRPs sold,
reflecting the uncertainty in the advertising market ahead of the
parliamentary elections and our ratings decline due to the poor
performance of certain series on STUDIO 1+1 and increased competition from
other broadcasters. Non-spot revenues increased by 123%
in 2007 compared to 2006 primarily due to the sale of surplus programming
and increased sponsorship, as well as US$ 1.5 million of political
advertising revenues.
|
·
|
Segment EBITDA for the
year ended December 31, 2007 decreased by 10% compared to the year ended
December 31, 2006, resulting in an EBITDA margin of 22% compared to an
EBITDA margin of 31% in the year ended December 31, 2006. Costs
charged in arriving at Segment EBITDA for the year ended December 31, 2007
increased by 48% compared to the year ended December 31,
2006. Cost of programming grew by 78%, one third of which is
represented by US$ 10.4 million of value adjustments to program rights.
The increase in the cost of programming reflects the continued price
inflation for Russian programming, which drives strong ratings in the
Ukrainian market, as well as increased investment in such programming to
improve our programming schedule and boost ratings following disappointing
ratings earlier in the year in comparison with unusually strong
programming on Inter. Other operating costs increased by 28%
due to increased salary costs and increased broadcast operating
expenses. Selling, general and administrative expenses
decreased by 30%, primarily due to reallocating withholding tax on
programming acquisitions to cost of programming, which was partially
offset by higher office running
costs.
|
UKRAINE
(KINO, CITI) SEGMENT FINANCIAL INFORMATION
|
||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||
2007
|
2006
|
Movement
|
||||||||||
Spot
revenues
|
$ | 1,341 | $ | 549 | 144.3 | % | ||||||
Non-spot
revenues
|
1,309 | 646 | 102.6 | % | ||||||||
Segment
Net Revenues
|
$ | 2,650 | $ | 1,195 | 121.8 | % | ||||||
Represented
by
|
||||||||||||
Broadcast
operations
|
$ | 2,650 | $ | 1,195 | 121.8 | % | ||||||
Non-broadcast
operations
|
- | - | - | |||||||||
Segment
Net Revenues
|
$ | 2,650 | $ | 1,195 | 121.8 | % | ||||||
Segment
EBITDA
|
$ | (7,293 | ) | $ | (3,713 | ) | (96.4 | )% | ||||
Represented
by
|
||||||||||||
Broadcast
operations
|
$ | (7,293 | ) | $ | (3,713 | ) | (96.4 | )% | ||||
Non-broadcast
operations
|
- | - | - | |||||||||
Segment
EBITDA
|
$ | (7,293 | ) | $ | (3,713 | ) | (96.4 | )% | ||||
Segment
EBITDA Margin
|
(275 | )% | (311 | )% | 36 | % | ||||||
·
|
Segment Net Revenues for
the year ended December 31, 2007 increased by 122% compared to the year
ended December 31, 2006. Spot revenues increased by 144%. Non-spot
revenues increased by 103%, primarily due to increased
sponsorship.
|
·
|
Segment EBITDA losses
for the year ended December 31, 2007 increased by 96% compared to
the year ended December 31, 2006. Costs charged in arriving at
Segment EBITDA for the year ended December 31, 2007 increased by 103%
compared to the year ended December 31, 2006. Cost of programming grew by
117%, other operating costs increased by 96% and selling, general and
administrative expenses increased by 69% in 2007 compared to
2006.
|
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Production
expenses
|
$ | 140,650 | $ | 110,948 | $ | 67,366 | ||||||
Program
amortization
|
189,653 | 116,561 | 81,471 | |||||||||
Cost
of programming
|
$ | 330,303 | $ | 227,509 | $ | 148,837 |
·
|
US$
31.4 million of additional programming costs from our Ukraine (STUDIO 1+1)
operations;
|
·
|
US$
28.4 million of additional programming costs from our Romania
operations;
|
·
|
US$
11.4 million of additional programming costs from our Slovak Republic
operations;
|
·
|
US$
10.8 million of additional programming costs from our Croatia
operations;
|
·
|
US$
9.5 million of additional programming costs from our Czech Republic
operations;
|
·
|
US$
8.2 million of additional programming costs from our Slovenia operations;
and
|
·
|
US$
3.1 million of additional programming costs from our Ukraine (KINO, CITI)
operations.
|
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Program
amortization:
|
||||||||||||
Croatia
(NOVA TV)
|
$ | 20,784 | $ | 14,237 | $ | 16,373 | ||||||
Czech
Republic (TV NOVA, GALAXIE SPORT and NOVA CINEMA)
|
34,992 | 27,170 | 19,154 | |||||||||
Romania
(PRO TV, ACASA, PRO CINEMA, PRO TV INTERNATIONAL, SPORT.RO and MTV
ROMANIA)
|
44,673 | 30,610 | 20,132 | |||||||||
Slovak
Republic (TV MARKIZA) (post-acquisition)
|
16,326 | 7,539 | - | |||||||||
Slovenia
(POP TV and KANAL A)
|
10,289 | 7,164 | 5,517 | |||||||||
Ukraine
(STUDIO 1+1)
|
59,591 | 28,354 | 20,295 | |||||||||
Ukraine
(KINO, CITI)
|
2,998 | 1,487 | - | |||||||||
189,653 | 116,561 | 81,471 | ||||||||||
Slovak
Republic (TV MARKIZA) (pre-acquisition)
|
- | 1,735 | 6,970 | |||||||||
$ | 189,653 | $ | 118,296 | $ | 88,441 | |||||||
Cash
paid for programming:
|
||||||||||||
Croatia
(NOVA TV)
|
$ | 22,894 | $ | 17,165 | $ | 16,062 | ||||||
Czech
Republic (TV NOVA, GALAXIE SPORT, NOVA CINEMA)
|
27,343 | 28,237 | 26,027 | |||||||||
Romania
(PRO TV, ACASA, PRO CINEMA, PRO TV INTERNATIONAL, SPORT.RO and MTV
ROMANIA)
|
61,271 | 48,277 | 40,279 | |||||||||
Slovak
Republic (TV MARKIZA) (from January 23, 2006)
|
18,273 | 12,598 | - | |||||||||
Slovenia
(POP TV and KANAL A)
|
9,751 | 7,067 | 6,200 | |||||||||
Ukraine
(STUDIO 1+1)
|
68,597 | 38,419 | 27,019 | |||||||||
Ukraine
(KINO, CITI)
|
1,890 | 1,096 | - | |||||||||
210,019 | 152,859 | 115,587 | ||||||||||
Slovak
Republic (TV MARKIZA) (prior to January 23, 2006)
|
- | - | 10,692 | |||||||||
$ | 210,019 | $ | 152,859 | $ | 126,279 |
Consolidated
Net Revenues
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Croatia
|
$ | 37,193 | $ | 22,310 | 66.7 | % | $ | 22,310 | $ | 22,030 | 1.3 | % | ||||||||||||
Czech
Republic
|
279,237 | 208,387 | 34.0 | % | 208,387 | 154,010 | 35.3 | % | ||||||||||||||||
Romania
|
215,402 | 148,616 | 44.9 | % | 148,616 | 103,321 | 43.8 | % | ||||||||||||||||
Slovakia
|
110,539 | 71,660 | 54.3 | % | 71,660 | - | - | |||||||||||||||||
Slovenia
|
69,647 | 54,534 | 27.7 | % | 54,534 | 48,770 | 11.8 | % | ||||||||||||||||
Ukraine
(STUDIO 1+1)
|
125,323 | 96,413 | 30.0 | % | 96,413 | 72,847 | 32.3 | % | ||||||||||||||||
Ukraine
(KINO, CITI)
|
2,650 | 1,195 | 121.8 | % | 1,195 | - | - | |||||||||||||||||
Total
Consolidated Net Revenues
|
$ | 839,991 | $ | 603,115 | 39.3 | % | $ | 603,115 | $ | 400,978 | 50.4 | % |
Consolidated
Cost of Revenues
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Operating
Costs
|
$ | 117,959 | $ | 90,060 | 31.0 | % | $ | 90,060 | $ | 65,138 | 38.3 | % | ||||||||||||
Cost
of programming
|
330,303 | 227,509 | 45.2 | % | 227,509 | 148,837 | 52.9 | % | ||||||||||||||||
Depreciation
of station property, plant and equipment
|
33,294 | 25,795 | 29.1 | % | 25,795 | 16,367 | 57.6 | % | ||||||||||||||||
Amortization
of broadcast licenses and other intangibles
|
24,984 | 18,813 | 32.8 | % | 18,813 | 11,180 | 68.3 | % | ||||||||||||||||
Total
Consolidated Cost of Revenues
|
$ | 506,540 | $ | 362,177 | 39.9 | % | $ | 362,177 | $ | 241,522 | 50.0 | % |
Consolidated
Station Selling, General and Administrative Expenses
|
||||||||||||||||||||||||
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Croatia
|
$ | 8,844 | $ | 6,884 | 28.5 | % | $ | 6,884 | $ | 8,082 | (14.8 | )% | ||||||||||||
Czech
Republic
|
22,411 | 21,358 | 4.9 | % | 21,358 | 16,906 | 26.3 | % | ||||||||||||||||
Romania
|
13,552 | 10,725 | 26.4 | % | 10,725 | 8,016 | 33.8 | % | ||||||||||||||||
Slovakia
|
10,732 | 8,547 | 25.6 | % | 8,547 | - | - | |||||||||||||||||
Slovenia
|
6,707 | 5,195 | 29.1 | % | 5,195 | 4,683 | 10.9 | % | ||||||||||||||||
Ukraine
(STUDIO 1+1)
|
8,292 | 11,818 | (29.8 | )% | 11,818 | 8,695 | 35.9 | % | ||||||||||||||||
Ukraine
(KINO, CITI)
|
1,496 | 885 | 69.0 | % | 885 | - | - | |||||||||||||||||
Total
Consolidated Station Selling, General and Administrative
Expenses
|
$ | 72,034 | $ | 65,412 | 10.1 | % | $ | 65,412 | $ | 46,382 | 41.0 | % |
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Corporate
operating costs (excluding non-cash stock-based
compensation)
|
$ | 49,639 | $ | 30,529 | 62.6 | % | $ | 30,529 | $ | 22,420 | 36.2 | % | ||||||||||||
Non-cash
stock-based compensation
|
5,734 | 3,575 | 60.4 | % | 3,575 | 3,127 | 14.3 | % | ||||||||||||||||
Corporate
operating costs (including non-cash stock-based
compensation)
|
$ | 55,373 | $ | 34,104 | 62.4 | % | $ | 34,104 | $ | 25,547 | 33.5 | % |
·
|
A
charge of US$ 12.5 million in respect of the cost of settling our Croatia
litigation (see Part I, Item 3, “Legal Proceedings,
Croatia”);
|
·
|
increased
accruals for performance-related bonus payments;
and
|
·
|
increased
business development expenses incurred in researching potential
acquisitions,
|
·
|
decreased
property-related costs, as the expense incurred in 2006 included a lease
exit charge of approximately US$ 1.6 million (including additional
depreciation of US$ 0.3 million) incurred following the relocation of our
London office during the first quarter of 2006;
and
|
·
|
decreased
legal costs incurred in connection with legal proceedings in respect of
our Ukraine operations.
|
·
|
an
increase in legal expenses in connection with our investments in Ukraine
and legal proceedings in respect of our Ukraine
operations;
|
·
|
professional
fees incurred in reviewing our historic stock option granting practices;
and
|
·
|
an
increase in staff-related costs caused by an increase in corporate staff
as we brought in-house certain activities that had previously been
outsourced.
|
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Operating
Income
|
$ | 206,044 | $ | 140,674 | 46.5 | % | $ | 140,674 | $ | 52,196 | 169.5 | % |
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Interest
income
|
$ | 5,728 | $ | 6,365 | (10.0 | )% | $ | 6,365 | $ | 4,124 | 54.3 | % | ||||||||||||
Interest
expense
|
(54,999 | ) | (44,228 | ) | 24.4 | % | (44,228 | ) | (29,387 | ) | 50.5 | % | ||||||||||||
Foreign
currency exchange (loss)/gain, net
|
(34,441 | ) | (44,908 | ) | (23.3 | )% | (44,908 | ) | 37,968 | (218.3 | )% | |||||||||||||
Other
income/(expense)
|
7,891 | 3,038 | 159.7 | % | 3,038 | (4,705 | ) | (164.6 | )% | |||||||||||||||
Change
in fair value of derivatives
|
(3,703 | ) | (12,539 | ) | (70.5 | )% | (12,539 | ) | - | - | ||||||||||||||
Provision
for income taxes
|
(20,795 | ) | (14,962 | ) | 39.0 | % | (14,962 | ) | (16,691 | ) | (10.4 | )% | ||||||||||||
Minority
interest in income of consolidated subsidiaries
|
(17,157 | ) | (13,602 | ) | 26.1 | % | (13,602 | ) | (8,908 | ) | 52.7 | % | ||||||||||||
Equity
in (loss)/income of unconsolidated affiliates
|
- | (730 | ) | (100.0 | )% | (730 | ) | 8,238 | (108.9 | )% | ||||||||||||||
Gain
on sale of unconsolidated affiliate
|
- | 6,179 | (100.0 | )% | 6,179 | - | - | |||||||||||||||||
Discontinued
operations
|
- | (4,863 | ) | (100.0 | )% | (4,863 | ) | (513 | ) | 848.0 | % |
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Slovak
Republic operations
|
$ | - | $ | (737 | ) | (100.0 | )% | $ | (737 | ) | $ | 8,240 | (108.9 | )% | ||||||||||
Romania
operations
|
- | 7 | (100.0 | )% | 7 | (2 | ) | (450.0 | )% | |||||||||||||||
Equity
in (loss)/income of unconsolidated affiliates
|
$ | - | $ | (730 | ) | (100.0 | )% | $ | (730 | ) | $ | 8,238 | (108.9 | )% |
For
the Years Ended December 31, (US$ 000’s)
|
||||||||||||||||||||||||
2007
|
2006
|
Movement
|
2006
|
2005
|
Movement
|
|||||||||||||||||||
Gain
on disposal of discontinued operations
|
$ | - | $ | - | - | $ | - | $ | 164 | (100.0 | )% | |||||||||||||
Tax
on disposal of discontinued operations
|
- | (4,863 | ) | (100.0 | )% | (4,863 | ) | (677 | ) | 618.3 | % | |||||||||||||
Discontinued
operations
|
$ | - | $ | (4,863 | ) | (100.0 | )% | $ | (4,863 | ) | $ | (513 | ) | 848.0 | % |
(US$
000’s)
|
December
31, 2007
|
December
31, 2006
|
Movement
|
|||||||||
Current
assets
|
$ | 529,824 | $ | 413,616 | 28.1 | % | ||||||
Non-current
assets
|
1,808,611 | 1,405,384 | 28.7 | % | ||||||||
Current
liabilities
|
232,770 | 182,961 | 27.2 | % | ||||||||
Non-current
liabilities
|
682,703 | 574,084 | 18.9 | % | ||||||||
Minority
interests in consolidated subsidiaries
|
23,155 | 26,189 | (11.6 | )% | ||||||||
Shareholders’
equity
|
$ | 1,399,807 | $ | 1,035,766 | 35.1 | % |
(US$
000’s)
|
For
the Years Ended December 31,
|
|||||||||||
2007
|
2006
|
2005
|
||||||||||
Net
cash generated from continuing operating activities
|
$ | 102,870 | $ | 73,395 | $ | 3,544 | ||||||
Net
cash used in continuing investing activities
|
(237,418 | ) | (126,955 | ) | (298,803 | ) | ||||||
Net
cash received from financing activities
|
135,530 | 132,400 | 225,359 | |||||||||
Net
cash used in discontinued operations-operating activities
|
(2,164 | ) | (1,690 | ) | (2,000 | ) | ||||||
Impact
of exchange rate fluctuations on cash
|
(1,896 | ) | (2,904 | ) | (9,010 | ) | ||||||
Net
(decrease) / increase in cash and cash
equivalents
|
$ | (3,078 | ) | $ | 74,246 | $ | (80,910 | ) |
·
|
capital
expenditure of US$ 81.5 million;
|
·
|
payments
of SKK 1.9 billion (approximately US$ 78.5 million) in connection with our
acquisition of a 20% interest in our Slovak Republic operations (see Item
8, Note 3 “Acquisitions and Disposals- Slovak
Republic“);
|
·
|
payments
of US$ 51.6 million in connection with our acquisition of an additional 5%
interest in our Romania operations and a 20% stake in our Romanian
production company (see Item 8, Note 3 “Acquisitions and Disposals-
Romania”);
|
·
|
payments
of EUR 9.4 million (approximately US$ 13.9 million) in connection with our
acquisition of 100% interest in MTS (see Item 8, Note 3 “Acquisitions and
Disposals – Romania”);
|
·
|
payments
of EUR 6.7 million (approximately US$ 8.4 million) in connection with our
acquisition of Sport.ro (see Item 8, Note 3 “Acquisitions and Disposals -
Romania); and
|
·
|
payments
of US$ 3.1 million in connection with our acquisition of a 60.4% interest
in each of Tor and Zhysa (see Item 8, Note 3 “Acquisitions and Disposals –
Ukraine”).
|
·
|
capital
expenditure of US$ 60.4 million, largely in respect of the expansion of
our broadcasting facilities and equipment in Romania and the Czech
Republic;
|
·
|
a
payment of US$ 30.1 million in connection with our acquisition of ARJ (see
Item 8, Note 3, “Acquisitions and Disposals - Slovak
Republic”);
|
·
|
a
payment of US$ 27.2 million in connection with our acquisition of an
additional 5% interest in our Romania operations (see Item 8, Note 3,
“Acquisitions and Disposals -
Romania”);
|
·
|
a
payment of EUR 8.0 million (approximately US$ 10.3 million) in connection
with our acquisition of our 10% stake in Media Pro (see Item 8, Note 5,
“Investments”); and
|
·
|
a
payment of a further US$ 2.0 million following completion of our
acquisition of a 65.5% stake in Ukrpromtorg (see Item 8, Note 3,
“Acquisitions and Disposals -
Ukraine”).
|
·
|
total
cash payments of US$ 218.1 million (net of cash acquired of US$ 35.6
million) for the acquisition of the TV Nova (Czech Republic) group in May
2005.
|
|
·
|
the
issuance of 3.5 million shares of Class A Common Stock (US$ 120.9
million);
|
|
·
|
the
incurrence of US$ 491.7 million of short-term indebtedness to PPF (which
was repaid in cash on May 5, 2005);
|
|
·
|
forgiveness
of a US$ 18.5 million balance categorized as “Other Receivable” in our
Consolidated Balance Sheet as at December 31, 2004;
and
|
|
·
|
the
placement of US$ 24.7 million of cash into escrow as the second and final
payment to our former shareholder in the Czech
Republic;
|
|
·
|
a
payment of US$ 20.0 million in connection with the 5% increase in our
holding of our Romania operations;
|
|
·
|
a
payment of US$ 2.1 million in connection with our acquisition of Galaxie
Sport;
|
|
·
|
a
payment of Euro 4.7 million (approximately US$ 5.7 million) to acquire the
remaining 3.15% interest in Pro
Plus;
|
|
·
|
advance
payments of US$ 5.1 million with respect to our acquisition of a 65.5%
interest in Ukrpromtorg (see Item 8, Note 3, “Acquisitions and Disposals,
Ukraine”);
|
|
·
|
capital
expenditures of approximately US$ 26.5 million, primarily related to
upgrades of broadcasting facilities and production equipment;
and
|
|
·
|
a
net increase in restricted cash of US$ 18.6 million, of which US$ 24.6
million was a result of the acquisition of the TV Nova (Czech Republic)
group, US$ 0.7 million of other increases, and a reduction of US$ 6.7
million being the second payment for our acquisition of our Croatia
operations.
|
·
|
receipt
of approximately US$ 168.7 million (net of fees) from a public offering of
2,530,000 shares of our Class A Common
Stock;
|
·
|
receipts
of US$ 36.7 million from drawing on credit facilities in Czech Republic
and Slovenia, largely to finance the acquisition of ARJ and the increased
investment in our Romania operations;
and
|
·
|
repayment
of US$ 75.3 million of amounts drawn under the same credit
facilities.
|
·
|
net
proceeds of approximately US$ 465.1 million from the issuance of our
Senior Notes (see Item 8, Note 6, “Senior Notes”). The proceeds
from this loan were used to finance part of the acquisition of the TV Nova
(Czech Republic) group;
|
·
|
net
proceeds of approximately US$ 236.5 million from the issuance of Class A
Common Stock, of which US$ 230.6 million was raised from the issuance of
5.4 million shares of Class A Common Stock, the proceeds of which were
used for our acquisition of the TV Nova (Czech Republic) group, and
approximately US$ 5.9 million from stock option
exercises;
|
·
|
proceeds
from borrowing of our Czech Republic operations (US$ 42.7 million) and our
Slovenia operations (US$ 23.2
million);
|
·
|
repayments
of indebtedness by our Czech Republic operations (US$ 8.0 million), our
Slovenia operations (US$ 31.7 million) and our Croatia operations (US$ 0.3
million); and
|
·
|
repayments
of short-term indebtedness to PPF for the purchase of the TV Nova (Czech
Republic) group (US$ 491.7 million) and Galaxie Sport (US$ 3.0
million).
|
Operating
segment (US$ 000’s)
|
December
31, 2007
|
December
31, 2006
|
||||||
Croatia
|
$ | 119,910 | $ | 67,623 | ||||
Czech
Republic
|
604,474 | 434,897 | ||||||
Romania
|
105,540 | 25,620 | ||||||
Slovak
Republic
|
5,164 | 23,670 | ||||||
Slovenia
|
39,162 | - | ||||||
Ukraine
(STUDIO 1+1)
|
- | - | ||||||
Ukraine
(KINO, CITI)
|
16,040 | 4,621 | ||||||
Total
|
$ | 890,290 | $ | 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
|
$ | 597,691 | $ | 14,512 | $ | 1,700 | $ | 360,664 | $ | 220,815 | ||||||||||
Long-Term
Debt – interest (1)
|
222,149 | 44,418 | 87,007 | 70,765 | 19,959 | |||||||||||||||
Capital
Lease Obligations
|
7,245 | 1,103 | 1,568 | 1,294 | 3,280 | |||||||||||||||
Operating
Leases
|
13,021 | 5,439 | 6,411 | 1,171 | - | |||||||||||||||
Unconditional
Purchase Obligations
|
121,924 | 101,247 | 16,298 | 1,924 | 2,455 | |||||||||||||||
Other
Long-Term Obligations
|
4,177 | 3,177 | 1,000 | - | - | |||||||||||||||
FIN
48 Obligations
|
2,760 | 673 | 2,087 | - | - | |||||||||||||||
Total
Contractual Obligations
|
$ | 968,967 | $ | 170,569 | $ | 116,071 | $ | 435,818 | $ | 246,509 | ||||||||||
(1)
Interest obligations on variable rate debt are calculated using the rate
applicable at the balance sheet date.
|
December 31, 2007 (US$
000’s)
|
||||||||
Corporate
|
(1) – (2) | $ | 581,479 | |||||
Croatia
operations
|
(3) | - | ||||||
Czech
Republic operations
|
(4) – (6) | 13,829 | ||||||
Romania
operations
|
(7) | 683 | ||||||
Slovenia
operations
|
(8) | - | ||||||
Ukraine
(KINO, CITI) operations
|
(9) | 1,700 | ||||||
Total
|
$ | 597,691 |
(1)
|
In
May 2005, we issued senior notes in the aggregate principal amount of EUR
370.0 million (approximately US$ 544.7 million) consisting of EUR 245.0
million (approximately US$ 360.7 million) of fixed rate notes (the “2012
Fixed Rate Notes”) and EUR 125.0 million (approximately US$ 184.0 million)
of floating rate notes, which bore interest at six-month Euro Inter-Bank
Offered Rate (“EURIBOR”) plus 5.50% (the "2012 Floating Rate
Notes”). On May 15, 2007, we redeemed the 2012 Floating Rate
Notes.
|
(2)
|
On
July 21, 2006, we entered into a five-year revolving loan agreement for
EUR 100.0 million (approximately US$ 147.2 million) arranged by EBRD and
on August 22, 2007, we entered into a second revolving loan agreement for
EUR 50.0 million (approximately US$ 73.6 million) also arranged by EBRD
(collectively the “EBRD Loan”). ING Bank N.V. (“ING”) and Ceska
Sporitelna, a.s. (“CS”) are participating in the facility for EUR 75.0
million in aggregate.
|
(3)
|
On
March 28, 2007, we repaid EUR 0.6 million (approximately US$ 0.9 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 credit facility of CZK 1.2 billion (approximately US$ 66.4
million) with CS. The final repayment date is December 31,
2010. 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”) plus 1.65%. A utilization
interest of 0.25% is payable on the undrawn portion of this
facility. This percentage decreases to 0.125% of the undrawn
portion if more than 50% of the loan is drawn. 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 December 31, 2007, there were no drawings under this facility; however
on July 10, 2007, CZK 860.0 million (approximately US$ 47.6 million) was
drawn down under this facility, of which CZK 260.0 million (approximately
US$ 14.4 million) was repaid on July 31, 2007, and CZK 600.0 million
(approximately US$ 33.2 million) was repaid on September 14,
2007.
|
(5)
|
CET
21 has a credit facility of CZK 250.0 million (approximately US$ 13.8
million) with CS. The final repayment date is December 31, 2010. 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 December 31, 2007, the full CZK 250.0 million (approximately US$ 13.8
million) was drawn under this facility bearing interest at an aggregate
5.59% (three-month PRIBOR effective for this loan was
3.94%).
|
(6)
|
As
at December 31, 2007, there were no drawings under a CZK 300.0 million
(approximately US$ 16.6 million) factoring facility with Factoring Ceska
Sporitelna, a.s. This facility is available until June 30, 2011
and bears interest at the rate of one-month PRIBOR plus 1.40% for the
period that actively assigned accounts receivable are
outstanding.
|
(7)
|
Two
loans from San Paolo IMI Bank, assumed on acquisition of MTS, were
outstanding at December 31, 2007 and repaid in January
2008.
|
(8)
|
On
July 29, 2005, Pro Plus entered into a revolving five-year facility for up
to EUR 37.5 million (approximately US$ 55.2 million) in aggregate
principal amount with ING, Nova Ljubljanska Banka d.d., Ljubljana and Bank
Austria Creditanstalt d.d., Ljubljana. The facility
availability declines 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
December 31, 2007, EUR 30.0 million (approximately US$ 44.2
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 December 31, 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%.
|
ITEM
7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
Expected
Maturity Dates
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
||||||||||||||||||
Total
Debt in Euro (000’s)
|
||||||||||||||||||||||||
Fixed
Rate
|
- | - | - | - | 245,000 | - | ||||||||||||||||||
Average
Interest Rate
|
- | - | - | - | 8.25 | % | - | |||||||||||||||||
Variable
Rate
|
479 | - | - | - | - | 150,000 | ||||||||||||||||||
Average
Interest Rate
|
9.04 | % | - | - | - | - | 6.20 | % | ||||||||||||||||
Total
Debt in US$ (000’s)
|
||||||||||||||||||||||||
Fixed
Rate
|
- | 1,700 | - | - | - | - | ||||||||||||||||||
Average
Interest Rate
|
- | 9.00 | % | - | - | - | - | |||||||||||||||||
Total
Debt in CZK (000’s)
|
||||||||||||||||||||||||
Variable
Rate
|
250,000 | - | - | - | - | - | ||||||||||||||||||
Average
Interest Rate
|
5.59 | % | - | - | - | - | - |
Yearly
interest charge if interest rates increase by
(US$
000s):
|
|||||||||||||||||||||||||||||
Value
of Debt as at December 31, 2007 (US$ 000’s)
|
Interest
Rate
as
at
December
31, 2007
|
Yearly
Interest Charge
(US$
000’s)
|
1 | % | 2 | % | 3 | % | 4 | % | 5 | % | |||||||||||||||||
221,498
|
6.20 | % | 13,733 | 15,948 | 18,163 | 20,378 | 22,593 | 24,808 | |||||||||||||||||||||
(EUR
150.5 million)
|
|||||||||||||||||||||||||||||
13,829
|
5.59 | % | 773 | 911 | 1,050 | 1,188 | 1,326 | 1,464 | |||||||||||||||||||||
(CZK
250.0 million)
|
|||||||||||||||||||||||||||||
Total
|
14,506 | 16,859 | 19,213 | 21,566 | 23,919 | 26,272 |
ITEM
8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
|
|
|
|||||||
December
31, 2007
|
December
31, 2006
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 142,826 | $ | 145,904 | ||||
Restricted
cash (Note 7)
|
1,286 | 4,954 | ||||||
Accounts
receivable (net of allowance) (Note 8)
|
225,037 | 152,505 | ||||||
Income
taxes receivable
|
1,234 | 3,053 | ||||||
Program
rights, net
|
77,112 | 59,645 | ||||||
Other
current assets (Note 9)
|
82,329 | 47,555 | ||||||
Total
current assets
|
529,824 | 413,616 | ||||||
Non-current
assets
|
||||||||
Investments
(Note 5)
|
16,559 | 19,214 | ||||||
Property,
plant and equipment, net (Note 10)
|
180,311 | 115,805 | ||||||
Program
rights, net
|
108,362 | 76,638 | ||||||
Goodwill
(Note 4)
|
1,114,347 | 905,580 | ||||||
Broadcast
licenses, net (Note 4)
|
237,926 | 198,730 | ||||||
Other
intangible assets, net (Note 4)
|
135,732 | 71,942 | ||||||
Other
non-current assets (Note 9)
|
15,374 | 17,475 | ||||||
Total
non-current assets
|
1,808,611 | 1,405,384 | ||||||
Total
assets
|
$ | 2,338,435 | $ | 1,819,000 |
|
|
|||||||
December
31, 2007
|
December
31, 2006
|
|||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued liabilities (Note 11)
|
$ | 156,324 | $ | 119,717 | ||||
Duties
and other taxes payable
|
29,945 | 31,707 | ||||||
Income
taxes payable
|
27,705 | 12,434 | ||||||
Credit
facilities and obligations under capital leases (Note 12)
|
15,090 | 13,057 | ||||||
Dividends
payable to minority shareholders in subsidiaries
|
1,226 | - | ||||||
Deferred
consideration – Croatia
|
- | 4,010 | ||||||
Deferred
consideration – Ukraine
|
- | 200 | ||||||
Deferred
consideration – Romania
|
2,208 | - | ||||||
Deferred
tax
|
272 | 1,836 | ||||||
Total
current liabilities
|
232,770 | 182,961 | ||||||
Non-current
liabilities
|
||||||||
Credit
facilities and obligations under capital leases (Note 12)
|
5,862 | 6,359 | ||||||
Senior
Notes (Note 6)
|
581,479 | 487,291 | ||||||
Income
taxes payable
|
2,495 | 3,000 | ||||||
Deferred
tax
|
73,340 | 58,092 | ||||||
Other
non-current liabilities
|
19,527 | 19,342 | ||||||
Total
non-current liabilities
|
682,703 | 574,084 | ||||||
Commitments
and contingencies (Note 20)
|
||||||||
Minority
interests in consolidated subsidiaries
|
23,155 | 26,189 | ||||||
SHAREHOLDERS'
EQUITY:
|
||||||||
Nil
shares of Preferred Stock of US$ 0.08 each (December 31, 2006 –
nil)
|
- | - | ||||||
36,003,198
shares of Class A Common Stock of US$ 0.08 each (December 31, 2006 –
34,412,138)
|
2,880 | 2,753 | ||||||
6,312,839
shares of Class B Common Stock of US$ 0.08 each (December 31, 2006 –
6,312,839)
|
505 | 505 | ||||||
Additional
paid-in capital
|
1,051,336 | 931,108 | ||||||
Retained
Earnings / (Accumulated deficit)
|
53,619 | (31,730 | ) | |||||
Accumulated
other comprehensive income
|
291,467 | 133,130 | ||||||
Total
shareholders’ equity
|
1,399,807 | 1,035,766 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 2,338,435 | $ | 1,819,000 |
For the Years Ended December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Net
revenues
|
$ | 839,991 | $ | 603,115 | $ | 400,978 | ||||||
Operating
costs
|
117,959 | 90,060 | 65,138 | |||||||||
Cost
of programming
|
330,303 | 227,509 | 148,837 | |||||||||
Depreciation
of station property, plant & equipment
|
33,294 | 25,795 | 16,367 | |||||||||
Amortization
of broadcast licenses and other intangibles (Note 4)
|
24,984 | 18,813 | 11,180 | |||||||||
Cost
of revenues
|
506,540 | 362,177 | 241,522 | |||||||||
Station
selling, general and administrative expenses
|
72,034 | 65,412 | 46,382 | |||||||||
Corporate
operating costs
|
55,373 | 34,104 | 25,547 | |||||||||
Impairment
charge (Note 4)
|
- | 748 | 35,331 | |||||||||
Operating
income
|
206,044 | 140,674 | 52,196 | |||||||||
Interest
income
|
5,728 | 6,365 | 4,124 | |||||||||
Interest
expense
|
(54,999 | ) | (44,228 | ) | (29,387 | ) | ||||||
Foreign
currency exchange (loss) / gain, net
|
(34,441 | ) | (44,908 | ) | 37,968 | |||||||
Change
in fair value of derivatives
|
(3,703 | ) | (12,539 | ) | - | |||||||
Other
income / (expense)
|
7,891 | 3,038 | (4,705 | ) | ||||||||
Income
before provision for income taxes, minority interest, equity in income of
unconsolidated affiliates and discontinued operations
|
126,520 | 48,402 | 60,196 | |||||||||
Provision
for income taxes (Note 15)
|
(20,795 | ) | (14,962 | ) | (16,691 | ) | ||||||
Income
before minority interest, equity in income of unconsolidated affiliates
and discontinued operations
|
105,725 | 33,440 | 43,505 | |||||||||
Minority
interest in income of consolidated subsidiaries
|
(17,157 | ) | (13,602 | ) | (8,908 | ) | ||||||
Equity
in (loss) / income of unconsolidated affiliates (Note 5)
|
- | (730 | ) | 8,238 | ||||||||
Gain
on sale of unconsolidated affiliate (Note 5)
|
- | 6,179 | - | |||||||||
Net
income from continuing operations
|
88,568 | 25,287 | 42,835 | |||||||||
Discontinued
operations (Note 19):
|
||||||||||||
Pre-tax
income from discontinued operations (Czech Republic)
|
- | - | 164 | |||||||||
Tax
on disposal of discontinued operations (Czech Republic)
|
- | (4,863 | ) | (677 | ) | |||||||
Net
loss from discontinued operations
|
- | (4,863 | ) | (513 | ) | |||||||
Net
income
|
$ | 88,568 | $ | 20,424 | $ | 42,322 | ||||||
Currency
translation adjustment, net
|
158,825 | 157,524 | (33,354 | ) | ||||||||
Obligation
to repurchase shares (Note 13)
|
(488 | ) | - | - | ||||||||
Total
comprehensive income
|
$ | 246,905 | $ | 177,948 | $ | 8,968 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
PER
SHARE DATA (Note 17):
|
||||||||||||
Net
income / (loss) per share:
|
||||||||||||
Continuing
operations – Basic
|
$ | 2.14 | $ | 0.63 | $ | 1.24 | ||||||
Continuing
operations – Diluted
|
2.12 | 0.62 | 1.21 | |||||||||
Discontinued
operations – Basic
|
- | (0.12 | ) | (0.01 | ) | |||||||
Discontinued
operations – Diluted
|
- | (0.12 | ) | (0.01 | ) | |||||||
Net
income – Basic
|
2.14 | 0.51 | 1.22 | |||||||||
Net
income – Diluted
|
$ | 2.12 | $ | 0.50 | $ | 1.19 | ||||||
Weighted
average common shares used in computing per share amounts
(000’s):
|
||||||||||||
Basic
|
41,384 | 40,027 | 34,664 | |||||||||
Diluted
|
41,833 | 40,600 | 35,430 |
Class
A Common Stock
|
Class
B Common Stock
|
|||||||||||||||||||||||||||||||
Number
of shares
|
Par
value
|
Number
of shares
|
Par
value
|
Additional
Paid-In Capital
|
Retained
Earnings / (Accumulated Deficit)
|
Accumulated
Other Comprehensive Income/(Loss)
|
Total
Shareholders' Equity
|
|||||||||||||||||||||||||
BALANCE,
January 1, 2005
|
21,049,400 | $ | 1,684 | 7,334,768 | $ | 587 | $ | 394,313 | $ | (94,476 | ) | $ | 8,960 | $ | 311,068 | |||||||||||||||||
Stock-based
Compensation
|
- | - | - | - | 3,127 | - | - | 3,127 | ||||||||||||||||||||||||
Shares
issued to PPF
|
3,500,000 | 280 | - | - | 120,603 | - | - | 120,883 | ||||||||||||||||||||||||
Shares
issued, net of fees
|
5,405,000 | 432 | - | - | 230,172 | - | - | 230,604 | ||||||||||||||||||||||||
Stock
options exercised
|
710,359 | 57 | - | - | 5,846 | - | - | 5,903 | ||||||||||||||||||||||||
Conversion
of Class B to Class A Common Stock
|
368,235 | 29 | (368,235 | ) | (29 | ) | - | - | - | - | ||||||||||||||||||||||
Net
income
|
- | - | - | - | - | 42,322 | - | 42,322 | ||||||||||||||||||||||||
Currency
translation adjustment
|
- | - | - | - | - | - | (33,354 | ) | (33,354 | ) | ||||||||||||||||||||||
BALANCE,
December 31, 2005
|
31,032,994 | $ | 2,482 | 6,966,533 | $ | 558 | $ | 754,061 | $ | (52,154 | ) | $ | (24,394 | ) | $ | 680,553 | ||||||||||||||||
Stock-based
Compensation
|
- | - | - | - | 4,898 | - | - | 4,898 | ||||||||||||||||||||||||
Shares
issued, net of fees
|
2,530,000 | 202 | - | - | 168,452 | - | - | 168,654 | ||||||||||||||||||||||||
Stock
options exercised
|
95,450 | 8 | 100,000 | 8 | 3,697 | - | - | 3,713 | ||||||||||||||||||||||||
Conversion
of Class B to Class A Common Stock
|
753,694 | 61 | (753,694 | ) | (61 | ) | - | - | - | - | ||||||||||||||||||||||
Net
income
|
- | - | - | - | - | 20,424 | - | 20,424 | ||||||||||||||||||||||||
Currency
translation adjustment
|
- | - | - | - | - | - | 157,524 | 157,524 | ||||||||||||||||||||||||
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
|
- | - | - | - | 6,402 | - | - | 6,402 | ||||||||||||||||||||||||
Shares
issued, net of fees
|
1,275,227 | 102 | - | - | 109,751 | - | - | 109,853 | ||||||||||||||||||||||||
Stock
options exercised
|
315,833 | 25 | - | - | 4,075 | - | - | 4,100 | ||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | 88,568 | - | 88,568 | ||||||||||||||||||||||||
Currency
translation adjustment
|
- | - | - | - | - | - | 158,825 | 158,825 | ||||||||||||||||||||||||
Obligation
to repurchase shares (Note 13)
|
- | - | - | - | - | - | (488 | ) | (488 | ) | ||||||||||||||||||||||
BALANCE,
December 31, 2007
|
36,003,198 | $ | 2,880 | 6,312,839 | $ | 505 | $ | 1,051,336 | $ | 53,619 | $ | 291,467 | $ | 1,399,807 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
income
|
$ | 88,568 | $ | 20,424 | $ | 42,322 | ||||||
Adjustments
to reconcile net income to net cash generated from operating
activities:
|
||||||||||||
Loss
from discontinued operations (Note 19)
|
- | 4, 863 | 513 | |||||||||
Equity
in income of unconsolidated affiliates, net of dividends
received
|
- | 730 | 3,454 | |||||||||
Gain
on sale of unconsolidated affiliate (Note 5)
|
- | (6,179 | ) | - | ||||||||
Depreciation
and amortization
|
255,118 | 164,479 | 110,846 | |||||||||
Impairment
charge (Note 4)
|
- | 748 | 35,331 | |||||||||
Loss
on disposal of fixed assets
|
- | 1,292 | 685 | |||||||||
Stock-based
compensation (Note 16)
|
5,734 | 3,575 | 3,127 | |||||||||
Minority
interest in income of consolidated subsidiaries
|
17,157 | 13,602 | 8,908 | |||||||||
Change
in fair value of derivative instruments (Note 13)
|
3,703 | 12,539 | - | |||||||||
Foreign
currency exchange loss / (gain), net
|
34,441 | 44,908 | (37,968 | ) | ||||||||
Net
change in (net of effects of acquisitions and disposals
of businesses):
|
||||||||||||
Accounts
receivable
|
(57,270 | ) | (42,270 | ) | 1,693 | |||||||
Program
rights
|
(255,147 | ) | (173,345 | ) | (110,364 | ) | ||||||
Other
assets
|
(4,495 | ) | (6,417 | ) | 11,989 | |||||||
Other
accounts payable and accrued liabilities
|
7,882 | 16,908 | (55,248 | ) | ||||||||
Income
taxes payable
|
15,423 | (1,697 | ) | 9,597 | ||||||||
Deferred
taxes
|
(2,303 | ) | 9,705 | (17,271 | ) | |||||||
VAT
and other taxes payable
|
(5,941 | ) | 9,530 | (4,070 | ) | |||||||
Net
cash generated from continuing operating activities
|
102,870 | 73,395 | 3,544 | |||||||||
CASH
FLOWS USED IN INVESTING ACTIVITIES:
|
||||||||||||
Net
change in restricted cash
|
(440 | ) | 5,516 | (19,521 | ) | |||||||
Purchase
of property, plant and equipment
|
(81,463 | ) | (60,387 | ) | (26,548 | ) | ||||||
Proceeds
from disposal of property, plant and equipment
|
570 | 19 | 125 | |||||||||
Investments
in subsidiaries and unconsolidated affiliates
|
(156,535 | ) | (72,603 | ) | (35,305 | ) | ||||||
Partial
consideration for acquisition of TV Nova (Czech Republic)
group
|
- | - | (218,054 | ) | ||||||||
Repayment
of loans and advances to related parties
|
450 | 500 | 500 | |||||||||
Net
cash used in continuing investing activities
|
(237,418 | ) | (126,955 | ) | (298,803 | ) |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Net
proceeds from issuance of Senior Notes
|
199,400 | - | 465,120 | |||||||||
Proceeds
from credit facilities
|
177,515 | 36,681 | 65,902 | |||||||||
Payment
of credit facilities and capital leases
|
(182,391 | ) | (75,263 | ) | (41,243 | ) | ||||||
Redemption
of Senior Notes
|
(169,010 | ) | - | - | ||||||||
Repayment
of loans from unconsolidated affiliates
|
- | - | (5,827 | ) | ||||||||
Repayment
of notes for acquisition of TV Nova (Czech Republic) group
|
- | - | (491,703 | ) | ||||||||
Repayment
of liabilities on acquisition of Galaxie Sport
|
- | - | (3,000 | ) | ||||||||
Excess
tax benefits from share-based payment arrangements
|
668 | - | - | |||||||||
Proceeds
from exercise of stock options
|
4,100 | 3,713 | 5,903 | |||||||||
Issuance
of Class A Common Stock
|
109,853 | 168,654 | 230,604 | |||||||||
Dividends
paid to minority shareholders
|
(4,605 | ) | (1,385 | ) | (397 | ) | ||||||
Net
cash received from financing activities
|
135,530 | 132,400 | 225,359 | |||||||||
NET
CASH USED IN DISCONTINUED OPERATIONS-OPERATING
|
(2,164 | ) | (1,690 | ) | (2,000 | ) | ||||||
Impact
of exchange rate fluctuations on cash
|
(1,896 | ) | (2,904 | ) | (9,010 | ) | ||||||
Net
(decrease) / increase in cash and cash equivalents
|
(3,078 | ) | 74,246 | (80,910 | ) | |||||||
CASH
AND CASH EQUIVALENTS, beginning of year
|
145,904 | 71,658 | 152,568 | |||||||||
CASH
AND CASH EQUIVALENTS, end of year
|
$ | 142,826 | $ | 145,904 | $ | 71,658 | ||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
Cash paid for
interest
|
$ | 46,313 | $ | 41,038 | $ | 19,402 | ||||||
Cash paid for income taxes (net
of refunds)
|
$ | 40,903 | $ | 35,831 | $ | 10,066 | ||||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
|
||||||||||||
Exchange
of 3.5 million shares of Class A Common Stock to acquire the TV
Nova (Czech Republic) group
|
- | $ | - | $ | 120,883 | |||||||
Notes
taken out to acquire TV Nova (Czech Republic) group
|
- | $ | - | $ | 491,703 | |||||||
Exchange
of Other receivable in connection with acquiring the TV Nova
(Czech Republic) group
|
- | $ | - | $ | 18,541 | |||||||
Purchase
of Krsak interest in the TV Nova (Czech Republic) group financed with
payable
|
- | $ | 27,591 | $ | 24,683 | |||||||
Acquisition
of property, plant and equipment under capital lease
|
$ | 136 | $ | 702 | $ | 4,967 |
Company
Name
|
Effective
Voting
Interest
|
Jurisdiction
of
Organization
|
Type
of Affiliate (1)
|
Nova
TV d.d. (“Nova TV (Croatia)”)
|
100.0%
|
Croatia
|
Subsidiary
|
Operativna
Kompanija d.o.o. (“OK”)
|
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
|
MEDIA
CAPITOL, a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
HARTIC
a.s.
|
100.0%
|
Czech
Republic
|
Subsidiary
|
Galaxie
sport, s r.o. (“Galaxie Sport”)
|
100.0%
|
Czech
Republic
|
Subsidiary
|
CME
Slovak Holdings B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
CME
Romania B.V.
|
100.0%
|
Netherlands
|
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 Management S.A.
|
8.7%
|
Romania
|
Cost
investment
|
Media
Pro B.V.
|
10.0%
|
Netherlands
|
Cost
investment
|
Music
Television System S.R.L. (“MTS”)
|
95.0%
|
Romania
|
Subsidiary
|
A.R.J.,
a.s. (“ARJ”)
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
Markiza-Slovakia
spol. s r.o. (“Markiza”)
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
GAMATEX
spol. s r.o.
|
100.0%
|
Slovak
Republic
|
Subsidiary
(in liquidation)
|
A.D.A.M.
a.s.
|
100.0%
|
Slovak
Republic
|
Subsidiary
(in liquidation)
|
Media
Invest, spol s.r.o. (“Media Invest”)
|
100.0%
|
Slovak
Republic
|
Subsidiary
|
Company
Name
|
Effective
Voting
Interest
|
Jurisdiction
of
Organization
|
Type
of Affiliate (1)
|
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
|
Fit
& Fun d.o.o.
|
100.0%
|
Slovenia
|
Subsidiary
|
International
Media Services Ltd. (“IMS”)
|
60.0%
|
Bermuda
|
Subsidiary
|
CME
Ukraine Holding GmbH
|
100.0%
|
Austria
|
Subsidiary
|
Innova
Film GmbH (“Innova”)
|
60.0%
|
Germany
|
Subsidiary
|
CME
Cyprus Holding Ltd.
|
100.0%
|
Cyprus
|
Subsidiary
|
TV
Media Planet Ltd. (“TV Media Planet”)
|
60.0%
|
Cyprus
|
Subsidiary
|
Foreign
Enterprise “Inter-Media” (“Inter-Media”)
|
60.0%
|
Ukraine
|
Subsidiary
|
Studio
1+1 LLC (“Studio 1+1”)
|
60.0%
|
Ukraine
|
Subsidiary
|
Ukrainian
Media Services LLC
|
99.9%
|
Ukraine
|
Subsidiary
|
Ukrpromtorg-2003
LLC (“Ukpromrtorg”)
|
65.5%
|
Ukraine
|
Subsidiary
|
Gravis
LLC (“Gravis”)
|
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
|
Central
European Media Enterprises N.V.
|
100.0%
|
Netherlands
Antilles
|
Subsidiary
|
Central
European Media Enterprises II B.V.
|
100.0%
|
Netherlands
Antilles
|
Subsidiary
|
CME
Media Enterprises B.V.
|
100.0%
|
Netherlands
|
Subsidiary
|
CME
Development Corporation
|
100.0%
|
Delaware
(USA)
|
Subsidiary
|
CME
SR d.o.o.
|
100.0%
|
Serbia
|
Subsidiary
|
CME
Czech Republic II B.V.
|
100.0%
|
Netherlands
|
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.
|
Asset
category
|
Estimated
useful life
|
Land
|
Indefinite
|
Buildings
|
25
years
|
Station
machinery, fixtures and equipment
|
4 –
8 years
|
Other
equipment
|
3 –
8 years
|
Software
licenses
|
3 –
5 years
|
Amortization
%
|
||||||||||||||||||||
Type
of programming
|
Run
1
|
Run
2
|
Run
3
|
Run
4
|
Run
5
|
|||||||||||||||
Special
blockbuster
|
30 | % | 25 | % | 20 | % | 15 | % | 10 | % | ||||||||||
Films
and series, 2 runs
|
65 | % | 35 | % | - | - | - | |||||||||||||
Films
and series, 3 runs
|
60 | % | 30 | % | 10 | % | - | - | ||||||||||||
Long-run
series, Ukraine
|
85 | % | 15 | % | - | - | - | |||||||||||||
Concerts,
documentaries, film about film, etc.
|
100 | % | - | - | - | - |
·
|
we
intend to renew the licenses into the foreseeable
future;
|
·
|
we
have precedents of renewals, or reasonable expectation of
renewals;
|
·
|
we
do not expect any substantial cost to be incurred as part of a future
license renewal and no costs have been incurred in the renewals to
date;
|
·
|
we
have not experienced any historical evidence of a compelling challenge to
our holding these licenses; and
|
·
|
we
do not foresee that the technology used to exploit these licenses will
undergo significant changes in the foreseeable
future.
|
For
the year ended December, 31
|
||||||
2005
|
||||||
Net
income
|
As
Reported
|
$ | 42,322 | |||
Add:
Stock-based compensation expense included in reported net income, net of
related tax effects
|
As
Reported
|
3,127 | ||||
Deduct:
Total stock-based compensation expense determined under fair value based
method for all awards, net of related tax effects
|
Pro
Forma Expense
|
(3,196 | ) | |||
Net
income
|
Pro
Forma
|
$ | 42,253 | |||
Net
income per share – Basic:
|
As
Reported
|
$ | 1.22 | |||
Pro
Forma
|
$ | 1.22 | ||||
Net
income per share - Diluted:
|
As
Reported
|
$ | 1.19 | |||
Pro
Forma
|
$ | 1.19 |
Fair
Value on Acquisition
|
||||
Property,
plant and equipment
|
$ | 410 | ||
Intangible
assets subject to amortization (1)
|
1,709 | |||
Other
assets
|
827 | |||
Goodwill
|
17,253 | |||
Deferred
tax liability
|
(273 | ) | ||
Other
liabilities
|
(3,417 | ) | ||
Total
purchase price (2)
|
$ | 16,509 |
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 |
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 |
Fair
Value on
Acquisition
|
||||
Intangible
assets subject to amortization (1)
|
$ | 4,655 | ||
Intangible
assets not subject to amortization (2)
|
12,947 | |||
Goodwill
|
11,376 | |||
Deferred
tax liability
|
(2,816 | ) | ||
Minority
interest
|
1,038 | |||
Total
purchase price
|
$ | 27,200 |
Fair
Value on Acquisition
|
||||
Property
Plant and Equipment
|
$ | 2,425 | ||
Intangible
assets subject to amortization (1)
|
46,906 | |||
Intangible
assets not subject to amortization (2)
|
2,405 | |||
Goodwill
|
26,757 | |||
Deferred
tax liability
|
(9,761 | ) | ||
Minority
interest
|
10,268 | |||
Other
liabilities
|
(357 | ) | ||
Total
purchase price (3)
|
$ | 78,643 |
Fair
Value on
Acquisition
|
||||
Property,
plant and equipment
|
$ | 870 | ||
Program
library
|
185 | |||
Other
assets
|
733 | |||
Intangible
assets subject to amortization (1)
|
8,128 | |||
Intangible
assets not subject to amortization (2)
|
530 | |||
Goodwill
|
21,288 | |||
Deferred
tax liability
|
(1,893 | ) | ||
Total
purchase price (3)
|
$ | 29,841 |
Fair
Value on
Acquisition
|
||||
Property,
plant and equipment
|
$ | 2,615 | ||
Intangible
assets subject to amortization (1)
|
968 | |||
Other
assets
|
239 | |||
Goodwill
|
4,627 | |||
Deferred
tax liability
|
(724 | ) | ||
Other
liabilities
|
(373 | ) | ||
Total
purchase price (2)
|
$ | 7,352 |
Balance
Dec
31, 2005
|
Additions
|
Allocation
/
Adjustment
|
Impairment
charge
|
Foreign
currency
movement
|
Balance
Dec
31, 2006
|
|||||||||||||||||||
Croatia
|
$ | 695 | $ | - | $ | - | $ | (748 | ) | $ | 53 | $ | - | |||||||||||
Czech
Republic
|
706,950 | - | (7,580 | ) | - | 124,416 | 823,786 | |||||||||||||||||
Romania
|
19,754 | 11,376 | - | - | - | 31,130 | ||||||||||||||||||
Slovak
Republic
|
- | 21,288 | - | - | 4,195 | 25,483 | ||||||||||||||||||
Slovenia
|
15,088 | - | - | - | 1,370 | 16,458 | ||||||||||||||||||
Ukraine
(STUDIO 1+1)
|
4,096 | - | - | - | - | 4,096 | ||||||||||||||||||
Ukraine
(KINO, CITI)
|
- | 4,627 | - | - | - | 4,627 | ||||||||||||||||||
Total
|
$ | 746,583 | $ | 37,291 | $ | (7,580 | ) | $ | (748 | ) | $ | 130,034 | $ | 905,580 |
Balance
Dec
31, 2006
|
Additions
|
Allocation
/
Adjustment
|
Impairment
charge
|
Foreign
currency
movement
|
Balance
Dec
31, 2007
|
|||||||||||||||||||
Croatia
|
$ | - | $ | 712 | $ | - | $ | - | $ | 61 | $ | 773 | ||||||||||||
Czech
Republic
|
823,786 | - | - | - | 127,500 | 951,286 | ||||||||||||||||||
Romania
|
31,130 | 43,537 | - | - | - | 74,667 | ||||||||||||||||||
Slovak
Republic
|
25,483 | 26,757 | - | - | 5,395 | 57,635 | ||||||||||||||||||
Slovenia
|
16,458 | - | - | - | 1,935 | 18,393 | ||||||||||||||||||
Ukraine
(STUDIO 1+1)
|
4,096 | - | - | - | - | 4,096 | ||||||||||||||||||
Ukraine
(KINO, CITI)
|
4,627 | 2,870 | - | - | - | 7,497 | ||||||||||||||||||
Total
|
$ | 905,580 | $ | 73,876 | $ | - | $ | - | $ | 134,891 | $ | 1,114,347 |
Indefinite-lived
broadcast licenses
|
Amortized
broadcast
licenses
|
Total
|
||||||||||
Balance,
December 31, 2005
|
$ | 18,936 | $ | 152,655 | $ | 171,591 | ||||||
Additions
|
6,475 | 9,033 | 15,508 | |||||||||
Amortization
|
- | (15,758 | ) | (15,758 | ) | |||||||
Foreign
currency movements
|
933 | 26,456 | 27,389 | |||||||||
Balance,
December 31, 2006
|
$ | 26,344 | $ | 172,386 | $ | 198,730 | ||||||
Additions
|
23,321 | 8,974 | 32,295 | |||||||||
Amortization
|
- | (18,960 | ) | (18,960 | ) | |||||||
Foreign
currency movements
|
1,083 | 24,778 | 25,861 | |||||||||
Balance,
December 31, 2007
|
$ | 50,748 | $ | 187,178 | $ | 237,926 |
December
31, 2007
|
December
31, 2006
|
|||||||
Gross
value
|
$ | 241,100 | $ | 201,994 | ||||
Accumulated
amortization
|
(53,922 | ) | (29,608 | ) | ||||
Total
net book value
|
$ | 187,178 | $ | 172,386 |
Trademarks
|
Customer
relationships
|
Other
|
Total
|
|||||||||||||
Balance,
December 31, 2005
|
$ | 32,560 | $ | 15,098 | $ | - | $ | 47,658 | ||||||||
Additions
|
7,695 | 11,975 | 817 | 20,487 | ||||||||||||
Amortization
|
- | (2,941 | ) | (114 | ) | (3,055 | ) | |||||||||
Foreign
currency movements
|
3,771 | 3,081 | - | 6,852 | ||||||||||||
Balance,
December 31, 2006
|
$ | 44,026 | $ | 27,213 | $ | 703 | $ | 71,942 | ||||||||
Additions
|
12,192 | 46,554 | 2,126 | 60,872 | ||||||||||||
Amortization
|
(265 | ) | (5,244 | ) | (515 | ) | (6,024 | ) | ||||||||
Foreign
currency movements
|
4,131 | 4,744 | 67 | 8,942 | ||||||||||||
Balance,
December 31, 2007
|
$ | 60,084 | $ | 73,267 | $ | 2,381 | $ | 135,732 |
December
31, 2007
|
December
31, 2006
|
|||||||
Gross
value
|
$ | 147,514 | $ | 76,869 | ||||
Accumulated
amortization
|
(11,782 | ) | (4,927 | ) | ||||
Total
net book value
|
$ | 135,732 | $ | 71,942 |
|
||||||||||||
|
Carrying
value
|
|||||||||||
Type
of Affiliate
|
Effective Voting
interest
|
December
31, 2007
|
December
31, 2006
|
|||||||||
Media
Pro
|
Cost
Method Investment
|
8.7%
|
$ | 16,559 | $ | 16,559 | ||||||
Sport.ro
|
Equity-Accounted
Affiliate
|
95.0%
(1)
|
- | 2,645 | ||||||||
Other |
Equity-Accounted
Affiliate
|
Various
|
- | 10 | ||||||||
$ | 16,559 | $ | 19,214 |
For
the Year Ended December 31,
2005
|
||||
Net
revenues
|
$ | 64,266 | ||
Operating
income
|
14,641 | |||
Net
income
|
11,771 | |||
Currency
translation adjustment
|
$ | (3,226 | ) |
Carrying
Value
|
Fair
Value
|
|||||||||||||||
December
31, 2007
|
December
31, 2006
|
December
31, 2007
|
December
31, 2006
|
|||||||||||||
EUR
245.0 million 8.25% Senior Notes
|
$ | 360,664 | $ | 322,666 | $ | 366,976 | $ | 353,722 | ||||||||
EUR
125.0 million Floating Rate Senior Notes
|
- | 164,625 | - | 170,181 | ||||||||||||
EUR
150.0 million Floating Rate Senior Notes
|
220,815 | - | 204,806 | - | ||||||||||||
$ | 581,479 | $ | 487,291 | $ | 571,782 | $ | 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 | % |
December 31,
2007
|
December 31,
2006
|
|||||||
Croatia
|
$ | 424 | $ | 4,183 | ||||
Slovenia
|
810 | 724 | ||||||
Ukraine
|
52 | 47 | ||||||
Total
restricted cash
|
$ | 1,286 | $ | 4,954 |
December 31,
2007
|
December 31,
2006
|
|||||||
Trading:
|
||||||||
Third-party
customers
|
$ | 231,467 | $ | 156,701 | ||||
Less
allowance for bad debts and credit notes
|
(13,908 | ) | (11,472 | ) | ||||
Related
parties
|
7,978 | 7,655 | ||||||
Less
allowance for bad debts and credit notes
|
(656 | ) | (798 | ) | ||||
Total
trading
|
$ | 224,881 | $ | 152,086 | ||||
Other:
|
||||||||
Third-party
customers
|
$ | 57 | $ | 359 | ||||
Less
allowance for bad debts and credit notes
|
(27 | ) | (103 | ) | ||||
Related
parties
|
187 | 454 | ||||||
Less
allowance for bad debts and credit notes
|
(61 | ) | (291 | ) | ||||
Total
other
|
$ | 156 | $ | 419 | ||||
Total
accounts receivable
|
$ | 225,037 | $ | 152,505 |
December 31,
2007
|
December 31,
2006
|
|||||||
Current:
|
||||||||
Prepaid
programming
|
$ | 50,914 | $ | 23,072 | ||||
Other
prepaid expenses
|
11,785 | 13,177 | ||||||
Deferred
tax (Note 15)
|
3,652 | 2,124 | ||||||
VAT
recoverable
|
4,520 | 2,562 | ||||||
Loan
to related party (Note 21)
|
1,924 | 600 | ||||||
Capitalized
debt costs
|
3,104 | 2,908 | ||||||
Other
|
6,430 | 3,112 | ||||||
Total
other current assets
|
$ | 82,329 | $ | 47,555 | ||||
Non-current:
|
||||||||
Capitalized
debt costs
|
$ | 10,310 | $ | 11,264 | ||||
Loan
to related party (Note 21)
|
- | 1,603 | ||||||
Deferred
tax (Note 15)
|
2,147 | 3,443 | ||||||
Other
|
2,917 | 1,165 | ||||||
Total
other non-current assets
|
$ | 15,374 | $ | 17,475 |
December 31,
2007
|
December 31,
2006
|
|||||||
Land
and buildings
|
$ | 84,515 | $ | 56,212 | ||||
Station
machinery, fixtures and equipment
|
173,123 | 115,238 | ||||||
Other
equipment
|
31,512 | 21,980 | ||||||
Software
licenses
|
21,517 | 15,495 | ||||||
Construction
in progress
|
11,406 | 4,070 | ||||||
Total
cost
|
322,073 | 212,995 | ||||||
Less: Accumulated
depreciation
|
(141,762 | ) | (97,190 | ) | ||||
Total
net book value
|
$ | 180,311 | $ | 115,805 | ||||
Assets
held under capital leases (included in the above)
|
||||||||
Land
and buildings
|
$ | 6,193 | $ | 5,541 | ||||
Station
machinery, fixtures and equipment
|
800 | 2,330 | ||||||
Total
cost
|
6,993 | 7,871 | ||||||
Less: Accumulated
depreciation
|
(1,368 | ) | (1,877 | ) | ||||
Net
book value
|
$ | 5,625 | $ | 5,994 |
December 31,
2007
|
December 31,
2006
|
|||||||
Accounts
payable
|
$ | 37,977 | $ | 47,447 | ||||
Programming
liabilities
|
49,457 | 32,316 | ||||||
Deferred
income
|
7,126 | 3,212 | ||||||
Accrued
staff costs
|
29,202 | 12,947 | ||||||
Accrued
production costs
|
4,982 | 7,435 | ||||||
Accrued
interest payable
|
5,930 | 5,375 | ||||||
Accrued
legal costs
|
2,475 | 3,619 | ||||||
Accrued
rent costs
|
999 | 1,163 | ||||||
Authors’
rights
|
5,522 | 943 | ||||||
Onerous
contracts
|
2,832 | - | ||||||
Obligation
to repurchase shares (Note 13)
|
488 | - | ||||||
Other
accrued liabilities
|
9,334 | 5,260 | ||||||
Total
accounts payable and accrued liabilities
|
$ | 156,324 | $ | 119,717 |
December 31,
2007
|
December 31,
2006
|
||||||||
Credit
facilities:
|
|||||||||
Corporate
|
(a)
|
$ | - | $ | - | ||||
Croatia
|
(b)
|
- | 847 | ||||||
Czech
Republic
|
(c)
– (e)
|
13,829 | 11,975 | ||||||
Romania
|
(f)
|
683 | - | ||||||
Slovenia
|
(g)
|
- | - | ||||||
Ukraine
(KINO, CITI)
|
(h)
|
1,700 | 1,703 | ||||||
Total
credit facilities
|
$ | 16,212 | $ | 14,525 | |||||
Capital
leases:
|
|||||||||
Croatia
operations, net of interest
|
$ | - | $ | 19 | |||||
Romania
operations, net of interest
|
242 | 495 | |||||||
Slovak
Republic operations, net of interest
|
86 | 154 | |||||||
Slovenia
operations, net of interest
|
4,412 | 4,223 | |||||||
Total
capital leases
|
$ | 4,740 | $ | 4,891 | |||||
Total
credit facilities and capital leases
|
$ | 20,952 | $ | 19,416 | |||||
Less
current maturities
|
( 15,090 | ) | (13,057 | ) | |||||
Total
non-current maturities
|
$ | 5,862 | $ | 6,359 |
2008
|
$ | 14,512 | ||
2009
|
1,700 | |||
2010
|
- | |||
2011
|
- | |||
2012
|
360,664 | |||
2013
and thereafter
|
220,815 | |||
Total
|
$ | 597,691 |
2008
|
$ | 1,102 | ||
2009
|
1,038 | |||
2010
|
530 | |||
2011
|
497 | |||
2012
|
797 | |||
2013
and thereafter
|
3,281 | |||
$ | 7,245 | |||
Less:
amount representing interest
|
(2,505 | ) | ||
Present
value of net minimum lease payments
|
$ | 4,740 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Domestic
|
$ | (102,532 | ) | $ | (43,777 | ) | $ | (2,270 | ) | |||
Foreign
|
229,052 | 92,179 | 62,466 | |||||||||
$ | 126,520 | $ | 48,402 | $ | 60,196 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Income
tax expense from continuing operations
|
$ | 20,795 | $ | 14,962 | $ | 16,691 | ||||||
Income
tax expense from discontinued operations
|
- | 4,863 | 677 | |||||||||
Currency
translation adjustment in accumulated other comprehensive
income
|
20,202 | 22,878 | (3,266 | ) | ||||||||
Total
tax charge
|
$ | 40,997 | $ | 42,703 | $ | 14,102 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Current
income tax expense:
|
||||||||||||
Domestic
|
$ | (20,046 | ) | $ | (22,745 | ) | $ | 186 | ||||
Foreign
|
51,815 | 36,009 | 25,512 | |||||||||
$ | 31,769 | $ | 13,264 | $ | 25,698 | |||||||
Deferred
tax expense / (benefit):
|
||||||||||||
Domestic
|
$ | - | 1,467 | $ | (1,467 | ) | ||||||
Foreign
|
$ | (10,974 | ) | 231 | (7,540 | ) | ||||||
$ | (10,974 | ) | $ | 1,698 | $ | (9,007 | ) | |||||
Provision
for income taxes
|
$ | 20,795 | $ | 14,962 | $ | 16,691 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Income
taxes at Netherlands rates (2007:
25.5%: 2006: 29.6%,
2005: 31.5%)
|
$ | 32,259 | $ | 14,326 | $ | 18,961 | ||||||
Jurisdictional
differences in tax rates
|
(17,227 | ) | (10,432 | ) | (15,685 | ) | ||||||
Tax
effect of Croatian goodwill impairment
|
- | 149 | 1,983 | |||||||||
Effect
of change in tax law relating to investment allowances claimed in previous
years
|
- | (2,065 | ) | - | ||||||||
Interest
expense disallowed
|
4,347 | 7,365 | - | |||||||||
Tax
effect of other permanent differences
|
2,597 | (656 | ) | 4,921 | ||||||||
Effect
of change in tax rates
|
(9,271 | ) | 89 | 620 | ||||||||
Change
in valuation allowance
|
12,182 | 6,107 | 5,115 | |||||||||
Other
|
(4,092 | ) | 79 | 776 | ||||||||
Provision
for income taxes
|
$ | 20,795 | $ | 14,962 | $ | 16,691 |
|
|
|||||||
December 31, 2007
|
December 31, 2006
|
|||||||
Assets:
|
||||||||
Tax
benefit of loss carry-forwards and other tax credits
|
$ | 30,798 | $ | 16,880 | ||||
Programming
rights
|
3,734 | 4,098 | ||||||
Property,
plant and equipment
|
1,607 | 995 | ||||||
Accrued
expense
|
5,476 | 4,205 | ||||||
Other
|
1,524 | 691 | ||||||
Gross
deferred tax assets:
|
$ | 43,139 | $ | 26,869 | ||||
Valuation
allowance
|
(31,964 | ) | (16,574 | ) | ||||
Net
deferred tax assets
|
$ | 11,175 | $ | 10,295 | ||||
Liabilities:
|
||||||||
Broadcast
licenses, trademarks and customer relationships
|
$ | (67,606 | ) | $ | (57,036 | ) | ||
Property,
plant and equipment
|
(3,688 | ) | (2,936 | ) | ||||
Temporary
difference due to timing
|
(7,694 | ) | (4,684 | ) | ||||
Total
deferred tax liabilities
|
$ | (78,988 | ) | $ | (64,656 | ) | ||
Net
deferred income tax liability:
|
$ | (67,813 | ) | $ | (54,361 | ) | ||
|
|
|||||||
December 31, 2007
|
December 31, 2006
|
|||||||
Current
deferred tax assets
|
$ | 3,652 | $ | 2,124 | ||||
Non-current
deferred tax assets
|
2,147 | 3,443 | ||||||
$ | 5,799 | $ | 5,567 | |||||
Current
deferred tax liabilities
|
(272 | ) | (1,836 | ) | ||||
Non-current
deferred tax liabilities
|
(73,340 | ) | (58,092 | ) | ||||
$ | (73,612 | ) | $ | (59,928 | ) | |||
Net
deferred income tax liability
|
$ | (67,813 | ) | $ | (54,361 | ) |
Balance
at December 31, 2006
|
$ | 16,574 | ||
Charged
to costs and expenses
|
12,182 | |||
Charged
to other accounts
|
2,000 | |||
Foreign
exchange
|
1,208 | |||
Balance
at December 31, 2007
|
$ | 31,964 |
Year
|
2008
|
2009
|
2010
|
2011
|
2012
|
Indefinite
|
||||||||||||||||||
Austria
|
12,328 | |||||||||||||||||||||||
Croatia
|
463 | 9,759 | 27,062 | |||||||||||||||||||||
Czech
Republic
|
24 | 1,656 | 3,108 | 31 | 49 | |||||||||||||||||||
Slovenia
|
12,385 | |||||||||||||||||||||||
|
||||||||||||||||||||||||
Ukraine
|
10,203 | |||||||||||||||||||||||
Cyprus
|
185 | |||||||||||||||||||||||
Romania
|
533 | |||||||||||||||||||||||
Total
|
$ | 24 | $ | 1,656 | $ | 3,571 | $ | 9,790 | $ | 27,644 | $ | 35,101 |
Balance,
January 1, 2007
|
$ | 3,575 | ||
Decreases
for tax positions taken during a prior period
|
(1,279 | ) | ||
Increases
for tax positions taken during the current period
|
34 | |||
Decreases
resulting from the expiry of the statute of limitations
|
(1,122 | ) | ||
Other
|
515 | |||
Balance,
December 31, 2007
|
$ | 1,723 |
Country
|
Year
|
Croatia
|
2004
|
Czech
Republic
|
2003
|
Germany
|
2005
|
Netherlands
|
2006
|
Romania
|
2003
|
Slovak
Republic
|
2002
|
Slovenia
|
2002
|
Ukraine
|
2004
|
United
States.
|
2001
|
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Stock-based
compensation charged under FIN 44
|
$ | - | $ | - | $ | 918 | ||||||
Stock-based
compensation charged under FAS 123(R) (2005 FAS 123)
|
5,734 | 3,575 | 2,209 | |||||||||
Total
stock-based compensation
|
$ | 5,734 | $ | 3,575 | $ | 3,127 |
|
·
|
Expected forfeitures.
FAS 123(R) requires that compensation cost only be calculated on
those instruments that are expected to vest in the future. The number of
options that actually vest will usually differ from the total number
issued because employees forfeit options when they do not meet the service
conditions stipulated in the agreement. Since all forfeitures result from
failure to meet service conditions, we have calculated the forfeiture rate
by reference to the historical employee turnover
rate.
|
|
·
|
Expected volatility.
Expected volatility has been calculated based on an analysis of the
historical stock price volatility of the company and its peers for the
preceeding period corresponding to the options’ expected
life.
|
|
·
|
Expected term. The
expected term of options granted has been calculated following the
“shortcut” method as outlined in section D 2, question 6 of SEC Staff
Accounting Bulletin No. 107 “Share Based
Compensation” because our options meet the definition of “plain vanilla”
therein. Since insufficient data about holder exercise behavior is
available to make estimates of expected term we have continued to apply
the shortcut method in accordance with SAB
110.
|
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Risk-free
interest rate
|
3.62 | % | 4.76 | % | 4.00 | % | ||||||
Expected
term (years)
|
4.93 | 5.89 | 6.25 | |||||||||
Expected
volatility
|
36.15 | % | 43.44 | % | 50.56 | % | ||||||
Dividend
yield
|
0 | % | 0 | % | 0 | % | ||||||
Weighted-average
fair value
|
$ | 40.48 | $ | 31.67 | $ | 26.29 |
2007
|
2006
|
2005
|
||||||||||||||||||||||
Shares
|
Weighted
Average Exercise Price (US$)
|
Shares
|
Weighted
Average Exercise Price (US$)
|
Shares
|
Weighted
Average Exercise Price (US$)
|
|||||||||||||||||||
Outstanding
at beginning of year
|
1,288,575 | $ | 35.51 | 1,118,275 | $ | 22.23 | 1,705,017 | $ | 12.89 | |||||||||||||||
Awards
granted
|
246,000 | 108.48 | 388,500 | 65.19 | 194,500 | 49.23 | ||||||||||||||||||
Awards
exercised
|
(315,833 | ) | 12.98 | (195,450 | ) | 18.54 | (685,359 | ) | 8.08 | |||||||||||||||
Awards
expired
|
(20,000 | ) | 23.00 | - | - | - | - | |||||||||||||||||
Awards
forfeited
|
(22,625 | ) | 51.79 | (22,750 | ) | 40.38 | (95,883 | ) | 11.90 | |||||||||||||||
Outstanding
at end of year
|
1,176,117 | $ | 56.72 | 1,288,575 | $ | 35.51 | 1,118,275 | $ | 22.23 |
Range of exercise prices |
Options
outstanding
|
|||||||||||||||||
I.
|
Shares
|
Average
remaining contractual life (years)
|
Aggregate
intrinsic value (US$)
|
Weighted
average exercise price (US$)
|
||||||||||||||
$ |
0.01
- 20.00
|
264,200 | 5.79 | $ | 26,396 | $ | 16.07 | |||||||||||
$ |
20.01
- 40.00
|
131,042 | 6.61 | 11,739 | 26.40 | |||||||||||||
$ |
40.01
- 60.00
|
265,875 | 7.93 | 16,832 | 52.67 | |||||||||||||
$ |
60.01
- 80.00
|
269,000 | 7.24 | 12,882 | 68.09 | |||||||||||||
$ |
80.01
- 100.00
|
52,500 | 5.58 | 1,376 | 89.77 | |||||||||||||
$ |
100.01
- 120.00
|
193,500 | 7.93 | 468 | 113.56 | |||||||||||||
Total
|
1,176,117 | 7.04 | $ | 69,693 | $ | 56.72 | ||||||||||||
Expected
to vest
|
1,086,820 | 6.98 | $ | 65,489 | $ | 55.71 |
Range of exercise prices |
Options
exercisable
|
|||||||||||||||||
II.
|
Shares
|
Average
remaining contractual life (years)
|
Aggregate
intrinsic value (US$)
|
Weighted
average exercise price (US$)
|
||||||||||||||
$ |
0.01
- 20.00
|
208,200 | 5.76 | $ | 20,801 | $ | 15.80 | |||||||||||
$ |
20.01
- 40.00
|
89,417 | 6.62 | 8,010 | 26.71 | |||||||||||||
$ |
40.01
- 60.00
|
96,375 | 7.80 | 6,101 | 51.04 | |||||||||||||
$ |
60.01
- 80.00
|
47,250 | 8.90 | 2,263 | 71.25 | |||||||||||||
$ |
80.01
- 100.00
|
- | - | - | - | |||||||||||||
$ |
100.01
- 120.00
|
- | - | - | - | |||||||||||||
Total
|
441,242 | 6.72 | $ | 37,175 | $ | 31.65 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Net
income available for common shareholders
|
$ | 88,568 | $ | 20,424 | $ | 42,322 | ||||||
Weighted
average outstanding shares of common stock (000’s)
|
41,384 | 40,027 | 34,664 | |||||||||
Dilutive
effect of employee stock options (000’s)
|
449 | 573 | 766 | |||||||||
Common
stock and common stock equivalents
|
41,833 | 40,600 | 35,430 | |||||||||
Earnings
per share:
|
||||||||||||
Basic
|
$ | 2.14 | $ | 0.51 | $ | 1.22 | ||||||
Diluted
|
$ | 2.12 | $ | 0.50 | $ | 1.19 |
|
·
|
expenses
presented as corporate operating costs in our consolidated statements of
operations ;
|
|
·
|
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 on assets or investments or gains on sale of unconsolidated
affiliates).
|
SEGMENT
FINANCIAL INFORMATION
|
||||||||||||||||||||||||
For
the Years Ended December 31,
|
||||||||||||||||||||||||
Segment
Net Revenues (1)
|
Segment
EBITDA
|
|||||||||||||||||||||||
2007
|
2006
|
2005
|
2007
|
2006
|
2005
|
|||||||||||||||||||
Country
|
||||||||||||||||||||||||
Croatia
(NOVA TV)
|
$ | 37,193 | $ | 22,310 | $ | 22,030 | $ | (13,882 | ) | $ | (14,413 | ) | $ | (15,866 | ) | |||||||||
Czech
Republic (2)
|
279,237 | 208,387 | 154,010 | 156,496 | 100,488 | 71,544 | ||||||||||||||||||
Romania
(3)
|
215,402 | 148,616 | 103,321 | 93,075 | 65,860 | 43,803 | ||||||||||||||||||
Slovak
Republic (TV MARKIZA)
|
110,539 | 73,420 | 64,266 | 41,532 | 20,805 | 17,240 | ||||||||||||||||||
Slovenia
(POP TV and KANAL A)
|
69,647 | 54,534 | 48,770 | 22,767 | 19,842 | 19,337 | ||||||||||||||||||
Ukraine
(STUDIO 1+1)
|
125,323 | 96,413 | 72,847 | 27,000 | 29,973 | 21,803 | ||||||||||||||||||
Ukraine
(KINO, CITI) (4)
|
2,650 | 1,195 | - | (7,293 | ) | (3,713 | ) | - | ||||||||||||||||
Total
Segment Data
|
$ | 839,991 | $ | 604,875 | $ | 465,244 | $ | 319,695 | $ | 218,842 | $ | 157,861 | ||||||||||||
Reconciliation
to Consolidated Statement of Operations and Comprehensive
Income:
|
||||||||||||||||||||||||
Consolidated
Net Revenues / Income before provision for income taxes, minority
interest, equity in income of unconsolidated affiliates and discontinued
operations
|
$ | 839,991 | $ | 603,115 | $ | 400,978 | $ | 126,520 | $ | 48,402 | $ | 60,196 | ||||||||||||
Corporate
operating costs
|
- | - | - | 55,373 | 34,104 | 25,547 | ||||||||||||||||||
Impairment
charge
|
- | - | - | 748 | 35,331 | |||||||||||||||||||
Unconsolidated
equity affiliates (5)
|
- | 1,760 | 64,266 | - | (1,292 | ) | 17,240 | |||||||||||||||||
Depreciation
of station property, plant & equipment
|
- | - | - | 33,294 | 25,795 | 16,367 | ||||||||||||||||||
Amortization
of broadcast licenses and other intangibles
|
- | - | 24,984 | 18,813 | 11,180 | |||||||||||||||||||
Interest
income
|
- | - | - | (5,728 | ) | (6,365 | ) | (4,124 | ) | |||||||||||||||
Interest
expense
|
- | - | - | 54,999 | 44,228 | 29,387 | ||||||||||||||||||
Change
in fair value of derivatives
|
- | - | - | 3,703 | 12,539 | - | ||||||||||||||||||
Foreign
currency exchange loss / (gain), net
|
- | - | - | 34,441 | 44,908 | (37,968 | ) | |||||||||||||||||
Other
(income) / expense
|
- | - | - | (7,891 | ) | (3,038 | ) | 4,705 | ||||||||||||||||
Total
Segment Data
|
$ | 839,991 | $ | 604,875 | $ | 465,244 | $ | 319,695 | $ | 218,842 | $ | 157,861 |
For
the Years Ended December 31,
|
||||||||||||
Depreciation
of station property, plant & equipment and amortization of broadcast
licenses and other intangibles:
|
2007
|
2006
|
2005
|
|||||||||
Croatia
|
$ | 3,630 | $ | 2,920 | $ | 2,951 | ||||||
Czech
Republic
|
28,810 | 24,274 | 15,960 | |||||||||
Romania
|
10,511 | 5,811 | 3,829 | |||||||||
Slovak
Republic
|
6,784 | 4,070 | 2,599 | |||||||||
Slovenia
|
4,650 | 4,004 | 2,947 | |||||||||
Ukraine
(STUDIO 1+1)
|
3,148 | 3,216 | 1,860 | |||||||||
Ukraine
(KINO, CITI)
|
745 | 490 | - | |||||||||
Total
|
$ | 58,278 | $ | 44,785 | $ | 30,146 | ||||||
Reconciliation
to Consolidated Statement of Operations:
|
||||||||||||
Unconsolidated
equity affiliates
|
- | (177 | ) | (2,599 | ) | |||||||
Total
consolidated depreciation and amortization
|
$ | 58,278 | $ | 44,608 | $ | 27,547 | ||||||
Represented
as follows:
|
||||||||||||
Depreciation
of station property, plant & equipment
|
33,294 | 25,795 | 16,367 | |||||||||
Amortization
of broadcast licenses and other intangibles
|
24,984 | 18,813 | 11,180 |
For
the Years Ended December 31,
|
||||||||||||
Capital
expenditure:
|
2007
|
2006
|
2005
|
|||||||||
Corporate
|
$ | 185 | $ | 1,990 | $ | 427 | ||||||
Croatia
|
6,836 | 2,114 | 4,342 | |||||||||
Czech
Republic
|
35,903 | 16,608 | 5,121 | |||||||||
Romania
|
16,981 | 24,363 | 7,280 | |||||||||
Slovak
Republic
|
8,954 | 6,777 | - | |||||||||
Slovenia
|
8,492 | 2,506 | 3,842 | |||||||||
Ukraine
(STUDIO 1+1)
|
2,592 | 6,029 | 5,536 | |||||||||
Ukraine
(KINO, CITI)
|
1,520 | - | - | |||||||||
Total
|
$ | 81,463 | $ | 60,387 | $ | 26,548 |
As
at December 31,
|
||||||||
Total
assets (1):
|
2007
|
2006
|
||||||
Croatia
|
$ | 44,787 | $ | 30,394 | ||||
Czech
Republic
|
1,429,256 | 1,200,894 | ||||||
Romania
|
360,144 | 206,850 | ||||||
Slovak
Republic
|
203,302 | 86,872 | ||||||
Slovenia
|
89,984 | 67,919 | ||||||
Ukraine
(STUDIO 1+1)
|
90,064 | 75,020 | ||||||
Ukraine
(KINO, CITI)
|
17,854 | 13,293 | ||||||
Total
segment assets
|
$ | 2,235,391 | $ | 1,681,242 | ||||
Reconciliation
to Consolidated Balance Sheet:
|
||||||||
Corporate
|
103,044 | 137,758 | ||||||
Total
assets
|
$ | 2,338,435 | $ | 1,819,000 |
As
at December 31,
|
||||||||
Long-lived
assets (1):
|
2007
|
2006
|
||||||
Croatia
|
$ | 12,144 | $ | 6,804 | ||||
Czech
Republic
|
58,809 | 28,002 | ||||||
Romania
|
44,808 | 32,312 | ||||||
Slovak
Republic
|
29,345 | 19,498 | ||||||
Slovenia
|
21,524 | 15,595 | ||||||
Ukraine
(STUDIO 1+1)
|
7,380 | 7,965 | ||||||
Ukraine
(KINO, CITI)
|
5,003 | 3,674 | ||||||
Total
long-lived assets
|
$ | 179,013 | $ | 113,850 | ||||
Reconciliation
to Consolidated Balance Sheet:
|
||||||||
Corporate
|
1,298 | 1,955 | ||||||
Total
Long-lived assets
|
$ | 180,311 | $ | 115,805 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Arbitration-related
costs
|
$ | - | $ | - | $ | 164 | ||||||
Income
on disposal of discontinued operations
|
- | - | 164 | |||||||||
Tax
on disposal of discontinued operations
|
- | (4,863 | ) | (677 | ) | |||||||
Net
loss from discontinued operations
|
$ | - | $ | (4,863 | ) | $ | (513 | ) |
a)
|
Station
Programming Rights Agreements
|
December 31,
2007
|
||||
Croatia
|
$ | 12,212 | ||
Czech
Republic
|
39,067 | |||
Romania
|
21,987 | |||
Slovak
Republic
|
14,244 | |||
Slovenia
|
7,255 | |||
Ukraine
(STUDIO 1+1)
|
12,671 | |||
Ukraine
(KINO, CITI)
|
190 | |||
Total
|
$ | 107,626 |
b)
|
Operating
Lease Commitments
|
December 31,
2007
|
||||
2008
|
$ | 5,439 | ||
2009
|
5,098 | |||
2010
|
1,312 | |||
2011
|
866 | |||
2012
|
306 | |||
2013
and thereafter
|
- | |||
Total
|
$ | 13,021 |
c)
|
Acquisition
of minority shareholdings
|
d)
|
Other
|
a)
|
Litigation
|
b)
|
Licenses
|
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 NOVA CINEMA license expires in November 2019. The
GALAXIE SPORT license expires in March 2014.
|
Romania
|
Licenses
expire on dates ranging from November 2008 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 held for
Kino and Citi expire on dates ranging from November 2008 to July
2016.
|
c)
|
Restrictions
on dividends from Consolidated Subsidiaries and Unconsolidated
Affiliates
|
For
the Year ended December 31, 2007
|
||||||||||||||||
First
Quarter
(Unaudited)
|
Second
Quarter
(Unaudited)
|
Third
Quarter
(Unaudited)
|
Fourth
Quarter
(Unaudited)
|
|||||||||||||
(US$
000’s, except per share data)
|
||||||||||||||||
Consolidated
Statement of Operations data:
|
||||||||||||||||
Net
revenues
|
$ | 147,912 | $ | 216,284 | $ | 174,836 | $ | 300,959 | ||||||||
Cost
of revenue
|
104,071 | 126,562 | 108,438 | 167,469 | ||||||||||||
Operating
income
|
13,287 | 66,579 | 28,393 | 97,785 | ||||||||||||
Net
income / (loss)
|
(250 | ) | 34,590 | (18,763 | ) | 72,991 | ||||||||||
Net
income / (loss) per share:
|
||||||||||||||||
Basic
EPS
|
$ | (0.01 | ) | $ | 0.84 | $ | (0.45 | ) | $ | 1.73 | ||||||
Effect
of dilutive securities
|
- | (0.01 | ) | - | (0.02 | ) | ||||||||||
Diluted
EPS
|
$ | (0.01 | ) | $ | 0.83 | $ | (0.45 | ) | $ | 1.71 |
For
the Year ended December 31, 2006
|
||||||||||||||||
First
Quarter
(Unaudited)
|
Second
Quarter
(Unaudited)
|
Third
Quarter
(Unaudited)
|
Fourth
Quarter
(Unaudited)
|
|||||||||||||
(US$
000’s, except per share data)
|
||||||||||||||||
Consolidated
Statement of Operations data:
|
||||||||||||||||
Net
revenues
|
$ | 119,754 | $ | 156,589 | $ | 112,482 | $ | 214,290 | ||||||||
Cost
of revenue
|
81,424 | 89,571 | 81,088 | 110,094 | ||||||||||||
Operating
income
|
16,183 | 44,033 | 6,571 | 73,887 | ||||||||||||
Net
income / (loss)
|
(18,264 | ) | 8,522 | 3,934 | 26,232 | |||||||||||
Net
income / (loss) per share:
|
||||||||||||||||
Basic
EPS
|
$ | (0.48 | ) | $ | 0.21 | $ | 0.09 | $ | 0.64 | |||||||
Effect
of dilutive securities
|
- | - | - | - | ||||||||||||
Diluted
EPS
|
$ | (0.48 | ) | $ | 0.21 | $ | 0.09 | $ | 0.64 |
ITEM
9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
|
ITEM
9A.
|
CONTROLS AND
PROCEDURES
|
ITEM
9B.
|
OTHER INFORMATION
|
ITEM
10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
ITEM
11.
|
EXECUTIVE COMPENSATION
|
ITEM
12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
|
ITEM
13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
ITEM
14.
|
PRINCIPAL ACCOUNTANT FEES AND
SERVICES
|
ITEM
15.
|
EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES
|
|
·
|
Report
of Independent Registered Public
Accountants;
|
|
·
|
Consolidated
Balance Sheets as of December 31, 2007 and
2006;
|
|
·
|
Consolidated
Statements of Operations and Comprehensive Income for the years ended
December 31, 2007, 2006 and 2005;
|
|
·
|
Consolidated
Statement of Shareholders’ Equity for the years ended December 31, 2007,
2006 and 2005;
|
|
·
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2007, 2006 and
2005; and
|
|
·
|
Notes
to Consolidated Financial
Statements.
|
Exhibit
Number
|
Description
|
|
3.01*
|
Memorandum
of Association (incorporated by reference to Exhibit 3.01 to the Company’s
Registration Statement No. 3380344 on Form S-1, filed June 17,
1994).
|
|
3.02*
|
Bye-Laws
of Central European Media Enterprises Ltd., as amended, dated as of May
25, 2000 (incorporated by reference to Exhibit 3.02 to the Company’s
Annual Report on Form 10-K for the fiscal year ending December 31,
2000).
|
|
3.03*
|
Memorandum
of Increase of Share Capital (incorporated by reference to Exhibit 3.03 to
Amendment No. 1 to the Company’s Registration Statement No. 33-80344 on
Form S-1, filed August 19, 1994).
|
|
3.04*
|
Memorandum
of Reduction of Share Capital (incorporated by reference to Exhibit 3.04
to Amendment No. 2 to the Company’s Registration Statement No. 33-80344 on
Form S-1, filed September 14, 1994).
|
|
3.05*
|
Certificate
of Deposit of Memorandum of Increase of Share Capital executed by
Registrar of Companies on May 20, 1997 (incorporated by reference to
Exhibit 3.1 to the Company’s Quarterly Report on Form 10Q for the
quarterly period ended September 30, 1997).
|
|
4.01*
|
Specimen
Class A Common Stock Certificate (incorporated by reference to Exhibit
4.01 to Amendment No. 1 to the Company’s Registration Statement No.
33-80344 on Form S-1, filed August 19, 1994).
|
|
4.02*
|
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
(incorporated by reference to Exhibit 10.65 to the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended June 30,
2007).
|
|
10.01+*
|
Central
European Media Enterprises Ltd. 1995 Stock Incentive Plan, as amended and
restated to April 11, 2004 (incorporated by reference to Exhibit A to the
Company’s Proxy Statement dated May 9, 2005).
|
|
10.02*
|
Agreement
between CME Media Enterprises BV and the Tax and Customs Administration of
the Netherlands dated March 24, 2004 (incorporated by reference to the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2004).
|
|
10.03*
|
Pro
TV SA put-option between CME Romania BV, Adrian Sarbu and Rootland Trading
Ltd (incorporated by reference to the Company’s Quarterly Report on Form
10-Q for the quarterly period ended September 30,
2004).
|
|
10.04*
|
MPI
SA put-option between CME Romania BV, Adrian Sarbu and Rootland Trading
Ltd (incorporated by reference to the Company’s Quarterly Report on Form
10-Q for the quarterly period ended September 30,
2004).
|
|
10.05*+
|
Employee
Stock Option Form (a management contract) (incorporated by reference to
the Company’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2004).
|
Exhibit
Number
|
Description
|
|
10.06*
|
Framework
Agreement CME Media Enterprises BV, Central European Media Enterprises
Ltd. and PPF (Cyprus) Ltd. dated December 13, 2004 (incorporated by
reference to the Company’s Annual Report on Form 10-K for the period ended
December 31, 2004).
|
|
10.07*
|
Agreement
on Settlement of Disputes and Transfer of Ownership Interest, dated
February 24, 2005 (incorporated by reference to the Company’s Annual
Report on Form 10-K for the period ended December 31,
2004).
|
|
10.08*
|
Subscription
Agreement between Central European Media Enterprises Ltd, and PPF (Cyprus)
Ltd. dated May 2, 2005 (incorporated by reference to the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended March 30,
2005).
|
|
10.10*
|
Deed
of Guarantee among PPF a.s., Central European Media Enterprises Ltd. and
CME Media Enterprises B.V. dated May 2, 2005 (incorporated by reference to
the Company’s Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 2005).
|
|
10.12*
|
PPF
Group Guarantee among PPF Group N.V., Central European Media Enterprises
Ltd. and CME Media Enterprises B.V. dated May 2, 2005 (incorporated by
reference to the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended March 30, 2005).
|
|
10.13*
|
Indenture
among Central European Media Enterprises Ltd., Central European Media
Enterprises N.V., and CME Media Enterprises B.V. J.P. Morgan Chase Bank
N.A.. London Branch and J.P. Morgan Bank Luxembourg S.A. dated May 5, 2005
(incorporated by reference to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended March 30, 2005).
|
|
10.14*
|
Euro
37.5 million facility agreement, dated July 29, 2005, between Produkcija
Plus Storitveno Podjetje d.o.o. and ING Bank N.V., Nova Ljubljanska banka
d.d., and Bank Austria Creditanstalt d.d. (incorporated by reference to
the Company’s Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2005).
|
|
10.15*
|
Credit
line agreement No. 2644105/LCD between Ceska Sporitelna a.s. and CET 21
spot. s r.o. dated October 27, 2005 (incorporated by reference to the
Company’s Annual Report on Form 10-K for the period ended December 31,
2005).
|
|
10.16*
|
Loan
Agreement between Central European Media Enterprises Ltd. and European
Bank for Reconstruction and Development, dated July 21, 2006 (incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2006).
|
|
10.17*
|
Pledge
Agreement on Shares in Central European Media Enterprises N.V. among
Central European Media Enterprises Ltd., European Bank for Reconstruction
and Development and Central European Media Enterprises N.V., dated July
21, 2006 (incorporated by reference to the Company’s Quarterly Report on
Form 10-Q for the quarterly period ended June 30,
2006).
|
|
10.18*
|
Pledge
of Shares in CME Media Enterprises B.V. among Central European Media
Enterprises N.V., European Bank for Reconstruction and Development and CME
Media Enterprises B.V., dated July 21, 2006 (incorporated by reference to
the Company’s Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2006).
|
Exhibit
Number
|
Description
|
|
10.19*
|
Deed
of Guarantee and Indemnity between Central European Media Enterprises N.V.
and European Bank for Reconstruction and Development, dated July 21, 2006
(incorporated by reference to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2006).
|
|
10.20*
|
Deed
of Guarantee and Indemnity between CME Media Enterprises B.V. and European
Bank for Reconstruction and Development, dated July 21, 2006 (incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2006).
|
|
10.21*
|
Contract
Assignment between CME Media
Enterprises B.V., Central European Media Enterprises Ltd. and European
Bank for Reconstruction and Development, dated July 21, 2006 (incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2006).
|
|
10.22*+
|
Amendment
of Employment Agreement (dated March 30, 2004) between Michael Garin and
CME Development Corporation, dated July 28, 2006 (incorporated by
reference to the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2006).
|
|
10.23*+
|
Amended
and Restated Contract of Employment between Marina Williams, Executive
Vice President, and CME Development Corporation, dated October 5, 2006
(incorporated by reference to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 2006).
|
|
10.24*+
|
Amended
and Restated Contract of Employment between Wallace Macmillan, Chief
Financial Officer, and CME Development Corporation, dated October 6, 2006
(incorporated by reference to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 2006).
|
|
10.25
|
Agreement
to Provide Advertising Services between Video International-Prioritet LLC
and Broadcasting Company “Studio 1+1” LLC dated November 30,
2006.
|
|
10.26*
|
Subscription
Agreement between the Company and Igor Kolomoisky, dated August 24, 2007
(incorporated by reference to Exhibit 4.02 to the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended September 30,
2007).
|
|
10.27*
|
Registration
Rights Agreement between the Company and Igor Kolomoisky, dated as of
August 24, 2007 (incorporated by reference to Exhibit 4.03 to the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2007).
|
|
10.28*
|
Supplemental
Agreement Relating to the Loan Agreement dated July 21, 2006 (as amended
by an amending Letter Agreement dated November 16, 2006) between the
Company and the European Bank for Reconstruction and Development, dated
August 22, 2007 (incorporated by reference to Exhibit 10.68 to the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2007).
|
|
10.29*
|
Loan
Agreement between the Company and the European Bank for Reconstruction and
Development, dated August 22, 2007 (incorporated by reference to Exhibit
10.69 to the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2007).
|
Exhibit
Number
|
Description
|
|
10.30*
|
Agreement on
Transfer of Participation Interest in Media Invest, spol. s.r.o. between
Mr Jan Kovàčik and CME Slovak Holdings B.V., dated July 13, 2007
(incorporated by reference to Exhibit 10.70 to the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended September 30,
2007).
|
|
10.31*
|
Agreement on
Consideration between Mr Jan Kovàčik and CME Slovak Holdings B.V.,
dated July 13, 2007 (incorporated by reference to Exhibit 10.71 to the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2007).
|
|
10.32*
|
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 (incorporated by reference to Exhibit 10.63 to the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2007).
|
|
10.33*
|
Amended
and Restated Registration Rights Agreement, between Central European Media
Enterprises Ltd., and Testora Ltd., dated May 11, 2007 (incorporated by
reference to Exhibit 10.64 to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2007).
|
|
10.34*
|
Sale-Purchase
Contract for Shares in Pro TV S.A., between Rootland Trading Ltd. and CME
Romania B.V., dated June 1, 2007 (incorporated by reference to Exhibit
10.66 to the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2007).
|
|
10.35*
|
Sale-Purchase
Contract for Shares in Media Pro International S.A., between Rootland
Trading Ltd. and CME Romania B.V., dated June 1, 2007 (incorporated by
reference to Exhibit 10.67 to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2007).
|
|
10.36*+
|
Employment
Agreement between CME Development Corporation and Michael Garin, dated
March 30, 2004 (incorporated by reference to Exhibit 10.63 to the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 2004).
|
|
Letter
of Amendment, dated November 15, 2007, to the Employment Agreement between
CME Development Corporation and Michael Garin, dated March 30,
2004.
|
||
Contract
of Employment between CME Development Corporation and Adrian Sarbu, dated
December 27, 2007.
|
||
Contract
for the Performance of the Office between Pro TV SA and Adrian Sarbu,
dated December 27, 2007.
|
||
Framework
Agreement among Aleksandr Rodnyansky, Boris Fuchsmann, International
Teleservices Ltd., the Company, CME Media Enterprises B.V., CME Ukraine
Holding GmbH, CET 21 s.r.o., Ukrainian Media Services LLC, Studio 1+1
LLC, Foreign Enterprise Inter-Media, Innova Film GmbH, International Media
Services Ltd and TV Media Planet Ltd., dated January 31,
2008.
|
Exhibit
Number
|
Description
|
|
Termination
Agreement by and between Aleksandr Rodnyansky, Boris Fuchsmann,
International Teleservices Ltd., the Company, CME Media Enterprises B.V.,
CME Ukraine Holding GmbH, CET 21 s.r.o., Ukrainian Media Services LLC,
Studio 1+1 LLC, Foreign Enterprise Inter-Media, Innova Film GmbH,
International Media Services Ltd and TV Media Planet Ltd., dated January
31, 2008.
|
||
Assignment
Agreement among Igor Kolomoisky, Manita Investments Limited, Global Media
Group Ltd., Torcensta Holding Ltd., the Company, CME Media Enterprises
B.V., CME Ukraine Holding GmbH and Ukrainian Media Services LLC, dated
January 31, 2008.
|
||
Agreement
between Mr. Richard Anthony Sheldon and Nova TV d.d., dated November 26,
2007.
|
||
Agreement
among Global Komunikacije d.o.o., Nova TV d.d. and Opertivna Kompanija
d.o.o., dated November 26, 2007.
|
||
Agreement
among Narval A.M. d.o.o., Studio Millenium d.o.o. and Nova TV d.d., dated
November 26, 2007.
|
||
List
of subsidiaries.
|
||
Consent
of Deloitte & Touche LLP
|
||
Power
of Attorney, dated as of February 26, 2007.
|
||
31.01
|
Sarbanes-Oxley
Certification s.302 CEO, dated February 28, 2008.
|
|
31.02
|
Sarbanes-Oxley
Certification s.302 CFO, dated February 28, 2008.
|
|
32.01
|
Sarbanes-Oxley
Certification - CEO and CFO, dated February 28, 2008 (furnished
only).
|
*
|
Previously
filed exhibits
|
+
|
Exhibit
is a management contract or compensatory
plan
|
b)
|
Exhibits:
See (a)(3) above for a listing of the exhibits included as part of this
report.
|
c)
|
Report
of Independent Registered Public Accountants on Schedule II - Schedule of
Valuation Allowances. (See page S-1 of this Form
10-K).
|
Date: February
28, 2008
|
/s/ Michael
Garin
|
|
Michael
Garin
|
||
Chief
Executive Officer
|
||
(Duly
Authorized Officer)
|
||
Date: February
28, 2008
|
/s/ Wallace
Macmillan
|
|
Wallace
Macmillan
|
||
Chief
Financial Oficer
|
||
(Principal
Financial Officer and Accounting
Officer)
|
Signature
|
Title
|
Date
|
||
*
|
Chairman
of the Board of Directors
|
February
28, 2008
|
||
Ronald
S. Lauder
|
||||
*
|
Vice-Chairman
of the Board of Directors
|
February
28, 2008
|
||
Herbert
A. Granath
|
||||
/s/
Michael Garin
|
Chief
Executive Officer and Director
|
February
28, 2008
|
||
Michael
Garin
|
(Principal
Executive Officer)
|
|||
/s/
Wallace Macmillan
|
Chief
Financial Officer
|
February
28, 2008
|
||
Wallace
Macmillan
|
(Principal
Financial Officer and Principal
Accounting Officer)
|
|||
*
|
Director
|
February
28, 2008
|
||
Charles
Frank
|
||||
*
|
Director
|
February
28, 2008
|
||
Herbert
Kloiber
|
||||
*
|
Director
|
February
28, 2008
|
||
Igor
Kolomoisky
|
||||
*
|
Director
|
February
28, 2008
|
||
Alfred
W. Langer
|
||||
*
|
Director
|
February
28, 2008
|
||
Bruce
Maggin
|
||||
*
|
Director
|
February
28, 2008
|
||
Ann
Mather
|
||||
*
|
Director
|
February
28, 2008
|
||
Christian
Stahl
|
||||
*
|
Director
|
February
28, 2008
|
||
Eric
Zinterhofer
|
||||
*By
|
||||
/s/Wallace Macmillan
|
||||
Wallace
Macmillan
|
||||
Attorney-in-fact
|
Bad
debt and credit note provision
|
Deferred
tax allowance
|
||
Balance
at December 31, 2004
|
6,140
|
8,011
|
|
Charged
to costs and expenses
|
1,750
|
5,115
|
|
Charged
to other accounts (1)
|
1,532
|
(185)
|
|
Foreign
exchange
|
(172)
|
(1,007)
|
|
Balance
at December 31, 2005
|
9,250
|
11,934
|
|
Charged
to costs and expenses
|
1,989
|
6,107
|
|
Charged
to other accounts (1)
|
1,540
|
(1,168)
|
|
Foreign
exchange
|
(115)
|
(299)
|
|
Balance
at December 31, 2006
|
12,664
|
16,574
|
|
Charged
to costs and expenses
|
1,876
|
12,182
|
|
Charged
to other accounts (1)
|
(579)
|
2,000
|
|
Foreign
exchange
|
691
|
1,208
|
|
Balance
at December 31, 2007
|
14,652
|
31,964
|
|
(1) Charged
to other accounts for the bad debt and credit note provision consist
primarily of accounts receivable written off and opening balance of
acquired companies.
|